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Duquesne Light Co. v. EPA

ELR Citation: 13 ELR 20251
Nos. No. 80-2103, 698 F.2d 456/18 ERC 1489/(D.C. Cir., 01/07/1983)

The court upholds Environmental Protection Agency (EPA) regulations implementing the Clean Air Act's §120 noncompliance penalties. The court first rules that, with one exception, EPA was correct in construing the applicability of $120 broadly. EPA properly applied the penalties to sources operating in compliance with federal or state consent decrees but in violation of state implementation plans (SIPs) or other legal requirements. The court also rules that as a general matter EPA did not err in applying §120 penalties to sources in violation of federally approved SIPs but in compliance with pending revisions to those SIPs. However, it remands the regulations for changes providing that §120 penalties be held in abeyance for such a source once the deadline for EPA action on the revision has passed.

The court rules that EPA correctly defined several key terms in its regulations. The Agency was consistent with the statute and precedent in (1) defining "owner or operator" of a violating facility to include lessees and supervisors, (2) defining the "potential to emit" of the "major sources" covered by the most stringent requirements of §120 in terms of their maximum design capacity with emission controls installed, and (3) including fugitive emissions regulated in the SIP as part of a source's potential emissions.

On all but one issue, the court affirms EPA's interpretation of two mandatory exemptions from §120 penalties. The court holds that EPA reasonably excluded technological impossibility from the list of conditions qualifying as an inability-to-comply exemption. However, it rules that EPA erred in limiting the exemption to seven specific situations. On the other hand, the court rules that EPA was reasonable in not defining precisely when the ability to comply of another entity that "controls" the violator would disqualify it from this exemption. The issue is one properly left to the fact finder. The court also holds that EPA's determination that the source must have received a delayed compliance order to qualify for an inability-to-comply exemption was consistent with §120(a)(2)(B)(iv). The second challenged exemption applies to violations due solely to conditions for which a temporary emergency suspension is authorized by §110(f) or (g). The court rules that EPA properly limited the exemption to cases where the suspension had in fact been granted. The court also affirms EPA's rules governing the §120(a)(2)(C) exemption for violations that are de minimis in nature and duration.

The court substantially upholds EPA on challenges to its procedures specified in the §120 regulations. It remands provisions allowing rejection of petitions challenging liability for the penalties, but upholds those (1) leaving reconsideration of penalty calculations to the Administrator's discretion, (2) providing only informal hearings on de minimis exemption requests, and (3) providing for waiver of claims not timely raised in petitions challenging penalty assessments. The court also affirms the EPA rule delaying judicial review of final administrative actions in the assessment process until the penalty itself is assessed and challenged.

The court affirms EPA's model for calculating the penalties, rejecting petitioners' challenges to (1) data assumptions in the model, (2) EPA's failure to allow credits for interim controls that do not reduce emissions, and (3) its use of prorated, rather than dollar-for-dollar, credits for actual control expenditures. Finally, the court rules that §120 does not require a special "safety valve" variance. The exemptions provided in EPA's regulations provide adequate protection against inequity.

Counsel for Petitioners
Jeffrey O. Cerar, Glenn M. Young Jr., J. Van Carson, Kenneth C. Moore
Squire, Sanders & Dempsey
1201 Pennsylvania Ave. NW, Washington DC 20004
(202) 626-6600

Christopher R. Schraff, J. Jeffrey McNealey, Robert L. Brubaker, William J. Kelly Jr., Charles S. Carter
Porter, Wright, Morris & Arthur
37 W. Broad St., Columbus OH 43215
(614) 227-2000

Alfred V. J. Prather, J. William Doolittle
Prather, Seeger, Doolittle & Farmer
1101 16th St. NW, Washington DC 20036
(202) 296-0500

Thomas H. Truitt, Thomas W. Brunner, D. Michael Freeman, Mark R. Joelson
Wald, Harkrader & Ross
1300 19th St. NW, Washington DC 20036
(202) 828-1200

Patrick C. Joyce; David F. Zoll, General Counsel
Chemical Manufacturers Ass'n, 2501 M St. NW, Washington DC 20037
(202) 887-1100

Counsel for Petitioners-Intervenors
Andrea S. Bear, Henry V. Nickel, Mark G. Weisshar
Hunton & Williams
1919 Pennsylvania Ave. NW, Washington DC 20006
(202) 223-8650

Gary H. Baise, Charles A. Patrizia, Scott W. Bowen
Beveridge & Diamond
1333 New Hampshire Ave. NW, Washington DC 20036
(202) 828-0200

Counsel for Defendant
William F. Pedersen, Christopher C. Herman, Todd M. Joseph; Robert M. Perry, General Counsel
Environmental Protection Agency, Washington DC 20460
(202) 382-4134

Dean K. Dunsmore, Michael W. Neville, Donald W. Stever
Land and Natural Resources Division
Department of Justice, Washington DC 20530
(202) 633-2800

Counsel for Intervenor
Ronald J. Wilson, Richard E. Ayres
Natural Resources Defense Council, Inc.
1725 I St. NW, Washington DC 20006
(202) 223-8210

Before: ROBINSON, Chief Judge; MIKVA, Circuit Judge and BAZELON, Senior Circuit Judge.