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National Association of Metal Finishers v. Environmental Protection Agency

decided as amended october 5 1983.: September 20, 1983.

NATIONAL ASSOCIATION OF METAL FINISHERS, ELECTROPLATERS OF YORK, INC. AND PIONEER METAL FINISHING, INC., PETITIONERS
v.
ENVIRONMENTAL PROTECTION AGENCY, RESPONDENT; THE INSTITUTE FOR INTERCONNECTING AND PACKAGING ELECTRONIC CIRCUITS, PETITIONER V. ENVIRONMENTAL PROTECTION AGENCY, RESPONDENT; FORD MOTOR COMPANY, INC., PETITIONER V. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY AND DOUGLAS M. COSTLE, ADMINISTRATOR, UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, RESPONDENTS, NATURAL RESOURCES DEFENSE COUNCIL, INC., INTERVENOR; NATIONAL ASSOCIATION OF METAL FINISHERS AND INSTITUTE FOR INTERCONNECTING AND PACKAGING ELECTRONIC CIRCUITS, PETITIONERS V. ENVIRONMENTAL PROTECTION AGENCY, RESPONDENT; GENERAL MOTORS CORPORATION, PETITIONER V. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY AND WALTER BARBER, ACTING ADMINISTRATOR, UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, RESPONDENTS, NATURAL RESOURCES DEFENSE COUNCIL, INC., INTERVENOR; NATURAL RESOURCES DEFENSE COUNCIL, INC., 917 15TH STREET, N.W., WASHINGTON, D.C. 20005, PETITIONER V. U.S. ENVIRONMENTAL PROTECTION AGENCY, 401 M STREET, S.W., WASHINGTON, D.C. 20460 AND DOUGLAS M. COSTLE, ADMINISTRATOR, U.S. ENVIRONMENTAL PROTECTION AGENCY, 401 M STREET, S.W., WASHINGTON, D.C. 20460, RESPONDENTS, CHEMICAL MANUFACTURERS ASSOCIATION, AMERICAN CYANAMID COMPANY, FMC CORPORATION, UNION CARBIDE CORPORATION, INTERVENORS; UNITED STATES BREWERS ASSOCIATION, PETITIONER V. ADMINISTRATOR, ENVIRONMENTAL PROTECTION AGENCY, AND ENVIRONMENTAL PROTECTION AGENCY, RESPONDENTS, NATURAL RESOURCES DEFENSE COUNCIL, INC., INTERVENOR; MANUFACTURING CHEMISTS ASSOCIATION, AMERICAN PAPER INSTITUTE, NATIONAL FOREST PRODUCTS ASSOCIATION, NATIONAL PAINT AND COATINGS ASSOCIATION, SYNTHETIC ORGANIC CHEMICAL MANUFACTURERS ASSOCIATION, AIR PRODUCTS AND CHEMICALS, INC., AMERICAN CYANAMID COMPANY, FMC CORPORATION, HERCULES INCORPORATED, SHELL OIL COMPANY, AND UNION CARBIDE CORPORATION, PETITIONERS V. ENVIRONMENTAL PROTECTION AGENCY, RESPONDENT, NATURAL RESOURCES DEFENSE COUNCIL, INC., INTERVENOR; ASSOCIATION OF METROPOLITAN SEWERAGE AGENCIES, PETITIONER V. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, RESPONDENT, NATURAL RESOURCES DEFENSE COUNCIL, INC., INTERVENOR; NATIONAL ASSOCIATION OF METAL FINISHERS, PETITIONER V. ENVIRONMENTAL PROTECTION AGENCY, RESPONDENT, NATURAL RESOURCES DEFENSE COUNCIL, INC., INTERVENOR; CHEMICAL MANUFACTURERS ASSOCIATION, AMERICAN CYANAMID COMPANY, FMC CORPORATION, UNION CARBIDE CORPORATION, PETITIONERS V. ENVIRONMENTAL PROTECTION AGENCY, RESPONDENT, NATURAL RESOURCES DEFENSE COUNCIL, INC., INTERVENOR; AMERICAN PAPER INSTITUTE AND NATIONAL FOREST PRODUCTS ASSOCIATION, PETITIONERS V. ENVIRONMENTAL PROTECTION AGENCY, RESPONDENT, NATURAL RESOURCES DEFENSE COUNCIL, INC., INTERVENOR; NATURAL RESOURCES DEFENSE COUNCIL, INC., 1725 EYE STREET, N.W., 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 CORPORATION, INTERVENORS; METAL FINISHING ASSOCIATION OF SOUTHERN CALIFORNIA, PETITIONER V. ENVIRONMENTAL PROTECTION AGENCY, RESPONDENT; INTERLAKE, INC., REPUBLIC STEEL CORPORATION AND UNITED STATES STEEL CORPORATION, PETITIONERS V. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, RESPONDENT, NATURAL RESOURCES DEFENSE COUNCIL, INC., INTERVENOR, AMERICAN IRON & STEEL INSTITUTE, ROUGE STEEL CO., INTERVENORS; CHICAGO ASSOCIATION OF COMMERCE AND INDUSTRY, ILLINOIS MANUFACTURERS ' ASSOCIATION, AND MID-AMERICAN LEGAL FOUNDATION, PETITIONERS V. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, RESPONDENT, NATURAL RESOURCES DEFENSE COUNCIL, INC., INTERVENOR



ON PETITIONS FOR REVIEW OF ACTIONS OF THE ENVIRONMENTAL PROTECTION AGENCY.

Gibbons, Hunter and Becker, Circuit Judges.

Author: Hunter

Opinion OF THE COURT

HUNTER, III, Circuit Judge:

1. Section 307 of the Clean Water Act*fn1 directs the Administrator of the Environmental Protection Agency ("EPA") to promulgate regulations requiring industrial facilities to pretreat the pollutants that they discharge into public sewage treatment systems. The Administrator has promulgated both general pretreatment regulations*fn2 and regulations establishing categorical pretreatment standards for existing electroplating sources.*fn3 The petitioners in these consolidated cases seek review of the Administrator's actions in promulgating certain provisions of those regulations. Under section 509 of the Clean Water Act*fn4 we have jurisdiction to exercise a limited review of the Administrator's actions. We may overturn those actions only if they are arbitrary, capricious or otherwise contrary to law.*fn5 Under that standard of review, we find invalid certain provisions of the general pretreatment regulations. Because it is not for us to rewrite those provisions, we will remand them to the Administrator.

I. BACKGROUND

A. The Statute

2. In 1972 Congress amended the Federal Water Pollution Control Act ("the Act" or "the Clean Water Act"),*fn6 setting as a national goal the elimination, by 1985, of the discharge of pollutants into navigable waters, 33 U.S.C. § 1251(a)(1) (1976). To reach that goal the Act directed the Administrator of EPA to promulgate regulations setting limits on the pollution that can be discharged by three general types of "point sources," see id. § 1362(14) (1976 & Supp. I 1977).

3. First, the Administrator was to establish effluent limitations for point sources which discharge pollutants directly into navigable waters ("direct dischargers"). The Administrator had to define effluent limitations for categories or classes of point sources which would require existing direct dischargers to employ by 1977 the best practicable control technology currently available ("BPT"), id. §§ 1311(b)(1)(A), 1314(b)(1) (1976), and to use by 1983-87 the best available technology economically achievable ("BAT"), id. §§ 1311(b)(2) (1976 & Supp. I 1977), 1314(b)(2) (1976). For newly-constructed direct dischargers the Administrator had until 1974 to establish "new source" performance standards requiring the application of the best available demonstrated control technology ("BDT"). Id. § 1316. The Administrator had to set the BPT, BAT, and BDT limitations by considering the factors specified in sections 304(b) and 306(b) of the Act, id. §§ 1314(b), 1316(b). He was to apply those limitations to individual direct dischargers through the National Pollutant Discharge Elimination System ("NPDES") permit issued to the discharger under section 402 of the Act, id. § 1342 (1976 & Supp. I 1977).

4. Second, the Act mandated that the Administrator set effluent limitations for publicly owned treatment works ("POTWs") engaged in the treatment of municipal sewage or industrial wastewater. See id. § 1292(2) (1976 & Supp. I 1977). Under the Act the Administrator had to establish effluent limitations, based on "secondary treatment," which POTWs had to meet by 1977. Id. §§ 1311(b)(1)(B), (C), 1314(d)(1) (1976). The limitations thus established were to be applied to each individual POTW through its NPDES permit. Id. § 1342 (1976 & Supp. I 1977).

5. Third, section 307 of the Act addressed the "indirect dischargers," point sources which discharged their pollutants not directly into navigable waters but into POTWs. Congress recognized that the pollutants which some indirect dischargers release into POTWs could interfere with the operation of the POTWs, or could pass through the POTWs without adequate treatment. To prevent such discharges by existing sources, Congress directed in section 307(b)(1) of the Act:

(b)(1) The Administrator shall . . . publish proposed regulations establishing pretreatment standards for introduction of pollutants into [POTWs] for those pollutants which are determined not to be susceptible for treatment by such treatment works or which would interfere with the operation of such treatment works. . . . Pretreatment standards under this subsection . . . shall be established to prevent the discharge of any pollutant through [POTWs], which pollutant interferes with, passes through or otherwise is incompatible with such works.

33 U.S.C. § 1317(b)(1) (1976); see also id. § 1314(g) (Supp. I 1977). The Administrator had to designate the categories of existing sources to which each such standard would apply, promulgate the standards by 1973, and revise the standards as control technologies and industrial processes changed. Id. § 1317(b). For newly-constructed indirect dischargers the Act directed that by 1974 the Administrator had to promulgate pretreatment standards for each category of new sources which "shall prevent the discharge of any pollutant into such treatment works, which pollutant may interfere with, pass through, or otherwise be incompatible with such works." Id. § 1317(c). New and existing indirect dischargers did not need to obtain NPDES permits, but instead had pretreatment standards imposed directly upon them.

6. In 1977 Congress amended the Act by passing the Clean Water Act of 1977, Pub. L. No. 95-217, 91 Stat. 1566 ("the 1977 Amendments"). Section 54 of the 1977 Amendments added a sentence to section 307(b)(1) permitting a POTW to modify the pretreatment requirement of an existing indirect discharger if the POTW could successfully remove all or part of the toxic pollutants released by that discharger. Id. § 54(a), 91 Stat. 1591 (amending 33 U.S.C. § 1317(b)(1) (Supp. I 1977)).

B. The Regulations

7. The Administrator elaborated his regulatory approach to indirect dischargers in his National Pretreatment Strategy, 43 Fed. Reg. 27,759 (1978), and in the consent decree in NRDC v. Train, 8 Env't Rep. Cas. (BNA) 2110 (D.D.C. 1976), modified sub nom. NRDC v. Costle, 12 Env't Rep. Cas. (BNA) 1833 (D.D.C. 1979), aff'd in part sub nom. Environmental Defense Fund v. Costle, 205 U.S. App. D.C. 101, 636 F.2d 1229 (D.C. Cir. 1980), modified on remand sub nom. NRDC v. Gorsuch, Nos. 2153-73 et al. (D.D.C. Oct. 26, 1982). The Administrator announced that he would promulgate two types of pretreatment standards.

8. The first type, "categorical" pretreatment standards, would establish numerical limits on the discharge, by twenty-one specific categories of industrial sources, of particular toxic pollutants which could cause interference with or pass through POTWs. 43 Fed. Reg. 27,760, 27,771-73 (1978); NRDC v. Train, 8 Env't Rep. Cas. (BNA) at 2130-36. Categorical pretreatment standards would be set to require the application of similar levels of control technology as the Act mandated for direct dischargers. 43 Fed. Reg. 27,760-63 (1978); 42 Fed. Reg. 6480 (1977). The Administrator agreed to promulgate categorical pretreatment standards "generally analogous to best practicable control technology currently available" (BPT) for eight industries by May 15, 1977. NRDC v. Train, 8 Env't Rep. Cas. (BNA) at 2128 para. 13. For all twenty-one industrial categories the Administrator would then promulgate categorical pretreatment standards based on BAT for existing sources and BDT for new sources. 43 Fed. Reg. 27,760 (1978); see NRDC v. Gorsuch; NRDC v. Train, 8 Env't Rep. Cas. (BNA) at 2123-26.

9. The second type of pretreatment standard, the "prohibited discharge" standard, would not set numerical limits on the discharge of particular pollutants by specified sources. 43 Fed. Reg. 27,759-60 (1978). Rather, the prohibited discharge standard would establish a general prohibition on the release of any pollutants by any nondomestic source if those pollutants interfere with or pass through a POTW. Id.

1. The General Pretreatment Regulations

10. The General Pretreatment Regulations for Existing and New Sources of Pollution, 40 C.F.R. § 403.1.-16 (1982), serve to implement the two types of pretreatment standards. First, the general pretreatment regulations themselves contain the prohibited discharge standard generally forbidding interference and pass through, id. § 403.5, and define the terms " interference" and "pass through," id. § 403.3(i), (n). Second, the general pretreatment regulations establish the mechanisms and procedures governing the separately promulgated categorical pretreatment standards. The general regulations define whether a source is a "new source" under the standards. Id. § 403.3(k). The general regulations contain a mechanism through which the existing industrial user of a POTW can obtain a variance from a categorical discharge limit if the user can show that during the development of the standard EPA had considered "fundamentally different" factors than those relating to the user's operation ("the FDF variance provision"). Id. § 403.13. The regulations set up the procedure by which a POTW can revise an industrial user's catergorical discharge limit to reflect the POTW's removal of the user's pollutants ("the removal credit provision"). Id. § 403.7. Finally, the regulations provide a formula to calculate an adjusted categorical discharge limit where the industrial user mixes the effluent from the regulated process with other wastewaters prior to pretreatment ("the combined wastestream formula"). Id. § 403.6(e).

11. The Administrator first proposed the general pretreatment regulations on February 2, 1977. 42 Fed. Reg. 6476 (1977). He promulgated the regulations on June 26, 1978. 43 Fed. Reg. 27,736 (1978). On October 29, 1979, the Administrator proposed amendments to the regulations, 44 Fed. Reg. 62,260 (1979), which he promulgated on January 28, 1981, 46 Fed. Reg. 9404 (1981). The Administrator then attempted to postpone indefinitely the effective date of first all and later part of the general pretreatment regulations. 47 Fed. Reg. 4518 (1982); 46 Fed. Reg. 19,936, 50,502, 50,503 (1981). After we declared that indefinite postponement invalid in NRDC v. EPA, 683 F.2d 752 (3d Cir. 1982), the Administrator reinstated the regulations' effective date of March 30, 1981. 47 Fed. Reg. 42,688 (1982); see 46 Fed. Reg. 11,971 (1981). On October 4, 1982, we granted the petitioners' unopposed motion to extend the regulations' effective date until June 30, 1981. 48 Fed. Reg. 2774 (1983).

2. The Categorical Electroplating Standards

12. The categorical pretreatment standards for the Electroplating Point Source Category, 40 C.F.R. §§ 413.01.-84 (1982), are BPT-level pretreatment standards set pursuant to the NRDC v. Train consent decree. 44 Fed. Reg. 52,592, 52,608 (1978); see 8 Env't Rep. Cas. (BNA) at 2128 para. 13(b). The categorical electroplating standards cover 7752 existing firms with electroplating operations, the firms falling in three broad groups: independent "job shops," firms performing electroplating as their primary line of business; independent manufacturers of printed circuit board; and "captive operations," electroplating sections of firms which perform electroplating as part of their manufacture of another product. See 44 Fed. Reg. 52,593 (1979); 43 Fed. Reg. 6561-62 (1978). The electroplating standards divide those firms into seven subcategories, based on the electroplating process employed.*fn7 For each subcategory the standards, inter alia, set numerical limits on the dischargeable concentrations of cyanide and several metals (e.g., cadmium, chromium, copper, lead, nickel, and zinc). 40 C.F.R. §§ 413.14.-84 (1982). Electroplating sources discharging less than 10,000 gallons per day of electroplating process watewater have to meet limits for only lead, cadmium and amenable cyanide. Id. "Integrated" facilities, which combine the process wastestream from their captive electroplating operations with other wastewaters prior to pretreatment, are instructed to adjust their discharge limits using the combined wastestream formula. Id. § 413.04; see id. § 413.02(h).

13. The Administrator proposed the categorical electroplating standards on February 14, 1978, 43 Fed. Reg. 6560 (1978), and promulgated them on September 7, 1979, 44 Fed. Reg. 52,590 (1979), corrected, id. at 56,360. Following promulgation petitioners National Association of Metal Finishers and Institute for Interconnecting and Packaging Electronic Circuits filed petitions for review in this court. Nos. 79-2256, 79-2443. On March 7, 1980, those parties and EPA reached a settlement agreement ("the NAMF Settlement Agreement"). Addendum to Respondent's Brief at D-1 [hereinafter cited as "R. Add."]. Pursuant to that agreement the Administrator on July 3, 1980, proposed several amendments to the 1979 electroplating standards. 45 Fed. Reg. 45,322 (1980). In response to the petition for review of Ford Motor Co., No. 80-1008, EPA proposed other changes, 45 Fed. Reg. 19,245 (1980). Ford later filed a petition for reconsideration of the 1979 standards. J. App. at 2082. On January 28, 1981, the Administrator denied Ford's petition for reconsideration of the 1979 standards. J. App. at 2082. On January 28, 1981, the Administrator denied Ford's petition for reconsideration, 46 Fed. Reg. 9476 (1981), and promulgated the amendments to the electroplating standards, id. at 9462, corrected, id. at 30,625. The deadline for compliance with the electroplating standards for integrated facilities was set at three years from the effective date of the combined wastestream formula,*fn8 while non-integrated facilities had a compliance date of May 12, 1982, 46 Fed. Reg. 9462 (1981), later modified to April 27, 1984, 48 Fed. Reg. 2775 (1983); 46 Fed. Reg. 43,973 (1982).

14. On August 31, 1982, the Administrator published the proposed Metal Finishing regulations, which established BAT pretreatment standards for most of the indirect dischargers presently covered by the electroplating standards. 47 Fed. Reg. 38,462-63 (1982). Only existing job shops and printed circuit board manufacturers would remain under the electroplating standards, which would be amended to restrict the discharge of toxic organic pollutants. Id. at 38,464, 38,468. On July 15, 1983, the Administrator promulgated the Metal Finishing regulations. 48 Fed. Reg. 32,462 (1983) (to be codified at 40 C.F.R. § 433.10-17).

C. The Consolidated Cases

15. As noted above, National Association for Metal Finishers ("NAMF"), Institute for Interconnecting and Packaging Electronic Circuits ("IIPEC"), and Ford Motor Co. ("Ford") filed petitions for review of the 1979 electroplating standards. Nos. 79-2256, 79-2443, 80-1008. Ford, NAMF, General Motors Corp. ("GM"), and Metal Finishing Association of Southern California ("MFASC") petition for review of the 1981 electroplating amendments. Nos. 81-1279, 81-1351, 81-1712, 81-2119. Ford also petitions for review of the Administrator's denial of its petitions for reconsideration of the 1979 electroplating standards, No. 81-1214. We address that appeal in Ford Motor Co. v. EPA, 718 F.2d 55 (3d Cir. 1983).

16. Petitioners Natural Resources Defense Council ("NRDC"), United States Brewers Association ("USBA"), and Chemical Manufacturing Association ("CMA") petition for review of the 1978 general pretreatment regulations. Nos. 81-1977, 81-1978, 81-1979. Petitioners Ford, NAMF, CMA, NRDC, Interlake, Chicago Association of Commerce and Industry ("CACI") and others seek review of the 1981 general pretreatment regulations. Nos. 81-1210, 81-1981, 81-1982, 81-1983, 81-1984, 81-1985, 81-2150, 81-2151.

17. Consideration of the cases was necessarily held pending our resolution in NRDC v. EPA of the challenge to the Administrator's indefinite postponement of the 1981 general pretreatment amendments. Judge Becker of this Court then presided over a series of conferences in which he consolidated the cases, set a briefing schedule, and, on October 29, 1982, limited the subjects of briefing.*fn9

D. The Standard of Review

18. Under section 10(e) of the Administrative Procedure Act, we may not invalidate agency actions unless we find them to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A) (1976). This standard sets the level of deference with which we must review the agency's actions for their statutory authority, substantive validity and procedural regularity. See Weyerhaeuser Co. v. Costle, 191 U.S. App. D.C. 309, 590 F.2d 1011, 1024 (D.C. Cir. 1978).

19. We must extend "great deference to the interpretation given the statute by the officers or agency charged with its administration." EPA v. National Crushed Stone Association, 449 U.S. 64, 83, 66 L. Ed. 2d 268, 101 S. Ct. 295 (1980) (quoting Udall v. Tallman, 380 U.S. 1, 16, 13 L. Ed. 2d 616, 85 S. Ct. 792 (1965)); American Iron & Steel Institute v. EPA ("AISI I"), 526 F.2d 1027, 1041-42 (3d Cir. 1975), mandate recalled in part, 560 F.2d 589 (3d Cir. 1977), cert. denied, 435 U.S. 914, 98 S. Ct. 1467, 55 L. Ed. 2d 505 (1978). If an act is susceptible to more than one reasonable interpretation, we must accept any reasonable interpretation chosen by the agency. Udall v. Tallman, 380 U.S. 1, 16, 13 L. Ed. 2d 616, 85 S. Ct. 792 (1965); see NRDC v. Train, 421 U.S. 60, 75, 95 S. Ct. 1470, 43 L. Ed. 2d 731 (1975). If the agency rejects the reasonable interpretation of the statute, however, we must "honor the clear meaning of a statute, as revealed by its language, purpose and history." International Brotherhood of Teamsters v. Daniel, 439 U.S. 551, 556 n.20, 58 L. Ed. 2d 808, 99 S. Ct. 790 n.20 (1979); see FEC v. Democratic Senatorial Campaign Committee, 454 U.S. 27, 32, 37, 70 L. Ed. 2d 23, 102 S. Ct. 38 (1981).

20. Our inquiry into the substantive basis for the agency's actions must be searching and careful, but our review is a narrow one. As the Supreme Court has recently stated:

The scope of review under the arbitrary and capricious standard is narrow and a court is not to substitute its judgment for that of the agency. Nevertheless, the agency must examine the relevant data and articulate a satisfactory explanation for its action including a "rational connection between the facts found and the choice made." Burlington Truck Lines v. United States, 371 U.S. 156, 168, [9 L. Ed. 2d 207, 83 S. Ct. 239] (1962). In reviewing that explanation, we must "consider whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment." Bowman Transp. Inc. v. Arkansas-Best Freight System, [419 U.S. 281, 285, 42 L. Ed. 2d 447, 95 S. Ct. 438 (1974)], Citizens to Preserve Overton Park v. Volpe, [401 U.S. 402, 416, 28 L. Ed. 2d 136, 91 S. Ct. 814 (1971)]. Normally, an agency rule would be arbitrary and capricious if the agency has relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise. The reviewing court should not attempt itself to make up for such deficiencies: "We may not supply a reasoned basis for the agency's action that the agency itself has not given." SEC v. Chenery Corp., 332 U.S. 194, 196, 91 L. Ed. 1995, 67 S. Ct. 1575 (1947). We will, however, "uphold a decision of less than ideal clarity if the agency's path may reasonably be discerned." Bowman Transp. Inc. v. Arkansas-Best Freight Systems, [419 U.S. at] 286.

Motor Vehicle Manufacturers Association v. State Farm Mutual Automobile Insurance Company, 463 U.S. 29, 43, 103 S. Ct. 2856, 77 L. Ed. 2d 443, 51 U.S.L.W. 4953, 4956-57 (1983).

21. Our review of an agency's "observance of procedure required by law," 5 U.S.C. § 706(2)(D) (1976), is more exacting. NRDC v. EPA, 683 F.2d 752, 760 (3d Cir. 1982); see Weyerhaeuser, 590 F.2d at 1027-28. Under section 4 of the Administrative Procedure Act, an agency initiating informal rulemaking must first publish a general notice which includes "either the terms or substance of the proposed rule or a description of the subjects and issues involved." 5 U.S.C. § 553(b)(3) (1976). Such notice must "fairly apprise interested persons" of the subjects and issues dealt with in the rule ultimately promulgated. American Iron & Steel Institute v. EPA ("AISI II"), 568 F.2d 284, 290-93 (3d Cir. 1977); see Ethyl Corp. v. EPA, 176 U.S. App. D.C. 373, 541 F.2d 1, 48 (D.C. Cir. 1976) (en banc), cert. denied, 426 U.S. 941, 49 L. Ed. 2d 394, 96 S. Ct. 2663 (1976). The agency must then give interested persons an opportunity to participate in the rulemaking through the submission of written comments. 5 U.S.C. § 553(c) (1976). After considering the relevant comments submitted, the agency must incorporate in the promulgated rules "a concise general statement of their basis and purpose." Id. To ensure meaningful judicial review, the agency in that statement and in its supporting materials must articulate the rational basis for the choices it has made; however, as stated above, we "should not reverse an agency's decision that is not fully articulated where we can reasonably discern the basis for the agency's action." AISI I, 526 F.2d at 1047; see AISI II, 568 F.2d at 295-96.

22. Finally, we note that the Administrator's actions are entitled to a presumption of regularity. Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 415, 28 L. Ed. 2d 136, 91 S. Ct. 814 (1971). A party petitioning for review of an agency's regulations bears the burden of overcoming that presumption. Lewes Dairy v. Freeman, 401 F.2d 308, 316 (3d Cir. 1968), cert. denied, 394 U.S. 929, 89 S. Ct. 1187, 22 L. Ed. 2d 455 (1969); accord Environmental Defense Fund v. Costle, 211 U.S. App. D.C. 313, 657 F.2d 275, 283 n.28 (D.C. Cir. 1981). If after adequate notice and opportunity to comment a petitioner claims on appeal that the agency overlooked technical, factual and policy issues not raised in comments before the agency, that petitioner will have less latitude in its complaints, Weyerhaeuser, 590 F.2d at 1028, n.15, or in special circumstances will be barred altogether, AISI I, 526 F.2d at 1050; see American Frozen Food Institute v. Train, 176 U.S. App. D.C. 105, 539 F.2d 107, 134 (D.C. Cir. 1976).

II. THE GENERAL PRETREATMENT REGULATIONS

23. NRDC and all the other petitioners ("industrial petitioners") raise challenges to several provisions of the general pretreatment regulations, 40 C.F.R. §§ 403.1.-16 (1982). We consider those challenges in the following order: (A) the definitions of "interference" and "pass through;" (B) the definition of "new sources;" (C) the FDF variance provision; (D) the removal credits provision; and (E) the combined wastestream formula.

A. The Definitions of "Interference" and "Pass Through"

24. Section 403.3 of the general pretreatment regulations defines "interference" and "pass through." 40 C.F.R. § 403.3(i), (n) (1982). The industrial petitioners in their joint brief ("joint petitioners") and USBA contend that the breadth of the definitions of "interference" and "pass through" violates the Act because the definitions subject indirect dischargers to penalties without consideration of fault, causation or consequences. Joint petitioners argue that the definitions were improperly promulgated. We will grant the petitions for review in Nos. 81-1982, 81-1983, 81-1984, 81-2150, and 81-2151, and will remand the definition of both "interference" and of "pass through."

1. Interference

25. Section 307(b) of the Act directs the Administrator to promulgate pretreatment standards to prevent the discharge of any pollutant through a POTW which "interferes with, passes through or is otherwise incompatible with such works." 33 U.S.C. § 1317(b)(1) (1976 amended Supp. I 1977). Under that mandate the Administrator not only has promulgated the categorical pretreatment standards setting numerical limits upon discharges from certain regulated categories of industrial sources, but has also established a general prohibition applying to all non-domestic indirect dischargers whether or not they are subject to categorical pretreatment standards. See 40 C.F.R. § 403.5(a) (1982). That "prohibited discharge" standard contains a general prohibition of the introduction into a POTW of pollutants that "Pass Through a POTW or Interfere with the operation or performance of the works." Id. § 403.5(a). The prohibited discharge standard also specifically prohibits the introduction into a POTW of pollutants that in several specified ways cause interference.*fn10 Violation of the prohibited discharge standard is unlawful and renders the violator liable to suit by the Administrator, by the State, by the POTW, or by any adversely affected party. 33 U.S.C. §§ 1317(d), 1319(b), (c), (f), 1342(b)(7), 1365(a) (1976 & Supp. I 1977). Violations may carry civil penalties of up to $10,000 per day, and criminal penalties of up to $25,000 per day and two years in prison. Id. § 1319(c)(1), (d). In addition, if the violation is likely to recur the POTW is required to develop and enforce such specific effluent limits for its users as are necessary to ensure the POTW's future compliance with its NPDES permit.40 C.F.R. § 403.5(c)(2) (1982).

26. Section 403.3 provides the definition of "interference" as that term is used in the prohibited discharge standard. As originally promulgated in the 1978 general pretreatment regulations, section 403.3 defined "interference" as "an inhibition or disruption of a POTW's sewer system, treatment processes or operations which contributes to a violation of any requirement of [the POTW's] NPDES Permit." 43 Fed. Reg. 27747 (1978) (emphasis added). In 1979 the Administrator proposed to narrow the ambit of the definition by requiring an inhibition or disruption which "causes or significantly contributes" to the violation of the POTW's permit, and by including a "safe harbor" provision exempting from the definition inhibitions and disruptions caused by an indirect discharger "in compliance with specific prohibitions or standards developed by Federal, State or local governments." 44 Fed. Reg. 62,260, 62,265 (1979). As promulgated, however, the 1981 general pretreatment amendments omitted the safe harbor provision and defined "significantly contributes" using three numbered categories. 46 Fed. Reg. 9413 (1981). The amended regulations thus redefine "interference" as:

an inhibition or disruption of the POTW . . . which is a cause of or significantly contributes to either a violation of any requirement of the POTW's NPDES permit (including an increase in the magnitude or duration of a violation) or to the prevention of sludge use or disposal by the POTW . . . . An industrial user significantly contributes to such a permit violation or prevention of sludge use or disposal . . . whenever such User:

(1) Discharges a daily pollutant loading in excess of that allowed by contract with the POTW or by Federal, State or local law;

(2) Discharges wastewater which substantially differs in nature or constituents from the User's average discharge; or

(3) Knows or has reason to know that its Discharge, alone or in conjunction with Discharges from other sources, would result in a POTW permit violation or prevent sewage use or disposal . . . .

40 C.F.R. § 403.3(i) (1982).

27. Joint petitioners allege that the present definition is contrary to the Act because it renders an indirect discharger liable for interference even though its discharges did not cause the POTW's permit violation or sludge problem. They posit that an industrial user may be held liable if discharging more than average or beyond its contract limit, even though it is the discharge of another user of the POTW, or a malfunction or mistake at the POTW itself, that actually causes the inhibition or disruption. Joint petitioners contend that Congress did not intend to subject indirect dischargers to liability without proof of causation.

28. EPA argues that joint petitioners have misread the definition. EPA urges that the definition requires that causation be shown before liability is established. In its brief EPA emphasizes that an industrial user's discharge must "lead to" or "give rise to" the inhibition or disruption. Brief for Respondent (No. 79-2256) at 125-27. At oral argument EPA's counsel asserted that to prove liability the Administrator must show that the discharge both caused the inhibition or disruption and fell within the three categories defining "significantly contributes." Transcript of Oral Argument at 133, 136. We cannot agree. The words "leads to" and "gives rise to" do not appear in the definition. Instead, the promulgated definition requires only that the discharge "is a cause of or significantly contributes," and defines "significantly contributes" by substituting three categories of discharger misconduct, at least two of which exclude any necessity for proving that the discharge caused the inhibition or disruption. 40 C.F.R. § 403.3(i)(1), (2) (1982).*fn11 If the Administrator has not written the definition to require causation, we cannot rewrite the definition to match the representations of counsel.*fn12

29. Given that section 403.3(i)'s definition of interference does not require causation to establish liability, we must now consider whether liability without causation is within the intent of Congress. We find that neither the language of the Act nor the intent of Congress appears to contemplate liability without causation. First, sections 307(b) and (c) requires that pretreatment standards "prevent the discharge of any pollutant . . ., which pollutant interferes with such works." Id. § 1317(b), (c) (1976 & Supp. I 1977) (emphasis added). Section 307(c) explains that such standards must be promulgated "to insure that any source introducing pollutants into a [POTW] . . . will not cause a violation of the effluent limitations of such treatment works." Id. § 1317(c) (1976) (emphasis added).

30. Second, Congress made plain its intent that "in no event is it intended that pretreatment facilities be required for compatible wastes as a substitute for adequate municipal waste treatment works." S. Conf. Rep. No. 1236, 92d Cong., 2d Sess. 130, reprinted in 1972 U.S. Code Cong. & Ad. News 3776, 3807; accord H.R. Rep. No. 911, 92d Cong., 2d Sess. 113, reprinted in Senate Comm. on Public Works, 93d Cong., 1st Sess., Legislative History of the Water Pollution Control Act Amendments of 1972, at 753, 800 (1973) [hereinafter cited as "1972 Legis. Hist."].*fn13 If the inhibition or disruption is caused not by the industrial user's discharge but by a mistake or malfunction at the POTW, the industrial user will be punished for failing to substitute its own pretreatment for the POTW's impaired treatment. We do not think that Congress intended such liability. See also AISI I, 526 F.2d at 1056 (rejecting penalties for circumstances beyond discharger's control).

31. We conclude that given the language and purpose of the Act, an indirect discharge cannot be liable under the prohibited discharge standard unless it is a cause of the POTW's permit violation or sludge problem. If the definition of "interference" required that an indirect discharger be both "the cause of" and "significantly contribute to" the POTW's permit violation, it would be consistent with that causation requirement. As written, however, the definition fails to require such causation, and thus violates the clear meaning of the Act.*fn14 We will therefore remand the entire definition of interference*fn15 to the Administrator.*fn16

2. Pass Through

32. Joint petitioners allege that the definition of pass through in 40 C.F.R. § 403.3(n) (1982) was promulgated without the notice and comment required under section 4 of the Administrative Procedures Act, 5 U.S.C. § 553(c) (1976). They point out that the amendments proposed in 1979 contained no suggestion that the Administrator intended to use or to define the term "pass through" in the general pretreatment regulations. See 44 Fed. Reg. 62,260-71 (1979). The Administrator nonetheless promulgated the definition of "pass through" in the 1981 general pretreatment amendments, justifying his failure to first propose the definition by saying that it was "almost identical" to the promulgated definition of interference. 46 Fed. Reg. 9416 (1981).

33. EPA now admits that the definition of "pass through" was promulgated without the notice and comment required by the Administrative Procedure Act. Brief for Respondent (No. 79-2256) at 132-33. EPA suggests that for that reason we should remand the definition to the Administrator; nevertheless, it contends that we are not barred from passing on the definition's substantive validity. Id. at 133 & n.*. We believe that it would be fruitless for us to review the definition before it has been submitted for public comment. We will therefore remand the definition of "pass through" in section 403.3(n) to the Administrator.*fn17

B. Definition of "New Source"

34. "New source" is defined in section 403.3(k) of the general pretreatment regulations, 40 C.F.R. § 403.3(k) (1982). Under that definition, if the Administrator fails to promulgate a new source pretreatment standard within 120 days of its publication, those sources whose construction began after the publication but before the promulgation of the proposed standard are not considered to be new sources. Petitioner NRDC argues that by excluding those sources the definition is inconsistent with the Act and is contrary to our holding in Pennsylvania Department of Environmental ...


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