Reply Brief — Appalachian Power Co. v. Environmental Protection Agency

24

No. 98-1330 MAY 099

i

IN THE

Supreme Court of the United States

APPALACHIAN POWER COMPANY, ef al.,

Petitioners,

V.

ENVIRONMENTAL PROTECTION AGENCY,

UNITED STATES,

Respondent.

On Petition for a Writ of Certiorari to the

United States Court of Appeals

for the District of Columbia Circuit

REPLY BRIEF FOR PETITIONERS

APPALACHIAN POWER CO., ET AL.

DAVID E. MENOTTI HENRY V. NICKEL

WILLIAM F.. PEDERSEN (Counsel of Record)

SHAW, PITTMAN, POTTS KEVIN L. FAST

& TROWBRIDGE LAUREN E,. FREEMAN

2300 N St., N.W. HUNTON & WILLIAMS

Washington, D.C. 20037 1900 K Street, N.W.

(202) 663-8675 Washington, D.C. 20006

Counsel for American (202) 955-1500

Petroleum Institute Counsel for Appalachian

Power Company, et al.

G. WILLIAM FRICK

JOHN E. REESE

AMERICAN PETROLEUM INSTITUTE

1220 L Street, N.W.

Washington, D.C. 20005

(202) 682-8240

Counsel for American

May 24, 1999 Petroleum Institute

[ Additional Counsel Listed Inside]

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

RUSSELL S. FRYE

Roy S. BELDEN

CHADBOURNE & PARKE LLP

1200 New Hampshire Ave., N.W.

Washington, D.C. 20036

(202) 974-5600

Counsel for American Forest &

Paper Association, Inc.

ROBERT A. KIRSHNER

General Counsel

AMERICAN FOREST &

PAPER ASSOCIATION, INC.

1111 19th Stret, N.W.

8th Floor

Washington, D.C. 20036

(202) 463-2700

Counsel for American Forest &

Paper Association, Inc.

MICHAEL H. LEVIN

NEAL J. CABRAL

MICHAEL MCGOVERN

McGuire, Woops, BATTLE

& BooTHE, L.L.P.

1050 Connecticut Avenue, N.W.

Suite 1200

Washington, D.C. 20036

(202) 857-1700

Counsel for

Can Manufacturers Institute

WILLIAM H. LEwISs, JR.

MICHAEL A. McCorpD

JOSHUA D. SARNOFF

MorGAN, LEw!s & Bockius LLP

1800 M Street, N.W.

Washington, D.C. 20036

(202) 467-7145

Counsel for Clean Air

Implementation Project

DAVID E. MENOTTI

WILLIAM F.. PEDERSEN

SHAW, PITTMAN, POTTS

& TROWBRIDGE

2300 N Street, N.W.

Washington, D.C. 20037

(202) 663-8675

Counsel for

Corn Refiners Association, Inc.

ROBERT L. BRUBAKER

JANET J. HENRY

KATERINA M, EFTIMOFF

PORTER, WRIGHT, MORRIS

& ARTHUR

41 South High Street

Columbus, Ohio 43215

(614) 227-2033

Counsel for Ohio Chamber of

Commerce, and Ohio

Chemical Council

LYNN L. BERGESON

BETHAMI AUERBACH

LISA CAMPBELL

BERGESON & CAMPBELL

1300 Eye Street, N.W.

Suite 1000 West

Washington, D.C. 20005

(202) 962-8585

Counsel for RSR Corporation

HOWARD B. MYERS

General Counsel

RSR CORPORATION

2777 Stemmons Freeway

Suite 1800

Dallas, Texas 75207

(214) 583-0238

Counsel for RSR Corporation

RULE 29.6 CORPORATE DISCLOSURE STATEMENT

Pursuant to Rule 29.6, amendments to the previously

filed corporate disclosure statement are included below.

The page numbers of the Appendix, on which the corpo-

rations requiring amended statements appear, are included

for convenience.

Central [Illinois Public Service Company (84a) is now

referred to as: AmerenCIPS

ClINergy Corp. (85a) now lists its subsidiaries in the

following manner:

Subsidiaries:

The Cincinnati Gas and Electric Company

Subsidiaries:

KO Transmission Company

Subsidiaries:

Lawrenceberg Gas Company

Miami Power Corporation

Tri-State Improvement Co.

Union Light, Heat and Power Company

The Western Harrison Gas and Electric Company

Cinergy Investment

Subsidiaries:

Cinergy-Cadence, Inc.

Cinergy Resources, Inc.

Cinergy Services

PSI Energy, Inc.

Kansas City Power & Light (89a) no longer lists KLT

Power, Inc. as a subsidiary

Ohio Power Company (91a) now lists Cardinal Operat-

ing Co. as a subsidiary

(i)

ii

PacifiCorp (91a-92a) no longer lists the following corpo-

rations as subsidiaries:

Cascade Autovon Co.

Gem State Utilities Corporation

Inter Island Telephone Co., Inc.

International Communications Holdings, Inc.

Northwestern Telephone Systems, Inc.

Pacific Telecom Cellular, Inc.

Telephone Utilities of Alaska, Inc.

Telephone Utilities of Eastern Oregon, Inc.

Telephone Utiliites of Oregon, Inc.

Telephone Utilities of Washington, Inc.

TABLE OF CONTENTS

Page

RULE 29.6 CORPORATE DISCLOSURE STATE-

nee See AMEE ES HOCH A! LNRM AE OAR Lie UVALDE OE hat, i

ge Ve BN ete ds 4 ys SR Mnne com hearer ir ere iv

PIEPER, sedans ie ste dae ere oes oe 1

I. CERTIORARI SHOULD BE GRANTED TO

RESOLVE WHETHER ABBOTT LABS AL-

LOWS CIRCUIT COURTS TO DISMISS

CASES ON PRUDENTIAL RIPENESS

GROUNDS WHERE CONGRESS DIRECTED

PROMPT, PRE-ENFORCEMENT REVIEW

OF FINAL LEGISLATIVE RULES ............... 3

Il. CERTIORARI SHOULD BE GRANTED TO

AVOID AN UNWIELDY AND ILL-DEFINED

PROCESS OF JUDICIAL REVIEW OF FINAL

GRIER: ROC onlniiciate ati iice a ha ks 8

AURA INOR TD ssinciuibatipadinaaduptaeiicdicipikesncetacdlte ss 10

iv

TABLE OF AUTHORITIES

FEDERAL CASES

Abbott Laboratories v. Gardner, 387 U.S. 186

BE etcspcttn Dh nanidciciekineonbceesccatntomerehabotnsieconial

Bennett v. Spear, 117 S. Ct. 1154 (1997) .............

Ciba-Geigy Corp. v. Sidamon-Eristoff, 3 F.3d 40

"Gt A | ARSE Sipe AAarI Oe MEW ccenayoe s teuctcl ordre

Harrison v. PPG Indus., Inc., 446 U.S. 578 (1980)..

Kennecott Copper Corp. v. EPA, 462 F.2d 846

At AR 7. Me Eo 7 MRO Se, SEIS te nae Ime RAL POEs Oe

Lujan v. National Wildlife Fed’n, 497 U.S. 871

i, ARRIETA m0 Cn WON Me ME a CONC Rae

Ohio Forestry Ass’n, Inc. v. Sierra Club, 118 S. Ct.

RA 0 TED piscina wsabkensecuaubaibnhe cassie pgubutatcaeadaiiincue

FEDERAL STATUTES

42 U.S.C. § 7413(b), CAA §113(b) (1994) 00...

42 U.S.C. § 7418 (c), CAA § 113(c) (1994) ..............

42 U.S.C. § 7607, CAA § 307 (1994) ..............2......-

42 U.S.C. §7607(b)(1), CAA §307(b) (1)

SRE Sncveptpinincnerninssinepanniainsniehpininicsabasceieeigsaaimnndiannn

42 U.S.C. §7607(b) (2), CAA — §307(b) (2)

CD Sehnndecctacritic canahonacen va iden imiegpneniniienaaaplaaaagealces

42 U.S.C. § 7607(d) (6)(C), CAA § 307(d) (6)

Jet Ee St) Mbabbertrererc cen rectors abr ern ntenc nasa he NT

42 U.S.C. §7607(d)(7), CAA §3807(d) (7)

CROPS cxiruchshdsd ciacvicuicteacionntgenaeinaeninceinals

MISCELLANEOUS

Judge A. Raymond Randolph, Administrative Law

and the Legacy of Henry J. Friendly, 74

N.Y.U. L. Rev. 1 (April, 1999)

Oem ee eee eee eee ee eeeeene

Page

ARGUMENT

The Government asserts that the United States Court

of Appeals for the District of Columbia Circuit (“D.C.

Circuit”) and other federal Courts of Appeals can refuse

a clear congressional command to those courts to under-

take prompt, pre-enforcement review of final legislative

rules on the basis of the prudential ripeness doctrine in

Abbott Laboratories v. Gardner, 387 U.S. 136 (1967)

(hereafter “Abbott Labs”) and its progeny. Without re-

sponding directly to many of Petitioners’ arguments, the

Government contends that certiorari should not be granted

in this case. According to the Government, the Circuit

Court with jurisdiction to review all final, nationally ap-

plicable legislative rules promulgated by EPA has uncon-

strained discretion to apply the Abbott Labs test of pru-

dential ripeness and thereby pick and choose which final

rules to review unless Congress states “in express terms”

that the Abbott Labs test does not apply.

Abbott Labs involved judicial review in a district court

under generic “federal question” jurisdiction. “Federal

question” jurisdiction applies universally to all cases aris-

ing under federal law. Since it embodies no specific judg-

ment regarding which cases shall be reviewed, it allows

courts to apply judicially created “prudential” standing

and ripeness doctrines to decline review. By contrast,

statutes like the Clean Air Act (“CAA” or “Act”) that

mandate pre-enforcement judicial review of specified

agency actions have never been interpreted by this Court

to allow lower courts to dismiss a case on “prudential”

standing or ripeness grounds. In these statutes, unlike the

federal question statute, Congress has specifically directed

reviewing courts to exercise jurisdiction.

1 Petition for Writ of Certiorari (“Pet.”) at 16-20.

2

The D.C. Circuit clearly has a different view of the

law. Judge Randolph, the author of the opinion at issue

in this case, explained in a recent speech to the District

of Columbia bar:

Before we leave Abbott Laboratories I would like

to comment on the current state of affairs regarding

pre-enforcement review of agency regulations. There

is, | believe, a serious question whether, since 1967,

the pendulum has swung too far in favor of per-

mitting such review. Increasingly, our court is con-

fronted with regulations of the most abstract nature,

often dealing with complex technological subjects.

.. +f am more than a little uncomfortable with the

system as it has evolved since Abbott Laboratories,

which imposes on courts the burden of deciding the

validity of rules in the absence of concrete settings.

I think the time has come for us to be more discrimi-

nating... .”

The “pendulum” Judge Randolph refers to was “swung”

by Congress in numerous statutes enacted in the two dec-

ades following Abbott Labs. In those statutes, Congress

directed Circuit Courts to review legislative rules prior to

enforcement. While judges in those courts may be “un-

comfortable” with that system, it is for Congress, not the

courts, to decide that the pendulum has swung too far

and that these statutes should be amended to allow courts

to decide which rules will be reviewed prior to enforce-

ment based on a subjective balancing of the Abbott Labs

factors. For this reason and the reasons below, certiorari

should be granted in this case.

2Judge A. Raymond Randolph, Administrative Law and the

Legacy of Henry J. Friendly, 74 N.Y.U. L. Rev. 1, 9-10 (April,

1999) (revised text of speech to the District of Columbia Bar,

June 23, 1998) (emphasis added).

3

I. CERTIORARI SHOULD BE GRANTED TO RE-

SOLVE WHETHER ABBOTT LABS ALLOWS CIR-

CUIT COURTS TO DISMISS CASES ON PRU-

DENTIAL RIPENESS GROUNDS WHERE CON-

GRESS DIRECTED PROMPT, PRE-ENFORCEMENT

REVIEW OF FINAL LEGISLATIVE RULES.

The Government asserts that the decision below “rests

on a routine application of the two-part [Abbott Labs]

test” for prudential ripeness.? The Government fails to

note, however, that the D.C. Circuit applied Abbott Labs

to a statutory context different from the one in which it

arose. There should be nothing “routine” about applica-

tion of the Abbott Labs test to judicial review of final

legislative rules under § 307 of the Act and numerous

similar provisions enacted by Congress after Abbott Labs.

See generally Pet. at 14-15.

The Government acknowledges that Congress can re-

quire a federal court to resolve legal actions “without

regard to the court's self-imposed ‘prudential’ limitations

on the court's own powers, including limitations arising

from the prudential doctrine of ripeness.” Resp. Brief at

9 (emphasis added). The Government maintains, how-

ever, that Congress’ power to foreclose application of the

prudential ripeness doctrine is not at issue because Con-

gress did not intend to do so under the Act. More specifi-

cally, the Government argues that § 307 does not ex-

plicitly state that “the court of appeals must decide the

petition on the merits without any regard whatsoever to

prudential principles governing judicial review.” Jd. at

10. This formulaic argument lacks merit.

Although the Government is correct that § 307 does not

expressly declare that “the court of appeals must decide

the petition on the merits without any regard whatsoever

3 Brief for the Respondent in Opposition (Resp. Brief’) at 8.

4

to prudential principles governing judicial review,” the ab-

sence of such language does not mean (or imply) that

Congress intended a different result. To the contrary, the

same result is confirmed simply by reading § 307 in its

entirety. No better evidence of this fact exists than the

Government’s inability to provide any interpretation of

§§ 307(d)(6)(C), 307(d) (7) and 307(e), or the legisla-

tive history of § 307 generally, that supports application

of Abbott Labs to judicial review of final legislative rules

under § 307. See Pet. at 4-7, 16-20.

Indeed, neither the D.C. Circuit in its decision, nor the

Government in its opposition, address the full array of

provisions under § 307 or its detailed legislative history.*

The only provision of § 307 referenced by the Govern-

ment in support of its opposition is § 307(b)(2), but this

reference is to no avail. Congress included § 307(b) (2)

to make clear that actions reviewable under § 307(b)(1)

in Circuit Courts are not reviewable in District Courts in

enforcement proceedings. The provision has nothing to

do with “prudential” ripeness principles and says nothing

about the jurisdiction of the Circuit Court to review EPA

actions under § 307(b)(1). To read § 307(b)(2) as

authorizing Circuit Courts to decline jurisdiction granted

under § 307(b)(1) stands § 307(b) on its head.5

4The Government asserts that the D.C. Circuit explicitly con-

cluded “that Congress preserved the court’s authority to apply

ripeness principles” under § 307 of the Act. Resp. Brief at 10.

In fact, the D.C. Circuii s.mply assumed that it could refuse to

exercise its jurisdiction on prudential ripeness grounds without

consideration of § 307 in its entirety, which considerations pre-

sumably would have occurred if the court had ordered briefing on

the issue of prudential ripeness (which it did not).

5It also gives District Courts jurisdiction to review final agency

District Court concludes that a Circuit Court might not have re-

viewed the action on prudential ripeness grounds had a petition

been filed.

5

The Government also makes no attempt to rebut Peti-

tioners’ detailed assessment of this Court’s decisions in

Abbott Labs and its progeny as those cases relate to pre-

enforcement review of final legislative rules. See Pet. at

20-23. The Government concedes only that “Congress’s

decision to authorize pre-enforcement review [is] an im-

portant factor bearing on the question of ripeness.” Resp.

Brief at 11. The Government’s concession is far too

grudging. This Court has recognized that Congress’

wishes regarding pre-enforcement review are not merely a

“factor” to be considered, but binding directives to be

followed. See, e.g., Ohio Forestry Ass'n, Inc. v. Sierra

Club, 118 S. Ct. 1665, 1672 (1998); Lujan v. National

Wildlife Fed’n, 497 U.S. 871, 894 (1990); Harrison v.

PPG Indus., Inc., 446 U.S. 578, 592 (1980); Abbott

Labs, 387 U.S. at 146.

Nor is there merit to the Government’s assertion that

“[iJf Congress had intended the extraordinary result that

courts must conduct a pre-enforcement review [without

consideration of prudential ripeness] . . . then Congress

presumably wouid have said so in express terms.” Resp.

Brief at 12. The plain language of § 307 accomplishes

precisely this result when read in its entirety. Moreover,

this Court rejected the Government’s proposed approach

for interpreting § 307 in a related setting, noting that “a

court cannot, in the manner of Sherlock Holmes, pursue

the theory of the dog that did not bark.” Harrison v.

PPG Indus., Inc., 446 U.S. at 592. In the Court’s view,

“it would be a strange canon of statutory construction

that would require Congress to state in committee reports

or elsewhere in its deliberations that which is obvious on

the face of the statute.” Jd. Compare Bennett v. Spear,

117 S. Ct. 1154, 1162 (1997) (holding that Congress

“expressly negated” prudential standing concerns even

6

though statute makes no explicit reference to prudential

standing).

The Government maintains the D.C. Circuit determined

that the credible evidence petitions could not be “evalu-

ated in the abstract” and therefore postponed review

“until the agency attempts to apply specific credible evi-

dence in a concrete enforcement setting.” Resp. Brief at

12. The Government’s arguments simply parrot those

made by the D.C. Circuit in its decision and are equally

unpersuasive.

Petitioners raised a series of purely legal challenges,

including several procedural challenges, to the credible

evidence rule. Pet. at 9-11. Resolution of those legal

challenges does not depend to any degree on whether

“concrete” credible evidence might or might not be differ-

ent from, or more stringent in effect than, the applicable

results from the performance tests prescribed by regula-

tion. Like the D.C. Circuit, the Government never ex-

plains why resolution of these purely legal issues must

await the “concrete setting” sought by the D.C. Circuit.

Indeed, this Court has noted that persons injured by an

agency’s failure to adhere to procedural requirements

“may complain of that failure at the time the failure takes

place, for the claim can never get riper.” Ohio Forestry

Ass'n, 118 S. Ct. at 1672 (emphasis added).

The Government’s assertion that the postponement of

review does “not harm the affected parties” is similarly

misguided. See Resp. Brief at 11. Whether Petitioners

suffer harm by virtue of delayed judicial review is not

a relevant consideration under a statute such as CAA

§ 307. So long as Petitioners have suffered harm sufficient

to satisfy Article III’s “case or controversy” requirement

—a point not disputed in this case—Congress is, as the

Government concedes, free to eliminate application by a

7

reviewing court of prudential justiciability doctrines. Resp.

Brief at 9. This is precisely what § 307 accomplishes.

In any event, Congress recognized that “[a]dministra-

tively developed standards, rules and regulations under the

Act . . . clearly affect the interests of parties.” App. 68a

(emphasis added). Congress commanded that judicial re-

view occur “within controlled time periods” for this very

reason. Id.

Despite the Government’s claims to the contrary, the

credible evidence rule has binding legal effect on peti-

tioners who must now consider the possibility that they

may be subjected to criminal, as well as civil and admin-

istrative penalties, based on information, such as contin-

uous opacity monitoring data, that prior to the credible

evidence rule was completely irrelevant to compliance

determinations. See Pet. at 7-9. Some at least, such as

those who may lack complete confidence in the judicial

system or those who have a strong aversion to even the

possibility of being sent to prison, will be forced to meet

more stringent standards to avoid the alternative of hav-

ing to develop and present “a defense in an enforcement

action” on which the D.C. Circuit’s decision and the Gov-

ernment’s opposition so squarely rests.

The legislative history is clear that Congress intended

to strictly time-limit the D.C. Circuit’s jurisdiction to

review final legislative rules “affect{ing] the interests” of

regulated parties “unless a petitioner can show that the

basis for his challenge did not exist or was not reasonably

to be anticipated before the expiration of 60 days.” App.

68a, 77a-78a (emphasis added). There is no dispute in

6 Under §113(b) of the Act, courts can impose civil penalties

of $25,000 per day for each violation. 42 U.S.C. § 7413(b). Under

§ 113(c), a person may be imprisoned for up to five years for a

single violation. Jd. § 7413(c).

8

this case that the “basis” for Petitioners’ challenge to the

credible evidence rule arose within the designated 60 day

period. Nothing in the D.C. Circuit’s decision or the

Government’s opposition suggests that the case involves

anything other than “merely postpon[ing] judicial review”

as a matter of judicial prudence. Resp. Brief at 7. The

D.C. Circuit has determined that the “basis” for Petition-

ers’ challenge may only be reviewed at a time and in a

forum (i.e., district court) different from that directed by

Congress. This the D.C. Circuit simply cannot do. Pet.

at 17-18; App. 77a-78a.

In short, the Government fails to provide a sound basis

for denying certiorari in this case. Contrary to the Gov-

ernment’s bald assertion that the D.C. Circuit’s decision

“does not conflict with any decision of this Court,” the

D.C. Circuit’s decision fundamentally misconstrues this

Court’s seminal decisions on the issues of prudential ripe-

ness as it applies to congressionally mandated Circuit

Court pre-enforcement review of final legislative rules.

II. CERTIORARI SHOULD BE GRANTED TO AVOID

AN UNWIELDY AND ILL-DEFINED PROCESS OF

JUDICIAL REVIEW OF FINAL AGENCY AC-

TIONS.

The Government contends alternatively that, even if

Petitioners’ claims had merit, this Court should not grant

certiorari because there is no split in the Circuit Courts

regarding application of Abbott Labs to statutes such as

CAA § 307. Resp. Brief at 12-13. The Government’s re-

liance upon the absence of a direct circuit split is unper-

suasive because the D.C. Circuit has exclusive responsibil-

ity to review final legislative rules of nationwide scope

arising under the Act and many other similar federal stat-

7 Resp. Brief at 7.

9

utes.* As Judge Levanthal recognized long ago, one of

the principal objectives of § 307(b) was “to avoid con-

flicting holdings by various federal courts of appeals’ re-

garding the validity of rules of nationwide scope under the

Act. Kennecott Copper Corp. v. EPA, 462 F.2d 846,

849-50, n.15 (D.C. Cir. 1972) (emphasis added). Thus,

far from supporting denial of certiorari, the absence of a

circuit split further highlights why review by this Court

is essential. The D.C. Circuit alone decides judicial policy

in this area, subject only to this Court’s oversight.

Finally, the Government complains that Petitioners have

engaged in “hyperbole” in characterizing the D.C. Cir-

cuit’s decision as “a dangerous precedent.” Resp. Brief

at 14. The Government is unable, however, to provide

answers to any of the many questions raised by the D.C.

Circuit’s decision regarding further review of the credible

evidence rule. See Pet. at 23-25. This suggests that the

Government is as baffled as Petitioners regarding the im-

plications of the D.C. Circuit’s decision for judicial review

of final legislative rules.

8 The Government mischaracterizes the Second Circuit’s deci-

sion in Ciba-Geigy Corp. v. Sidamon-Eristoff, 3 F.3d 40 (2d Cir.

1993) by suggesting that the Second Circuit has embraced the

Abbott Labs test for prudential ripeness. Resp. Brief at 13-14. The

Second Circuit ruled that the case was ripe for review even if the

Abbott Labs test applied. In accordance with this Court’s decisions,

the Second Circuit recognized that Abbott Labs has “limited rele-

vance” in cases where Congress has ordered pre-enforcement re-

view. Ciba-Geigy Corp., 3 F.3d at 46.

10

CONCLUSION

For the foregoing reasons, the Government’s arguments

in Opposition to certiorari are without merit and the peti-

tion for a writ of certiorari to the D.C. Circuit should be

granted.

Respectfully submitted on

behalf of all Petitioners,

HENRY V. NICKEL

(Counsel of Record)

KEVIN L. FAST

LAUREN E. FREEMAN

HUNTON & WILLIAMS

1900 K Street, N.W.

Washington, D.C. 20006

(202) 955-1500

Counsel for Appalachian

Power Company, et al.

May 24, 1999