Natural Resources Defense Council, Inc. v. Gorsuch

Nos. 2153-73, 75-0172, -1698, -1267 (D.D.C. February 5, 1982)

Upon remand from the District of Columbia Circuit, 10 ELR 20803, the court rules that a consent decree governing the regulation of toxic pollutant dischares under the Federal Water Pollution Control Act (FWPCA) does not impermissibly infringe upon the discretion of the Environmental Protection Agency (EPA) to implement amendments to the FWPCA. The court upholds the validity of the decree under applicable case law since it is oriented to procedures rather than specific results, it was formulated with the participation of the parties, and it is open to modification by the court if circumstances change. In addition, the court finds that express congressional approval of the consent agreement in the 1977 amendments to the FWPCA also shows that it does not impermissibly infringe on the EPA Administrator's discretion.

Counsel for Plaintiffs
Ronald J. Wilson
1735 I St. NW, Rm. 600, Washington DC 20006
(202) 223-8210

Counsel for Defendants
Ridgeway M. Hall
Office of the General Counsel
Environmental Protection Agency, Washington DC 20460
(202) 382-4134

Counsel for Intervenors
Robert C. Barnard
Cleary, Gottlieb, Steen & Hamilton
1250 Connecticut Ave. NW, Washington DC 20036
(202) 828-3000

[12 ELR 20371]

Flannery, J.:

Memorandum Opinion

This matter comes before the court on remand from the Court of Appeals. The sole issue remanded for consideration is: Whether the settlement agreement ("the agreement or decree") reached in this case impermissibly infringes on the discretion Congress granted to the Administrator of the Environmental Protection Agency ("EPA") to make certain decisions under the Federal Water Pollution Control Act ("FWPCA").¹

Background

Between 1973 and 1975 five environmental groups (collectively referred to as "NRDC") brought four separate lawsuits against EPA to rectify the agency's alleged failure to implement several key provisions of the FWPCA, 33 U.S.C. § 1251 et seq. (1976). The first lawsuit challenged the criteria EPA was using to decide which pollutants to include in a list of toxic pollutants which the agency was required to compile by Section 307(a) of the FWPCA, and also sought to expand EPA's then existing list of toxic pollutants. The second and third lawsuits were aimed at compelling EPA to promulgate effluent discharge standards for the substances already on the agency's list of toxic pollutants. The fourth lawsuit sought an order requiring EPA to promulgate pretreatment standards under Section 307(b) of the FWPCA covering approximately 35 industries and a wide variety of pollutants.

While these lawsuits were pending, EPA officials conducted a thorough review of the agency's strategy for controlling toxic pollutant emissions. They concluded that there was a need to replace the agency's then existing approach with a new strategy calling for an integrated program for controlling toxic pollutants. EPA officials also felt that development of such a new approach could provide a basis for resolving the controversies involved in the pending lawsuits. After the general outlines of the new program were developed, EPA and NRDC, joined by various industry intervenors, began settlement negotiations. After tentative agreement was reached between EPA and NRDC, a proposed settlement agreement was submitted to this court. Several hearings were held on the proposed agreement and interested parties were allowed to file comments on it. Representatives of various industries intervened in these proceedings and filed comments vigorously opposing the proposed agreement. After making several modifications to the agreement, this court, on June 8, 1976, approved the agreement finding it a "just, fair, and equitable resolution of the issues raised." Natural Resources Defense Council, Inc. v. Train, 8 ERC 2120, 2122 [6 ELR 20588] (D.C.C. 1976). No appeal was taken from this court's order adopting the settlement agreement.

Basically, the settlement agreement outlines a comprehensive strategy for the regulation of toxic pollutant discharges under the FWPCA, including details concerning the timing, scope, and nature of the programs that EPA is to initiate. Under the agreement, EPA proposes to regulate the discharge of toxic pollutants by developing effluent limitations, guidelines and performance standards for new and existing emission sources, as well as pretreatment standards regulating the introduction of pollutants into treatment works. These limitations, guidelines and standards cover 21 major industries and 65 specified pollutants or groups of pollutants. Further, EPA agreed to employ technology-based controls [12 ELR 20372] in promulgating these guidelines and limitations. The new pretreatment standards are to apply to any of the 65 pollutants listed in the agreement and to any other pollutants that prove to be incompatible with "publicly owned treatment works." Promulgation of the regulations envisaged by the agreement was to take place according to a phased schedule running through December 31, 1979, and the affected industries were to comply with the regulations by June 30, 1983.

This original schedule was not adhered to however, and in 1978, NRDC moved to hold the Administrator of EPA in contempt for failing to meet the timetables provided by the original decree. Several intervenors then moved to vacate the decree on the grounds that the 1977 amendments to the Clean Water Act had superseded the decree and rendered it moot and that the decree violated the Administrative Procedure Act's notice and comment provisions. NRDC and EPA then jointly moved this court for an order adopting certain modifications to the decree in settlement of NRDC's pending contempt motion. On March 9, 1979, this court modified the decree in accordance with the joint request of EPA and NRDC and denied the intervenor's motion to vacate the decree. Natural Resources Defense Council, Inc. v. Costle, 12 ERC 1833 [9 ELR 20176] (D.C.C. 1979). Certain intervenors appealed that order by this court to the Court of Appeals. The Court of Appeals rejected all of the intervenors' arguments and affirmed the decision of this court on the issues raised by the parties, but, as noted above, the Court of Appeals remanded the case to this court for consideration of the "impermissible infringement" issue.

Discussion

Introduction

After a detailed study of the policies and precedents both supporting and denying the power of a trial court to fashion a detailed equitable decree, such as the decree approved in the instant case, it is the court's opinion that the instant settlement agreement does not impermissibly infringe on the EPA Administrator's discretion to make certain decisions and to take certain actions under the FWPCA. Before discussing the various factors underlying this decision, as a preliminary matter it should be noted that the focus of this analysis is on an "impermissible" infringement of the Administrator's discretion, not just an infringement. In the broad sense of the term, any judicial decision compelling agency action infringes to some degree on an agency's discretion, yet it is only when that infringement reaches a certain level and/or produces a certain effect that it becomes "impermissible." There is no doubt that the instant settlement agreement infringes to some degree on the EPA Administrator's discretion, but for the reasons discussed below this court does not believe that this infringement is impermissible.

A. The Parties' Positions

Subsequent to the Court of Appeals' remand in this case, the intervenors, comprised of representatives of various industries likely to be affected by implementation of the decree, seized upon the issue remanded by the Court of Appeals and made it the focal point of a motion to vacate the consent decree (i.e. they moved to vacate the consent decree on the ground that it impermissibly infringed upon the Administrator's discretion under the FWPCA). See Intervenor's Motion to Vacate the Decree Or, Alternatively, To Revise The Decree. In support of this position, the intervenors argue that the decree compels the EPA to take certain actions, which actions effect certain results under the FWPCA; the effecting of these results, according to the intervenors, should properly reside within the discretion of the Administrator.²

The original adverse parties in this action, NRDC and EPA, both argue that the instant decree is perfectly permissible. It is the Government's position that "there is no basis in fact, law or policy for holding that the decree constitutes an impermissible exercise of judicial power." Defendant's Opposition at 4. EPA maintains that any impermissible infringement argument in this case is simply not congruent with the facts of the case; these facts reveal that in entering into the decree "the then-Administrator not only consented to its terms in order to avoid risks of continued litigation, but exercised his independent judgment that the decree provided an appropriate means of implementing the Act." Id. Finally, and perhaps most importantly, EPA argues that the decree does not prescribe any substantive rules or outcomes under the FWPCA, but instead leaves the substance of all final agency action solely in the hands of the EPA.

Similarly, NRDC argues that the instant decree is permissible because it "does not require this Court to become involved in the affairs of EPA," see Opposition by NRDC et al. to Motion to Vacate The Consent Decree Or, Alternatively, To Revise The Decree (hereinafter "Plaintiffs' Opposition") at 2, but instead merely establishes a process for EPA to follow. Id. at 8. As a participant in the bargaining process which culminated in this decree, NRDC places particular importance on the fact that this process was both formulated in the first instance and later agreed to by the EPA in the exercise of its independent judgment. See ie. at 4 & 8. Finally, NRDC notes that the original decree in this case has received express congressional support, which support clearly indicates that the decree does not impermissibly infringe on the discretion given to EPA by Congress under the FWPCA. Id. at 21-23.

"In order to give effect to remedial statutes, the equitable powers of the federal courts are particularly broad, and the courts may utilize flexible and novel approaches to implement congressional intent." Handler v. Securities and Exchange Commission, 610 F.2d 656-659 (9th Cir. 1979) (citing Porter v. Warner Holding Co., 328 U.S. 395 (1946). Further, these equitable powers are greatest where the public interest is involved. See Antone v. Block, No. 80-1053 slip op. at 11-12 (D.C. Cir. Aug. 10, 1981); Natural Resources Defense Council v. Train, 510 F.2d 692 [5 ELR 20046, 20696] (D.C. Cir. 1975). In the instant case where the agency has failed to implement a congressionally sanctioned process aimed at protecting the public from toxic pollutants, it is clear that the public interest is heavily in favor of compelling agency action.

A review of the cases discussing a trial court's power to utilize a detailed equitable decree reveals that certain definite factors are crucial to the viability of any decree. The first such factor is the presence of unlawful or impermissible agency action. This link to unlawful activity is important because in its absence the courts are unwilling to uphold detailed decrees fashioned by trial courts.³ See Antone v. Block, supra, slip op. at 10-11; Natural Resources Defense Council v. Train, 510 F.2d at 711. In the present case, the aggregate record of the EPA with regard to the regulation of these toxic pollutants can be considered equivalent to administrative action unlawfully withheld. American Dairy of Evansville v. Bergland, 627 F.2d 1252, 1262 (D.C. Cir. 1980). Section 706(1) of the Administrative Procedure Act gives the courts the power to compel administrative action in such circumstances. Id.

Once the hurdle of original authority to fashion a decree is cleared, the primary touchstone for determining whether any given decree impermissibly infringes on an agency's discretion appears to be whether the decree is result or procedure oriented. Compare National Association of Postal Supervisors v. United States Postal Service, 602 F.2d 420 (D.C. Cir. 1979) (district court ordered specific pay raise; decree invalid) and Huntt v. Government of the Virgin Islands, 382 F.2d 38 (7th Cir. 1967) (district court ordered specific performance of contract against apparent legislative will; decree invalid) with Adams v. Richardson, 480 F.2d 1159 (D.C. Cir. 1973) (en banc) (district court ordered procedure [12 ELR 20373] for HEW to follow; decree valid). In fact, in Adams an en banc panel of this circuit's Court of Appeals placed heavy emphasis on this distinction: "Far from dictating the final result with regard to any of these [school] districts, the order merely requires initiation of a process which, excepting contemptuous conduct, will then pass beyond the District Court's continuing control and supervision." Adams, 480 F.2d at 1163 n.5. The instant settlement agreement does not seek to control any of the EPA's final results, which are lawfully within the province of the agency alone to determine, but instead merely seeks to compel the EPA to implement the process that Congress intended to provide to protect both this nation's waters and the users of those waters.⁴ As a process-oriented decree, the instant settlement agreement does not impermissibly infringe on the EPA's discretion.

The next factor furnishing support for the upholding of a detailed equitable decree is the extent to which the parties are allowed to participate in the formulation of the court's decree. See Handler, 610 F.2d at 658 & 660 (placing weight on fact that parties agreed to special investigation as part of consent decree); NRDC v. Train, 510 F.2d at 705 (fact that parties allowed to draft decree helps to ensure workability); cf. Adams, 480 F.2d at 1165 (in upholding plan over objection, court of appeals relies on fact that trial court's decree was supported by testimony of objecting party). Obviously the chance to participate in the formulation of the decree greatly lessens the intrusive, infringing aspects of the decree when it is finally implemented.

This participation factor is particularly relevant in the instant case where the parties were the prime formulators of the decree; this court did not dictate a course of action to the Administrator, but merely approved what he had formulated in the first instance and then voluntarily agreed to undertake. In fact, the agency has affirmatively exercised its discretion to undertake the acts set forth in the decree and to settle litigation, thereby enabling it to exercise its discretion in the way it deemed best. The agreement actually freed the agency from restrictions arising from the lawsuits and allowed the agency the requisite flexibility to exercise its discretion. See United States v. Ketchikan Pulp Co., 430 F. Supp. 83, 85 [7 ELR 20369] (D. Alaska 1977) (EPA's implementation of FWPCA facilitated by ability to negotiate settlements in contested litigation). As such, the instand settlement agreement is more of an accommodation to rather than an infringement upon the Administrator's discretion. See Defendant's Opposition at 12 (settlement allowed EPA to implement preferred regulatory approach by removing threat of continued litigation over that approach).

The final factor, according to the caselaw, contributing to the support for extensive equitable decrees is flexibility; "[f]lexibility rather than rigidity has distinguished equity jurisprudence." NRDC v. Train, 510 F.2d at 713. The fact that the party subject to an extensive decree can petition the court to modify the decree if circumstances change, and if convincing can have the court effect the desired modification, lessens the potential intrusion and infringement caused by an extensive decree. See NRDC v. Train, 510 F.2d at 705 (court's willingness to entertain objections buttresses party participation and makes decree palatable); Adams, 480 F.2d at 1163. In the instant case, this court has indicated such a willingness to respond to objections by the parties; the settlement agreement has already been modified a number of times and, at present, there is another such motion to modify awaiting briefing and oral argument. The fact that the court has adopted a flexible approach to the decree also compels the conclusion that the instant decree does not impermissibly infringe upon EPA's discretion.

II.

Although the relevant caselaw factors discussed above provide ample support for findings that the instant agreement does not impermissibly infringe on the EPA Administrator's discretion, the instant case possesses further persuasive non-caselaw support for the settlement agreement: express congressional approval. In enacting the 1977 Amendments to the FWPCA, Congress clearly had the instant settlement agreement in mind and clearly approved of its procedures. For example, Senator Muskie, the architect of the 1972 FWPCA and the Senate floor manager of the Conference Report in 1977, told the Senate:

Another, and possibly more important, reason for maintaining the BAT requirements is that the Agency currently has a major program underway of using BAT to control toxics. Technology-based effluent limitations are being developed which will place limits on toxic pollutants which pose or are likely to pose human health and ecological hazards.

The conference agreement was specifically designed to codify the so-called "Flannery decision," which set forth 65 families of pollutants which are to be regulated by BAT, and EPA has been implementing this consent decree. To take a different course for dealing with toxics at this point would require a major reprogramming of EPA resources. Such a delay, whether it be to allow utilization of a different section of the act or in order to implement this section, would only cause confusion and add still more delay to efforts to solve the toxics problem. The discharge of toxic pollutants should be eliminated as soon as possible. Because EPA is already embarked upon a program to control toxics using a proven mechanism, technology-based effluent limitations, and because of the urgency to control toxics, prudent public policy demands that this policy be maintained.

123 CONG. REC. S. 19647-48 (daily ed. Dec. 15, 1977). See also S. REP. NO. 95-370 at 56 (noting Committee approval and endorsement of strategy contained in decree), reprinted in [1977] U.S. CODE CONG. & AD. NEWS at 4380. The Court of Appeals specifically noted this congressional approval. Environmental Defense Fund, Inc. v. Costle, 636 F.2d at 1242. The fact that Congress has placed its imprimatur on the procedures established by the instant settlement agreement provides substantial support for finding that this decree does not impermissibly infringe upon the EPA Administrator's discretion.

Conclusion

In light of the failure of the EPA to meets its acknowledged duties under the FWPCA and in light of the fact that the agency was subject to suit for the failure to perform these duties, the parties' decision to enter into a settlement agreement, and this court's decision to ratify and supervise it, constituted reasonable steps to assure early efforts by the delinquent defendant toward eventual discharge of its statutory responsibilities. See NRDC v. Train, 510 F.2d at 704-05. Further,

sound principles counsel resort to a structured type of order where the court seeks to compel completion of a task which will necessarily extend over a substantial period. Requiring the courts to rely on mere exhortation to move with expedition toward compliance within a "reasonable time" would undercut their ability to spur reticent defendants to render the performance to which the plaintiff and the public are entitled. The authority to set enforceable deadlines both of an ultimate and an intermediate nature is an appropriate procedure for exercise of the court's equity powers to vindicate the public interest.

Id. As a result, this court finds that the instant settlement agreement does not impermissibly infringe upon the discretion accorded to the EPA Administrator by Congress.

An appropriate Order accompanies this Memorandum Opinion.

Order

This matter came before the court on remand from the Court of Appeals. After considering all the memoranda submitted by the parties in connection with the remanded issue before this court [12 ELR 20374] and for good cause shown, it is, by the court, this 5th day of February, 1982

ORDERED that the intervenors' motion to vacate or, in the alternative to revise, the instant settlement agreement on the grounds that said agreement impermissibly infringes upon the discretion granted to the Administrator of the EPA by Congress is, for the reasons stated in the accompanying Memorandum Opinion, hereby denied.

1. Although none of the parties had originally raised this issue, this court had considered its implications throughout the settlement process. For example, at an April 30, 1976 status call on the eve of settlement, after examining the parties' proposed paragraph 8(c), this court observed:

Now that, as I view it, would put the court in a position of supervising the discretionary actions of EPA until conceivably 1983 or beyond. I don't intend to undertake any such role, and I don't think it is a proper judicial role.

Transcript at 4. As a result, the paragraph was modified.

Although the Court of Appeals had addressed this issue at oral argument and had allowed the parties the opportunity to file supplemental briefs on the issue, that Court determined that this issue should be remanded to this court for three reasons: 1) to allow this court to rule on the issue and consider its implications in fashioning the decree, 2) to enable the parties to develop a record of what restrictions the modified agreement placed on the Administrator's discretion, and 3) to allow EPA to consult with other federal departments and agencies to obtain a complete exposition of the government's views on this important issue. See Environmental Defense Fund, Inc. v. Costle, 636 F.2d 1229, 1258-59 [10 ELR 20803] (D.C. Cir. 1980). Pursuant to this directive, "the Department of Justice has solicited the views of its own divisions and of other departments, agencies and commission of the federal government" and these viewpoints are reflected in the Government's position in this case. See Defendant's Opposition to Intervenors' Joint Motion to Vacate or, Alternatively, to Revise The Decree And In Support of Defendant's Cross-Motion to Modify The Decree (hereinafter "Defendant's Opposition") at 1-2.

2. Intervenors also suggest that this court has exceeded its Article III powers in both entering and modifying the instant agreement. In this argument, intervenors maintain that the court has gone beyond the Constitution's "case or controversy" limitation by exercising both legislative and administrative powers in connection with this decree and by approving a settlement agreement which exceeds the parameters of the original dispute between the parties. Id. at 19-21. The court finds that these arguments plainly lack merit.

3. This link to unlawful activity is arguably les important in this case where the court is not actually imposing a decree upon the parties, but is instead condoning their own settlement decree. See text infra at [12 ELR 20373]. In fact, by settling EPA may be tacitly admitting at least some level of impropriety on its part. See Defendant's Opposition at 5 (agency legitimately perceived risk of losing law-suits, which loss could have subjected agency to court orders severely restricting its discretion) and at 7 (NRDC had colorable claim and stood reasonable chance of obtaining court order.

4. This court has consciously strived to maintain the process-oriented nature of this settlement agreement. For example, in entering the decree this court noted:

Of special concern was the degree to which the agreement required the court to become involved in the affairs of EPA . . . specifically, the court will not review substantive judgments of the EPA as the original decree appeared to require . . . . The key difference between the modified agreement and the original, however, is that this is a proper burden for the court to bear.

NRDC v. Train, 8 ERC at 2121. The court also took care to ensure that the 1979 modifications constituted a proper exercise of judicial power. See NRDC v. Costle, 12 ERC at 1840.