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

[ottics - Supreme

No. 84-932 PIL Cour, Uk

IN THE APR 6 1965

AREXANDER L. STEVASB.

Supreme Court of the United Sttes _ccexx

Octoper Term, 1984

ee

CED’S, INC., d/b/a PRODUCTS FOR POWER,

Petitioner,

VS.

UNITED STATES ENVIRONMENTAL PROTECTION

AGENCY, ET AL.,

Respondents.

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS FOR

THE SEVENTH CIRCUIT

REPLY BRIEF OF PETITIONER

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.

Two North LaSalle Street

Suite 2205

Chicago, Illinois 60602

(312) 236-7742

III.

Exhibit

i

TABLE OF CONTENTS

The Fourth Amendment Does Not Authorize

Administrative Searches Without the Artic-

ulation of A Violation of Some Law.....................

CED’S Has Made Its Fourth Amendment Argu-

SORE FIOM CC VETY SEAM 2... .cccccccccsssccccccssccescocssese

NIE ted os Oe ct TS eR SO

1. EPA Brief in the United States Court of

Appeals for the Seventh Circuit..................

2. CED’s, Inc., Brief in the United States

Court of Appeals for the Seventh Circuit...

3. CED?’s, Inc., Complaint for Injunctive Re-

4. Defendants’ District Court Memorandum

in Opposition to Plaintiffs Emergency

Motion for Temporary Restraining Order

and Preliminary Injunction and In Sup-

port of Defendants’ Motion to Dismiss.......

PAGE

llb

TABLE OF AUTHORITIES

PAGE

Cases

Marshall v. Barlow’s, 436 U.S. 307 dj, | ee 3,4

See v. City of Seattle, 387 U.S. 541 ( Ls Oe 4

Weyerhaeuser v. Marhsall, 592 F.2d 373 (7th Cir.

SPF P victsnaiinitinsesinssiibhdigiesi ata 4

{

No. 84-932

IN THE

Supreme Court of the Anited States

OCTOBER TERM, 1984

CED’S, INC., d/b/a PRODUCTS FOR POWER,

Petitioner,

vs.

UNITED STATES ENVIRONMENTAL PROTECTION

AGENCY, ET AL.,

Respondents.

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS FOR

THE SEVENTH CIRCUIT

REPLY BRIEF OF PETITIONER

The sole justification given by EPA in support of its search

of CED’s premises and records is that CED’s lawfully manufac-

tured and distributed product is misused by persons several

times removed in the distribution chain. EPA has never once

articulated any causal connection between CED’s lawful sale

and the subsequent improper use by others. EPA has only

postulated that somehow a legal sale amounts to a Clean Air

Act violation, without any explanation or evidence of a causal

connection.! This lack of both explanation and evidence is

1The probable cause test is a comparison of an articulated

offense with evidence adduced to support the claim. Without the

initial threshold articulation, no true probable cause test is possible.

EPA’s conclusory boilerplate recitation does not permit any intelligent

probable cause analysis.

2

supported by EPA’s own statements: it has never asserted that

CED’s has ever violated any of the provisions of the Clean Air

Act. Nor has EPA ever asserted that its search and seizure of

CED’s records was pursuant to an administrative plan based

upon neutral criteria. Indeed, for the first time, EPA now states

in this Court that its search was based on its perceived “need”

for the records to advance its own investigation of CED’s and

other entities.2 See Brief in Opposition, p. 6. But see EPA Brief

in the Seventh Circuit, p. 8 n.8, Reply App. 1, p. 3b (EPA 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 ...”).

From the first day of this litigation, CED’s has maintained that

EPA’s assertions are insufficient to justify both the search of its

business premises and records and the seizure of whatever

documents EPA deems necessary to assist in its “investigation.”

It is this issue which is now before the Court.

I. THE FOURTH AMENDMENT DOES NOT AUTHOR-

IZE ADMINISTRATIVE SEARCHES WITHOUT THE

ARTICULATION OF A VIOLATION OF SOME LAW.

The lawful nature of CED’s product, test tubes, although

much maligned by EPA, has never been in dispute. There is no

question that the manufacture, marketing, and sale of test tubes

are lawful activities. It is also undisputed that the use of test

tubes as a testing device for catalytic convertors is permissible in

49 out of 50 states. Individual automobile owners may lawfully

and permanently replace their catalytic convertors with test

2 As EPA admits in its Brief In Opposition, this was not an issue

below. EPA has always directed its allegations against CED’s. For

this reason alone, the facts and holding of Zurcher v. Stanford Dail,

436 U.S. 547 (1978), are inapposite. Moreover, Zurcher involved the

search of a third party for necessary evidence of a criminal act in an

investigation of others. Here, CED’s itself is alleged to be the target of

a civil investigation through its manufacture, distribution and sale of

test-tubes.

tubes. CED’s sells test tubes primarily to a single category of

businesses: warehouse distributors. CED’s also sells its product

abroad and to the United States military. Under certain

conditions, automotive workmen are prohibited from installing

the device onto the automobiles of others. There are no

assertions, however, that CED’s has ever directly sold its

products to such automotive workmen or for any other illegal

activity.?

With these facts in mind, there is no justification for the

warrant. EPA has never addressed, either in this Court or in

the Court of Appeals, the applicable law as to when a search

warrant may properly issue. For purposes of an administrative

search, probable cause justifying the issuance of the warrant

must be based upon either specific evidence of an existing

statutory or administrative violation or upon a showing that

reasonable legislative or administrative standards for con-

ducting the inspection have been satisfied. Marshall v. Bar-

low’s, 436 U.S. 307, 321 (1978). EPA admits it has not

promulgated any administrative standards or regulations in this

matter. The issue which this Court must address then, and

which the Seventh Circuit in its utilitarian analysis failed to do,

is whether petitioner’s sale of a lawfully manufactured and

distributed product, without more, rises to the level of evidence

of an existing statutory or administrative violation. EPA has

never articulated how the “sale, distribution and promotion” of

test tubes could in any way result in a violation of the Clean Air

Act. CED’s has maintained from the start that these allegations

are insufficient to justify the seizure of its premises and records.*

3EPA has never asserted that CED’s has directly caused a

violation of the Act and has never even advanced a theory as to how

any indirect causation was being accomplished.

4EPA dismisses in its reply brief the inspection as a “limited”

intrusion. Aside from what this cavalier attitude reveals about EPA’s

concerns for the rights of small businesses, one can only scoff at EPA’s

distortion of the record. A total! inspection of a facility, complete with

photographs, and the search and seizure of all records pertaining to

CED’s business for a four-year period of time is hardly a limited

intrusion.

4

The opinion of the Seventh Circuit, by failing to articulate the

specific violation at issue, conflicts with a plethora of holdings

of both this Court and others. See, e.g., Marshall v. Barlow’s,

436 U.S. 307 (1978); See v. City of Seattle, 387 U.S. 541

(1967); Weyerhaeser v. Marshall, 592 F.2d 373 (7th Cir.

1979). It is this issue which the Court must address.

Il. CED’S HAS MADE ITS FOURTH AMENDMENT

ARGUMENT FROM THE VERY START.

For EPA now to claim that CED’s has not previously

raised the issue that EPA failed wo adduce sufficient justification

for its search is nothing less than disingenuous. For example, in

its Brief in the Seventh Circuit (Reply App. 2, p. 5b) CED’s

raised the following issue for review:

3. Whether CED’s, having been alleged by EPA to be

engaged in no other activity than the mere manufacture

and sale of a device that has both a legitimate and lawful

use, may be considered to be “causing” a violation of

Section 203 of the Clean Air Act, 42 U.S.C. § 7522(a), on

the ground that other persons further removed in the

distribution network may unlawfully replace catalytic con-

vertors from automobiles and replace them with the

manufactured device.

See also CED’s Brief, p. 27 n. 11, Reply App. 2, p. 6b (no such

facts have been alleged which would justify a finding of

probable cause). In fact, prior to oral argument in the Seventh

Circuit, CED’s advised counsel for EPA of additional Fourth

Amendment authority which CED’s would rely upon in oral

argument. Fourth Amendment issues were expressly argued

before the Seventh Circuit. In the District Court, although

CED’s did not give its argument the appellation “probable

cause,” the argument was the same: EPA has neither asserted a

specific violation nor advanced any evidence of a violation,

both of which are necessary to justify the search of its premises.

See, e.g., Complaint for Injunctive Relief, p. 4, Reply App. 3, p.

5

7b. This fact is witnessed in EPA’s own memorandum in

opposition to CED’s emergency motion for a temporary re-

straining order and preliminary injunction, wherein EPA ar-

gued that it had met the standards necessary for the issuance of

a warrant. See Reply App. 4, p. 12b. EPA’s argument to this

Court that CED’s has not previously raised this position simply

is unfounded.

Ill. CONCLUSION

CED’s has maintained from the first day of this litigation

that EPA has failed to articulate or establish that which is

necessary to justify its search and seizure of CED's records.

This Court has previously held that a search is justified only

where there is specific evidence of an existing specified statutory

violation. Under the opinion of the Seventh Circuit, adminis-

trative agencies now have the authority to inspect an entity’s

records and premises in the absence of any showing that the

conduct complained of even amounts to an administrative

violation. This is constitutionally insufficient. This Court

should grant CED’s petition for a writ of certiorari to resolve

the issue of what must be alleged by an administrative agency

to justify a warrant in an administrative setting.

Respectfully submitted,

JERALD P. ESRICK

Counsel of Record for Petitioner

CED’S, INC., d/b/a

OF COUNSEL: PRODUCTS FOR POWER

JERALD P. ESRICK

JAMES R. MORRIN

CAL R. BURNTON

WILDMAN, HARROLD, ALLEN & DIXON

One IBM Piaza—Suite 3000

Chicago, Illinois 60611

(312) 222-0400

ARNOLD M. FLANK

ARNOLD M. FLANK, LTD.

Two North LaSalle Street

Suite 2205

Chicago, Illinois 60602

(312) 236-7742

Ce WIT 4 Chal SO ere eke ts ae

te ae male es? ae *

a tegnd mdf M

Ib

REPLY APPENDIX

TABLE OF CONTENTS

EPA Brief in the United States Court of Appeals

BE Te INE IIE snctintrcecsveceeneenvsasamentinnsicenniens

CED’s, Inc., Brief in the United States Court of

Appeals for the Seventh Circuit ...............:.eeeeeeeee

CED’s Complaint for Injunctive Relief................

EPA District Court Memorandum in Opposition

to Plaintiffs Emergency Motion for Temporary

Restraining Order and Preliminary Injunction

and in Support of Moiion to Dismiss..................-.

PAGE

2b

4b

7b

2b

No. 83-2608

IN THE UNitTep States Court OF APPEALS

For the Seventh Circuit

CED’S, INC., d/b/a PRODUCTS FOR POWER.

Appellee

Vv.

ENVIRONMENTAL PROTECTION AGENCY.

Appellant

ON APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

BRIEF FOR THE APPELLANT

F. Henry Hasicut, II

Acting Assistant Attorney General

Dan K. Wess

United States Attorney

Chicago, Illinois 60604

Ropert T. GRUENEBERG

Assistant United States Attorney

Chicago, Illinois 60604

OF COUNSEL: MARTIN W. MATZEN

AaTHurR E. Gowran

A. JAMES BARNES Attorneys, Department of

Justice

General Counsel Washington, D.C. 20530

(202) 633-2754

WILLIAM F. Pepersen

Racpu J. COLteci

Attorneys, Environmental

Protection Agency

Washington, D.C. 20460

3b

[-8-]

C. Issuance of the warrant and the inspection. —On April

5, 1983, the magistrate issued the administrative warrant to the

EPA. The warrant authorized agency representatives to inspect

and copy certain specified business documents (¢.g., receipts,

invoices, customer lists, and correspondence) relating to the

promotion and sale of test tubes in order to determine whether

a violation had been or was being committed (App. 82-83).

The EPA had not previously required CED’s to maintain such

documents under Section 114(a)(1)(A) of the CAA. Such

records were maintained by CED’s in the ordinary course of

business.

On April 6, 1983, EPA enforcement officials served the

warrant, and EPA agents entered CED’s facility during normal

business hours and examined, inspected, and copied documents

specified in the warrant. To minimize disruption of CED's

operations, most of the inspected documents were copied on the

firm’s premises. The few documents which were

| Footnote continued from previous page. |

and other regulated persons. CED’s promoted its product through

advertisements in muffler industry journals, through appearances at

trade shows and conventions, by product packaging and claims, and,

allegedly, through direct contact with at least one muffler shop. EPA

indicated that such activities might have been in violation of Section

203(a) (Application for Warrant, R. 15; App. 58-61).

EPA never asserted that mere sales, without more. of catalytic

converter ment would violate the “ ws

of Section 203(a). See, e.g. Tr. of May 27, 1983. = at 34, App.

118; Application for Warrant at 2-5. App. 58-61. On the contrary.

BEA has maintained that only after complete [ems gativs of all the

ing CED's opera

ible to determine whether CED's had in fact “em Section

203(a) (e.g.. Application for Warrant. R. 15; App. 57).

4b

IN THE

United States Court of Appeals

FOR THE SEVENTH CIRCUIT

No. 83-2608

CED'S, INC., d/b/a

] Appeal from Ununed States

PRODUCTS FOR POWER,

District Court for the North-

Plaintiff-Appellee. | een District of Iinois. East-

9’, ern Division

UNITED STATES ENVIRONMENTAL PRO- 5 Ne. $3.C 2609

TECTION AGENCY, and WILLIAM RUCK- ei

LESHAUS, ADMINISTRATOR, UNITED

STATES ENVIRONMENTAL PROTECTION Honorable

AGENCY. Joba A. Nordberg

BRIEF AND APPENDIX OF PLAINTIFF-APPELLEE

CED’S, INC., d/b/a

PRODUCTS FOR POWER

JAMES R. MORRIN

Cal R. Burnton

Arnold M. Flank

Attorneys for Plaintiff-Appellee

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, Limited

2 North LaSalle St., Suite 2205

Chicago, Illinois 60602

(312) 236-7742

Pandick Press Midwest. Inc.. Chicago * 454-7600

Sb

[-2-]

3. Whether CED’S, having been alleged by EPA to be

engaged in no other activity than the mere manufacture and

sale of a device that has both a legitimate and lawful use. may

be considered to be “causing” a violation of Section 203 of the

Clean Air Act, 42 U.S.C. § 7522(a), on the ground that other

persons further removed in the distribution network may

unlawfully remove catalytic converters from automobiles and

replace them with the manufactured device.

4. Whether the district court, after holding that EPA had

no statutory authorization to inspect and copy the documents of

CED'’S, Inc., properly granted to CED’S injunctive relief.

STATUTES INVOLVED

Resolution of this appeal involves an interpretation of

Sections 114(a) and 203(a) of the Clean Air Act, 42 U.S.C.

§ 7414(a) and § 7522(a). Section 114(a) of the Act, under

which authority EPA seeks to maintain its search, provides:

Record Keeping, inspections, monitoring, and entry

(a) For the purpose of (i) of developing or assisting

in the development of any implementation plan under

section 7410 or section 7411(d) of this title, any standard

of performance under section 7411 of this title, or any

emission standard under secon 7412 of this title, (ii) of

determining whether any person is in violation of any such

standard or any requirement of such a plan, or (iii)

carrying out any provision of this chapter (except a provi-

sion of subchapter II of this chapter with respect to a

manufacturer of new motor vehicles or new motor vehicle

engines )—

[-26-]

Act simply by manufacturing Test Tubes cannot stand. The

district court correctly concluded that the “causing” language of

Section 203 does not apply to CED’S.'°

© This conclusion was shared by the district court in National

[ Footnote continued on following page |

6b

A. Neither the Manufacture Nor the Sale of Test Tubes

is Illegal.

EPA concedes that the Clean Air Act prohibits neither the

manufacture nor the sale of Test Tube(s). EPA Brief p.8 n.8.

Test Tubes may be lawfully used to test the efficiency or

efficacy of catalytic converters; they are needed for automobiles

which are exported from the United States; and they may also

be lawfully used to replace a catalytic converter by individual

car owners. See H.R. Rep. No. 95-294, 97th Cong. Ist Sess.

(1977), EPA Supp. App., p. 54. Although EPA suggests that

CED’S markets its product to certain individuals who, if they

should subsequently permanently install the Test Tube(s),

would be in violation of the Clean Air Act, there is no evidence

to refute CED’S assertion that it never acted unlawfully.''

Furthermore, the question of to whom CED’S markets its

product was not an issue in the district court. CED’S customers

are wholesalers. It is beyond dispute that Section 203 does not

prohibit car repair shops from legally installing the devices on a

temporary basis for testing and repair purposes. Further, Test

Tubes may be lawfully purchased and used by individual car

owners and car repair shops acting in compliance with the law.

[ Footnote continued from preceding page|

Muffler Manufacturing Co., Inc. v. EPA, No. 83-929A (N.D. Ga.

Sept. 21, 1983), where the court stated that “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.” Jd. at 6, EPA

App. III, p. 145.

‘' EPA further asserts that because catalytic converter replace-

ment pipes are addressed in five state statutes, CED’S also “causes” a

violation of the Act. Like the Act, however, those statutes are not

directed at manufacturers. In any event, for probable cause to exist

there must be evidence that defendant either deliberately caused a

removal, see, United States v. Kunofske, 243 U.S. 440, 443 (1917), or

conducted itself in such a way as to have the inevitable effect of

causing the prohibited activity, see Chrysler Corp. v. EPA, 63' F.2d

865, (D.C. Cir. 1980). No such facts have been alleged here.

OO —

7b

IN THE UNiTeED STATES District COURT

For the Northern District of Illinois

Eastern Division

CED’S, INC., d/b/a PRODUCTS

FOR POWER,

Plaintiff,

v. NO.

UNITED STATES ENVIRONMEN-~ >

TAL PROTECTION AGENCY, and

LEE THOMAS, Acting Adminis-

trator, United States Environmental

Protection Agency,

Defendants.

COMPLAINT FOR INJUNCTIVE RELIEF

Plaintiff, CED’S, INC., d/b/a PRODUCTS FOR POWER

(“CED’S”), for its complaint against defendants, UNITED

STATES ENVIRONMENTAL PROTECTION AGENCY

(“EPA”) and LEE THOMAS, Acting Administrator, United

States Environmental Protection Agency (““Thomas”’), states as

follows:

1. Jurisdiction is founded upon the existence of a Federal

question. This action arises under the provisions of the Clean

Air Act, as amended, 33 U.S.C. §§ 7401, et seq.

2. CED’S, Inc. is a corporation incorporated under the

laws of the State of Illinois with its principal place of business at

25 Official Road, Addison, Illinois. “Products for Power” is an

operating division of CED’S, Inc., engaged in the manufacture

and production of internal combustion engine exhaust system

equipment, including mufflers, tail pipe connecters and adapt-

ers, clamps and hangers for said systems.

8b

3. CED’S also manufactures a product designed and sold

for the purpose of testing for operational problems with exhaust

system catalytic converters, which product is sold under the

registered trademark of “Test Tube”.

4. CED’S is not a “manufacturer” or “dealer” as said

terms are defined by the Clean Air Act, 42 U.S.C. § 7550( 1)

and § 7550( 4), respectively. Products for Power is not engaged

in the business of repairing, servicing, selling, leasing or trading

motor vehicles or motor vehicle engines. Neither CED’S, Inc.

nor Products for Power are engaged in the operation of a fleet

of motor vehicles.

5. The Products for Power division of CED’S, Inc. sells

Test Tubes primarily to warehouse distributors of automobile

equipment. CED’S sells no test tubes to automobile manufac-

turers, Or new or used automobile dealers.

6. On April 5, 1983, the United States Attorney on behalf

of EPA filed with this court an “Application for Administrative

Warrant”, purportedly pursuant to its authority under Sections

114 and 203(a) of the Clean Air Act (hereinafter the “Act’’),

42 U.S.C. § 7414 and § 7522(a), respectively. Pursuant to said

Application, U.S. Magistrate Sussman ordered a civil inspection

warrant (“the Warrant”). True and correct copies of the

Application for Administrative Warrant and the Warrant are

attached hereto as Exhibits A and B, and are made parts

hereof.

7. On April 6, 1983, U.S. EPA agents, pursuant to the

Warrant, entered upon the aforesaid property of CED’S, Inc.,

d/b/a Products for Power, and commenced a search of CED’S,

Inc., correspondence, records, customer lists and other docu-

ments as more fully set forth in said Warrant.

8. On April 6, 1983, CED’S filed a Motion to Quash the

Warrant. A true and correct copy of CED’S Motion to Quash

the Warrant is attached hereto as Exhibit C and is made a part

hereof. On April 6, 1983, Magistrate Sussman denied said

Motion to Quash.

9b

9. U.S. EPA has made clear its intent to continue to

execute the Warrant, and to continue to enter upon the property

of CED’S and inspect CED’S, Inc., d/b/a Products for Power,

records, correspondence, customer lists and other documents as

set forth in the Warrant.

10. The U.S. EPA, pursuant to the Clean Air Act, has

never requested or required CED’S, Inc., d/b/a Products for

Power to maintain any records whatsoever with respect to Test

Tubes or any other product manufactured or sold by CED’S.

11. CED’S has never knowingly removed or rendered

inoperative any device or element of design installed on or in a

motor vehicle or motor vehicle engine in compliance with

reguiations under the Clean Air Act either prior to or after

delivery of any such vehicle to an ultimate purchaser.

12. CED’S, Inc. has never knowingly directed or caused

any person, manufacturer, dealer, or any person engaged in the

repairing, servicing, selling, leasing or trading of motor vehicles

or motor vehicle enginges 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 regulations under the

Clean Air Act either prior to said vehicle’s sale and delivery to

an ultimate purchaser, or after such sale and delivery.

13. Unless restrained, EPA will continue to enter upon the

property of CED’S and continue to copy and inspect CED’S

records and other documents, customer lists, and other valuable

information owned by CED’S all in violation of the Clean Air

Act and of CED’S rights under the Fourth Amendment to the

Constitution of the United States of America. Said violation

constitutes irreparable harm to CED’S, an unlawful taking of a

valuable property night of CED’S, and unlawful invasion of

CED’S property and privacy nghts.

14. CED’S has no adequate remedy at law to prevent the

wrongful invasion of its privacy and property rights.

15. No hardship will result to EPA if it is enjoined from its

unlawful invasion of CED’S property and privacy rights.

10b

WHEREFORE, plaintiff prays:

1. That this Court enter a Temporary Restraining Order

and a Preliminary Injunction, or either of them, and a Per-

manent Injunction enjoining U.S. EPA, its agents, officers,

employees and contractors from executing the Warrant issued

by Magistrate Sussman on Apmil 5, 1983, and that U.S. EPA be

ordered to return to CED’S all documents taken, and copies

and notes thereof, as a result of its unlawful inspection con-

ducted pursuant to said Warrant.

2. That this Court enter a Permanent Injunction enjoining

U.S. EPA, its agents, officers, employees and contractors from

at any time entering upon the premises of CED’S or from

obtaining access to and inspection and copying of any docu-

ments or other records owned by CED’S, wherever situated.

/s/ JAMES R. MorRIN

James R. Morrin

One of CED’S Attorneys

JAMES D. FIFFER

James D. Fiffer

One of CED’S Attorneys

James R. Morrin, Esq.

James D. Fiffer, Esq.

Attorneys for Plaintiff

One IBM Plaza, Suite 3000

Chicago, Illinois 60611

(312 )222-0400

OF COUNSEL:

Wildman, Harrold, Allen & Dixon

One IBM Plaza, Suite 3000

Chicago, Illinois 60611

(312 )222-0400

i aaeedond

L1lb

IN THE UNITED STATES DISTRICT COURT

For the Northern District of Illinois

Eastern Division

CED’s, Inc. d/b/a )

PRODUCTS FOR POWER,

Plaintiff, No. 83-C-2409

2 { Judge Nordberg

UNITED STATES ENVIRONMENTAL

PROTECTION AGENCY, et al.

Defendants.

DEFENDANTS’ MEMORANDUM IN OPPOSITION TO

PLAINTIFF’S EMERGENCY MOTION FOR

TEMPORARY RESTRAINING ORDER AND

PRELIMINARY INJUNCTION AND IN

SUPPORT OF DEFENDANTS’ MOTION TO DISMISS

INTRODUCTION

On April 5, 1983 the United States Environmental Protec-

tion Agency (“EPA”) applied for and obtained an adminis-

trative warrant to inspect and copy documents in the possession

of CED’S, Inc., d/b/a Products for Power (“CED’s”’), in

connection with an investigation under the Clean Air Act (the

“Act’”), 42 U.S.C. 7401 et seg. The following day CED’s

moved to quash the warrant but its motion was denied by

Magistrate Sussman.

On April 7,’ 1983, CED’s filed an emergency motion

seeking a temporary restraining order or preliminary injunction

(“emergency motion”) to enjoin execution of the warrant and

the return of all documents

” * *

12b

[-20-]

(ii) EPA has met the legal standard for the issuance

of the warrant.

The applicable case law demonstrates that the agency

bears a minimal burden to obtain an administrative search

warrant. Public Service Co. of Indiana, Inc. v. EPA, 509 F.

Supp. 720 (S.D. Ind. 1981), aff'd 682 F.2d 626 (7th Cir. 1982),

cert. denied, No. 82-512 (January 10, 1983)18 establishes the

standard for issuance of a warrant under Section |14(a) of the

Act.

The level of probable cause required to support an

administrative inspection warrant has been the subject of

considerable discussion in recent years. It is clear that the

probable cause standard for such a warrant is somewhat

less stringent than that required in criminal matters.

509 F. Supp. at 723. The Court went on to hold:

Whether an agency inspection is pursuant to a pre-

established administrative plan or the result of specific

employee complaints is immaterial insofar as the level of

probable cause required to support a warrant is concerned.

Burkart [ Randall Div. of Textron, Inc. vy. Marshall, 625

F.2d 1313, 1316 (7th Cir. 1980] ... In the Matter of

Establishment Inspection of Gilbert & Bennett Mfg. Co.,

589 F.2d 1335 (7th Cir. 1979), cert. denied, 444 U.S. 884

wae. *

509 F. Supp. at 723, quoting with approval Marshall v.

Barlow’s, Inc., 436 U.S. 307 (1978).

Applying this “flexible administrative probable cause stan-

dard”, 509 F. Supp. at 723, to the facts of this case, it is clear

that EPA met the legal and factual standards for issuance of the

warrant. '9

18 The district court opinion relied on herein regard‘ng warrants

was adopted in full by the Seventh Circuit. 682 F.2d at 638.

19 Compare Appendix I to Public Service Co. of Indiana, Inc.,

supra, 509 F. Supp. at 723.

ree ve eT ire ee Oke

13b

EPA has legal authority to inspect and copy records to

ascertain compliance with the Act. As discussed in the Affidavit

of Paulette Peltz at 7 5-11, Attachment A, EPA has authority

under Section 113(a) of the Act to enforce, under certain

conditions, requirements of state law which are part of a SIP

approved by EPA under Section 110(a)(1). Five states

(California, Idaho, Texas, Virginia, and Wisconsin) have pro-

visions in their federally-approved SIP’s which prohibit any

person from removing or disabling motor vehicle emission

controls or from causing such tampering. Jd. EPA’s authority to

enforce these State provisions under Section | 13(a) is sufficient

to justify issuance of a search warrant under Section 114,

provided there was reason to believe that CED’s had “caused”

tampering in any of those states.

Moreover, Section 203(a) is applicable to CED’s. Con-

trary to CED’s claims,”° there is no limitation in the statute as to

who may be liabie for “causing” a violation of the anti-

tampering prohibition of Section 203(a)(3)(B). Paragraph

(a) of Section 203 unambiguously prohibits “the following acts

[including tampering by automobile repair shops] and the

causing thereof—...” without regard to the identity of the

person causing the tampering. It is a well-established principle

of construction that a statutory provision should be interpreted

according to the plain, ordinary meaning of its words, e.g.,

Perrin v. United States, 444 U.S. 37, 42 (1979). Interpreting

Section 203(a) to include any person who causes tampering is

also consistent with the purpose of the Act “to protect and

20CED’s apparently would read the restrictive language of

Section 203(a)(3)(B) (limiting its scope to persons “repairing,

servicing, selling, leasing ..., trading, ... or who operate fleets of

motor vehicles. . . .”) into Section 203(a) as well. There is no support

for this reading and it would force an unnecessary and illogical

redundancy into the section. Such a strained interpretation should not

be accepted in place of a plain, common sense, literal interpretation.

Cf. Citizens to Save Spencer County v. EPA, 600 F.2d 894,870 (D.C.

Cir. 1979).

14b

enhance the quality of the Nation’s air resources,” Section

101(b)(1), 42 U.S.C. 7401(b)(1), and with Congressional

concern that tampering with emission controls will “cause

[automobile] emissions [to] increase dramatically.” S. Rep.

No. 95-127, 95th Cong., Ist Sess. (1977) at 78, Leg. Hist. at

1452.

EPA also made the requisite factual showing to obtain the

warrant. For example, EPA submitted evidence to the magis-

trate alleging that Ced Kotowicz (president of CED’s, Inc.)

had advised the owner of a repair shop that he was unaware of

any limitations on the length of time a “test tube” could be left

on a vehicle after its catalytic converter was removed by the

repair shop. See Attachment A (Peltz affidavit) at { 20;

Attachment J (Kenny Affidavit). This statement, if true,2'

would allow a reasonable inference that CED’s intended that

the repair shop would use “test tubes” to permanently replace

catalytic converters, or knew that “test tubes” would be used for

that purpose.22

EPA also submitted evidence to the magistrate that CED’s

sells its “test tubes” in all states including those (Texas, Idaho,

Wisconsin and Virginia)23 which have federally enforceable

SIP provisions prohibiting tampering. In sum, there was

evidence that:

(1) Ced Kotowicz had discussed use of test tubes as

permanent replacements for converters with a repair shop

21 Administrative probable cause can, of course, be based on

hearsay contained in the government’s supporting affidavits. See, e.g.,

Burkart Randall Div. of Textron, Inc. v. Marshall, supra, 625 F.2d at

1319.

22 It would be irrcievant whether Mr. Kotowicz believed in good

faith that there was no legal limit on how long a “test tube” could be

left in place. It would be sufficient that he caused someone in the

repair business to knowingly remove and replace a converter without

regard to his knowledge of the law.

23 CED’s alleges it no longer sells “test tubes” in California,

another State with a federal enforceable anti-tampering prohibition.

15b

owner; (2) CED’s actively promoted sales of test tubes to

repair shops through advertisements in trade magazines

and attendance at trade shows; (3) only a very small

percentage of do-it-yourself car owners purchase exhaust

parts from repair shops; (4) only a minority of car owners

are capable of replacing their own catalytic converters; ( 5)

certain repair shops have already replaced converters with

CED’s test tubes; (6) the packaging and advertisements

for test tubes strongly promote replacement of catalytic

converters, but contain no instructions for any legitimate

testing use of test tubes or instructions for removing test

tubes after testing; (7) test tubes are comparatively in-

efficient testing devices; (8) warnings of possible violations

of the law to users of test tubes on packages and in

advertisements are inconspicuous and vague; (9) over 30

states restrict or prohibit most uses or test tubes by any

person; and (10) sales of catalytic converter replacement

pipes may exceed one million per year, nationwide, of

which the majority may be produced by CED’s, inciuding

sales in States with essentially no legal uses, Attachment A

at 924, 29, (Peltz Affidavit); “Market Facts Survey,”

Attachment H. See Attachments A-F, H-K, M-D.

This evidence. and the permissible inferences that can be drawn

from it, easily meet the standard for administrative probable

cause for issuance of the warrant.

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