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Natural Resources Defense Council Inc. v. U.S. Environmental Protection Agency

July 8, 1982

NATURAL RESOURCES DEFENSE COUNCIL, INC., 1725 I STREET, N.W., SUITE 600, WASHINGTON, D.C. 20006, PETITIONER
v.
U.S. ENVIRONMENTAL PROTECTION AGENCY, 401 M. STREET, S.W., WASHINGTON, D.C. 20460, RESPONDENT; CHEMICAL MANUFACTURERS ASSOCIATION; AMERICAN CYANAMID COMPANY; FMC CORPORATION & UNION CARBIDE CORP.; FORD MOTOR COMPANY; AMERICAN PAPER INSTITUTE & NATIONAL FOREST PRODUCTS ASSOCIATION; CHICAGO ASSOCIATION OF COMMERCE & INDUSTRY; ILLINOIS MANUFACTURERS" ASSOCIATION, & MID-AMERICA LEGAL FOUNDATION, INTERVENORS



PETITION FOR REVIEW OF ORDER OF THE ENVIRONMENTAL PROTECTION AGENCY

Author: Hunter

Before: GIBBONS, HUNTER, Circuit Judges and THOMPSON,*fn* District Judge

Opinion OF THE COURT

HUNTER, Circuit Judge.

1. Petitioner Natural Resources Defense Council ("NRDC") challenges the action of the Environmental Protection Agency ("EPA") in indefinitely postponing the effective date of final amendments ("the amendments") to certain regulations without complying with the notice and comment rulemaking requirements of the Administrative Procedure Act ("APA").*fn1 For the reasons which follow, we will order that EPA reinstate all of the amendments, effective March 30, 1981.*fn2

I. Background

In this suit, NRDC, pursuant to 33 U.S.C. § 1369(b) (1),*fn3 seeks review of the procedures employed by EPA in deferring indefinitely the effective date of a set of amendments to regulations dealing with the discharge of toxic pollutants into publicly owned treatment works ("POTWs").*fn4 The regulations and amendments were promulgated pursuant to section 307(b) (1) of the Clean Water Act, 33 U.S.C. § 1317(b) (1), which provides, in part:

The Administrator shall, within one hundred and eighty days after October 18, 1972, and from time to time thereafter, publish proposed regulations establishing pretreatment standards for introduction of pollutants into treatment works . . . which are publicly owned for those pollutants which are determined not to be susceptible to treatment by such treatment works or which would interfere with the operation of such treatment works. Not later than ninety days after such publication, and after opportunity for public hearing, the Administrator shall promulgate such pretreatment standards. Pretreatment standards under this subsection shall specify a time for compliance not to exceed three years from the date of promulgation and shall be established to prevent the discharge of any polluta nts through treatment works . . . which are publicly owned, which pollutant interferes with, passes through, or otherwise is incompatible with such works.

3. The Clean Water Act thus mandates the promulgation by EPA of regulations requiring that industries pretreat waste by removing pollutants before discharging the waste into POTWs*fn5 Pursuant to that mandate and to a consent decree,*fn6

[o]n February 2, 1977, EPA proposed a rule which would establish mechanisms and procedures for enforcing national pretreatment standards controlling the introduction of wastes from non-domestic sources into publicly owned treatment works (POTWs). On June 26, 1978, after more than a year of consideration during which time 4 public hearings and 16 public meetings were held and more than 400 individual comments received, the Agency promulgated the final general pretreatment regulations, 40 CFR Part 403.

46 Fed. Reg. 9404 (January 28, 1981).The General Pretreatment Regulations for Existing and New Sources, 40 C.F.R. Part 403 ("the 1978 regulations") became effective on August 28, 1978, 43 Fed. Reg. 27736 (1978), and have remained in effect ever since.

4. On October 29, 1979, EPA proposed a set of amendments to the 1978 regulations.*fn7 After "considering numerous comments submitted on the proposed changes," EPA promulgated those amendments on January 28, 1981 in "final form." 46 Fed. Reg. 9404 (January 28, 1981).*fn8 EPA designated March 13, 1981, as the effective date of the amendments, and, pursuant to 40 C.F.R. § 100.01, established February 10, 1981, as the date of the regulations "for the purposes of judicial review." 46 Fed. Reg. 9404 (January 28, 1981).

5. On January 29, 1981, the President of the United States issued a memorandum ordering that the effective dates of all regulations which were final but not yet effective be postponed for a period of sixty days from the date of the memorandum. 46 Fed. Reg. 11227 (February 6, 1981). Pursuant to that order, the effective date of the amendments at issue here was postponed from March 13, 1981 to March 30, 1981. 46 Fed. Reg. 11972 (February 12, 1981).No challenge has been made to that postponement.

6. On February 17, 1981, the President issued Executive Order 12291 ("E.O. 12291"). 46 Fed. Reg. 13193-13198 (February 19, 1981). Section 2 of E.O. 12291 stated that administrative action must be based on adequate information "concerning the need for and consequences of proposed government action," that no action should be taken unless the potential benefits of the regulatory action would outweigh the costs to society, that the agency should maximize the net benefits to society by its regulatory action, that the agency should choose the regulatory action involving the least net cost to society, and that the agency action should maximize the "aggregate net benefits to society, taking into account the condition of the particular industries affected by regulations, the condition of the national economy, and other regulatory actions contemplated for the future." Section 3 of E.O. 12291 required that all "major rules"*fn9 be accompanied by a Regulatory Impact Analysis ("RIA") in order to implement Section 2.

7. Section 7 of E.O. 12291 dealt with regulations which had been published in final form but which had not yet taken effect. Sections 7(a) and (d) provide:

(a) To the extent necessary to permit reconsideration in accordance with this Order, agencies shall, except as provided in Section 8 of this Order, suspend or postpone the effective dates of all major rules that they have promulgated in final form as of the date of this Order, but that have not yet become effective, excluding:

(1) Major rules that cannot legally be postponed or suspended;

(2) Major rules that, for good cause, ought to become effective as final rules without reconsideration.

(d) Agencies may, in accordance with the Administrative Procedure Act and other applicable statutes, permit major rules that they have issued in final form as of the date of this Order, and that have not yet become effective, to take effect as interim rules while they are being reconsidered in accordance with this Order, provided that, agencies shall report to the Director, no later than 15 days before any such rule is proposed to take effect as an interim rule, that the rule should appropriately take effect as an interim rule while the rule is under reconsideration.

8. Despite the fact that EPA apparently took the position initially that the amendments were not "major rules," and thus were not subject to E.O. 12291, appendix at 24-25, 28, the Acting Administrator of EPA signed an order on March 27, 1981, which was published in the Federal Register of April 2, 1981, eliminating the March 30, 1981 effective date of the amendments and postponing them indefinitely. That action was "taken pursuant to Executive Order 12291." 46 Fed. Reg. 19936 (April 2, 1981). This was the sole reason given for the postponement.

9. One of the amendments proposed on October 29, 1979, and postponed indefinitely pursuant to E.O. 12291, was the Combined Wastestream Formula ("CWF"), 40 C.F.R. § 403.6(e), which merits separate mention here.*fn10 In 1979, EPA established categorical pretreatment regulations governing the discharge of pollutants into POTWs by the electroplating industry. 40 C.F.R. Part 413, Electroplating Point Source Category.*fn11 Title 40 C.F.R. § 413.01(a) provides:

This part shall apply to electroplating operations in which metal is electroplated on any basis material and to related metal finishing operations as set forth in the various subparts, whether such operations are conducted in conjunction with electroplating, independently or part of some other operation. The compliance deadline for integrated facilities shall be 3 years from the effective date of 40 CFR 403.6(e). The compliance deadline for non-integrated facilities shall be May 12, 1983 [since amended to January 28, 1984, 46 Fed. Reg. 43972 (September 2, 1981)].

(Emphasis added.)*fn12

10. EPA described the impact of the postponement of the effective date of the amendments on integrated electroplating facilities:

The deferral of the effective date of the amendments to the general pretreatment regulations is of special significance to the electroplating pretreatment standards. First, under § 413.01 of the electroplating standards, the compliance date for integrated facilities is three years from the effective date of the combined wastestream formula contained in § 403.6(e) of the amendments to the general pretreatment regulations. Since the effective date of this provision has been deferred, so too has the compliance date for integrated facilities under the electroplating pretreatment standards.

46 Fed. Reg. 43973 (September 2, 1981). See 33 U.S.C. § 1317(b) (1) ("compliance not to exceed three years from the date of promulgation [of a pretreatment standard]"). The indefinite postponement of the CWF thus brought with it the indefinite postponement of the obligation of integrated electroplating facilities to comply with the categorical pretreatment standards applicable to the electroplating industry.

11. On J une 24, 1981, NRDC filed suit under 33 U.S.C.§ 1369(b) (1) seeking review of EPA's action in deferring the amendments indefinitely without holding an APA notice and comment period.*fn13

12. On October 5, 1981, published October 13, 1981, EPA "decided to terminate the indefinite postponement of the general pretreatment amendments and make them effective January 31, 1982." 46 Fed. Reg. 50502 (1981).*fn14 On October 13, 1981, EPA also published a notice of rulemaking:

By separate action taken this day, EPA has announced that the general pretreatment amendments will be effective January 31, 1981 [sic; should read "1982"]. As an adjunct to this announcement, EPA, through this notice, proposes to further suspend the effective date of the general pretreatment amendments and invites comment on whether the effective date of the general pretreatment amendments (or specific portions thereof) should be further postponed.

EPA HAS not yet conducted a rulemaking on the desirability and appropriate scope of the deferral. Therefore, in order to provide a full public airing of the issue, EPA is hereby initiating a rulemaking on whether the effective date of the amendments should be further postponed and, if so, which portions and for how long.

46 Fed. Reg. 50503 (1981). Thus, EPA treated the further postponement of the amendments as a rule subject to the rulemaking provisions of the APA, despite the fact that it did not treat the initial postponement as a rule.

13. In an order signed on January 27, 1982 and published in the Federal Register on February 1, ...


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