Opposition Brief — B&W Investment Properties v. United States

No. 94-1431

ee

Iu the Supreme Court of the United States

OCTOBER TERM, 1994

3 & W INVESTMENT PROPERTIES AND LOUIS WOLF,

PETITIONERS

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

DREW S. Days, III

Solicitor General

Lois J. SCHIFFER

Assistant Attorney General

ANNE S. ALMY

WILLIAM B. LAZARUS

Attorneys

Department of Justice

Washington, D.C. 20530

202) 514-2217

QUESTION PRESENTED

Whether pre-suit notification was required before

the United States initiated civil enforcement actions

against petitioners under the Clean Air Act, 42

U.S.C. 7413(b) (3) and (4) (1988), for violations of

the Act’s hazardous air pollutant requirements, 42

U.S.C. 7412(c), and the Act’s recordkeeping and

reporting requirements, 42 U.S.C. 7414.

TABLE OF CONTENTS

ESS ee a a EI EE a

ESTAR een

Statement

Argument ..

Conclusion

TABLE OF AUTHORITIES

Statutes and regulations:

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

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Regulations—Continued: Page

Clean Air Act Amendments of 1990, Pub. L. No.

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40 C.F.R. Pt. 61 (1989):

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In the Supreme Court of the United States

OCTOBER TERM, 1994

No. 94-1431

B & W INVESTMENT PROPERTIES AND LOUIS WOLF,

PETITIONERS

Vv.

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

OPINIONS BELOW

The opinion of the court of appeals (Pet. App.

1-12), as modified (Pet. App. 14-15), is reported at

38 F.3d 362.

JURISDICTION

The judgment of the court of appeals was entered

on October 24, 1994. A petition for rehearing was

denied on December 2, 1994 (Pet. App. 14-15). The

petition for a writ of certiorari was filed on Febru-

(1)

nn yn ae ee ——---+— ~— pie aw ee

- a te “~ a a

2

ary 27, 1995. The jurisdiction of this Court is in-

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

STATEMENT

1. The Clean Air Act authorizes the Adminis-

trator of the Environmental Protection Agency (Ad-

ministrator) to publish a list of hazardous air

pollutants that “cause[], or contribute[] to, air pol-

lution which may reasonably be anticipated to result

in an increase in mortality or an increase in serious

irreversible, or incapacitating reversible, illness.” 42

U.S.C. 7412(a)(1) and (b).’ The Administrator is

also required to prescribe national emission standards

for such hazardous air pollutants (NESHAP), which

must be set at a level that provides an ample margin

of safety to protect the public health. 42 U.S.C. 7412

(b)(1)(B). When it is not feasible to prescribe or

enforee emission standards, the Administrator may

promulgate work practice standards prescribing spe-

cific procedures for handling hazardous air pollu-

tants. 42 U.S.C. 7412(e) (1).

In 1971, the Administrator designated ashestos as

a hazardous air pollutant pursuant to Section 7412.

36 Fed. Reg. 5931. A major source of airborne

asbestos is demolition and renovation activities where

insulation containing asbestos is stripped or removed

from structures and pipes. The Administrator first

issued an asbestos NESHAP in 1973. 38 Fed. Reg.

'The Clean Air Act was amended in November 1990. See

Pub. L. No. 101-549, 104 Stat. 2399. The events at issue

occurred prior to that date. Therefore, the district court and

the court of appeals applied pre-amendment law, except for

a post-amendment provision that mitigated punishment. Pet.

App. 1 n.1. Unless otherwise noted, all references to the Act

in this brief are to the Act before the 1990 amendments.

3

8820. It regulates emissions of airborne asbestos by

establishing work practice standards for handling

and disposing of asbestos during asbestos stripping

and removal activities. The Environmental Protec-

tion Agency (EPA) has authorized the State of IIli-

nois to implement and enforce the asbestos NESHAP

pursuant to 42 U.S.C. 7412(d)(1), while retaining

authority to bring an action itself for any NESHAP

violation under 42 U.S.C. 7412(d)(2). The 1984

version of the asbestos NESHAP (49 Fed. Reg.

13,658) applies to the renovation activities in this

case, and is published at 40 C.F.R. Pt. 61, Subpt. M,

Sections 61.140-61.156 (1989) .°

The asbestos NESHAP requires owners and opera-

tors* of renovation projects to follow specific “work

2 The asbestos NESHAP defines “renovation” in relevant

part as “altering in any way one or more facility components”

(40 C.F.R. 61.141 (1989) ); “facility component” as “any pipe,

duct, boiler, tank, reactor, turbine, or furnace at or in a facil-

ity; or any structural member of a facility” (ibid.); and

“facility” as “any institutional, commercial, or industrial

structure, installation, or building (excluding apartment build-

ings having no more than four dwelling units)” (ibid.). The

asbestos NESHAP was revised and repromulgated in Novem-

ber 1990 (55 Fed. Reg. 48,406).

8’ An “owner or operator” is defined in the general NESHAP

regulations to include “any person who owns, leases, operates,

controls, or supervises a stationary source.” 40 C.F.R. 61.02

(1989). The Act defines “stationary source” as “any building,

structure, facility, or installation which emits or may emit

any air pollutant.” 42 U.S.C. 7411(a) (3). The general provi-

sions of the NESHAP regulations further define “stationary

source” as “any building, structure, facility or installation

which emits or may emit any air pollutant which has been

designated as hazardous by the Administrator.” 40 C.F.R.

61.02 (1989).

4

practice standards” when a renovation operation in-

volves stripping or removing at least 260 linear feet

of friable asbestos materials from pipes, or at least

160 square feet of friable asbestos materials from

other facility components. 40 C.F.R. 61.145(d),

61.147, 61.152 (1989).* The standards require that

friable asbestos materials be sufficiently wet when

they are being stripped from facility components, un-

less EPA waives this requirement (40 C.F.R. 61.147

(c) (1989)), and that friable asbestos materials that

have been removed or stripped must be sufficiently

wet and remain wet until they are collected for dis-

posal. 40 C.F.R. 61.147(e) (1989).

Emitting an air pollutant in violation of a NESHAP

by a stationary source is a violation of 42 U.S.C.

7412(c). The Administrator is authorized to com-

mence a civil action seeking injunctive relief, or a

civil penalty “of not more than $25,000 per day of

violation, or both, whenever such person * * * vio-

lates * * * section 7412(c).” 42 U.S.C. 7413(b) (3).

The Administrator is authorized by 42 U.S.C. 7414

(a) to establish reporting requirements applicable to

owners and operators of emission sources subject to

various requirements promulgated under Section

7412, including the asbestos NESHAP, to enable

EPA to determine whether an owner or operator has

violated Section 7412. Accordingly, the asbestos

NESHAP requires each owner and operator of a

renovation operation to provide EPA with timely,

advance written notice of the intention to renovate

a facility. 40 C.F.R. 61.145, 61.146(b)(4) (1989).

*“Friable asbestos material” is defined as “any material

containing more than 1 percent asbestos by weight that hand

pressure can crumble, pulverize, or reduce to powder when

dry.” 40 C.F.R. 61.141 (1989).

5

When a renovation operation involves stripping or

removing at least 260 linear feet of friable asbestos

materials from pipes, or at least 160 square feet of

friable asbestos materials from other facility com-

ponents, written notice regarding the renovation

must be given as early as possible before renovation

begins. 40 C.F.R. 61.145, 61.146(b) (4), 61.146(c)

(1989). The Administrator is authorized to com-

mence a civil action seeking injunctive relief, or a

civil penalty “of not more than $25,000 per day of

violation, or both, whenever such person * * * fails

or refuses to comply with any requirement of section

7414.” 42 U.S.C. 7413 (b) (4).

The Clean Air Act also provides for the Adminis-

trator to establish national primary and secondary

ambient air quality standards. 42 U.S.C. 7409.

States are required to adopt, and to submit for EPA

approval, a state implementation plan. 42 U.S.C.

7410. An implementation plan must provide for the

implementation, maintenance, and enforcement of the

national primary and secondary air quality standards

promulgated by the Administrator. The enforcement

procedures for violations of “any requirement of an

applicable implementation plan,” 42 U.S.C. 7413(a)

(1) and (b)(2)—~e., any requirement of a state

implementation plan for national primary and secon-

dary ambient air quality standards, see 42 U.S.C.

7410(d)—differ from the procedures in Section 7413

(b)(2) for violations of Sections 7412 and 7414.

Under Section 7413(a)(1), the Administrator is re-

quired to notify a person found to be in violation of

“an applicable implementation plan,” and if the vio-

lation extends beyond the 30th day after the date of

notification, the Administrator may act to enforce

the finding either by issuing an administrative order

6

requiring compliance or by initiating a civil action

under Section 7413(b) (2).°

2. In 1989, petitioner Louis Wolf purchased ap-

proximately 5.5 acres of property in Cicero, Illinois,

that includes four buildings. Pet. App. 3. In May

1990, the undeveloped portion of the property was

leased by Wolf’s colleague Albert Berland, as an

agent for petitioner B & W Investment Properties,

Inc. (B & W), to David Moss for use as a storage

lot. Zbid. Berland entered into an agreement to sell

Moss the property, subject to removal of asbestos

from the buildings, after which Berland hired a con-

tractor to remove‘the asbestos. Jd. at 3-4.

EPA was not given notice of this renovation work

prior to the contractor’s initiation of the work on

August 10, 1990. Pet. App. 4. EPA investigators

went to the site on August 27 and 31, 1990, follow-

ing receipt of an anonymous tip concerning the

renovation activities at the site. The investigators

discovered at the site large quantities of unwetted

friable asbestos which was capable of becoming air-

borne near the adjacent commuter rail stop. They

also noted a general lack of security at the site in-

cluding open doors, broken windows, a hole in the

roof, and the absence of warning signs to alert in-

dividuals to the danger of asbestos exposure. Ibid.

5 The 1990 amendments to the Clean Air Act incorporated

the amended provisions governing procedures for violations

of an applicable implementation plan, previously found in

subsections (b) (1) and (b) (2), in a new subsection (b) (1).

See 42 U.S.C. 7413(b) (1) (Supp. V 1993). The 1990 Act

incorporated the amended provision governing civil enforce-

ment actions for violations of Sections 7412 and 7414, previ-

ously found in subsection (b) (3), in a new subsection (b) (2).

See 42 U.S.C. 7413(b) (2) (Supp. V 1993).

7

On August 30, 1990, EPA served Berland with an

administrative order which outlined the inspectors’

findings, required cessation of the renovation activi-

ties, and stated the steps required to bri ng the prop-

erty into compliance with the relevant laws. Pet.

App. 27-34. Wolf, as agent for B & W, subsequently

hired a contractor to perform the necessary cleanup

work, which commenced on January 21, 1991 and

was completed March 13-15, 1991. Jd. at 4.

3. On September 16, 1991, the United States initi-

ated a civil enforcement action against Louis Wolf

and B & W alleging violations of the Clean Air Act,

specifically Sections 7412 and 7414, and the asbestos

NESHAP, and seeking civil penalties against each

defendant and permanent injunctive relief. Pet. App.

16-25. The district court granted the government’s

motion for summary judgment, concluding that Wolf

and B & W were jointly and severally liable under

the Act and regulations for the violations. The court

accepted a magistrate judge’s penalty recommenda-

tion and reduced Wolf’s liability based on his ability

to pay, and assessed no fine for the violation of

Section 7414. Pet. App. 5.

4. The court of appeals affirmed. Pet. App. 1-12.

The court held that Section 7413(b) did not require

the United States to give notice before initiating its

asbestos NESHAP enforcement action because pre-

suit notification is required only in actions to enforce

state implementation plans under the Act and is not

required in actions to enforce Section 7412(c)

(NESHAP violations) or Section 7414 (notice viola-

tions). Pet. App. 5-8. The court also ruled that the

district court did not err in finding B & W liable as

an “owner or operator” of the subject property, and

did not abuse its discretion regarding the penalty im-

$<. —____— —— —————

8

posed or in rejecting defendants’ effort to admit as

evidence an internal EPA memorandum. /d. at

8-12. The court denied Wolf’s and B & W’s petition

for rehearing with suggestion for rehearing en banc,

and amended a portion of one sentence in its opinion.

Id. at 14-15.

ARGUMENT

Petitioners assert (Pet. 9-13) that the court of

appeals erred in affirming the district court’s deter-

mination that the United States was not obligated

under 42 U.S.C. 7413(b)(2) to serve Wolf and

B & W with a notice of the Section 7412(c) NESHAP

violation and the Section 7414 reporting violation in

advance of instituting this civil enforcement action for

those violations. Petitioners contend (Pet. 10) that

this case involves alleged violations of a state imple-

mentation plan, because “the Administrator had dele-

gated to the State of Illinois his authority to imple-

ment and enforce both asbestos removal [42 U.S.C.

sec. 112(d)(1) [sic]] and asbestos reporting require-

ments [42 U.S.C. see. 114(b)(1) [sic]].” Accord-

ingly, in petitioners’ view, this civil enforcement

action was unlawful because Wolf and B & W re-

ceived no pre-suit notice as required by Section

7413(b)(2) prior to initiation of a civil action for

violations of a state implementation plan, which then

may proceed only “if there is a compliance failure

30 days after the date of notice to that person.”

Pet. 10.

Petitioners’ contentions are not supported by any

appellate decision and are contradicted by the terms

of the Act. The Act provides that the pre-suit noti-

fication requirements apply only to claims of vio-

lations of “any requirement of an applicable imple-

mentation plan.” 42 U.S.C. 7413(a)(1) and (b)(2).

9

Petitioners err by assuming (Pet. 10) that the term

“applicable implementation plan” includes the author-

ity delegated to the State of Illinois under Section

7412(d) to enforce Section 7412 NESHAP violations,

and under Section 7414(b) to carry out the report-

ing requirements of Section 7414.

Contrary to petitioners’ assumption, the Act’s defi-

nition of the term “applicable implementation plan”

does not include state procedures developed and sub-

mitted to the Administrator under Section 7412

(d)(1) “for implementing and enforcing emission

standards for hazardous air pollutants for stationary

sources located in such State,” or state procedures

developed and submitted to the Administrator under

Section 7414(b) (1) “for carrying out” Section 7414’s

requirements in the State. Rather, Section 7410(d)

expressly limits the use of the term “applicable im-

plementation plan” to a state implementation plan

for national primary and secondary ambient air

quality standards approved or promulgated under

Section 7410:

For purposes of this chapter, an applicable

implementation plan is the implementation plan,

or most recent revision thereof, which has been

approved under subsection (a) of this section or

promulgated under subsection (c) of this section

and which implements the requirements of this

section.

42 U.S.C. 7410(d).

Accordingly, the notification requirements in Sec-

tion 7413(a)(1) and (b)(2) have no application

here. This case involves enforcement of Sections

7412(¢c) and 7414, and does not involve enforcement

of “an applicable implementation plan,” as Congress

10

defined that term “[f]or purposes of” the Clean Air

Act. As explained above, Section 7413(b) (38) pro-

vides for the initiation of a civil enforcement action

for violations of Section 7412(c), and Section 7413

(b) (4) provides for the initiation of a civil enforce-

ment action for violations of Section 7414. Neither

subsection (b)(3) nor (b)(4) contains any pre-suit

notification requirement.

In these circumstances, the court of appeals cor-

rectly held that “the Act imposes no duty on the EPA

to provide notice of violations of section [7412] be-

fore commencing an action for injunction or civil

penalties.” Pet. App. 6. As the court explained,

[T]he EPA did not rely on the enforcement pro-

vision of section 118(b)(2) [7418(b)(2)]. In

fact the EPA could not, because section 113(b)

(2) which concerns violations of state implemen-

tation plans for ambient air quality standards,

by its terms does not apply to regulation of

hazardous air pollutants. There are no ambient

air quality standards for hazardous air pollut-

ants such as asbestos. 42 U.S.C. § 7412 (“ ‘haz-

ardous air pollutant’ means an air pollutant to

which no ambient air quality standard is appli-

cable’”’).

Ibid.

Nor, finally, are petitioners correct in suggesting

(Pet. 10) that the Administrator had no authority to

initiate enforcement actions for violations of Section

7412(c) or Section 7414, because he had delegated to

the State authority to enforce the Section 7412 as-

bestos NESHAP and authority to carry out Section

7414. Subsection (d)(1) of Section 7412 provides

for delegation of the Adiministrator’s enforcement

authority to a State that meets the provision’s condi-

:

i

;

:

;

1]

tions for such delegation, but subsection (d)(2) ex-

pressly reserves concurrent enforcement authority in

the Administrator:

Nothing in this subsection shall prohibit the

Administrator from enforcing any applicable

emission standard under this section.

42 U.S.C. 7412(d) (2). Similarly, subsection (b) (1)

of Section 7414 permits delegation of the Adminis-

trator’s authority to “carry out” Section 7414 to a

State that meets the provision’s conditions for such

delegation, but subsection (b) ( 2) expressly reserves

concurrent authority in the Administrator to carry

out this authority in the State:

Nothing in this subsection shall prohibit the

Administrator from carrying out this section in

a State.

42 U.S.C. 7414(b) (2).

CONCLUSION

The petition for a writ of certiorari should be

denied.

Respectfully submitted.

Drew S. Days, III

Solicitor General

Lois J. SCHIFFER

Assistant Attorney General

ANNE S. ALMY

WILLIAM B. LAZARUS

Attorneys

MAY 1995

w ou.s. GOVERNMENT PRINTING OFFICE: 1995 3867147 20067