In re Aluminum Co. of America

11 ELR 20554 | Environmental Law Reporter | copyright © 1981 | All rights reserved

In re Aluminum Co. of America

No. M-80-13 (M.D.N.C. July 9, 1980)

The district court denies the Aluminum Co. of America's (ALCOA's) motion to quash an administrative search warrant, ruling that under § 114(a)(2) of the Clean Air Act the Environmental Protection Agency (EPA) is authorized to use non-Agency personnel in making inspections of emission sources. The court determines initially that because ALCOA failed to seek preenforcement review of the warrant, despite the fact that it had adequate prior notice, renders the motion to quash moot. Nevertheless, the court rules that on the merits the motion must be denied. Section 114(a)(2) of the Act, particularly when viewed in contrast to § 208, reveals Congress' intent to authorize the EPA Administrator to utilize independet contractors to assist Agency employees in conducting inspections. This reading of the Act is confirmed by the legislative history. The court adds that the bringing of independent contractors into ALCOA's plant did not expose it to a risk of losing trade secrets for which it has no legal remedy, for it has a cause of action against both EPA employees and independent contractors in the case of unauthorized disclosure of confidential materials.

Counsel for Environmental Protection Agency
H. M. Michaux Jr., U.S. Attorney
P.O. Box 1858, Greensboro NC 27402
(919) 378-5351

Judson W. Starr
Land and Natural Resources Division
Department of Justice, Washington DC 20530
(202) 633-2810

Counsel for Aluminum Co. of America
James C. Smith, George V. Hanna III
Moore & Van Allen
3000 NCNB Plaza, Charlotte NC 28280
(704) 374-1300

Richard L. Holz
Legal Department
Aluminum Co. of America, ALCOA Bldg., Pittsburgh PA 15219
(412) 553-4203

[11 ELR 20554]

Smith, Magistrate:

Findings of Fact, Conclusions of Law and Order Denying Motion to Quash

This matter having come before the Court upon the Aluminum Company of America's (Alcoa) Motion to Quash the Administrative Warrant and the U.S. Environmental Protection Agency's (EPA) response thereto and the Court, having reviewed the pleadings and being otherwise fully advised in the premises, makes the following Findings of Fact and Conclusions of Law.

Findings of Fact

1. On March 24, 1980 upon the application and affidavit of E. Floyd Ledbetter, Enforcement Officer, Region IV, EPA, an administrative warrant was issued authorizing Mr. Ledbetter and duly authorized representatives of EPA to enter and inspect the premises of Alcoa's Badin works plant in Badin, North Carolina, pursuant to § 114 of the Clean Air Act, 42 U.S.C. 7414.

2. The affidavit of E. Floyd Ledbetter and the application for the warrant demonstrated that this administrative search, based on neutral administrative criteria, was sought to conduct an "overview" or compliance auditing inspection and to evaluate the amount of emissions, particularly fluoride emissions, and the effectiveness of air pollution controls at Alcoa's Badin Works.

3. On March 25, 1980 an inspection was conducted without protest at the Badin works site by Mr. Ledbetter accompanied by two employees of PEDCO Environmental, Inc. (PEDCO). The inspection was completed on the morning of March 26, 1980.

4. The EPA had previously contracted with PEDCO, an engineering consulting firm, for the purpose of providing it with additional expertise and personnel to conduct such inspections as the one at Alcoa's Badin works site. The two PEDCO employees possessed credentials certified by the Regional Administrator of EPA which empowered them to act as authorized representatives of the Administrator of the EPA for the limited purpose of assisting EPA on inspections such as that of Alcoa's Badin works site.

5. The contract between EPA and PEDCO expressly prohibited PEDCO from disclosing confidential information to "anyone other than EPA employees" without prior written approval of EPA's Deputy Associate General Counsel for Contracts and Administration, and required PEDCO to execute separate confidentiality [11 ELR 20555] agreements with its employees. Alcoa has the right under the EPA-PEDCO contract to bring an action to enforce the contract terms.

6. The PEDCO employees involved in the Alcoa search were subject to confidentiality agreements which each had made with PEDCO and which recited that no confidential information obtained during the entire course of their employment with PEDCO could be disclosed to anyone except as directed under penalty of dismissal and liability for damages arising from any unauthorized disclosure.

7. Prior to the inspection, on March 17, 1980, EPA informed Alcoa's corporate headquarters that the inspection would take place on March 25, 1980. Further, Alcoa's personnel were informed that the inspection would be performed by Mr. Ledbetter with the assistance of the PEDCO employees.

8. 40 C.F.R. § 2.201 et seq. (Subpart B) sets out procedures for asserting confidentiality claims in order to safeguard proprietary information attained pursuant to § 114(c) of the Clean Air Act. Alcoa has not asserted a confidentiality claim regarding the documents it gave to EPA during the inspection nor otherwise exhausted its rights under the regulation.

9. Subsequent to the inspection on March 31, 1980 Alcoa filed a Motion to Quash the warrant which had previously been executed. Alcoa's memorandum in support of that Motion was filed on April 4, 1980.

Conclusions of Law

1. Alcoa's motion to quash a warrant that had previously been executed was not timely, and the issues raised in its motion are moot.

2. By failing to seek judicial review of the warrant, of which Alcoa had adequate prior notice, prior to its execution, Alcoa waived its right to contest the warrant, and is precluded from doing so after the fact.

3.Alcoa's only claim on the merits is that the warrant permitted entry into Alcoa's premises by unauthorized persons, employees of PEDCO and EPA constractors. Alcoa's claim must be rejected, since the Court finds that the PEDCO employees, whose entry was permitted by the warrant, were properly authorized representatives of the EPA Administrator, for purposes of entry pursuant to § 114 of the Clean Air Act, 42 U.S.C. 7414. This conclusion is based on the following subsidiary findings:

a. Congress did not intend that the right to enter Alcoa for the purposes of conducting a § 114 inspection be limited to only officers and employees of EPA. The language of the Clean Air Act demonstrates that where Congress intended rights of entry to be limited to EPA officers and employees it said so. See § 208, 42 U.S.C. 7542. Therefore, where Congress granted a right of entry to "the Administrator or his duly authorized representatives" it obviously intended that the right to enter a premises for the purpose of conducting § 114 inspections could be delegated by the Administrator.

b. The legislative history of the Clean Air Act shows that Congress deliberately chose "authorized representatives" in § 114 of the Act over the more restrictive language "officers and employees," as appeared in §§ 206 and 208 of the Clean Air Act, 42 U.S.C. 7525 and 7542, at the time of the amendment of § 114 and which remains in the Act.

(c) Upon the facts presented to the Court, the court finds that the PEDCO employees named in the warrant were "authorized representatives" of the Administrator, within the meaning of 42 U.S.C. 7414.

4. Entry by the PEDCO employees did not breach any constitutional right of Alcoa nor expose Alcoa to any breach of confidentiality for which it has no remedy. The court finds that, on the facts presented, PEDCO and its employees are subject to significant contractual and legal restraints against disclosure of any confidential information secured during the inspection. Moreover, the court concludes that Alcoa has a private right of action against PEDCO and its employees in the event any of its confidential material is compromised.

5. The court makes no finding as to the applicability of 18 U.S.C. 1905 to the PEDCO employees, but finds that even if such sanctions were not applicable, Alcoa possesses sufficient civil and contractual monetary remedies and safeguards that such absence would be of no significance.

Based upon the above stated Finding of Fact and Conclusions of Law, it is

HEREBY ORDERED, ADJUDGED and DECREED that Alcoa's Motion to Quash is denied.

Dated this 9th day of July 1980.

Gordon, J.:


From the Magistrate's order entered July 9, 1980, ruling on Aluminum Company of America's motion to quash a U.S. Environmental Protection Agency's inspection warrant, counsel for Aluminum Company of America appeals.

The Court finds that the Magistrate's ruling is not clearly erroneous or contrary to law. 28 U.S.C. § 636(b)(1)(A). Therefore, the Court dispenses with oral argument and hereby AFFIRMS the subject order of the Magistrate.

11 ELR 20554 | Environmental Law Reporter | copyright © 1981 | All rights reserved