Dupont v. Train: Supreme Court Upholds EPA's Authority to Issue Uniform Effluent Limitations

Partially resolving a protracted series of inconsistent decisions among the circuits,¹ the Supreme Court on February 23, 1977 held in E.I. DuPont de Nemours & Co. v. Train² that § 301 of the Federal Water Pollution Control Act Amendments of 1972 (FWPCA)³ authorizes the Environmental Protection Agency (EPA) to promulgate regulations establishing uniform, single-number, industry-wide effluent limitations for existing dischargers, provided some allowance is made for variations in individual plants. The Court ruled that § 509⁴ requires challenges to such regulations to be brought in the appropriate court of appeals rather than in the district courts. The Court also held that EPA need not insert a variance provision in new-source perfomance standards promulgated under § 306⁵ of the Act because Congress intended such standards to be absolute prohibitions from which variances for individual dischargers would be impermissible.

The decision definitively settles a central legal dispute concerning the regulatory structure established by the FWPCA that has dogged EPA's attempts to implement the statute for almost three years, and broadly approves EPA's approach to that implementation. The ruling nevertheless leaves important questions concerning the legality of the limitations unanswered, such as the proper scope of EPA's variance provision for existing sources. Although the Court indicated a clear predisposition to uphold standards and procedures established by EPA in the complex area of pollution control, the DuPont decision is not likely to stem the tide of litigation under the FWPCA currently engulfing the agency.

Issues Before the Court

In separate decisions in 1975 and 1976, the Fourth Circuit ruled that the regulations in question were subject to review exclusively in the court of appeals⁶ and that EPA had the power to issue uniform single-number effluent limitations for classes of the inorganic chemicals manufacturing industry under § 301.⁷ These limitations, and the accompanying new-source performance standards, were held to be only "presumtively applicable" to individual plants, however. The new-source standards were therefore remanded to the agency because, unlike the effluent limitations for existing sources, they contained no variance provision through which particular dischargers could rebut the presumption of applicability. On April 19 and June 21, 1976, the Supreme Court granted the eight chemical companies' petition for certiorari in DuPont on the questions of the scope of EPA's authority to issue regulations governing existing sources under § 301 and the proper forum for judicial review and EPA's cross-petition for review of the lower court's conclusion that the new-source standards are only presumptively applicable.⁸

The chemical companies argued that § 301 is not an independent basis of authority for setting effluent limitations by regulation but is merely a description of the limitations to be set for each plant on an individual basis by the § 402 permit issuer. Under this view, the guidelines called for by § 304(b)⁹ are designed to aid the permit issuer in setting these limitations. Because the regulations in question were issued under § 304 rather than § 301, the industry argued, they are subject to review in the district courts under the Administrative Procedure Actrather than in the court of appeals under § 509.

EPA, on the other hand, contended that permits issued under § 402 must incorporate across-to-board discharge limitations promulgated by the agency under § 301, subject to the limited exceptions allowed by the variance provision. The § 304(b) guidelines, according to this interpretation, were intended to guide EPA itself in later establishing effluent limitations by regulation under § 301. Because this two-step process proved more difficult than Congress had anticipated and the agency fell behind the statutory timetable, EPA (at that point under a judicially-imposed schedule¹⁰) condensed the two stages into a single regulation. Since they were issued pursuant to § 301, the aency argued, the limitations are reviewable exclusively in the court of appeals under § 509.

[7 ELR 10063]

The Court's Decision

The Effluent Limitations Issue

Justice Stevens, writing for a unanimous court, began by summarizing the relevant portions of the statute (§§ 301, 304, 306, and 402) and describing the procedure EPA used in promulgating the regulations at issue. He nevertheless found a more extensive examination¹¹ of the statutory language, structure, and legislative history unnecessary in determining that § 301 itself provided the key to solving the problem.

Section 301(b)(2)(A)'s reference to 1983 "effluent limitations for categories and classes of point sources" convinced Justice Stevens that such limitations are to be established for groups of sources by regulation rather than for single plants in individual permit proceedings. The Court cited the Third Circuit's decision in American Iron & Steel Institute v. EPA¹² in noting there is nothing to suggest that the omission of the term "categories and classes" in § 301's reference to the 1977 limitations was intended to reflect that the 1977 and 1983 limitations were to be set by radically different mechanisms.

The opinion did emphasize that, unlike the 1983 limitations, the 1977 standards must make some allowance for variances. The Fourth Circuit had arrived at this same conclusion but had coined the phrase "presumptively applicable"¹³ to describe its practical effect. The limitations are applicable to all existing sources within a class or category unless a particular plant can rebut this presumption of applicability. The Supreme Court simply looked to see that the regulations establishing the 1977 standards contained a variance clause and then agreed with the lower court's conclusion that consideration of the proper scope of this variance provision would be premature.

Justice Stevens also pointed out that it would be highly anomalous if the 1983 regulations and the new-source performance standards were directly reviewable in the courts of appeals while the 1977 limitations, based on the same highly technical record, were reviewable only in the district court. And finally, the Court found that § 509(b)(1)'s mention of "the Administrator's action … in approving or promulgating any effluent limitation or other limitation under § 301 …"¹⁴ leaves little doubt that the EPA Administrator rather than the permit issuer is the one who is to issue the regulations.

After a cursory examination, in which he acknowledged the strong policy of ensuring national uniformity that underlies the Act, Justice Stevens stated that the legislative history supports this reading of the statute. The opinion went on to conclude that the guidelines called for by § 304(b) are to survey the available pollution control technology for an industry, assess its effectiveness, and describe EPA's methodology in determining the effluent limitations embodied in § 301 regulations. The Court affirmed the lower court's ruling that EPA's decision to issue § 304 guidelines and § 301 limitations together in a single set of regulations because of time pressures was within the agency's discretion.

Justice Stevens based his decision on two additional considerations. First, he noted that accepting the industry's view of the Act would place an impossible administrative burden on EPA. The agency would be required to consider individually the circumstances surrounding each of the more than 42,000 discharge permits sufficiently prior to the July 1977 deadline to allow industry to install the necessary pollution control equipment.

In addition to explicit considerations of practicality, the Court fell back on the principle of deferring to an agency's construction of ambiguous aspects of the statutes it administers as long as that interpretation is reasonable. Citing Train v. Natural Resources Defense Council,¹⁵ in which the Court applied this rule and upheld EPA's interpretation of various aspects of the complex provisions of the Clean Air Act, Justice Stevens noted that in this case the agency's interpretation in addition to being reasonable, was supported by thorough legal analysis in judicial opinions from an overwhelming majority of the courts of appeals that have considered the issue.¹⁶ The Court, therefore, had little difficulty holding that EPA has the authority to issue regulations setting forth uniform effluent limitations for categories of existing plants.

The Jurisdictional Issue

Justice Stevens pointed out that this holding on the question of the Administrator's power to promulgate effluent limitations under § 301 necessarily resolves as well the jurisdictional issue of where the regulations are subject to judicial review. Section 509(b)(1) provides that review of the Administrator's actions in promulgating effluent limitations under § 301 lies in the court of appeals, and the regulations in question clearly fall within that classification.

The Court rejected industry's argument that § 509's reference to § 301 was intended to cover only action on a variance request pursuant to § 301(c)because it would result in a "truly perverse situation in which the Court of Appeals would review numerous individual actions issuing or denying permits pursuant to § 402 but would have no power of direct review of the basic regulations governing those individual actions." The Court also noted that § 301 effluent limitations are typically promulgated in the same proceedings as § 306 new-source performance standards, which are clearly subject to review in the court of appeals under § 509(b)(1), and that Congress intended review of the two sets of regulations to be obtained in the same forum.

Variances for New Sources Not Permitted

The only portion of the Fourth Circuit's decision which the Supreme Court felt compelled to reverse was its remand of the new-source performance standards to EPA for insertion of a variance provision. The court of [7 ELR 10064] appeals had based this action on its conclusion that the new source standards were, like the 1977 effluent limitations for existing plants, only presumptively applicable. Deducing a clear congressional intention that the standards be absolute prohibitions so as to ensure national uniformity from the language of § 306(a)(1), its legislative history, and the fact that, unlike § 301, there is no mention of variances in § 306, Justice Stevens held that a variance clause for new sources would be inappropriate.

Conclusion

The Supreme Court's decision in E.I. DuPont de Nemours & Co. v. Train is noteworthy for a number of reasons beyond the fact that it resolves the long-standing controversy surrounding EPA's authority to issue uniform effluent limitations and the judicial forum in which these limitations are subject to review. First, the decision validates EPA's extensive standard-setting activities over the last four years in the area of water pollution control. If the Court had accepted the industry's arguments in DuPont, the validity of these activities and the nearly completed regulatory structure which the agency has put into place would have been open to serious doubt. Moreover, review of the agency's actions in the district courts would almost certainly have led to protracted litigation and inconsistent judicial rulings. In other words, the possibility of meeting the 1977 deadline as part of the national water pollution control program would have all but evaporated. Now EPA instead is able to turn its full attention to the difficult task of enforcing the established standards.

Second, the opinion shows that the Court appreciates the central goal of national uniformity which underlies the FWPCA. Validation of EPA's power to set uniform effluent limitations subject to direct review in the courts of appeals effectively reinforces that principle.

Third, the opinion reiterates the Court's strong propensity to uphold both EPA's interpretation of ambiguous statutory provisions which it administers and its discretionary determinations concerning how to proceed in implementing statutory mandates in the area of pollution control, as long as these interpretations and determinations are reasonable. The Court explicitly considered the administrative and judicial practicalities of implementation in deciding to reject the alternative interpretation urged by the industrial petitioners. The opinion indicates that EPA has broad discretion to reject interpretations which would result- in an unwieldy regulatory structure and to adjust the manner of implementation when particular steps prove unexpectedly difficult or time consuming. Such administrative flexibility would clearly assist the agency in dealing with unrealistically short statutory timetables and other knotty procedural problems which have consistently bedeviled its regulatory efforts.

And finally, while it affirms the necessity for a variance clause in the 1977 limitations for existing sources, the decision leaves open the question of the proper scope of this provision. With the July 1977 deadline fast approaching, this issue is certain to be the focus of continuing litigation¹⁷ and may ultimately require an additional ruling from the Court.

1. See CPC International, Inc. v. Train, 515 F.2d 1032, 5 ELR 20392 (8th Cir. 1975) (EPA lacks authority to issue effluent limitations regulations under § 301; jurisdiction to review regulations as § 304 guidelines lies in district court); American Petroleum Institute v. Train, 540 F.2d 1023, 6 ELR 20748 (10th Cir. 1976), E.I. DuPont de Nemours & Co. v. Train, 541 F.2d 1018, 6 ELR 20371 (4th Cir. 1976) (EPA has authority to issue presumptively applicable effluent limitation regulations; review lies in court of appeals); American Iron & Steel Institute v. EPA, 526 F.2d 1027, 6 ELR 20068 (3d Cir. 1975),American Meat Institute v. EPA, 526 F.2d 442, 6 ELR 20029 (7th Cir. 1975), American Frozen Food Institute v. Train, 539 F.2d 107, 6 ELR 20485 (D.C. Cir. 1976), Hooker Chemicals & Plastics Corp v. Train, 537 F.2d 620, 6 ELR 20467 (2d Cir. 1976) (EPA has authority to issue regulations setting uniform, binding effluent limitations; review lies in the court of appeals). For an analysis of these decisions, see Parenteau & Tauman, The Effluent Limitations Controversy, 6 ECOLOGY L.Q. 1 (1976).

2. 45 U.S.L.W. 4212, 7 ELR 20191 (U.S. Feb. 23, 1976).

3. 33 U.S.C. § 1311, ELR 41112.

4. 33 U.S.C. § 1369, ELR 41127.

5. 33 U.S.C. § 1316, ELR 41115.

6. E.I. DuPont de Nemours & Co. v. Train, 528 F.2d 1136, 6 ELR 20117 (4th Cir. 1975).

7. E.I. DuPont de Nemours & Co. v. Train, 541 F.2d 1018, 6 ELR 20371 (4th Cir. 1976).

8. 425 U.S. 933 (1976); 426 U.S. 947 (1976).

9. 33 U.S.C. § 1314(b), ELR 41113-14.

10. Natural Resources Defense Council, Inc. v. Train, 510 F.2d 694, 5 ELR 20046 (D.C. Cir. 1974).

11. Such as that undertaken by the courts in CPC International, Inc. v. Train, 515 F.2d 1032, 5 ELR 20392 (8th Cir. 1975), on the one hand, and American Iron & Steel Institute v. EPA, 526 F.2d 1027, 6 ELR 20068 (3d Cir. 1975), on the other.

12. 526 F.2d 1027, 6 ELR 20068 (3d Cir. 1975).

13. 541 F.2d at 1028, 6 ELR at 20373.

14. 33 U.S.C. § 1369(b)(1), ELR 41127.

15. 421 U.S. 60, 87, 5 ELR 20264, 20270 (1975).

16. I.e., all the decisions mentioned in note 1, supra, except CPC International, Inc. v. Train, 515 F.2d 1032, 5 ELR 20392 (8th Cir. 1975).

17. There are already indications that litigation on this point may present serious problems for EPA. In Appalachian Power Co. v. Train, 545 F.2d 1351, 6 ELR 20732 (4th Cir. July 16, 1976, as modified, Aug. 31, 1976), the Fourth Circuit held that the clause allowing modification of the 1977 effluent limitations for thermal discharges from plants in the Steam Electric Power Point Source Category facing "fundamentally different" technological circumstances was "unduly restrictive." Id. at 1359.This is the standard variance clause for the 1977 limitations included in EPA's regulations for all point source categories. See, e.g., 40 C.F.R. § 415.72 and 39 Fed. Reg. 28926 (Aug. 12, 1976), 39 Fed. Reg. 30073 (Aug. 20, 1974).