General Motors Corp. v. United States: A Boon to Clean Air Act Enforcement

Editors' Summary: In June, the Supreme Court handed the Environmental Protection Agency's Clean Air Act enforcement program a significant victory. The Court held that EPA is not required to act on a proposed SIP revision within four months and is not barred from enforcing the existing SIP if it does not act on the proposal within a reasonable time. This Comment describes the "four-month rule" for revisions and the enforcement bar that created the split in the circuits, and it analyzes the opinion. The author notes that the opinion creates confusion concerning the remedy for agency delay and argues that the proper remedy lies with the courts of appeals.

[20 ELR 10471]

In its first ruling on a Clean Air Act enforcement issue,¹ the Supreme Court handed the Environmental Protection Agency (EPA) a stunning and solid victory in General Motors Corp. (GM) v. United States.² In a 9-0 decision, the Court held that EPA is not required to act on state implementation plan (SIP) revisions within four months. Reversing all lower courts that had ruled on the issue,³ the Court held that the "four-month rule" applies only to the original promulgation of SIPs and not to revisions. The Court held that EPA is not barred from enforcing an existing SIP when the Agency has failed to complete its review of a proposed revision in a timely manner. With both issues resolved in EPA's favor, the Clean Air Act enforcement program can proceed on more solid footing. What remains unclear, however, is an air pollution source's remedy for EPA delay in acting on a SIP revision.

This Comment reviews the GM case and the split in the circuits that prompted the Supreme Court to take it. The Comment then describes the Supreme Court opinion, which focuses on statutory language rather than on policy. It concludes that, while the decision provides EPA with certainty for its enforcement program, it creates uncertainty for sources seeking a remedy for agency delay. It argues that the proper remedy for such a case should be in the courts of appeals.

The GM Case

GM owns an automobile assembly plant in Framingham, Massachusetts, that emits volatile organic compounds (VOCs). VOCs react with other chemicals in the atmosphere to form ozone, a principal component of smog. Because Massachusetts is a nonattainment area for ozone, the Massachusetts SIP, which EPA approved in 1980, required stringent limits on VOC emissions from painting operations at automobile coating facilities. The SIP required full compliance by December 31, 1985.

In October 1981, EPA published a policy that would allow for extensions until 1986 or 1987 for installation of new technologies, such as conversion of lacquer paints to the basecoat/clearcoat process (BC/CC).⁴ Revisions, however, would have to comply with statutory requirements of implementation of reasonably available control technology (RACT) as expeditiously as practicable and "reasonable further progress."⁵

Although GM requested extensions for three of its assembly plants in other states within 10 days of the policy's publication, GM waited until November 1984 to submit its request that Massachusetts extend the December 31, 1985, deadline to December 31, 1987, to give GM additional time to install emission controls on its lacquer coating lines. The Commonwealth of Massachusetts never [20 ELR 10472] submitted the request as a SIP revision to EPA. Eight months later, GM requested the same extension but proposed converting to BC/CC. On December 30, 1985 (one day before the compliance deadline), the Commonwealth submitted a SIP revision to EPA proposing an extension of the compliance deadline until August 31, 1987.

EPA's Region I began reviewing the SIP revision. At the same time, EPA entered into negotiations with Massachusetts and GM to resolve GM's noncompliance with the existing SIP. Five months after submitting the request, the Commonwealth asked EPA to delay action on the revision pending the outcome of the negotiations on the delayed compliance order. On August 14, 1986, a month after Region I submitted a proposed disapproval of the SIP revision to EPA Headquarters, EPA issued a notice of violation alleging that from January 1, 1986, to June 30, 1986, GM violated the SIP emission limits for VOC content.

On August 17, 1987, the United States filed an enforcement action against GM under § 113 of the Clean Air Act.⁶ After proposing disapproval of the SIP revision in December 1986, EPA issued a final disapproval of the revision in September 1988 on the basis of its failure to meet RACT as expeditiously as practicable as well as other requirements of the 1981 policy. By then, the district court had dismissed EPA's enforcement action and GM had closed its lacquer plant and was operating a BC/CC facility.

The district court dismissed the action, concluding that § 110(a)(3) imposed a four-month time limit on EPA's review of a proposed SIP revision.⁷ Because EPA had exceeded the deadline, the court reasoned, it was barred from enforcing the existing SIP for violations that occurred after the end of the four months and before the Agency took final action. According to the court, this bar would provide sufficient incentive for EPA to act on SIP proposals within four months.

The Court of Appeals for the First Circuit, however, reversed the dismissal and remanded the case for consideration of penalties.⁸ In keeping with previous decisions of the D.C., Second, and Fifth Circuits,⁹ the court found that the reference to § 110(a)(2),¹⁰ governing original SIPs, in § 110(a)(3)(A),¹¹ governing SIP revisions, incorporates both substantive and procedural provisions. Stressing the important role of the states in implementing the Clean Air Act, the court concluded that Congress would not have wanted the states' "policy choices to be held hostage to the EPA's schedule."¹² Furthermore, the court noted that the imposition of the four-month rule avoided "the possibility that the Agency would have assigned a lower priority to SIP revisions from First Circuit states than to those from states in circuits that had imposed a deadline."¹³

While the First Circuit affirmed the four-month rule, it disagreed with the remedy that barred EPA from enforcing the existing SIP. Reasoning that an enforcement bar was too drastic a remedy, the court found the appropriate remedies in the statute: a suit to compel agency action under § 304(a)(2)¹⁴ or a request pursuant to § 113(b)¹⁵ for reduction or elimination of penalties during the period in which the unreasonable delay resulted in prejudice. The court found the latter remedy applicable and remanded to the district court to assess appropriate penalties.

The Split in the Circuits

Five courts of appeals considered the issue of whether EPA must act on a SIP revision within four months.¹⁶ While all found EPA bound by the four-month rule, three courts — the First, Fifth, and D.C. Circuits — fashioned a variety of remedies for EPA's delay.¹⁷ The Second Circuit addressed the issue only in passing, and the Sixth Circuit followed the remedy of the First Circuit.¹⁸

D.C. Circuit

In the first case to consider the issue, the Court of Appeals for the District of Columbia Circuit in Duquesne Light Co. v. EPA¹⁹ found that EPA should be barred from assessing § 120 penalties against sources out of compliance with the SIP but in compliance with the proposed revision regardless of how long EPA takes to act on the revision.²⁰ According to the court, such an inequitable use of penalty powers violated congressional intent. Nor did the court believe that petitioner's right to compel EPA to perform under § 304(a) acts as an adequate safeguard.²¹ The court reasoned that if the SIP were ultimately approved, the penalty assessed from the period between the time limit and the approval would be the result of EPA's failure to act in a timely manner, not the failure of the source to comply. If, on the other hand, the penalty were tolled once the deadline had passed, the noncomplying source would benefit undeservedly when the SIP was ultimately disapproved.²² Therefore, the court remanded the regulation concerning § 120 penalties to EPA with directions to [20 ELR 10473] develop a regulation "so that once the statutory deadline for acting on a SIP revision passes, the noncompliance penalty is held in abeyance pending final action on the SIP by EPA. Should EPA ultimately reject the SIP, the penalty should be calculated back to the deadline, with interest."²³

Fifth Circuit

The Court of Appeals for the Fifth Circuit fashioned a harsher remedy in American Cyanamid v. EPA.²⁴ Unlike the D.C. Circuit, which addressed a challenge to EPA regulations, the Fifth Circuit addressed an actual case in which Louisiana had submitted a proposed revision to EPA four months before EPA issued a notice of noncompliance to the company. After four years, EPA had still not acted on the SIP revision. The court found that EPA's failure to comply with the statute should affect not only its right to adjudicate the amount of the § 120 penalty but also its authority to bring § 120 proceedings.²⁵ To the Cyanamid court, the Duquesne remedy provided little or no incentive for EPA to abide by the four-month rule: "EPA loses nothing by its contumaciousness."²⁶ Furthermore, the court found that the Duquesne remedy may provide an incentive for EPA to reject revisions it would otherwise approve.

Stressing the importance of federal-state cooperation in implementing standards and enforcing the Clean Air Act, and rebuking the D.C. Circuit for failing to recognize this relationship, the FifthCircuit held that EPA was barred from collecting penalties from the period between four months after a state submits a proposed revision and the date EPA rejects the revision. The court ruled that EPA may therefore collect penalties only for violations that occur after EPA rejects the revision.²⁷ According to the court, if EPA collects less than it could retroactively under Duquesne, "it is because of its own failure to act within the time limits of the Act."²⁸ Furthermore, the court found that when EPA issues a notice of noncompliance more than four months after a state submits a revision, it may not commence a § 120 proceeding until it rejects the revision.²⁹

First Circuit

In GM,³⁰ the Court of Appeals for the First Circuit attempted to steer a middle course between the remedies fashioned by the D.C. and Fifth Circuits. While the court recognized that the Fifth Circuit's enforcement bar would provide the greatest incentive for EPA to act on proposals within four months, it also recognized EPA's inability to meet the deadline. It noted that an enforcement bar harms not EPA, but the public. On the other hand, it believed that the D.C. Circuit's solution provides too little incentive for EPA to act in a timely manner. Instead, the court adopted a twofold remedy. First, the aggrieved company may bring suit in district court to compel Agency action under § 304(a)(2) of the Act. The district court should use a standard of reasonableness and assess EPA's failure to meet the four-month deadline as one factor to consider.

Second, the district court may consider the reasonableness of EPA's delay and the resulting prejudice to the company as one of the factors to consider as it assesses penalties under § 113(b): "If, for example, a trial court finds that the review process should have taken ten months rather than two years, it may decline to award penalties for the fourteen months of unwarranted delay."³¹ By fashioning a remedy that, short of an enforcement bar, provides an incentive for EPA to act, the court believed it both avoided the public's bearing the brunt of Agency delay and protected the states' interests.³²

The Supreme Court Decision

To resolve the split in the circuits on whether EPA is barred from enforcing an existing SIP if it fails to act on a proposed SIP revision within four months or a reasonable time, the Supreme Court granted certiorari. Ignoring the government's Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc.³³ arguments and its policy arguments, the Court decided the case on statutory construction and congressional intent bases.

First, rejecting the four-month rule, the Court found that the procedural requirements of § 110(a)(2) are not incorporated in § 110(a)(3).³⁴ The Court reasoned that the statute states that the Administrator is to approve the proposed revision if he determines that "it" — not "he" — meets the substantive requirements of § 110(a)(2); the statute does not require that "he" meet the deadline. Because § 110(a)(3) explicitly specifies the procedural requirement of notice and public hearing, the Court reasoned, the section does not incorporate every procedural requirement of § 110(a)(2). Furthermore, noting several instances in which the Act provides explicit deadlines elsewhere, and noting no express deadline in the section governing SIP revisions, the Court concluded that Congress intended to omit a deadline.³⁵

Finally, the Court dispensed with the argument that § 110(g)³⁶ imposes a deadline on EPA. That section's [20 ELR 10474] reference to "the required four month period" does not require the Administrator to take action but rather authorizes the governor to suspend the existing SIP under certain circumstances. The Court reasoned that in doing so, the section merely incorporates a "mistaken presupposition."³⁷

After finding that the four-month rule does not apply, the Court turned to the enforcement bar issue when EPA unreasonably delays.³⁸ It first noted, as EPA had conceded, that EPA's action on a proposed SIP revision is subject tothe Administrative Procedure Act's (APA's) requirements of timeliness.³⁹ The Court found no congressional intent to bar enforcement.⁴⁰ It looked at both the plain language of the statute authorizing EPA to bring enforcement actions to redress violations of any requirement of an "applicable implementation plan"⁴¹ as well as an express enforcement bar elsewhere in the statute.⁴² Finally, the Court noted that Congress had provided other statutory remedies for EPA inaction.⁴³

Conclusion

In basing its decision on plain language, the Court ignored several strong policy arguments advanced by the government.⁴⁴ These arguments include an explanation of why EPA needed a shorter timeframe to review the initial round of SIPs⁴⁵ and why EPA needs more than four months to review proposed SIP revisions.⁴⁶ Nor did the Court recognize, as Massachusetts argued, that an enforcement bar would undermine both the states' interests and the public's interest in clean air⁴⁷ as well as encourage noncomplying sources to propose and states to submit last-minute SIP revisions to stay enforcement actions and postpone compliance deadlines.⁴⁸

Nevertheless, the Supreme Court, by rejecting the four-month rule and removing the enforcement bar, has allowed EPA to proceed unencumbered with both SIP processing and enforcement.⁴⁹ For sources, on the other hand, uncertainty exists. Although the Court noted that EPA remains subject to the APA requirements of timeliness, it also cited a suit under § 304(a)(2), which confers jurisdiction in the district court for agency failure to comply with a deadline, as a remedy for unreasonable delay.

In Sierra Club v. Thomas,⁵⁰ the Court of Appeals for the District of Columbia analyzed district court and circuit court jurisdiction of an agency delay claim. The court concluded that the citizen suits provision of § 304(a)(2) grants independent jurisdiction to the district court over claims that EPA had failed to perform a nondiscretionary duty of timeliness.⁵¹ As the court explained, § 307, which confers jurisdiction in the courts of appeals, addresses review of discretionary agency action:

Where Congress has established no date-certain deadline — explicitly or implicitly — but EPA must nevertheless avoid unreasonable delay, it does not follow that EPA is, for purposes of section 304(a)(2) under a nondiscretionary duty to avoid unreasonable delay. Instead, this type of duty is discretionary and, . . . this court reviews claims alleging unreasonable delays of this type in order that we may protect our eventual jurisdiction under section 307 to review the final EPA action.⁵²

Under the Sierra Club analysis, the remedy for unreasonable delay in acting on a SIP revision lies with the courts of appeals. Had the Supreme Court upheld the four-month rule in GM, § 304(a)(2) would apply. Because it found a discretionary duty to act on SIP revisions, however, the APA's remedy and § 307 apply. Nevertheless, the contradictory language is likely to create confusion about the remedy.

Ironically, the Agency underestimated how favorable a decision the Court would hand them: both the House and Senate bills have provisions that address the four-month rule by setting a deadline of one year for review of SIP revisions.⁵³ Exceeding the twelve-month deadline could then become the basis of a § 304(a)(2) action as well as a clear factor in a court's equitable consideration of penalties.

— Erica Rosenberg

1. Two earlier Clean Air Act enforcement cases were resolved on other grounds. See Dow Chem. Co. v. United States, 476 U.S. 227, 14 ELR 20858 (1986) (involving inspections under § 114 and resolved on Fourth Amendment grounds); United States v. Stauffer Chem. Co., 464 U.S. 165, 14 ELR 20064 (1984) (involving inspection authority under § 114, 42 U.S.C. § 7414, ELR STAT. CAA 017, and resolved on collateral estoppel grounds).

2. 110 S. Ct. 2528, 20 ELR 20959 (1990).

3. See United States v. General Motors Corp., 876 F.2d 1060, 19 ELR 20628, 21287 (1st Cir. 1989); American Cyanamid v. EPA, 810 F.2d 493, 495, 17 ELR 20642, 20643 (5th Cir. 1987); Duquesne Light Co. v. EPA, 698 F.2d 456, 471, 13 ELR 20251, 20258 (D.C. Cir. 1983); see also United States v. Alcan Foil Prods., 889 F.2d 1513, 1518, 20 ELR 20302, 20304 (6th Cir. 1989) (decided after the Court of Appeals for the First Circuit ruled in General Motors Corp., 876 F.2d 1060); Council of Commuter Orgs. v. Thomas, 799 F.2d 879, 888, 16 ELR 20927, 20932 (2d Cir. 1986) (addressing the four-month rule but not the enforcement bar).

4. 46 Fed. Reg. 51386 (Oct. 20, 1981).

5. 42 U.S.C. § 7502, ELR STAT. CAA 029.

6. 42 U.S.C. § 7413, ELR STAT. CAA 014.

7. 18 ELR 20853 (D. Mass. 1988).

8. 876 F.2d 1060, 19 ELR 21287 (1st Cir. 1989).

9. At the time of the decision, language, deemed "arguably dicta" by the First Circuit, 876 F.2d at 1066, 19 ELR at 21287, in a Sixth Circuit opinion indicated no four-month rule. See United States v. National Steel Corp., 767 F.2d 1176, 1182 n.1, 15 ELR 20678, 20681 n.1 (6th Cir. 1985). In a subsequent opinion, however, the Court of Appeals for the Sixth Circuit adopted the four-month rule. See United States v. Alcan Foil Prods., 889 F.2d 1513, 1518, 20 ELR 20302, 20304 (6th Cir. 1989).

10. 42 U.S.C. § 7410(a)(2), ELR STAT. CAA 008. The section provides, in part: "The Administrator shall, within four months after the date required for submission of a plan under paragraph (1), approve, or disapprove such plan for each portion thereof."

11. 42 U.S.C. § 7410(a)(3)(A), ELR STAT. CAA 008. The section provides: "The Administrator shall approve revision of any implementation plan applicable to an air quality control region if he determines that it meets the requirements of paragraph (2) and has been adopted by the State after reasonable notice and public hearings."

12. 876 F.2d at 1066, 19 ELR at 21287.

13. Id.

14. 42 U.S.C. § 7604(a)(2), ELR STAT. CAA 043.

15. 42 U.S.C. § 7413(b), ELR STAT. CAA 014.

16. See cases cited in supra note 3.

17. Some cases, such as America Cyanamid, involve § 120 administrative assessments; others, such as GM, involve § 113 enforcement proceedings. No court has found this distinction significant.

18. See United States v. Alcan Foil Prod., 889 F.2d 1513, 1518, 20 ELR 20302, 20304 (6th Cir. 1989); Council at Commuter Orgs. v. Thomas, 799 F.2d 879, 888, 16 ELR 20927, 20932 (2d Cir. 1986).

19. 698 F.2d 456, 13 ELR 20251 (D.C. Cir. 1983).

20. Id. at 471, 13 ELR at 20258.

21. Id. at 472, 13 ELR at 20258.

22. Id.

23. Id.

24. 810 F.2d 493, 17 ELR 20642 (5th Cir. 1987).

25. Id. at 500, 17 ELR at 20645.

26. Id. at 499, 17 ELR at 20645.

27. EPA may collect fines from the date of the notice of violation if issued before the state submits a SIP revision. Id. at 500, 17 ELR at 20645.

28. Id. at 501, 17 ELR at 20645.

29. The court applied the same reasoning when EPA failed to act on a delayed compliance order pursuant to § 113. See General Motors Corp. v. EPA, 871 F.2d 495, 497-98, 19 ELR 20841, 20842-44 (5th Cir. 1989).

30. 876 F.2d 1067, 19 ELR 21288.

31. Id. at 1068, 19 ELR at 21258. The court noted that it is unclear whether § 120 penalties may be adjusted in a similar manner. Id. at 1068 n.4; 19 ELR at 21258 n.4.

32. In United States v. Alcan Foil Prods., 889 F.2d 1513, 20 ELR 20302 (6th Cir. 1989), the Court of Appeals for the Sixth Circuit adopted the First Circuit's second remedy but stressed compliance or noncompliance with the proposed SIP revision as the critical factor to consider in assessing penalties. Id. at 1521, 20 ELR at 20306. But see id. at 1522-23, 20 ELR 20306-307. (Ryan, J., concurring) (arguing focus should be on compliance with existing SIP).

33. 467 U.S. 837, 14 ELR 20507 (1984).

34. 110 S. Ct. at 2532, 20 ELR at 20961.

35. Id. The Court cites § 110(a)(3)(B) (three-month review for certain SIP revisions for fuel-burning stationary sources), § 110(c)(1) (six-month review for imposition of a federal implementation plan), and § 113(d)(2) (90-day deadline for state-issued delayed compliance order).

36. 42 U.S.C. § 7410(g), ELR STAT. CAA 010. The section provides, in part:

(1) In the case of any State which has adopted and submitted to the Administrator a proposed plan revision which the State determines —

(A) meets the requirements of this section, and

(B) is necessary (i) to prevent the closing for one year or more of any source of air pollution, and (ii) to prevent substantial increases in unemployment which would result from such closing, and

which the Administrator has not approved or disapproved under this section within the required four month period, the Governor may issue a temporary emergency suspension of the part of the applicable implementation plan for such State which is proposed to be revised with respect to such source.

(Emphasis added.)

37. 110 S. Ct. at 2533, 20 ELR at 20962.

38. Id.

39. See 42 U.S.C. § 555(b), ELR STAT. ADMIN. PROC. 004 (requiring agencies to act on matters within a reasonable time); 5 U.S.C. § 706(1), ELR STAT. ADMIN. PROC. 007 (providing a remedy for agency action unreasonably delayed).

40. The Court did not decide whether EPA's delay in GM was unreasonable. 110 S. Ct. at 2528, 20 ELR at 20962.

41. Id. at 2533, 20 ELR at 20962 (citing § 113(b)(2), 42 U.S.C. § 7413(b)(2), ELR STAT. CAA 014). The Court affirmed that the "applicable implementation plan" is the existing SIP.

42. 110 S. Ct. at 2534, 20 ELR at 20962 (citing § 113(d)(10), 42 U.S.C. § 7413(d)(10), ELR STAT. CAA 014).

43. The Court cited a suit under § 304(a)(2) and a § 113(b) request as remedies. See id. at 2534 n.4, 20 ELR at 20962 n.4.

The Court also cited Brock v. Pierce County, 476 U.S. 253, 260 (1986) for the proposition that courts should not assume that agencies lose their power to act when they fail to observe procedural requirements.

44. GM's arguments, also ignored by the Court, focused on preserving the primary role of the states in Clean Air Act implementation. See generally Brief of Petitioner, GM v. United States, 110 S. Ct. 2528 (No. 89-369) (1990).

45. Id. at 19.

46. Id. at 20-24.

47. Id. at 36. While several states asserted their support of the four-month rule in an amicus brief, they opposed an enforcement bar primarily because a bar would allow the SIP revision to go into effect without EPA approval. See, e.g., Brief of the Commonwealths of Massachusetts and Virginia, and the States of California, Connecticut, Idaho, Illinois, Kansas, Michigan, Minnesota, New York, North Carolina, Vermont, and Washington as Amici Curiae Urging Affirmance at 3-6, GM (No. 89-369). But see Brief for the Department of Environmental Quality of the State of Louisiana, GM (No. 89-369) (arguing for the enforcement bar).

48. Brief of Petitioner, supra note44, at 42.

49. It is still Agency policy to consider an outstanding proposed SIP revision in both bringing an enforcement case and in mitigating penalties.

50. 828 F.2d 783, 17 ELR 21198 (D.C. Cir. 1987).

51. Id. at 787, 17 ELR at 21200.

52. Id. at 792, 17 ELR at 21203.

53. S. 1630, 101st Cong., 2d Sess. § 104(b) (1990); H.R. 3030, 101st Cong., 2d Sess. § 101(c) (1990). The Senate bill expressly overrides the enforcement bar. S. 1630 § 104(c).