13 ELR 20189 | Environmental Law Reporter | copyright © 1983 | All rights reserved


United States v. Tenneco Chemicals, Inc.

No. 80-4141 (D.N.J. July 6, 1981)

The court rules that defendant is barred by § 307(b)(2) of the Clean Air Act from attacking the constitutionality of the emission standard for vinyl chloride in an Environmental Protection Agency (EPA) enforcement proceeding. The court finds that defendant participated in the rulemaking that culminated in the promulgation of the standard. Therefore, it concludes that defendant could have raised its contention that the standard was unconstitutionally vague in a judicial review proceeding under § 307(b)(2). Defendant's failure to do so within the 60-day period forecloses review in an enforcement proceeding. The court further holds that $307(b)(2) does not violate defendant's due process rights.

The court also rejects the equitable defenses of laches and waiver since defendant did not assert any harm from delay and because the public interest could be adversely affected if these defenses were to bar the instant enforcement proceeding. Moreover, the court declines to strike the defense of estoppel because defendant's allegations concerning EPA inspections of its facility are sufficient to make out a claim of detrimental reliance, given the early stage of the litigation. Finally, the court grants a protective order against deposition of a high EPA official, finding that written interrogatories would suffice to obtain the needed information.

Counsel for Plaintiff
James A. Plaisted, Ass't U.S. Attorney
Fed. Bldg., 970 Broad St., Rm. 502, Newark NJ 07102
(201) 645-2155

Counsel for Defendant
Bruce I. Goldstein
Saiber, Schlesinger, Satz & Goldstein
Gateway I, Newark NJ 07102
(201) 622-3333

[13 ELR 20189]

Lacey, J.:

Memorandum Opinion

The government moves to strike the 6th-9th and the 15th affirmative defenses of defendant Tenneco Chemicals, Inc.'s Answer (Tenneco) pursuant to FED. R. CIV. P. 12(f) and for a protective order barring the deposition of the Director of the Enforcement Division of the Environmental Protection Agency (EPA), Region II, pursuant to FED. R. CIV. P. 26 (c).1

The complaint alleges that Tenneco discharged vinyl chloride on 17 occasions overan eight-month period in 1978 and 1979 from its polyvinyl chloride plant in Burlington, New Jersey, in violation of provisions of the Clean Air Act, 42 U.S.C. § 7401, et seq. Specifically, it is alleged that Tenneco violated 40 C.F.R. 61.65(a) (the relief valve standard), the regulation governing the circumstances under which a facility may release vinyl chloride into the atmosphere as a result of a relief valve discharge. The regulation provides in part:

(a) Relief valve discharge. Except for an emergency relief discharge, there is to be no discharge to the atmosphere from any relief valve on any equipment in vinyl chloride service. An emergency relief discharge means a discharge which could not have been avoided by taking measures to prevent the discharge.

The government contends that the discharge of the vinyl chloride was under non-emergency conditions and preventable within the meaning of 40 C.F.R. 61.65(a). The complaint seeks $450,000 in civil penalties arising out of the alleged discharges and an order enjoining Tenneco from violating the relief valve standard in the future.

Prior to the commencement of this action, the parties engaged in litigation arising from EPA's issuance of administrative orders to Tenneco, finding that relief valve discharges had occurred under non-emergency conditions and directing Tenneco to comply in the future with the requirements of 40 C.F.R. 61.65(a). These orders involved some of the same discharges alleged in the complaint filed here. One order, dated July 2, 1979, was accompanied by a letter from the Acting Director of the Enforcement Division of Region II, which advised Tenneco that the EPA construed the exception for emergency relief valve discharges narrowly, stating that at a minimum a company must demonstrate that discharges could not have been prevented by implementing any of the following procedures:

1) employee training programs, including instruction on emergency procedures;

2) proper inspection and maintenance programs (including replacement of relief valve seals on a sufficiently frequent basis in order to prevent their rupture);

3) proper design and operation of process and control equipment; and

4) installation and operation of all control equipment needed to comply with the vinyl chloride standard.

Goldstein Affidavit, Exhibit B. This construction of the regulation was consistent with and in large part taken from an internal memorandum issued by the Division of Stationary Source Enforcement of the EPA in April 1979. The memorandum states that relief valve discharges should be presumed to be preventable and thus under non-emergency conditions, in violation of the relief valve standard, subject to the company responsible for the discharge demonstrating otherwise. The memorandum concludes that a relief valve discharge is a violation of 40 C.F.R. 62.65(a) if it could have been anticipated and preventive measures could have been taken or "if the discharge could have been prevented by properly training employees or by properly operating, maintaining and inspecting equipment." Goldstein Affidavit, Exhibit C.

On August 30, 1979, Tenneco filed a petition for review of the July 2 order in the United States Court of Appeals for the Second Circuit; thereafter it was transferred to the Third Circuit Court of Appeals and consolidated for hearing and determination [13 ELR 20190] with a similar petition filed by another polyvinyl chloride manufacturer. Tenneco challenged the construction of 40 C.F.R. 61.65(a) reflected in the EPA memorandum and the letter accompanying the July 2 order. Goldstein Affidavit P7. On October 5, 1979, the EPA, without explanation, issued an order withdrawing its enforcement order of July 2.In a letter accompanying the order, Julio Morales-Sanchez, Director of the Enforcement Division of Region II, stated that although the EPA was withdrawing the order, it continued to believe that Tenneco was in violation of 40 C.F.R. 61.65(a) and that the EPA would take "appropriate enforcement measures necessary to remedy and such violation." Goldstein Affidavit, Exhibits D & E.

Following withdrawal of the order, the EPA filed a motion in the court of appeals to dismiss Tenneco's petition on mootness grounds. Although the court did not find the petition moot, it did dismiss the petition, finding the issue raised on appeal not ripe for adjudication. The opinion, filed on February 23, 1981, took note of the pendency of this proceeding and stated that Tenneco was free to attack the EPA's construction of 61.65(a) in this proceeding. See Affidavit of Jane E. Deaterly in Support of Motion, Exhibit A, p. 10.

I.

Tenneco's fifteenth affirmative defense to the complaint is that 61.65(a) is so impermissibly vague as to violate the Due Process Clause of the Fifth Amendment to the United States Constitution. The government contends that this defense is insufficient as a matter of law in that it is barred by section 307(b)(2) of the Clean Air Act. 42 U.S.C. § 7607.

Section 307(b)(1) of the Act provides in part:

A petition for review of action of the Administrator in promulgating . . . any emission standard or requirement under Section 7412 of this title . . . may be filed only in the United States Court of Appeals for the District of Columbia.

This provision, applicable to the relief valve emission standard at issue here, requires that such a petition be filed within sixty days from the date notice of promulgation of the emission standard appears in the Federal Register. Section 307(b)(2) goes on to state:

Action of the administrator with respect to which review could have been obtained under paragraph (1) [that is 307(b)(1)] shall not be subject to judicial review in civil or criminal proceedings for enforcement.

The EPA proposed the National Emission Standard for vinyl chloride, including 40 C.F.R. 61.65(a), on December 24, 1975, and promulgated the standard on October 21, 1976. Tenneco apparently participated in the rule-making process, submitting comments on the proposed rules to the EPA, and thus presumably had the opportunity to seek judicial review of the regulation within sixty days of its promulgation. Tenneco did not, however, seek such review. The government maintains that Tenneco's contention that 61.65(a) is impermissibly vague is an issue which could have been raised under section 307(b)(1) within sixty days of the date the regulation was promulgated. If this is the case, it is clear that Tenneco is barred from obtaining review of this claim in this civil enforcement proceeding under section 307(b)(2).

The Eighth Circuit considered this issue in a somewhat different context in Lloyd A. Fry Roofing Co. v. E.P.A., 554 F.2d 885 [7 ELR 20415] (8th Cir. 1977). Plaintiff there sought declaratory and injunctive relief to prevent enforcement by the EPA of a Kansas State Implementation Plan emissions standard on the ground that the plan was unconstitutionally vague. The court determined that plaintiff's attack on the constitutionality of the regulation fell within the purview of section 307(b)(1), reasoning that a court of appeals, in reviewing the Administrator's action in approving state implementation plans, decides whether the plan is arbitrary, capricious, an abuse of discretion or otherwise not in accordance with the law. Subsumed within this determination is a finding whether the plan itself is constitutional. That the court, in deciding that case, was considering a different subdivision of section 307(b)(1) than is at issue here, does not meaningfully distinguish that case from the case at bar.

In Getty Oil Co. (Eastern Operations) v. Ruckelshaus, 467 F.2d 349 [2 ELR 20683] (2d Cir. 1972), Getty Oil Company sought a permanent injunction staying the effect of an order issued by the Administrator of the EPA pursuant to section 113 of the Clean Air Act, directing the company to comply with certain regulations in an implementation plan filed with the Administrator by the State of Delaware, limiting pollutants which could be released into the air. Getty argued, in part, that the EPA's failure to file an environmental impact statement pursuant to the National Environmental Policy Act, 42 U.S.C. § 4332(2)(C), rendered the Administrator's compliance order ultra vires. The Third Circuit concluded that this issue could have been properly raised in a section 307 proceeding and that under section 307(b)(2), failure to utilize that proceeding foreclosed review in a civil or criminal proceeding for enforcement.

In an attempt to diminish the impact of these cases, Tenneco argues that Adamo Wrecking Co. v. United States, 434 U.S. 275 [8 ELR 20171] (1978), supports its position that section 307(b)(1) only permits review of the procedural aspects of the Administrator's promulgation of an emission standard. In Adamo, the defendant was indicted and charged with a violation of an emission standard for asbestos promulgated, as is the case here, under section 112 of the Clean Air Act. The alleged emission standard did not establish a numerical or quantitative limit as Congress had intended in defining an emission standard in the Act; it merely set forth certain work practices for reducing asbestos emissions resulting from building demolition activities. The defendant defended on the ground that the asbestos work practice standard, although referred to as an emission standard, was not in fact an "emission standard" within the meaning of Section 112 of the Act.

The Supreme Court held that, while section 307(b)(2) precludes judicial review of the validity of emission standards, it does not preclude review of whether the regulation defendant is said to have violated is actually an emission standard. While the decision may reflect to a limited degree that the Court will abide by a flexible approach in considering the preclusive effect of section 307(b)(2), the Court was careful to point out the limited nature of its ruling. Thus it stated:

We conclude, therefore, that a federal court in which a criminal prosecution under $113(c)(1)(C) of the Clean Air Act is brought may determine whether or not the regulation which the defendant is alleged to have violated is an "emission standard" within the meaning of the Act. We are aware of the possible dangers that flow from this interpretation; district courts will be importuned, under the guise of making a determination as to whether a regulation is an "emission standard," to engage in judicial review in a manner that is precluded by §307(b)(2) of the Act. This they may not do. The narrow inquiry to be addressed by the court in a criminal prosecution is not whether the Administrator has complied with appropriate procedures in promulgating the regulation in question, or whether the particular regulation is arbitrary, capricious, or supported by the administrative record. Nor is the court to pursue any of the other familiar inquiries which arise in the course of an administrative review proceeding. The question is only whether the regulation which the defendant is alleged to have violated is on its face an "emission standard" within the broad limits of the congressional meaning of that term.

Id. at 285. Tenneco seeks to take comfort from the fact that the Court specifically stated that section 307(b)(2) precluded any consideration of whether the Administrator complied with appropriate procedures or whether the regulation is arbitrary, capricious or supported by the administrative record, but did not rule out a challenge to the constitutional validity of the regulation. Two responses are appropriate. First, if the reasoning employed by the Eighth Circuit in Lloyd A. Fry Roofing Co. v. EPA is followed, incorporated within a decision of whether a regulation is arbitrary or capricious could be a determination of whether the regulation is constitutional. Second, the fact that the Court unequivocally states that section 307(b)(2) precludes judicial review of the validity of emission standards, see Adamo Wrecking Co. v. [13 ELR 20191] United States, 434 U.S. at 284, and further states that the district court in an enforcement proceeding may inquire no further than to determine whether the regulation was an emission standard, provides strong support for the position that section 307(b)(2) precludes attacking the constitutionality of an emission standard within an enforcement proceeding. Certainly an attack on an emission standard's constitutionality is an attack on its validity.

Thus, rather than supporting Tenneco's position, Adamo suggests that the constitutional defense sought to be raised here is precluded by section 307(b)(2). Accordingly, I cannot consider the vagueness defense.2

Tenneco next argues that if section 307(b)(2) of the Act precludes a challenge to the validity of 40 C.F.R. 61.65(a), it is unconstitutional in that it violates its rights to due process of law.

The Supreme Court's decision in Yakus v. United States, 321 U.S. 414 (1944), is dispositive of this issue. The court there held that consistent with due process Congress could require that objections to the validity of price regulations set by the Administrator pursuant to the Emergency Price Control Act be made by protest of the regulation, within 60 days of its issuance, to the Administrator, with right of appeal to the Emergency Court of Appeals or not at all.

Relying on Yakus, the Eighth Circuit in Lloyd A. Fry Roofing Co. v. EPA, supra, decided this issue, finding that the fact that a company was precluded from challenging the constitutionality of a state's implementation plan under 307(b)(2) on vagueness grounds did not render that provision unconstitutional.

On the basis of Yakus and Lloyd A. Fry Roofing Co., I find that section 307 is constitutional.3 Accordingly, the motion to strike the fifteenth affirmative defense is granted.

II.

The Sixth, Seventh, Eighth and Ninth Affirmative Defenses raise the defenses of waiver, estoppel and laches. The government maintains that general equitable principles such as estoppel and laches are not applicable to the government in effectuating a statute intended to vindicate the public interest, in the absence of strong countervailing factors such as detrimental reliance. This position has been expressed in somewhat different ways by the courts. In Pacific Shrimp Co. v. United States, 375 F. Supp. 1036, 1042 (W.D. Wash. 1974), for example, the plaintiff-shipowner alleged that the United States Coast Guard's inactivity for over 30 years in inspecting vessels similar to the one he owned, prohibited the government from enforcing the federal maritime inspection statutes to his ship. The court recognized that plaintiff had been unfairly treated but declined to prohibit enforcement of the inspection laws, stating:

The government has at times been estopped to enforce the law because of breach of the doctrine of elementary fairness. Estoppel may not be invoked, however, as a means of successfully avoiding the requirements of legislation enacted for the protection of the public interest. An administrative agency charged with protecting the public interest is not precluded from taking appropriate action nor can the principles of equitable estoppel be applied to deprive the public of a statute's protection because of mistaken action or lack of action on the part of public officials.

In United States v. Lazy FC Ranch, 481 F.2d 985 (9th Cir. 1973), a case relied upon by Tenneco in opposing this part of the motion, the court asserted:

[E]stoppel is available as a defense against the government if the government's wrongful conduct threatens to work a serious injustice and if the public's interest would not be unduly damaged by the imposition of estoppel.

Id. at 989. From these and other cases it appears that estoppel should only lie in those cases where a private party detrimentally relies on affirmative actions of the government and where the public interest will not be unduly damaged by involving estoppel. See United States v. Michael Schiavone & Sons, Inc. 430 F.2d 231, 233 (1st Cir. 1970). Under these circumstances, the waiver and laches defenses must be stricken. These defenses seem to be attempts to bar this action simply because either the EPA has been slow in instituting this action or because the EPA has waived its right to bring this action after issuing and then withdrawing administrative orders. Tenneco does not assert that any harm befell it due to the delay. Moreover, at least as to the injunctive aspect of the relief sought, the public interest could be adversely affected if these defenses were to bar this proceeding.

On the other hand, the estoppel defense will not be stricken at this time. Tenneco submits that discovery may uncover the following:

[T]hat Tenneco was advised by the EPA that its facility was in compliance with all pertinent EPA regulations following a full inspection of the defendant's facility in Burlington by the EPA; that EPA was fully advised of all relief valve discharges when they occurred at the facility and at no time prior to July of 1979 did the EPA ever suggest that these discharges were in violation of 40 C.F.R. 61.65; that in meetings which transpired prior to July of 1979 the EPA never suggested that these discharges were in violation of the regulation; and that the circumstances under which the EPA withdrew the compliance order issued in July of 1979 also support the invocation of estoppel.

Brief at 17. These allegations, although found only in defendant's brief, are sufficient to make out a claim of detrimental reliance, given the relatively early stage of the litigation. The motion to strike the eighth affirmative defense is thus denied. However, the sixth, seventh and ninth defenses will be stricken.

III.

The government seeks a protective order to prevent Tenneco from deposing Julio Morales-Sanchez, the Director of the Enforcement Division of the Environmental Protection Agency, Region II. The government makes a three-prong argument. First it states that the deposition of Morales seeks wholly irrelevant information; second it cannot be justified by a showing of need; and third, the testimony is protected by the work product doctrine.

The government contends the sole issue in this case is whether the discharges were preventable within the meaning of 40 C.F.R. 61.65(a) and that Morales has no first-hand knowledge about whether in fact they were preventable. Thus it is claimed only irrelevant information is sought. The government contends that the only information which Tenneco can obtain in a deposition of Morales consists of: (1) the reason why the EPA opted to withdraw its prior Orders and commence a civil enforcement action against Tenneco; (2) how EPA makes its decision to bring enforcement actions against violators of the relief valve standard; and (3) how Mr. Morales interprets the regulation. The government arrives at this conclusion from reviewing the document request contained in the notice of deposition. Tenneco seeks production of all written materials relating to issuance and withdrawal of the administrative orders, all written materials also subject to 40 C.F.R. 61.65(a), and all written materials setting forth the EPA's policies in ascertaining whether or not to pursue civil proceedings or issue administrative orders.

Morales has gotten himself personally involved in this litigation, at least to a limited extent, by signing the letter sent to Tenneco which accompanied the EPA's order withdrawing the administrative orders it had issued. There he states that it is the EPA's continuing belief that Tenneco has violated 61.65(a). Certainly Tenneco is entitled to discover the factual predicate for that belief.

The government responds that, given Morales' position of [13 ELR 20192] authority with the EPA, Tenneco has not made a sufficient showing of need to justify taking his deposition. As stated in Capitol Vending Co. v. Baker, 36 F.R.D. 45 (D.D.C. 1964):

There must be some showing, if the right to take a deposition is challenged by the prospective witness, why the prospective witness should be examined. This applies particularly to heads of governemnt agencies. If the head of a government agency were subject to having his deposition taken concerning any litigation between private parties which may indirectly involve some activity of the agency, we would find that the heads of government departments and members of the President's Cabinet would be spending their time giving depositions and would have no opportunity to perform their functions.

In light of the limited personal knowledge apparently possessed by Morales of this case and the fact that Morales holds a high position within the agency it appears that any information Tenneco needs from Morales can be obtained through written interrogatories.

Accordingly, Tenneco may not depose Morales. It may, however, proceed by was of interrogatory.

In accordance with the foregoing, the government's motion to strike the fifteenth, sixth, seventh and ninth defenses, and for a protective order barring the deposition of Julio Morales-Sanchez is granted. The motion to strike the eighth affirmative defense is denied. Tenneco may serve Morales with written interrogatories.

1. The government had also moved to compel production of documents.This issue has been resolved. See Affidavit of Bruce I. Goldstein in Opposition to the Motion P13.

2. Further support for this holding is found in the many appellate courts that have entertained constitutional attacks upon the facial validity of promulgated regulations in judicial review proceedings under section 307(b)(1). See, e.g., Sierra Club v. Environmental Protection Agency, 540 F.2d 1114, 1139 [6 ELR 20669] (D.C. Cir. 1976) (facial challenge to constitutionality of regulations governing "prevention of significant deterioration" of air quality); and see Commonwealth of Pennsylvania v. Environmental Protection Agency, 500 F.2d 246, 256 n.17 [5 ELR 20618] (3d Cir. 1974) (constitutionality of enforcement provisions where failure to enforce transportation control plan) ("In view of [the] interrelation between the enforcement procedures and the substantive regulations contained in the implementation plan, the Commonwealth's constitutional challenge to 40 C.F.R. § 52.23 is clearly ripe for adjudication.")

3. I am, of course, aware of the serious concerns expressed by Justice Powell in his concurring opinion to Adamo with respect to the constitutionality of section 307. However, the Supreme Court has not as a whole considered this issue. I thus am compelled to follow Yakus.


13 ELR 20189 | Environmental Law Reporter | copyright © 1983 | All rights reserved