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Union Oil Co. of Cal. v. EPA

Citation: 17 ELR 21020
No. No. 85-1326, 821 F.2d 678/26 ERC 1215/(D.C. Cir., 06/19/1987)

The court holds that the "state standard limitation" in the Environmental Protection Agency's (EPA's) final lead phasedown regulations is reasonable. The regulations allow gasoline producers who bring their gasoline lead content below that required by federal law to "bank" those credits and use them later as the lead content standards become progressively stricter. The regulations do not allow the banking of credits for reductions achieved solely because of compliance with a state standard that is stricter than the national standard, a limitation that only affects California. The court first holds that even if EPA did not strictly comply with the notice requirements of Clean Air Act § 307 by not including notice of its rationale for the state standard limitation in the notice of the proposed lead banking rule, the procedural error is harmless because the gasoline producers had actual notice of EPA's rationale at a public hearing on the proposed rule at which the producers had an opportunity to comment before the rule became final. The court holds that EPA did not comply with § 307 by failing to include in the docket an internal EPA memorandum regarding the economic effects of the rule before it was promulgated. The court holds, however, that the procedural error was harmless. Even though EPA identified the memorandum as a basis for the final rule, there was no evidence that there was a substantial likelihood that the rule would have been changed for economic reasons, since the purpose was to ensure that the lead banking scheme would not increase the overall amount of lead used in gasoline. The court rejects arguments that the state standard limitation is arbitrary and capricious, violates due process, and denies equal protection by discriminating against California producers, since the standard is clearly designed to promote public health. The court also rejects arguments that the standard violates the Tenth Amendment since it in no way coerces California to change its lead standard, but in fact accommodates the state's stricter standard.

Counsel for Petitioners
Patrick M. Raher
Hogan & Hartson
815 Connecticut Ave. NW, Washington DC 20036
(202) 331-4500

Counsel for Respondents
Bonnie A. Sullivan
Land and Natural Resources Division
Department of Justice, Washington DC 20530
(202) 633-2000

Before: BORK* and SILBERMAN, Circuit Judges, and WRIGHT, Senior Circuit Judge.