Opposition Brief — Modine Manufacturing Co. v. United States Environmental Protection Agency

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Supreme Court, U.S,

FILED

(3)

No. 85-333 oc

T $1 1986

In the Supreme Court of the Gini :

OCTOBER TERM, 1985

MGDINE MANUFACTURING COMPANY, PETITIONER

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

ON PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

THIRD CIRCUIT

BRIEF FOR THE RESPONDENT IN OPPOSITION

CHARLES FRIED

Solicitor General

F. HENRY HABICHT II

Assistant Attorney General

ROBERT L. KLARQUIST

Attorney

Department of Justice

Washington, D.C. 20530

(202) 633-2217

FRANCIS BLAKE

General Counsel

SUSAN G. LEPOW

Assistant General Counsel

LEE C. SCHROER

Attorney

U.S. Environmental Protection Agency

Washington, D.C. 20460

QUESTIONS PRESENTED

1. Whether the Environmental Protection Agency’s

metal finishing pretreatment standards, which did not in-

clude a provision for variances, were contrary to prior

decisions of this Court.

2. Whether the court of appeals’ decision not to extend

the compliance deadline for the metal finishing pretreat-

ment standards was contrary to prior decisions of this

Court.

(I)

TABLE UF CONTENTS

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TABLE OF AUTHORITIES

Cases:

American Paper Institute v. Train, 543 F.2d 328, cert.

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Chemical Manufacturers Ass'n v. Natural Resources

Defense Council, Inc., No. 83-1013 (Feb. 27, 1985) .... 2, 3,

5, 6, 7, 8,9

E.I duPont deNemours & Co. v. Train, 430 U.S. 112 ....2, 7, 9

EPA v. National Crushed Stone Ass’n, 449 U.S. 64 ...... 4, 7-8

General Motors Corp. v. EPA, 738 F.2d 97 ............ 3, 11

National Association of Metal Finishers v. EPA, 719 F.2d

624, rev’d sub nom. Chemical Manufacturers Ass’n v.

Natural Resources Defense Council, Inc., No. 83-1013

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Natural Resources Defense Council, Inc. v. EPA, 656

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Train v. Natural Resources Defense Council, Inc., 421

OUT os, he ek c da vibks kimeed ce cocks oa: 10-11

Statutes and regulation:

Administrative Procedure Act, 5 U.S.C. 553(e) ......... 6

Clean Water Act of 1977, 33 U.S.C. 1251 ef seg. ........ l

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(I)

(IV)

Statutes and regulation — Continued:

40 C.F.R.:

Pt. 403:

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48 Fed. Reg. (1983):

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In the Supreme Court of the Gnited States

OCTOBER TERM, 1985

No. 85-333

MopDiINE MANUFACTURING COMPANY, PETITIONER

, Vv.

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

ON PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

THIRD CIRCUIT

BRIEF FOR THE RESPONDENT IN OPPOSITION

OPINION BELOW

The court of appeals entered a judgment order without

opinion (Pet. App. Al).

JURISDICTION

The judgment of the court of appeals was entered on

May 17, 1985. The petition for a writ of certiorari was

filed on August 15, 1985. The jurisdiction of this Court is

invoked under 28 U.S.C. 1254(1).

STATEMENT

1. The Clean Water Act of 1977, 33 U.S.C. 1251 ef seq.,

requires the Administrator of the United States Environ-

mental Protection Agency (EPA) to regulate two types of

industrial facilities: (1) “direct” dischargers, i.e., facilities

that discharge waste water directly into navigable waters;

and (2) “indirect” dischargers, i.e., facilities that discharge

(1)

waste water into publicly owned treatment works (POT Ws)

prior to discharge into navigable waters. For both types of

dischargers, EPA conducts notice-and-comment rulemak-

ing proceedings and promulgates nationwide, technology-

based requirements applicable to categories of dischargers

(e.g., iron and steel, metal finishing, and leather tanning).

See E.J. duPont deNemours & Co. v. Train (duPont), 430

U.S. 112 (1977); Chemical Manufacturers Ass’n v. Natural

Resources Defense Council, Inc. (CMA), No. 83-1013

(Feb. 27, 1985).

For direct dischargers, the Act required that limitations

be established in a two-phase program; dischargers were

required to comply with best practicable control

technology currently available (BPT) by July 1, 1977 (33

U.S.C. 1311(b)(1)(A)) and were required subsequently to

comply with the more stringent best available technology

economically achievable (BAT) (33 U.S.C. 1311(b){2)(A)

and (C)). Indirect dischargers are subject to pretreatment

standards applicable to pollutants that are not suscep dle

to treatment by or that would interfere with the operation

of POTWs. These standards must be complied with within

three years of their promulgation as specified by the Ad-

ministrator. 33 U.S.C. 1317(b).

The categorical pretreatment standards at issue in this

case are those applicable to indirect dischargers in the

metal finishing industry. EPA has established these

categorical pretreatment standards under the same two-

phase approach used for direct dischargers.

2. In each rulemaking proceeding, EPA gathers as much

data as possible regarding facilities in the particular

category. Nationwide requirements for all plants in that

‘category are based on these data. On occasion, however,

the Agency may be unaware of or may not consider a fac-

tor that is applicable to a few plants and that would dictate

a change in the requirements applicable to those facilities.

EPA therefore developed a regulatory mechanism by

which the national requirements may be adjusted, on a

case-by-case basis, to better suit those few atypical plants.

This vehicle, known as the “fundamentally different fac-

tors” (FDF) variance, was examined by the Court last

Term in CMA. As its name suggests, this mechanism

allows variances for existing dischargers that can

demonstrate that their situation is characterized by factors

that are “fundamentally different” from those considered

by EPA in developing the national rule for their category.

In effect, the FDF variance creates a new subcategory for

the discharger in question based on factors that would

have justified — and indeed required —the creation of that

subcategory had EPA been aware of those factors or taken

them into account during the national rulemaking process.

The FDF variance procedures for indirect dischargers

are codified in EPA’s general pretreatment regulations. 40

C.F.R. 403.13 (Pet. App. A48).

3. On July 15, 1983, EPA promulgated the categorical

pretreatment standards for the metal finishing industry. 48

Fed. Reg. 32462 (Pet. App. A3-42). The metal finishing

pretreatment standards are the equivalent of the more

Stringent “BAT” effluent limitations guidelines applicable

to direct dischargers.' Those pretreatment standards

‘ EPA promulgated categorical pretreatment standards for elec-

troplating sources in the metal finishing industry on January 28, 1981.

46 Fed. Reg. 9462; 40 C.F.R. Pt. 413. Those standards are the

equivalent of the “BPT” effluent limitations guidelines appiicable to

direct dischargers. The electroplating standards were upheld in Na-

tional Association of Metal Finishers (NAMF) v. EPA, 719 F.2d 624

(3d Cir. 1983), rev'd on other grounds sub nom. Chemical Manufac-

turers Ass'n v. Natural Resources Defense Council, Inc., No. 83-1013

(Feb. 27, 1985). The metal finishing industry, including Modine’s

facilities, was required to comply with the electroplating categorical

pretreatment standards by June 30, 1984. Several industrial com-

panies petitioned EPA to extend this compliance deadline. EPA

denied this petition, and the court of appeals upheld the Agency's

decision. General Motors Corp. v. EPA, 738 F.2d 97 (3d Cir. 1984).

require approximately 7,500 metal finishers to comply with

numerical limitations on toxic metals, organics, and

cyanide discharged in their waste water. The toxic metal

pretreatment standards must be complied with by Febru-

ary 15, 1986. 48 Fed. Reg. 32462 (1983) (Pet. App. A4).?

Like other categorical pretreatment standards, the metal

finis. ing pretreatment standards contain a provision (40

C.F.R. 433.15(a)) authorizing FDF variances pursuant to

the general pretreatment regulations (40 C.F.R. 403.13).

The general pretreatment regulations r..tre that an ap-

plication for an FDF variance generally must be filed

within 180 days after the effective date of the categorical

pretreatment standard (40 C.F.R. 403.13(g)(2)). The effec-

tive date of the metal finishing pretreatment standards was

August 29, 1983.

4. Prior to promulgation of the metal finishing stan-

dards, numerous parties petitioned the United States

Court of Appeals for the Third Circuit to review various

aspects of the Agency’s general pretreatment regulations

and the electroplating categorical pretreatment standards.

On September 20, 1983, the court of appeals upheld the

electroplating pretreatment standards in their entirety but

remanded several aspects of the general pretreaimert

regulations. Of particular relevance to this case, the court

2 The metal finishing pretreatment standards apply to a larger

number of waste streams than the electroplating pretreatment stan-

dards and impose somewhat more stringent limitations. Compare 40

C.F.R. Pt. 413 with Pt. 433. Both standards, however, are based on

the use of the same treatment technology — precipitation and clarifica-

tion — which is widely used in the metal finishing industry. The more

stringent metal finishing standards reflect the additional data gathered

by the Agency and represent the “BAT” standard of the “best” treat-

ment technology performance in the industrial category. American

Paper Institute v. Train, 543 F.2d 328, 346 (D.C. Cir.), cert. dismiss-

ed, 429 U.S. 967 (1976). The electroplating standards represent the

“BPT” standard of the “average of the best” treatment technology per-

formance in the industrial category. EPA v. National Crushed Stone

Ass'n, 449 U.S. 64, 76 n.15 (1980).

of appeals remanded the FDF variance provision, holding

that Section 301(/) of the Clean Water Act, 33 U.S.C.

1311(/), prohibits FDF variances for toxic pollutants

covered by categorical pretreatment standards. National

Association of Metal Finishers v. EPA, 719 .2d 624, 646

(3d Cir. 1983).

In response to the court of appeals’ decision, EPA

issued a technical amendment to the general pretreatment

regulations providing that an FDF variance would not be

available for toxic pollutants. 49 Fed. Reg. 5131 (1984).

The Agency announced, however, that in the absence of

the FDF variance procedure it would entertain petitions

for amended rulemaking by indirect dischargers who were

previously eligible for FDF variances. In pretreatment

standards promulgated after the Third Circuit’s decision,

the Agency explained that in such cases “it may be ap-

propriate to issue specific categorical standards for such

facilities, treating them as a separate subcategory with

more, or less, stringent standards as appropriate.” 48 Fed.

Reg. 52396 (1983).

Subsequently, in CMA, this Court reversed the court of

appeals’ decision, accepting EPA’s construction of Section

301(/) of the Clean Water Act that FDF variances are not

prohibited for toxic pollutants.

5. Prior to this Court’s decision in CMA, Modine in-

itiated this case in the United States Court of Appeals for

the Third Circuit to challenge the metal finishing pretreat-

ment standards. In its initial brief, Modine argued that

EPA failed to consider Modine’s unique situation during

the metal finishing rulemaking; that EPA relied on the ex-

istence of the FDF variance provision to cure such failure;

and that the Third Circuit’s remand and EPA’s subsequent

withdrawal of the FDF variance for toxic pollutants

thereby rendered the metal finishing pretreatment stan-

dards invalid as to Modine. In response, EPA explained

that during the metal finishing rulemaking, the Agency

had carefully considered Modine’s comments and that

Modine had never established that it was in any way

unique or fundamentally different from other metal

finishers; that the Agency did not rely on the FDF variance

procedure in making the metal finishing standards ap-

plicable to Modine’s facilities since Modine had never

established that those facilities were in any way unique;

and that the Agency’s repeal of the FDF variance provi-

sion did not preclude Modine from obtaining ad-

ministrative relief by petitioning the Agency under the Ad-

ministrative Procedure Act (5 U.S.C. 553(e)) to initiate

rulemaking to amend the standards on the ground that its

facilities were fundamentally different.

Subsequent to this Court’s decision in CMA, Modine

filed a supplemental brief requesting the Third Circuit to

declare the metal finishing standards invalid until such

time as a variance provision was reinstated and to remand

the standards to the Agency for extension of the com-

pliance deadline to reflect the period during which the

FDF variance procedure was unavailable. In response,

EPA pointed out that this Court’s decision in CMA did

not hold or even imply that the metal finishing standards

or the many other pretreatment standards promulgated by

EPA were invalid due to the temporary unavailability of

the FDF procedure for those standards and that Modine’s

proper recourse for an extension of the compliance

deadline was to petition the Agency. EPA noted that its

decision on any such petition would be separately subject

to judicial review.

The parties presented oral argument to the Third Circuit

on May 14, 1985. On May 17, 1985, the court denied

Modine’s petition for review without opinion (Pet. App.

Al).

On September 25, 1985, EPA amended the general

pretreatment regulations by removing the prohibition on

the granting of FDF variances for toxic pollutants. 50 Fed.

Reg. 38809. In that notice, the Agency acknowledged that

facilities covered by the metal finishing pretreatment

a |

standards had the 180-day application period for FDF

variances cut short by the Third Circuit’s decision.

Because 22 days of their period to apply for an FDF

variance had elapsed prior to that decision, the Agency

provided that metal finishers could submit FDF variance

requests for toxic pollutants within 158 days after the

notice. 50 Fed. Reg. 38810 (1985).

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. Review by this Court is therefore unwar-

ranted.

1. Petitioner argues (Pet. 7-8) that the metal finishing

pretreatment standards are invalid by virtue of this Court’s

decision in CMA, as well as its decisions in E.J. duPont

deNemours & Co. v. Train, 430 U.S. 112 (1977), and EPA

v. National Crush d Stone Ass’n, 449 U.S. 64 (1980). Peti-

tioner complains that it was improperly denied an FDF

variance from the standards. This argument plainly lacks

merit. Petitioner had an opportunity to apply for an FDF

variance prior to the Third Circuit’s decision. After that

decision, petitioner could, and did, petition the Agency

for a modification of the standards as they applied to its

facilities, a procedure functionally similar to an FDF

variance. And facilities governed by the metal finishing

pretreatment standards now have additional time to apply

for FDF variances for toxic substances. Thus, the tem-

porary unavailability of such variances provides no basis

for attacking the pretreatment standards.

a. The decisions of this Court in duPont and National

Crushed Stone concluded that it was necessary that “some

allowance [be] made for variations in individual plaats”

when EPA promulgated BPT effluent limitations guide-

lines for classes and categories of facilities. duPont, 430

U.S. at 128; see also National Crushed Stone Ass’n, 449

U.S. at 72. However, the Court did not require that EPA

specifically adopt the FDF variance procedure. Similarly,

in CMA, the Court did not require EPA to include the

FDF variance mechanism in pretreatment standards. It

merely accepted as permissible EPA’s construction that

Section 301(/) of the Clean Water Act, 33 U.S.C. 1311(J/),

does not prohibit FDF variances for toxic pollutants

covered by national regulations. The Court also did not in-

validate any previously adopted categorical pretreatment

standards for which the FDF variance was temporarily

unavailable.?

b. Following the Third Circuit’s decision in National

Association of Metal Finishers, the Agency temporarily

made FDF variances unavailable for toxic pollutants

regulated by pretreatment standards. As previously noted,

however, the Agency announced that it would entertain

petitions for amended rulemaking by indirect dischargers

that were previously eligible for FDF variances. This Court

in CMA acknowledged that such a procedure was

equivalent to the FDF variance procedure. Slip op. 29

n.22. Thus, although the metal finishing pretreatment stan-

dards temporarily did not include provision for modifica-

tion through the FDF variance procedure, a functionally

comparable modification procedure was provided.

Petitioner, in fact, availed itself of this procedure on

June 29, 1984, by filing a petition for rulemaking with the

Agency requesting separate, less stringent pretreatment

standards for two of its metal finishing facilities. The

Agency denied this petition on November 15, 1984, and

judicial review of that denial was not sought.

c. Finally, petitioner in its challenge to the metal

finishing standards in the court below raised the same

issues that it presumably would raise in seeking an FDF

3 Similarly, the Third Circuit had upheld the electroplating pretreat-

ment standards in their entirety and had struck down only portions of

the general pretreatment regulations. See 4-5, supra.

variance. The FDF variance provides a regulatory mecha-

nism to allow a discharger to show how it is fundamentally

different from other dischargers subject to the same stan-

dard. The primary basis of petitioner’s challenge to the

metal finishing pretreatment standards was that the Agen-

cy acted in an arbitrary and capricious manner because it

did not create a separate subcategory for petitioner’s

facilities. As EPA pointed out, however, the metal finish-

ing rulemaking record demonstrates that petitioner failed

to establish that it was fundamentally different with

respect to any factor that would have justified the creation

of a separate subcategory. The court of appeals, after

reviewing the metal finishing rulemaking record, rejected

petitioner’s contention that it had established any fun-

damental difference justifying a separate subcategory for

its facilities. Therefore, there is no evidence to substantiate

petitioner’s claim that its facilities would be entitled to an

FDF variance.

2. Petitioner argues (Pet. 8-9) that the court of appeals

decision not to require EPA to extend the compliance

deadline for the metal finishing pretreatment standards

renders this Court’s decisions in CMA and duPont mean-

ingless (Pet. 8-9). As discussed above, even the temporary

unavailability of the FDF variance did not deny petitioner

the opportunity to seek modification of the metal finishing

pretreatment standards. Furthermore, an application for a

variance or modification of an applicable pretreatment

standard does not, and should not, act to shield the appli-

cant from compliance with the applicable pretreatment

standard. Finally, any request for an extension of a com-

pliance deadline should first be submitted for considera-

tion by the Agency.

a. The court of appeals rejected petitioner’s challenge to

the metal finishing pretreatment standards. The metal

finishing standards have been effective since August 29,

1983. Therefore, petitioner as well as all other metal

finishing facilities will have had two and one-half years to

come into compliance with the metal finishing standards

by the February 15, 1986, compliance deadline. These

facilities also currently are required to be in compliance

with the electroplating pretreatment standards.

Petitioner is the only party that has challenged the

standards or sought a delay in the compliance deadline.

Since the standards apply to approximately 7,500 metal

finishers, there is every indication that the vast majority of

metal finishers will be in compliance with the metal

finishing standards by February 15, 1986. Petitioner’s re-

quest that the court of appeals “remand the metal finishing

regulations to the Agency for revision of the compliance

deadline” (Supp. Br. 4) was properly denied by the court

of appeals. The metal finishing pretreatment standards are

valid, and petitioner presented no evidence to support an

order directing the Agency to extend the compliance

deadline.

b. The pendency of an application for a variance is not a

justification for failure to comply with a compliance

deadline. It is a well established principle in environmental

law that requests for variances and appeals from those

decisions are “on the polluter’s time.”* Train v. Natural

Resources Defense Council, Inc., 421 U.S. 60, 92 (1975).

The ultimate responsibility for compliance with the ap-

plicable deadline is the discharger’s. Applying for a

variance from an applicable standard does not alter the

fact that the standards “remain in effect, and the polluter’s

failure to comply may subject him to a variety of enforce-

‘The Administrator of EPA relied upon this principle in denying a

request by petitioner that he stay the applicability of the metal

finishing pretreatment standards pending a review by the court of ap-

peals of petitioner’s challenge to those standards. While finding that

petitioner offered no justification for a stay, the Administrator also

noted that “challenges by industry must be resolved on the discharger’s

own time.” Petitioner did not challenge this November 15, 1984, deci-

sion by the Administrator. -

ment procedures.” Jbid.; see also Natural Resources

Defense Council, Inc. v. EPA, 656 F.2d 768, 780-781

(D.C. Cir. 1981).

c. As EPA indicated before the court of appeals, if peti-

tioner can establish that it needs an extension of the com-

pliance deadline for any of its facilities, its proper recourse

is to petition the Agency for an extension of the deadline.

EPA Supp. Br. 4. In any such petition, petitioner could at-

tempt to make the showing, which it thus far has failed to

do, that any particular facility is entitled to an extension of

the compliance deadline. The Agency’s decision on any

such petition would be subject to judicial review.

Industry petitioners followed this procedure in seeking

to have the Agency extend the 1984 compliance deadlirie

for the electroplating pretreatment standards. The Ad-

ministrator denied the request, and the court of appeals

upheld the Administrator’s action. General Motors Corp.

v. EPA, 738 F.2d 97 (3d Cir. 1984). In the present case,

where no such request was made to the Agency, the court

of appeals properly rejected petitioner’s request that an ex-

tension of the compliance deadline be granted for all metal

finishers. Petitioner’s proper avenue for relief lies with the

Agency.

CONCLUSION

The petition for a writ of certiorari should be denied.

Respectfully submitted.