Editors' Summary: This is the second of two articles in this issue concerning the Third Circuit's recent decision on EPA's pretreatment regulations. The first article, 14 ELR 10039, discusses all but one of the issues reached by the court in National Association of Metal Finishers v. Environmental Protection Agency, 13 ELR 21042, a decision that resolved finally most questions about the pretreatment program. The remaining issue, the legality of "fundamentally different factors" (FDF) variances from categorical pretreatment standards, is a controversial one with major implications for EPA's regulation of direct water pollution discharges as well. The Third Circuit accepted the arguments of the Natural Resources Defense Council, Inc. (NRDC) and ruled that Congress outlawed FDF variances from all categorical standards governing toxic pollutants in 1977 when it added §301(1) to the FWPCA. Industry has filed a petition for certiorari on this issue and the government reportedly will follow suit.

In this Article, Mr. Want examines the Third Circuit's ruling on FDF variances in light of the history of categorical effluent standards and FDF variances for direct dischargers. He argues that the FDF variance was an essential part of a compromise sanctioned by the Supreme Court that allowed EPA to take the shortcut of one-step, mandatory categorical effluent limits through the complex regulatory process dictated by Congress for controlling pollution from factories discharging directly to the nation's rivers and streams. EPA later used the same approach in the pretreatment program. Reviewing the parties' arguments on the issue in Metal Finishers, Mr. Want concludes that, while both sides have merit, the NRDC position adopted by the Third Circuit is flawed because it removes one of the essential working parts from the basic FWPCA regulatory mechanism upheld by the Supreme Court: the combination of categorical standards and FDF variances.