Reply Brief — Ford Motor Co. v. United States

Supreme Court, U.S.

FILED

AUG 19 198;

No. 86-1892 JOSEPH F. SPANIOL, JR

GLERK

ne

Iu the Supreme Court of the United States

OCTOBER TERM, 1987

FORD MOTOR COMPANY, PETITIONER

UNITED STATES OF AMERICA, RESPONDENT

On Petition for a Writ of Certiorari to the United States

Court of Appeals for the Sixth Circuit

REPLY BRIEF FOR THE PETITIONER

DOUGLAS E. CUTLER KATHRYN A. OBERLY

NORMAN W. BERNSTEIN Counsel of Record

Ford Motor Company Mayer, Brown & Platt

401 Parklane Towers West 2000 Pennsylvania Ave., N.W.

One Parklane Boulevard Washington, D.C. 20006

Dearborn, Michigan 48126 (202) 463-2000

(313) 322-4891

WILSON - Epes PRINTING Co., INC. - 789-0096 - WASHINGTON, D.C. 20001

TABLE OF AUTHORITIES

Cases: Page

Sierra Club v. Indiana-Kentucky Electric Corp.,

ri By, BC By, Ge A. | Seem 1

Train Vv. NRDC, 421 U.S. 60 (1975) ......................2+- 6

Union Electric Co. v. EPA, 427 U.S. 246 (1976)..... 2, 3,

6, 8a

United States v. Best, 573 F.2d 1095 (9th Cir.

I i aa a a esas 5

United States v. Brown, 608 F.2d 551 (5th Cir.

INE AER Ee En ee ona 5

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

Be I I ID ss cateinectsatinblethamniieinnnsntininpaniosn 3

Statutes and regulations:

Assimilative Crimes Act, 18 U.S.C. § 18 —.............. 5

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

i icaemsinnsinehehixna Ana ensesmanses 5

oasis nscisnssnnccniclicdnasidanseecmane 3

ee TD oc eiceccccccascncsercternansiinncensioes 2a

RE IIE pi snctseccnoninncacenanstnsacosnsicncnccaenmane 2a

Re ee I HOOD osiccetenccaseisanconstcccavnnssnnices 6

Re Ie I ar eticcinevsctxnnececndoncunnnaxastinacnneses 6

Be Fs i I FD iisviicccenccieenincaseneciescincssecescos 6

BD FP TE, TR COD oo avcersscecescncasce..0s-s......22. 2a

Miscellaneous:

Note, The Federai Assimilative Crimes Act, 70

BT Wik Ny SI CIID na cacccteciccensnssensensanansiescianass 5

REPLY BRIEF FOR THE PETITIONER

fhe Brief in Opposition offers no answer to the legal

arguments set forth in the Petition, in which we showed

that the court of appeals’ decision deprives companies

such as Ford of any opportunity, in any court, to obtain

a binding determination of the validity of a state SIP

and that this inequitable result conflicts with the deci-

sions of other circuits. Instead, the Opposition presents

a melange of erroneous characterizations of the record

(see App. 1, infra, 1la-3a), incorrect assertions about the

impact of our position on Clean Air Act enforcement,

and unseemly and unsupported suggestions of “collusion”

between Ford and Michigan state environmental officials.

EPA’s effort to obscure the fundamental issues of fed-

eralism and due process presented by the Petition should

not be permitted to succeed.

1. The Conflict In The Circuits. EPA is unable to offer

any tenable distinction between the decision below and

that of the Seventh Circuit in Sierra Club v. Indiana-

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

Agency therefore is forced merely to parrot the Sixth

Circuit’s assertion that Sierra Club should be limited to

state SIPs invalidated on state procedural grounds. See

Br. in Opp. 16-18. But EPA fails to explain why there

is any conceivable logic to the procedural-substantive dis-

tinction, nor does it offer any rationale for treating pro-

cedural flaws as having greater significance than substan-

tive flaws. See Pet. 17-18. There is, of course, no such

reason. As we explained in the Petition (at 16-20), the

common denominator in Sierra Club and this case is that

both SIPs were held by state courts to have been funda-

mentally flawed from their inception. It is that fact that

places the two decisions in conflict, thereby necessitating

an authoritative resolution by this Court.

2. The Deprivation Of Judicial Review. The Brief in

Opposition also makes no effort to dispute our contention

(Pet. 24-27) that the court of appeals’ decision deprives

Ford of any judicial forum in which to obtain a binding

resolution of its challenge to the technological and eco-

2

nomic feasibility of the state SIP. Notwithstanding this

Court’s decision in Union Electric Co. v. EPA, 427 U.S.

246 (1976), teaching that the state courts are the ex-

clusive judicial forum for such challenges, EPA wouid

deprive companies such as Ford of any meaningful op-

portunity for state court review by telling them that they

should be satisfied if, after successfully challenging a

state SIP on feasibility grounds, the state court judgment

is treated as nothing more than the “ ‘first step in the

[SIP] revision process’” (Br. in Opp. 16 (citation

omitted) ). And by studiously avoiding the promulgation

of its own federal SIP which would be subject to chal-

lenge in federal court, EPA has cut off Ford’s only other

avenue for judicial review.

Thus, EPA simply refuses to come to grips with the

basic inequity of its position and the fundamental denial

of due process that inevitably results from that position.

EPA does not contend that Ford or any other source

could ever have complied with Rule 610, nor does it con-

tend that the State would have promulgated the rule if

it had been aware at the outset of its infeasibility. Yet

EPA insists on enforcing that rule even after the state

court has declared it invalid on feasibility grounds. It is

simply no answer to say that Ford’s due process rights

are satisfied by allowing it to plead for the imposition of

lesser penalties in the case of a state SIP that has been

invalid since its inception.

EPA’s only proposed “solution” to Ford’s dilemma is to

suggest that it should have brought suit to force EPA

to conclude its consideration of the proposed SIP revision

more promptly. Br. in Opp. 15 n.14. Yet if Ford ever

did file such a suit, EPA undoubtedly would say that it

is engaged in a “continuing dialogue” with state authori-

ties and is acting “expeditiously in light of the important

public rights involved.” Ibid. Of course, each day of this

seemingly interminable “continuing dialogue” could cost

Ford up to $25,000 per vinyl coating line, and that dia-

logue, even if ultimately successful, might not avoid penal-

ties for alleged violations during the years EPA has been

3

considering the proposed revision. Cf. United States v.

National Steel Corp., 767 F.2d 1176, 1182 n.1 (6th Cir.

1985).

3. The State Court Judgment Controls. EPA’s posi-

tion also virtually eradicates any meaningful role for the

states in the federal-state partnership created by the

Clean Air Act. EPA’s entire argument depends on its

insistence that the issue in this case is whether proposed

SIP revisions must be approved by EPA before they may

become effective. But the SIP revision process is wholly

irrelevant to the actual question presented: May a fed-

eral administrative agency override the decision of a state

court adjudicating the validity or invalidity of the adop-

tion of a state SIP? As to that issue, which is an inevita-

ble consequence of this Court’s decision in Union Electric,

EPA simply fails to offer any plausible reason to support

the denial of certiorari.’

Although federal law establishes minimum requirements

that states must adopt, state SIPs are nevertheless crea-

tures of state law. They are promulgated by state legis-

latures or state administrative agencies, and they have

the force and effect of state statutes and regulations.

Not surprisingly, therefore, nothing in either the lan-

guage of the Clean Air Act or its legislative history sug-

gests that EXPA’s approval of a state SIP does anything

more than make it federally enforceable; EPA’s approval

does not transform state law into some sort of “born

again” federal law, the validity of which must thereafter

be decided according to federal law. Indeed, EPA has

never contended that its approval of a state SIP trans-

mutes that provision into federal substantive law.

Against this background, EPA does not explain why

it is that state court judgments adjudicating the validity

1 EPA’s reliance (Br. in Opp. 9) on 42 U.S.C. § 7410(i) begs the

question. That section, prohibiting modification of SIP require-

ments except through the revision process, is relevant only in the

case of “applicable” plans, and the “applicability” of the Michigan

SIP is the very issue in this case.

es be

4

or invalidity of a state law—the state SIP—may be dis-

regarded by EPA unless and until EPA decides to

“ratify” the state court’s judgment. EPA does not sit

as a reviewing court authorized to affirm or reverse the

judgments of state courts. Clearly, any such role for a

federal administrative agency would work a radical in-

trusion on state sovereignty.* Absent a clear indication

that Congress actually intended to permit a federal ad-

ministrative agency to so interfere with the workings of

state legal systems, it is plain that a state court judg-

ment declaring a provision of state law to be invalid is

wholly authoritative.®

4. The Federal SIP Route Available To EPA. It is

EPA’s position, not Ford’s, that would work a radical

2 There are two entirely separate aspects to the state court judg-

ment. First, the state court ruled that Rule 610 was void from its

inception because it was adopted in the belief that it represented

RACT when it fact it never did. Validity under state law is an

issue as to which only the state courts may speak. The second, and

wholly distinct, aspect of the state court’s judgment was its ratifica-

tion of the State’s proposal to submit a SIP revision containing

new limits to EPA for federal approval. See Pet. 19 n.5. We do

not contend that the new limits are binding on EPA until it ap-

proves them. The result is that, if EPA relies on a state SIP

(rather than promulgating a federal SIP), there is no federally

enforceable SIP in place between the time of a state court adjudica-

tion of invalidity and EPA’s approval of a new SIP. But the length

of that period of time is entirely within EPA’s control (see Pet. 21;

page 5, infra). In addition, the source remains subject to any

applicable state standard, such as the revised emission limits ap-

plicable to Ford’s Mount Clemens plant by virtue of the Michigan

Air Pollution Control Commission’s February 1, 1985 adoption of

the the parties’ Cons#»’* Order. See Pet. App. 26a-32a.

3 Contrary to EPA’s apparent contention (Br. in Opp. 14), our

position does not depend upon EPA’s being “bound” by the state

court judgment in the collateral estoppel sense, nor does it depend

upon the state court’s being aware of the collateral consequences

of its judgment. Instead, it turns on the state SIP’s having been

declared void from its inception because it never represented RACT.

As explained above, there is no justification for permitting EPA

to collaterally attack the validity of the state court’s ruling as to

that issue.

5

restructuring of the Clean Air Act. Congress explicitly

authorized EPA to promulgate a federal SIP as federal

substantive law, in accordance with procedures mandated

by the Administrative Procedure Act, whenever a state

fails in its responsibility to promulgate a valid SIP under

state law. 42 U.S.C. § 7410(c). Thus, when Congress

wanted to give EPA the power to create federal law (in

contradistinction to federally enforceable state law), it

knew exactly how to do it.* That EPA has chosen, for

whatever reason, not to exercise the express mechanism

for the creation of federal law built into the Clean Air

Act is no justification for granting it “license to circum-

navigate the statutory scheme” (Br. in Opp. 19) by

arrogating unto itself the authority to determine the

validity or invalidity of state law.*

5. The Irrelevance Of “Technology-Forcing.” There is

also no merit to EPA’s contention that acceptance of our

position would cause the Clean Air Act’s “elaborate tech-

nology forcing provisions * * * [to] lose all practical

*A familiar example of Congress’s decision to transform state

law into federal substantive law is found in the Assimilative

Crimes Act, 18 U.S.C. §13. Prosecutions under that statute are

not for the enforcement of state laws, but for the enforcement of

federal law assimilating state statutes. See, e.g., United States v.

Brown, 608 F.2d 551, 553 (5th Cir. 1980). Importantly, however,

federal courts applying such assimilated state law are bound by

state courts’ interpretation of their own laws. See, e.g., United

States v. Best, 573 F.2d 1095, 1098-1099 (9th Cir. 1978). See also

Note, The Federal Assimilative Crimes Act, 70 Harv. L. Rev. 685,

696 (1957) (concluding that “Congress intended to adopt not only

the state criminal statutes but also the state courts’ interpretation

of those statutes”).

5 There is thus no merit to EPA’s assertion (Br. in Opp. 14 n.13)

that “the Clean Air Act’s express provision for a SIP revision

process overrides principles of comity.” The fact is that it is

Congress that has decided that federal enforcement depends upon

the existence of either a valid state SIP or a federal substitute

promulgated by EPA. Having elected not to follow the federal

route, EPA cannot be heard to argue that the state court judgment

should be treated as if it had never been entered.

6

meaning.” Br. in Opp. 12.¢ EPA elsewhere acknowledges

that RACT is the applicable standard for Ford’s Mount

Clemens plant. Jd. at 13 n.12. Thus, EPA’s emphasis on

“technology-forcing” considerations serves only to ob-

fuscate the critical and undisputed fact that the State

never would have promulgated Rule 610 had it known

from the outset that the rule was not achievable “by the

application of control technology that is reasonably

available considering technological and economic feasi-

bility.” 45 Fed. Reg. 59331 (1980) (emphasis added)

(footnote omitted) (EPA definition of RACT).’

6. Nothing Turns On The Issue Of Consent. Despite

EPA’s suggestions to the contrary,* it is impossible to

® Indeed, in the context of this case, it is highly misleading for

EPA to assert that the Act’s requirements “ ‘are expressly designed

to force regulated sources to develop pollution control devices that

might at the time appear to be economically or technologically

infeasible’” (Br. in Opp. 9 (quoting Union Electric Co., 427 U.S.

at 257)). EPA’s reliance on the “technology-forcing” nature of

the Clean Air Act has absolutely no relevance to this litigation.

The technological standard at issue in this case is “RACT’—

reasonably available coatrol technology. As we explained in the

Petition (at 4, 27), RACT, by definition, is not a techmology-

forcing standard. Technology-forcing standards are found in other

sections of the Clean Air Act, such as the new source performance

standards. See 42 U.S.C. §7475(a)(4) (“best available control

technology”); 42 U.S.C. § 7503(2) (“lowest achievable emission

rate’).

7 Equally beside the point is EPA’s observation (see Br. in Opp.

19) that nothing in Michigan law would have prevented the State

from choosing to impose a standard more stringent than RACT. It

is undisputed on this record that the State intended Rule 610 to

represent no more and no less than RACT, and this “ourt has made

it plain that EPA has no authority to question the wisdom of that

choice. Train v. NRDC, 421 U.S. 60, 79 (1975).

8 By repeatedly stressing that the state court’s judgment in-

validating Rule 610 was entered on consent, EPA comes perilously

close to suggesting that the State of Michigan—including its judi-

cial system—violated its obligations to the public. Although

it stops just shy of accusing the State and Ford of collusion,

EPA repeatedly suggests that states and their courts are not to be

Se 7

7

conclude on this record that the state court’s judgment

should be given any less controlling effect than would be

accorded a judgment that had been fully “litigated.”

Far from suggesting any improper “deal” between Ford

and the State, the record shows that the reason for the

State’s agreement to the consent judgment was to rectify

the fundamental flaw inherent in Rule 610 as originally

adopted—a flaw that came about because both Ford and

Michigan were misled by a defective EPA technical guid-

ance document.°

The State’s attorney told his client that he had no

viable defense to Ford’s state court action because his

own witnesses had reached the same conclusion as Ford—

i.e., Rule 610 never was achievable through the use of

RACT technology. The State’s attorney explained that

trusted, lest they succumb to their “possible inclination * * * to give

unduly favorable treatment to local industries.” Br. in Opp. 12.

See also id. at 11, 14, 18-19. There is also a suggestion (id. at 14)

that state court judges may be willing to sign whatever document

is placed before them. EPA’s thinly veiled attacks on the integrity

of the State are, to say the least, unseemly, and they find not the

slightest support in the record of this case.

® Rule 610 was based on EPA’s Control Technology Guidance

(CTG) document for vinyl coatings. The Agency’s CTGs were

hastily prepared in the period immediately after passage of the

1977 Amendments to the Clean Air Act and without any formal

public notice or comment. The vinyl coating CTG assumed that

RACT technology would capture 90% of the solvent applied and

remove 90% of what was captured, thereby achieving an emission

reduction of 81%. Pet. App. 43a.

The CTG’s removal efficiency estimate was basically correct, but

the capture efficiency estimate was wildly incorrect. Pet. App. 46a-

48a. Actual test data show that capture efficiency of an estimated

60% is optimum for the state-of-the-art control equipment in-

stalled by Ford. /d. at 48a. Even under EPA’s standards, there was

no other technically and economically feasible alternative for Ford’s

facility. Jd. at 49a-50a. Accordingly, the Michigan Air Pollution

Control Commission found that, notwithstanding its belief that it

was adopting a RACT standard when it first approved Rule 610, the

rule was never one that could have been achieved by RACT tech-

nology. Jd. at 273-28a, 6la-62a.

8

“all of the people that I would look to as witnesses to de-

fend your rule are people who are here recommending to

you that the rule be changed.” Pet. App. 60a. EPA’s

suggestion that there should nevertheless have been a full

trial therefore amounts to a contention that the State

should have been required to mount a sham defense in

the state court action. Clearly, nothing in this case (and

nothing in the Sixth Circuit’s decision) turns on whether

the state court acted “after trial’ or ‘on consent.”

CONCLUSION

There is no avoiding the basic federalism and due

process issues raised by the petition. The petition for a

writ of certiorari should be granted.

Respectfully submitted.

DOUGLAS E. CUTLER KATHRYN A. OBERLY

NORMAN W. BERNSTEIN Counsel of Record

Ford Motor Company Mayer,Brown & Platt

401 Parklane Towers West 2000 Pennsylvania Ave., N.W.

One Parklane Bowevard Washington, D.C. 20006

Dearborn, Michigan 48126 , (202) 463-2000

(313) 322-4891

AUGUST 1987

APPENDICES

la

APPENDIX 1

SUMMARY OF MISLEADING AND UNSUPPORTED

ASSERTIONS IN THE GOVERNMENT’S BRIEF

(1) EPA repeatedly asserts (Br. in Opp. 5, 14, 15

n.13) that it was not a party to the state court action.

EPA avoids mentioning that its counsel conceded at

oral argument before the court of appeals that EPA was

not a necessary party to the state court action. See App.

2, infra, 4a.

(2) EPA places heavy stress on the “technology-

forcing” nature of the Clean Air Act’s requirements.

See, e.g., Br. in Opp. 9, 12. Those requirements hive

nothing to do with the RACT-based standard applicable

in this case. See pages 5-6 and note 6, supra.

(3) EPA charges Ford with dilatory tactics for op-

erating six of the eight viny! coating lines at the Mount

Clemens plant without pollution controls beyond the ini-

tial deadline for compliance with Rule 610. Br. in Opp.

15-16 n.14. Ford and the State agreed in 1982 on a plan

that permitted Ford to achieve compliance with the

equivalent of the emission limitation contained in Rule

610 through use of a “bubble” concept, whereby state-

of-the-art technology would be installed on two of the

plant’s eight coating lines (at a cost of $3 million) and

major additional reductions would be obtained on the

remaining vinyl coating lines by the introduction of the

“embossed last” process that reduced the number of coat-

ing applications from three to two (at a cost of an addi-

tional $3 million). Pet. App. 44a-45a. By these efforts,

Ford reduced total VOC emissions from its Mount

Clemens plant to a level well below that sought to be

achieved by Rule 610 as construed by EPA. See Pet. 8,

21 n.7. EPA continues this action based on violations of

the rate of emissions allegedly allowed by Rule 610. Con-

trary to EPA’s claim (Br. in Opp. 4-5 n.5), Ford does

not concede that it violated Rule 610, because it does not

agree that EPA has correctly interpreted the methodol-

i |

2a

ogy for calculating the emission rates contained in the

old rule. See Pet. App. 42a.

(4) EPA states (Br. in Opp. 3) that “petitioner

urged approval [of Rule 610], providing technical data

in support of its recommendation.” See also id. at n.3.

Ford was misled by the erroneous analysis contained in

EPA’s Control Technology Guidance document for vinyl

coatings. See page 7 note 9, supra.

(5) EPA observes (Br. in Opp. 4 n.3) that Rule 610

was “not as stringent as limitations recommended by

EPA and placed on vinyl coaters in other states.” EPA

excused the Chrysler Plastic Products Corporation from

installing any VOC emission control devices and, in ap-

proving the Ohio SIP, subjected that company to a less

stringent standard of 4.8 pounds of VOC per gallon of

coating applied. See 48 Fed. Reg. 31202 (1983). EPA

also granted Chrysler an extension of compliance dates to

August 1, 1987 and December 31, 1987 under the Ohio

SIP. Jbid.

(6) EPA disputes (Br. in Opp. 4 n.4) Ford’s state-

ment (Pet. 7, 20 n.6) that EPA did not notify the State

prior to the filing of its enforcement action against Ford.

The State’s attorney testified at the hearing before the

Michigan Air Pollution Control Commission that the

State was not consulted prior to EPA’s commencement of

suit against Ford (Pet. App. 6la), and EPA does not

contend that it issued notice of the action (required by

42 U.S.C. § 7413(b)) prior to suit. The April 19, 1984

Notice of Violation to which EPA refers (required by 42

U.S.C. § 7413(a) (1)) is not the same thing.

(7) EPA contends that the state court judgment was

not intended to affect federal enforcement because “‘noth-

ing in the judgment or the supporting documents indicates

that the parties expected to preclude federal enforcement

of Rule 610.” Br. in Opp. 14. The State’s attorney

warned the Michigan Air Pollution Control Commission

that, by admitting it made a mistake, it could expect “un-

3a

friendly reaction” from EPA because the “United States

in effect is trying to enforce your rule in federal court”

(Pet. App. 60a-6la). That express warning and state-

ment of the parties’ intent was included in the supporting

documents submitted te the state court.

(8) EPA accuses Ford of misciting Union Electric by

failing to explain the Agency’s statutory authority to en-

sure that state SIPs meet the Clean Air Act’s minimum

requirements, iricluding the RACT requirement. Br. in

Opp. 13 n.13. Ford explained EPA’s authority in exactly

the same terms as does EPA. See Pet. 5 & n.2.

(9) EPA states that “[p]etitioner itself composed the

consent judgment’s language” (Br. in Opp. 14). Neither

the citation proffered by EPA (Pet. App. 22a) nor any-

thing else in the record supports EPA’s contention that

Ford, rather than Ford and the State jointly, drafted

the consent judgment. See Pet. App. 59a-61a.

4a

APPENDIX 2

United States v. Ford Motor Co., No. 85-1945 (6th Cir.)

Transcript of Oral Argument Before the United States

Court of Appeals for the Sixth Circuit

December 8, 1986

Before ENGEL, EDWARDS AND JONES, Circuit

Judges.

JUDGE ENGEL: Mr. Lazarus.

MR. LAZARUS: Good morning, Your Honor. May

it please the Court, I represent the United States on

behalf of the Environmental Protection Agency.

* ze * * *

JUDGE ENGEL: Could Ford have properly brought

this action in the state court had not the instant action

already been pending?

MR. LAZARUS: Oh, absolutely—Ford could have

brought the ac-- Ford could have brought the action if

Ford had believed that the Rule 610 was technologically

and economically infeasible. Ford could have brought

that action long prior to the federal action.

JUDGE ENGEL: So, so then it has a substantive right

to make that kind of challenge—the kind that it did in

the-—in the state court.

MR. LAZARUS: That’s correct.

JUDGE ENGEL: Would EPA have been a necessary

party to that proceeding?

* MR. LAZARUS: No. EPA would not have been a

necessary party to the proceeding.

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