Opposition Brief — CED'S, Inc. v. United States Environmental Protection Agency

6) x ay es ¥. S.

MAR_$7 1965

Inu the Supreme Court of the Biter Pxier rs

No. 84-932

OCTOBER TERM, 1984

Cep’s, INc., d/b/a PRODUCTS FOR POWER, PETITIONER

V.

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY,

ET AL.

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS FOR

THE SEVENTH CIRCUIT

BRIEF FOR THE RESPONDENTS IN OPPOSITION

Rex E. Lge

Solicitor General

F. Henry Hasicut II

Assistant Attorney General

MARTIN W. MATZEN

ARTHUR E. GOWRAN

Attorneys

Department of Justice

Washington, D.C. 20530

(202) 633-2217

GERALD H. YAMADA

Acting General Counsel

RALPH J. COLLELI

Attorney

Environmental Protection Agency

Washington, D.C. 20460

QUESTION PRESENTED

Whether the administrative search warrant issued in this

case was invalid for lack of administrative probable cause.

(I)

TABLE OF CONTENTS

Page

RP eer Te eer ee eee ee eee l

Se ee ee I

Statutory and constitutional provisions involved ..... l

ihe dpi aseb rh nee ted ebb ees Ode aee eee 2

as it CK KOAG 960 KE OS CELE KOON S00 4.0.06:0-0° 4

ee ce neh eek ch eee Raeee cena eene sence 9

ose eet ie eCe CNAME RELA RED EAEE Kec 08 8o 02 la

TABLE OF AUTHORITIES

Cases:

Blackie’s House of Beef, Inc. v. Castillo,

659 F.2d 1211, cert. denied, 455 U.S. 940 ...... 6

Camara v. Municipal Court, 387 U.S. 523 ...... 6

Duignan v. United States,274U.S.195 ........ 5

Marshall v. Barlow’s Inc.,

ce veh ieeenkseebiew ke ee X> jecn SS

United States v. Lovasco, 431 U.S. 783 ......... 5

West Point-Peppereil, Inc. v. Donovan,

EE er 6

Zurcher v. Stanford Daily, 436 U.S. 547 ........ 6

Constitution and statute:

RE 1, 4, 5, 6

Clean Air Act, 42 U.S.C. 7401 et seq. :

$ 114(a), 42 U.S.C.

Cenk ah ibs a6 ee 60-40% 1,7,8

$ 114(a)(i)-{ili), 42 U.S.C.

I 7

IV

Page

Constitution and statute—Continued:

§$ 114(a)(1), 42 U.S.C.

PARIAME) co cccccvcsccscccecevenssosens 3

§$ 114(a)(2), 42 U.S.C.

TAREE) onc ccccccrcvevceccevenes 3, 4, 5

$ 114(a)(2)(A), 42 U.S.C.

TAIA(aN 2A) ...cccccccccccccccccccees 7

§$ 114(aX(2)(B), 42 U.S.C.

T414(aN 2B) .....ccceccccccccccccccees 7

$ 203(a), 42 U.S.C.

FRE Sok nhv eens W nn cinecdecevnn 1, 2,4, 8

$ 203(a)(3)(B), 42 U.S.C.

TSA aN3MB) ..cccccccccccccvcesees 47

Miscellaneous:

123 Cong. Rec. 27070 (1977) ....--eeeeeeeeeee 8

In the Supreme Court of the United States

OCTOBER TERM, 1984

No. 84-932

CEpD’s, INc., d/b/a PRODUCTS FOR POWER, PETITIONER

V.

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY,

ET AL.

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS FOR

THE SEVENTH CIRCUIT

BRIEF FOR THE RESPONDENTS IN OPPOSITION

OPINIONS BELOW

The opinion of the court of appeals (Pet. App. 4a-19a) is

reported at 745 F.2d 1092. The opinions of the district court

(Pet. App. 20a-36a) are unreported.

JURISDICTION

The judginent of the court of appeals was entered on

September 28, 1984. A petition for rehearing was denied on

October 29, 1984 (Pet. App. 3a). The petition for a writ of

certiorari was filed on December 10, 1984. The jurisdiction

of this Court is invoked under 28 U.S.C. 1254(1).

STATUTORY AND CONSTITUTIONAL

PROVISIONS INVOLVED

Sections 114(a) and 203(a) of the Clean Air Act, 42

U.S.C. 7414(a), 7522(a), and the Fourth Amendment to the

Constitution are set forth at Pet. 3-5.

(1)

2

STATEMENT

1. Petitioner is a manufacturer and distributor of cata-

lytic converter replacement pipes (“test tubes”) for automo-

biles.! These replacement pipes are hollow metal tubes that

can be installed in place of catalytic converters. They per-

form absolutely no emission control. Pet. App. 5a. Section

203(a)(3)(B) of the Clean Air Act (the Act), 42 U.S.C.

7522(a)(3)(B), prohibits specified persons, including per-

sons in the automobile repair industry, from knowingly

removing or rendering inoperative any emission control

device on an automobile after it is sold.” Section 203(a) also

prohibits “the causing” of the acts prohibited in that sec-

tion, including the acts described in Section 203(a)(3)(B).

The Environmental Protection Agency (EPA) has been

investigating its suspicion that there is a pervasive practice

of unlawful installment of catalyst replacement pipes by

automobile repair facilities (Pet. App. 5a). As part of that

investigation, on April 5, 1983, EPA applied for and

obtained an administrative search warrant from a magis-

trate of the United States District Court for the Northern

District of Illinois, authorizing EPA to enter petitioner’s

business premises to inspect and copy specified business

records relevant to the marketing, sale, and distribution of

test tubes from 1979 through 1982 (Pet. App. 46a-48a).° The

1Catalytic converters are the primary means of controlling emissions

of certain air pollutants from automobiles manufactured after 1975.

2 The Clean Air Act does not prohibit individual car owners from

removing catalytic converters and installing replacement pipes on their

own cars; nor does it prohibit temporary installation of a replacement

pipe for legitimate testing purposes.

3Contrary to petitioner’s statement (Pet. 6), the warrant did not

authorize a general, unrestricted inspection of petitioner’s facility or all

of its records. The warrant was, in fact, limited to inspection of specified

records and subject to other restrictions on its scope and duration. See

Pet. App. 46a-48a.

3

warrant application specified that there was “probable

cause to believe that [petitioner], through the sale, distribu-

tion and promotion of test tubes to regulated automotive

repair facilities is ‘causing’ such repair facilities to remove

or render inoperative emission control devices in viclation

of section 203(a)(3) of the Act” (Pet. App. 50a).

2. On April 6, 1983, the warrant was served and peti-

tioner filed a motion with the magistrate to quash the

warrant. That motion was denied on the same day. On April

7, 1983, petitioner filed a complaint and motion in the

district court seeking an injunction to compel return of the

copied records.‘ After several hearings, the district court

issued an order on July 1, 1983, permanently enjoining EPA

from making any use of the copied records and ordering

EPA to return the copies to petitioner (Pet. App. 30a). The

court held that EPA lacked statutory authority to conduct

the inspection because it concluded that Section 114(a)(2)

authorized EPA to inspect only those persons required to

keep records under Section 114(a)(1) (Pet. App. 33a). On

July 22, 1983, EPA moved the district court to stay its order

pending appeal. On November |, 1983, the district court

issued an order denying EPA’s motion for a stay, as well as a

supplemental memorandum opinion purporting to modify

its July | opinion (Pet. App. 21a-28a).

3. The court of appeals vacated the district court’s sup-

plemental opinion, holding that the lower court had been

divested of jurisdiction on August 31, 1983, when EPA filed

its notice of appeal (Pet. App. 7a-9a).° The court then

reversed the July 1, 1983, order, holding: (1) that Section

114(a) of the Clean Air Act authorizes EPA to enter the

‘Pursuant to an agreement made between EPA and petitioner on

April 7, EPA did not use the copied records for any investigation until

June 1, 1983.

‘Petitioner does not dispute the correctness of this holding.

4

premises of any person “subject to any requirement of” the

Act and to inspect and copy routine business records, as

well as records the Administrator has required to be kept by

such person; and (2) that petitioner is a person subject to a

requirement of the Act because it is prohibited by Section

203(a) from causing actions proscribed by Section

203(a)(3)(B) (Pet. App. 10a-18a).

ARGUMENT

The decision of the court of appeals is correct and does

not conflict with any decision of this Court or any other

court of appeals. Accordingly, review by this Court is not

warranted.

i. Petitioner’s principal argument (Pet. 10-19) is that the

decision below is inconsistent with Marshall v. Barlow’s,

Inc., 436 U.S. 307 (1978), and its progeny because it permits

an administrative inspection of business premises and

records in the absence of probable cause. Specifically, peti-

tioner argues (Pet. 10, 12, 16-17) that the inspection was

unconstitutional because EPA’s warrant application

allegedly was unsupported by any facts or allegations estab-

lishing that petitioner had violated the Clean Air Act. This

contention was not pursued below and hence is not properly

presented in this Court; in any event, it is without merit.

a. Neither the court of appeals nor the district court

ruled on the question whether the warrant was invalid

under the Fourth Amendment for lack of probable cause.

In the district court, petitioner’s principal claim was that

Section 114(a)(2) of the Act did not give EPA authority to

obtain the warrant, in part because petitioner contended

that it was not subject to Section 203(a) or any other

requirement of the Act. Indeed, petitioner specifically

stated in its reply to EPA’s memorandum in opposition to

motion for permanent injunction that “[petitioner] has not

raised probable cause as an issue in this matter” (App.,

5

infra, 1a). Accordingly, the district court’s July 1, 1983,

order and opinion addressed only the scope of EPA’s statu-

tory authority under Section 114(a)(2), not whether the

warrant application established probable cause (see Pet.

App. 33a-34a).

By the same token, petitioner did not brief the probable

Cause issue on appeal, and the court of appeals did not

address it.® It is therefore inappropriate for this Court, in

the first instance, to consider petitioner’s present contention

that the administrative search warrant was invalid for lack

of probable cause. See United States v. Lovasco, 431 U.S.

783, 788 n.7 (1977); Duignan v. United States, 274 U.S.

195, 200 (1927). Moreover, since the courts below did not

address this issue, petitioner’s allegation that the decision

below is a precedent that undermines Barlow’s is manifestly

unfounded.’

b. In any event, there is no merit to the contention that

the warrant was unconstitutional for lack of probable

cause. The warrant application was supported by extensive

evidence showing reason to believe that repair shops sup-

plied by petitioner were unlawfully installing test tubes and

that petitioner was “causing” these violations through its

®Indeed, the court noted that the question of probable cause was “not

pertinent” to petitioner’s contention that EPA lacked statutory author-

ity to inspect it (Pet. App. | 1a).

7Indeed, petitioner itself states (Pet. 15 n.9) that the Seventh Circuit

has correctly applied Barlow’s in other cases. Contrary to petitioner’s

suggestion (Pet. 12), the fact that the court of appeals, in finding

statutory authority here for the inspection, did not expressly note the

obvious —- that that authority is limited by the Fourth Amendment

—plainly does not indicate that the court was holding that EPA’s

authority under the Clean Air Act is not subject to constitutional

limitations. EPA does not dispute that its inspection authority under

the Act is subject to Fourth Amendment limitations.

6

sale and promotion practices (see Pet. App. 49a-67a).* The

warrant application also demonstrated the need for an

inspection of petitioner’s records to advance the investiga-

tion of these activities (id. at 52a-53a). In these circumstan-

ces, it was clear that there was a strong public interest that

outweighed the limited intrusion of inspecting petitioner’s

records, and the magistrate correctly concluded that EPA

had established administrative probable cause that justified

the inspection of petitioner’s records. See Camara v.

Municipal Court, 387 U.S. 523, 539 (1967); West Point-

Pepperell, Inc. v. Donovan, 689 F.2d 950, 957-958 (11th

Cir. 1982): Blackie’s House of Beef, Inc. v. Castillo, 659

F.2d 1211, 1224-1227 (D.C. Cir. 1981), cert. denied, 455

U.S. 940 (1982).* Indeed, although not an issue below, the

warrant was justified not only because of the reasonable

belief that petitioner was violating the Act, but because

petitioner’s records were surely probative evidence in con-

nection with the investigation of the repair facilities sup-

plied by petitioner and identified in the warrant application.

See Zurcher v. Stanford Daily, 436 U.S. 547, 555-556

(1978).

2. Petitioner does not specifically challenge the court of

appeals’ rulings on the scope of EPA’s statutory authority,

‘The warrant application stated (Pet. App. S0a-Sla) that EPA

believed that “sale, distribution and promotion” of replacement pipes to

repair facilities was causing those facilities to remove catalytic conver-

ters permanently. The primary affidavit supporting the application

explained in detail how petitioner’s promotion and sales tactics could

cause unlawful use of its product by extolling the benefits of permanent:

catalytic converter replacement in advertisements and at conventions

attended by members of the auto repair industry (id. at 62a-66a). The

affidavit also showed that far more replacement pipes were being sold

than were likely to be used for lawful purposes (id. at 66a).

*Contrary to petitioner's repeated suggestions (Pet. 11, 14-15, 17), the

Fourth Amendment does not require that an agency know that a

violation is occurring before it may conduct an inspection.

7

which formed the focus of the litigation in the lower courts.

Petitioner does, however, briefly assert (Pet. 16) that EPA

lacked authority to inspect its records because they were not

required to be kept by the Act. Petitioner also criticizes

(Pet. 12) the court’s conclusion that the prohibition against

“causing” tampering with catalytic converters is applicable

to persons not specifically covered by Section 203(a)(3)(B).

The court of appeals correctly resolved these questions of

statutory interpretation, and no other court has ruled to the

contrary; hence there is no reason for this Court to review

those questions.

a. With respect to EPA’s inspection authority under Sec-

tion 114(a)(2)(A), the court of appeals stated that the natu-

ral reading of the provisions indicates that the phrase “such

person” refers to persons “who own or operate emission

sources or who are subject to any requirement” of the Clean

Air Act (Pet. App. 14a-15a). This reading is further sup-

ported by the legislative history of Section 1 14(a) (see Pet.

App. 15a-16a). Thus, the court correctly held that Section

114(a)(2)(B) authorizes EPA, in appropriate circumstances,

to enter for inspection purposes the premises of any person

subject to any requirement of the Act (Pet. App. 17a).'® By

the same token, the court correctly found (id. at 17a-18a)

that Congress intended to give EPA authority to inspect

“any records” of any person subject to the Act, including

routine business records not previously required to be

maintained.

b. The court of appeals also was right in concluding that

“{ petitioner], along with everyone else, is clearly prohibited

‘This authority is, of course, subject to constitutional limitations and

the statutory provisions stating the permissible purposes of such an

inspection. 42 U.S.C. 7414a){i)-{iii).

8

by section 203(a) from causing any act described in subsec-

tion (3)(B)” (Pet. App. 10a). Section 203(a) unambigu-

ously prohibits “{t}he following acts and the causing thereof

* * * ” without any limitation as to what type of person is

subject to the “causing” prohibition. Moreover, application

of this prohibition to petitioner is strongly supported by the

1977 Conference Report on the Act, which explicitly notes

with reference to Section 114(a) that the inspection author-

ity extends to “auto parts makers.” See Pet. App. 12a-13a;

123 Cong. Rec. 27070 (1977). Therefore, the court cor-

rectly found that petitioner is a person “subject to any

requirement” of the Act within the meaning of Section

114(a). Accordingly, petitioner is subject to EPA’s inspec-

tion authority as long as there are reasonable grounds for an

inspection.

‘The court plainly did not hold, however, that petitioner actually

had violated Section 203(a). Indeed, it noted that such an inquiry was

“not pertinent” to its consideration of the case (Pet. App. I 1a). Thus,

there is no basis for petitioner's contention (Pet. 16-17) that this Court

should grant certiorari “to correct the impression” left by the court of

appeals on the meaning of “causing.”

9

CONCLUSION

The petition for a writ of certiorari should be denied.

Respectfully submitted.

Rex E. Lee

Solicitor General

F. Henry Hasicut II

Assistant Attorney General

MARTIN W. MATZEN

ARTHUR E. GOWRAN

Attorneys

GERALD H. YAMADA

Acting General Counsel

RALPH J. COLLELI

Attorney

Environmental Protection Agency

MARCH 1985

DO) :985-03

APPENDIX

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

CED’S, INC., d/b/a )

PRODUCTS FOR POWER, )

)

Plaintiff, ) HONORABLE

) JOHN A. NORDBERG

)

V. ) NO. 83 C 2409

)

UNITED STATES )

ENVIRONMENTAL )

PROTECTION AGENCY, _)

et al., )

)

Defendants. )

[EXCERPT FROM] CED’S REPLY TO EPA'S

MEMORANDUM IN OPPOSITION TO MOTION

FOR PERMANENT INJUNCTION

Argument

I. The Issue is not one of Probable Cause, but

Whether EPA Acted Outside the Scope of its

Statutory Authority.

CED’S has not raised probable cause as an issue in this

matter. EPA, however, repeatedly characterizes CED’S

motion and appeal as an attempt to re-raise the issue of

probable cause for the Magistrate’s issuance of the Admi-

nistrative Warrant. EPA cites numerous cases which deal

with the standards of review and jurisdictional problems

associated with the issue of probable cause. EPA’s

(la)

2a

argument, however, subsumes and side-steps a more basic

issue — whether EPA has authority to obtain an adminis-

trative warrant under the Clean Air Act and the regula-

tions promulgated by EPA thereunder. CED’S contends

that, while EPA may well have authority to promulgate

regulations directly affecting CED’S business, it has not

done so and therefore lacks authority, under the Clean Air

Act, to enter CED’S facility or inspect any records located

thereon.

* ¢ ¢ & &