On Petition for Review of Action of the Administrator of the Environmental Protection Agency.
Seitz, Chief Judge, Rosenn, Circuit Judge and H. Curtis Meanor, District Judge.*fn*
These are petitions to review Environmental Protection Agency regulations governing certain manufacturing processes within the iron and steel industry. The regulations, which were published in the Federal Register on March 29, 1976, establish maximum permissible quantities of pollutant which may be discharged by operations performing the designated processes. The regulations also survey the available pollution control techniques, and specify techniques - the "best practicable control technology currently available" (BPCTCA) - which might be used in meeting the prescribed effluent limitations. In issuing the regulations, the EPA was exercising its statutory mandate to establish effluent limitations requiring the application of the BPCTCA by July 1, 1977. 33 U.S.C. § 1311(b)(1)(A). It is these regulations as to BPCTCA which are under review here. The regulations promulgated by the EPA also contain proposed : a) effluent limitations and guidelines as to the application of the "best available technology economically achievable" by July 1, 1983 b) standards of performance for new point sources and c) pretreatment standards for existing sources and for new sources.
The regulations governing the application of the BPCTCA are in "interim final" form, which is to say that, while they were to take effect immediately upon promulgation, the EPA is now in the process of considering "final" regulations covering the same subject matter. The regulations state that the reasons for this novel procedural form is that "the Agency is subject to an order of the United States District Court for the District of Columbia entered in Natural Resources Defense Council v. Train, et al. (Cv. No. 1609-73) which requires the promulgation of regulations for this industry category no later than March 15, 1976." 41 Fed. Reg. 13004.
The regulations deal only with certain processes of the iron and carbon steel and specialty steel (ferroalloy and stainless steel) industries, namely forming and finishing processes, and with certain steelmaking processes within the specialty steel industry. An earlier phase ("phase I") of the regulations, published on June 28, 1974, dealt with steelmaking processes within the iron and carbon steel industries. This court considered the latter regulations in American Iron and Steel Institute v. EPA (AISI I), 526 F.2d 1027 (3d Cir. 1975), and remanded them to the EPA for reconsideration in certain respects.
Some petitioners have argued that the "interim final" regulations are invalid because they were not promulgated in accordance with the Administrative Procedure Act. The relevant procedural history may be outlined as follows.
Since November 15, 1973, the EPA has been under order of the district court for the District of Columbia, in Natural Resources Defense Council v. EPA to promulgate regulations governing the processes of the iron and steel industry covered by the present regulations. The EPA was originally under order to promulgate these regulations in 1974, but it has asked for and received several extensions of the deadlines.
On August 21, 1975, the EPA published in the Federal Register "advance notice of intent to propose and promulgate effluent limitations and guidelines for existing sources." 40 Fed. Reg. 36708. The notice of "proposed rulemaking" (ANPR) then proceeded to list the subcategories of the industry for which tentative regulations were being set forth. The EPA engaged in extensive reevaluation and revision of the tentative limitations and guidelines after they were published, partly in response to substantial sentiment within the agency that they were too lenient. The EPA did not, however, propose the revised regulations for further notice and comment. It also stipulated that the interim final regulations would be effective immediately, and thus did not allow the 30 day interval between publication date and date of effectiveness usually required by the APA. 5 U.S.C. § 553(d). The regulations contain a statement that, due to the pendency of the court order and the need to expedite the effectuation of the Act, the Agency had determined that it was "impracticable and contrary to the public interest" "to develop and publish regulations . . . in proposed form [and] to provide a 30 day comment period." The Agency also stated that there was "good cause . . . for these regulations to become effective immediately upon publication." 41 Fed. Reg. 13004.
Petitioners in Nos. 76-1386, 76-1757 and 76-2176, ("the Companies") - who are steel companies and the American Iron and Steel Institute - have made two challenges to the validity of the "interim final" regulations under the APA which require discussion.*fn1
They first argue that any regulations governing specialty steel are invalid because the ANPR failed to give sufficient indication that the Agency was considering regulations as to the specialty steel segment of the industry. This court delineated the purposes of the APA's notice and comment requirement in Texaco, Inc. v. FPC, 412 F.2d 740, 744 (1969): "Section 553 was enacted to give the public an opportunity to participate in the rule-making process. It also enables the agency promulgating the rule to educate itself before establishing rules and procedures which have a substantial impact on those regulated." In evaluating the Companies' contention that the ANPR was insufficient to enable the public to effectively participate in the rule-making process, we must determine whether the notice given was "sufficient to fairly apprise interested parties" of all significant subjects and issues involved. Senate Rept. No. 752, 79th Congress, 1st Session, at 16 (1945).
The adequacy of the notice as to specialty steel really encompasses two questions: whether there was adequate notice that the making of specialty steel would be covered by the regulations, and whether there was adequate notice that the forming and finishing of specialty steel would be covered by the regulations. With respect to the forming and finishing of specialty steel, the ANPR set forth "Proposed Effluent Guidelines and Standards" for the "Iron and Steel Manufacturing Point Source Category." As noted above, the EPA was making regulations under order of the court in Natural Resources Defense Council v. EPA. In ordering the EPA to make regulations, the court listed various "categories": while category 19 was "Iron and Steel Manufacturing", category 23 was "Ferroalloy Manufacturing" - what we have called specialty steel. Thus, an interested person who read that the EPA was giving advance notice of intent to promulgate regulations for the "Iron and Steel Manufacturing Point Source Category" would be misled into thinking that regulations for "Ferroalloy Manufacturing" were not involved. This misimpression would be fostered by the fact that the ANPR said that "in developing the requisite data to support effluent limitations, guidelines and standards EPA commissioned a study and report entitled 'Development Document for Effluent Limitations Guidelines and New Source Performance Standards - Iron and Steel Industry: Hot Forming and Cold Finishing Segment' prepared by Cyrus Wm. Rice Division, NUS Corporation." The EPA had commissioned an entirely separate study of the specialty steel industry - by Datagraphics, Inc.
Our conclusion that the ANPR would not apprise an interested person that the specialty steel industry would be covered by the regulations on forming and finishing processes applies a fortiori with respect to the portions of the interim final regulations which deal with the making of specialty steel. The ANPR gave no indication that the Agency intended to make any regulations on steelmaking, whether in the carbon steel or specialty steel industry: all the enumerated subcategories of the "iron and steel manufacturing" industry pertained to processes other than steelmaking. The interim final regulations, however, do contain regulations governing three processes by which specialty steel is made.*fn2 Since the ANPR gave no indication that the regulations would deal with steelmaking, an interested person would not be able to make comments which could assist the EPA in formulating these regulations.
EPA argues that even if the ANPR was insufficient to apprise an interested person that specialty steel would be covered by the regulations, the regulations may be upheld under an exception to the APA's notice and comment requirement. 5 U.S.C. § 553(b) says that:
"General notice of proposed rule making shall be published in the Federal Register . . . . Except when notice or hearing is required by statute, this subsection does not apply . . . (b) when the agency for good cause finds . . . that notice and public procedure are impracticable, unnecessary, or contrary to the public interest."
This exception is to be narrowly construed. As is stated in the Senate Report on a precursor of the final APA:
"Impracticable" means a situation in which the due and required execution of the agency functions would be unavoidably prevented by its undertaking public rule-making proceedings . . . "Public interest" supplements the terms "impracticable" or "unnecessary"; it requires that public rule-making procedures shall not prevent an agency from operating and that, on the other hand, lack of public interest in rule making warrants an agency to dispense with public procedure. Senate Rept. No. 752, 79th Congress, 1st Session at 16. (1945)
In arguing that it was "impracticable and contrary to the public interest" to provide notice and an opportunity for comment, the EPA relies chiefly on the fact that it had been ordered to promulgate regulations by March 15, 1976 by the court in Natural Resources Defense Council v. EPA. But we find this argument unconvincing. The EPA had been under order to promulgate regulations for the specialty steel industry since November 15, 1973, and it received its contractor's study of the specialty steel industry in January, 1974. So EPA was aware of the necessity for rapid promulgation of the limitations on specialty steel in November of 1973, and had the basic contractor's study in January of 1974. But the interim final regulations were not published until March of 1976. Moreover, the ANPR did in fact contain detailed tentative regulations on the forming and finishing of iron and carbon steel, a subject on which EPA had obtained its contractor's report in July of 1974 - 6 months after it received its contractor's report on the carbon steel industry. Under these conditions, EPA has failed to show that it may be exempted from the APA's usual requirement of notice and comment.
In sum, EPA may not be exempted from the APA's rulemaking requirement of notice and comment, and it has failed to give adequate notice that the interim final regulations would govern the specialty steel industry.*fn3 The interim final regulations are thus invalid insofar as they apply to the specialty steel industry.*fn4
Apart from their challenge to the regulations concerning specialty steel, the Companies also allege that the ANPR did not give sufficient indication of the following two issues: "(1) whether filtration and tight recycle (the '10/10/5 model') are practicable for the steel industry to construct and operate by July 1, 1977 and (2) if so, the treatment levels achievable by such technology." The history behind the adoption of the 10/10/5 model is as follows. After the ANPR was published, the EPA, in its internal review of the tentative regulations found that:
"there were substantial errors in the limitations. The advance notice was improperly biased; costing inaccuracies caused an invalid comparison between clarifier and filter technologies; plants had already installed both filtration and recycle technology; and, generally, both BPT and BAT were set at improperly low levels, levels at which a quarter of the Nation's steel production would already be at BAT, with many more facilities at BPT . . ." EPA's Brief at 90.
The Agency's response was to make the regulations substantially more stringent. The Companies especially question the use of "filtration and tight recycle" technology, which is used in Subparts M (hot forming-primary subcategory), N (hot forming-section subcategory), O (hot forming-flat subcategory and P (pipe and tubes subcategory).*fn5
We agree with the court in International Harvester Co. v. Ruckelshaus, 155 U.S. App. D.C. 411, 478 F.2d 615, 632 n.51 (1973), that the submission of a proposed rule for comment does not of necessity bind an agency to undertake a new round of notice and comment before it adopts a rule which is different - even substantially different - from the proposed rule. As we have noted above, the adequacy of the notice must be tested by determining whether it would fairly apprise interested persons of the "subjects and issues" before the Agency.
Judged by this standard, we conclude that the ANPR was sufficient to apprise interested persons of the issues involved in the EPA's decision to adopt more stringent treatment technologies than had been embodied in the ANPR. The Companies' concern is focussed on the EPA's determination that recycling and filtration technology is BPCTCA with respect to some forming and finishing subcategories. These techniques, as we have noted, are prescribed as BPCTCA for Subparts M through P of the industry, and the control technology specified for these subcategories is similar. The chief pollutants produced by all four processes are suspended solids, oil and grease. The interim final regulations specify that the first step of the BPCTCA for all four processes is a primary scale pit - a settling unit - with oil skimming equipment applied to the effluent in the scale pit. This was also specified as the first step of the BPCTCA in the ANPR. The interim final regulations specify that after the scale pit,*fn6 part of the effluent is recycled for use in the steel making process; this is one of petitioners' points of concern. The interim final regulations state that the remaining effluent in the scale pit goes to a clarifier; the use of a clarifier was also specified in the ANPR. The underflow from the clarifier is to be vacuumed filtered, as the ANPR had also stated. Finally, the overflow from the clarifier is filtered and discharged. The use of filtration is a second point of concern to petitioners, and is peculiar to the interim final regulations.
We conclude that the ANPR was sufficient to apprise interested persons that there was an issue as to whether recycling of partially clarified effluent was BPCTCA. In the first place, the suggested BPCTCA in the ANPR regulations for three of the four subcategories of the industry here involved - N, O and P - include some recycling of effluent. Moreover, in surveying the treatment technology currently in place in existing plants, the ANPR notice mentioned recycling with respect to all subcategories of the iron and steel industry for which the interim final regulations later specified recycling as part of the BPCTCA. An interested person thus should have been aware that recycling was potentially a significant component of the ultimate regulations as to BPCTCA.
The use of filtration upon the overflow from the clarifier presents a closer question, since the ANPR did not suggest that filtration of the clarifier overflow would be part of the BPCTCA for any of the hot-forming subcategories (Subparts M, N and O) or the pipe and tubes subcategory (Subpart P). Nevertheless, we conclude that the notice was sufficient, since, as with the use of recycle, the ANPR did inform the public that high rate filtration technology was already in place in plants in those of three subcategories (M, N and O). With respect to the meaning of BPCTCA, the Senate Report to the bill which ultimately became the Federal Water Pollution Control Act Amendments of 1972 said that: "The Administrator should establish the range of best practicable levels based upon the average of the best existing performance by plants of various sizes, ages, and unit processes within each industrial category."*fn7 Senate Report No. 92-414, 92d Congress, 1st Session (1971), p. 50. The statements in the ANPR that "a few plants will have high rate filters to treat either scale pit or clarifier effluents",*fn8 and that the "range of treatment technology currently practiced in existing plants includes all the items discussed above"*fn9 - including the use of high rate filters - may not be a full statement that the plants now employing filter technology within each subcategory of the industry are "of various sizes [and] ages." But this is little more than to say that EPA had not yet determined that filtration was BPCTCA when it published the August notice. The notice does fairly apprise interested parties that there was an issue as to whether filtration was BPCTCA because it states that some of the best existing plants use filters.
In sum, we conclude that the use of the 10/10/5 model did not violate the APA's requirement of notice and hearing.*fn10
Pennsylvania's Department of Environmental Resources, ("Pennsylvania") the Petitioner in No. 76-1751, questions the sufficiency under the APA of the Agency's decision to exempt plants in the Mahoning River Valley region of Eastern Ohio "from the effluent limitations based on best practicable control technology currently available." We need discuss only two of Pennsylvania's arguments:*fn11 1) that the EPA did not provide notice and an opportunity for comment on the special treatment afforded plants in the Mahoning Valley 2) that adequate judicial review of the Mahoning Valley exemption is precluded by the EPA's failure to include a "concise general statement of [the] basis and purpose" of the action as required by the APA. 5 U.S.C. § 553 (c).
1. The interim final regulations state that:
The relief granted from severe economic impact in the Mahoning River Valley region, which impact is likely to occur absent such relief, is the exemption of point sources located within that region from the effluent limitations based on best practicable control technology currently available. Nevertheless, the Agency fully expects that authorities granting permits, pursuant to section 402 of the Federal Water Pollution Control Act, as amended, shall not allow point sources in that region to discharge pollutants in any greater amounts than are currently being discharged by those sources. 41 Fed. Reg. 12995.
The only indication in the ANPR that such an action might be taken is the following:
One commenter has claimed that the proposed guidelines will result in the loss of 12,000 jobs from the steel employment in the Mahoning River Valley region. Furthermore, the commenter asserts that "there is ample justification for adding to the guidelines, a subcategory based on the age of the facility."
The Agency intends to secure and evaluate additional information on possible economic impacts in this region and would consider revision of the regulations if the information appears to warrant this action. 40 Fed. Reg. 36723.
Pennsylvania argues that in reading the language "would consider revision of the regulations" an interested member of the public might well come to the conclusion that the EPA would not consider whether to give Mahoning Valley special treatment until the rulemaking then noticed had already been completed. Thus, the public could well have been misled into thinking that comments on the Mahoning Valley question were not appropriate during the present rulemaking proceedings.
Pennsylvania's argument hinges on the meaning of the word "regulations" in the ANPR. If the word refers to the regulations to be promulgated at the end of the noticed rulemaking, then a member of the public might indeed be misled into thinking that he should defer comment on the Mahoning Valley question. On the other hand, if the word refers to the regulations then proposed, a member of the public would be on notice that immediate comment was appropriate. We note that the ANPR states that "the regulations set forth below when promulgated will amend 40 CFR, part 420." 40 Fed. Reg. 36708 (emphasis added). This, read in conjunction with the statement that the EPA would consider revision of the "regulations" to take account of any special conditions in the Mahoning Valley would indicate that immediate comment was appropriate. Thus, we conclude that there was sufficient notice to "fairly apprise" the public that the Agency might afford special treatment to facilities in the Mahoning Valley. We confess, however, that the language in the ANPR is hardly a model of clarity.
2. Pennsylvania has also argued that the Mahoning Valley exemption is invalid because the EPA did not give a "concise general statement of [the] basis and purpose" of the action as required by the APA. 5 U.S.C. § 553(c). This argument is meritless. The interim final regulations state that:
Tentative analysis of the available data leads to the conclusion that conditions in the Mahoning River Valley region are unique with respect to the physical and geographical characteristics of the region, physical and operating characteristics of the facilities located therein, and the importance of the facilities to the economy of the region. Tentative analysis of the available data and the consultant's evaluation thereof appears to support the contention that mandatory compliance with effluent limitations guidelines which do not take into account these factors is likely to result in severe economic dislocation within the Mahoning River Valley region.
In addition to similar economic disadvantages resulting from age and size characteristics, facilities in the region appear to share economic disadvantages caused by locational characteristics. These include the movement of markets away from the region, constrained access to raw materials due to the unavailability of waterborne transportation and required transshipment by rail, and space limitations which prohibit major expansion of existing facilities. 41 Fed. Reg. 12994.
This statement is clearly sufficiently detailed to allow for "searching judicial scrutiny." Amoco Oil v. EPA, 163 U.S. App. ...