On Petition for Review from the United States Environmental Protection Agency.
Sloviter, Becker, Circuit Judges and Cowen, District Judge.*fn*
This is a petition for review of the Environmental Protection Agency's denial of a request to redesignate an area in Western Pennsylvania to "attainment" status under the Clean Air Act. 42 U.S.C. §§ 7401-7642 (1982). Resolution of the petition itself would require us to determine whether petitioner West Penn Power Company's construction of a tall (3O7-meter) smokestack in reliance on EPA's formal approval of a state implementation plan incorporating the construction of such stack can insulate the company from future, more stringent regulations, which render the state's plan inadequate because of the stack's excessive height. This opinion, however, addresses the question whether we have jurisdiction over the petition in view of the fact that there is a petition for reconsideration still pending before the agency.
Long after this case was argued, in a footnote to a supplemental letter-brief, West Penn brought to our attention that prior to bringing its petition for review in this Court it had petitioned EPA for reconsideration of its determination that Armstrong County was not in attainment status and that the reconsideration petition was still pending before EPA. Believing that this might raise serious questions about our jurisdiction, we solicited memoranda from the parties as to the effect of the outstanding petition for reconsideration on our jurisdiction. In their responsive submissions, the parties both argued that it had no effect. However, we have an independent duty to examine our jurisdiction. See Bender v. Williamsport Area School District, 475 U.S. 534, 541, 89 L. Ed. 2d 501, 106 S. Ct. 1326 (1986).
Whether an agency order is final and thus reviewable in a court of appeals when a party has petitioned for agency reconsideration is a difficult question that has divided the courts of appeals. Compare Northside Sanitary Landfill, Inc. v. Thomas, 804 F.2d 371, 378-79 (7th Cir. 1986) (allowing simultaneous agency and court jurisdiction) and American Trucking Associations, Inc. v. ICC, 225 U.S. App. D.C. 256, 697 F.2d 1146, 1148 n.* (D.C. Cir. 1983) (same) with Winter v. ICC, 851 F.2d 1056, 1062 (8th Cir. 1988) (disallowing simultaneous jurisdiction).*fn1 The language of 5 U.S.C. § 704 (1982), the relevant portion of the Administrative Procedure Act ("APA"), seems on its face to permit such simultaneous jurisdiction, see infra. The American Trucking and Northside opinions of the D.C. Circuit and 7th Circuit, supra, rely on that plain language. However, the Supreme Court's recent decision in ICC v. Brotherhood of Locomotive Engineers, 482 U.S. 270, 107 S. Ct. 2360, 2368-69, 96 L. Ed. 2d 222 (1987), interprets section 704 differently. For the reasons that follow, we come to the conclusion that the pendency of the reconsideration petition deprives the agency decision of finality and thus puts it beyond our present ability to review.
West Penn Power is an electric utility in Western Pennsylvania. West Penn's coal-fired Armstrong generating station is primarily responsible for the high levels of sulfur dioxide in the local (Armstrong County) air quality region. Attainment status for the region depends on the extent of credit allowable for improvements in local air quality that stem from the dispersive effect of the 307-meter smokestack.
This dispute results from a long-standing controversy about the extent to which a power company can obtain Clean Air Act credit for reducing pollutants in the immediate vicinity of a power plant by sending the pollutants elsewhere by means of an extraordinarily high smokestack. The "elsewhere" is the rub, for smoke from high stacks, while avoiding the downward-pulling effect of wind currents hitting low-lying obstacles, tends to catch the high winds and is generally regarded as the cause of "acid rain." The original Clean Air Act Amendments of 1970 left this issue open and led to varying policy decisions and statutory interpretations among the courts and EPA. See Sierra Club v. EPA, 231 U.S. App. D.C. 192, 719 F.2d 436, 440 (D.C. Cir. 1983), cert. denied, 468 U.S. 1204, 104 S. Ct. 3571, 82 L. Ed. 2d 870 (1984) (discussing case law and regulatory history). However, in 1977, Congress attempted to resolve the issue by adding section 123 to the Clean Air Act, clearly pronouncing a preference for pollution reduction rather than pollutant dispersion, and "bann[ing] virtually all reliance on tall stacks or 'any other dispersion technique' in achieving compliance with ambient air quality standards." Id. (quoting § 123(a), 42 U.S.C. § 7423(a) (Supp. V 1981)).
Section 123 declares that no source of pollution can get credit for any improvements in local air quality that merely stem from the dispersive effect of a stack that exceeds that height mandated by "good engineering practice," or "GEP." West Penn's huge Armstrong Station stack was nonetheless built in conformity with and in reliance upon proposed regulations promulgated by EPA pursuant to section 123 on January 12, 1979. In fact EPA approved Pennsylvania's 1981 revision to its state implementation plan ("SIP"), which required West Penn to replace its two 70-meter stacks with one 307-meter stack. A SIP is a statutorily required roadmap for achieving and maintaining air quality attainment status in each of a state's air quality regions, and the SIP approval indicated EPA's belief that this new stack would allow Armstrong County to attain national ambient air quality standards ("NAAQS").
However, EPA's proposed regulations, upon which West Penn relied in constructing its tall stack, were significantly altered in their final form. Final regulations, which were much less stringent than the 1979 proposed rules, were promulgated in 1982, but were in turn invalidated by the decision in Sierra Club, supra. This decision led EPA to promulgate, in 1985, regulations so stringent that they rendered West Penn's previously conforming 307-meter stack well beyond GEP height.
Applying these more stringent stack height regulations to the Armstrong stack, it became clear that their disallowance of credit for any pollution reduction that stems from the extraordinary height of the stack would render Armstrong County no longer in attainment status. Pennsylvania nevertheless requested that EPA act on the state's long-standing request to redesignate the county to attainment status, insisting that EPA "honor its previous commitment" under the 1979 regulations and 1981 SIP approval. EPA solicited notice and comment on Pennsylvania's proposal and, on February 5, 1987, published a final rule denying Pennsylvania's reclassification request, primarily because no showing had been made that the Armstrong stack was in compliance with the 1985 ...