Petition for Writ of Certiorari — CED'S, Inc. v. United States Environmental Protection Agency
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. Court, U.S.
No. 84- RILE D
ne DEC 10 18
Supreme Court of the Gnited —
OCTOBER TERM, 1984
CED’S, INC., d/b/a PRODUCTS FOR POWER,
Petitioner,
vs.
UNITED STATES ENVIRONMENTAL PROTECTION
AGENCY, and LEE THOMAS, Acting Administrator,
United States Environmental Protection Agency,
Respondents.
PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE SEVENTH CIRCUIT
JERALD P. Esrick
Counsel of Record for Petitioner
CED’s, INC., d/b/a
PRODUCTS FOR POWER
OF COUNSEL:
JERALD P. Esrick
JAMES R. MORRIN
Cat R. BURNTON
WILDMAN, HARROLD, ALLEN & DIXON
One IBM Plaza, Suite 3000
Chicago, Illinois 60611
(312) 222-0400
ARNOLD M. FLANK
Arnold M. Flank, Ltd.
2 North LaSalle Street, Suite 2205
Chicago, Illinois 60602
(312) 236-7742
Pandick Midwest, Inc., Chicago © 454-7600 G 4, P's.
QUESTIONS PRESENTED
Petitioner manufactures an automotive product which has
several recognized lawful uses. Petitioner’s product is resold
through two to three distribution levels before it is ever installed
in a vehicle. No Federal law prohibits this sale or manufacture,
but automotive workmen are prohibited from installing the
device under certain conditions.
The EPA sought to seize petitioner’s business records. To
obtain the necessary warrant, EPA filed an application stating
that, by the mere manufacture and sale of the device, petitioner
may be “causing” some consumers several times removed from
petitioner to install the device on automobiles in an illegal
manner. Yet EPA furnished no evidence of any such “causing”
by petitioner—the warrant application contained only a boil-
erplate recitation of a statutory violation by automobile repair-
persons.
The Seventh Circuit Court of Appeals, reversing the tral
court, upheld EPA’s authority to obtain an administrative
warrant bottomed on an unsupported, unarticuiated statutory
violation by others. The Court of Appeals’ ruling raises the
following constitutional questions:
1. Whether EPA should be treated differently from all
other government agencies by being vested with unbridled
authority to search any premises, commercial or residential,
without having to make any showing whatsoever of a statutory
violation by the person to be searched?
2. Are the clear and explicit standards for demonstrating
probable cause established by this Court in Camara v. Munici-
pai Court, 387 U.S. 523 (1967), and Marshall v. Barlow’s, 436
U.S. 307 (1978), applicable to the issuance of a warrant
obtained by EPA pursuant to its authority under the Clean Air
Act?
3. If so, does the unsupported assertion in a warrant
application that a search is necessary “in order to determine
whether violations of section 203(a) of the Act have been or are
il
being committed ...” (emphasis added), without any evidence
or even a hint of an actual violation by the person to be
searched, satisfy the probable cause standards of Camara and
Barlow’s?
PARTIES TO THE PROCEEDING
The caption of the case in this Court contains the names of
all parties. There are no parent comfy nies, subsidiaries, or
affiliates.
iil
TABLE OF CONTENTS
PAGE
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i cscccnaccaincnenssivstoree TREES OR TOO l
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Constitutional and Statutory Provisions Involved............ 3
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The Court of Appeals..................... Decisadieadioichentaanceen 8
Reasons for Granting Certiorann ...............c.ccccccssssssesseeceees 9
A. The Decision of the Court of Appeals Con-
flicts With and Ignores this Court’s Decisions
Sg ey 11
B. The Seventh Circuit’s Holding Fails to Ad-
dress the Allegations Necessary to Show
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Appendix
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Exhibit
IV
Order of the Seventh Circuit granting motion
to stay the mandate, dated November 9, 1984
Order of the Seventh Circuit denying petition
for rehearing with suggestion for rehearing en
banc, dated October 29, 1984 oo... cccceccecsceceeee
Opinion of the Seventh Circuit, dated
Sepeemnber 2B, (9G 6 nn. cceccnsevessccssoscrassovseseees
Supplemental memorandum opinion and or-
der of district court, dated November 1, 1983.
Memorandum opinion and order of district
Court, Gated Fuly 1, 1963 ........cccccccccscocsscecesonesees
Memorandum opinion in National Muffler
Manufacturing Co., Inc. v. U.S. E.P.A., No.
C83-929A (N.D. Ga. September 21, 1983)...
Warrant of entry issued by Magistrate Suss-
BUR, IE FEE S, TI a niccecscnicesincnecsiikesnrisinere
EPA application for warrant, dated April 5,
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PAGE
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TABLE OF AUTHORITIES
PAGE
Cases:
Batterton v. Marshall, 648 F.2d 694 (D.C. Cir.
DI A i scccorsusitiinsianiinascitesaincaieiansichaiteidalteumainlisiiaibmgacncadeiiien 15, 16
Camara v. Municipal Court, 387 U.S. 523 (1967).. 10, 12-15
Colonnade Catering Corp. v. United States, 397
SIS, Far 0 OEE cicdniicistinivcicesisticsssadanaaanicennenes 12, 13
Coolidge v. New Hampshire, 403 U.S. 443 (1971)... 18
Donovan v. Dewey, 452 U.S. 594 (1981)... eee 13
Donovan v. Lone Steer, Inc., i
i eh PA, SD viccicinnccccersnnssiontsncstnainiabastinamenensanenanas 14
Donovan v. Wollaston Alloys, Inc. 695 F.2d 1 (\st
OE, FPN DS picscstncsensciviisnsteissicecntens sncgcunibbaninsapeiannbageadion 15
Marshall v. Barlow’s, 436 U.S. 307 (1978).............. 10-15, 17,
18
National Muffler Manufacturing Co., Inc. v. U.S.
EPA, No. C83-929-A (N.D. Ga. Sept. 21, 1983) 8
See v. City of Seattle, 387 U.S. 541 (1967) ............. 12
Stoddard Lumber Co., Inc. v. Marshall, 627 F.2d
SOE Cite Ce CIP veka 15
United States v. Mississippi Power & Light Co., 638
F.2d 899 (Sth Cir.), cert. denied, 454 U.S. 892
C BE Masevisentiscsnienstnictnsinpcontotonsspiatincaesseieaeaniinndniniciess 15
Weyerhaeuser v. Marshall, 592 F.2d 373 (7th Cir.
PF iineisaskscistnictcecccciniashicamnctsabeticaiateanaptbidiagiaiaitaaiumamain 10, 15
CONSTITUTIONAL PROVISIONS AND STATUTES:
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OF UBS, BTS i CAREY erect ressericcssreeenninn 13
IN THE
Supreme Court of the Anited States
OctToBER TERM, 1984
CED’S, INC., d/b/a PRODUCTS FOR POWER,
Petitioner,
vs.
UNITED STATES ENVIRONMENTAL PROTECTION
AGENCY, and LEE THOMAS, Acting Administrator,
United States Environmental Protection Agency,
Respondents.
PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURS OF APPEALS
FOR THE SEVENTH CIRCUIT
CED’s, Inc., d/b/a Products for Power (‘““CED’s’’), re-
spectfully petitions for a writ of certiorari to review the opinion
of the United States Court of Appeals for the Seventh Circuit
entered in this proceeding on September 28, 1984.
OPINIONS BELOW
The opinion of the Seventh Circuit Court of Appeals in
CED’s, Inc., d/b/a Products for Power v. United States
Environmental Protection Agency and Lee Thomas, Acting
Administrator, United States Environmental Protection Agency,
not yet Officially reported, is reproduced in the Appendix to this
petition. App. C. p. 4a. The memorandum opinions, final
2
orders and judgment of the district court, which were not
Officially reported, are reproduced in the Appendix to this
petition. App. D, p. 20a; App. E p. 29a.
JURISDICTION
The opinion of the Seventh Circuit Court of Appeals in this
case was entered on September 28, 1984. A petition for
rehearing with a suggestion for rehearing en banc was denied
on October 29, 1984. App. B, p. 3a. The Seventh Circuit
subsequently granted CED’s motion to stay the mandate until
December 19, 1984. App. A, p. 2a. This petition is being filed
within the time specified in Rule 20.2 of the Rules of the
Supreme Court and 28 U.S.C. § 2101(c).
The jurisdiction of this Court is invoked pursuant to 28
U.S.C. § 1254(1). Jurisdiction in the district court was based
on the existence of a federal question, 28 U.S.C. § 1331,
concerning the provisions of the Clean Air Act, 42 U.S.C.
§ 7401 et seq.
CONSTITUTIONAL AND STATUTORY
PROVISIONS INVOLVED
The Fourth Amendment to the United States Constitution
provides: ,
The right of the people to be secure in their persons,
houses, papers, and effects, against unreasonable searches
and seizures, shall not be violated, and no Warrants shall
issue but upon probable cause, supported by Oath or
Affirmation, and particularly describing the piace to be
searched, and the persons or things to be seized.
U.S. Const., amend. IV.
Section 114(a) of the Clean Air Act, 42 U.S.C. § 7414(a),
provides in pertinent part:
(a) For the purpose of (i) developing or assisting in the
development of any implementation plan under sec-
tion 7410 or 7411(d) of this title, any standard of
performance under section 7411 of this title, or any
emission standard under section 7412 of this title, (ii)
determining whether any person is in violation of such
standard or any requirement of such plan, or (ii!)
carrying out any provision of this chapter (except a
provision of subchapter II of this chapter with respect
to a manufacturer of new motor vehicles or new motor
vehicle engines ) —
(1) The Administrator may require any person who
owns Or operates any emission source or who is
subject to any requirement of this chapter (other
than a manufacturer subject to the provisions of
section 7525(c) or 7542 of this title) with respect
to a provision of subchapter II of this chapter to
(A) establish and maintain such records, (B)
make such reports, (C) install, use, and maintain
such monitoring equipment or methods, (D)
sample such emissions (in accordance with such
methods, at such locations, at such intervals, and
in such manner as the Administrator shall pre-
scribe), and (E) provide such other information
as he may reasonably require: and
4
(2) The Administrator or his authorized representa-
tive, upon presentation of his credentials—
(A) shall have the right of entry to, upon, or
through any premises of such person or in
which any records required to be maintained
under paragraph (1) of this section are
located, and
(B) may at reasonable times have access to and
copy any records, inspect any monitoring
equipment or method required under para-
graph (1), and sample any emissions which
such person is required to sample under
paragraph (1).
42 U.S.C. § 7414(a).
Section 203(a) of the Clean Air Act, 42 U-S.C.
§ 7522(a)(3)(A) and (B), under which EPA asserts that
CED’s falls within the coverage of the Clean Air Act, states in
relevant part:
(a) The following acts and the causing thereof
are prohibited —
(3)(A) For any person to remove or render inoperative
any device or element of design installed on or in
a motor vehicle or motor vehicle engine in com-
pliance with regulations under this part prior to
its sale and delivery to the ultimate purchaser, or
for any manufacturer or dealer knowingly to
remove or render inoperative any such device or
element of design after such sale and delivery to
the ultimate purchaser; or
(B) For any person engaged in the business of repair-
ing, servicing, selling, leasing, or trading motor
vehicles or motor vehicle engines, or who oper-
ates a fleet of motor vehicles, knowingly to
remove or render inoperative any device or ele-
ment of design installed on or in a motor vehicle
5
or motor engine in compliance with regulations
under this subchapter following its sale and deliv-
ery to the ultimate purchaser; or
42 U.S.C. § 7522(a)(3)(A) and (B).
STATEMENT OF THE CASE
THE PARTIES
Petitioner CED’s, Inc., d/b/a Products For Power
(CED’s), operates a small manufacturing business in Addison,
Illinois. Among the engine exhaust system parts manufactured
at this plant is a device known as a “Test Tube”, a product
marketed under CED’s registered trademark. The Test Tube
has several well-recognized and lawful uses. Primarily, it may
be used by any individu il or entity to perform tests on the
efficiency and efficacy of a catalytic converter that has been
installed in an automobile exhaust system. Also, under federal
law, an individual motorist may lawfully and permanently
replace his automobile’s catalytic converter with a Test Tube. It
is, however, unlawful for a person engaged in the business of
repairing, servicing, selling, leasing or trading of motor vehicles
to permanently remove catalytic converters.
CED’s does not, in general, sell its Test Tubes to muffler
shops, the general public, or to retail outlets. Nor does CED’s
sell its Test Tubes to automobile manufacturers or to any new
or used automobile dealers. CED’s sells Test Tubes primarily
to a single category of businesses: warehouse distributors. Test
Tubes are marketed nationally by CED’s and are sold in 49 of
the 50 states.’ Test tubes are also marketed for sale abroad and
to the United States military. EPA has never alleged that
CED’s has ever either directed or directly caused any person
1 CED’s does not sell its Test Tube in California. There, the sale
of devices which are capable of being used to eliminate pollution
control devices is specifically prohibited.
6
engaged in the business of repairing, servicing, selling, leasing,
or trading of motor vehicles to remove or render inoperative
any pollution control equipment.
THE WARRANT
On April 5, 1983, EPA filed an application for an adminis-
trative search warrant with United States Magistrate Sussman,
pursuant to its administrative search authority under Section
114 of the Clean Air Act, 42 U.S.C. § 7414. App. H, p. 49a. In
the warrant application, EPA alleged that CED’s “may be
causing” violations of the Clean Air Act by the “sale, dis-
tribution and promotion” of Test Tubes. An extensive search
was requested so that EPA could “determine whether violations
of section 203(a) of the Act have been or are being committed
by Products for Power... .” No violations of the Clean Air Act
were asserted, nor did the warrant application contain any
evidence of such violations.2 Magistrate Sussman granted
EPA’s application and issued a civil inspection warrant, author-
izing virtually a complete inspection of CED’s facility. App. G,
p. 46a. This inspection included the review and copying of
virtually all of CED’s business records, including correspond-
ence, raw material purchases, advertising records, production
records, sales records, customer lists, and inventory lists. The
warrant additionally authorized without restriction the in-
spection of CED’s facility and the taking of photographs of the
facility.
Pursuant to the warrant, on April 6, 1983, EPA agents and
a United States Marshall entered CED’s facility and examined,
inspected, and copied the documents specified in the warrant.
2 The affidavits attached to the warrant application, if assumed to
be true, established only that some muffler shops may be permanently
removing catalytic converters. See App. H, p. 49a.
3 Since EPA had no evidence, nor even a theory, as to how the
mere manufacture and sale of Test Tubes could amount to a
“causing” (i.e. an improper installation ), the scope of the warrant was
extremely broad.
7
As the inspection was being carried out, CED’s filed with
Magistrate Sussman a motion to quash the warrant for lack of
probable cause. Following a hearing. CED’s motion to quash
was denied.
THE DISTRICT COURT
CED’s then filed a complaint for injunctive relief and a
notice of appeal from the magistrate’s order with the district
court on April 7, 1983. In response, EPA filed a motion to
dismiss CED’s complaint. After an emergency hearing an
interim agreement was reached between the parties, in which
EPA agreed to refrain from contacting CED’s customers and
from using the information seized other than for purposes of
review, interpretation and collation. On CED’s motion, the
district court stated that it would treat CED’s motion for
injunctive relief as a motion for both temporary and permanent
relief.
On July 1, 1983, the district court granted CED’s motion
for a permanent injunction, prohibiting EPA from making
further use of the business records obtained under the adminis-
trative warrant. App. E, p. 29a. The court also ordered EPA to
return all copied documents to the plaintiff. In so holding, the
court concluded that EPA had no authority under § 114(a) of
the Clean Air Act to enter and inspect CED’s records.
EPA moved for a stay pending appeal of the district court’s
order. In its motion of July 20, 1983, EPA reiterated several
contentions previously made and also attacked the substance of
the district court’s July 1, 1983 order. In a hearing on July 22,
1983, EPA reiterated its challenges to the original holding of
the district court. At several points in the hearing the district
court stated that it would reconsider contentions made by EPA.
The court noted that it would treat EPA’s motion fur a stay as a
motion to amend the July | order and would accordingly either
consider its original order as merely a preliminary injunction or
it would issue a supplementary opinion. No objection was
made by EPA. On August 31. 1983. EPA filed a notice of
I
appeal from the district court’s order of July 1, 1983. All
documents seized by EPA have since been held by the Depart-
ment of Justice pending the resolution of this appeal.
On November 6, 1983, the district court entered a
supplemental memorandum opinion and order clarifying its
original order and denying EPA’s motion for a stay pending
appeal. In its supplemental order, the court held that CED’s
could not “cause” a violation of the Clean Air Act by the mere
manufacture and sale of Test Tubes.* The district court reaf-
firmed its original holding that injunctive relief was appropriate
in light of the irreparable harm CED’s would suffer from the
search. The district court denied EPA’s stay application,
concluding that it had failed to show that a stay was appro-
priate.
THE COURT OF APPEALS
On September 28, 1984, a panel of the Seventh Circuit
Court of Appeals reversed the judgment of the district court
and ordered the injunction dissolved and CED’s complaint
dismissed. The panel held that sections 114 and 203(a) of the
Clean Air Act give blanket authority to EPA to inspect the
records of any person who is “subject to” a requirement of the
Act and that “CED’s, along with everyone else, is clearly
prohibited ... from causing any act described in subsection
3(B).” App. C, p. 10a. The appellate court concluded that
EPA had the mght to inspect CED’s facility and to seize its
records. The panel failed to address in any way whether the
“As did a district court in Georgia, when faced with the same
question in a search launched by EPA the same day as the CED’s
search. See National Muffler Manufacturing Co., Inc. v. U.S. EPA,
No. C83-929A (N.D. Ga. Sept. 21, 1983), App. F, p. 37a.
ne
~ eel
warrant application complied with the probable cause require-
ments of the Fourth Amendment.
CED’s subsequently filed a petition for rehearing with a
suggestion for rehearing en banc, urging the full Seventh Circuit
to review the panel’s opinion. CED’s argued that the panel’s
decision allows EPA the right to inspect the records of any
entity without regard to the Fourth Amendment probable cause
requirements. Under the Seventh Circuit’s analysis, in order for
EPA to search the premises of any individual or entity, EPA
need only allege that the person or entity “may be” causing a
violation of the Act. On October 29, 1984, the Seventh Circuit
denied CED’s petition for rehearing. App. B, p. 3a.
On November 3, 1984, CED’s moved the Seventh Circuit
to stay the issuance of its mandate pending CED’s application
to this Court for a writ of certiorari. Six days later, Judge
Eschbach, author of the panel’s opinion, granted CED’s peti-
tion for a stay of the mandate, up to December 10, 1984. This
petition for certiorari followed.
REASONS FOR GRANTING CERTIORARI
The breadth and scope of administrative regulatory stat-
utes such as the Clean Air Act touch virtually every commercial
entity in this country. While many of these acts have been
broadly written and interpreted, this Court has consistently
stated that no enactment may supercede constitutional protec-
tions. In this case, however, the Seventh Circuit has given to
EPA under the Clean Air Act unprecedented search and seizure
authority; authority unknown to any other governmental
agency.
5CED’s has repeatedly raised this probable “causing” issue
throughout the course of this proceeding. The district court found no
showing of a “causing” and further held that EPA lacked statutory
authority to search an unregulated manufacturer such as CED’s. The
Seventh Circuit reversed on tie authority issue and leap-frogged the
critical probable cause issue to reach its unprecedented holding.
10
Unless the opinion of the Seventh Circuit is corrected by
this Court, Magistrates will be empowered to grant EPA
warrant applications on the naked assertion that a “violation”
may be occurring. No other agency has such authority, even
those charged with criminal law enforcement. Yet EPA may
now search anywhere to investigate a single civil prohibition.
Certiorari should thus be granted in this case because the
opinion of the Seventh Circuit fails to apply, and totally
disregards, this Court’s decisions in Marshall v. Barlow’s, 436
U.S. 307 (1978), Camara vy. Municipal Court, 387 U.S. 523
(1967), and their progeny.® Those cases require that before a
finding of probable cause justifying an administrative search
and seizure can be made, there must exist either (i) specific
evidence of a violation of an administrative regulation or law,
or (ii) evidence that the search is sought pursuant to an
articulated administrative plan based on neutral criteria.7 EPA
failed to satisfy these requirements in obtaining the warrant at
issue. The Seventh Circuit upheld the warrant, employing the
following unprecedented analysis:
(1) CED’s (along with everyone else) is subject to the
provisions of the Clean Air Act;
(2) “the plain language of the Act authorizes the EPA to
copy any records of any person subject to any require-
ment of the Act ...”; and
(3) therefore, EPA may have access to and copy any
records CED’s may possess.
At no time did the Seventh Circuit address the applicability of
the Fourth Amendment, Barlow’s, Camara, or probable cause.
By its analysis the Seventh Circuit has effectively eliminated the
requirement that probable cause be shown to justify the search
of a commercial entity.
6 One of which is the Seventh Circuit’s own case, Weyerhaeuser v.
Marshall, 592 F.2d 373 (7th Cir. 1979), the facts of which are almost
identical to those here.
7EPA has never asserted that the search was part of an
administrative plan.
11
Certiorari should also be granted to define what facts must
be shown by a governmental agency to satisfy the constitutional
requirement of probable cause in order to justify a nonconsen-
sual inspection of a business premise. In the immediate case,
EPA alleged only that a search was necessary to determine
whether CED’s “MAY BE” causing a violation of the Clean Air
Act. No facts establishing probable cause were adduced. The
showing required of EPA before it can engage in a nonconsen-
sual seizure of records is of great concern to all individuals and
entities subject to the Clean Air Act, as well as to those who are
subject to other federal regulatory statutes.
There is also a compelling need for this Court to provide
guidance to the lower courts in the application of the probable
cause standards of Barlow’s. As this Court has noted many
times, explicit probable cause requirements serve to inform the
magistrate of the violation in question, and thereby help limit
the search to a reasonable scope, ensuring adherance to Fourth
Amendment principles. A definitive statement from this Court
regarding the showing that is necessary to meet administrative
probable cause standards will ensure future consistent and
proper application of Barliow’s, and will serve to put business
entities On notice as to when their premises may be subject to a
search or seizure. For not only must laws, regulations, and
court decisions provide a clear mandate of congressional or
agency intentions, they must also provide guidance to those
persons affected so that those persons may structure their future
conduct to comply with the law.
The Seventh Circuit’s decision fails to adequately guide
U.S. magistrates, judges, or business entities through its failure
to delineate when and to what extent businesses may be the
subject of a search and seizure under the Clean Air Act.
A. The Decision of the Court of Appeals Conflicts With
and Ignores this Court’s Decisions in Camara and
Barlow’s.
The Seventh Circuit concluded that “the plain language of
the Act authorizes the EPA to copy any records of any person
12
subject to any requirement of the Act....” App. C, p. 17a.
Applying this conclusion, the Court reasoned that since “CED’s,
along with everyone else, is clearly prohibited . . . from causing
any act described in subsection (3)(B),” App. C, p. 10a, EPA
has authority to search and inspect CED’s premises. Under the
court’s analysis, EPA has unbridled discretion to inspect the
records of any individual or entity without any consideration of
the Fourth Amendment protections from unreasonable search
and seizure. The EPA may now obtain warrants to randomly
search and inspect the records of any individual or entity,
merely to ascertain whether they “might be” causing a violation,
without even a requirement that the supposed violation be
articulated. Such judicially-condoned fishing expeditions con-
stitute a total abrogation of Fourth Amendment probable cause
protections.
Prior Supreme Court cases have firmly established that the
Fourth Amendment’s prohibition against unreasonable
searches applies to administrative inspections of private com-
mercial property. Marshall v. Barlow’s, 436 U.S. 307 (1978);
Camara v. Municipal Court, 387 U.S. 523 (1967). In See v.
City of Seattle, 387 U.S. 541, 543 (1967), the Supreme Court
noted:
The businessman, like the occupant of a residence, has a
constitutional right to go about his business free from
unreasonable official entries upon his private commercial
property. The businessman, too, has that nght placed in
jeopardy if the decision to enter and inspect for violation of
regulatory laws can be made and enforced by the inspector
in the field without official authority cvidenced by a
warrant.
Id. at 543. Inspections of commercial property have been held
to be unreasonable if they are not authorized by law or are
unnecessary for the furtherance of federal interests. Colonnade
Catering Corp. v. United States, 397 U.S. 72, 77 (1970).
13
The importance of a warrant in the administrative scheme
is well recognized. This Court has observed that where
Congress has authorized an inspection, but has made no rules
governing the procedures that inspectors must follow, the
Fourth Amendment and its various restrictive rules are to
apply. Colonnade Catering Corp. v. United States, 397 U.S. 72,
77 (1970). Warrants are necessary to protect the owner from
the “unbridled discretion [of] executive and administrative
officers,” Marshall v. Barlow’s, 436 U.S. at 323, by assuring the
owner that “reasonable legislative or administrative standards
for conducting inspection are... satisfied with respect to a
particular [establishment].” Camara v. Municipal Court, 387
U.S. 523, 538 (1967). In the absence of evidence of probable
cause, a search of a commercial premise may be justified only in
the following situation:
[A] warrant may not be constitutionally required when
Congress has reasonably determined that warrantless
searches are necessary to further a regulatory scheme and
the federal regulatory presence is sufficiently com-
prehensive and defined that the owner of commercial
property cannot help but be aware that his property will be
subject to periodic inspections undertaken for specific
purposes.
Donovan v. Dewey, 452 U.S. 594, 601 (1981).
A plain reading of section 203(a)(3) of the Clean Air Act
could not make CED’s aware that its facility is or could be
subject to inspection by EPA.® CED’s is not “engaged in the
business of repairing, servicing, selling, leasing, or trading
motor vehicles or motor vehicle engines.” CED’s does not
“operate a fleet of motor vehicles.” Nor is CED’s defined as a
‘“‘manufacturer or dealer.” See 42 U.S.C. § 7527. How then is
CED’s supposed to anticipate that its facility could be searched
by EPA?
8 CED’s is not presently subject to any EPA-promulgated regu-
lations.
14
The Seventh Circuit’s opinion does not provide any
answer.
This Court has noted only last term that in the absence of a
specific legislative framework, the constitutional requirements
of probable cause must be met in order to allow a nonconsen-
sual entry into a commercial area not open to the public.
Donovan v. Lone Steer, Inc., US. —, 104 §.Ct. 769,
773 (1984). The Seventh Circuit’s use of its novel analysis
directly conflicts with the rules established by this Court in
Camara, Barlow’s, Lone Steer, and other cases addressing
administrative warrant requirements.
The Seventh Circuit’s decision gives EPA carte blanche to
engage in the inspection of any records in any facility which is,
or which EPA believes to be, subject to the Clean Air Act. If
left undisturbed, the Seventh Circuit’s decision will not only
result in searches and seizures that are unauthorized by the
Clean Air Act, but it will also do away with probable cause
requirements. The new logic expressed in the Seventh Circuit’s
holding could be equally applied to other major regulatory
statutes. Because of the likelihood that EPA will engage in the
future inspections of facilities that are, or may be, subject to its
provisions, this Court should provide clear guidance to the
lower courts on the application of Barlow’s probable cause
requirements to such inspections. Without any clear ex-
planation of the Barlow’s probable cause standard, the lower
courts may acquiesce in the intrusive and unjustified enforce-
ment of federal legislation at the expense of the constitutional
rights of those subject to its reach.
B. The Seventh Circuit’s Holding Fails to Address The
Allegations Necessary to Show Probable Cause.
The sole justification given by EPA for the search of CED’s
premises was their belief that CED’s may “cause” improper
installations of its product simply by the manufacture, promo-
tion and ultimate distribution of Test Tubes to automotive
repair facilities. Application for Warrant. App. H. p. 50a. In its
———
15
brief to the Seventh Circuit, EPA asserted that it could not
determine whether CED’s had “caused” violations of the Clean
Air Act until after ‘“‘a complete investigation of all the facts and
circumstances surrounding CED’s operation ....” EPA Brief,
p. 81.8. This approach is constitutionally unpermitted. The
Seventh Circuit, however, failed to address the issue of whether
EPA had satisfied the Fourth Amendment’s probable cause
requirements. Had the Seventh Circuit tested EPA’s actions
against the standards set forth in Camara and Barlow’s, it
would have found that there was no probable cause to support
the issuance of the warrant.9
The probable cause required of EPA to justify its search in
this case is neither burdensome nor unreasonable. This Court
has noted that probable cause in the criminal law sense is not
required. Marshall v. Barlow’s, 436 U.S. 307, 321 (1978). But
even for purposes of an administrative search, probable cause
justifying the issuance of a warrant must nevertheless be based
either on specific evidence of an existing statutory or adminis-
trative violation or on a showing that reasonable legislative or
administrative standards for conducting an inspection have
been satisfied. Jd. at 321. Reasonable administrative standards
have always been interpreted to require the agency in question
to have promulgated regulations after appropriate nctice and
hearing opportunities have been provided. Batterton v. Mar-
9Other Seventh Circuit decisions have required that adminis-
trative warrants comply with the Fourth Amendment’s requirements
for administrative probable cause. See, e.g., Weyerhaeuser Co. v.
Marshall, 592 F.2d 373 (7th Cir. 1979). In Weyerhaeuser, the
warrant application was defective because the “magistrate was given
no clue as to what the nature of the alleged violation might be. The
affidavit is unrelieved boilerplate ...” Jd. at 378. Such language is
directly applicable to the case at bar. Other circuit courts of appeals
have uniformly tested the validity of a warrant by the probable cause
standards established by this Court in Barlow’s. See Donovan v.
Wollaston Alloys, Inc., 695 F.2d 1 (lst Cir. 1982): United States v.
Mississippi Power & Light Co., 638 F.2d 899 ( Sth Cir. ), cert. denied,
454 U.S. 892 (1981): Stoddard Lumber Co.. Inc. v. Marshall, 627
F.2d 984 (9th Cir. 1980).
16
shall, 648 F.2d 694 (D.C. Cir. 1980). There are NO regulations
promulgated by EPA which require a manufacturer of automo-
tive replacement parts or automotive testing devices to perform
any of the record keeping requirements specified in section
114(a)(1) of the Clean Air Act. Consequently, EPA has no
authority to inspect the business premises of CED’s, as section
114(a)(2) grants EPA authority to inspect only those business
records required by section 114(a)(1) to be maintained.
Absent such legisiative authority, specific evidence of an exist-
ing violation of the Clean Air Act was required.
There was no allegation anywhere that there was probable
cause to believe that CED’s was in violation of the Clean Air
Act. EPA has never even contended that such facts exist.
Moreover, at no time did EPA assert that its search was
authorized by an administrative plan based on any neutral
criteria. Instead, EPA sought to seize and inspect CED’s
records in an effort to determine at a later date whether CED’s
may perhaps be “causing” a violation of the Act. However, the
manufacture, distribution and sale of Test Tubes is lawful; the
Seventh Circuit’s opinion fails to provide CED’s (or anyone
else) with any clue as to the actual nature of any alleged
violation which would justify the inspection of its premises.
To “cause” is to be the agent or force which produces an
effect or result. Under the Clean Air Act the prohibited result is
improper installation. Neither EPA nor the Seventh Circuit has
articulated how the “sale, distribution and promotion of Test
Tubes,” either to warehouse distributors (as is CED’s business
practice ) or to “regulated automotive repair facilities” (as EPA
alleged in its Application for Warrant) could in any way result
in CED’s knowing participation in the removal or rendering
inoperative of an emission control device by an automobile
manufacturer, dealer, fleet operator, or repair shop. The most
that could be alleged by EPA is that CED’s products might
17
make it easier or quicker for the actions prescribed by the Clean
Air Act to occur. However, any entity described in section
203(a)(3) which has pipe-bending machinery and tubular
steel at its premises could create a device which could be used
to remove or render inoperative a catalytic converter.'° By
following the analysis of the Seventh Circuit, EPA could allege
that the manufacturer of the pipe-bending machine, or the
supplier of steel tubing, could “‘cause” a violation of the Clean
Air Act. Indeed, CED’s equipment vendors and suppliers of
raw materials could, under the Seventh Circuit’s analysis, be
deemed to have “caused” a violation of the Clean Air Act, and
therefore be subjected to searches and seizures. Surely this
result could not have been intended by the Seventh Circuit, and
action by the Supreme Court is necessary to correct the
impression to the contrary left by the appellate court’s opinion.
There is, and can be, no support for EPA’s assertion that its
search is permissible simply to determine “whether” a violation
of the Clean Air Act may have occurred. Just as a constable
may not be allowed to enter a home to determine whether a
crime may be taking place, EPA may not randomly inspect a
business entity and search its premises to determine whether a
violation “may have” occurred. The panel’s opinion gives EPA
carte blanche to inspect the records of any business or person so
long as the search is claimed to be under a legislative frame-
work. EPA has not even advanced the theory of how CED’s
has violated the Clean Air Act. The substitution of boilerplate
language for specificity strips the magistrate of his probable
cause function. See Marshall v. Barlow’s, 436 U.S. at 324.
Indeed, the very purpose of the warrant requirement is to
have the probable cause determination made by a detached
10 Tronically, muffler shops are the least likely installers of Test
Tubes, since most shops possess the machinery to fabricate pipe for
less money than the cost of a Test Tube.
18
judicial officer rather than an overzealous law enforcement
agency. See Coolidge v. New Hampshire, 403 U.S. 443, 449
(1971). Under the Seventh Circuit’s framework, since “every-
one” is subject to the Clean Air Act, the magistrate now serves
merely a rubber stamp function. EPA no longer has to allege
that a search is part of a legislative scheme or even that a
violation has occurred. It need not even advance a scintilla of
evidence as to whether a supposed violation has occurred. As
long as it is conceivable to the mind of one EPA employee that
one can “cause” a violation, no further analysis by a court is
permitted or necessary in the Seventh Circuit. The Seventh
Circuit’s holding is applicable not only to manufacturers of
automotive parts, but to any organization or entity within the
stream of commerce. This surely is not the intent of the framers
of the Clean Air Act.
In short, EPA’s warrant application falls far short of
meeting the Barlow’s test for probable cause. By ignoring the
strict requirements of the Fourth Amendment, the Seventh
Circuit has removed the important function of a neutral and
detached magistrate and instead leaves him to rubber-stamp
EPA requests for search warrants. EPA may now merely assert
that it wishes to ascertain whether a violation may have been
committed. This Court should correct the Seventh Circuit’s
error.
19
CONCLUSION
For reasons set forth herein, the petition for a writ of
certiorari to review the opinion of the United States Court of
Appeals for the Seventh Circuit entered in this proceeding on
September 28, 1984 should be granted.
Respectfully submitted,
JERALD P. Esrick
Counsel of Record for Petitioner
CED’s, Inc., d/b/a
PRODUCTS FOR POWER
OF COUNSEL:
JERALD P. Esrick
JAMES R. MORRIN
CaL R. BURNTON
WILDMAN, HARROLD, ALLEN & DIXON
One IBM Plaza, Suite 3000
Chicago, Illinois 60611
(312) 222-0400
ARNOLD M. FLANK
Arnold M. Flank, Ltd.
2 North LaSalle Street, Suite 2205
Chicago, Illinois 60602
(312) 236-7742
APPENDIX
la
APPENDIX TABLE OF CONTENTS
Order of the Seventh Circuit granting motion to
stay the mandate, dated November 9, 1984...........
Order of the Seventh Circuit denying petition for
rehearing with suggestion for rehearing en banc,
ga TT
Opinion of the Seventh Circuit, dated September
i, SNE cic iadeabdiahainacehiabialstanainsdasconibeeubeiactaadbdesenes
Supplemental memorandum opinion and order of
district court, dated November 1, 1983..................
Memorandum opinion and order of district court,
I iabinieiccicciaiiniihidid sasuidsiabbapsamennes
Memorandum opinion in National Muffler Manu-
facturing Co., Inc. v. U.S. E.P.A., No. C83-929A
(N.D. Ga. September 21, 1963 )......ccccccosccccocccccceeee
Warrant of Entry issued by Magistrate Sussman,
ee I UD oltaheseicssiaMrcctimmicaiccndsdatcsinces
EPA Application for Warrant, dated Apri 5,
PAGE
2a
EXHIBIT A
United States Court of Appeals
For the Seventh Circuit
Chicago, Illinois 60604
November 9, 1984.
Before
. Hon. Jesse E. ESCHBACH, Circuit Judge
CED’S, INC., d/b/a PRODUCTS | :
FOR POWER, Aa Appeal from the |
Plaintiff-Appellee, United States Dis-
No. 83-2608 - trict Court for the
Northern District of
UNITED STATES ENVIRONMEN- > Illinois, Eastern Di-
TAL PROTECTION AGENCY and vision.
LEE THOMAS, Acting Adminis- No. 83 C 2409
trator, United States Environmental John A. Nordberg |
Protection Agency, Judge |
Defendants-Appellants. j
On consideration of the “CED’S, INC."S MOTION FOR
STAY OF MANDATE PENDING APPLICATION TO THE
SUPREME COURT FOR A WRIT OF CERTIORARI” filed
herein on November 3, 1984, by counsel for plaintiff-appellee,
IT IS ORDERED that said motion is hereby GRANTED
and the mandate of this court is STAYED to and including
December 10, 1984.
3a
EXHIBIT B
United States Court of Appeals
For the Seventh Circuit
Chicago, Illinois 60604
October 29, 1984
Before
Hon. Jesse E. ESCHBACH, Circuit Judge
Hon. JoeL M. Flaum, Circuit Judge
Hon. WILLIAM J. JAMESON, Senior District Judge*
CED’S _INC., d/b/a PRODUCTS | Appeal from the
FOR POWER, 4 United States Dis-
Plaintiff- Appellee, trict Court for the
No. 83-2608 vs. Northern District of
Illinois, Eastern Di-
UNITED STATES ENVIRONMEN- [f vision.
TAL PROTECTION AGENCY, and
LEE THOMAS, Acting Adminis- No. 83 C 2409
trator, United States Environmental John A. N. -dberg,
Protection Agency, Judge.
Defendants-Appellants. |
ORDER
On consideration of the petition for rehearing and sug-
gestion for rehearing en banc filed in the above-entitled cause
by plaintff-appellee, no judge in active service has requested a
vote thereon, and all of the judges on the original panel have
voted to deny a rehearing. Accordingly,
IT IS ORDERED that the aforesaid petition for rehearing
be, and the same is hereby, DENIED.
* The Honorable William J. Jameson, Senior District Judge for the
District of Montana, sitting by designation.
4a
EXHIBIT C
in the
United States Court of Appeals
For the Seventh Cirrnit
No. 83-2608
Cep’s INnc., d/b/a PRopucts For Power,
Plaintiff-Appellee,
Vv.
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY,
and LEE Tuomas, Acting Administrator, United States
Environmental Protection Agency,
Defendants-Appellants.
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 83 C 2409—John A. Nordberg, Judge.
ARGUED APRIL 9, 1984—DECIDED SEPTEMBER 28, 1984
Before ESCHBACH and FLAUM, Circuit Judges, and
JAMESON, Senior District Judge.*
ESCHBACH, Circuit Judge. The Environmental Protec-
tion Agency appeals from an order of the district court
enjoining it from making use of copies of business records
it had obtained from Ced’s Inc. under an administrative
warrant and ordering it to return the copies to the com-
pany. The principal issue presented is the scope of the
* The Honorable William J. Jameson, Senior District Judge,
United States District Court of Montana, sitting by designation.
Sa
2 No. 83-2608
Environmental Protection Agency’s authority to copy
records of companies under section 114(a) of the Clean
Air Act. We reverse.
I
Ced’s Inc. (“‘Ced’s’’), doing business as Products for
Power, manufactures and distributes automotive engine
exhaust equipment, including a device known as the ““Test
Tube,” a length of hollow metal pipe shaped and fitted
to replace the catalytic converter in an automobile exhaust
system. Under section 203(a) of the Clean Air Act (the
“Act’’), 42 U.S.C. § 7522(aX3XB), those in the business of
repairing and servicing automobiles are prohibited from
permanently replacing a catalytic converter with a pipe
such as the Test Tube, although they may temporarily
make the substitution for the purpose of determining if
the catalytic converter needs to be replaced. The owner
of an automobile is not prohibited from permanently re-
placing its catalytic converter with a Test Tube. Ced’s
markets the Test Tube nationwide, but exclusively to
warehouse distributors, not directly to retailers or auto-
motive repair facilities.
The Environmental Protection Agency (“EPA’’) suspects
that the unlawful permanent installation of catalytic con-
verter replacement pipes by automotive repair and serv-
ice facilities is a pervasive problem with potentially far-
reaching deleterious environmental consequences. It has
accordingly been investigating the practice.
On April 5, 1983, the EPA applied to a magistrate for
an administrative warrant under section 114(a) of the Act,
42 U.S.C. § 7414(a), authorizing the examination and copy-
ing of certain of Ced’s business records pertaining to the
promotion and sale of the Test Tube. The application was
based on evidence which, the EPA claimed, established
administrative probable cause to believe that Ced’s may
have caused certain automobile repair facilities to remove
catalytic converters permanently and to replace them with
Test Tubes in violation of section 203(a) of the Act. The
6a
No. 83-2608 3
magistrate issued the warrant ex parte. On April 6 EPA
agents served the warrant, entered Ced’s facility during
normal business hours, and examined and copied docu-
ments. While the inspection was in progress, Ced’s filed
with the magistrate a motion to quash the warrant. A
hearing was held on April 6, and the magistrate denied
the motion.
On April 7 Ced’s filed a motion in the district court
seeking a temporary restraining order or preliminary in-
junction enjoining execution of the warrant and ordering
the return of the documents, and a complaint requesting
a permanent injunction forbidding the EPA to enter Ced’s
premises and to inspect Ced’s records. On the same day
the EPA filed a motion to dismiss the complaint. The
court held hearings on these motions and on July 1 signed
an order and issued a memorandum opinion denying the
EPA’s motion to dismiss, granting a permanent injunc-
tion prohibiting the EPA from making any use of ma-
terials obtained from Ced’s under the administrative
warrant, and ordering the EPA to return those materials,
including any copies, to the company. The order was
entered on July 6.
On July 22 the EPA filed its mot‘on for stay pending
appeal, and on August 5 the district court stayed com-
pliance with that portion of its order that required the
EPA to return to Ced’s copies of documents that were
inspected pursuant to the administrative search warrant.
On August 31 the EPA filed its notice of appeal to this
court.
On November 1 the district court (apparently viewing
its order of August 5 as merely an interim order) entered
a second order with respect to the EPA’s motion for stay
pending appeal, this time denying the motion but per-
mitting the EPA to retain the copies of Ced’s documents
pending the appeal, without using them in any way. At-
tached to the order was a supplemental memorandum
opinion which did not address itself to the EPA’s motion
for a stay but instead set forth additional grounds in sup-
7a
4 No. 83-2608
port of its order of July 1 granting a permanent injunc-
tion. The additional grounds took the form entirely of con-
clusions of law; there were no new findings of fact.
In this appeal the EPA contends that the district court
erroneously determined that the EPA had no authority
under section 114(aX2XB) of the Act to inspect and copy
Ced’s business records and that the district court ex-
ceeded its jurisdiction by issuing a supplemental memo-
randum opinion amending its previous order after the
EPA had filed its notice of appeal.
II
Because it affects the scope of our review, we consider
first the question whether the district court exceeded its
jurisdiction in issuing the supplemental memorandum opin-
ion on November 1, nearly four months after judgment
was entered and two months after the EPA filed its
notice of appeal.
As the EPA points out, there is a general rule that the
filing of a notice of appeal divests the district court of
jurisdiction over the matters appealed. Lenard v. Argen-
to, 699 F.2d 874, 898 (7th Cir.), cert. denied, 104 S. Ct.
69 (1983); United States v. Bastanipour, 697 F.2d 170, 173
(7th Cir. 1982), cert. denied, 103 S. Ct. 1790 (1983);
McClatchy Newspapers v. Central Valley Typographical
Union No. 46, 686 F.2d 731, 734 (9th Cir.), cert. denied,
103 S. Ct. 491 (1982). There are exceptions for certain ac-
tions — to preserve the status quo pending the ap-
peal, United States v. El-O-Pathic Pharmacy, 192 F.2d
62, 79 (9th Cir. 1951), or to assist the court of appeals
in its determination. United States v. Lafko, 520 F.2d 622,
627 (3d Cir. 1975).?
1 The rule does not operate where there is a purported appeal
from a non-appealable order. United States v. Bastanipour, 697
F.2d 170, 173 (7th Cir. 1982), cert. denied, 103 S. Ct. 1790 (19838).
Even though there is no judgment of record, the order of perma-
(Footnote continued on following page)
8a
No. 83-2608 5
We are persuaded that none of the exceptions to the
rule is applicable here. Even if the district court was
motivated by a desire to assist this court in its determina-
tion by stating additional conclusions of law on the basis
of which this court might affirm the order, the assistance
in this case came too late.? The filing of a notice of ap-
peal sets the appellate clock running, and the parties and
the clerk of the court become subject to deadlines imposed
by the rules. The parties to an appeal are entitled to have
a stable set of conclusions of law on which they can rely
in preparing their briefs. The district court issued its sup-
plemental memorandum opinion only a week before ap-
pellant EPA’s opening brief was due, making it necessary
for the EPA to prepare a supplemental brief and appen-
dix and requiring the preparation of a supplemental record
on appeal.
The district court stated at the hearing on the EPA’s
motion for stay pending appeal that because of the issues
raised the court would treat it “in effect, as the equivalent
1 continued
nent injunction purports to be a final adjudication of the merits,
and both parties founded appellate jurisdiction on 28 U.S.C. § 1291.
We take it that they have waived the requirement of Rule 58 that
a judgment be entered on a separate document. See Bankers Trust
Co. v. Mallis, 485 U.S. 381, 384-85 (1978).
We note also that the district court entered its final order before
the EPA had filed an answer. Although such procedure is ir-
regular, the EPA did not assign it as error, and our review of
the transcripts satisfies us that the EPA’s position on the matters
raised in the complaint was adequately presented to the district
court and to Ced’s. Because of the posture in which we find this
matter and the finality of the district court’s order, we do not
view the absence of an answer in this case as a barrier to our
review under 28 U.S.C. § 1291.
2 We note in ing that the supplementation of findings of fact
is governed by Fed. R. Civ. P. 52tb), and the effect of a Rule 52(b)
motion on the time for appeal is governed by Fed. R. App. P.
4(aX4). Since the district court did not make any new or amended
findings of fact in its supplementary memorandum opinion, Rule
52(b) does not apply.
9a
6 No. 83-2608
of a motion to reconsider.” Transcript of Hearing, July
22, 1988, at 5. Under Rule 4(aX4) of the Federal Rules
of Appellate Procedure, a timely motion under Rule 59
of the Federal Rules of Civil Procedure postpones the
time for appeal until the entry of an order granting or
denying the motion, and a notice of appeal filed before
the disposition of the motion has no effect. For purposes
of Rule 4(a), a motion to reconsider is treated as a Rule
d%e) motion. Lenard ». Argento, 699 F.2d 874, 898 (7th
Cir.), cert. denied, 104 S. Ct. 69 (1983). But even if we
view the EPA’s motion to stay as a motion to reconsider,
and thus as equivalent to a Rule 5%e) motion, it was clear-
ly out of time. Rule 5%e) sets a limit of ten days after
entry of judgment, and the EPA’s motion was filed later.
Rule 4(aX4), therefore, does not apply.
Accordingly, the district court’s supplemental memoran-
dum opinion of November 1, 1983 is vacated. We thus
need not consider the EPA’s assignments of error relat-
ing to that opinion.
III
A
We come now to the central issue in the case: whether
the EPA had authority to carry out its inspection and
copying of Ced’s records. The EPA bases its assertion
of authority over Ced’s on the premise that Ced’s is a
“person .. . subject to any requirement of the Act,”
within the meaning of section 114(aX1).3 Specifically, the
3 Section 114(aX1), as codified at 42 U.S.C. § 7414(aX1), reads in
pertinent part as follows:
(1) The Administrator may require any person who owns or
operates any emission source or who is subject to any require-
ment of this chapter (other than a manufacturer subject to the
provisions of section 7525(c) or 7542 of this title) with respect
to a provision of subchapter II of this chapter to (A) estab-
lish and maintain such records . . . as he may reasonably re-
quire...
(Footnote continued on following page)
10a
No. 83-2608 7
EPA asserts, Ced’s is subject to section 203(a), which
enumerates certain prohibitions. Ced’s denies that it is
subject to section 203(a) or to any other requirement of
the Act.4 We agree with the EPA.
Section 203(a) begi Pug following acts and the caus-
henge Ad .” 42 U.S.C. § 7522(a) (em-
phasis added) oun (3XB) reads:
for any person e in the business of repairing,
servicing, selling, leasing, or trading motor vehicles
or motor vehicle engines, or who operates a fleet of
motor vehicles, knowingly to remove or render in-
operative any device or element of design installed
on or in a motor vehicle or motor vehicle e in
compliance with regulations under this subchapter
—— its sale and delivery to the ultimate pur-
chaser.
= § 7522(aX3XB). Ced’s, along with everyone else, is
deni is Gaba by section 203(a) from causing any act
in subsection (3XB). Compliance with this pro-
hibition is a requirement of the Act; therefore, Ced’s i
subject to a requirement of the Act.
Ced’s argues that it is not subject to section 203(a) be-
cause the of Test does not constitute
causing an act prohibited by section 203(aX3XB). Test
3 continued
The exception for certain manufacturers is irrelevant
in the nt context, and we shall not take further notice of
it. In we think that the hrase “with respect to a provi
sion of subchapter II of this chapter” has been in the
Code. ing to the technical amendment that its in-
sertion, it aie fhe usc within
4 Although the district court did not address itself to this issue
oe eee a on 1, Ced’s raised it in proceed-
ings before the district court both parties have discussed it
in their briefs to this court. ’ Accordingly, we consider it here.
lla
- No. 83-2608
Tubes, Ced’s contends, have perfectly legal uses; not
every use violates that prohibition. Test Tubes can be per-
pongo poe by automobile Masood , my own
cars y auto e repairmen temporarily for the pur-
pose of veri the need to replace the catalytic con-
verter, all without ae any ‘any prohibition of the Act.
The mere fact that Ced’s actures and sells Test
Tubes thus does not pa ine inference that it is caus-
ing anyone to install a Test Tube unlawfully. This
ment fails because it confuses being subject to the
with being in violation of the Act. Ced’s is subject to the
Act because the Act prohibits Ced’s from causing an act
prohibited in section 203(aX3XB); whether Ced’s has ac-
tually caused such a prohibited act, or whether there is
even probable cause to think that Ced’s has done so, is
not pertinent.
Ced’s argues further that the prohibition against caus-
ing an act prohibited in section 203(aX3XB) applies only
to the persons identified in that section: any person en-
in the business of repairing, servicing, selling, leas-
ing, or trading motor vehicles or motor vehicle engines,
or who —" a fleet of motor vehicles. It is clear that
the eo ition against knowingly removing antipollution
them e applies only to per-
sons poy the identified class. But the pines B of the stat-
ute gives no reason to ee ee ition against
causing such a prohibited act applies only to persons in
the same class. Congress yaa ve written in such a
— but it did not, and we decline to supply it
ere.
Ced’s argues finally that Congress has recognized that
Ced’s does not presently fall within the “caus provi-
sion of section 203(a), i e ean Air
Act Amendments of 1982 made s expressly subject
to section 203(a).5 But the fact that proposed legislation
5 According to the proposed amendment, section 203(aX3) was to
be supplemented with the following prohibition:
(Footnote continued on following page)
12a
No. 83-2608 9
introduces new prohibitions to which Ced’s would be sub-
ject does not tend in the slightest to show that Ced’s was
in no way covered by the existing prohibitions.
There is support in the legislative history of the Clean
Air Act ts of for the conclusion that Ced’s
is subject to the requirements of the Act. The 1977 amend-
ments added to the class of persons covered by section
114(a) all persons 7 to any requirement of the Act.
See infra pp. 12-13. Conference Report explained the
effect of the revisions to section 114(a) as follows:
(Tlhe conference agreement permits the Adminis-
trator to enter, inspect, test, or require testing on
the premises (sic: of] any person other than a new
motor vehicle manufacturer in order to carry out and
— - requirements gpd foe th <p
w apply to not iously cov sec-
tion 114, including but not limited to fuel additive
manufacturers, i t —* service stations,
auto parts makers, and refineries. It may be used
for the purpose of assuring compliance with any re-
quirement of the Act (including, but not limited to,
vapor recovery, transportation eontrol, air quality
maintenance plan measures, anti-tampering prohibi-
5 continued
(C) for any n to sell, or offer to sell, any part or com-
ponent intended for use with, or as part of, any motor vehi-
cle, where such person knows, or reasonably should have
the purpose of controiling emissions in compliance .
lations under this title... . _—
House Subcomm. on Health and the Environment, 97th cape 2d
Sess., Draft of Clean Air Act Reauthorization Amendments of 1982
at 81-82 (Comm. Print 1982).
l3a
10 No. 83-2608
tions, MMT restrictions) which does not pertain to
new motor vehicle manufacturers.
Clean Air Conference Report (1977): Statement of Intent;
Clarification of Select Provisions, reprinted in 123 Cong.
Rec. 27070 (1977) (emphasis added). This passage shows
that the Conference Committee regarded auto parts
makers as among the persons covered by the revised sec-
tion 114 and that the authority granted to the EPA could
be used to assure compliance with anti-tampering pro-
hibitions.
Accordingly, we hold that Ced’s is subject to a require-
ment of the Clean Air Act, so as to bring it within the
class of persons subject to the authority granted to the
EPA in section 114(a).
B
In its memorandum oe pgp of July 1, the district court
found that the EPA no statutory authority under sec-
tion 114(a) of the Act to inspect and copy Ced’s business
records, because it had never required Ced’s to keep any
records. “(TJhe Administrator’s authority to enter, inspect
and 3 Ms § 114(aX2) applies only when the Adminis-
trator the person to establish and maintain
records pursuant to its authority under § 114(aX1).” Memo-
randum Opinion of July 1, 1983, at 4. The court reached
this result by analysis of the language of section 114(a).
It noted that section 114(aX1) “authorizes the Adminis-
trator to "e any person who is subject to any re-
quirement of the Act to establish and maintain such
records as the Administrator may require for the purpose
of carrying out any provision of the Act.” Jd. It noted
further that section 114(aX2) “authorizes the Administrator
to enter the premises of ‘such persons’ and have access
to and copy such records.’’® Jd. The court inferred that
* The statute actually says “any records,” not “such records.”
The full text of § 114(aX2) reads:
(Footnote continued on following page)
l4a
No. 83-2608 11
“such persons” refers to D essing required to keep records
under section 114(aX1). From this, and from the fact that
subsection 114(aX1) and 114(aX2) are connected by “and,”
the court concluded that the EPA has authority to inspect
and copy documents only of persons it has previously re-
quired to establish and maintain records. Jd.
The EPA contends that the district court erred in identify-
ing the antecedent of “such persons” in section 114(aX2)(A).
It maintains that “such persons” refers to persons who
own or operate any emission source or who are subject
to any requirement of the Act. Because Ced’s is subject
to a requirement of the Act, the EPA reasons, the EPA
is authorized by section 114(aX2XA) to have a right of
entry to Ced’s premises and by section 114(aX2XB) to have
access to and copy any of Ced’s records.
There is neither any useful legislative history nor any
published decision on this particular issue. Accordingly,
our analysis will focus on the language of the statute. We
think that section 114(aX1) identifies a certain composite
class of persons—those who own or operate emission
sources or who are subject to any requirement of the
Act—and authorizes the Administrator to require any per-
son in that class to do any or all of the five things
enumerated. We think that the phrase “such person” in
section 114(aX2XA) means “any person in the class pre-
viously identified”—those who own or operate emission
6 continued
(2) the Administrator or his authorized representative, upon
presentation of his credentials—
(A) shall have a right of entry to, upon, or through any
premises of such person or in which any records required
to be maintained under paragraph (1) of this section are
located, and
(B) may at reasonable times have access to and copy any
records, inspect any monitoring equipment or method re-
quired under paragraph (1), and sample any emissions which
such person is required to sample under paragraph (1).
lSa
12 No. 83-2608
sources or who are subject to any requirement of the Act.
This is the natural reading of the language. As it appears
from the grammatical structure alone, the intent of sec-
tion 114{a) is to give the EPA authority over a certain
class of persons. Subsection (1) gives the EPA authority
to require any person in the class to do certain things;
subsection (2) gives it authority to do certain things to
any person in the class. There are two subsections be-
cause two different kinds of authority are granted: the
authority to require someone else to do something, and
the authority to do something itself. But the class of per-
sons over which the authority is granted is the same in
both subsections—those persons who own or operate emis-
sion sources or who are subject to any requirement of
the Act. There is nothing to indicate that the class over
whom authority is granted in subsection (2) is limited to
those over whom the EPA has exercised the authority
granted in subsection (1). As we read section 114(a), sub-
section (1) and subsection (2) are independent and co-
ordinate grants of authority over the same class of per-
sons. Our grammatical pine sis of section 114(a) thus in-
clines us to agree with the EPA’s reading and to disagree
with the reading of the district court.
Our interpretation gains additional support from a com-
parison of the language of section 114(a) before the 1977
amendments with the language after. Before 1977 section
114(aX1) began as follows:
The Administrator may require the owner or oper-
ator of any emission source to (A)... .
42 U.S.C. § 1857¢c-%A1) (1976). Section 114(aX2XA) gave
the Administrator
a right of entry to, upon, or through any premises
in which an emission source is located or in which
any records required to be maintained under para-
graph (1) of this section are located... .
Id. § 1857c-HaX2XA) (emphasis added). It appears clear
from this language that the right of entry applied to any
No. 83-2608 13
emission source, not just those whose owners or operators
had been required to do something under section 114(aX1).
The 1977 Clean Air Act Amendments changed section
114(aX1) to begin: |
The Administrator may require any person who owns
or operates any emission source or who is subject
to any requirement of this Act....
Pub. L. No. 95-95, 91 Stat. 776 (1977); Pub. L. 95-190,
91 Stat. 1400 (1977) (technical amendment) (codified as
amended at 42 U.S.C. § 7414(a) (1982)). Section 114(aX2XA)
was amended to read:
a right of entry to, upon, or through any premises
of such person or in which any records required to
a a tained under paragraph (1) of this section are
ocated....
Id. (emphasis added).
It seems evident to us that the effect of these changes
was to expand the class of persons whom the Adminis-
trator can require to do certain things and to expand cor-
respondingly the class of premises to which the Adminis-
trator has a right of entry, so as to inciude all the
premises of all the persons in the expanded class. Before
1977, the Administrator could require the owners and
operators of emission sources to do various things and had
a right of entry to premises where any emission sources
were located. After 1977, the Administrator can require
the owners and operators of emission sources as well as
any person who is subject to a requirement of the Act
to do the same things, and he has a right of entry to the
premises of such persons—the owners and operators of
emission sources and those who are subject to a require-
ment of the Act. The substitution of “of such persons”
for “in which an emission source is located” in section
114(aX2XA) provides no basis for imputing to Congress an
intent to create a new restriction on the right of entry
to include only the premises of persons whom the Ad-
17a
14 No. 83-2608
nnistrator has required to do something under section
114(aX1), where no such restriction was present before.
Accordingly, we hold that the phrase “such persons”
in section 114(aX2XA) refers to any person who owns or
operates any emission source or who is subject to any
requirement of the Clean Air Act, whether or not the Ad-
ministrator has exercised his authority under section
114(aX1) with respect to the person in question. The
district court’s interpretation is therefore erroneous.
C
Ced’s argues finally that the EPA has not required
Ced’s to maintain any records, whereas section 114(aX2XB)
permits the EPA to have access to and copy only records
that it has previously required Ced’s to maintain under
section 114(aX1).7 We find no basis for this restrictive in-
terpretation. We think that the plain language of the Act
authorizes the EPA to copy any records of any person
subject to any requirement of the Act, whether or not
it has previously required the person to maintain records
under the authority granted in section 114(aX1).
Section 114(aX2XB) authorizes three distinct actions. The
Administrator may at reasonable times
—have access to and copy any records;
—inspect any monitoring equipment or method re-
quired under paragraph (1);
—sample any emissions which such person is required
to sample under paragraph (1).
42 U.S.C. § 7414(aX2XB) (emphasis added). The latter two
authorizations are expressly restricted to matters required
under section 114(aX1). There is no such restriction on the
records that may be copied. When two items of a three-
item coordinate list are made expressly subject to the
7 See supra note 4.
18a
No. 83-2608 15
same restriction but the third item is not, it is strong
evidence of legislative intent not to apply the restriction
to the third item.
Our conclusion is further supported by the language of
the preceding subsection, which gives the Administrator
“a right of entry to, upon, or through any premises of
such person or in which any records required to be main-
tained under paragraph (1) of this section are located.”’
42 U.S.C. § 7414(aX2XA) (emphasis added). The inclusion
of the restriction on “‘any records” in subsection (2A)
is further evidence that the exclusion of it in subsection
(2XB) was intentional. If Congress had intended the
records referred to in subsection (2XB) to be confined to
records required to be maintained under section 114aX)),
it could easily have done so by appending to “any rec-
ords” the phrase “required to be maintained under para-
graph (1),” as it had done in the immediately preceding
subsection, or by simply putting “such” in place of “any.”
Ced’s reading of section 114(aX2XB) not only conflicts
with the oo? language of the statute but also imposes
on the EPA an arbitrary and meaningless requirement.
In order to have access to and copy any records kept in
the ordinary course of business, the EPA would first have
to direct the business to maintain them. The function
served by a direction to maintain records that are already
kept in the ordinary course of business is obscure. We
will not interpret a statute to require a meaningless act
as a condition of authority if a more plausible interpreta-
tion is available. We hold that Congress, in enacting sec-
tion 114(aX1), intended to give the EPA authority to re-
quire certain persons to keep certain records not already
kept in the ordinary course of business, and in enacting
section 114(aX2XB) intended to permit the EPA to have
access to and copy any of the records of such persons,
including those previously required to be kept under sec-
wa! 114(aX1) iad those already kept in the ordinary course
of business.
19a
16 No. 83-2608
IV
In support of its grant of a permanent injunction against
the EPA, the district court found that Ced’s would suf-
fer irreparable injury if the EPA carried out its an-
nounced intention of contacting Ced’s customers. While
the parties vigorously argued the issue of irreparable
harm in their briefs, we need not reach that issue here.
One of the requirements for a permanent injunction is that
the plaintiff must have succeeded on the merits of its
claim. Philadelphia Welfare Rights Organization v. O’Ban-
non, 525 F. Supp. 1055, 1057 (E.D. Pa. 1981); Sierra Club
v. Alexander, 484 F. Supp. 455, 471 (N.D.N.Y.), affd
mem., 633 F.2d 206 (2d Cir. 1980). In this case Ced’s has
not succeeded on the merits, because it has failed to es-
tablish any unlawful act on the part of the EPA. Accord-
ingly, the order of the district court granting a perma-
nent injunction against the EPA is reversed and the case
is remanded to the district court with instructions to dis-
solve the injunction and dismiss the complaint.
REVERSED AND REMANDED.
A true Copy:
Teste:
Clerk of the United States Court of
Appeals for the Seventh Circuit
20a
EXHIBIT D
UNITED STATES DISTRICT COURT,
Northern District of Illinois
Eastern Division
Name of Presiding Judge, Honorable John A. Nordberg
Cause No. 83 C 2409 Date Nov. I, 1983
Title of Cause: CED’S INC. etc. v. UNITED STATES
ENVIRONMENTAL PROTECTION AGENCY et al.
Brief Statement of Motion: SUPPLEMENTAL MEMO-
RANDUM OPINION AND ORDER
The rules of this court require counsel to furnish the names
of all parties entitled to notice of the entry of an order and
the names and addresses of their attorneys. Please do this
immediately below (separate lists may be appended).
Names and Addresses of moving counsel:
Representing:
Names and Addresses of other counsel entitled to notice and
names of parties they represent:
Reserve space below for notations by minute clerk
Enter supplemental memorandum opinion and order
amending memorandum opinion and order of July 1, 1983 and
denying defendant’s motion to stay pending appeal.
(DRAFT)
2la
IN THE UNITED StaTEs District CouRT
For the Northern District of Illinois
- Eastern Division
7
CED’S INC., d/b/a PRODUCTS
FOR POWER,
Plaintiff,
- No. 83 C 2409
UNITED STATES ENVIRON-
MENTAL PROTECTION John A. Nordberg
AGENCY and LEE THOMAS. District Judge
Acting Administrator, United States
Environmental Protection
Agency,
Defendants.
J
SUPPLEMENTAL MEMORANDUM
OPINION AND ORDER
This action is before the court on motion of United States
Environmental Protection Agency (“EPA”) for a stay pending
appeal of an injunction order issued against EPA on July 1,
1983. Before addressing ithe merits of EPA’s motion for a stay,
however, some matters raised after issuance of the injunction in
open court and in EPA’s motion for a stay concerning the
court’s initial order of injunction warrant additional discussion.
The court therefore amends its Memorandum Opinion and
Order of July 1, 1983 with the following:
I. Section 114 and Section 203 of the Clean Air Act
First, EPA has asserted in its motion that the court’s
interpretation of Section 114 of the Clean Air Act, 42 U.S.C.
§ 7414, in the July 1, 1983 Memorandum, ignores the plain
language of Section 114. Section 114 provides in pertinent part:
22a
(1) The Administrator may require any person .
who is subject to the requirement of this Chapter .. . with
respect to a provision of Subchapter II of this Chapter to
(A) establish and maintain such records ... and (E)
provide such other information as he may reasonably
require; and
(2) the Administrator ... (A) shall have a nght of
entry to... any premises of such person... and (B) may
at reasonable times have access to and copy any records
EPA argues that the term “such person” as used in
§ 114(a)(2)(A) refers only to the phrase “any person who is
subject to any requirement of this Chapter,” even if that
“person” has not been required to keep records or provide
information under § 114(a)(1). Thus, it is EPA’s position that
it may enter the premises of any person who may be subject to
the Chapter at any time and seize their books and records
without prior notice, regulation or requests for information.
However, EPA’s interpretation does not comport with the
actual limiting language of § 114(a)(1). Section 114(a)(1)
provides that “such persons” means “any person. . . subject to
any requirement of this Chapter... [who is required] to (A)
establish and maintain such records... and (E) provide such
other information as he [the Administrator] may reasonably
require.” By its interpretation, EPA seeks to edit out of the
statute the language limiting the term “any person.” In the July
1, 1983 Memorandum, the court rejected EPA’s interpretation
of § 114, and found that the term “such persons” refers to
persons the Administrator may require to establish and main-
tain records and provide such other information as he may
reasonably require under § 114(a)(1). The court therefore
concluded that EPA could not enter and inspect under
§ 114(a)(2) without some type of pnor regulation or request
for information. The court adheres to its initial interpretation of
$114.
23a
However, even if EPA were correct—that the term “such
person” refers to any person subject to any provisions of the
Chapter—§ 114(a) still does not provide authonty for EPA’s
action, because CED’s was not a person “subject to” any
requirement of the Chapter. EPA has asserted that CED’s is
“subject to” § 203 of the Chapter, 42 U.S.C. § 7522, because it
allegedly “causes” violations of § 203 by manufacturing test
tubes knowing they will be used in a manner prohibited in
§ 203. Section 203 is a peculiar statute in that it only prohibits
the replacement of catalytic converters by certain specified
persons, such as car manufacturers and car repair shops. The
statute does not prohibit the manufacture or sale of test tubes,
and, more importantly, it does not prohibit individuai car
owners from purchasing test tubes and permanently replacing
the catalytic converters on their own cars with the devices. In
addition, car repair shops can legally install the devices on a
temporary basis for testing and repair purposes. Thus, all the
devices manufactured and sold by CED’s could legally be
purchased and used by individual car owners and by car repair
shops acting in compliance with the law. Since the statute
permits such widespread use of the device, CED’s cannot be
said to be “causing” violations of § 203 merely by manufac-
turing and selling the devices.
Moreover, the term “causing” in § 203 must be interpreted
in accordance with the intent of Congress, and the plain
language of this section clearly prohibits only specified persons
from installing the devices. To interpret the term “causing” to
expand the persons liable for violations under the narrowly
drawn statute far beyond the persons specified in § 203 would
run contrary to the manifest intent of Congress. Congress could
not have intended to impose liability on persons through such a
circuitous “back door” route. Congress could have prohibited
the manufacture and sale of the test tubes, and it could have
prohibited the installation of the devices on a permanent basis
by any person, but instead Congress chose to limit the statute’s
24a
application to car manufacturers and certain other specified
persons. These specifically limited prohibitions in the statute
evince a clear Congressional intent not to include manufacturers
of the devices or individual car owners in the proscription. The
court therefore will not interpret the term “causing” in § 203 to
include these persons in direct contravention of the intent of
Congress.'
Accordingly, the court concludes that CED’s does not
“cause” violations of § 203 merely by manufacturing and
selling test tubes. Since EPA has not argued that CED’s has
directly violated § 203 or any other provision of the Clean Air
Act, CED’s is not a “person subject to any requirement of the
Chapter.”2 Therefore, even under EPA’s interpretation of the
term “such persons” in § 114, this section does not provide a
statutory basis for EPA’s seizure of CED’s records.?
‘ Interestingly, EPA has stated that it supports an amendment of
§ 203 presently under consideration by Congress which would prohi-
bit the manufacture and sale of test tubes. EPA thus apparently
admits indirectly that amendment of § 203 is necessary to reach test
tube manufacturers like CED’s, yet they ask this court to hold that
§ 203 in its present form already prohibits the manufacture and sale of
test tubes.
2To the extent that this analysis may be considered to be
inconsistent with the court’s statement in the July |, 1983 Memo-
randum that EPA perhaps could have required CED’s to produce the
seized records under § 114 if it had followed the appropriate proce-
dures, that opinion is modified to be consistent with this opinion.
3 EPA also asserted in its brief that the court’s interpretation of
$114 “creates a significant anomaly in the statute” by prohibiting
EPA from inspecting records it could require CED’s to produce
without a warrant under §114(a)(1)(E). Since the court has
concluded that CED’s is ,not subject to §203 of the Act,
§ 114(a)(1)(E) cannot provide a statutory basis for EPA’s seizure.
However, even if CED’s were subject to § 203, § 114 is not applicable
in this case. Section 114(a)(1) grants the Administrator power to
require any person who is subject to any requirement of the Act to
provide specified types of information, including, under subsection
Footnote continued on following page
25a
IL. Irreparable Harm
EPA has also objected to the court’s finding of irreparable
harm, arguing that it was based solely on a finding of harm to
CED’s business and that there is no evidence in the record to
support this finding. Because the court’s determination of
irreparable harm in the July 1, 1983 Memorandum was made
in the context of applying the factors to be weighed in
exercising equitable jurisdiction, a clarification is in order. The
court’s finding of irreparable harm in this case was based both
on the obvious harm to CED’s business from EPA’s actions and
on EPA’s violation of CED’s Fourth Amendment rights. EPA
acted without statutory authority in entering CED’s premises
and seizing its business records. It has not been disputed that
CED’s has a reasonable expectation of privacy in its internal
business records stored in its offices. By seizing and copying
these records without statutory or other authority, EPA has
clearly made an unreasonable search in violation of CED’s
Fourth Amendment rights.‘ This finding of constitutional viola-
Footnote continued from preceding page.
(E), “such other information as he may reasonably require.” In this
case, however, EPA has not “reasonably required” CED’s to produce
anything, either by regulation or by less formal means. EPA made no
requests of any kind for information from CED's. EPA simply
obtained a warrant, entered CED’s property and seized its records. It
is clear from the plain language of § 114(a)(1)(E) that EPA must
make a “reasonable request” to lawfully obtain information under
this subsection. Since EPA made no such “reasonable request,” EPA
cannot rely on § 114(a)(1) to justify its seizure of CED’s records.
EPA’s argument that the court’s interpretation of § 114(a) creates an
anomaly in the statute is therefore without merit.
“The court notes that CED’s is not part of a highly regulated
industry in which administrative searches without warrants may be
reasonable. See. ¢.g., Donavan v. Dewey, 452 U.S. 594, 101 §.Ct. 2534
(1981); Marshall v. Barlows, Inc., 436 U.S. 307, 98 S.Ct. 1816
(1978). In fact, CED's had not been regulated in any way by EPA
prior to the April 6, 1983 seizure of CED’s records.
26a
tion was implicit in the court’s discussion of the equitable
factors justifying exercise of the court’s equitable jurisdiction to
enter an injunction. The use of this illegally seized information
alone is sufficient to constitute irreparable harm, and this
constitutional harm, combined with the harm to CED’s business
from EPA’s use of the records, clearly justifies issuance of an
injunction.
EPA has argued that there is no evidence in the record to
support a finding of harm to CED’s business. The court first
notes that, although it offered to hear testimony from CED's
officers or the Government at two hearings on this matter, both
parties declined to present such testimony. CED’s took the
position that the constitutional violation alone established
irreparable harm per se. In a hearing on July 22, 1983, EPA
concurred with CED’s that, if constitutional harm were found,
there would be irreparable harm per se and thus no need for
specific factual findings. Based on this statement, the court did
not require additional testimony on this point. Since the court
has found that CED’s suffered constitutional harm from EPA’s
illegal search and seizure, EPA’s objection that there is no
evidence in the record of harm to CED’s business is no longer
viable.5 In any event, however, in view of the nature of CED’s
business, and based on EPA’s statement that it plans to use the
information seized to contact CED’s customers and the verified
allegations of the complaint, the court reasonably concluded
5 EPA’s objection that it was improperly denied the opportunity
to file a written answer and thereby created an issue of fact on the
question of irreparable harm is not well taken. EPA agreed to handle
this matter as a motion for permanent injunction so that the legal
issues involved could be finally resolved expeditiously. The court has
attempted to create as complete a record as possible for any appeal,
and has granted both parties numerous opportunities to supplement
the record so that a final determination could be made by this court,
and, if necessary, by the Court of Appeals. In any event, since the
court has found that CED’s Fourth Amendment rights were violated
by EPA, and that this violation alone constitutes irreparable harm.
EPA's objection is obviated.
27a
that CED’s business will suffer irreparable harm from EPA
contact with its customers. The court therefore adheres to its
finding of irreparable harm, based both on EPA’s violation of
CED’s Fourth Amendment rights, and on the harm which
would be caused to CED’s business by EPA’s intended use of
the illegally seized materials.6
MOTION FOR STAY PENDING APPEAL
EPA has moved for a stay of the injunction pending
appeal. In deciding a motion for a stay pending appeal, the
court must consider: (1) whether the appellant has made a
showing of likelihood of success on appeal, (2) whether
appellant has demonstrated a likelihood of irreparable injury
absent a stay, (3) whether a stay would substantially harm
other parties to the litigation, and (4) where the public interest
lies. Adams v. Walker, 488 F.2d 1064 (7th Cir. 1973).
® The recent decision in Mobil Oil Corporation v. United States
Environmental Protection Agency, No. 83-1047 (September 14, 1983),
has been cited to the court as analogous to this action. However, the
Mobil case is readily distinguished from this case on the basis of the
facts and the law applied. Under the regulatory scheme created under
the Clean Water Act, Mobil Oil had sought and was granted a permit
to discharge certain pollutants into a river. Section 308 of the Clean
Water Act, 33 U.S.C. § 3138, specifically authorizes EPA to enter any
premises in which an effluent source is located and sample any
effluents which the owner is required to sample under the Act. Unlike
CED's in the instant action, Mobil was unquestionably subject to the
Act, having applied for and been issued a permit to discharge
pollutants. Further, § 308 explicitly authorized the entry onto Mobil’s
premises and the sampling of effluents. As noted by the court, there
was no question that EPA had the right to enter Mobil’s refinery; the
only question was, once EPA entered the premises, did it have the
power to collect samples of untreated wastes. The decision does not
provide any guidance for resolving the issues in this case of whether
§ 114 of the Clean Air Act authorizes entry and seizure without prior
regulation or notification, and whether CED’s is subject to § 203 of
the Act.
28a
EPA has failed to demonstrate that a stay pending appeal
is appropriate in this case. First, based on the discussion above
and in the July 1, 1983 Memorandum, the court finds that there
is not a substantial likelihood that EPA will succeed on appeal.
Second, EPA has not shown that it will be irreparably harmed
if a stay is not granted. If EPA succeeds on appeal, its
investigation will merely have been delayed. Moreover, the
limited injunction issued by the court limits only EPA’s use of
the illegally seized records; it does not prevent EPA from using
all legal means available to it to continue its investigation.
Third, as discussed above and in the July |, 1983 Memo-
randum, the use of the information seized by EPA will cause
substantial harm to CED’s business. Finally, the public interest
is well-served when government agencies are prevented from
using materials seized in violation of their empowering statutes
and the Constitution. The court therefore denies EPA’s motion
for a stay, except that: by agreement of both parties, EPA need
not return to CED’s the copies of CED’s records pending
appeal, and these documents may not be used in any way by
EPA or any other government body during the pendency of the
appeal.
ENTER:
/s/ JOHN A. NORDBERG
John A. Nordberg
United States District Judge
DATED: November 1, 1983.
29a
EXHIBIT E
UNITED States District Court,
Northern District of Illinois
Eastern Division
Name of Presiding Judge, Honorable John A. Nordberg
Cause No. 83 C 2409 Date July 1, 1983
Title of Cause: CED’S INC. v. UNITED STATES
ENVIRONMENTAL PROTECTION AGENCY
Brief Statement of Motion’ MEMORANDUM OPINION
AND ORDER
The rules of this court require counsel to furnish the names
of all parties entitled to notice of the entry of an order and
the names and addresses of their attorney. Please do this
immediately below (separate lists may be appended).
Names and Addresses of moving counsel:
Representing:
Names and Addresses of other counsel entitled to notice and
names of parties they represent:
Reserve space below for notations by minute clerk
Enter memorandum opinion and order. (DRAFT) De-
fendant’s motion to dismiss is denied, and plaintiff's motion for
a permanent injunction is granted.
Nordberg, J. /s/
30a
IN THE UNITED STATES DistRICT COURT
For the Northern District of [linois
Eastern Division
.
CED’S, INC., d/b/a PRODUCTS
FOR POWER
Plaintiff,
v.
UNITED STATES ENVIRONMEN- | 0: 83 € 2409
TAL PROTECTION AGENCY John A. Nordberg
and LEE THOMAS, Acting District Judge
Administrator, United States
Environmental Protection
Agency,
Defendants.
4
MEMORANDUM OPINION AND ORDER
This action is before the court on motion of plaintiff for a
permanent injunction, and on motion of defendant to dismiss
plaintiff's complaint. For the reasons set forth below, defend-
ant’s motion to dismiss is denied, and plaintiff's motion for a
permanent injunction is granted.
Facts
CED’, Inc. (““CED’S”’), the plaintiff in this action, filed its
complaint for injunctive relief on April 7, 1983 to enjoin the
defendant, the United States Environmental Protection Agency
(“EPA”), from executing, or using any information obtained
through the execution of, a civil inspection warrant issued by a
United States Magistrate. Plaintiff also filed, concurrently with
ee
3la
the complaint for injunctive relief, a notice of appeal from the
Magistrate’s denial of plaintiff's motion to quash the adminis-
trative warrant. The complaint for injunction relief and the
appeal of the Magistrate’s decision were consolidated before
this court.
CED’S operates a manufacturing facility in Addison, II-
linois, at which a product known as a “Test Tube” is manufac-
tured and sold. The test tube is a device which can be installed
in the exhaust system of automobiles to replace catalytic
converters, for testing and other purposes. - CED’S sells test
tubes primarily to warehouse distributors, not to retailers or the
general public. The test tubes are marketed nationally by
CED’S, and are sold in every state except California, where sale
of the device is prohibited.’
On April 5, 1983, EPA filed an application for an adminis-
trative warrant with a United States Magistrate in this judicial
district. The magistrate issued the civil inspection warrant
authorizing a complete inspection of CED’S facility, including
the review and copying of virtually all of CED’S business
records. On April 6, 1983, EPA agents entered CED’S facility
pursuant to the warrant, and examined, inspected, and copied
the documents specified in the warrant. As the inspection was
being carried out, CED’S filed with the magistrate a motion to
quash the warrant. After a hearing that day, CED’S motion to
quash was denied by the magistrate.
On April 7, 1983, CED’S filed its complaint for injunctive
relief and the notice of appeal of the magistrate’s order with
this court. An emergency hearing was held that day by this
‘It is important to note that the sale of test tubes can be for
entirely legitimate purposes under § 203 of the Clean Air Act, 42
U.S.C. § 7522, as the EPA admits in their memorandum. While § 203
prohibits automobile manufacturers and automobile repair shops
from permanently replacing catalytic converters with test tubes,
current federal legislation does not prohibit individuals from installing
the devices permanently on their own automobiles. Therefore, the
manufacture and sale of test tubes are not prohibited under the Act.
32a
court on plaintiff's motion for a temporary restraining order and
preliminary injunction. Defendant filed a motion to dismiss the
complaint immediately before the hearing. No ruling was
made on either motion at the hearing, pending briefing of issues
by the parties. An interim agreement was reached by the
parties, in which EPA agreed to. refrain from contacting CED’S
customers, and from using the information seized other than to
review, interpret and collate it.
On motion of the plaintiff, the court stated its intention at a
hearing on May 6, 1983 to treat plaintiffs motion as a motion
for permanent injunction, since the same basic legal question
would be dispositive of both a preliminary and permanent
injunction, and no purpose would be served by delaying the
final decision on the merits.
MOTION FOR PERMANENT INJUNCTION
The primary issue raised by plaintiff in their complaint for
injunctive relief is whether EPA has any statutory authority to
inspect CED’S business records. Although it is well established
that the scope of an administrative agency’s investigative power
is broad, United States v. Morton Salt Co., 338 U.S. 632, 70
S.Ct. 357 (1950), this investigatory power is not limitless. The
Fourth Amendment demands that the investigation be con-
ducted pursuant to legitimate Congressionally authorized pur-
poses, and that the agency must follow all the statutory
procedures imposed by Congress. United States v. Powell, 379
U.S. 48, 57-58, 85 S.Ct. 248 (1964); Marshall v. Chromalloy
Am. Corp., 589 F.2d 1335, 1343 (7th Cir. 1979).
EPA bases its authority to inspect on sections 114(a) and
203(a) of the Clean Air Act, 42 U.S.C. § 7414(a), § 7522(a).
Section 203(a) prohibits the removal, and the causing thereof,
of pollution control devices such as catalytic converters from
motor vehicles by specified persons. Section 114 of the Act
allows the EPA to inspect the records of businesses in specified
33a
circumstances to enforce other provisions of the act, such as
section 203. EPA asserts that, by manufacturing and selling test
tubes, CED’S may be violating § 203 by “‘causing” persons to
remove catalytic converters from automobiles and replace them
permanently with test tubes. This alleged violation of § 203,
asserts EPA, permits them to inspect CED’S records under
§ 114(a) of the Act. CED’S argues that § 114(a)(2) gives the
EPA authority to inspect business records only when it has
required the businesses in question by regulation to establish
and maintain such records pursuant to its authority under
§ 114(a)(1).
Section 114
Section 114(a)(1) authorizes the Administrator to require
any person who is subject to any requirement of the Act to
establish and maintain such records as the Administrator may
require for the purpose of carrying out any provision of the Act.
Section 114(a)(2) then authorizes the Administrator to enter
the premises of “such persons” and have access to and copy
such records. EPA asserts that its right to have access to and
copy records under § 114(a)(2)(B) is independent of its
authority to require persons to maintain and establish records
under § 114(a)(1). However, it is clear from the use of the
conjunctive “and” between § 114(a)(1) and § 114(a)(2), and
from the specific referral in § 114(a)(2) to “such persons”—
i.e., those persons required to keep records under
§ 114(a)(1)—that the Administrator’s authority to enter, in-
spect and copy in § 114(a)(2) applies only when the Adminis-
trator has required the person to establish and maintain records
pursuant to its authority under § 114(a)(1).
Although EPA perhaps could have taken action to require
CED’S to maintain and establish records under § 114(a), EPA
has clearly failed to do so. Therefore, EPA has no authority
under § 114(a) to enter and inspect the records of CED’S.
Since EPA has not based its inspection of CED’S records on any
34a
other statutory or other authority, and the court has not
uncovered any other authority for EPA’s action, the court must
conclude that EPA has exceeded the scope of its authority
under the Act by seizing the business records of CED’S.
It should be noted, however, that the court’s interpretation
of § 114 does not in any way prohibit EPA from taking future
action with regard to CED’s pursuant to §114 or other
provisions of the Act. EPA is merely prohibited from sidestep-
ping the Congressionally imposed requirements in § 114 for
exercising its power to enter and inspect records.
Equitable Jurisdiction
Having found that an administrative agency has unlaw-
fully seized property, a district court has inherent power under
its “equitable jurisdiction” to order the return of the property,
even though no regulatory, enforcement or prosecutorial action
has been filed. Mr. Lucky Messenger Service, Inc. v. United
States, 587 F.2d 15 (7th Cir. 1978); Hunsucker v. Phinney, 497
F.2d 29 (Sth Cir. 1974), cert. denied, 420 U.S. 927 (1975);
Richey v. Smith, 515 F.2d 1239 (Sth Cir. 1975). Although it is
not often invoked, courts have discretion to exercise this
jurisdiction after balancing equitable considerations. Jd.
In this case, equitable factors weigh heavily in favor of
exercising the court’s equitable jurisdiction to enjoin EPA.
First, the court finds that CED’S will be irreparably harmed by
EPA’s use of the illegally seized information. EPA has
announced its intention to contact CED’S customers. This
action will undoubtedly result of necessity in intimidation of
customers, loss of sales, and damage to CED’S goodwill,
causing serious and irreparable damage to CED’S business.?
2As noted above, § 203 of the Act does not prohibit the
manufacture and sale of test tubes, and it does not prohibit individ-
uals from permanently replacing catalytic converters on their own
automobiles with these devices. Thus, CED’s manufacture and sale of
test tubes can be for entirely legal purposes under the Act.
35a
Further, CED’S has no adequate remedy at law. The injury to
its business caused by EPA contacting customers would be
irreversible, and would be almost impossible to calculate in
monetary terms.
In addition, there is an important public interest in pre-
venting governmental enforcement agencies from overstepping
their authority and intruding on the important constitutional
right to be free from unreasonable searches and seizures, a right
extended to include commercial buildings as well as private
buildings. Marshall v. Barlows, 436 U.S. 307, 98 S.Ct. 1816
(1978). It is in the public interest to require federal agencies to
follow Congressionally mandated procedures for exercising
their powers, particularly when those powers, once properly
invoked, have been construed very broadly. EPA’s ability to
enforce the Clean Air Act, and thereby further the public
interest in protecting the environment, is not thwarted by the
court’s limited ruling in this case. The EPA is free to follow the
prescribed procedures of § 114 of the Act, or to attempt to
enforce § 203 directly through its powers under § 204, 42
U.S.C. § 7523.
On balance, the court finds that exercise of its equitable
jurisdiction to order injunctive relief is appropriate. The court
therefore grants plaintiff's motion for permanent injunction,
and for the same reasons, denies defendant’s motion to dismiss.
Accordingly, the court orders as follows:
36a
ORDER OF PERMANENT INJUNCTION
IT IS ORDERED, based on the above-stated findings,
that:
1. The United States Environmental Protection Agency
(“EPA”), and all those in active concert or participation with
EPA, are hereby enjoined and restrained fiom any use of
materials obtained from CED’S, Inc. (“CED’S”) through
execution of the administrative warrant issued April 5, 1983.
2. EPA is ordered to return to CED’S all such materials,
including any copies made therefrom, obtained from CED’S
through execution of the administrative warrant.
ENTER:
/s/ JOHN A. NORDBERG
John A. Nordberg
District Judge
Dated: July 1, 1983
37a
EXHIBIT F
Filed in Clerk’s Office
U.S.D.C.—Atlanta
Sep 21, 1983
Ben H. Carter, Clerk
By:
Deputy Clerk
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
NATIONAL MUFFLER MANU-
FACTURING COMPANY, INC..
Plaintiff,
vs. Civil Action
No. C83-929A
UNITED STATES ENVIRONMEN-
TAL PROTECTION AGENCY,
Defendant. |
ORDER
This action, involving allegations of violations of plaintiff's
rights under the Fourth Amendment to the United States
Constitution, is before the court on plaintiffs motion for a
preliminary injunction and motion for a temporary restraining
order. A hearing was held on these motions on May 13, 1983.
For the reasons set forth below, plaintiffs motions for a
preliminary injunction and temporary restraining order are
DENIED.
38a
L.
Plaintiff produces engine and exhaust system parts for
automobiles. One of the products produced by plaintiff is a line
of testing pipes used to test the efficiency of catalytic converters.
The catalytic converter is the primary emission control device
used by automobile manufacturers to assure that new cars meet
exhaust emission standards imposed by the Clean Air Act.
Since the converter is a “device or element of design” installed
in a motor vehicle in compliance with regulations under Title II
of the Clean Air Act, causing the removal of a converter and/or
its replacement with a testing pipe is a violation of Section
203(a)(3)(B) of the Clean Air Act, 42 U.S.C. § 7522(a)-
(3)(B). Plaintiff does not install the testing pipes, but rather
manufactures and sells them to various retail businesses.
On or about April 5, 1983, defendant entered onto plain-
tiffs premises, searched the premises, and seized several docu-
ments. The search and seizure was undertaken pursuant to a
warrant and continued for several days.
The magistrate issued the administrative search warrant
pursuant to 42 U.S.C. §§ 7414(a), 7522(a), stating that prob-
able cause existed for the issuance of the warrant for the entry,
inspection, collection, and copying of information and records
at plaintiff's premises. The warrant specified that access was to
be directed to records showing or relating to the marketing,
sale, or distribution of testing pipes and other catalytic con-
verter replacement pipes during the period from January |,
1979, through December 31, 1982. It also provided that in the
event that any records are copied off the plaintiff's premises,
such records shall be properly receipted for and returned within
72 hours after removal from the premises. Finally, the warrant
indicated that the duration of the inspection was not to exceed
ten days.
39a
Plaintiff alleges that defendant is using the information
from the search of its premises and seizure of its documents by
contacting its customers and prospective customers, suggesting
to them that plaintiff is engaged in criminal activity, threatening
them with criminal prosecution, and offering them immunity
from such prosecution in return for testimony against plaintiff.
Plaintiff contends that as a result of defendant’s conduct, it has
suffered loss of business and damage to its reputation and good
name.
In its motion for a preliminary injunction and temporary
restraining order, plaintiff argues that it is not subject to the
provisions of the Clean Air Act specified in the administrative
search warrant, and therefore the search of its premises and
seizure of its documents was without statutory authority in
violation of its fourth amendment rights. Plaintiff contends that
defendant should be enjoined from making any use of any
records obtained by means of the warrant. Specifically, plain-
tiff seeks injunctive relief that defendant be enjoined from the
following: (a) entering plaintiffs premises for the purpose of
inspecting, collecting, photographing, or copying materials,
documents, or papers regarding testing pipes; (b) using, retain-
ing, copying, or transmitting any portion of plaintiff's records;
(c) contacting any customer of plaintiff whose identity was
learned by defendant; and (d) making untrue, disparaging,
false, or misleading statements, or omitting to state a material
fact necessary to make statements made not misleading, to any
person who is a customer, or prospective customer, of plaintiff
with respect to any communication.
IL.
While the scope of an administrative agency’s investigative
power is broad, see Federal Communications Commission vs.
Pottsville Broadcasting Co., 309 U.S. 134, 142-44 ( Frankfurter.
J.), the fourth amendment prohibition against unreasonable
40a
searches and seizures applies to administrative searches as well
as criminal investigations. Marshall vs. Barlow’s, Inc., 436 U.S.
307 (1978).
The application upon which the magistrate issued the
warrant in the instant case stated that there is probable cause to
believe that plaintiff, through the sale, distribution, and promo-
tion of testing pipes to automotive repair facilities, is “causing”
such repair facilities to remove or render inoperative emission
control devices in violation of Section 203(a)(3) of the Clean
Air Act, 42 U.S.C. § 7522(a)(3). In the application, the
defendant presented evidence to show that plaintiff is engaged
in activities which promote the removal of catalytic converters
on motor vehicles and their replacement with testing pipes.
Specifically, the evidence showed the following: (1) More
testing pipes are being made or manufactured than are legally
needed; (2) plaintiff manufactures testing pipes and markets
them aggressively, with some of the marketing containing a
caveat; (3) at some time before 1980, plaintiff advocated
replacing catalytic converters with testing pipes, but that type of
marketing was discontinued; (4) there are possible violations of
the statute by third parties; and (5) testing pipes are lawful for
various vehicles.’ On the basis of this application, Magistrate
Castellani issued the warrant for the entry of plaintiff's premises
and for the inspection, collection, and copying of information
and records. The warrant was issued pursuant to Sections
114(a) and 203(a) of the Clean Air Act, 42 U.S.C. §§ 7414(a),
7522(a).
Section 203(a) prohibits the removal, and the causing
thereof, of pollution control devices such as catalytic converters
from motor vehicles by specified persons. 42 U.S.C. § 7522(a).
Section 114 of the Act allows the Environmental Protection
‘This court’s review of the sufficiency of the information or
evidence for the issuance of a warrant is strictly confined to that
information brought to the magistrate’s attention. West Point-
Pepperell, Inc. vs. Donovan, 689 F.2d 950. 959 «| 1th Cir. 1982).
4la
Agency to inspect the records of businesses in specified circum-
stances to enforce other provisions of the Act, such as section
203. 42 U.S.C. § 7414(a).
Defendant argues that the concept of causation is flexible
and broad enough to allow plaintiff to come within the purview
of section 203(a) and contends that the evidence provided to
the magistrate was sufficient to create a reasonable suspicion?
that plaintiff is causing the removal of emission control devices
in violation of the Clean Air Act.
In order for the magistrate to have made such a finding of
probable cause, two assumptions must have existed: (i)
Through plaintiff's aggressive marketing, testing pipes are being
used in an unlawful manner; and (ii) if testing pipes are being
used unlawfully due to plaintiff's marketing, plaintiff is causing
another to violate the law. Such an analysis is problematic,
however. With removal as the prohibited activity, the court
believes that a more direct cause than the furnishing of a
substitute not itself unlawful is required. This is especially
significant on the facts presented here where plaintiff's advo-
cacy of unlawful replacement in trade journals is stale from an
evidentiary point of view. The company’s advertisements warn
against use of the pipes as replacements for converters. For
probable cause to exist, there must be evidence that the plaintiff
either deliberately caused the removal, see United States vs.
Konofskey, 243 U.S. 440, 443 (1917), or conducted itself in
such a way as to have the inevitable effect of causing, see
Chrysler Corp. vs. United States Environmental Protection
Agency, 631 F.2d 865 (D.C. Cir. 1980), the prohibited activity
—removal. In other words, irrespective of the standard this
court adopts to define the meaning of “cause,” the magistrate
was not provided with sufficient evidence to suspect reasonably
2 See West Point-Pepperell, Inc. vs. Donovan, 689 F.2d at 957-58
(administrative probable cause, based upon specific evidence of an
existing violation, must at least be shown by “a reasonable belief that
a violation has been or is being committed and not upon a desire to
harass the target of the inspection.” ).
42a
that plaintiff is causing another to remove catalytic converters in
violation of the law in light of the fact that the evidence of
plaintiff's advertisements and marketing activity is stale.
Accordingly, the court concludes that the magistrate’s
determination that probable cause existed to issue a warrant on
the basis that plaintiff was causing another to violate the law
was arbitrary. See West Point-Pepperell vs. Donovan, 689 F.2d
950, 959 (llth Cir. 1982) (a magistrate’s probabie cause
determination, while entitled to great deference, is not con-
clusive upon a showing of arbitrariness ).
Plaintiff argues that since the administrative search warrant
is without any lawful basis, defendant should be enjoined from
making any other further entry of its premises or inspection,
collection, or copying of its records. Plaintiff contends that an
injunction is warranted, inasmuch as: (i) It will be irreparably
harmed if defendant is not enjoined by the disruption and loss
of business caused by defendant’s conduct, and the likelihood
of further search and seizure pursuant to this unlawful warrant;
(ii) plaintiff has no adequate remedy at law; and (iii) plaintiff
is engaged in a lawful business and therefore harm in not
granting an injunction would be great, while granting the
injunction would work no hardship to defendant. It is noted
that defendant has returned to plaintiff all of its original records
or documents taken during the search in issue.
At the outset, it is noted that the fourth amendment
protects all citizens and not merely criminal defendants. This
amendment peculiarly protects privacy interests:
The effect of the Fourth Amendment is to put the course of
the United States and federal officials, in the exercise of
their power and authority, under limitations and restraints
as to the exercise of such power and authority, and to
forever secure the people, their persons, houses, papers and
effects against all unreasonable searches and seizures under
43a
the guise of law. This protection reaches all alike, whether
accused of crime or not, and the duty of giving it force and
effect is obligatory upon all entrusted under our federal
system with the enforcement of the laws.
Weeks vs. United States, 232 U.S. 383, 391 (1914). While
these principles are axiomatic, it does not necessarily resolve the
question of what remedies are available to an individual or
corporation whose fourth amendment rights have been vio-
lated. While an individual is entitled to maintain a claim for
damages against the officers who conducted the unlawful
search, Bivens vs. Six Unknown Federal Narcotics Agents, 403
U.S. 388 (1971), and the individual may obtain the return of
the illegally seized property, Go-Bart Importing Co. vs. United
States, 282 U.S. 344 (1931), and the individual may obtain
exclusion of unlawfully seized evidence and its “fruits” from a
trial in which he is a defendant, Mapp vs. Ohio, 367 U.S. 643
(1961); Wong Sun vs. United States, 371 U.S. 471 (1963),
plaintiff contends that a disruption of its privacy interests may
be remedied by an injunction against defendant’s further
copying or using of the records illegally seized.
Initially, the court notes the proposition that once privacy
is ruptured, it cannot be restored for reparation comes too late.
Linkletter vs. Walker, 381 U.S. 618, 637 (1965). As the
Supreme Court stated in United States vs. Calandra:
Questions based on illegally obtained evidence are only a
derivative use of the product of a past unlawful search and
seizure. They work no new Fourth Amendment wrong.
414 U.S. 338, 354 (1974). Therefore, plaintiff errs in its belief
that it is entitled to an injunction due to the fact that the
question presented is not one of rights, but of remedies.
The only continuing interest that plaintiff can assert here is
a property interest. Compare United States vs. Hubbard, 650
F.2d 293 (D.C. Cir. 1980) (pure privacy interests allow for
injunctive relief restraining public access to documents). But.
44a
plaintiff's original documents or records have been returned.
Thus, any property interest that can be asserted is attenuated.
Furthermore, no evidence has been presented that defendant is
using the “fruit” of the illegal search against plaintiff. There is
no allegation of an administrative or civil action against
plaintiff. The defendant may use the information gained in the
investigation of others who may actually be removing con-
verters and replacing them with the pipes. There is ample
evidence that some of plaintiff's customers may be doing that,
but neither they nor the plaintiff may have standing to complain
of this use. See United States vs. Salvucci, 448 U.S. 83 (1980);
Rakas vs. Illinois, 439 U.S. 128 (1978). Simply, there is no
showing of ‘rreparable harm which would necessitate this
court’s utilizing its equitable powers. See generally 11 C.
Wright & A. Miller, Federal Practice & Procedure § 2942, at
368-70 (1973); J. Moore & J. Lucas, Moore’s Federal Practice
1 65.04[2] (2d Ed. 1982).
45a
CONCLUSION
In summary, the court makes two conclusions. First, the
court finds that there was no probable cause to believe that
plaintiff was causing automotive repair facilities to remove or
render inoperative emission control devices in violation of
Section 203(a)(3) of the Clean Air Act, and concludes that the
search and seizure pursuant to the administrative search war-
rant issued by Magistrate Castellani was unreasonable.
Second, as to the remedy for this fourth amendment
violation, the court concludes that an injunction against defend-
ant from making any use of any copies of any information
obtained by means of the warrant is not justified. The original
documents have been returned to plaintiff, and thus any court
order requiring the return of illegally seized property is not
necessitated. Any concern regarding the exclusion of unlaw-
fully seized evidence and its fruits from a trial or proceeding in
which plaintiff is a defendant is not an inquiry proper at this
time. Any damage as a result of the illegal search and seizure is
adequately provided for in a Bivens action. Finally, plaintiff
has no standing to assert defendant’s derivative use of informa-
tion received from the illegal search and seizure.
IT IS SO ORDERED this 15th day of September, 1983.
/s/ J. OWEN FORRESTER
J. Owen Forrester
United States District Judge
46a
EXHIBIT G
UNITED STATES DIstTRICT COURT
Northern District of Illinois
Eastern Division
83M 155
In the Matter of: Warrant of Entry, In-
CED’S. INC. d/b/a spection, Collecting of
PRODUCTS FOR POWER Information, Taking
25 OFFICIAL ROAD | Photographs, and
ADDISON, ILLINOIS Copying of Records
Respondent Pag the Clean Air
ct
TO: THE UNITED STATES OF AMERICA, UNITED
STATES ENVIRONMENTAL PROTECTION
AGENCY, THROUGH ITS DULY DESIGNATED
REPRESENTATIVE OR REPRESENTATIVES, THE
UNITED STATES MARSHALL OR ANY OTHER
FEDERAL OFFICERS:
Application having been made and Paulette B. Peltz
having shown probable cause for the issuance of a warrant for
entry, inspecting, collecting of information, copying of the
records, and inspection and photographing of the other items
described below at the premises known as Ced’s, Inc. d/b/a
Products for Power (hereinafter “Products for Power”), lo-
cated at 25 Official Road, Addison, Illinois.
WHEREFORE, pursuant to the Clean Air Act (Act) as
amended, 42 U.S.C. § 7401 ef seqg., and the regulations there-
under, the United States of America, United States
Environmental Protection Agency (EPA), through its duly
authorized representative or representatives is hereby author-
47a
ized to enter the above-described premises for the purpose of
conducting an administrative inspection pursuant to sections
114(a) and 203(a), respectively. Any duly authorized
Enforcement Officer of the EPA upon presentation of appropri-
ate credentials, is authorized to have access to and inspect and
copy (including copying off premises) records maintained or
stored at the aforementioned location which show or relate to
the marketing, sale, and/or distribution of “test tubes” and
other catalytic converter replacement pipes (hereinafter re-
ferred to as “test tubes”) during the period of January 1, 1979
through December 31, 1982. Said records specifically include
the following regarding test tubes: 1) purchase and sales
receipts, 2) billing invoices, 3) shipment invoices, 4) product
distribution and customer lists, 5) mail order mailing lists, 6)
current inventory and production figure documents, 7) corre-
spondence with purchasers and potential purchasers, 8) memo-
randa and notes regarding telephone and other conversations
with purchasers and potential purchasers, 9) advertising and
marketing surveys and studies, 10) advertising and marketing
materials, 11) memoranda, notes, or other documents written
by company employees or other persons regarding or relating
to the legality of marketing test tubes or installing such devices,
and 12) documents regarding test tube test procedures.
In the event that any records are copied off the premises of
Products for Power said records shall:
(1) be properly receipted for, and
(2) be returned within 72 hours after removal from
the premises.
The inspection will be conducted during normal business
hours, will begin as soon as practicable after issuance of this
warrant, will be completed with reasonable promptness, and
will otherwise be conducted in a reasonable manner.
48a
The duration of this inspection will be of such reasonable
length, but not to exceed ten (10) days, as to enable the
authorized enforcement officers of EPA to satisfactorily com-
plete such inspection pursuant to 42 U.S.C. §§ 7414(a) and
7522(a).
The United States Marshall is hereby authorized to assist
the representatives of the United States Environmental Protec-
tion Agency in such a manner as may be reasonably necessary
to execute this warrant and the provisions contained herein.
A copy of this warrant shail be left at the premises at the
time of the inspection.
A prompt return of this warrant shall be made to this court
showing that the warrant has been executed and that the
inspection has been completed within such reasonable time, not
to exceed ten (10) days from the date of warrant issue.
Dated: This 5th day of April 1983.
/s/ Cart B. SUSSMAN
Carl B. Sussman
United States Magistrate
49a
EXHIBIT H
UNITED STATES District Court
Northern District of Illinois
Eastern Division
In the Matter of: iets for W
; pplication for War-
CED’S, INC. d/b/a rant to Enter, Inspect,
PRODUCTS FOR POWER | Collect Information.
25 OFFICIAL ROAD Take Photographs and
ADDISON, ILLINOIS Copy Records
Respondent
J
TO: THE HONORABLE UNITED STATES DISTRICT
COURT JUDGE FOR THE NORTHERN DISTRICT
OF ILLINOIS
The United States of America, United States Environmen-
tal Protection Agency (hereinafter ““EPA”’), through the below-
mentioned Assistant United States Attorney for the Northern
District of Illinois, hereby applies for a warrant pursuant to
sections 114 and 203(a) of the Clean Air Act (hereinafter
“Act”), 42 U.S.C. § 7414 and § 7522(a), respectively, for the
purpose of conducting an inspection as follows:
To enter to, through and upon the premises of Ced’s, Inc.
d/b/a Products for Power, (hereinafter “Products for Power” ),
located at 25 Official Road, Addison, Illinois, and to inspect,
collect information, take photographs, and copy records as
specified below. Products for Power is engaged in the manufac-
ture, sale, marketing and distribution of test tubes and catalytic
converter replacement pipes (hereinafter referred to as “test
tubes”), devices used to remove and replace the catalytic
converters of motor vehicles in violation of section 203(a), 42
U.S.C. § 7522(a).
50a
Section 203(a), 42 U.S.C. § 7522(a) prohibits any person
from causing a party regulated under section 203(a)(3) to
remove or render inoperative any emission control device or
element of design installed on or in a motor vehicle or motor
vehicle engine. There is probable cause to believe that Products
for Power, through the sale, distribution and promotion of test
tubes to regulated automotive repair facilities is “causing” such
repair facilities to remove or render inoperative emission con-
trol devices in violation of section 203(a)(3) of the Act.
Ms. Paulette B. Peltz, an attorney of the U.S. Environmen-
tal Protection Agency, stated in her affidavit (Attachment A):
|) that an EPA investigation of Lew Smith Muffler & Parts, Inc.
in Covington, Kentucky indicates that numerous Products for
Power test tubes were used by Lew Smith, a regulated party
under section 203(a)(3), to replace catalytic converters on
motor vehicles (see Attachments A, F and G) and that page
540 of the 1981 Cincinnati Consumer Yellow pages contains an
advertisement for Lew Smith Muffler & Parts, Inc. which
advertises test tubes to replace catalytic converters (see Attach-
ment G); 2) that Mr. Robert Steelback, the owner of The
Mud Hole motor vehicle repair facility in Memphis, Tennessee,
stated in regard to an EPA investigation on April 19, 1982, that
he had installed test tubes manufactured by Products for Power
on motor vehicles after the shop had removed the catalytic
converters on those vehicles (see Attachments A and I); 3)
that Mr. Ketchum, the owner of Custom Exhaust, Inc., a motor
vehicle repair facility located in Lake Worth, Florida, stated to
an EPA attorney that he had been replacing catalytic converters
with test tubes manufactured by Products for Power. Mr.
Ketchum claims he was nder the belief it was legal to do so
based in part, upon his conversations with Ced Kotowicz,
President and owner of Products for Power (see Attachments A
and J); 4) that there is reason to believe that the numerous
advertisements by Products for Power of test tubes, in such
national trade journals as Muffler Digest, and Automotive
Sla
Aftermarket News all of which are directed to Parties regulated
under section 203(a)(3), promote the removal of catalytic
converters on motor vehicles and their replacement with test
tubes (see Attachment B); 5) that there is reason to believe
that Products for Power attended and marketed test tubes at:
(a) the Specialty Equipment Market Association (SEMA)
convention and trade shows in 1981, 1982 and 1983; (b) the
Automotive Parts and Accessories Association (APAA) nation- °
al convention and trade shows in 1980 and 1981 and (c) the
Exhaust System Professional Association convention and trade
show (ESPA) in 1981. These conventions and trade shows are
attended primarily by parties regulated under section
203(a)(3). The attendance and marketing of test tubes and
the items distributed by Products for Power at such conventions
and trade shows promotes the removal of catalytic converters
by parties regulated under section 203(a)(3) (see Attachments
C and D); 6) that the test tube is packaged in a way that
Promotes the permanent removal of catalytic converters on
motor vehicles (see Attachment E); 7) that based upon a
market survey conducted by Market Facts, a marketing re-
search firm, it is believed that about 1.5 million catalytic
converter replacement pipes were sold during 1981 which
represents a ratio of ten (10) replacement pipes sold to each
replacement catalytic converter and that a substantial number
of regulated persons install such parts (see Attachment H ); 8)
that in fiscal year 1982 only 5,726 “waiver letters” which permit
an individual to legally have the catalytic converter on his
motor vehicle removed prior to taking the vehicle out of the
country were issued by Federal agents authorized by EPA; 9)
that there are five (5) states which have incorporated prohibi-
tions against causing any person to remove emission control
devices in their State Implementation Plans (SIPs), which are
federally enforceable under the Clean Air Act. These prohibi-
tions against removing emission control devices are not limited
to parties regulated under section 203(a)(3), but rather extend
§2a
to all persons including individual vehicle owners. The five (5)
states are California, Idaho, Virginia, Wisconsin and Texas.
Test tubes have been or are being sold by Products for Power in
each of the five (5) states: California, Idaho, Virginia, Wiscon-
sin and Texas (see Attachment K ) despite the fact that in these
states there is no marketplace need for this product but for the
insignificant possible use in conjunction with EPA approved
catalyst removal waiver letters (supra) (see Attachment O).
Test tubes are no longer sold in California because the state
entered into a Settlement Agreement with Products for Power
wherein Products for Power agreed not to “sell any of its “Test
Tube’ or ‘Dump Tube’ products, or any comparable product, to
any purchaser in California” (see Attachment L); 10) that a
telephone survey by an EPA employee of 20 randomly selected
muffler shops and repair facilities in 12 states indicates that 40
percent of the surveyed facilities will install for a customer a test
tube in place of a catalytic converter (see Attachment N); 11)
Byron O. Pond, Jr., President of Maremont Corporation, one of
the nation’s largest manufacturers of exhaust system products,
stated in a letter to Congressman John D. Dingell dated June 9,
1982, that “... we believe that the preponderance of devices
being purchased are being used to permanently replace con-
verters....” (see Attachment H).
In order to determine whether violations of section 203(a)
of the Act have been or are being committed by Products for
Power as alleged by Paulette B. Peltz, it is necessary to inspect
and copy ( both on and off premises ) the following: |) purchase
and sales‘receipts; 2) billing invoices; 3) shipment invoices; 4)
product distribution and customer lists; 5) mail order mailing
lists; 6) current inventory and production figure lists; 7)
correspondence with purchasers and potential purchasers; 8)
memoranda and notes regarding telephone conversations with
purchasers and potential purchasers; 9) advertising and mar-
keting surveys and studies; 10) advertising and marketing
materials: il) memoranda. notes or other documents written
53a
by company employees or other persons regarding or relating
to the legality of marketing test tubes or installing such devices,
and 12) documents regarding test tube test procedures.
The inspection will be conducted during normal business
hours, will begin as soon as practicable after issuance of this
warrant and will be completed with reasonable promptness.
The inspection will be conducted by United States EPA
Enforcement Officers under the following provisions of the
Clean Air Act:
(1) Section 203(a), 42 U.S.C. § 7522(a) states that the
following acts and the causing thereof are prohibited .. .
(3)(A) for any person to remove or render inopera-
tive any device or element of design installed on or in a
motor vehicle or motor vehicle engine in compliance with
regulations under this title prior to its sale and delivery to
the ultimate purchaser, or for any manufacturer or dealer
knowingly to remove or render inoperative any such device
or element of design after such sale and delivery to the
ultimate purchaser, or
(B) for any person engaged in the business of repair-
ing, servicing, selling, leasing, or trading motor vehicles or
motor vehicle engines, or who operates a fleet of motor
vehicles, knowingly to remove or render inoperative any
device or element of design installed on or in a motor
vehicle or motor vehicle engine in compliance with regu-
lations under this title following its sale and delivery to the
ultimate purchaser, .. .
(2) Section 114(a)(2), 42 U.S.C. § 7414(a), which ex-
pressly authorizes Environmental Protection Agency repre-
sentatives to enter the premises of any person who is subject to
any requirement of the Act with respect to Title II ( mobile
source emissions) and to have access to or copy records at
reasonable times to carry out the provisions of the Act.
A return will be made to the Court upon completion of the
inspection which will conclude not later than ten (10) days
after the warrant is issued.
54a
WHEREFORE, it is respectfully requested that a warrant
to entex, inspect, photograph, collect information and copy the
records of Products for Power be issued.
BY:
Respectfully submitted,
Dan K. WEBB
United States Attorney
Northern District of Illinois ,
Rospert T. GRUENBERG
Assistant United States Attorney
219 South Dearborn Street
Chicago, Illinois 60604
(312) 353-4305
55a
ATTACHMENT A
AFFIDAVIT IN SUPPORT OF AN APPLICATION
FOR A WARRANT
I, Paulette B. Peltz, being duly sworn upon oath, depose
and state that:
1. I am a duly authorized enforcement officer of the
United States Environmental Protection Agency (EPA), and
my title is Attorney/Advisor, Eastern Field Office, Field Oper-
ations and Support Division. In this capacity, I am responsible
for conducting investigations to determine compliance with
several aspects of the Federal program for control of the
emission of air pollutants from motor vehicles, as set forth in
the Clean Air Act as amended (hereinafter the “Act”), 42
U.S.C. § 7401 ef seq.
2. Section 203(a)(3)(A) of the Act, 42 US.C.
§ 7522(a)(3)(A), prohibits any person from removing or
rendering inoperative any device or element of design installed
on or in a motor vehicle or motor vehicle engine in order to
satisfy Federal emission requirements, prior to its sale and
delivery to an ultimate purchaser, or for any manufacturer or
dealer to knowingly remove or render inoperative any such
device after a vehicle’s sale and delivery to an ultimate
purchaser.
3. Section 203(a)(3)(B) of the Act, 42 USC.
§ 7522(a)(3)(B), prohibits any person engaged in the business
of repairing or servicimg motor vehicles or motor vehicle
engines from knowingly removing or rendering in~perative any
device or element of design installed on or in a motor vehicle or
motor vehicle engine im compliance with Federal emission
requirements, following its sale and delivery to the ultimate
purchaser.
4. Section 203(a) of the Act. 42 US.C. § 7522(a),
prohibits any person from causing the acts prohibited by
sections 203(a)(3)(A) and (B).
56a
§. Section 110(a)(1) of the Act, 42 U.S.C. § 7416, states
that cach State shall adopt and submit to the Administrator,
within 1ine (9) months after the promulgation of a national
primary ambient air quality standard for any air pollutant, a
plan which provides for attainment, maintenance, and enforce-
ment of such primary standard in each air quality control region
within such State. In addition, such State shall adopt and
submit to the Administrator within nine (9) months after the
promulgation of a national ambient air quality secondary
standard, a plan which provides for attainment, maintenance,
and enforcement of such secondary standard in each air quality
control region within such State.
6. State implementation plans adopted pursuant to section
110(a)(1) become Federal law and are enforceable under
section 113(a) of the Act. Section 113(a)(1) of the Act, 42
U.S.C. § 7413 states that whenever the Administrator finds that
any person is in violation of any requirement of an applicable
implementation plan, the Administrator shall notify the person
in violation of the plan and the State in which the plan applies
of such finding. If such violation extends beyond the 30th day
after the date of the Administrator’s notification, the Adminis-
trator may issue an order requiring such person to comply with
the requirements of such plan or may bring a civil action
(b)...for a permanent or temporary injunction, or to
assess and recover a civil penalty of not more than $25,000
per day of violation, or both whenever such person—
(b)(2) violates any requirement of an applicable
implementation plan... more than 30 days after having
been notified by the Administrator under subsection
(a)(1) that such person is violating such requirement, .. .
42 U.S.C. §§ 7413(b).
This provision may be invoked in five (5) states: Califor-
nia, Idaho, Texas, Virginia, and Wisconsin.
57a
7. Section 27156 of the California Vehicle Code states
that...
No person shall install, sell, offer for sale or advertise
any device, apparatus, or mechanism intended for use with
or as a part of, any required motor vehicle pollutant
control device or system which alters or modifies the
engine design or performance of any such motor vehicle
pollutant control device or system. (emphasis added )
This section was adopted as part of the California State
Implementation Plan (hereafter cited as “SIP”) on March 16.
1979.
8. Section 1-1502 of the Rules and Regulations for the
Control of Air Pollution of Idaho states that:
No person shall allow, suffer, cause or permit the
removal, disconnection or disabling of a crankcase emis-
sion control system or device, exhaust emission control
system or device, or any other system or device which has
been installed on-a motor vehicle in accordance with
Federal laws and regulations while such motor vehicle is
operating in the State. (emphasis added) -
This provision was adopted as part of Idaho’s SIP on July
28, 1982.
9. Section 114.1 Regulation IV of the Texas Air Control
Board Regulations for Control of Air Pollution from Motor
Vehicles states that:
...MO person may cause, suffer, allow or permit the
emission of any air contaminant or the performance of any
activity which causes or contributes to a condition of air
pollution. (emphasis added )
This section was adopted as part of the Texas SIP on May
31, 1972.
10. Rule EX-10, Section 4.100 of the Emission Standards
for Mobile Sources, Part IV of the Commonwealth of Virginia
State Air Pollution Control Board Regulation for the Control
and Abatement of Air Pollution states:
58a
(1) No owner or other person shall cause, suffer,
allow or permit the removal, disconnection or disabling of
a crankcase emission control system or device, exhaust
emission control system or device, fuel evaporative emis-
sion control system or device, or other air pollution control
system or device which has been installed on a motor
vehicle in accordance with Federal laws and regulations
while such motor vehicle is operating in the Com-
monwealth of Virginia. (emphasis added )
This section was adopted as part of the Virginia SIP on
May 31, 1972.
11. Section NR 157.17(2) of the State of Wisconsin
Administrative Code states:
(2) Control of Motor Vehicles. No person shall cause,
suffer, allow or permit the removal, dismantling, or dis-
repair of any air pollution control device or system which
has been installed on a motor vehicle or internal com-
bustion engine. Such devices or systems include but are
not limited to:
(a) Positive crank case ventilation system.
(bd) Exhaust emission control devices.
(c) Evaporative fuel loss control systems.
(d) Any control device operating on principles such as
thermal decomposition, catalytic oxidation or reduc-
tion, absorption or adsorption. (emphasis added )
This section was adopted as part of the Wisconsin SIP on
June 21, 1982.
12. A catalytic converter is a device and element of design
within the meaning of section 203(a)(3) of the Act, 42 U.S.C.
7522(a)(3). A repair facility therefore violates the Act by
removing a catalytic converter and installing a test tube in its
place. Under section 203(a) any person who causes such acts
by a repair facility also violates the Act.
59a
13. A catalytic converter is a device within the meaning of
section 27156 of the California vehicle code; section 1-1502 of
the Rules and Regulations for the Control of the Air Pollution
of Idaho; Rule EX-10, section 4.100 of the Emissions Standards
for Mobile Sources, Part IV of Commonwealth of Virginia State
Air Pollution Control Board Regulation for the Control and
Abatement of Air Pollution; and section NR 157.17(2) of the
State of Wisconsin Administrative Code. Removal of a cataly-
tic converter and replacement with a test tube is an act
prohibited by section 114.1 Regulation IV of the Texas Air
Control Board Regulations for Control of Air Pollution for
Motor Vehicles. Therefore, in each of these five States the
removal by any person of a catalytic converter and replacement
with a test tube violates Federal law as embodied in the
applicable State Implementation Plan. Any person who causes
such acts by any person also violates Federal law as embodied
in the applicable State Implementation Plans.
14. On March 23, 1983, I examined various state laws that
deal with the removal and/or rendering inoperative of emission
control devices (anti-tampering laws) and determined that in
addition to the five states identified in paragraph 13, above
approximately thirty (30) states have laws which prohibit any
individual from engaging in such conduct. Therefore in each of
these states the removal by any person of a catalytic converter
and replacement with a test tube violates state law.
15. The catalytic converter is the primary emission control
device on most cars built since 1975. The removal of a catalytic
converter and its replacement with a test tube causes a 200% to
800% increase in hydrocarbon and carbon monoxide emissions.
Removal of the catalyst from many cars built since 1981 also
causes a 400% to 900% increase in nitrogen oxide emissions.
16. Since August 1982 EPA has initiated enforcement
actions by sending notices of violations to 10 muffler shops and
auto repair facilities for allegedly removing catalytic converters
and replacing them with catalytic converter replacement pipes.
60a ~
These actions involved the removal of catalysts from 209 cars,
and civil penalties of $522,500 were proposed by EPA. During
this same period 3 cases alleging the removal of catalytic
converters or their replacement by catalytic converter replace-
ment pipes were filed in the federal district courts. These cases
involved catalyst removals from 44 cars and potential penalties
of $110,000.
17. As an EPA investigator, the activities I perform to
determine compliance with the Act include (1) conducting
surveillance of facilities which are regulated under section
203(a)(3) of the Act or under State Implementation Plans
(SIPs), (2) inspecting and copying records such as work
invoices which show or relate to the maintenance and repair of
motor vehicles, (3) inspecting motor vehicles and parts thereof,
(4) taking photographs of motor vehicles and parts thereof,
and (5) inspecting, copying, photographing or obtaining, any
evidence which constitutes, relates to, or is part of a violation of
the Act or State Implementation Plans under the Act. In the
course of my activities, I have become familiar with the various
components of motor vehicle exhaust systems along with their
location in motor vehicles, and | can identify components such
as catalytic converters, mufflers, and plain exhaust tubing.
18. On December 6, 1982, I had a discussion with Rick
Friedman an enforcement officer in my office about an in-
vestigation he had performed of Lew Smith Muffler and Parts,
Inc. in Covington, Kentucky to determine compliance with
section 203(a)(3)(B) of the Act. He stated that while
performing the inspection of the facility he observed a large
stock of test tubes manufactured by Products for Power on the
shelves of the facility. He counted and photographed these test
tubes (see Attachments F and G) and questioned the owner’s
son to determine if the shop used test tubes to replace catalytic
converters on motor vehicles. He was told that test tubes were
used in the past but that currently the shop used a pipe bending
machine to make their own replacement pipes (see Attachment
F). The shop advertised the fact that they carried “test tubes to
6la
replace catalytic converters” in the 1981 Cincinnati Consumer
Yellow Pages as well as through the use of a large sign placed
in front of the shop stating, “Test Tubes to Replace Catalytic
Converters, Increases Mileage, Saves Gas, More Power” (see
Attachment G). An examination of over 100 recent shop
invoices revealed at least 25 invoices stating “test tube” on
them (see Attachment G). The follow-up investigation (con-
tacting the owner and examining the vehicle) revealed 48
instances in which catalytic converters had been replaced by
this muffler shop with catalytic converter replacement pipes.
EPA has initiated enforcement proceedings against this muffler
shop under section 203(a)(3)(B).
19. On or about December 5, 1982, I had a discussion with
George E. Lawrence, Jr., an enforcement officer in my Office
regarding an investigation he had performed on April 19, 1982,
of The Mud Hole, a motor vehicle repair facility located in
Memphis, Tennessee. The inspection was performed to deter-
mine compliance with section 203(a)(3)(B) of the Act. Mr.
Lawrence stated that while inspecting the facility he observed
eight (8) test tubes manufactured by Products for Power in the
parts sales area (see Attachment I). He then proceeded to
question the owner, Robert Steelback, to determine whether
The Mud Hole ever installed test tubes. Mr. Steelback told Mr.
Lawrence that he had installed such devices because he thought
the installation was legal. Further, Mr. Lawrence stated that
when he reviewed the facility’s work receipts for the two (2)
months prior to the inspection he found one (1) receipt,
number 4155, which stated that a test tube had been installed
on a 1979 AMC vehicle. Mr. Steelback confirmed that he had
removed the converter and installed the test tube on the vehicle.
20. On December 1, 1982, I had a discussion with Chery!
Kenny, who at that time was an attorney in my office (she has
since left the Agency), regarding a pending enforcement action
brought by the EPA against Custom Exhaust, Inc., a motor
vehicle repair facility in Florida (see Attachment J). Ms.
Kenny stated that the EPA had issued a Notice of Violation
62a
letter against Custom Exhaust, Inc. for violations of section
203(a)(3)(B) of the Act. She further stated that during the
course of a conversation with the owner, Doug Ketchum, he
stated to her that it was not until he’ had received the EPA’s
Notice of Violation that he became aware that it was a violation
of Federal law for him to remove a catalytic converter and
replace it with a test tube. He told Ms. Kenny that he had been
replacing catalytic converters with “test tubes” manufactured
by Products for Power. He stated that he had spoken to a man
named Ced Kotowicz of Products for Power who had told him
that he knew of no requirements restricting the length of time
that a test tube could be left on a vehicle after the converter had
been removed. Mr. Ketchum also told Ms. Kenny that he had
relied on similar statements made by Mr. Kotowicz in a trade
magazine.
21. On March 29, 1983, I had a discussion with Dennis
Parker, an enforcement officer in my office, regarding a tele-
phone survey Mr. Parker conducted of 20 randomly selected
muffler shops and automotive repair facilities in 12 states. Mr.
Parker asked the person representing each facility if it would
install a catalytic converter replacement pipe on his vehicle.
Forty percent (40%) of these regulated repair facilities re-
sponded that they would install a test pipe in the place of a
catalytic converter (see Attachment N).
22. During the month of November 1°82, I examined
various issues of several national trade journals. My exam-
ination revealed that Products for Power has engaged in
extensive advertising of its product known as the “test tube.” I
found advertisements by Products for Power test tubes in each
of the January 1980 through June 1980 issues and each of the
August 1980 through November 1980 issues of Muffler Digest,
a widely distributed national trade journal directed primarily
towards repair facilities regulated under section 203(a)(3) (in
fact, it describes itself as the “‘automotive exhaust industry
journal”) (see Attachment B). In addition, I also found
advertisemenis by Products for Power for this product in the
Se
63a
March 1981 and November 1981 and the January, April, June,
July and August 1982 issues of Automotive Aftermarket News
and the March 1981 issue of Specialty and Custom Dealer (in
which an advertisement by Detroit Hi-Performance Warehouse
was Offering the test tube for sale), both of which are trade
journals directed toward the trade industry and parties regu-
lated under section 203(a)(3) (see Attachment B). These
advertisements in national industry trade journals are likely to
promote the removal of catalytic converters from motor ve-
hicles by parties regulated under section 203(a)(3) of the
Clean Air Act. The advertisements extol the benefits which
customers of parties regulated under section 203(a)(3) of the
Act will receive by removing catalytic converters and replacing
them with test tubes. The advertisements generally state that
customers will save fuel, money, and expensive repairs.
Although the advertisements are ostensibly written to promote
over-the-counter sales to “do-it-yourself” consumers, there is
reason to believe that most consumers are not capable of
replacing their own catalytic converters with test tubes and that
most consumers in fact do not perform such work themselves
(see Attachment O).
23. On March 27, 1983, I had a discussion with Dennis
Parker, an enforcement officer in my office, regarding the states
in which Muffler Digest, Automotive Aftermarket News, and
Specialty and Custom Dealer are distributed. Mr. Parker stated
that each of these trade journals is distributed in all 50 states
(see Attachment N).
24. On March 25, 1983, I had a discussion with Ross
Ruske, an enforcement officer in my office, regarding a number
of telephone calls he made to aftermarket auto parts dis-
tributors in the states of Texas, Virginia, Wisconsin, and Idaho
where he inquired whether these distributors sold catalytic
converter eliminator pipes manufactured by Products for Power
(see Attachment K). He stated that he found that various
distributors in each of these states which have broad antitam-
pering prohibitions in their SIPs offered the test tube for .wle.
64a
25. I have reason to believe that Products for Power
aggressively promotes its product via attendance at national
trade shows and conventions. Products for Power had a booth
at the Automotive Parts and Accessories Association Show
(APAA) in Chicago in November 1981. A photograph in the
December 1981 issue of Muffler Digest depicts Products for
Power Assistant Sales Manager Denise Kotowicz showing a
potential customer a “dump tube” which is a device manufac-
tured by Products for Power which is used to replace a catalytic
converter (see Attachment C). The photograph depicts Ms.
Kotowicz standing in front of a display of the test tube. Based
on a review of past issues of Muffler Digest and official trade
show directories and exhibitors’ lists, there is reason to believe
that Products for Power also attended the Exhaust System
Professional Association (ESPA) show in New Orleans in
January 1981 (see Attachment C), the Automobile Parts and
Accessories Association (APAA) show in Atlanta in November
1980 and 1981, and the 1981, 1982, and 1983 Specialty
Equipment Market Association Shows (SEMA) in Las Vegas
(see Attachment C). At these national trade shows Products
for Power displayed and advertised catalytic converter replace-
ment pipes including test tubes. In addition, Products for
Power distributed literature and items which promote the use of
the test tube (such as a plastic carry bag at the 1983 SEMA
Show which promotes the removal of catalytic converters ) (see
Attachment D). Attendance at these shows is generally
restricted to the automotive aftermarket and repair industries
including muffler shop owners, parts distributors and automo-
tive repair facility owners, many of which are regulated by the
section 203(a) tampering prohibitions of the Act.
26. There is also reason to believe that Products for Power
promotes the permanent removal of catalytic converters by the
way it packages the test tube. The front of the bright orange
box states in large black letters “Test Tube to Replace Catalytic
Converters.” In small light black letters it states, without
explanation “verify the need.”’ Underneath the words appears a
See
65a
colored drawing of the test tube with the word “IN” next to it
and then next to that a drawing of a catalytic converter and the
word “OUT” next to it (see Attachment E). The instructions
on the side of the box state to remove the catalytic converter
and install the test tube in its place and then perform the
desired iest. The instructions on the box provide no informa-
tion regarding the tests to be performed. There are no test
instructions on or in the box. A footnote on the box states in
very small black letters that “Federal, State and local laws may
prohibit the user from leaving this device on the vehicle after
testing procedures are completed.”
27. On April 1, 1983, I had a discussion with Richard
Ackerman, a Supervisory Environmental Engineer in my office
who stated that the Products for Power advertisements in the
trade journals regarding the test tube are ostensibly directed
towards increasing over the counter sales. He stated that over
the counter sales, however, are only likely to be a limited
portion of the total sales of these devices. The advertisements
in trade journals such as Muffler Digest are directed towards
exhaust system repair facilities. He stated that studies con-
ducted by Motor and Equipment Manufacturers Association
and Industrial Marketing Research show that approximately
two-thirds of all exhaust system repair work is performed by
muffler shops and repair facilities (see Attachment O). He
further stated with respect to the approximately one-third of
exhaust system repairs that are performed by consumers ( do-it-
yourselfers), less than 4 percent of the parts used for these
repairs are purchased from muffler shops by over the counter
sales (see Attachment O).
2 i ee
ee ae ee ee
Dud ~
28. On April 1, 1983, I had a conversation with Richard
Ackerman, a Supervisory Environmenial Engineer in my office
who stated that there is no marketplace need for a testing
device of this nature in the automotive service industry. He
stated that the predominant failure mode of a catalytic con-
verter which would manifest in a customer complaint necessi-
66a
tating diagnosis is a plugging condition. He further stated that
an automotive exhaust system mechanic without any particu-
larly sophisticated level of expertise can readily detect a
plugged converter through an elementary sequence of diagnos-
tic evaluations. He stated that both the Ford Motor Company
and General Motors Corporation for example, have prescribed
a simple procedure for use by its dealers requiring standard
inexpensive tools for identifying a plugged catalyst (see Attach-
ment O). He further stated that these procedures require the
use of a tachometer and vacuum gauge and can generally be
completed in less than one hour.
29. The removal of catalytic converters and the replace-
ment of the converter with a catalytic converter replacement
pipe such as the test tube manufactured by Products for Power
appears to be a pervasive problem. A market survey conducted
by Market Facts, a market research firm, and submitted to EPA
by an aftermarket part manufacturer projects that about 1.5
million catalytic converter replacement pipes were sold during
1981 which represents a ratio of ten (10) replacement pipes
sold to each replacement catalytic converter sold (see Attach-
ment H). In contrast, in fiscal year 1982 only 5,726 “waiver
letters” (letters issued by the Environmental Protection Agency,
the Department of Defense and Department of State as
authorized by the Environmental Protection Agency) were
issued which permit an individual to take his motor vehicle to a
motor vehicle repair facility and have the catalytic converter
removed legally because the vehicle is being taken out of the
country.
30. On November 3, 1982, I telephoned the Illinois
Secretary of State for Corporations and confirmed that Ced’s
Inc. d/b/a Products for Power is an Illinois corporation and
that its registered agent is Arnold M. Frank who is located at 77
West Washington Street, Suite 1220, Chicago, Illinois and that
its President is Cedric Kotowicz. and that the corporate address
is 25 Official Road, Addison. Illinois.
67a
Based on the facts outlined above, Products for Power is a
person within the meaning of section 203(a) cited at paragraph
4 above, and there is probable cause to believe that Products
for Power is violating this Federal law and State Implementa-
tion Plans under the Act, each of which prohibits causing the
removal or rendering inoperative of any emission control device
or element of design installed on or in a motor vehicle by
specified parties. I have concluded it is necessary to examine
the various records of Products for Power to determine the
extent to which Products for Power may be violating Federal
law.
PAULETTE B. PELTZ
Attorney/ Advisor Field Operations and
Support Division United States Envi-
ronmental Protection Agency
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