Petition for Writ of Certiorari — American Mining Congress v. Thomas

85-174)

No.

IN THE —— -

Supreme Court of the Gnited States

OCTOBER TERM, 1985

AMERICAN MINING CONGRESS,

AMAX INC.,

ASARCO INCORPORATED,

St. JOE MINERALS CORPORATION,

Petitioners,

L

ENVIRONMENTAL PROTECTION AGENCY,

Respondent.

Petition for Writ of Certiorari to the United States Court

of Appeals for the Fourth Circuit

JAMES R. WALPOLE*

EDMUND E. HARVEY

JOANNE M. SALVATORE

CHADBOURNE & PARKE

1101 Vermont Ave., N.W.

Suite 900

Washington, D.C. 20005

(202) 289-3000

Of Counsel:

ROBERT A. EMMETT

DOUGLAS E. MCALLISTER REED SMITH SHAW & MCCLAY

AMERICAN MINING CONGRESS 1150 Conn. Ave., N.W.

1920 N Street, N.W. Washington, D.C. 20036

Washington, D.C. 20036 (202) 457-6100

GESy See Attorneys for Petitioners

*Counsel of Record

PRESS OF BYRON S. ADAMS, WASHINGTON, D.C. (202) 347-8203

a

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i

.

QUESTION PRESENTED

Whether national standards promulgated by the En-

vironmental Protection Agency under the Clean Water

Act are invalid because the Agency failed to provide

notice and an additional opportunity to comment, pur-

suant to section 4 of the Administrative Procedure

Act, on substantive changes made to its proposed

regulations.

PARTIES TO THE PROCEEDING:

Petitioner American Mining Congress is a national

trade association whose members produce most of the

nation’s metals, coal, uranium, and other mineral

products. Petitioners AMAX Inc.,2- ASARCO

Incorporated*® and St. Joe Minerals Corporation‘ are

major U.S. producers of metals, including primary

lead, zinc and copper.

‘In the court below, the following were also parties: Ken-

necott, GTE Products Corporation, Secondary Lead Smelters

Association, Gulf Coast Lead Company, Inc., and Mallinckrodt,

Inc.

* Petitioner AMAX Inc. has the following affiliated companies:

Alumax Inc. and Canada Tungsten Mining Corporation, Ltd.

’ Petitioner ASARCO Incorporated has the following non-

wholly owned subsidiaries or other associated companies: Alta

Mining and Development Company, Blackhawk Mining and De-

veloping Company, Limited, Compania Miners Quioma S.A., Fed-

erated Genco Limited, Fry’s Metals, Inc., Geominerals, Ltd.,

Government Gulch Mining Company Ltd., Green Hill Cleveland

Mining Company, Liard River Mining Company Ltd., Mexico

Desarrollo Industrial Minero, S.A., M.I.M. Holdings Limited,

Empress Miners Beranguela S.A., Empress Miners Cerro Grande

S.A., Midetco Ltd., Lesarco, Inc., Neptune Mining Company,

Corporacion Miners Nor Peru, S.A., Southern Peru Copper Cor-

poration, Wyoming Mining and Milling Company Ltd.

‘ Petitioner St. Joe Minerals Corporation is a wholly owned

subsidiary of Fluor Corporation. The following are non-wholly

owned subsidiaries or affiliates of St. Joe Minerals Corporation:

B & W Micronutrients, Inc., St. Joe Gold Corporation, Massey

Coal Company (partnership between subsidiaries of St. Joe Min-

erals Corporation and Shell Oil Company), and Yuba Placer Gold

Company (joint venture between a subsidiary of St. Joe Minerals

Corporation and Yuba Natural Resources, Inc.).

ill

TABLE OF CONTENTS

QUESTION PRESENTED ............sssccccssssssssececcesecsssseceess i

PARTIED TO THE PROCEEDING _ ...........ccccesccesccccssccesess il

I RPUMEOUIED a cccshaccsvenecccnvsserceenasecesnsscoesnes iv

a 5s adnananonenbusesneencasenuene

Ce scctnschahobannennennnncdennssnonsess

STATUTES AND REGULATIONS INVOLVED .........cceeeee0s

STATEMENT OF THE CABE .........ccccccccccsscssscsesscesesssees

Rulemaking Proceeding. ................::ssscceeesesees

Participation in Rulemaking ..............:seeeeee

i nia csnkanansnnsntaniercarevessecasnsvane

onrawhnds ws Nd

REASONS FOR GRANTING THE WRIT ...........cceeseeeeeeees

I. This Case Presents Important Questions Of

Federal Administrative and Environmental

ao cu scnadansenstlieinanes 9

A. The Fourth Circuit Misinterpreted the Notice

Requirements of the Administrative Procedure

Bete haas ick vavephanixusthasanduaccenerscacteasnssencessenseees 10

B. The Fourth Circuit Misinterpreted the ‘‘Log-

ical Outgrowth” Rule ................ccssscccsssseseseees 14

II. The Decision Below Creates A Conflict Among

6a sich skcsmnnadbnvedcusnennensannacseusiietsers 16

0 ccagnuntanasnebaesunantnuace 19

iv

TABLE OF AUTHORITIES

CASES: Page

American Federation of Labor and Congress of In-

dustrial Organizations v. Donovan, 757 F.2d 330

TK. SPB” (cicada, 17

American Frozen Food Institute v. Train, 539 F.2d

Sie Gaeta eet: SN ¢ Sahib ede tas) 12

American Iron and Steel Institute v. EPA, 568 F.2d

Pe PETE sinideieeee 13

American Paper Institute v. EPA, 660 F.2d 954 (4th

ers OE, * vieedadetetccscs Denese oa eae en 13

Appalachian Power Co. v. EPA, 579 F.2d 846 (4th

2. men ire nea Rn ind iS Ne A 13

BASF Wyandotte Corp. v. Costl 598 F.2d 687 (1st

Cir. 1979), cert. denied, 444 U.S. 1096

SE “aptutacicracenchbndpdds tag ammeter sade es. 1]

Chocolate Manufacturers Ass’n v. Block, 755 F.2d

Pee Cte TRE, BOD crivcsstcencresasssecsens 11, 14, 17, 18

Eli Lilly & Co. v. Costle, 444 U.S. 1096

GRIPE) VusrcnnlonsraachasncouacahusectanetaManeonaienecabetas as 10

Marathon Oil Co. v. EPA, 564 F.2d 1253 (9th Cir.

PP Or wonectetneekscnietusmerucauncactidacbicsa sae cs 1]

National Association of Home Health Agencies v.

Schweiker, 690 F.2d 932 (D.C. Cir. 1982), cert.

denied, 459 U.S. 1205 (1983) oo... eeeeeeeeess 11

National Tour Brokers Ass'n v. United States, 591

Pome WO GRR CR FTI viceisneccscansccacneasadiones 10

PPG Industries, Inc. v. Costle, 659 F.2d 1239 (D.C.

IE outa icacaataeaseor sarcnulseiuas eng. 12

Small Refiner Lead Phase-Down Task Force v. EPA,

705 F.2d 506 (D.C. Cir. 1983) ............... 11, 14, 17

Taylor Diving & Salvage Co., Inc. v. Dept. of Labor,

GOD F.2d GES (6th Cir. 19TB) .nccccsccccscnccsccsccce, 14

Wagner Electric Corp. v. Volpe, 466 F.2d 1013 (3d

SGuts SITE < Kiscipeat ona stensmtniicemen ae seateGise 14

Table of Authorities Continued

Page

Weyerhaeuser Co. v. Costle, 590 F.2d 1011 (D.C. Cir.

SUSU). acécstccduseinisnscnsssiannssntermbatuacomianconnaeepreaneinnh 17

STATUTES:

Administrative Procedure Act of 1946, Pub. L. No.

89-554, 80 Stat. 383, 5 U.S.C. §§551, et seq.

EOITIEE ecxbisescenssusciiacsusbonecaghamnscceusibenaiameaaninas 2

Clean Water Act of 1977, Pub. L. No. 95-217, 91

Stat. 1567, 33 U.S.C. §§ 1251-1376, as amended

by Municipal Wastewater Treatment Construc-

tion Grant Amendments of 1981, Pub. L. No.

97-117, 95 Stat. 1623 (1981) — ...........cccrrrresee 2

B UC. § BGR CIDR) cemcenciiccsescnscicssccsccssccasccanes 2, 9

5 U.S.C. § SES(NS) (1966) _............cccrccsssescess 10

ZB U.S.C. § TRGEE) CEFR) wn nnencsecccsscccscscscessess 2

BB U.S.C. § EGE CRMC) onnvsncssccccccsssicsssccssnsnses 3

83 U.S.C. § 1814(OK 2A) (1981). ...........ceccccsneees 4,7

83 U.S.C. § 1SGB(D) (T9TS) — ............ceccccecocsennens 3

RULES AND REGULATIONS:

48 Fed. Reg. 7073 (February 17, 1983) ........ 4

49 Fed. Reg. 8760 (March 8, 1984) .............. 7

SO CR: 6 OB TRG okie 2,3

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«

eS Ae

IN THE

Supreme Court of the Gnited States

OCTOBER TERM, 1985

AMERICAN MINING CONGRESS, AMAX INC., ASARCO

INCORPORATED, AND ST. JOE MINERALS

CORPORATION,

Petitioners,

UNITED STATES ENVIRONMENTAL PROTECTION

AGENCY,

Respondent.

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

FOURTH CIRCUIT

Petitioners American Mining Congress, AMAX Inc.,

ASARCO Incorporated, and St. Joe Minerals Cor-

poration (‘‘Petitioners’’) pray that a writ of certiorari

issue to review the opinion and judgment of the

United States Court of Appeals for the Fourth Circuit

entered on December 26, 1985.

OPINION BELOW

The opinion of the court of appeals below is re-

ported at 780 F.2d 445. It is reproduced in Appendix

A.

JURISDICTION

The opinion of the court of appeals was issued De-

cember 26, 1985. The Order denying rehearing and

rehearing en banc was issued on January 24, 1986.

The jurisdiction of this Court is invoked pursuant to

28 U.S.C. § 1254(1).

STATUTES AND REGULATIONS INVOLVED

Section 4 of the Administrative Procedure Act of

1946, Pub. L. No. 89-554, 80 Stat. 383 (1966) (codified

as amended at 5 U.S.C. § 553) is reprinted in App. H.

Relevant portions of the Clean Water Act of 1977,

Pub. L. No. 95-217, 91 Stat. 1567 (1977) (codified as

amended at 33 U.S.C. §§ 1251-1376 (1981), at issue

here, are reprinted in App. I.

STATEMENT OF THE CASE

This case presents an issue of great and recurring

importance under a major Federal environmental law

and the governing procedures of the Administrative

Procedure Act, 5 U.S.C. §§ 551, et seg. (‘‘APA’’). The

case arises out of petitions to review national stand-

ards (known as effluent limitations guidelines) set by

the Environmental Protection Agency (“EPA”’ or

“Agency’’) for portions of the U.S. metals industry

in a rulemaking proceeding under the Ciean Water

Act, 33 U.S.C. §§ 1251-1376 (1981); 40 C.F.R. § 421.

In proposing the limitations EPA sought comment on

certain specific technologies for the control of water

pollution effluents. Comments by Petitioners demon-

strated to the Agency that such technologies could

not achieve the proposed limitations. EPA thereupon

decided to adopt and promulgate a substantially dif-

ferent technology—one, of which the Petitioners and

public had not been placed on notice, and that had

not been the subject of any comments.

Petitioners challenged the regulations’ pursuant to

33 U.S.C. § 1369(b), and the Fourth Circuit upheld

EPA’s action. It succumbed to the temptation to defer

to the Agency’s claimed expertise, and failed to hold

the Agency to the notice and fairness requirements

of the APA. Since EPA’s adopted technology had

never been exposed to comment because of lack of

notice, the court below had an inadequate record and

was in no position to determine whether the rule was

the product of an informed and reasoned judgment.

Petitioners are major lead, zinc and copper pro-

ducers in the United States, and a national trade

association. Their operations are deeply affected by

federal environmental laws and regulations, including

the Clean Water Act requirements at issue.

Rulemaking Proceeding

On February 17, 1983, EPA, pursuant to section

304 of the Clean Water Act, 33 U.S.C. § 1314, pro-

posed twelve sets of nationally applicable effluent

guideline regulations for ‘“‘Nonferrous Metals Manu-

facturing.’’ Regulations were proposed, inter alia, for

the U.S. lead, zinc and copper industries.

The Clean Water Act requires the national effluent

guideline regulations to “identify ... the degree of

effluent reduction attainable through the application

1 Petitioners challenged four of the twelve sets of regulations

issued by EPA: 40 C.F.R. Part 421, Subparts E, G, H and I.

Other industries challenged different regulations, and the court

below consolidated all the cases over the opposition of all the

petitioner-litigants. See App. 60a.

of the best control measures and practices achieva-

ble.” 33 U.S.C. § 1814(bX2\A). In promulgating these

technology-based regulations, EPA must first identify

the best control measures and practices achievable,

and then set the actual discharge limits based on the

capability of the technology identified. The identifi-

cation by the EPA of the control measure is a crucial

step because the actual limits are based on the ca-

pacity of the technology selected. The control tech-

nology from one industry may be “‘transferred”’ (7.e.,

identified) to another if the processes are similar, but

EPA may choose to have different discharge limits

for the two industries. Thus, the identification of the

technology is a fundamental step in the rulemaking

process.

In the rulemaking at issue, EPA published in the

Federal Register proposed effluent limitations and

specified the six pollution control technology options

it was considering, and it requested specific comments

on them or any other alternative technologies.? The

six options included two waste treatment processes

frequently used by Petitioners: “lime and sedimen-

tation’”’ (known as “‘lime and settle’) and “‘lime, settle

2 The 94 page proposal! included a list of ‘‘in-process’’ systems

and several ‘‘in-place” systems considered for proposal (App. 64a-

67a), and then it specified the six ‘‘control and treatment options”

that were selected for final consideration. App. 67a-68a. Com-

ments were requested on these six options: ‘The Agency spe-

cifically requests long-term sampling data (especially paired raw

wastewater—treated effluent data) from nonferrous metals man-

ufacturing plants having well-operated treatment systems using

the treatment technologies relied upon for this regulation, and

also other equally effective treatment technologies.’ 48 Fed. Reg.

7073 (Feb. 17, 1983) (emphasis added). App. 69a.

and filter.’’ The Agency regarded these as two sep-

arate and distinct treatment options.

After the publication of Notice in the Federal Reg-

ister, EPA distributed to interested parties a pro-

posed Development Document, which was not

published in the Federal Register. That 3-volume doc-

ument consisted of over 2100 pages, and contained,

inter alia, general descriptions of over 25 technolo-

gies, including a process known as sulfide precipita-

tion. Nowhere in that document was it stated or even

suggested that sulfide precipitation was either being

considered as an option or a supplement to one of

the six stated options.

During the development of the Agency’s 55,000

page administrative record (‘‘Record’’) sulfide precip-

itation was never addressed as being an alternative

or supplement to the six options, nor was it ever

mentioned in any of the comments. Petitioners fo-

cused their attention on the options listed for consid-

eration in the Federal Register, especially “‘lime and

settle’’ and ‘“‘lime, settle and filter,’ systems with

which they were extremely familiar. They had grave

concerns about the sampling and analysis data relied

on by EPA which, for the most part, was from other

industries. As a result they undertook a major effort

to submit to EPA data developed by experienced in-

dustry professionals and consultants on the treatment

capabilities of the six technologies.

Participation in Rulemaking

During the comment period, Petitioners submitted

hundreds of pages of comments plus over 30,000

The court below notes the Agency relied on ‘‘only 300 raw

sampling and analysis results obtained from the in-

dustry’s seven major plants, taken over the course of

seven years. Petitioners also met twice with EPA

representatives to discuss the data.‘ The thrust of

Petitioners’ comments was that the precise limits

called for by the proposed regulations (that were based

on data from five other industries) were impossible

to meet with the six technologies. The Agency was

urged to consider the comprehensive data submitted

by Petitioners since it represented the actual industry

being regulated.

After the close of the comment period, EPA rep-

resentatives notified Petitioners that the sulfide pre-

cipitation technology was being considered since the

original six options did not seem capable of achieving

the discharge limits in the proposal. EPA represen-

tatives stated that they were considering sulfide pre-

cipitation in addition to the “‘lime, settle and filter”

and treated data points’’ (App. 10a); these were obtained from

other industries. The court upheld the Agency’s rejection of

Petitioners’ comprehensive, industry-specific data.

‘The EPA minutes of one meeting were prepared three months

later, and those for the second were prepared more than two

months afterwards. Record pp. 44439 and 44443.

’ The notification that the Agency was considering a new tech-

nology occurred during a January 5, 1984 conference phone call

between representatives of EPA and Petitioners, after the com-

ment period had closed. The normal procedure is for the Agency

to prepare a memorandum of such a phone call and include it

in the Administrative Record, although the Agency made no re-

cord of this phone call. The only record of the conversation is

in the affidavit attached to Petitioners’ Reply Brief in the Fourth

Circuit, to which the Agency did not object. See August 2, 1985

Court Order App. 39a, and affidavit from Reply Brief App. 40a-

49a.

~]

process. Petitioners requested an opportunity to com-

ment on sulfide precipitation to demonstrate inade-

quacies of such treatment in certain circumstances.

Permission to submit any comments on the new tech-

nology was denied by EPA. Since no comments were

allowed, the only data on the new technology in the

Record was that developed by the Agency. Petitioners

could not even obtain from EPA a copy of Agency

test results on the new technology until May, 1984,

three months after the final regulations were pub-

lished, and then only after a Freedom of Information

Act request was filed. See App. 47a-49a. The final

regulations were based on the new technology® se-

lected internally by EPA after the close of the com-

ment period.’

Decision Below

In rejecting Petitioners’ challenge to EPA’s regu-

lations on the issue of adequate notice, the Fourth

Circuit held that Petitioners’ ‘‘should reasonably have

known that EPA was considering sulfide precipita-

tion.” App. 15a. While the court acknowledged that

® See e.g. the notice in the final regulations: ‘“‘The Agency has

amended the proposed BAT technology basis for primary lead

plants operating acid plants to include sulfide precipitation.” 49

Fed. Reg. 8760 (March 8, 1984), App. 71a.

7 There is a serious question whether this EPA procedure of

predetermining regulatory limits prior to selecting the model

technology is in violation of § 304(bX2XA) of the Clean Water

Act, 33 U.S.C. § 1814(bX2KA). The court below did not address

this issue which was raised by Petitioners in their principal and

reply briefs. The court below referred to the EPA proposed limits

as the ‘‘established effluent guidelines.”” App. 14a. The limits

were not established; they were proposed and still under Agency

consideration, along with the technology to meet them.

sulfide precipitation was not among the EPA’s listed

six control and treatment options in the proposed

rule, the court found that the preamble to the pro-

posed rules “specifically asked for comments on al-

ternative treatment technologies.” App. 15a.

Additionally the court found that EPA’s associated

Development Document “‘included both lime and settle

and sulfide precipitation in its discussion of effective

chemical precipitation methods.’”’ App. 15a.

The court below discussed the “logical outgrowth”’

rule and concluded that “EPA did not violate the

requirements of the Administrative Procedure Act

when, in an attempt to respond to industry comments

and complaints, it added sulfide precipitation as a

supplement to the Best Available Technology on which

its effluent limitations were grounded.’’ (emphasis

added). App. 15a.

Throughout the court’s opinion are references to

deferral to Agency expertise.* This deference un-

doubtedly led the court to accept, without benefit of

any comments and contrary to Petitioners’ position,

the Agency’s contentions that sulfide precipitation was

simply the addition of a second step to the “‘lime,

settle and filter’”’ technology, that it could be trans-

ferred to Petitioners’ plants from experience gained

outside the industry, and that it is a ‘‘more effective

treatment than the conventional lime and settle proc-

ess.’’ App. 17a.° These determinations were based to-

* The court below summarily deferred to Agency expertise on

a number of far-reaching technical issues raised in Petitioners’

briefs. There is no explanation of the EPA bases for such con-

clusions.

*If sulfide precipitation is a more effective technology than

tally on the EPA references in the 55,000 page

Record, none of which were contained, or referred

to, in the Federal Register notice.

The court also denied a Motion of Petitioners to

Supplement the Administrative Record. App. 55a. In-

sofar as_ sulfide precipitation was concerned,

Petitioners sought to include in the Record long-term

data from a foreign plant (relied upon by EPA) show-

ing that sulfide precipitation would not achieve the

prescribed limits, evidence of a meeting between rep-

resentatives of EPA and the foreign plant (prior to

the promulgation of the regulations) in which EPA

representatives were told that EPA samplings from

that plant were not representative of long-term per-

formance, and Petitioners’ estimates of the costs of

sulfide precipitation which were not considered by the

Agency since no comments had been allowed.

REASONS FOR GRANTING THE WRIT

I

THIS CASE PRESENTS IMPORTANT QUESTIONS

OF FEDERAL ADMINISTRATIVE AND

ENVIRONMENTAL LAW

This case presents an issue of great importance in

rulemaking proceedings conducted by the Environ-

mental Protection Agency, and other agencies, under

the Administrative Procedure Act, 5 U.S.C. § 553. It

raises the question of what obligation a federal agency

the conventional ‘‘lime, settle and filter’ process, it raises the

question why sulfide precipitation was not designated in the Fed-

eral Register as an option for consideration in the originally

proposed rules.

10

has under section 4 of the APA to give notice and

opportunity for comment on a rule that differs sub-

stantially from the originally proposed rule and has

been adopted in response to complaints and comments

directed at the initial proposal. The question is a re-

curring one that, according to Justice Rehnquist, ‘‘will

ultimately require interpretation of important statu-

tory language by this Court,” Eli Lilly & Co. v. Cos-

tle, 444 U.S. 1096, 1098 (1980), dissent in order

denying certiorari.

If the decision below is allowed to stand it will have

a chilling impact on the public’s ability to participate

meaningfully in rulemaking proceedings. The case also

takes on added significance because of the prominent

role informal] rulemaking proceedings have in the im-

plementation of Environmental Laws. They involve

voluminous amounts of technical and scientific ma-

terial with no opportunity for a hearing.

A. The Fourth Circuit Misinterpreted the Notice Re-

quirements of the Administrative Procedure Act

Section 4 of the Administrative Procedure Act re-

quires that the notice in the Federal Register of a

proposed rulemaking contain ‘‘either the terms or

substance of the proposed rule or a description of

the subjects and issues involved.’’ 5 U.S.C. § 553(b\3)

(1966). It is well-acknowledged that this notice re-

quirement serves to benefit both the public and the

agency involved,’® by encouraging public comment

10 See National Tour Brokers Ass’n v. United States, 591 F.2d

896, 902 (D.C. Cir. 1978).

1]

and testing the rules, providing a fair opportunity for

all views,! and creating a record for judicial review.”

It is especially important that adequate notice be

given in EPA rulemakings because of the large

amount of technical data normally involved in such

proceedings. It is incumbent upon EPA to identify

issues and related data with ‘“‘reasonable specificity”’

in order to avoid an ‘‘elaborate treasure hunt, in which

interested parties, assisted by high-priced guides

(called ‘lawyers’), must search the record for the bur-

ied treasure of a possibly relevant comment.’’®

While the Fourth Circuit acknowledged the need to

afford notice “sufficiently descriptive to provide in-

terested parties with a fair opportunity tc comment

and to participate in the rulemaking,”’ citing Chocolate

Manufacturers Ass’n v. Block, 755 F.2d 1098, 1104

(4th Cir. 1985), it erroneously interpreted what con-

stitutes adequate notice.

The court’s suggestion that Petitioners ‘‘should rea-

sonably have known that EPA was considering sulfide

precipitation’’ was based on two factors: (1) “EPA

specifically asked for comments on alternative treat-

11 See Small Refiner Lead Phase-Down Task Force v. EPA,

705 F.2d 506, 547 (D.C. Cir. 1983), BASF Wyandotte Corp. v.

Costle, 598 F.2d 637, 641 (1st Cir. 1979), cert. denied, 444 U.S.

1096 (1980), and National Association of Home Health Agencies

v. Schweiker, 690 F.2d 932, 949 (D.C. Cir. 1982), cert. denied,

459 U.S. 1205 (1983).

12 See Marathon Oil Co. v. EPA, 564 F.2d 1253, 1271 n. 54

(9th Cir. 1977).

13 Small Refiner Lead Phase-Down Task Force v. EPA, 705

F.2d at 550.

12

ment technologies’ in the preamble to the proposed

rules; and (2) EPA’s associated Development Docu-

ment included sulfide precipitation in its discussion of

effective precipitation methods. App. 15a.

To suggest that the Agency’s request for “‘‘alter-

native treatment technologies,’ and nothing more,

placed Petitioners’ on notice of anything, let alone

that sulfide precipitation was under consideration,

does not comport with the APA’s requirement that

the notice be sufficiently descriptive to give the public

a fair opportunity to comment and participate in the

rulemaking. And the lack of notice is exacerbated

where, as here, no party in its comments even sug-

gested such a technology. The absence of any com-

ments on sulfide precipitation plainly emphasizes the

lack of adequate notice,‘ particularly in light of the

substantial comments submitted by Petitioners.

The court’s reliance upon the proposed Develop-

ment Document as satisfaction of the notice require-

ments of the APA is equally misplaced. That document

was not published in the Federal Register and con-

sisted of over 2100 pages, including a boilerplate cat-

alog of more than twenty-five existing water

treatment technologies. Sulfide precipitation was just

one of the technologies discussed, and it was not iden-

tified as one of the options under consideration as a

proposed model technology. The decision below would

place an intolerable burden on commentators, requir-

14 See American Frozen Food Institute v. Train, 539 F.2d 107,

135 (D.C. Cir. 1976) and PPG Industries, Inc. v. Costle, 659 F.2d

1239, 1250 (D.C. Cir. 1981) which states ‘‘the importance of the

issue was belied by the obscurity of the footnote intended to

give notice, (and) by the lack of meaningful comment.”

13

ing them to address every technology discussed in a

Development Document even though the Agency pub-

lished a notice in the Federal Register specifying the

technologies under final consideration.'® The court re-

lied on assertions and interpretations of data on sul-

fide precipitation that first appeared in the Agency’s

brief; they were not addressed in the rulemaking. The

only “‘record’’ before the court was information EPA

presented. When Petitioners attempted to address

these matters, the Agency moved to strike the ma-

terial from Petitioners’ brief, and the court granted

the motion. App. 55a, 52a.

The decision below failed to understand the nature

of a proposed Development Document. It is not a

proposal, but simply the means of providing back-

ground data and details with respect to the rulemak-

ing.'© American Paper Institute v. EPA, 660 F.2d 954,

959 n.13 (4th Cir. 1981); Appalachian Power Co. v.

EPA, 579 F.2d 846, 853 (4th Cir. 1978); American

Iron and Steel Institute v. EPA, 568 F.2d 284, 291

(8d Cir. 1977).

15 The vice of such a requirement is readily apparent in this

case. Here Petitioners, in addressing the six proposed technology

options, submitted hundreds of pages of data and 30,000 sampling

results. The decision below would have increased Petitioners’

burden four-fold. That indeed would be a classic “paper chase.”’

16 The final Development Document contains sulfide precipita-

tion data obtained by EPA after the rulemaking: ‘Information

contained in this paragraph was added by the Agency after pro-

mulgation of the regulations and is not part of the Administrative

record.’’ Record 46973. This is somewhat incongruous since the

Development Document itself is in the record.

14

B. The Fourth Circuit Misinterpreted the ‘Logical

Outgrowth”’ Rule

The decision also erroneously held that sulfide pre-

cipitation technology was a “‘logical outgrowth’’ of the

original proposal; it misconstrues that concept. Log-

ical outgrowth must stem from the Agency’s proposal,

and not from a response to comments or complaints,

if a substantial change in a proposed rule without

further notice is to be sanctioned. The Agency itself

must provide the notice of a regulatory proposal.

Small Refiner Lead Phase-Down Task Force v. EPA,

705 F.2d at 549 (D.C. Cir. 1983). See also Taylor

Diving & Salvage Co., Inc. v. Dept. of Labor, 599

F.2d 622 (5th Cir. 1979); Wagner Electric Corp. v.

Volpe, 466 F.2d 1018 (8d Cir. 1972). It is the Agency’s

responsibility to provide notice of a proposed rule;

comments by other parties do not satisfy that obli-

gation. As stated in Chocolate Manufacturers Ass’n

v. Block, 755 F.2d at 1104:

“An agency, however, does not have carte

blanche to establish a rule contrary to its

original proposal simply because it receives

suggestions to alter it during the comment

period. An interested party must have been

alerted by the notice to the possibility of the

changes eventually adopted from the com-

ments.”’

In this case Petitioners could scarcely have been

alerted to any changes in the rule prompted by the

comments, since neither the proposal nor the com-

ments even mentioned sulfide precipitation. The de-

cision adopts in tote the EPA position on sulfide

15

precipitation which was developed entirely without

public input or scrutiny.”

The court below clearly extended the logical] out-

growth theory beyond legal limits, relying heavily

upon the comments as the nexus to the final proposal.

The court noted that the ‘“‘comments led EPA to re-

examine its selections of model technologies and data

basis.”’ It also observed that changes can be a “‘ ‘log-

ical outgrowth’ of the original proposal and the notice

and comments upon it.’’ (emphasis added). In vali-

dating EPA’s addition of sulfide precipitation, it re-

ferred to the fact that it was ‘‘an attempt to respond

to industry comments and complaints.’’"® App. 15a. It

is clear then that the court considered the complaints

and comments as the trigger for the final proposal.

The court’s failure to order the EPA to provide a

further opportunity to comment on sulfide precipita-

tion and its refusal to permit Petitioners to supple-

ment the administrative record compounded the error.

Without the benefit of Petitioners’ comments on sul-

fide precipitation the court was in no position to de-

termine whether that technology was simply an

’ For example, the court said: “‘We do not think it disquali-

fying that the Ashio plant, for example, uses sulfide precipitation

to produce an end-product rather than to clean its wastewater,

so long as the process adequately reduces pollutant concentra-

tions in wastewater.” App. 17a. For a number of technica] and

production reasons, Petitioners certainly found it “disqualifying”’

but were not allowed to alert EPA or the court.

18 These comments and complaints demonstrated that the six

proposed technologies were not appropriate for the specific limits

in the regulations. Rather than acknowledge the comments, the

Agency rejected all Petitioners’ data and invoked a new tech-

nology to justify its preconceived limits.

awe

16

incidental supplement to “‘lime, settle and filter,”’ as

EPA contended; whether it could achieve the pre-

scribed effluent limits; and whether the use of the

technology in other industries could be validly trans-

ferred to the U.S. nonferrous metals industry.'® In

short, the Court deprived itself of a record upon which

to make a reasoned and informed judgment.

The effect of the decision is to impose significant

burdens on those who wish to comment on proposed

regulations. It allows an agency to fulfill the APA no-

tice requirement merely by including material in the

voluminous Development Document or anywhere else

in the record. This allows (using the words of the court

below) ambushing those who have not addressed all the

items described therein. It frustrates and precludes

meaningful comments in the rulemaking process. It also

increases the costs for those who wish to participate

in informal rulemaking proceedings since the entire re-

cord becomes subject to comment, regardless of what

is specified in the Federal Register notice.

Il

THE DECISION BELOW CREATES

A CONFLICT AMONG THE CIRCUITS

The decision below, in its interpretation of ‘‘logical

outgrowth,” conflicts with those of other circuit

courts. As noted supra, the court below has deemed

that a substantial change in a proposed rule induced

by comments or criticisms meets the “logical out-

growth’”’ test.

1’ See App. 16a-17a where the court makes specific findings

with regard to technical and process matters presented in the

EPA brief.

17

Decisions in the District of Columbia Circuit and

even within the Fourth Circuit have reached contrary

conclusions. Recently the D.C. Circuit stated that as

“‘a general rule, [an agency] must itself provide notice

of a regulatory proposal. Having vowed to do so, it

cannot bootstrap notice from a comment. The APA

does not require comments to be entered on a public

docket. This notice necessarily must come—if at all—

from the agency.”’ American Federation of Labor and

Congress of Industrial Organizations v. Donovan, 757

F.2d 330, 340 (D.C. Cir. 1985), citing Small Refiner

Lead Phase-Down Task Force v. EPA, 705 F.2d at

549 (emphasis in original). In the instant case, the

court blindly approved EPA’s promulgation of a sub-

stantially new regulation which was not even based

on a new comment, but rather on the Agency’s in-

ternal determination that the six proposed technolo-

gies were not appropriate.”° See App. 70a-73a. It also

introduced the element of the Agency’s good faith

(App. 14a), which is irrelevant to the issue of notice

and is not a legal substitute for it.

The decision below also conflicts with the recent

Fourth Circuit Chocolate Manufacturer Ass’n v. Block

decision. 755 F.2d 1098 (4th Cir. 1985). In that case,

the agency proposed regulations concerning the sugar

content of Federally funded food packages. Flavored

milk and its sugar content was not placed in issue

by the proposed rule. However, in response to com-

ments, flavored milk was deleted from the program

because of its high sugar content.

* See also Weyerhaeuser Co. v. Costle, 590 F.2d 1011, 1031

(D.C. Cir. 1978) (‘the Agency’s final conclusions are far from

the ‘logical outgrowth’ of the preceding notice and comment proc-

ess’’).

18

The court there recognized an agency may pro-

mulgate a final rule different from the proposal, but

when the final rule substantially departs from the

proposed rule, the notice is inadequate. It noted at

the time of proposal the public could not have had

any indication that flavored milk was at issue, and

the very detailed and specific information in the

preamble to the proposed rule did not address it. In

striking down the final rule, the Chocolate court spe-

cifically addressed the ‘‘logical outgrowth”’ rule (755

F.2d at 1105-1106). The court said it did not feel the

petitioner was “‘fairly treated or that the administra-

tive rulemaking process was well served by the dras-

tic alteration of the rule without an opportunity for

CMA to be heard.” Jd. at 1106. The court below did

not even attempt to distinguish the Chocolate decision,

and only cited the case for the general proposition

that an agency may promulgate a final rule that dif-

fers in some particulars from its proposals.

CONCLUSION

For these reasons, the petition for writ of certiorari

should be granted.

Of Counsel:

DouGLas E. MCALLISTER

AMERICAN MINING CONGRESS

1920 N Street, N.W.

Washington, D.C. 20036

(202) 861-2800

Respectfully submitted,

JAMES R. WALPOLE

EDMUND E. HARVEY

JOANNE M. SALVATORE

CHADBOURNE & PARKE

1101 Vermont Ave., N.W.

Washington, D.C. 20005

(202) 289-3000

ROBERT A. EMMETT

REED SMITH SHAW &

McCay

1150 Conn. Ave., N.W.

Washington, D.C. 20036

(202) 457-6100

Attorneys for Petitioners