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National Ass'n of Metal Finishers v. EPA

ELR Citation: 13 ELR 21042
Nos. Nos. 70-2256 et al., 719 F.2d 624/19 ERC 1785/(3d Cir., 09/20/1983)

The court upholds in part and remands in part Environmental Protection Agency (EPA) general pretreatment regulations and categorical pretreatment standards for the electroplating industry under §307(b) of the Federal Water Pollution Control Act (FWPCA). The court first addresses the general pretreatment regulations, which establish requirements applicable to all industrial facilities that discharge wastewater to municipal sewage treatment plants and establish procedures for developing regulations governing individual industrial categories. The court rules that EPA's prohibition of discharges that "interfere" with the operation of a receiving sewage treatment plant was inconsistent with the language and legislative history of the Act because the prohibition failed to require that the discharge cause or significantly contribute to an effluent limitation violation at the treatment plant or render its sludge unusable. The court also remands EPA's definition of discharges that "pass through" the treatment plant since EPA admits that the definition was promulgated without notice and comment. The court rules that §306(a)(2) of the FWPCA requires that any facility on which construction is started after proposal of an applicable pretreatment standard be considered a "new source," even if EPA fails to promulgate the standards within 120 days of proposal as required in §306(b)(1)(B) of the Act.

The court remands the "fundamentally different factors" (FDF) variance provision in the general regulations. It rules that the Act does not espressly authorize such variances and that the Supreme Court's decision in E.I. DuPont de Nemours & Co. v. Train, 7 ELR 20191, did not require them in the pretreatment program. However, the court declines to decide whether it is within EPA's discretion to allow such variances as a general matter, ruling that the Act prohibits variances from pretreatment standards governing toxic pollutants. Finding that the FDF variance qualifies as a "modification," the court holds that §301(l) bars modifications of pretreatment standards for toxics as well as for best available technology standards for discharges directly to surface waters.

The court upholds the general pretreatment provision governing "removal credits," which allows relaxation of categorical standards for pollutants that the sewage treatment plant will effectively remove. EPA properly allowed removal credits only where the municipality operating the sewage treatment plant had an EPA-approved pretreatment program. While the statute is silent on this issue, the legislative history indicates that Congress intended to limit the availability of removal credits to municipalities with approved programs. The provision is not unworkable as charged by petitioners.

The court also upholds EPA's combined wastestream formula setting out a methodology for calculating categorical pretreatment standards for integrated facilities, which combine wastestreams from different processes each of which has its own categorical standards. The court rules that EPA acted within its broad discretion in dividing industries into process categories. While petitioners correctly point out that the combined wastestream formula can present an integrated facility with a "moving target" as EPA promulgates new standards for one process at a time, this does not render the EPA action arbitrary and capricious. EPA could reasonably have concluded that the resulting uncertainty was warranted by the simplicity and uniformity of the combined wastestream formula. Even though the proposed standards required segregation of wastestreams, petitioners had adequate notice of the combined wastestream formula because it was developed in response to comments on the proposal. Petitioners' claims that the formula will result in unattainable standards and that EPA failed to consider costs are not ripe until raised in a challenge to a specific categorical standard.

Turning to the categorical pretreatment standards for the electroplating industry, the court first upholds EPA's methodology. The court, deferring to EPA's technical expertise, upholds the Agency's use of regression analysis instead of empirical data in calculating standards for several pollutants. EPA's use of treatability data on one group of pollutants as the basis of standards for a second group is not fatally flawed since petitioners failed to carry their burden of demonstrating that the data were not transferable.

The court rejects petitioners' argument that the standards are invalid because they are not economically achievable. Initially, the court rejects EPA's argument that petitioners are barred from raising the issue by the terms of a settlement agreement between the parties, since EPA itself violated the terms of the agreement. The court finds that the categorical standards are based on "best practicable technology" (BPT) requirements, which need not be economically achievable. EPA reasonably conducted the limited cost-benefit analysis required by the FWPCA for BPT standards. It considered the net costs and pollution reduction benefits of the proposed standard. The court rules that EPA was obligated also to consider the costs and pollution reduction benefits at the margin, and that although EPA disputed the need for such analysis, it satisfied the requirement when it reviewed the controls on which the standards were based and relaxed some of them to save industry money. Finally, the court rules that the FWPCA requires that integrated facilities comply with the categorical standards within three years of their effective date in 1981, even though EPA's subsequent wrongful suspension of the effective date will result in many companies getting a late start in complying with the standards.

A concurring opinion would make clear that an EPA definition of cinterference" consistent with the definition urged by the Agency at oral argument satisfies the FWPCA.

[A related decision is published at 13 ELR 21038 — Ed.]

Counsel for Petitioners
Theodore L. Garrett, Constance J. Chatwood, Corinne A. Goldstein
Covington & Burling
P.O. Box 7566, Washington DC 20044
(202) 662-6000

Turner T. Smith, E. Milton Farley III, William B. Ellis, Manning Gasch Jr.
Hunton & Williams
P.O. Box 1535, Richmond VA 23212
(804) 788-8200

Norman Bernstein, Douglas E. Cutler
Ford Motor Co. World Headquarters
The American Rd., Detroit MI 48121
(313) 322-3554

Louis E. Tosi, William L. Patberg
Fuller & Henry
P.O. Box 2088, Toledo OH 43603
(419) 255-8220

James T. Harrington, Dixie L. Laswell, Edward P. Kenney
Rooks, Pitts, Fullagar & Poust
Xerox Ctr., Suite 1500, Chicago IL 60603
(312) 372-5600

Michael K. Glenn, Gary R. Feulner
Chadbourne, Parke, Whiteside & Wolff
Suite 900, 1101 Vermont Ave. NW, Washington DC 20005
(202) 289-3000

Counsel for Respondents
Barry S. Neuman, Michael W. Steinberg, George B. Henderson, Lee R. Tyner, Jose R. Allen
Land and Natural Resources Division
Department of Justice, Washington DC 20530
(202) 633-2664

Michael Dworkin, Michael Murchison, Ellen Siegler, Daniel J. Berry
Office of the General Counsel
Environmental Protection Agency, Washington DC 20460
(202) 382-4134

Counsel for Intervenor
Alan S. Miller, Frances Dubrowski, J. Taylor Banks
Natural Resources Defense Council, Inc.
1725 I St. NW, Suite 600, Washington DC 20006
(202) 223-8210

Hunter, J., joined by Gibbons and Becker, JJ.