Petition for Writ of Certiorari — Ford Motor Co. v. United States

Supreme Cot, U.S.

FILED

| MAY 29 1987

No. 86-1892 ‘ JOSEPH F. SPANIOL, JR.

Iu the Supreme Court of the Hnited States

OCTOBER TERM, 1986

FORD MOTOR COMPANY, PETITIONER

Vv.

UNITED STATES OF AMERICA, RESPONDENT

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

PAUL M. BATOR KATHRYN A. OBERLY

STEPHEN M. SHAPIRO Counsel of Record

Mayer, Brown & Platt Mayer, Brown & Platt

190 South LaSalle Street 2000 Pennsylvania Ave., N.W.

Chicago, Illinois 60603 Washington, D.C. 20006

(312) 782-0600 (202) 463-2000

DOUGLAS E. CUTLER

NORMAN W. BERNSTEIN

Ford Motor Company

401 Parklane Towers West

One Parklane Boulevard

Dearborn, Michigan 48126

(313) 322-4891

— eee

WILSON - Eres Printine Co., Inc. - 789-0096 - WASHINGTON, D.C. 20001

QUESTION PRESENTED

The State of Michigan promulgated an emission lim-

itation as part of a State Implementation Plan (SIP)

under the Clean Air Act. That limitation was approved

by the Environmental Protection Agency, but a Michigan

state court subsequently entered a final judgment holding

that the limitation was fundamentally flawed from the

outset, and therefore void ab initio, because it was prom-

ulgated in the mistaken belief that it was achievable

through the use of “reasonably available control tech-

nology.” Against this background, the question presented

is:

Whether, consistent with the Clean Air Act and the

Due Process Clause, the United States may maintain an

enforcement action in federal court under the Clean Air

Act for alleged noncompliance with an emission limita-

tion invalidated by a court of the state that adopted the

limitation, notwithstanding the fact that challenges to

the technological and economic feasibility of a SIP are

within the exclusive competence of the state judicial

system.

(1)

II

RULE 28.1 STATEMENT

A listing of petitioner’s subsidiaries (other than

wholly owned subsidiaries) and affiliates is set forth at

App. H, infra, 72a-74a.

TABLE OF CONTENTS

Page

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1. The Promulgation Of State Implementation

ee celaienielnhenaniseudadienekaadnere 2

2. State Administrative And Judicia! Primacy Over

Claims Of Technological And Economic Infeasi-

ce mnhachanesesercnngtecnwonns 3

3. Revised SIPs Required For ‘‘Nonattainment”

Areas And The “RACT” Standard ...................... 4

4. The Consequences For Enforcement Actions Of

State Primacy Over Claims Of Economic And

Technological Infeasibility ..................02..2...2222......

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a. The Allegations In The Government’s

Ea Ne A 7

b. Michigan’s Review Of The Feasibility Of

Compliance With Rule 610 ................--.......... 7

ec. Ford’s State Court Action ..............................

a cc snnncenssnnsaceeaenssacnsencs 12

REASONS FOR GRANTING THE PETITION ........... 13

A. The Federal Government May Not Maintain An

Enforcemert Action Under The Clean Air Act

Based On Provisions Of A State Implementation

Plan That A State Court Has Determined To Be

Invalid As Of Their Inception -............................. 15

(III)

IV

TABLE OF CONTENTS—Continued

Page

B. The Sixth Circuit’s Decision Violates Well-

Settled Principles Of Federalism And Comity.... 23

C. The Sixth Circuit’s Decision Produces Gross In-

equities That Cannot Have Been Intended By

I icc i2k lca cena htc cpeniteen apenaridandamabanmnion 24

D. The Sixth Circuit’s Decision, By Refusing To

Give Any Meaningful Effect To The State

Court’s Judgment, Denies Ford It: Right To

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DUN a dees anamenieaaiee 63a

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Vv

TABLE OF AUTHORITIES

Cases: Page

American Cyanamid Co. v. EPA, 810 F.2d 493 (5th

Ses HITE. - sin aieiciesdasibeiencadiblainioliccoadaitiastalsaniientimmisaniiaesaiaia 25

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

I ek tall 16

Armstrong v. Manzo, 380 U.S. 545 (1965) -............ 26

Bethlehem Steel Corp. v. EPA, 782 F.2d 645 (7th

eR Re re eee SEN Se ee 4

Boddie v. Connecticut, 401 U.S. 371 (1971) ............ 26

Brock v. Roadway Express, Inc., 55 U.S.L.W. 4530

CRE, TI. SI stencssilnnssncottenripiadanistabatitigpaailsaadaiiiiniabinae 26

Chevron, U.S.A., Inc. v. NRDC, 467 U.S. 837

EE. sadncsanccricnshnanciastedlecdmepsaceieedsnhihighaemaienamssloa aaimeaiiidss 4, 28

Connecticut v. EPA, 696 F.2d 147 (2d Cir. 1982) .. 2

Friends of the Earth v. Potomac Electric Power

Co., 419 F. Supp. 528 (D.D.C. 1976) ..................... 6

Illinois v. Celotex Corp., 516 F. Supp. 716 (C.D.

BE PIED ccacsaiciesereccaneinenoistintonnciaiadaliaaaunesadcmiiaaas ts 18

Indiana & Michigan Electric Co. v. EPA, 509 F.2d

ee re a I eda catered anteatcianiibiintns 16

Juidice Vv. Vail, 480 U.S. 327 (1977) .....................---- 23

Kremer Vv. Chemical Construction Corp., 456 U.S.

ye ¢ Rare nenecnape es ae a LEONE TER eae mae rea 24

Little v. Streater, 452 U.S. 1 (1981) ...........-202220...... 26

Mathews Vv. Eldridge, 424 U.S. 319 (1976) -............. 26, 28

Michigan V. Thomas, 805 F.2d 176 (6th Cir. 1986) .. 22

National Great Lakes Steel Corp. v. Gorsuch, 700

a RR RC eine ene ee 5

New Mexico Environmental Improvement Division

v. Thomas, 789 F.2d 825 (10th Cir. 1986) _......... 22, 23

Ohio Environmental Council v. EPA, 593 F.2d 24

GEE SE SINE picotictanasisssnchancdanisasatabienbabucacadsanachlantioos 16

Pennzoil Co. v. Texaco, Inc., 107 S. Ct. 1519

IIE cs ccscsicohekaccnspcoecsetcncanapboesdmaneerceaaianumeedacsin otetaaneas ahaa ciate 23

Sierra Club v. Indiana-Kentucky Electric Corp.,

716 F.2d 1145 (7th Cir. 1983) ............................... passim

Train Vv. NRDC, 421 U.S. 60 (1975) -........ ieesiagecahel 15, 19

Trainor V. Hernandez, 431 U.S. 434 (1977) ............. 23

Union Electric Co. v. EPA, 427 U.S. 246 (1976) ......passim

VI

TABLE OF AUTHORITIES—Continued

United States v. Mendoza-Lopez, No. 86-2067 (May

BE, Se ccceestchsnschvicivicbintansetidiemsbinammpeeiatabennniees

United States v. Mitchell, 445 U.S. 535 (1980) .......

United States v. National Steel Corp., 767 F.2d

ke Ft | een

United States v. Wheeling-Pittsburgh Steel Corp.,

642 F. Supp. 468 (W.D. Pa. 1986) ........................

Western Oil & Gas Ass’n V. EPA, 633 F.2d 803 (9th

GRR, SI sss rccdheketeadarstanshtnedabcetenedits cadets accadalens

Younger V. Harris, 401 U.S. 37 (1971) ...................

Constitution, statutes and regulations:

U.S. Const., Amend. V (Due Process Clause) ........

Anti-Injunction Act, 28 U.S.C. § 2283 ....................

Clean Air Act of 1970, 42 U.S.C. § 7401 et seq.:

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Michigan Administrative Code, Air Pollution Con-

trol Commision, General Rules, R. 336.1610 _.......

Page

27

20

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TABLE OF AUTHORITIES—Continued

Miscellaneous: Page

Bleicher, Economic and Technical Feasibility in

Clean Air Act Enforcement Against Stationary

Sources, 89 Harv. L. Rev. 316 (1975) -................ 6

U.S. Attorneys’ Manual! 4-5.700 (3/84) -................. 20

In the Supreme Court of the United States

OCTOBER TERM, 1986

No.

ForRD MOTOR COMPANY, PETITIONER

V.

UNITED STATES OF AMERICA, RESPONDENT

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

Ford Motor Company respectfully petitions for a writ

of certiorari to review the judgment of the United

States Court of Appeals for the Sixth Circuit in this

case.

OPINIONS BELOW

The opinion of the court of appeals (App. A, infra,

la-9a) is reported at 814 F.2d 1099. The oral ruling of

the district court (App. B, infra, 10a-13a) is unre-

ported.

JURISDICTION

The judgment of the court of appeals (App. E, infra,

18a-19a) was entered on March 27, 1987. The jurisdic-

tion of this Covrt is invoked under 28 U.S.C. § 1254(1).

STATUTE INVOLVED

Relevant provisions of the Clean Air Act, 42 U.S.C.

§ 7401 et seq., are reprinted at App. G, infra, 63a-71a.

(1)

2

STATEMENT

The court of appeals has held that the Environmental

Protection Agency may maintain an enforcement action

in federal court under Section 113(b) of the Clean Air

Act, 42 U.S.C. § 7413(b), for alleged violations of a

provision of a State Implementation Plan (SIP), even

though a court of the state that adopted the provision

entered a final judgment holding the provision void ab

initio. The principal issue presented by this case is

whether a federal administrative agency is free simply

to ignore the final judgment of a state court on a ques-

tion committed to the exclusive competence of the state

judicial system. Before turning to the facts of this case,

we briefly describe the statutory framework applicable to

this dispute.

1. The Promulgation Of State Implementation Plans.

The Clean Air Act has been aptly described as “a bold

experiment in cooperative federalism.” Connecticut Vv.

EPA, 696 F.2d 147, 151 (2d Cir. 1982). Under the

federal-state partnership created by the Act, the Admin-

istrator of EPA promulgates National Ambient Air

Quality Standards (NAAQSs) for a variety of pollut-

ants. Section 109, 42 U.S.C. § 7409.1. Although the

NAAQSs are established by EPA, Congress vested each

state with the “primary responsibility for assuring air

quality within the entire geographic area comprising

such State.” Section 107(a), 42 U.S.C. § 7407(a). Thus,

Section 110 of the 1970 Act, 42 U.S.C. § 7410, required

each state to adopt and submit to the Administrator an

implementation plan providing for the attainment, main-

tenance, and enforcement of the NAAQSs. If the Ad-

ministrator determines that the plan meets the require-

1The Act directed the Administrator to promulgate two levels of

NAAQSs. National “primary” standards are air quality standards

that, in the Administrator’s judgment, are “requisite to protect the

public health,” and national “secondary” standards are those “requi-

site to protect the public welfare.” Section 109(b) (i) and (2), 42

U.S.C. § 7409(b) (1) and (2).

3

ments of Section 110(a) (2) (A)-(K), 42 U.S.C. § 7410

(a) (2) (A)-(K), he is required to approve it. Once a

state-promulgated SIP has been approved by EPA, it

may be enforced by either the federal or state govern-

ments. 42 U.S.C. §§ 7410(a) (2) (D), 7413. If a state

fails to adopt a SIP that meets the requirements of the

Act, the Administrator is expressly authorized to prom-

ulgate his own implementation plan for that state. Sec-

tion 110(c), 42 U.S.C. § 7410(c).

2. State Administrative And Judicial Primacy Over

Claims Of Technological And Economic Infeasibility.

Shortly after passage of the 1970 Act, the courts of

appeals divided over the issue whether the Administrator

could consider claims of economic or technological in-

feasibility in deciding whether to approve a state-

promulgated SIP. This Court resolved the conflict in

Union Electric Co. v. EPA, 427 U.S. 246 (1976), holding

that the Administrator may not take such concerns into

account. The Court determined that Section 110(a) (2)

of the Act, 42 U.S.C. § 7410(a) (2), limits the Ad-

ministrator’s role to ensuring that state plans comply

with the minimum federal standards established by the

Act; it does not permit him to second-guess a state’s

decision to impose more stringent requirements, even if

those requirements are so stringent that it is not feasible

to comply with them. 427 U.S. at 261-265.

Because the Administrator may not consider claims of

technological or economic infeasibility, the Court further

held that federal courts of appeals reviewing the Admin-

istrator’s approval of a state plan under Section 307

(b) (1) of the Act, 42 U.S.C. § 7607(b) (1), likewise

may not consider such claims. Union Electric Cc., 427

U.S. at 266-267. Instead, the Court suggested that

“(plerhaps the most important forum for considera-

tion of claims of economic and technological infeasibility

is before the state agency formulating the implementa-

tion plan.” Jd. at 266. The Court also observed that

———

4

a party dissatisfied with the state agency’s resolution of

such issues “may be able to take its claims of economic

or technological infeasibility to the state courts.” Id. at

266-267.

3. Revised SIPs Required For “Nonattainment”

Areas And The “RACT” Standard. The 1970 Act re-

quired SIPs to provide for the attainment of the primary

NAAQSs by 1975. In many areas of the country, how-

ever, that statutory deadline was not met. See generally

Chevron, U.S.A., Inc. Vv. NRDC, 467 U.S. 837, 847

(1984). In the 1977 amendments to the Act, those areas

were designated as “nonattainment” areas. 42 U.S.C.

§§ 7407(d), 7501(2). For such areas, the 1977 legis-

lation generally extended the deadline for attainment of

the primary NAAQSs to December 31, 1982, and re-

quired each state to submit by July 1, 1979, a revised

SIP for EPA’s approval. 42 U.S.C. § 7502(a) (1)

and (b).

With respect to existing major stationary sources of

air pollution not undergoing modification, the revised

SIPs required by the 1977 amendments had to provide

for such reductions in emissions “as may be obtained

through the adoption, at a minimum, of reasonably

available control technology.” Section 172(b)(3), 42

U.S.C. § 7502(b) (3). The Clean Air Act nowhere de-

fines “reasonably available control technology,” which

has come to be known by “the inevitable if unlovely acro-

nym” of “RACT.” Bethlehem Steel Corp. v. EPA, 782

F.2d 645, 650 (7th Cir. 1986). Even in the absence of

a statutory definition, however, it is clear that economic

and technological feasibility are the cornerstones of

“RACT. Thus, EPA has defined RACT as “[t]he lowest

emission limitation that a particular source is capable

of meeting by the application of control technology that

is reasonably available considering technological and eco-

nomic feasibility.” 45 Fed. Reg. 59331 (1980) (emphasis

added). See also 40 C.F.R. § 51.1(0).

T_T — LULU

|

:

5

The combined effect of the Court’s decision in Union

Electric and the minimum requirement of RACT for

existing sources in nonattainment areas is that the Ad-

ministrator may—indeed, must—consider_ technological

and economic factors to the extent necessary to determine

that a state’s submission requires the use of RACT, but

that he may not disapprove a state’s submission based on

a determination that it requires more than RACT, 2.e.,

that it is technologically and economically infeasible.

That is because, as Union Electric clearly held, a deci-

sion to impose infeasible requirements is left to the sole

discretion of the states. 427 U.S. at 265.2 By the same

token, a federal court reviewing the Administrator’s de-

cision to approve a SIP submitted under the 1977 amend-

ments may not consider arguments that the requirements

of a state plan are technologically and economically in-

feasible and, therefore, more stringent than RACT. See,

e.g., National Great Lakes Steel Corp. v. Gorsuch, 700

F.2d 314, 324 (6th Cir. 1983).

4. The Consequences For Enforcement Actions Of

State Primacy Over Claims Of Economic And Technologi-

cal Infeasibility. This Court’s decision in Union Electric

did not elaborate on its statement that state agencies

and state courts are the appropriate forums in which to

raise claims of economic and technological infeasibility.

In particular, the Court left open the question whether

such claims may also be raised as a defense to a federal

enforcement action. Union Electric, 427 U.S. at 268

n.18. In the wake of Union Electric, however, the only

two courts that have squarely considered the question

have held that such claims may not be raised as a defense

2 The “one-way” consideration that the Administrator must give

to RACT is not a significant change from his role under the 1970

Act. There, too, economic and technological factors were relevant in

determining whether the Act’s minimum requirements were met,

but infeasibility was not a legitimate basis upon which to disap-

prove a state plan. See Union Electric, 427 U.S. at 264-265 & n.14.

6

to an enforcement action. United States v. Wheeling-

Pittsburgh Steel Corp., 642 F. Supp. 468, 473 (W.D. Pa.

1986); Friends of the Earth v. Potomac Electric Power

Co., 419 F. Supp. 528, 535 (D.D.C. 1976). See also

Bleicher, Economic and Technical Feasibility in Clean

Air Act Enforcement Against Stationary Sources, 89

Harv. L. Rev. 316, 352-353 (1975). Moreover, EPA

has consistently taken the position that claims of tech-

nological and economic infeasibility are not a defense to

an enforcement action. Thus, as a practical matter, the

state courts are the only judicial forum in which such

claims may be raised.

The question presented in this case is yet another cru-

cial issue left unresolved by Union Electric—what effect

does a state court’s judgment that an EPA-approved SIP

is invalid have on EPA’s ability to maintain a federal

enforcement action? In other words, if a company ac-

cepts this Court’s invitation in Union Electric, challenges

a SIP in state court, and obtains a final state court judg-

ment holding that the SIP was invalid ab initio, may

EPA ignore that ruling and maintain an enforcement

action in federal court seeking monetary penalties and

other relief for “violations” of the same invalid SIP?

Two courts of appeals have confronted this important

question. In Sierra Club v. Indiana-Kentucky Electric

Corp., 716 F.2d 1145, 1148 (1983), the Seventh Circuit

expressly held that “a successful state court challenge

* * * render[s] an implementation plan provision un-

enforceable in both federal and state court.” As de-

scribed below (see pages 12-138, infra), the Sixth Cir-

cuit reached precisely the opposite result in this case.

5. The Facts Of This Case. Ford owns and operates a

plant in Mount Clemens, Michigan, for the manufacture

and coating of vinyl products. At the time this action

was filed, the Mount Clemens plant produced approxi-

mately 85% of the requirements of Ford’s North Ameri-

can automotive operations for vinyl-coated materials, in-

7

cluding automobile roofs, upholstery, and other interior

components. C.A. App. 78.

a. The Allegations In The Government’s Complaint.

On September 26, 1984, the United States, on behalf of

EPA, commenced this enforcement action against Ford

under Section 113(b) of the Clean Air Act, 42 U.S.C.

§ 7413(b). The government alleged that eight vinyl

“coating lines” at the Mount Clemens plant were emit-

ting volatile organic compounds (VOCs) in excess of

the rate permitted by R. 336.1610 of the Michigan

Administrative Code, Air Pollution Control Commission,

General Rules (Rule 610). C.A. App. 11-16.* Because

EPA had approved Rule 610 as part of Michigan’s re-

vised SIP in May 1980 (40 C.F.R. § 52.1172), the gov-

ernment contended that Rule 610 was federally enforce-

able. C.A. App. 8. The government sought injunctive

relief against the continued operation of the eight vinyl

coating lines at Ford’s Mount Clemens plant and penal-

ties of up to $25,000 per day of violation for each of the

coating lines—i.e., penalties of up to $200,000 per day.

Id. at 10-17. EPA did not consult with the State of

Michigan before filing suit. App., infra, 61a.

b. Michigan’s Review Of The Feasibility Of Compli-

ance With Rule 610. On March 5, 1979, the staff of the

Air Quality Division of the Michigan Department of

Natural Resources wrote to Ford acknowledging that

3 As promulgated by the Michigan Air Pollution Control Commis-

sion in January 1980, Rule 610 provided in pertinent part (C.A.

App. 74):

(3) It is unlawful for a person to cause or allow the emission

of volatile organic compounds from the coating of * * * vinyl

* * * from any existing coating line, in excess of the equiva-

lent emission rates as shown in table 63.

Table 63, contained within Rule 610, provided that the allowable

emission rate for the coating of vinyl (the vinyl “coating stand-

ard’) was 4.5 pounds of VOCs “per gallon of coating (minus water)

as applied.” C.A. App. 77.

8

Rule 610, which was based on the limited data available

in the late 1970s, might prove to be more stringent than

RACT, even though that was the standard required by

the Clean Air Act and the standard that the State in-

tended to impose. App., infra, 34a. Thereafter, the State

concluded that the emission rate limitation in Rule 610

could not reasonably be met by each of the eight vinyl

coating lines, but that total emissions could be reduced

to an equivalent level by other means. [bid.

In light of the State’s conclusions, Ford and the State

negotiated a Consent Order in May 1983. This order set

a new VOC limitation and established a schedule for in-

stallation of state-of-the-art control equipment on two of

the eight coating lines at the Mount Clemens plant (Nos.

7 and 8). App. infra, 34a. The Consent Order further

required a 250-ton reduction in total VOC emissions from

the remaining six coating lines by December 31, 1985.

Ibid.

Pursuant to that order, Ford spent $3 million to

install state-of-the-art control equipment on coating lines

7 and 8. App., infra, 45a. In addition, Ford spent $3

million to achieve an additional 450-ton reduction in total

VOC emissions, substantially exceeding the 250-ton re-

duction called for by the order. Jbid. The reduction was

achieved by installation of an “embossed last” process

that reduced the number of coatings applied. Ibid.

Even though Ford subsequently met or exceeded the

goal for reducing total VOC emissions that formed the

basis for the rate limitation in Rule 610, as well as the

goal set in the Consent Order, it was apparent by late

1983 that Ford still would be unable to meet the emis-

sions rate limitation of Rule 610 or of the 1983 Order on

coating lines 7 and 8. App., infra, 34a-36a, 41a, 48a.

In February 1984, therefore, Ford and the State began

another extensive technical review of VOC emissions at

the Mount Clemens plant. This review was ongoing when

9

the United States, without consulting the State of Michi-

gan, sued to enforce the orginal rate limitation in Rule

610.

ce. Ford’s State Court Action. On October 16, 1984,

Ford filed suit against the Michigan Air Pollution Con-

trol Commission, the Michigan Natural Resources Com-

mission, and the Michigan Department of Natural Re-

sources in the Circuit Court for the County of Ingham,

Michigan. Ford Motor Co. v. Michigan Air Pollution

Control Comm’n, No. 84-53025-CZ. Ford contended, inter

alia, that Rule 610 was “contrary to the Michigan Air

Pollution Act and void and unenforceable” because the

“emission limits set forth in the Rule and allegedly

applicable to Ford * * * are technically and economically

infeasible.” C.A. App. 80.

Following the filing of Ford’s state court action, the staff

of the Air Quality Division of the Department of Natural

Resources intensified its technical review of Rule 610. The

staff reported to the Air Quality Control Commission that,

when originally established, the limit on VOCs in Rule

610 was believed to be economically and technologically

feasible based on the data then available. App., infra,

34a. Upon reevaluation, however, the staff concluded that

the rate-based limit could not and cannot be achieved

through the application of RACT. /d. at 34a-35a. The

fundamental flaw in Rule 610 was the underlying as-

sumption that all VOCs used at the coating lines were

emitted into the atmosphere and that RACT would cap-

ture 90% of the VOCs emitted from the coating lines

and would remove 90% of the VOCs captured, leading to

a reduction in the rate of VOC emissions of 81%. ZId. at

43a. In fact, the “capture efficiency” for state-of-the-art

control equipment is below 60%. Id. at 46a-48a. Rule

610 had failed to account for losses of VOCs inherent in

the production process, including a substantial portion

that leave the plant as part of vinyl products and cannot

10

be captured by any emission control equipment. Jd. at

47a.

On January 15, 1985, the Air Pollution Control Com-

mission held a public hearing to consider the staff’s rec-

ommendation that it adopt an order setting new VOC

emission limits and a schedule for compliance at the

Mount Clemens plant. App., infra, 33a-37a, 55a-62a. At

the hearing, the Commission heard statements from the

staff and from Ford. In addition, a representative of the

Michigan Attorney General’s office testified that the Com-

mission should adopt the staff recommendation if it

concluded, based on the evidence presented, that the State

had “made a mistake in the promulgation of” Rule 610

(id. at 60a). The State’s counsel further stated that “all

of the people that I would look to as witnesses to defend

your rule are people who are here recommending to you

that the rule be changed.” Jbid. Thus, any defense of

the rule in the Michigan state court action brought by

Ford would have been a sham. After considering the

staff report and the oral and written comments received

(including comments filed by the United Automobile

Workers of America in support of Ford’s position),

the Commission formally adopted the staff’s recom-

mended “Stipulation for Entry of Consent Order and

Final Order” (id. at 61la-62a).

On March 18, 1985, after reviewing and considering

the Order of the Air Pollution Control Commission, the

Staff Report of the Department of Natural Resources,

the comments on that report, and the transcript of the

Commission’s public hearing, the Circuit Court for Ing-

ham County entered a Final Judgment on Ford’s verified

petition. App., infra, 22a-23a. The Final Judgment ex-

pressly affirmed the Commission’s Order and adopted the

following Findings of Fact made in the Order (id. at

22a, 27a-28a) :

11

5. In-adopting the Vinyl Limit [Rule 610], which

was recommended by the Staff, the Commission be-

lieved that they were imposing a requirement which

was technologically and economically feasible; that is,

[a] requirement that was achievable through the use

of reasonably available control technology.

6. Based on the Staff’s review of technica! and eco-

nomic data for Coaters 7 and 8 and upon the Com-

mission’s hearing of testimony from the Staff and the

Company, the Commission finds that for coaters 7

and 8, the Vinyl Limit was (and is) not achievable

through the use of reasonably available control tech-

nology.

7. Based upon the Staff’s review of all technical

and economic data, and upon the hearing of testimony

from the Staff and the Company, the Commission

finds that the emission control program set forth and

agreed to below does represent emission limits which

are achievable through the use of reasonably avail-

able control technology.

Accordingly, the Circuit Court’s judgment vacated the

vinyl coating standard contained in Rule 610 as of tts

effective date, December 31, 1982, and ordered Ford to

adhere to the emission control program set forth in the

Air Pollution Control Commission’s Order, which it found

to constitute “reasonably available control technology.”

App., infra, 28a. That program set new VOC emission

rate limits for the two controlled coating lines (Nos. 7

and 8), provided for the phased shut-down of the six

uncontrolled coating lines, and set a plantwide cap on

total VOC emissions of 440 tons (or roughly an 88% re-

duction from the 3700 tons emitted at the plant in 1977).

Id. at 28a-30a, 51a-52a.*

In addition, the state court judgment endorsed that

portion of the Commission’s Order that required submis-

4In accordance with the Air Pollution Control Commission’s

Order and the Final Judgment of the Circuit Court, the last of the

six uncontrolled coating lines ceased operating on November 30,

1985.

12

sion of the new compliance program to EPA for approval

as a SIP revision. App., infra, 30a. Pursuant to that

Order, on March 6, 1985—more than two years ago—

Michigan requested EPA to approve the Commission’s

Order as a SIP revision. EPA has not taken any action

on Michigan’s submission, however, even though the sub-

mission demonstrates that an important part of the exist-

ing SIP was invalid because it was promulgated on the

basis of a mutual mistake about economic and technologi-

cal feasibility. EPA has simply sat on its hands, acting

neither to approve the proposed revision nor to disap-

prove it and promulgate its own SIP provision instead.

At the same time, EPA has persisted in its efforts to

collect penalties of up to $200,000 per day for years of

alleged noncompliance with the original invalid SIP.

6. The Decisions Below. Following entry of the Mich-

igan Circuit Court’s final judgment, Ford moved for

judgment on the pleadings in this action. Ford argued

that the state court’s invalidation of Rule 610 as of its

effective date meant that there was no enforceable SIP

provision upon which to premise EPA’s enforcement ac-

tion. The district court agreed and ordered the dismissal

of the government’s action. App., infra, 14a-15a.

The court of appeals reversed. App., infra, la-9a.

In essence, the court of appeals decided an issue that

was not before it, holding that SIP revisions may not

take effect until they are approved by EPA. 7d. at 4a,

6a-7a. Rather than focusing on the effect of a state court

judgment holding a SIP void ab initio, the court appar-

ently reasoned that the state court’s judgment invalidat-

ing Rule 610 represented an advisory opinion that, while

perhaps relevant to the amount of penalties to be im-

posed, was otherwise entirely ineffective until EPA chose

—at whatever time in the future—to approve or dis-

approve it as a SIP revision. Thus, the Sixth Circuit

concluded that Rule 610 remained federally enforceable

unless and until EPA approved the proposed SIP revision

submitted by the State. App., infra, 4a, 7a-9a.

13

The court of appeals distinguished Sierra Club V.

Indiana-Kentucky Electric Corp., 716 F.2d 1145 (1983),

in which the Seventh Circuit had held unenforceable a

SIP provision determined by a state court to be void

ab initio. The Sixth Circuit reasoned that the rationale

of Indiana-Kentucky applied only to SIP’s invalidated

for “procedural” reasons. App., infra, 5a-6a. Here, by

contrast, the state court’s invalidation of Rule 610 rested

on what the court of appeals termed “technical” grounds,

i.e., a determination of technological and economic in-

feasibility. App., infra, 6a. The Sixth Circuit did not

explain why a state court can be deemed to have power to

invalidate a SIP on procedural grounds but not to have

power to invalidate it on grounds of technological or eco-

nomic infeasibility—even though it is precisely the latter

issue that is within the exclusive jurisdiction of the state

courts under this Court’s decision in Union Electric.

On Ford’s motion, the court of appeals stayed the issu-

ance of its mandate pending the timely filing and dispo-

sition of this petition.

REASONS FOR GRANTING THE PETITION

The decision below is in direct conflict with the decision

of the Seventh Circuit and cannot be reconciled with an

analogous decision of the Tenth Circuit. In addition, the

Sixth Circuit’s decision presents an important and sensi-

tive question concerning the proper roles of EPA and the

state courts in connection with the administration and

enforcement of state air quality plans—a question that

has not been decided by this Court, that has now divided

the courts of appeals, and that is an inevitable conse-

quence of this Court’s decision in Union Electric that

economic and technological infeasibility is not a proper

issue either for EPA or the federal courts. Moreover, the

decision below is wholly incompatible with the federal-

state partnership created by the Clean Air Act, displays

a remarkable disregard for the final judgment of a state

14

court in an area committed to the exclusive competence

of the state judicial system, and raises substantial con-

cerns under the Due Process Clause.

The Sixth Circuit ignored the role that Congress in-

tended for the states in the administration of the Clean

Air Act under the guise of advancing federal inter-

ests that Congress has already accommodated within

the structure of the Act itself. Thus, the court of ap-

peals wrongly concerned itself with a supposed threat to

EPA’s enforcement powers if state courts were permitted

to render an EPA-approved SIP unenforceable. In fact,

however, Congress expressly provided EPA with the

authority to promulgate its own regulations in the event

that a state fails to fulfill its role under the Act. Noth-

ing in the Act suggests that the remedy Congress in-

tended for a state-level failure to comply was a nullifi-

cation of the final judgment of a state court.

The Sixth Circuit’s decision is, in addition, so funda-

mentally unfair and draconian that it cannot have been

within the contemplation of Congress. Here, for exam-

ple, the federal government seeks to impose penalties of

up to $200,000 per day against a company that has

acted in the utmost good faith by pursuing the state

court remedies to which it was remitted by this Court

in Union Electric. According to the court of appeals,

however, that state court proceeding—which represented

Ford’s only opportunity to be heard on its claims of

technological and economic infeasibility—-was simply an

advisory opinion that EPA was free to ignore. Needless

to say, providing an opportunity to be heard does not

satisfy due process if the outcome of an exercise of that

opportunity can be treated as a legal nullity.

The problem presented 'y this case has arisen on sev-

eral occasions in the past, and it will continue to arise

whenever states propose SIP revisions that subsequently

turn out to have been invalidly promulgated. In light of

15

the conflict in the circuits, review by this Court is plainly

warranted in order to ensure the continued smooth func-

tioning of the federal-state partnership intended by Con-

gress in the Clean Air Act.

on) Tin ew:

A. The Federal Government May Not Maintain An En-

forcement Action Under The Clean Air Act Based On

Provisions Of A State Implementation Plan That A

State Court Has Determined To Be Invalid As Of

Their Inception.

As this Court’s decisions in Union Electric and Train

v. NRDC, 421 U.S. 60 (1975), make clear, the Clean

Air Act is a federal-state partnership. Under that part-

nership, EPA is responsible for determining the na-

tional standards that must be attained under the Act,

but the individual states have the responsibility and au-

thority for determining the precise mix of control strat-

egies best suited to their own needs and the “primary re-

sponsibility for assuring air quality within the entire

geographic area comprising such State.” 42 U.S.C.

§ 7407(a) (emphasis added). As the Court stated in

Train v. NRDC, 421 U.S. at 79 (emphasis added) :

The Agency is plainly charged by the Act with the

responsibility for setting the national ambient air

standards. Just as plainly, however, it is relegated

by the Act to a secondary role in the process of de-

termining and enforcing the specific, source-by-source

emission limitations which are necessary if the na-

tional standards it has set are to be met.

In order to give meaning to Congress’s policy of state

primacy, the federal courts have consistently held that

challenges to a state SIP must be brought in the state

courts. In Union Electric, for example, this Court first

held that a federal court may not review claims that a

SIP is technologically or economically infeasible because

the Administrator himself may not consider such claims

in deciding whether to approve a SIP. The Court added,

however, that the unavailability of review in federal

ieneedemecriiemeniiatieee mille

16

court did not mean that these claims could never be liti-

gated: a party dissatisfied with a state agency’s SIP

may “take its claims of economic or technological infeasi-

bility to the state courts.” 427 U.S. at 266-267. See also

Western Oil & Gas Ass’n v. EPA, 633 F.2d 803, 814 &

n.14 (9th Cir. 1980); Ohio Environmental Council v.

EPA, 593 F.2d 24, 29 (6th Cir. 1979); Appalachian

Power Co. v. EPA, 579 F.2d 846, 854-855 (4th Cir.

1978) ; Indiana & Michigan Electric Co. v. EPA, 509

F.2d 839, 847 (7th Cir. 1975).

Ford did just that in this case. It sued in state court

and obtained a final judgment holding that Rule 610 was

invalid as of its effective date. But the court of appeals

—in a remarkable about-face from the prior teachings of

the federal courts—held that EPA need give no effect to

that state court judgment. Ford thus finds itself in the

middle of a game of ping-pong in which, after properly

resorting to state court, it is bounced back to federal

court to face a federal enforcement action bottomed on

ne continued viability of a rule that the state court has

held invalid from its inception. Contrary to the court of

appeals’ assumption, neither the Clean Air Act nor any

“settled case law” (App., infra, 3a) compels such a

Kafkaesque result.

The only other court of appeals to have considered the

precise question presented here reached exactly the op-

posite result. In a situation that cannot be meaningfully

distinguished from this case, the Seventh Circuit ruled

that a state court judgment invalidating a SIP as of its

inception constituted a complete bar to a federal action

to enforce that SIP. Sierra Club v. Indiana-Kentucky

Electric Corp., 716 F.2d 1145 (1983). The Seventh Cir-

cuit reasoned that its holding was compelled by the many

federal court decisions directing litigants to take their

challenges to state-promulgated SIPs to state court (716

F.2d at 1151 (footnote omitted) ) :

AW 9 So Eig d ae a Ewe ee hI

17

If the state court procedural review afforded

under the Act is to have meaning, the rulings of

the state court must be given effect.

* * * * *

If we were to find that implementation plan provi-

sions were enforceable despite state court invalida-

tion of them, the state court review would be mean-

ingless. Those who followed our pronouncements

concerning the availability of state court review

would find that their efforts had been for naught;

and the Clean Air Act would be construed to reach

the inconsistent result that an implementation plan,

the product of a joint federal and state effort under

the same Act, would be enforceable in the courts of

one level of government but not the other.

The Sixth Circuit sought to distinguish IJndiana-

Kentucky on the theory that the Seventh Circuit’s hold-

ing applied only to SIPs invalidated on state procedural

grounds. App., infra, 6a. Nothing in the Seventh Cir-

cuit’s analysis, however, indicates that it would reach a

different result with respect to a fundamental substan-

tive defect under state law. The controlling factor in

both this case and /ndiana-Kentucky was that the SIPs

suffered from such fundamental flaws in the promulga-

tion process that they were invalid from their inception.

Furthermore, it was a critical feature of both cases that

the issue of validity involved a question—procedural

compliance with state law in one case, economic and tech-

nological infeasibility in the other—that was within the

exclusive jurisdiction of the state courts to pass upon.

That the flaw in one case was procedural and in the other

substantive cannot possibly justify a different result

when, at the end of the day, both plans were declared by

their respective state courts to have been nullities from

the outset.

The total illogic of the “procedural/substantive” di-

chotomy relied upon by the Sixth Circuit is further dem-

18

onstrated by the Seventh Circuit’s express endorsement

of the decision in Illinois v. Celotex Corp., 516 F. Supp.

716 (C.D. Ill. 1981). There, both Illinois and EPA

sought to enforce in federal court a SIP provision that

had been invalidated in state court on the “procedural”

ground that the state had failed to give adequate con-

sideration to the “technological feasibility and economic

reasonableness of the regulations.” 516 F. Supp. at 717-

718. The district court dismissed both the state and fed-

eral enforcement actions, holding that it “would be an

anomaly, if not a denial of defendant’s due process

rights, to allow, at this point, full enforcement of those

invalid regulations” (id. at 718). It would be equally

anomalous to hold that the “procedural” failure ade-

quately to consider technological and economic feasibility

is a sufficient basis upon which to hold a SIP unenforce-

able, but the “substantive” failure to adopt a techno-

logically and economically achievable regulation is not.

Indeed, if any distinction were to be drawn between

“procedural” and “substantive” defects, it would be quite

the opposite of the one embraced by the court below. It

makes no sense to suggest that a state SIP invalidated in

state court for purely procedural defects—defects that

are presumably capable of correction—is unenforceable,

while a state SIP invalidated in state court because it

is so fundamentally flawed in its substantive aspects that

no source is capable of complying with it may neverthe-

less form the basis for a federal enforcement action—an

action in which, further, the very issue of infeasibility

may not even be raised in defense.

The court of appeals advanced other grounds on which

to distinguish the Seventh Circuit’s decision in Jndiana-

Kentucky, but they are no more persuasive than the pro-

cedural/substantive dichotomy addressed above. First,

the Sixth Circuit insisted that Rule 610, unlike the in-

_s _—- = =o

ee ee

ert a a ee

19

validated Indiana SIP considered by the Seventh Circuit,

could not be deemed void from its inception. Thus, the

court devoted a substantial portion of its opinion (App.,

infra, 4a-7a) to the proposition that SIP revisions may

not take effect until they are approved by EPA and that

the provisions of an existing SIP remain effective and

enforceable pending such approval. See Train v. NRDC,

421 U.S. at 92. In essence, the court of appeals treated

the state court’s judgment as nothing more than a step—

and a purely advisory one at that—along the way

toward processing a SIP revision. See App., infra, 8a.

If that were all this case involved, Ford would agree

that the government could maintain the present enforce-

ment action on the authority of this Court’s decision in

Train v. NRDC. But the Sixth Circuit fundamentally

misunderstood the effect of the state court’s judgment

that Rule 610 is not—and never was—RACT. The es-

sential holding of the state court is that Rule 610,

although intended to reflect RACT, in fact is not and

never has been technologically and economically feasi-

ble. App., infra, 27a-28a.° In other words, as the rec-

ord before the state court showed, the parties labored

from the very outset under a mistake of fact that caused

the State of Michigan to submit, and EPA to approve, a

SIP provision that could not be achieved through RACT

when it was adopted and cannot be achieved through

RACT now. Simply stated, therefore, Rule 610 was void

as of its effective date, as the state court’s judgment

expressly held. A SIP provision promulgated in the mis-

5 The state court also endorsed the Air Pollution Control Com-

mission’s.Order calling for the submission of a SIP revision to

EPA. But the court of appeals clearly erred in treating the state

court judgment as if that had been the only matter determined. On

the contrary, the judgment of invalidity stands wholly apart from

the proposed revision, and that judgment would be sufficient to bar

this federal enforcement action whether or not the state court had

also endorsed the proposed revision.

20

taken assumption that it represented RACT means that

there never was a federally-enforceable SIP provision

applicable to Ford’s Mount Clemens plant. See /ndiana-

Kentucky, 716 F.2d at 1152.

The court of appeals also seemed concerned that states

might “trump” EPA’s enforcement pewers by contriving

to have their state courts invalidate SIP provisions so

as to make their states more attractive places for in-

dustry to locate. App., infra, 5a. This speculation, which

is premised on the unacceptable notion that state courts

and administrative agencies will act in bad faith, has no

support whatever in the record of this case. What is

more, the court of appeals failed to appreciate that the

Clean Air Act gives EPA all the tools it needs to deal

with any such possibility. As the Seventh Circuit ex-

plained in Indiana-Kentucky, Congress understood that

states might fail in their obligation to promulgate valid

8 As previously noted (see page 10, supra), the Michigan At-

torney General’s office advised the Air Pollution Control Commission

that it had no defense to the state court action initiated by Ford.

Thus, not only is there no hint in this record of any collusion be-

tween Michigan and Ford, there also is no basis for viewing the

consent judgment entered by the state court as any less authorita-

tive than a final judgment entered after protracted litigation.

The court of appeals also observed that EPA was not a party to

Ford’s state court action nor was it formally notified of that action.

See App., infra, 3a. In addition to the fact that the United States

similarly failed to notify the State of Michigan before it instituted

this enforcement action against Ford (see id. at 61a), any attempt

to make the government a party to the state court action would

have been a futile gesture. EPA of course would have been immune

from any suc- suit (see, e.g., United States v. Mitchell, 445 U.S.

535, 588 (1980) ), and the government almost certainly would have

followed the long-standing Department of Justice policy of remov-

ing the action to federal court for the purpose of obtaining a

dismissal. See U.S. Attorneys’ Manual 4-5.700 at 24 (3/84). More-

over, EPA has insisted throughout this action that its own policy is

not to participate in state proceedings involving SIPs but instead

to take a “wait-and-see” attitude. See Affidavit of William L.

McDowell, | 4 (C.A. App. 84).

ea steely etic joint:

21

SIPs, and it therefore provided a federal remedy in the

Act itself (716 F.2d at 1153-1154) :

The remedy Congress built into the Act in the event

of a state level failure is for the EPA to demand an

immediate state replacement or to promulgate its own

implementation plan (or appropriate provision) for

the state. This is the remedy Congress foresaw for

state inaction or ineffectiveness.

* * * * *

Where, as here, Congress has clearly shown an

intent to have state participation and an intent to

have EPA formulate a plan in the event of state

level failures, this court is not free to fashion un-

precedented and unusual alternative remedies that

have no foundation in the terms of the Act or in the

Act’s legislative history.

It is important to note that the Seventh Circuit’s ap-

proach works no interference with EPA’s ability to en-

sure that the goals of the Clean Air Act are met prospec-

tively. In this case, for example, it was particularly un-

justifiable for the Sixth Circuit to disregard the statu-

tory remedy, when EPA has had it within its power for

more than two years either to approve Michigan’s pro-

posed SIP revision or, if it deems that proposal not to

comply with the Act, to propose and promulgate its own

SIP provision. In view of this failure to act, it is simply

outrageous for EPA to continue to assert the authority to

penalize Ford with potential liabilities of $200,000 per

day for not complying with the very provision that, more

than two years ago, was invalidated by the state court

with exclusive jurisdiction to resolve Ford’s claim of

infeasibility. EPA’s failure to act clearly demonstrates

that it is concerned only with collecting monetary penal-

ties rather than advancing the policies of the statute.’

7™This conclusion is not at all surprising, however, in light of

Ford’s reduction in total VOC emissions from its Mount Clemens

plant during the period of EPA inaction to a level well below that

sought to be achieved under Rule 610. See pages 8, 11 n.4, supra;

App., infra, 41a, 48a, 45a.

22

Not only did the court of appeals ignore the statutory

remedy for a state’s failure to comply with the Clean

Air Act, but it also mistakenly assumed that states have -

an incentive to promulgate SIPs that fall short of the

minimum requirements imposed by the Act. Under the

1977 amendments, however, precisely the opposite is

true. If a state fails to submit an adequate SIP for its

‘“nonattainment” areas (including the area in which

Ford’s Mount Clemens plant is located), it is subject to

severe restraints on future growth (42 U.S.C. § 7410(a)

(2) (I)) and to sanctions such as a cut-off of federal

funds for transportation projects (42 U.S.C. § 7506(a)).

See, e.g., Michigan v. Thomas, 805 F.2d 176, 179 (6th

Cir. 1986); New Mexico Environmental Improvement

Division v. Thomas, 789 F.2d 825, 830 (10th Cir. 1986).

Thus, a state has every incentive to submit an adequate

plan and no reason at all to propose provisions that fail

to comply with the Act.

The Tenth Circuit’s decision in New Mexico Environ-

mental Improvement Division is also material because it

follows the Seventh Circuit’s lead by holding that a SIP

declared invalid from its inception by a state court is

simply a nullity. The issue in that case was whether

EPA properly imposed sanctions on New Mexico for

failure to submit a SIP after New Mexico’s previously-

approved SIP was invalidated by the New Mexico Su-

preme Court. Ironically, it was EPA that argued in that

case that the original SIP was a nullity. In affirming

the agency’s position, the Tenth Circuit cited Indiana-

Kentucky with approval and stated (789 F.2d at 833

(emphasis added) ) :

It is true that New Mexico did submit a plan which

had been approved by the EPA prior to its invalida-

tion by the New Mexico Supreme Court. However,

mere submission of a plan is not enough. The plan

submitted must also consider (i.e., satisfy) all re-

quirements of section 7502. The [inspection and

as ath inl ed bana

23

maintenance] program contained its infirmity from

its inception. Thus, EPA reasonably concluded that

a satisfactory SIP in terms of section 7502 require-

ments had never been submitted. When the approved

SIP contains an element that is invalidated by virtue

of state law, adoption by the EPA is also invali-

dated. The status is as if the state had not sub-

mitted a SIP.

EPA cannot have it both ways. EPA was correct in

New Mexico Environmental Improvement Division, and

it should not be heard to argue that the same result is

not required here.

B. The Sixth Circuit’s Decision Violates Well-Settled

Principles Of Federalism And Comity.

The Sixth Circuit’s willingness to allow EPA to ignore

the final judgment of the Michigan state court is quite

extraordinary. Although we are not aware of any pre-

cisely comparable situation, it is clear by way of analogy

that the court’s decision violates deeply rooted principles

of federalism and comity.

This Court has recognized that “in a Union where both

the States and the Federal Government are sovereign

entities, there are basic concerns of federalism which

counsel against interference by federal courts, through

injunctions or otherwise, with legitimate state functions,

particularly with the operation of state courts.” Trainor

v. Hernandez, 431 U.S. 484, 441 (1977). Accord Penn-

zoil Co. v. Texaco, Inc., 107 S. Ct. 1519, 1525-1527

(1987); Juidice v. Vail, 4830 U.S. 327, 334 (1977);

Younger v. Harris, 401 U.S. 37, 44-45 (1971). In fact,

both the Anti-Injunction Act, 28 U.S.C. § 2283, and the

Younger abstention doctrine arose from a basic respect

for the competence of state courts. See Younger, 401

U.S. at 48. Here, although there has been no interfer-

ence with pending state court proceedings, the Sixth

Circuit’s disregard for the final judgment of a state

court is no less serious an interference with state sov-

ereignty. Thus, the court of appeals not only has acted

24

in derogation of “basic tenets of comity and federalism,”

Kremer v. Chemical Construction Corp., 456 U.S. 461,

478 (1982), but it has stripped the state court judgment

of any legal force, thereby rendering the state court pro-

ceeding a nullity. In passing the Clean Air Act, Con-

gress could not have intended to permit EPA and the

federal courts to proceed in that fashion. See Indiana-

Kentucky, 716 F.2d at 1153-1154.

C. The Sixth Circuit’s Decision Produces Gross Inequities

That Cannot Have Been Intended By Congress.

Congress also could not have contemplated the harsh

consequences resulting from the court of appeals’ con-

struction of the Clean Air Act. The unfairness of re-

quiring a party to defend itself against an enforcement

action premised on an invalidated regulation would be

apparent in any case, but it is particularly egregious in

the circumstances presented here.

Union Electric teaches that the one issue that can

never be litigated in federal court is the economic and

technological feasibility of a SIP.“ As previously ex-

plained, however (see page 4, supra), economic and

technological feasibility is the essence of RACT. Thus,

the court of appeals has held that a company’s suc-

cessful challenge to a SIP, based on its failure to repre-

sent RACT, in the only judicial forum available—a state

court—may be disregarded in a federal enforcement

action and that the company may be forced to defend

itself against enormous monetary penalties for “viola-

tions” of a standard that, from its inception, never rep-

8Insofar as this issue is concerned, the court of appeals was

simply wrong when it stated that “invalidation of an EPA-approved

SIP may only occur in the federal appellate courts on direct appeal

from the Administrator’s decision under § 7607(b)(1)” (App.,

infra, 6a). On the contrary, economic and technological infeasibil-

ity is the one issue that can never form the basis for invalidation

of an EPA-approved SIP in the federal appellate courts. See

Union Electric, 427 U.S. at 266-267.

25

resented RACT. The Sixth Circuit’s only response to

this Catch-22 situation is to tell the company that it

should seek a SIP revision and, in the meantime, offer

its technological and economic arguments as “mitigating”

circumstances for a district court’s discretionary consid-

eration in the setting of penalties. App., infra, 8a-9a.

We find it difficult to understand why anyone should

be punished for failure to comply with an invalid regula-

tion in the first place, but, in any event, the court of

appeals’ suggested answer to this dilemma is wholly in-

adequate. The law in the Sixth Circuit is that there is

no time limit within which EPA must approve a pro-

posed SIP revision. United States v. National Steel

Corp., 767 F.2d 1176, 1182 n.1 (6th Cir. 1985). Thus,

EPA may sit on a proposed SIP revision indefinitely, as

it has done here, while at the same time taking advan-

tage of the ruling in this case that the invalidated SIP

remains enforceable and subjects “violators” to penalties

of up to $25,000 per day—for as long as it may take

EPA to act on the proposed revision. As a result, the

decision below, coupled with the decision in National

Steel Corp., opens the door to substantial abuse.

Furthermore, as the Fifth Circuit recognized in Ameri-

can Cyanamid Co. v. EPA, 810 F.2d 498, 500 (1987),

judicial refusal to allow EPA to profit by its own delay

is necessary not simply in fairness to regulated compa-

nies, but also out of deference to EPA’s partners in the

Clean Air Act’s scheme of cooperative federalism—the

states:

The emphasis of the statute * * * is upon the im-

portant role which the state plays in defining author-

ized emissions. * * * The issue then is not so much

pollution by American Cyanamid but the default of

the EPA in carrying out the congressional intent to

work in close cooperation with the states in imple-

menting standards and enforcing the Clean Air Act.

We emphasize the importance of EPA acting, not for

26

the benefit of American Cyanamid, but for the ben-

efit of the State of Louisiana which is by statute des-

ignated to play a significant cooperating role with

the EPA.

Here, too, the State of Michigan is entitled to greater

cooperation from EPA than it has received during the

more than two years that its proposed SIP revision has

been pending.

D. The Sixth Circuit’s Decision, By Refusing To Give Any

Meaningful Effect To The State Court’s Judgment,

Denies Ford Its Right To Due Process.

As the Seventh Circuit recognized in Indiana-Kentucky,

716 F.2d at 1151, a ruling denying any meaningful effect

to the judgment of a state court invalidating a SIP

raises serious constitutional problems. This Court has

held that “ ‘due process requires, at a minimum, that

* * * persons forced to settle their claims of right and

duty through the judicial process must be given a mean-

ingful opportunity to be heard.’” Little v. Streater, 452

U.S. 1, 5-6 (1981), quoting Boddie v. Connecticut, 401

U.S. 371, 377 (1971). Moreover, the Court has repeatedly

held that this opportunity to be heard must be granted

“at a meaningful time and in a meaningful manner.’ ”

Brock v. Roadway Express, Inc., 55 U.S.L.W. 4530, 4532

(Apr. 22, 1987), quoting Mathews v. Eldridge, 424 U.S.

319, 333 (1976), in turn quoting Armstrong v. Manzo,

380 U.S. 545, 552 (1965).

In view of the overriding importance of the meaning-

fulness of the opportunity to be heard, it would make a

mockery of this fundamental right to allow the Sixth

Circuit’s decision to stand. Although Ford has exercised

its opportunity to be heard by litigating the validity of

Michigan’s SIP in state court, the outcome of that hear-

ing has been rendered meaningless because the judgment

of the state court has been given no force and effect in

federal court, where no hearing on the relevant issues is

27

possible. Surely this result does not comport with Ford’s

due process right to a meaningful opportunity to be

heard. That right necessarily supposes that the outcome

of the hearing will be respected—not that it will be rele-

gated to a mere plea for “mitigat[ion]” of penalties im-

posed for “violations” of an invalid regulation. See

App., infra, 9a.°

It is no answer to the procedural run-around created

by the court of appeals to assert that “the Clean Air Act

envisions situations where standards currently econom-

ically or technologically infeasible will nonetheless be en-

forced.” App., infra, 8a. Whatever the validity of that

statement in other circumstances, it is demonstrably not

true in the case of sources subject to a RACT standard,

the essence of which is feasibility. See page 4, supra.

Although Michigan of course could have adopted a stand-

ard more stringent than RACT (see Union Electric, 427

U.S. at 263-265), that was not the State’s intent in this

case (see App., infra, 27a, 34a). Contrary to the Sixth

Cireuit’s assumption, therefore (id. at 8a), this is not

a situation in which Congress intended to “close down”

existing plants.”

® The constitutional necessity for according decisive effect to the

state court’s judgment is demonstrated by this Court’s recent deci-

sion in United States v. Mendoza-Lopez, No. 86-2067 (May 26,

1987). There, the Court held that an alien charged with violating

8 U.S.C. § 1326 (illegal entry following deportation) must be per-

mitted to collaterally attack the validity of the underlying deporta-

tion order if the deportation proceedings were fundamentally un-

fair. See slip op. 9-10. Quite clearly, the Court’s decision would

make no sense unless it intended that the outcome of judicial review

of the deportation order would be respected. The situation here is

not distinguishable in any meaningful sense. Thus, although Ford

has had the benefit of judicial review of Rule 610 in state court, the

Sixth Circuit’s refusal to require EPA to abide by the state court’s

judgment of invalidity just as surely deprives Ford of fundamental

fairness as does a prosecution under 8 U.S.C. § 1326 that is bot-

tomed on a deportation order entered in the absence of fair

procedures.

1© Significantly, the 1977 amendments require far more stringent

standards of pollution control than RACT in the case of proposed

28

In any event, even if the Sixth Circuit’s cavalier as-

sertion were applicable to this case, the decision below

does not comport with the constraints imposed by the

Due Process Clause on “governmental decisions which

deprive individuals of ‘liberty’ or ‘property’ interests.”

- Mathews, 424 U.S. at 332. Enforcement of Rule 610

against Ford could subject the company to penalties of

up to $25,000 per day for each coating line. Moreover,

because compliance with Rule 610 is technologically and

economically infeasible, the government’s successful en-

forcement of that rule would force Ford to close its vinyl

operations at the Mount Clemens plant. In sum, Ford

would be deprived of substantial property rights after

being afforded only a meaningless opportunity to be

heard. This Court therefore should review the judgment

below to ensure a constitutional and workable interpreta-

tion of the Clean Air Act.

CONCLUSION

The petition for a writ of certiorari should be granted.

Respectfully submitted. __

PAUL M. BATOR KATHRYN A. OBERLY

STEPHEN M. SHAPIRO Counsel of Record

Mayer, Brown & Platt Mayer, Brown & Platt

190 South LaSalle Street 2000 Pennsylvania Ave., N.W.

Chicago, Illinois 60603 Washington, D.C. 20006

(312) 782-0600 (202) 463-2000

DOUGLAS E. CUTLER

NORMAN W. BERNSTEIN

Ford Motor Company

401 Parklane Towers West

One Parklane Boulevard

Dearborn, Michigan 48126

(313) 322-4891

MAY 1987

new major stationary sources of pollution or proposed modifications

to existing major sources. See generally, Chevron, 467 U.S. at 850.

APPENDICES

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APPENDIX A

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

No. 85-1945

UNITED STATES OF AMERICA,

Plaintiff-A ppellant,

v.

ForD Motor COMPANY,

Defendant-A ppellee.

On Appeal from the United States District Court

for the Eastern District of Michigan

Decided and Filed March 27, 1987

Before: ENGEL and JONES, Circuit Judges; and

EDWARDS, Senior Circuit Judge.

EDWARDS, Senior Circuit Judge. In this case Ford

Motor Company and the United States are litigating a

question fundamental to the authority of the federal gov-

ernment to control the emission of air pollutants within

the boundaries of a particular state.

The pollutants at issue are volatile organic compounds

which are the principal contributors to ambient ozone.

The site of this dispute is a Ford Motor Company plant

(la)

2a

located in Mount Clemens, Michigan. This factory coats

vinyl products with solvent-based coating and emits am-

bient ozone from eight production lines.

Plaintiff cites a vivid description of the problems posed

by ozone from the District of Columbia Circuit Court of

Appeals:

Ozone is the primary cause of the ill effects asso-

ciated with smog, of which it usually comprises 65-

100%. At certain concentration levels, ozone irritates

the respiratory system and causes coughing, wheez-

ing, chest tightness, and headaches. Due to its irri-

tating nature, ozone can aggravate asthma, bron-

chitis, and emphysema. Some studies indicate that

chronic exposure to fairly low levels of ozone may

reduce resistance to infection and alter blood chem-

istry or chromosome structure. Ozone can destroy

vegetation, reduce crop yield, and damage exposed

materials by causing cracking, fading, and weather-

ing.

American Petroleum Institute v. Costle, 665 F.2d 1176,

1177 (1981), cert. denied, 455 U.S. 10384 (1982).

The origin of this dispute is dated a decade ago. In

February 1979 the United States Environmental Pro-

tection Agency (EPA) promulgated a combined primary

and secondary national ambient air quality standard for

ozone. This action was based on federal law, § 109 of the

Clean Air Act, 42 U.S.C. § 7409. Michigan promulgated

a State Implementation Plan which governed pollutants

contributing to ozone formation in 1979, and U.S. EPA

approved the State Implementation Plan in 1980. Two

separate legal proceedings followed. On September 26,

1984, the United States initiated the first action under

§113(b) of the Clean Air Act, 42 U.S.C. § 7413(b), to

enforce the EPA-approved State Implementation Plan

(SIP). A month later, the Ford Motor Company filed

suit in a Michigan state court against the Michigan Air

Pollution Commission, the Michigan Natural Resources

3a

Commission, and the Michigan Department of Natural

Resources. Ford sought to enjoin the state defendants

from enforcing the State Implementation Plan concern-

ing which the United States had filed the first action.

EPA was not a party to the state action nor was it noti-

fied of its pendency.

Ford and the state defendants named above then nego-

tiated a consent judgment which was entered March 18,

1985. Ford then filed a motion for summary judgment

in the federal proceeding contending that the EPA-

approved SIP could not be enforced because the state

court consent judgment had invalidated it. On August 5,

the United States District Court orally granted the Ford

Motor Company’s motion and dismissed the federal gov-

ernment’s action. After the United States’ motion for

reconsideration and modification of the District Court’s

judgment had been denied, the United States initiated

this appeal.

Ford’s contention in this litigation is that the state

court consent judgment is controlling and that the United

States has no authority to overrule it. Essentially the

United States District Court accepted this point of view.

As we see the question posed by this case, it is as

follows: whether a state court consent order which was

entered in an action brought by the defendant (Ford)

against state air pollution regulatory authorities but not

the United States or any of its agencies, and which pur-

portedly vacated a State Implementation Plan adopted

under the Clean Air Act and approved by EPA, pre

cludes federal enforcement of the previously federally-

approved plan?

We believe that under the United States Clean Air Act

and settled case law, the answer to this question must

be *no.”’

Although it is clear that the Clean Air Act contem-

plates very significant participation in air pollution con-

4a

trol by state air pollution control agencies, it is equally

clear that the final authority is vested in the United

States Environmental Protection Agency and the courts

of the United States. In Train v. NRDC, 421 US. 60,

64 (1975), the United States Supreme Court pointed

out that the 1970 amendments to the Act had “sharply

increased federal authority and responsibility in the

continuing effort to combat air pollution.” Justice Rhen-

quist, now Chief Justice, writing for a nearly unanimous

Supreme Court held:

[A] polluter is subject to existing requirements until

such time as he obtains a variance, and variances

are not available under the revision authority until

they have been approved by both the State and the

Environmental Protection Agency. Should either

entity determine that granting the variance would

prevent attainment or maintenance of national air

standards, the polluter is presumably within his

rights in seeking judicial review. This litigation,

however, is carried out on the polluter’s time, not

the public’s, for during its pendency the original reg-

ulations remain in effect, and the polluter’s failure

to comply may subject him to a variety of enforce-

ment procedures.

Train v. NRDC, 421 U.S. at 92 (footnote omitted).

The Supreme Court’s conclusion in Train is based upon

the language of the Clean Air Act, which requires revi-

sions of State Implementation Plans to be approved by

EPA before such revisions are effective. See 42 U.S.C.

§ 7410(a) (3) (A) & (i).

The ultimate authority of the United States EPA is

indeed recognized by the state Staff Report on which the

commission’s final order and state court judgment were

based. In the Supplemental Amended Answer, Exhibit 3,

that report stated:

5a

If approved by the Commission the Order will be

submitted to the United States Environmental Pro-

tection Agency (EPA) as a revision to the State

Implementation Plan (SIP).

* * * *

Because the proposed Order reflects limits that are

different than those in the currently approved Mich-

igan SIP, the order must be submitted to EPA as

a revision to the SIP. Such “site. specific’ SIP revi-

sions for existing sources must meet certain criteria

in order to be approvable.

We observe at this point that standards for purifica-

tion of the ambient air simply cannot be set along the

boundaries of our 50 states. The winds, of course, recog-

nize no such boundaries. The 50 states of this union

compete intensely with one another for industry. As

Congress has recognized, if state control of ambient air

emissions were final, in short order, major shifts of

smoke stack industries to states with the most lenient

pure air standards would inevitably take place. Absent

final authority in United States EPA, the attainment

goals of the Clean Air Act would prove ephemeral.

In the face of overwhelming authority declaring that

revisions of State Implementation Plans are ineffective

until approved by EPA, Ford relies principally on a

Seventh Circuit decision, Sierra Club v. Indiana-Kentucky

Electric Corp. 716 F.2d 1145 (7th Cir. 1983). Sierra

Club was a ciuzen suit seeking to enforce an EPA-

approved SIP provision in federal court. Prior to the

federal lawsuit, a state appellate court had held the

provision invalid on state procedural grounds, namely

that the state officer who presided over the hearing on

the provision had failed to submit written findings to the

Indiana Environmental Management Board, as required

by state law. This failure to make written findings made

it impossible for the Board to evaluate and review the

decision. The Seventh Circuit held that federal enforce-

Ga

ment was barred because the SIP provision was not

adopted in accordance with applicable state procedures,

and therefore, was an invalid plan submission to EPA.

The SIP, thus, was never valid. The Seventh Circuit,

however, acknowledged that the revision or modification

of a valid plan must be approved by the EPA to become

effective, 716 F.2d at 1152. The court thus. concluded

that:

Once a plan is adopted by the states and it with-

stands any subsequent procedural challenge, then

§ 7607(b) (1) provides that invalidation may occur

only in the federal appellate courts.

Id. (emphasis in original).

The present suit, unlike Sierra Club, concerns invali-

dation of a SIP on technical grounds by a state court.

Thus, even under the language of Sierra Club, such in-

validation cannot be given effect, because invalidation of

an EPA-approved SIP may only occur in the federal ap-

pellate courts on direct appeal from the Administrator’s

decision under § 7607(b) (1), and revisions and variances

of properly promulgated SIPs require EPA approval.

This case, in short, does not concern a SIP found invalid

on state procedural grounds by a state court, as was the

case in Sierra Club.1 Nor does the fact that the consent

decree in this case purported to vacate and modify the

SIP as of its compliance date render it void ab initio in

the sense described in Sierra Club. The mere fact that

state authorities, through the discovery of subsequent

technical data, or otherwise, change their views on the

technological or economic feasibility of a properly adopted

emission limit cannot in itself render the original emis-

1The government indicated at oral argument that it may take

the position in future litigation that Sierra Club was wrongly de-

cided. Because we find Sierra Club readily distinguishable, we

neither approve nor disapprove its conclusion that state courts may

invalidate EPA-approved State Implementation Plans on state

procedural grounds.

Ta

sion limit unenforceable. As this court has stated, “the

Act clearly envisions the possibility of continuous adjust-

ments in the basic plan by the State and the EPA. If a

plan became unenforceable every time such a revision be-

came a possibility, the entire enforcement procedure of

the Clean Air Act would be crippled.” Ohio Environ-

mental Council v. United States District Court, 565 F.2d

393, 398 (6th Cir. 1977) (citations omitted). Instead,

the original emission limit remains fully enforceable un-

til a revision or variance is approved by both the State

and EPA. Id.

Ford raises two additional arguments. First, Ford ar-

gues that EPA is barred from asserting the validity of

the SIP by the final judgment of the Michigan Circuit

Court. Ford’s reliance on collateral estoppel borders on

the frivolous. First, it is questionable whether the con-

sent judgment, which specifically states that it should be

transmitted to EPA for approval as a SIP revision, was

intended to do any more than invalidate the SIP for state

law purposes. Second, it is doubtful whether EPA can

be held to be in privity with the State of Michigan as

required by collateral estoppel principles. Third, it is

questionable whether the consent judgment on which Ford

relies meets the “actual litigated” collateral estoppel re-

quirement.

Fundamentally, however, we must find collateral estoppel

inapplicable to this case, because Congress, as demon-

strated above, has given EPA the final authority to ap-

prove revisions of EPA-approved SIPs. State courts thus

lack the authority to invalidate EPA-approved SIPs on

infeasibility grounds. See Train v. NRDC, supra, (ex-

isting SIP enforceable until SIP revision approved by

EPA). The Clean Air Act thus modifies the operation of -

the Federal Full Faith and Credit Statute, 28 U.S.C.

§ 1738, and determines the permissible effect of the state

court judgment at issue.

Second, Ford argues that refusal to give effect to the

Michigan Circuit Court judgment would violate Ford’s

—_—

8a

Fifth Amendment due process rights. Ford notes that

state court is the only forum available for challenging

the technological and economic feasibility of SIP provi-

sions. Ford argues that the failure to give binding effect

to the feasibility determination made by the only avail-

able forum deprives it of property without a meaningful

right to be heard.

Ford’s contention can best be answered by noting that

the Clean Air Act envisions situations where standards

currently economically or technologically infeasible will

nonetheless be enforced. See Union Electric Co. v. EPA,

427 U.S. 246, 258-59 (1976); National Steel Corporation

Great Lakes Steel Division v. Gorsuch, 700 F.2d 314,

324-25 (6th Cir. 1983). Congress has the authority to

demand that “existing sources of pollutants either should

meet the standard of the law or be closed down... .”,

regardless of whether such standards are currently feasi-

ble. S. Rep. No. 91-1196, p. 2-3 (1970), quoted in Union

Electric Co., supra, at 259.

In addition, we note that meaningful opportunities for

raising claims of technological and economic infeasibility

have been provided by the Act. See Union Electric Co.,

supra, at 266-69. While the attainment of national stand-

ards remains paramount, id. at 268, emission sources such

as Ford are offered the opportunity to have significant in-

put on the setting of emission limits through the ap-

propriate voicing of feasibility concerns. Ford, for ex-

ample, participated in the state’s promulgation of the

SIP in 1979 and in EPA’s approval of the SIP in 1980.

Ford’s subsequent challenge of the SIP on feasibility

grounds in the state court has resulted in the state

proposing a revision of the SIP to EPA for approval.

Thus the state court judgment, while not binding on

EPA, is significant, because it has effected the first step

in the revision process: the proposal of a revision to

EPA by the state.

9a

Furthermore, technical infeasibility coupled with good

faith efforts can be considered by the district court as a

factor mitigating against ‘the imposition of monetary

penalties in the enforcement action. On the other hand,

“the absence of demonstrable good faith efforts toward

compliance should serve to dampen any enthusiasm for

technological and economic arguments advanced in de-

fense of a claimed violation.” Indiana & Michigan Elec-

tric Co. v. EPA, 509 F.2d 839, 845 (7th Cir. 1975).

The judgment of the District Court is reversed and the

case is remanded for further proceedings consistent with

this opinion.

10a

APPENDIX B

UNITED STATES OF AMERICA

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

84 CV 4459 DT

UNITED STATES OF AMERICA

—)

ForD MOTOR COMPANY,

Defendant.

MOTION

PROCEEDINGS HAD before the HONORABLE GEORGE

WOODS, United States District Court Judge, at 272 Fed-

eral Courthouse on Monday, August 5, 1985.

APPEARANCES:

JOEL GROSS, ESQUIRE

Assistant United States Attorney

U.S. Department of Justice

10th and Pennsylvania NW

Room 1250

Washington, D.C. 20530

Appearing on behalf of the Government.

ROBERT A. FINEMAN, ESQUIRE

2290 First National Building

Detroit, Michigan 48226

Appearing on behalf of the Defendant.

lla

[21] THE COURT: ***

This complaint was brought at the request of the Ad-

ministrator of the USEPA alleging that Ford was vio-

lating the provision of the Michigan State Implementa-

tion Plan, SIP as it is called, with the Defendant Ford

pointing out that SIP was vacated in the Ford Motor

Company in Ingham County in March of 1984. Ford

then brought this motion for judgment on the pleadings.

Both the parties have eloquently put their positions

and all their arguments on the record.

[22] The Court will concern itself with the reiteration

that Ford made in its motion. The motion being based

solely on the final judgment entered in the Ingham

County case.

Ford states, of course, as we have heard it, makes

no claim or contention upon this motion that any re-

vised, and I’m quoting, that any revised or modified rule

or compliance program was Federally effective or bind-

ing upon the EPA without EPA’s approval of that pro-

gram as a SIP, S-I-P, revision.

They have contended, Ford that is, that the sole issue

before the Court is as the Court eloquently stated earlier

is the legal effect of the State Court judgment.

The Defendant contends that since the State rule has

been declared void ab initio on the grounds that such

rule was improper and erroneously adopted, that this

Court simply must find that binding in this action and

grant summary judgment.

Ford has contended that there are three separate

grounds on which the Court must grant their motion.

One, that Federal enforcement is barred as a result

of the invalidation of Rule 610 by the State Court.

Second, that the Plaintiff is estopped by the State

Court judgment from asserting the validity of Rule 610

under the doctrine of full faith and credit res judicata

and collateral estoppel. And, third, enforcement by this

12a

Court [23] Rule 610 would be a denial of Ford’s con-

stitutional due process rights.

In response and in reply memorandum and in their

argument, the Defendant Ford has sought to show that

the Plaintiff’s reliance on the Sierra, Indiana case and

the Illinois Celotex case is and has been misplaced. And,

also cuts both ways actually.

The Plaintiff relied on these two cases for support,

and the Defendant contends also that the Indiana-Ken-

tucky case supports its position. And, the Defendant

quotes the following in Sierra Club, the Seventh Circuit

found that a Federally approved SIP was no longer en-

forceable since it had been invalidated by a State Court

on the ground that it had not been properly promulgated

in the first place.

Well, of course Plaintiff contends that SIP was prop-

erly promulgated in the first instance where the Defend-

ant points out that the consent final judgment held that

Rule 610 was promulgated on the erroneous assumption

and belief that it represented reasonably available con-

trolled technology.

The Defendant contends that the SIP invalidated on

substantive rather than procedural grounds cannot re-

main Federally enforceable. And, that Plaintiff has been

unable to find any case law in support of such a position.

And, Mr. Fineman also points out that the proper[ 24]

procedure in such a case is to first address the invalidity

of State promulgated State regulations in a State Court.

He also pointed out the fact that this was—in effect

that this was a consent judgment should absolutely and

in no way diminish the result.

In his reply brief memorandum, the Defendant re-

iterated previous argument in fuller fashion, again point-

ing to the res judicata collateral estoppel and full faith

and credit and demands that the Court find in its favor.

The Court is convinced of the soundness of the prior

State Court proceeding, and the consent final judgment,

and finds in favor of Ford and grants the motion.

~~

ee ee

et es et er es

ae

13a

It appears to this Court Ford was following the proper

procedure in first taking the SIP in the State Court as

it should have effect and binding.

Mr. Fineman, prepare a proper order after you do

business with Mr. Gross who has come all the way from

Washington, and see if you can settle this and have the

proposed order in to Ms. Henson by one o’clock Friday.

MR. FINEMAN: I will certainly try to do that, sir.

THE COURT: All right.

(Motion concluded. )

l4a

APPENDIX C

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

Civil Action No. 84-CV-4459-DT

Hon. GEORGE E. Woops

UNITED STATES OF AMERICA,

Plaintiff and

Counterdefendant,

Vv.

ForD MOTOR COMPANY,

Defendant and

Counterplaintiff,

Vv.

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY,

Additional

Counterdefendant.

[Filed Aug. 14, 1985]

JUDGMENT OF DISMISSAL OF

PLAINTIFF’S COMPLAINT

This matter having come on before th: Court upon

the motion of defendant Ford Motor Company for judg-

ment on the pleadings and Ford having submitted its

motion and brief in support thereof and plaintiff United

States of America having submitted its brief and the

affidavit of William L. MacDowell in opposition and Ford

having submitted its reply memorandum and the parties

15a

having appeared before the Court for oral argument on

August 5, 1985 and the Court having heard such argu-

ment and being otherwise fully advised in the premises

and the court having determined, for the reasons set

forth by the Court on the record on August 5, 1985 that

Ford’s motion should be granted now, therefore;

IT IS HEREBY ORDERED AND ADJUDGED that

the complaint of the United States of Amei.ca and each

count and claim for relief therein is hereby dismissed

with prejudice.

/s/ George Woods

U.S. District Court Judge

APPROVED AS TO FORM:

HONIGMAN MILLER SCHWARTZ AND COHN

Attorneys for Defendant

By /s/ Robert A. Fineman

ROBERT A. FINEMAN

2290 First National Building

Detroit, Michigan 48226

(313) 256-7722

JOEL M. SHERE

United States Attorney

By /s/ Geneva S. Halliday

GENEVA S. HALLIDAY

Assistant U.S. Attorney

817 Federal Building

Detroit, Michigan 48226

(313) 226-2163

16a

APPENDIX D

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

No. 84-CV-4459-DT

Hon. GEORGE E. Woops

UNITED STATES OF AMERICA,

Plaintiff,

VS.

ForD Motor COMPANY,

Defendant.

ORDER DENYING PLAINTIFF’S MOTION

FOR RECONSIDERATION

AT A SESSION of said Court, held in the

United States Courthouse, in the City of De-

troit, State of Michigan, on the 27th day of

September, 1985.

PRESENT: THE HONORABLE GEORGE E. Woops

United States District Judge

This matter having come before the Court on plain-

tiff’s Motion for Reconsideration and Modification;

The Court having reviewed the pleadings submitted

herein, and responses and replies thereto, and being

otherwise fully informed in the premises;

IT IS HEREBY ORDERED that plaintiff’s motion be

and the same is DENIED, the Court determining that

its prior ruling on the defendant’s Motion for Summary

Judgment was correct as ordered. The Court is per-

ee ee ee ees

Rat i ti ner ALL itl Pi CE ET cl

. SAID eS AA

17a

suaded that the State Court Judgment vacated the entire

vinyl coating standard contained in Rule 610, as shown

by the express findings:

. . . the Vinyl Limit was (and is) not achievable

through the use of reasonably available control

technology.

Stipulation for Entry of Consent Order and Final

Order, Paragraph 6, February 1, 1985. Although the

above language refers specifically to Lines 7 and 8, the

Court finds that the language contained in the Final

judgment, Ford Motor Company v. Michigan Air Pollu-

tion Control Commission, No. 84-53025-CZ (Cir. Ct.

Ingham County, March 18, 1985), adopting the Findings

of Fact Nos. 4, 5, 6 and 7 of the Stipulation for Entry

of Consent Order and Final Order, February 1, 1985,

mandates a finding that Table 63, Rule 336.1610, is

vacated in regard to the Ford Motor Company Mt.

Clemens Vinyl Plant, and all existing vinyl lines therein

that facility. |

So ordered.

/s/ George E. Woods

GEORGE E. Woops

United States District Judge

18a

APPENDIX E

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

No. 85-1945

UNITED STATES OF AMERICA,

Plaintiff-Appellant,

Vv.

ForD MOTOR COMPANY,

Defendant-A ppellee.

Before: ENGEL and JONES, Circuit Judges; and EDWARDS,

Senior Circuit Judge. ;

[Filed Mar. 27, 1987]

JUDGMENT

ON APPEAL from the United States District Court

for the Eastern District of Michigan.

THIS CAUSE came on to be heard on the record from

the said district court and was argued by counsel.

ON CONSIDERATION WHEREOF, It is now here

ordered and adjudged by this court that the judgment

of the said district court in this case be and the same

is hereby reversed and the case is remanded for further

proceedings consistent with this opinion.

19a

Each party is to bear its own costs on appeal.

ENTERED BY ORDER OF THE COURT

/s/ John P. Hehman

JOHN P. HEHMAN

Clerk

Issued as Mandate:

COSTS:

I cs cccncesaessveneuscenns $

ia saekcscinnccansanes $

eh $

20a

APPENDIX F

STATE OF MICHIGAN

CIRCUIT COURT FOR THE COUNTY OF INGHAM

Hon. THOMAS L. BROWN

File No. 84-53025-CZ

ForD Motor COMPANY, a Delaware Corporation,

Plaintiff,

Vs.

MICHIGAN AIR POLLUTION CONTROL COMMISSION,

MICHIGAN NATURAL RESOURCES COMMISSION and

MICHIGAN DEPARTMENT OF NATURAL RESOURCES,

Defendants.

CERTIFICATE UNDER 28 USC § 1738

At a session of said Court held in the City of

Lansing, County of Ingham, State of Michigan

on May 20, 1985

PRESENT: HON. THOMAS L. BROWN

Circuit Court Judge

NOW COMES the Honorable Thomas L. Brown, Cir-

cuit Court Judge of Ingham County, Michigan, and

hereby certifies that the attestation, dated May 20, 1985,

by County Clerk, Lingg Brewer, on the attached Judge-

ment is in the proper form. The attached Final Judg-

ment was entered on March 18, 1985 in the above

captioned case by the Honorable Thomas L. Brown.

/s/ The Honorable Thomas L. Brown

THE HONORABLE THOMAS L. BROWN

Circuit Court Judge

2la

Drafted by: Gary A. Trepod (P-21561)

Honigman Miller Schwartz and Cohn

Michigan National Tower, Suite 636

Lansing, Michigan 48933

(517) 484-8285

22a

STATE OF MICHIGAN

CIRCUIT COURT FOR THE COUNTY OF INGHAM

File No. 84-53025-CZ

Forp Motor CoMPANY, a Delaware Corporation,

- Plaintiff,

MICHIGAN AIR POLLUTION CONTROL COMMISSION,

MICHIGAN NATURAL RESOURCES COMMISSION and

MICHIGAN DEPARTMENT OF NATURAL RESOURCES,

Defendants.

FINAL JUDGMENT

At a Session of the Circuit Court Held in the

City of Lansing on March 18, 1985.

PRESENT: THE HONORABLE THOMAS L. BROWN

Cireuit Judge

Upon the joint Motion for Entry of Final Judgment,

it is the judgment of this Court that the agreement of

the parties, as reflected in the Stipulation for Entry of

Consent Order and Final Order, a copy of which is

attached as Exhibit A, and which is hereby incorporated

by reference, is an appropriate resolution of the dispute

between the parties.

NOW THEREFORE:

It is Ordered and Adjudged that the “Stipulation for

Entry of Consent Order and Final Order” of the Michi-

gan Air Pollution Control Commission, SIP No. 1-1985,

is hereby AFFIRMED and that Findings of Fact Nos. 4,

5, 6, and 7 made therein are adopted by the Court.

It is Further Ordered and Adjudged that pursuant to

1969 PA 306, as amended, § 106 (2), MCL 24.306:

wee

23a

1) The Ford Motor Company shall fully comply with

the abatement program set forth in the “Stipulation for

Entry of Consent Order and Final Order” of the Michi-

gan Air Pollution Control Commission.

2) Table 63, of R 336.1610, of the rules of the Michi-

gan Air Pollution Control Commission is hereby vacated

and modified, with regard to the Ford Motor Company

Mt. Clemens Vinyl Plant, to define reasonably available

control technology, after December 31, 1982, as the emis-

sion control program set forth in the “Stipulation for

Entry of Consent Order and Final Order” of the Michi-

gan Air Pollution Control Commission.

It is Further Ordered that no costs are awarded, a

public question being presented.

/s/ The Honorable Thomas L. Brown

THE HONORABLE THOMAS L. BROWN

Circuit Judge

Approved As to Form:

FRANK J. KELLEY HONIGMAN MILLER SCHWARTZ

Attorney General AND COHN

By /s/ Stewart H. Freeman By /s/ Robert A. Fineman

STEWART H. FREEMAN ROBERT A. FINEMAN

Assistant Attorney General JOSEPH M. POLITO

in Charge Attorneys for Plaintiff

Attorneys for Defendants 2290 First National Building

Environmental Protection Detroit, Michigan 48226

Division (313) 256-7722

720 Law Building

Lansing, Michigan 48913

(517) 373-1110

24a

STATE OF MICHIGAN

CIRCUIT COURT FOR THE COUNTY OF INGHAM

File No. 84-53025-CZ

ForD Motor COMPANY, a Delaware Corporation,

Plaintiff,

vs.

MICHIGAN AIR POLLUTION CONTROL COMMISSION,

MICHIGAN NATURAL RESOURCES COMMISSION and

MICHIGAN DEPARTMENT OF NATURAL RESOURCES,

Defendants.

STIPULATION

The parties stipulate and agree as follows:

1. Entry of Final Judgment in the form attached

hereto as Exhibit I shall be sought based upon the fol-

lowing record:

a. Stipulation for Entry of Consent Order and Final

Order of the Michigan Air Pollution Control Commis-

sion, SIP No. 1-1985, a copy of which is attached hereto

as Exhibit II.

b. Michigan Department of Natural Resources Air

Quality Division’s Staff Activity Report dated January

15, 1985, a copy of which is attached hereto as Exhibit

Ill.

ec. Comments of Ford Motor Company dated Janu-

ary 8, 1985, attached hereto as Exhibit IV.

d. Comments of United Automobile, Aerospace, Agri-

cultural Implement Workers of America (UAW) dated

January 7, 1985, attached hereto as Exhibit V.

25a

e. Transcript of proceedings held before the Michigan

Air Pollution Control Commission on January 15, 1985

at a public hearing, a copy of which is attached hereto

as Exhibit VI, which the parties agree is an accurate

record of the proceedings held before the Michigan Air

Pollution Control Commission at the public hearing on

January 15, 1985.

By /s/

FRANK J. KELLEY

Attorney General

Stewart H. Freeman

STEWART H. FREEMAN

Assistant Attorney General

in Charge

Environmental Protection Division

720 Law Building

Lansing, Michigan 48913

(517) 373-1110

HONIGMAN MILLER SCHWARTZ

AND COHN

ROBERT A. FINEMAN

2290 First National Building

Detroit, Michigan 48226

(313) 256-7722

Dated: March 13, 1985

26a

STATE OF MICHIGAN

DEPARTMENT OF NATURAL RESOURCES

AIR POLLUTION CONTROL COMMISSION

SIP No. 1-1985

In the matter of administrative proceedings against

ForD MOTOR COMPANY, a corporation organized under

the laws of the State of Delaware and doing business

at 151 Lafayette, City of Mt. Clemens, County of

Maconib, State of Michigan.

STIPULATION FOR ENTRY OF

CONSENT ORDER AND

FINAL ORDER

This proceeding resulted from allegations by the staff

of the Air Quality Division of the Department of Nat-

ural Resources (hereinafter referred to as the “Staff’’).

The Staff alleges that Ford Motor Company, a Delaware

corporation (hereinafter referred to as the “Company”),

located at 151 Lafayette, City of Mt, Clemens, County

of Macomb, State of Michigan, is emitting volatile or-

ganic compounds (VOCs) from its Mt. Clemens vinyl

Plant (hereinafter the ‘“Plant”) which are in excess of

allowable limits as established by Administrative Code

1980 AACS, R. 336.1610 and Stipulation for Entry of

Consent Order and Final Order No. 24-1982. The Com-

pany and the Staff agree to the termination of this pro-

ceeding by entry of a Final Order by consent.

The Company and the Staff agree as follows:

1. The Company admits that the Chief of the Air

Quality Division of the Department of Natural Resources

eh nna I aD eee ote nat B08

27a

is authorized by resolution of the Air, Pollution Control

Commission (hereinafter ‘“Commission’”) adopted June

28, 1977, as agent of the Commission to enter into this

Final Order by consent.

2. The Company stipulates that the Chief of the Air

Quality Division of the Department of Natural Resources

is charged with the investigation and enforcement of all

orders, regulations, rules, standards and statutes of the

State of Michigan concerning the emission and control

of air contaminants.

3. The Company stipulates that the termination of

this matter by a Final Order to be entered as a Consent

Order is proper and acceptable.

4. The Company and the Staff agree to the following

findings:

(a) R 336.1610 prohibits emission of VOC from the

coating of vinyl from any existing coating line

in excess of equivalent emission rates as shown

in Table 63.

(b) Table 63, contained within R 336.1610, provides

that after December 31, 1982, the allowable

emission rate for the coating of vinyl is 4.5

pounds of VOC per gallon of coating (minus

water) as applied (the “Vinyl Limit”).

5. In adopting the Vinyl Limit, which was recom-

mended by the Staff, the Commission believed that they

were imposing a requirement which was technologically

and economically feasible; that is, requirement that was

achievable through the use of reasonably available control

technology.

6. Based on the Staff’s review of technical and eco-

nomic data for Coaters 7 and 8 and upon the Commis-

sion’s hearing of testimony from the Staff and the Com-

pany, the Commission finds that for Coaters 7 and 8,

28a

the Vinyl Limit was (and is) not achievable through the

use of reasonably available control technology.

7. Based upon the Staff’s review of all technical and

economic data, and upon the hearing of testimony from

the Staff and the Company, the Commission finds that the

emission control program set forth and agreed to below

does represent emission limits which are achievable

through the use of reasonably available control tech-

nology.

8. The Company and the Staff agree that the signing

of this Stipulation is for settlement purposes only and

does not constitute an admission by the Company that

the law has been violated. Both Staff and the Company

agree that the VOC emissions from the vinyl coating op-

erations should be abated in accordance with the follow-

ing schedule:

(a) With the effective date of this Order and until

November 30, 1985, the VOC emissions from

each of the Vinyl Coaters 1, 5 and 10 shall not

exceed 84 pounds per gallon of solids applied,

based on a 15-day averaging period, nor exceed

117 pounds per gallon of solids applied, based on

a 24-hour averaging period.

(b) With the effective date of this Order, the VOC

emissions from Vinyl Coater 7 shall not exceed

46 pounds per gallon of solids applied, based on

a 15-day averaging period, nor exceed 55 pounds

per gallon of solids applied, based on a 24-hour

averaging period.

(c) With the effective date of this Order, the VOC

emissions from Vinyl Coater 8 shall not exceed

47 pounds per gallon of solids applied, based on

a 15-day averaging period, nor exceed 51 pounds

per gallon of solids applied, based on a 24-hour

averaging period.

ee ee ee ne oN

(d)

(e)

(f)

(g)

(h)

29a

With the effective date of this Order, the VOC

emissions from the cast line shall not exceed 9.0

pounds per gallon of solids applied, based on a

15-day averaging period, nor exceed 11.0 pounds

per gallon of solids applied, based on a 24-hour

averaging period.

By June 30, 1985, the Company shall perma-

nently discontinue operation of Vinyl Coaters 1

and 5 and shall not resume operation of such

vinyl coaters unless an approved Permit to In-

stall is issued by the Commission.

By November 30, 1985, the Company shall per-

manently discontinue operation of Vinyl Coater

10 and shall not resume operation of such coater

unless an approved Permit to Install is issued

by the Commission.

Beginning January 1, 1986, the total annual

VOC emissions from all of the vinyl coaters at

the Plant shall not exceed 440 tons.

The Company shall take all steps necessary to

assure continuous compliance with the VOC

emission limitations specified in paragraphs 8

(a) through 8(f), above. These steps shall in-

clude, but are not limited to, production cur-

tailments and the utilization of Vinyl Coaters

7, 8 and 11 to the greatest extent possible.

(i) With the effective date of this Order, the Com-

pany shall submit a report to the Staff every

three (3) months demonstrating compliance with

the emission limits of this Order in a format

acceptable to the Staff. These reports shall also

provide documentation of the quantities and

volatile organic compound content of coatings

used on each coater and shall be submitted within

30 days following the end of the calendar quar-

ter.

30a

(j) With the effective date of this Order, the Com-

pany shall permanently discontinue operation

of Vinyl Coaters 2, 3 and 9 and shall not re-

sume operation unless an approved Permit to

Install is issued by the Commission.

9. The Company and the Chief of the Air Quality Di-

vision of the Department of Natural Resources agree

that this Consent Order, the supporting data, and all

necessary data that may be requested by the U.S. En-

vironmental Protection Agency which is available to the

Staff or provided by the Company shall be transmitted

to the U.S. Environmental Protection Agency for ap-

proval as a revision to the Michigan State Implementa-

tion Plan.

10. Nothing contained herein shall be considered a

waiver of any claim or defense asserted by the Company

in United States of America vs. Ford Motor Company,

United States District Court Civil Action No. 84CV4459

DT (ED MICH, SD).

11. The Company and the Commission agree that this

Consent Order shall rescind and supersede Consent Order

No. 24-1982.

12. The Staff and the Company do not regard this

abatement program as a variance subject to the 12-

month limitation specified in Section 22 of the Air Pollu-

tion Act, being MCLA 336.32. Approval of this abate-

ment program is not a major state action for purposes

of further environmental review pursuant to Executive

Order 1974-4.

13. Staff and the Company both acknowledge that a

public hearing on this abatement program was held on

January 15, 1985. Both Staff and the Company consent

to enforcement of this Stipulation and Final Order in the

same manner and by the same procedures for all final

orders entered pursuant to Section 16 of 1972 PA 257,

OREN ADR BO WP

3la

MCLA 336.26; MSA 14.58(16), including enforcement

pursuant to 1970 PA 127, MCLA 691.1201 et.seq.; MSA

14.528 (201) et.seq.

Approved as to Form and Content:

/s/ [Illegible] /s/ Norman W. Bernstein

ForpD MoToR COMPANY NORMAN W. BERNSTEIN

Associate Counsel

ForD Motor COMPANY

Dated: Jan. 29, 1985 Dated:

Approved as to Content:

/s/ Robert P. Miller

ROBERT P. MILLER

Chief

AIR QUALITY DIVISION

DEPARTMENT OF NATURAL RESOURCES

Dated: 2/1/85

Approved as to Form:

/s/ Stewart H. Freeman

STEWART H. i"REEMAN

Assistant Attorney Generai

DEPARTMENT OF ATTORNEY GENERAL

Dated: February 1, 1985

32a

FINAL ORDER

This Commission having had opportunity to review the

above stated Stipulation for Entry of Consent Order, and

this Commission having authorized the Chief of the Air

Quality Division of the Department of Natural Resources

as agent of the Commission to enter into consent orders,

IT IS ORDERED that this Consent Order is approved

and shall be entered in the record of this Commission as

a Final Order.

AIR POLLUTION CONTROL COMMISSION

By: /s/ Robert Miller

ROBERT P. MILLER

Chief

Air Quality Division

Department of Natural Resources

Dated: 2/1/85

as a ae rN

33a

MICHIGAN DEPARTMENT OF

NATURAL RESOURCES

AIR QUALITY DIVISION

STAFF ACTIVITY REPORT

January 15,-1985

Respondent

Ford Motor Company

Mount Clemens Viny! Plant

Mount Clemens, Michigan

Purpose

Commission consideration of a new Consent Order and

Final Order to resolve the ongoing violations of Consent

Order Sip No. 24-1982 and Michigan Air Pollution Con-

trol Commission (MAPCC) Rule 610 by providing for

the control of volatile organic compound (VOC) emis-

sions from the plant’s vinyl coating operations. If ap-

proved by the Commission the Order will be submitted

to the United States Environmental Protection Agency

(EPA) as a revision to the State Implementation Plan

(SIP).

Description of Source

The plant operates coating lines for the coating of vinyl

fabrics to be used in automobile seats, headliners and

other automotive applications. A wide variety of fabrics

and coatings are used. The coating lines at the plant are

designated as lines 1, 2, 3, 5, 7, 8, 9, 10, 11, and the cast

line. Lines 1, 2, 3, 5, 9, and 10 are currently uncontrolled.

Lines (coaters) 7 and 8 are controlled by liquid based

nitrogen condensation processes which recover solvents.

The cast line is controlled by a thermal incinerator.

Coater No. 11 was installed in 1977 and is also con-

trolled by an afterburner.

34a

Applicable Rule

For vinyl coating operations, Rule 610 limits the emis-

sion rate to 4.5 pounds of VOC per gallon of coating

(minus water) as applied. Compliance is required with

this rule on and after December 31, 1982.

History

The vinyl plant operated by Ford in Mount Clemens is

the only vinyl coating operation in the state subject to

the 4.5 pounds per gallon limit. Therefore, the limit was

based specifically on a Reasonably Available Control

Technology (RACT) evaluation of the Mount Clemens

plant using information and data available in the mid

to late 1970s. A letter from staff to Ford dated March

5, 1979, however, acknowledged that the 4.5 limit may

not represent RACT for this plant and staff expected

additional review of the limit. It should be noted that

the limit recommended to the states by the EPA for

adoption was 3.8 pounds of VOC per gallon of coating

as applied, and therefore, the 4.5 limit had to be justified

technically to EPA in the 1979 SIP submittal. The 4.5

limit was formally approved by EPA as part of the SIP

on May 6, 1980.

Staff, iz. review of the company’s complianve program,

thoroughly re-evaluated all of the existing vinyl coaters

(and cast line) in terms of what is RACT for each

coater. After a technical review focusing on the cost

and energy problems associated with possible control sys-

tems in the coaters, staff concluded that the limit of 4.5

pounds per gallon, as applied, or equivalent, could not be

reasonably met by every coater so “Stipulation for Entry

of Consent Order and Final Order, SIP No. 24-1982”

was approved May 5, 1983. This Order set forth a

schedule for the installation of control equipment on

coaters 7 and 8. The Order further required a 250 ton

reduction of VOC emissions from other uncontrolled

coaters by December 31, 1985.

Ct a 8) WV IINAD OP YS ALLER AEE Kota FG LATE pA Neon.

CPS A cl Oe a Eine Sed MA EY be

35a

SIP No. 24-1982 required the company to submit com-

pliance status reports to staff each quarter. In late 1983,

the company began upgrading their computer program

to utilize more detailed information to calculate emission

rates. These new quarterly reports indicated that the

company exceeded limits set forth by SIP No. 24-1982,

specifically for coaters 7 and 8. Negotiations to revise

SIP No. 24-1982, between staff and the company began

on February 7, 1984.

On April 19, 1984 the EPA issued a Notice of Violation

to the company for violating MAPCC R336.1610 (part of

a federally approved implementation plan). Negotiations

between staff and the company and EPA continued

through the summer.

On September 26, 1984, the United States Justice Depart-

ment filed a complaint against the company for violating

MAPCC R3836.1610. In turn, on October 16, 1984 the

company filed a suit against MAPCC, Michigan Natural

Resources Commission and Michigan Department of Nat-

ural Resources seeking injunctive relief and civil penalties

for violation of Michigan State Implementation Plan

R336.1610.

Staff and the company continued negotiations and agreed

on the major issues as summarized below. This agree-

ment forms the basis for the new proposed order.

1. The allowable emission rate for the coating of vinyl of

4.5 pounds of VOC per gallon of coating (minus

water), as applied, is not achievable through the use

of RACT specifically for coaters 7 and 8. The new

limits not to be exceeded which would constitute RACT

are: 46 pounds per gallon of solids applied, based on

a 15-day averaging period and 55 pounds per gallon of

solids applied based on a 24-hour averaging period

for coater No. 7; and 47 pounds per gallon of solids

applied, based on a 15-day averaging period and 51

pounds per gallon of solids applied based on a 24-hour

averaging period for coater 8.

36a -

2. The company will permanently discontinue operation

of the uncontrolled vinyl printers as follows: June 30,

1985 for coaters 1 and 5; November 30, 1985 for

coater 10; and the effective date of this Order for

coaters 2, 3, and 9; unless an approved Permit to

Install is issued by the Commission.

3. Total annual VOC emissions from all of the vinyl

cuvaters at the company shall not exceed 440 tons by

January 1, 1986.

4. The proposed Consent Order also includes record keep-

ing and reporting requirements to demonstrate com-

pliance with the terms of the Order.

Revision to the SIP

Because the proposed Order reflects limits that are differ-

ent than those in the currently approved Michigan SIP,

the order must be submitted to EPA as a revision to the

SIP. Such “site-specific’ SIP revisions for existing

sources must meet certain criteria in order to be ap-

provable. Those criteria include:

1. Documentation of why the revised emission limits

reflect RACT.

2. Documentation of why the compliance dates are as

“expeditiously as practicable”.

3. An smalysis based on modeling which shows that with

the revised compliance program contained in the Order,

the overall demonstration of attainment in the SIP

will continue to provide for attainment by the dead-

line mandated by the Clean Air Act (in this case,

December 31, 1987).

The information for the above three areas will be docu-

mented in detail as part of a separate report which will

accompany the Order as part of the formal SIP sub-

mittal to EPA. To summarize, the company has provided

staff with information for printers Nos. 7 and 8 which

~ te = ne Be

87a

indicate that the cost to provide any controls in addition

to the liquid based nitrogen condensation systems which

are currently utilized would be disproportionate to the

amount of VOC emission reductions to be gained from

such additional controls. Regarding printers 1 and 5, and

10, which will discontinue operation by June 30, 1985, and

November 30, 1985, respectively, documentation in the

SIP submittal will focus on the unreasonableness of in-

stalling air pollution controls for such a short duration

of time. The plantwide emission limitation included in the

order will be made a part of the 1982 ozone SIP for the

Detroit urban nonattainment area which will be formally

submitted to EPA in early January 1985 and, therefore,

will parallel this site-specific SIP revision.

Recommendation

Staff recommends entry of the attached proposed Consent

Order which provides for a schedule for the vinyl coating

operation at the Ford Motor Vinyl Plant in Mount

Clemens.

Submitted by: Ann Peppo

December 21, 1984

AP:jh

Attachment

38a

bee: N. Bernstein

S. Kehres

D. Schultz

D. Voita

D. Vonk

[FORD LOGO]

V. H. Sussman, Director

Stationary Source Environmental Control

Environmental and Safety Engineering

Ford Motor Company

One Parklane Boulevard

Dearborn, Michigan 48126

January 8, 1985

Mr. Robert P. Miller, Executive Secretary

Michigan Air Pollution Control Commission

P.O. Box 30028

Lansing, MI 48909

Subject: Ford Mt. Clemens Vinyl Plant—Proposed Con-

sent Order

Dear Mr. Miller:

Pursuant to the Notice of Air Pollution Hearing dated

December 10, 1984, the Company hereby submits brief

comments on the proposed order. In general, Ford sup-

ports and accepts the entry of the Proposed Order (with

our recommended corrections) and supports the recom-

mendations contained within the Staff Activity Report.

In addition, although Ford generally agrees with the con-

clusions and recommendations of the staff, some comment,

correction and addition is necessary to the staff report.

We have also included such information so that the Com-

mission may have a more complete picture of the Plant’s

emission control efforts. Copies of these comments and

89a

information are being forwarded directly to the members

of the Commission for their review.

Sincerely,

/s/ Victor H. Sussman

ee: Members, Michigan Air Pollution

Control Commission

Attachment

9A:FPP195/L

40a

January 8, 1985

Attachment I

Comments of Ford Motor Company

Mt. Clemens Vinyi Plant

Proposed Consent Order (Fifth Draft—11/30/84)

Ford Motor Company (‘‘Ford’’) files these comments on

the proposed Order regarding volatile organic compound

emissions from its Mt. Clemens Vinyl Plant, upon which

a public hearing is scheduled for January 15, 1985.

1. Paragraph 8(g), p. 4.

Substitute “Beginning” for the word “By”, so. as to

read: “Beginning January 1, 1986... .”

The purpose of this change is to more clearly state

the intent of this paragraph that the production lim-

iting annual emission cap applies in calendar year,

1986 and thereafter. As now worded, it could be con-

strued that the 440 TPY emission level will have been

achieved before, or in 1985.

2. Paragraph 10, p. 4.

The U.S. District Court Civil Action citation should

be corrected to read “84 CV” not “84 CB.”

Based on informal contact with MDNR and the Attor-

ney General’s Office Staff, it is the Company’s understand-

ing that the above two recommended changes are accept-

able. Ford respectfully requests that the Michigan Air

Pollution Control Commission adopt and enter the pro-

posed Order, including the above recommended changes..

4la

January 8, 1985

Attachment IT

Comments and Supplemental Information by

Ford Motor Company Mt. Clemens Vinyl Plant

with Respect to the Staff Activity Report dated

December 24, 1984 by the Air Quality Division,

Michigan Department of Natural Resources

Ford supports the recommendations contained within

the Staff Activity Report. In addition, although Ford

generally agrees with the conclusions and recormmenda-

tions of the staff, some comment, correction and addition

is necessary to the Staff Report. There are four basic

points that need to be made. First, Ford has already

reduced VOC emissions by more than 80% from the plant.

Second, we do not agree that there are any violations.

Third, we are submitting herewith additional data in sup-

port of the findings in paragraphs 6 and 7 of the pro-

posed Order. Fourth, entry of the proposed Order is im-

portant to minimizing the loss of jobs in the State of

Michigan, while at the same time assuring that the facil-

ity will surpass all air pollution control objectives. We

will address each of these points below.

1. By a combination of installation of control equip-

ment, process and scheduling changes, retirement of cer-

tain printers and reduction of production, costing in ex-

cess of $6.65 million (set forth in more detail below),

emissions of volatile organic compounds from the Mt.

Clemens Vinyl Plant have been reduced by over 80%

from 1977 to the present (from more than 3700 tons per

year in 1977 to less than 700 tons in 1984 from vinyl

coating operations).

Pursuant to the terms of the proposed Consent Order,

after January 1, 1986, emissions will be 88% below

1977 levels. This reduction exceeds the goals for reduc-

tions recommended by the USEPA for this industry.

42a

2. Ford Motor Company does not agree that any vio-

lation of a valid existing law or regulation has been

established (as stated under “Purpose,” Staff Activity

Report). To the extent that compliance is measured by a

rate of emission calculation using the so-called “hypo-

thetical gallon” method, the regulation and such calcula-

tions are invalid. The plain language of existing Rule

610 requires only a reduction in the rate of emissions

based on coatings “as applied.” It has been, and is, our

view that Ford has achieved compliance, even with the

rate limitations set forth in the Rule, on a plantwide

annual basis using the plain language of the Rule.

The allegation that Ford may be in violation of the

original Rule 610 is apparently based on a “hypothetical

gallon” method of calculating emission rate. The “hypo-

thetical rallon” method is not set out in the Rule, and if

used, the rate limitations in the Rule are beyond reason-

ably available control technology (RACT) at least as

applied to printers 7 and 8.

Nor does Ford Motor Company agree that noncompli-

ance has been established with regard to the prior Con-

sent Order covering vinyl coating operations at the Mt.

Clemens Plant. To the extent that a different rate type

calculation was included, the limits set in the original

Order assumed a 90% capture efficiency for control equip-

ment—an efficiency which is not achievable as RACT

either (see pages 6-8 for these comments).

8. In an effort to assist the Commission, and to sup-

plement the information set, forth in the Staff Activity

Report, the following information is provided in support

of paragraphs 6 and 7 of the proposed Consent Order

(also refer to Staff Activity Report, p. 3) which addresses

the establishment of a site-specific RACT VOC emission

control program for Printer Nos. 7 and 8.

A brief review of the nature of Mt. Clemens Vinyl

Plant (“the Plant”) production and development of vinyl

coating VOC limits is instructive. The Plant uniquely

‘

a ME ttt tm Ate silt pinn illly at Ailiaie

43a

manufactures coated sheet vinyl for 100% automotive

applications, unlike competitors with diversified products

such as wallpapers, furniture covers, etc. Ford’s auto-

motive vinyls have more demanding product quality speci-

fications than ordinary commercial vinyl due to the need

to withstand exposure to harsh weather conditions and

still retain an attractive appearance. These requirements

limit the type of coatings that can be used. The plant

uses over 500 different coating formulas (all solvent-

based with relatively low solids content) complicating re-

conversion just on sheer numbers.

Following the 1977 Clean Air Act amendments, EPA

provided “guidance” to states through Control Technology

Guidelines (“CTG’s”) for development of VOC emission

limits. These CTG’s were hastily prepared, often by out-

side contractors, were not subjected to any formal public

comment, and often contained inaccurate information.

The USEPA, during development of its CTG for vinyl

coating, never visited nor requested information from

Ford with respect to its unique vinyl plant circumstances.

Based on data from other vinyl coaters and a certain set

of assumptions, it suggested that a limit of 3.8 pounds

of VOC per gallon of coating (as applied) represented

RACT. The USEPA assumptions were that (1) 90% of

fugitive solvent losses in the plant could be captured—the

so-called “capture efficiency,” and (2) 90% of the solvent

captured could be recovered or controlled. The combined

effect of these two asumptions was that 81% overall emis-

sion control, EPA assumed, represented RACT [(0.90 x

0.90) x 100 = 81%]. When Michigan adopted Rule 610,

based on data Ford submitted related to its coatings, a

limit of 4.5 pounds of VOC per gallon was established.

Subsequent interpretation of that value and the differ-

ence of opinion on the extent of emission control required

resulted in the Consent Order entered into in 1982.

Original Consent Order. Confronted with the necessity

to try to meet this new regulatory requirement, the Plant

44a

had limited options—it could develop higher solids coat-

ings, convert to waterbased coatings, or install control

hardware.

Due to the nature of the vinyl coating process (roto-

gravure), coatings with high solids content reflecting 4.5

pounds VOC per gallon coating are not usable.. The Plant

had done considerable developmental work on waterbased

coatings, which at that time, were not commercially avail-

able, and concluded that none could be developed in the

time framework allowed that would meet both the VOC

emission limits and Ford’s stringent product quality de-

mands. Further, the Plant did not have the flexibility

as did others with varied products (like vinyl wall cover-

_ ings) to convert some printers to waterbased coatings and

average the emissions from the waterbased and solvent

based coatings. Accordingly, the control hardware option

was then selected and, reflecting the economic hardship

imposed by an across-the-board application to all printers,

a VOC control “bubble” was proposed to and approved by

the Commission (SIP No. 24-1982) on November 30,

1982. The major provisions of that order are as follows:

* By December 31, 1982—for controlled printers 7

and 8—allowable emissions of 13.5 lbs. VOC/gal.

solids applied, 24-hour average (to be adjusted

following new control equipment performance test-

ing). This value was based upon an expected 81%

emission reduction from the 1977 plantwide aver-

age emission rate.

* By December 31, 1982—for uncontrolled vinyl coat-

ers 1, 2, 3, 5, 9 and 10—allowable emissions of 76

Ibs. VOC/gal. solids applied (15-day moving aver-

age), 120 lbs. VOC/gal. solids applied (max. 24-

hour average).

Provide additional 250 ton-per-year emission reduc-

tion after December 31, 1985 through use of alter-

nate coatings or installation of hardware.

45a

* Submit quarterly reports of emission data.

The Company met every stipulated commitment date

in the Order:

* Installation of innovative control technology equip-

ment on printers 7 and 8 was completed before

12/31/82, at a cost of approximately $3 million.

However, as explained below, the required VOC

emission rate of 13.5 pounds per gallon solids ap-

plied was not achieved.

The allowed rates for uncontrolled printers as

initially met. With time, the 76 pounds VOC per

gallon solids (15-day average) increased slightly

due to the introduction of a process change and

refinement of the data base used to calculate plant-

wide VOC rates.

* A VOC emission reduction in excess of the 250-ton

reduction prescribed in the Order was accom-

plished at the Plant more than two (2) years ear-

lier than required at a cost of $3 million. It was

the result of a process change (‘embossed last’’)

which eliminated one of three coatings previously

applied to a majority of the Vinyl Plant’s prod-

ucts. Approximately 450 tons per year in VOC

usage were removed from the Plant by this effort.

An ironic effect of this process change was that the

plantwide VOC emission rate, expressed as an

average, increased slightly because the coatings re-

moved from the process contained less VOC than

the coatings which remained. Thus, even though

mass emissions were reduced substantially, the rate

of emission, on average, increased about 8% (from

74 to 80 lbs. VOC per gallon of solids applied).

This fact is not recognized in the Staff Activity

Report. Although an extraordinary effort in man-

power was expended to refine our computer pro-

gram, using individual raw materials and their

46a

respective specific gravities (instead of an average

specific gravity) for about 500 different formula-

tions, it was the process change described above

and not an improvement in reporting accuracy

which caused the Plant’s emission rate to increase.

All quarterly emission data reports have been and

continue to be submitted.

Given the past history, attention is now focused on why

the Plant’s accomplishments to date with respect to the

controlled printers (Nos. 7 and 8) and the revised VOC

emission limits in the proposed Order represent RACT

(or conversely why Rule 610, and the original Order are

not RACT). Experience gained with the installed con-

trol technology and its testing has revealed the short-

comings of the USEPA assumptions behind its 81%

reduction as RACT. The USEPA defines RACT as:

“the lowest emission limit that a particular source

is capable of meeting by the application of control

technology that is reasonably available considering

technological and economic feasibility” (emphasis

supplied).

Technology infeasibility. Pursuant to the original

Order, the Plant installed innovative control technology

on Printer Nos. 7 and 8, known as the Airco inert gas/

solvent recovery system. It uses an inert gas (nitrogen)

»ven atmosphere to enrich the solvent loading, which

atmosphere is continuously bled off to a condenser for

solvent recovery, and recycled. Ford had made one of the

first installations of this technology in the country.

The Airco systems were installed on time and tested

for performance. Results were surprising in that only

43% overall VOC control on average was demonstrated.

This was not the result of poor condenser performance

which by itself achieved 96% control of inlet sovent

vapor. An investigation followed and a number of modi-

fications to the original design and operating condi:ions

47a

was undertaken. The system was retested. Significant

improvements resulted, and overall capture was increased

on average to 53% for Printer No. 7 and 57% for Printer

No. 8. This appears to approach the expected upper

limit of performance given the nature of the system.

Further examination of the test results, in the form of

a mass balance, shewed that VOC losses are inherent in

the process in two areas—fugitive losses from printer

applications and from the ovens, and solvent carry-out on

the printed viny] product.

With respect to fugitive losses, the mass balance

showed that about 25% by weight of the solvent is lost.

It is not possible based on current information to allocate

these losses between the printer and the oven. The

printer stations are fully enclosed and efforts are made

to operate them at slightly negative pressure. Pressure

control of the nitrogen atmosphere oven is necessary to

prevent in-leakage of oxygen to the VOC rich environ-

ment, but control is difficult and some leakage does occur.

The amount of fugitive loss is in agreement with exten-

sive tests conducted by the Radian Corporation for US

EPA at another vinyl] facility.

The mass balance also revealed that_about 15 percent

of the solvent applied to the vinyl is retained on the

coated product. This phenomenon was not anticipated

and shows that even if all the fugitive emissions could be

controlled, the capture efficiency at best would be 85 per-

cent, or less than what EPA’s CTG for vinyl coating

anticipated.

The folowing is a block diagram showing the typical

emissions from the solvent recovery system assuming a

solvent loading of 100 pounds:

48a

x# Loss y* Loss 8# Loss

100# Solvent (100-x)# 60# Solvent

> Printer ——___B® Oven —p Recovery

System

v vV

15# Retained 57# Recovered

on Product

Figurel. Diagram Showing Typical Emissions from Solvent

Recovery System

1) 100 -x=y+60+15

2) x+y=100- (60+15)=25# VOC (fugitive losses)

The Company believes that Printer Nos. 7 and 8 have

been optimized and are currently operating at a maxi-

mum solvent control efficiency for which this type of

solvent recovery system is technically and reasonably

capable.

It is evident from the test data accumulated, that the

optimum control efficiency for vinyl coating, considering

retrofitting an existing printer-oven with some type of

control system will not reach the 81% level expected,

due to the inability to capture anything like 90% of the

fugitive VOC emissions and remove all the residual sol-

vent from the coated product before it leaves the oven.

In the case of the Mt. Clemens Vinyl Plant, using EPA’s

combined efficiency approach, the optimum performance

for its system is estimated as:

60% x 96% = 57%

(capture efficiency) (controlefficiency) (overall VOC control)

Importantly, due to retention of residual VOC in the

product, the substitution of incineration (or other technol-

ogy) would not significantly improve this overall per-

formance for existing coating lines. Therefore, it is

Ford’s contention that the existing control system is

“technologically speaking” RACT.

49a

Economic Unreasonableness. ‘Cost-effectiveness” or

the cost to control one ton of VOC emissions is an ac-

cepted gage of RACT in an economic sense. The USEPA

considers costs exceeding a range of $3,000-$5,000 per

ton unreasonable, and therefore “non-RACT.” In the

case of the Mt. Clemens Vinyl Plant Printer Nos. 7 and

8, VOC emissions have already been reduced by 53%

and 57%, respectively. Thus, cost-effectiveness is deter-

mined to achieve the incremental reduction up to the 81%

selected by EPA as RACT.

As shown above, alternate control technologies will not

achieve the 81% control target. The remaining option

for evaluation is conversion to waterbased coatings. Such

coatings, were they to exist for use on Ford vinyl con-

structions, could exceed the 81% reduction level. An

initial investment cost breakdown per printer is shown

below for waterbased conversion.

Cost Breakdown to Convert Printer to Waterbased Coatings

Equipment $199,000*

Capital Labor 162,000*

Expense Labor 54,000

Instrumentation 10,000*

Design 32,000*

License 125,000

R/D 168,000

* Capital cost items

These costs were annualized and cost-effectiveness values

computed for incremental emission reductions up to 81%,

and beyond for a waterbased coating containing a mini-

mum of 10% solvent by volume.

Incremental Cost-Effectiveness of Waterbased Coatings

Coating Incremental VOC Reduction Cost- Effectiveness

Basis: Line (Tons/ Year) ($/Ton)

W/B-81% 7 72 8,897

W/B-81% 8 67 9,561

W/B* 7 94.5 6,783

W/B* 8 92 6,967

* Assumes 10% organic solvent

50a

This analysis presumes all automotive vinyl products

produced at Mt. Clemens can be converted to waterbased

products, while maintaining stringent Ford quality spec-

ifications. We understand that other vinyl manufac-

turers may be making certain limited constructions (of

unknown quality) such as headliners, and seating mate-

rials for use in areas not subject to extensive wear.

Ford remains convinced that vinyls subject to exposure

to weather and to abrasion will not be amenable to con-

version. USEPA admits that waterbased coatings for

dielectric sealable exterior material (vinyl roofs) are not

available. (Letter, Steve Rothblatt, USEPA to Robert

Miller, Sept. 12, 1984.) The same is true for similar

materials used for interior door panels.

We conclude that: (1) waterbased vinyl coatings are

not available (and not likely to become available) for

across-the-board application to Ford automotive products,

and (2) even if they were developed at some future date

their application to Printer Nos. 7 and 8 is not eco-

nomically reasonable.

Two other RACT-related issues are mentioned in the

Staff Activity Report (p. 3)—expeditious compliance

dates, and non-interference with the ozone attainment

strategy (SIP). At present, Mt. Clemens Vinyl Plant

provides 88% of total Ford automotive vinyl require-

ments. When it became apparent that, in spite of VOC

emission reductions accomplished, neither the MDNR or

the USEPA would accept a revised compliance program

incorporating a bubble to allow all nine existing printers

to operate, Ford immediately developed a shutdown

schedule for the six uncontrolled printers. The timing of

this plan must accommodate the outsourcing of lost pro-

duction to avoid far-reaching economic effects to the

Company’s car and truck products. Three uncontrolled

printers (Nos. 2, 3 and 9) have already been retired.

The outsourcing program considered was to increase

the outside vinyl purchase to 56 percent on a total pur-

5la

chase quantity of 15.7 million yards and complexity of

203 parts for the 1986 model year. Purchasing Staff

projects that the complexity of this outsourcing action

will require approximately six months to complete after

sourcing is finalized.

After careful consideration of a wide range of factors

including the type of vinyl construction involved, the

shifting of production schedules to minimize job loss and

vender quality verifications, a plan had been established

for replacing this business by Canadian General Tower

and Uniroyal (both outside of Michigan). Contracts

were awarded to those suppliers on December 18, 1984.

The new suppliers have indicated that capital equip-

ment will be required to support their new business but

could expeditiously be procured within six months. In

addition, they were not previously qualified to supply all

of the required parts but felt that this could also be

accomplished within six months. Ford Purchasing Staff

has estimated, based on past experience, that this product

qualification of source approval would take from 21 to

29 weeks.

Accordingly, the shutdown of two uncontrolled printers

(Nos. 1 and 5) by June 30, 1985 is as “expeditiously as

practicable.” The remaining uncontrolled printer (No.

10) will cease operation as soon as possible after this

date. The proposed Order provides for its operation until

November 30, 1985 to ensure that quality standards are

not compromised and that introduction timing for the

Ford Motor Company 1986 model vehicles which are

scheduled for launch throughout the third quarter of

1985 is not jeopardized.

The 1982 ozone SIP revision for the Detroit urban

nonattainment area, scheduled to be formally submitted

by the MDNR to EPA in early January 1985, originally

allocated 1440 tons per year of VOC emissions to the

52a

Plant through 1987. Actually, the VOC emissions from

the vinyl plant will be reduced in accord with the proposed

Order to 440 tons per year by the end of 1985. There-

fore, the proposed Order will enhance (and not interfere

with) the strategy for bringing the Detroit urban area

into ozone attainment.

4. There will be a negative employment effect as a

result of the equipment shutdown required by the re

vised Order. Company management and the United Auto

Workers regret this consequence, but nonetheless we re-

quest the Commission’s approval in order to avoid even

greater job loss. The immediate effect of operating only

three controlled printers (Nos. 7 and 8, and No. 11 which

. is not covered in the Order) is a net loss of 139 hourly-

paid and 17 salaried headcount, or a total of 156 jobs.

Every effort is being made to cover these losses by attri-

tion (the Plant has not hired new employees since Au-

gust 1984) and to reassign or relocate affected individ-

uals.

If the Commission does not approve the revised Order,

Printer Nos. 7 and 8 will also have to be shut down

increasing the job loss to 364 (275 hourly and 89 sal-

aried). The consequenves of that action could be more

far-reaching, because the economic viability of operating

the Plant with only one remaining vinyl printer (No.

11) is questionable.

Appropriate representatives of the Company will be

present at the public hearing scheduled for January 15,

1985, to answer any questions from the Commission.

Approval of the staff’s recommendation and proposed

Consent Order is respectfully requested.

53a

[UAW LOGO]

UNITED AUTOMOBILE * AEROSPACE °

AGRICULTURAL IMPLEMENT WORKERS

OF AMERICA (UAW)

INTERNATIONAL UNION

FORD LOCAL No. 400 UAW

50595 Mound Road

Utica, Michigan 48087

January 7, 1985

Michigan Air Pollution Control Commission

P.O. Box 30028

Lansing, MI 48909

Subject: Air Pollution Hearing January 15, 1985

We the Bargaining Committee of Local 400 of the United

Auto Workers, which represents employees of Ford Motor

Company’s Mt. Clemens Vinyl Plant, strongly support the

proposed action by the Clean Air Commission of the De-

partment of Natural Resources.

The proposed consent order would allow the Vinyl Plant

to continue operating “controlled” printers (Nos. 7 & 8)

and yet still produce favorable results for the environ-

ment. Although the proposed action has an adverse ef-

fect on employment with a loss of up to 130 jobs, we be-

lieve if this consent order is not implemented there will

be an additional loss of approximately 200 jobs. Also,

if we cannot continue the vinyl operation, which is 75%

of the plant’s production output, we are sure that the

Vinyl Plant could not in the long term remain open

resulting in a total loss of 450 jobs.

We the Bargaining Committee believe the consent order

worked out between Ford Motor Company and the State

of Michigan’s Department of Natural Resources will

satisfy the environmental needs of the area and on be-

54a

half of the Vinyl Plant’s 450 hourly employees we im-

plore this Commission to accept the consent order.

Sincerely,

/s/ James H. Purchase

JAMES PURCHASE

Chairman Local 400 UAW

Mt. Clemens Paint & Vinyl Plants

/s/ Richard McCleary

RICHARD MCCLEARY

Committeeman Vinyl] Plant

/s/ Robert R. Catanzaro

ROBERT CATANZARO

Committeeman

/s/ Michael G. Bennett

MICHAEL BENNETT

Committeeman

Concur:

/s/ Frank Vesprini

FRANK VESPRINI

President

Local 400 UAW

/s/ Robert Tiseo

ROBERT TISEO

Vice President

Local 400 UAW

ec: Gov. J. Blanchard, S.P. Yokich,

B. Lent, G. Morris, P. Pestillo

fv/meg42

55a

TRANSCRIPT OF PROCEEDINGS

Before the Michigan Air Pollution Control Commission

Lansing, Michigan—January 15, 1985

THE CHAIRMAN: The record will so note that

Commissioner Partee is absent from this Commission

during the discussion of agenda items #5 and #6.

Item #5—The Commission will again convene public

hearing—this is on a public hearing for a proposed con-

sent order to control volatile organic compound emissions

from vinyl coating operations at the Mt. Clemens Vinyl

Plant. Staff.

MR. BOB MILLER: Before beginning the introduc-

tion I would like to pass on the complaint the people in

the back of the room have been having difficulty hearing

so to recommend that everybody speaks—speaks directly

into the microphone. Thank you.

To present the staff report on Ford Motor Company

will be Mr. Tom Maki. Tom is the district supervisor

from our Northville office and responsible for the Mt.

Clemens among other areas around the Metro area of

Detroit. Tom.

MR. TOM MAKI: Thanks Bob. The Ford Mt. Cle

mens Vinyl Plant produces and coats a wide variety of

sheet vinyl fabrics used in automobile seats, headliners

and other automotive applications with resulting volatile

organic compound emissions from the plant’s coating

lines. This plant is the only one in Michigan subject to

the vinyl coating limit to Rule 610. There is an existing

Consent Order SIP No. 24-1982 for this plant which was

approved by the Commission November 30, 1982 and

became effective May 25, 1983. The consent order which

is being proposed to the [2] Commission today would

rescind and replace this consent order.

On January 27, 1984 the Company submitted a letter

to staff which explained that the Company had revised

their computer program which is used to calculate coat-

56a

ing line emission rates. More accurate data on specific

coating formulations and densities were now being used.

As a result the calculated emission rates using more

accurate data were greater than the emission rates cal-

culated previously using composite coating characteris-

tics. Unexpectedly, the new calculated emission rates

were also in excess of some of the emission limits of

Consent Order 24-1982. Staff has met with the Company

on numerous occasions to renegotiate this consent order.

On April 19, 1984 the U.S. E.P.A. issued a notice of

violation to the Company for violation of Michigan Rule

610. On September 26, 1984 the U.S. Justice Department

filed suit on the Company. In turn, the Company on

October 16, 1984 filed suit in Ingham County Circuit

Court against the Michigan Air Pollution Control Com-

mission, the Michigan Natural Resources Commission,

and the Michigan Department of Natural Resources peti-

tioning the Court for injunctive relief from the enforce-

ment of Rule 610 and to declare that Rule 610 is void

and unenforceable with regard to the coating of vinyl.

Staff has continued to meet with the Company and a new

proposed consent order has been developed. The pro-

posed order provides for a phased shutdown of the six

uncontrolled printers with interim emission limits until

shutdown. Use of printers two, three and nine would be

discontinued with the effective date of the new order.

Printers one and five would be phased out by June 30th

of ’85 [3] and the last uncontrolled printer, printer ten,

would be removed from service by November 30th of

85. The proposed order also provides for a total emis-

sions cap of 440 tons of VOC per year from all coating

lines at the plant beginning January 1, 1986. In regards

to printers seven and eight, the Company has conducted

extensive work in testing to maximize efficiency of the

solvent condensation systems in an unsuccessful attempt

to meet the original emission limit. The RACT emission

limits proposed for printers seven and eight in items &b

and 8c of your consent order reflect the actual capabili-

ties of the condensation systems. It should be noted that

57a

the emission limits in this order use a different basis

than is used in the table in Rule 610. The basis or the

limit in Rule 610 is 4.5 pounds of VOC per gallon of

coating and the limits in this proposed order as in the

existing order use the basis of pounds of VOC per gallon

of coating solids. So the numbers appear higher than the

4.5 which is in the table but it should be remembered

that it uses a different basis.

The proposed order also includes record-keeping and

reporting requirements to demonstrate compliance with

the terms of the order. There have been two public com-

ments received, one from UAW—a letter dated January

7th which I believe is in your folder—supporting entry

of the order. Also, comments were received from Ford—

a letter dated January 8th—there were two specific com-

ments on the wording of the order, both of which are

supported by staff and they recommend changes on page

four. The first line is to replace the words “by January

1, 1986” and to use the words “beginning January l,

1986.” And the [4] last line on page four was a correc-

tion of notation where the letters “cb” appear in your

draft and it should read “cv.”

THE CHAIRMAN: Where is it?

MR. TOM MAKI: The last line on page four. Way

down at the bottom.

THE CHAIRMAN: Repeat that.

MR. TOM MAKI: The correction should read “Civil

Action No. 84 CV—as in Charlie Victor.

THE CHAIRMAN: CV?

MR. TOM MAKI: CV as in Charlie Victor. Staff

recommends entry of the proposed consent order which

would rescind and replace Consent Order No. 24-1982.

There are representatives of the Company here.

THE CHAIRMAN: Any questions of staff?

COMMISSIONER KACHMAN: Does this pliant now

object to interrupt existing operating conditions as pro-

posed?

MR. TOM MAKI: I believe its something in the

vicinity of 1,000 tons or more.

58a

COMMISSIONER KACHMAN: And when they are

through with it after ’85?

MR. TOM MAKI: It would be 440 tons per year or

less.

THE CHAIRMAN: Tom, could you explain why the

change in the units from pounds per gallon of .coating to

now pounds per gallon of solids, I am totally unfamiliar

with that—how do you determine compliance with that?

MR. TOM MAKI: There is a procedure for, an ac-

tual stack testing procedure, but the reason for it is that

it’s a more [5] understandable basis for—when there is

control equipment on a process.

COMMISSIONER KACHMAN: It makes it easier for

you to determine compliance with that as opposed to the

other which was just pounds per gallon.

MR. TOM MAKI: Yes.

COMMISSIONER KACHMAN: Is that right? So the

chance is really at staff’s preference as opposed to the

Company’s preference, is that...

MR. TOM MAKI: It could be either way, but it’s a

more—I think it better exemplifies the magnitude in

change in emissions. The emission limit which is in the

Rule is a non-linear scale. Whereas the pounds of VOC

per gallon of coating solids is a more linear relationship.

COMMISSIONER KACHMAN: Thank you.

THE CHAIRMAN: I have a card from a company

representative—Joe Lennon. Joe, did you want to speak

to this? And a Linda Gamble—not on that—not on the

outline. Thanks.

MR. JOE LENNON: Mr. Chairman, commissioners,

my name is Joseph Lennon. I am a facility environmental

control engineer for Ford Motor Company. I have with

me today on my right Dave Volta who is the plant man-

ager at Ford Mt. Clemens’ plant and to my left is

Norman Bernstein an associate counsel at Ford. Addi-

tional Ford and UAW personnel are here with us today.

Ford Motor supports the entry of the proposed order.

By letter dated January 8, 1985, Ford filed with the

59a

Executive Secretary to the Commission comments both to

support the proposed consent order and to amplify the

staff’s [6] activity report. Copies were also sent to the

Commission members. We would like those comments to

be deemed as Ford’s testimony in this matter and we are

here to answer any questions that you may have concern-

ing the proposed commission action.

THE CHAIRMAN: Any questions of the Company?

COMMISSIONER MOORE: Not so much a question

as a comment. I was very happy to receive Ford’s com-

ments and especially those by Mr. Sussman because it

went a long way to remedy the deficiencies in the staff

report and had I had to rely on the staff report I would

have had to have abstained because there wasn’t suffi-

cient information upon which I could base any kind of

intelligent vote. So, if I do vote for it, it’s only because

of your remedy of the staff report.

THE CHAIRMAN: Thank you. Well, Mr. Lennon, I

assume from your comments that the Company has en-

tered into an agreement with staff recommendations and

the changes that were made to the proposed order here

by staff at this time? Is that correct?

MR. JOKE LENNON: That’s correct.

THE CHAIRMAN: Other questions of the Company?

Thank you very much, gentlemen.

MR. JOE LENNON: Thank you.

THE CHAIRMAN: Again, this is a public hearing

and although I have no other cards indicating a desire to

speak on this issue, if there are others present that would

like to, you have an opportunity to do so at this time.

Mr. Bernstein.

MR. NORMAN BERNSTEIN: Yes, I think we should

add that Mr. Freeman and I have reached an agreement

in principle to settle [7] the litigation between the State

and Ford based on the entry of this order, and I think

Mr. Freeman can confirm that.

THE CHAIRMAN: Mr. Freeman, would you like to

comment on that at this time?

60a

MR. STEWART FREEMAN: Well, I—I think—I

think the language used is clear. I was in on the nego-

tiations of the document. You’ll notice particularly para-

graphs six, seven and eight reflect a finding by this Com-

mission that the existing rule is in effect unreasonable.

That doesn’t happen very often. But we have individually

and collectively admonished your staff that if and when a

hypothetical situation of a company that could show that

the rule is unreasonable comes forward it should be dealt

with honestly—that’s what you’ve got before you—the

settlement of the lawsuit is really fairly easy—and if this

Commission adopts an order which says—well, we made

a mistake in the promulgation of the rule and here’s what

we want to do instead—if you choose not to do that, we'll

go back and defend the rule. The difficulty from my

standpoint is that all of the people that I would look to

as witnesses to defend your rule are people who are here

recommending to you that the rule be changed. It’s an

interesting situation in that this rule in effect applies

only to a few pieces of machinery in a single plant. But

the precedent that the Commission when faced with it—

a company which says your rules are unreasonable and

staff agreeing—will then come in -and in effect repeal

the rule and change it. By it being an order, its prece-

dent, others may wish to take advantage of same. I am

not counseling you not to do it, as I say, I am one of

the [8] authors of what is before you, but I don’t want

you to get excited when others come in and say—vwell, we

want the same deal you gave Norm Bernstein at Ford.’

Maybe they’ll be entitled to it. When you write thou-

sands of rules, I think there is some risk that every once

in a while you are going to have to admit that one of

them could be fixed up a little bit—could be fixed a little

better—there is the possibility that unfriendly reaction

by the Environmental Protection Agency but somebody

has to go first in this situation. It’s your rule—the

United States in effect is trying to enforce your rule in

federal court which is why the Company came here and

6la

said look we can’t live with the rule. There will be those

who said—-there may be those who would suggest—that

in so doing you’re undercutting federal enforcement ac-

tion. Let me anticipate the question and tell you my

answer to that is perhaps the EPA should consult with

us before they file an action in Michigan against the

Company for enforcement of one of this Commission’s

rules when there is a dispute between the staff and the

Company as to whether or not the rule is reasonable and

enforceable in its present form. So, it’s a classic com-

promise but an interesting precedent. I guess the ques-

tion is whether you’re persuaded. We deliberately drafted

the language of key paragraphs so that the Commission

would make a finding. That’s mostly the lawyers on

both sides talking there. We don’t think Bob Miller should

be going out saying—well, this rule is no good or that

rule is no good. If the staff is going to retreat from a

position in a promulgated rule and adopt instead a dif-

ferent regulatory posture as to a particular company,

that’s the kind of [9] thing that this Commission ought to

do not the staff. We put it before you with the language

that has you finding that you’re satisfied with what’s

before you and if you’re not then we better get the Com-

pany or staff up here with some more facts.

THE CHAIRMAN: Thank you. Questions of Mr.

Freeman? Again, this is a public hearing. Is there any

others present now that would like to speak to this

issue? There being none, what’s the pleasure of the Com-

mission? :

COMMISSIONER KACHMAN: I make a motion that

we accept the staff’s recommendation.

THE CHAIRMAN: So moved by Commissioner Kach-

man, support by Commissioner Sehaner. Is there discus-

sion of the motion? Is the motion clear? Then we'll call

the roll.

Commissioner Greenberg.

COMMISSIONER GREENBERG. Yes.

62a

THE CHAIRMAN: Commissioner Kachman.

COMMISSIONER KACHMAN: Yes.

THE CHAIRMAN: Commissioner McMahon.

COMMISSIONER MCMAHON: Yes.

THE CHAIRMAN: Commissioner Moore.

COMMISSIONER MOORE: Yes.

THE CHAIRMAN: Commissioner Partee. Commis-

sioner Partee abstains. Commissioner Sehaner.

COMMISSIONER SEHANER: Yes.

THE CHAIRMAN: Commissioner Skoog.

COMMISSIONER SKOOG: Yes.

THE CHAIRMAN: The chair votes yes. Thank you.

63a

APPENDIX G

RELEVANT PROVISIONS OF THE CLEAN AIR ACT

Section 109(a), 42 U.S.C. § 7409(a), provides:

§ 7409. National primary and secondary ambient

air quality standards

(a) Promulgation

(1) The Administrator—

(A) within 30 days after December 31, 1970,

shall publish proposed regulations prescribing a

national primary ambient air quality standard

and a national secondary ambient air quality

standard for each air pollutant for which air

quality criteria have been issued prior to such

date; and

(B) after a reasonable time for interested per-

sons to submit written comments thereon (but

no later than 90 days after the initial publica-

tion of such proposed standards) shall by regula-

tion promulgate such proposed national primary

and secondary ambient air quality standards

with such modifications as he deems appropriate.

(2) With respect to any air pollutant for which

air quality criteria are issued after December 31,

1970, the Administrator shall publish, simultane-

ously with the issuance of such criteria and informa-

tion, proposed national primary and secondary ambi-

ent air quality standards for any such pollutant. The

procedure provided for in paragraph (1) (B) of this

subsection shall apply to the promulgation of such

standards.

64a

Section 110(a), 42 U.S.C. § 7410(a), provides in rele-

vant part:

§ 7410. State implementation plans for national pri-

mary and secondary ambient air quality stand-

ards

(a) Adoption of plan by State: submission to Admin-

istrator; content of plan; revision; new sources;

indirect source review program; supplemental or

intermittent control systems

(1) Each State shall, after reasonable notice and

public hearings, adopt and submit to the Administra-

tor, within nine months after the promulgation of a

national primary ambient air quality standard (or

any revision thereof) under section 7409 of this title

for any air pollutant, a plan which provides for im-

plementation, maintenance, and enforcement of such

primary standard in each air quality control region

(or portion thereof) within such State. In addition,

such State shall adopt and submit to the Administra-

tor (either as a part of a plan submitted under the

preceding sentence or separately) within nine months

after the promulgation of a national ambient air

quality secondary standard (or revision thereof), a

plan which provides for implementation, mainte-

nance, and enforcement of such secondary standard

in each air quality control region (or portion there-

of) within such State. Unless a separate public hear-

ing is provided, each State shall consider its plan im-

plementing such secondary standard at the hearing

required by the first sentence of this paragraph.

(2) The Administrator shall, within four months

after the date required for submission of a plan un-

der paragraph (1), approve or disapprove such plan,

or any portion thereof. The Administrator shall ap-

prove such plan, or any portion thereof, if he deter-

mines that it was adopted after reasonable notice and

hearing and that—

65a

(A) except as may be provided in subpara-

graph (I) (i) in the case of a plan implementing

a national primary ambient air quality stand-

ard, it provides for the attainment of such pri-

mary standard as expeditiously as practicable

but (subject to subsection (e) of this section) in

no case later than three years from the date of

approval of such plan (or any revision thereof

to take account of a revised primary standard) ;

and (ii) in the case of a plan implementing a

national secondary ambient air quality standard,

it specifies a reasonable time at which such sec-

ondary standard will be attained;

(B) it includes emission limitations, sched-

ules, and timetables for compliance with such

limitations, and such other measures as may

be necessary to insure attainment and main-

tenance of such primary or secondary standard,

including, but not limited to, transportation

controls, air quality maintenance plans, and

preconstruction review of direct sources of air

pollution as provided in subparagraph (D) ;

(C) it includes provision for establishment

and operation of appropriate devices, methods,

systems, and procedures necessary to (i) moni-

tor, compile, and analyze data on ambient air

quality and, (ii) upon request, make such data

available to the Administrator;

(D) it includes a program to provide for the

enforcement of emission limitations and regula-

tion of the modification, construction, and opera-

tion of any stationery source, including a permit

program as required in parts C and D and a

permit or equivalent program for any major

emitting facility, within such region as neces-

sary to assure (i) that national ambient air

quality standards are achieved and maintained,

66a

and (ii) a procedure, meeting the requirements

of paragraph (4), for review (prior to construc-

tion or modification) of the location of new

sources to which a standard of performance will

apply;

(E) it contains adequate provisions (i) pro-

hibiting any stationary source within the State

from emitting any air pollutant in amounts

which will (I) prevent attainment or mainte-

nance by any other State of any such national

primary or secondary ambient air quality stand-

ard, or (II) interfere with measures required

to be included in the applicable implementation

plan for any other State under part C to prevent

significant deterioration of air quality or to pro-

tect visibility, and (ii) insuring compliance with

the requirements of section 7426 of this title,

relating to interstate pollution abatement;

(F) it provides (i) necessary assurances that

the State will have adequate personnel, funding,

and authority to carry out such implementation

plan, (ii) requirements for installation of equip-

ment by owners or operators of stationary

sources to monitor emissions from such sources,

(iii) for periodic reports on the nature and

amounts of such emissions; (iv) that such re-

perts shall be correlated by the State agency

with any emission limitations or standards estab-

lished pursuant to this chapter, which reports

shall be available at reasonable times for public

inspection; (v) for authority comparable to that

in section 7603 of this title, and adequate con-

tingency plans to implement such authority; and

(vi) requirements that the State comply with

the requirements respecting State boards under

section 7428 of this title:

67a

(G) it provides, to the extent necessary and

practicable, for periodic inspection and testing

of motor vehicles to enforce compliance with ap-

plicable emission standards;

(H) it provides for revision, after public

hearings, of such plan (i) from time to time as

may be necessary to take account of revisions

of such national primary or secondary ambient

air quality standard or the availability of im-

proved or more expeditious methods of achieving

such primary or secondary standards; or (ii)

except as provided in paragraph (3) (C), when-

ever the Administrator finds ~n the basis of in-

formation available to him that the plan is sub-

stantially inadequate to achieve the national

ambient air quality primary or secondary stand-

ard which it implements or to otherwise comply

with any additional requirements established

under the Clean Air Act Amendments of 1977;

(1) it provides that after June 30, 1979, no

major stationary source shall be constructed or

modified in any nonattainment area (as defined

in section 7501(2) of this title) to which such

plan applies, if the emissions from such facility

will cause or contribute to concentrations of any

pollutant for which a national ambient air qual-

ity standard is exceeded in such area, unless, as

of the time of application for a permit for such

construction or modification, such plan meets the

requirements of part D (relating to nonattain-

ment areas) ;

(J) it meets the requirements of section 7421

of this title (relating to consultation), section

7427 of this title (relating to public notifica-

tion), part C (relating to prevention of signifi-

cant deterioration of air quality and visibility

protection) ; and

68a

(K) it requires the owner or operator of each

major stationary source to pay to the permitting

authority as a condition of any permit required

under

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