Bethlehem Steel Corp. v. Gorsuch

No. 82-2884 (7th Cir. February 3, 1984)

The court affirms the Environmental Protection Agency's (EPA's) disapproval of a delayed compliance order (DCO) issued by the Indiana Air Pollution Control Board to Bethlehem Steel Corp., holding that the DCO is inconsistent with EPA's valid partial approval of a revision to the Indiana state implementation plan (SIP). EPA first approved an Indiana SIP governing particulate emissions from "combustion" and "process" sources in 1972. In 1974 the state proposed revisions to the SIP governing particulate emissions from "any" equipment. The following year EPA partially approved the SIP revision, accepting a 40-percent opacity limit, but rejecting a 15-minute daily exception from that limit. In 1982 the Agency disapproved a DCO covering petitioner's coke oven emissions because the DCO allowed 15-minute daily exceedances from the 40-percent opacity rule, making it inconsistent with the 1975 approval order, though consistent with the 1974 proposed revision. The court rules, in a footnote, that under § 307(b)(1) of the Clean Air Act it is too late for petitioner to attack the substantive elements or procedures used in adopting the 1975 DCO. Petitioner is limited to attacking EPA's statutory authority to act. The court adheres to its decision in an earlier case, Public Service Co. of Indiana v. EPA (PSI), 12 ELR 20928, that the Agency's partial approval of the 1974 SIP revision was valid. It rejects as factually incorrect and irrelevant petitioner's argument that PSI should be distinguished because Bethlehem Steel's coke oven emissions were not covered by the 1972 SIP.

The court then rules that because the DCO required compliance with the 1974 revised SIP, not the 1975 EPA-approved version, the DCO violated the Clean Air Act and was correctly disapproved by the Agency. The court rules that the Act did not compel EPA to partially approve the DCO, or to issue a revised DCO, or to issue an enforcement order. The court notes that the EPA's failure to do any of these things does not bar the Agency from bringing a civil enforcement suit, but should weigh against the Agency in any attempt to assess penalties against petitioner. Further, if EPA has unreasonably delayed its consideration of SIP revisions, petitioner should have a defense against imposition of civil penalties for violation of those parts of the SIP during the period of delay.

Judge Wilkins, concurring, chastises EPA for its administrative delays and resort to litigation, but states that stare decisis and deference to the Agency force the outcome of the case.

Judge Posner, dissenting, argues that EPA's power to partially approve SIPs does not extend to removal of key words from limitations, as it did in the 1975 order. He would distinguish PSI because petitioner's coke oven emissions were not covered by the 1972 SIP, and he would allow petitioner to attack the substance and procedures used in adopting the 1975 order under the rule in Bethlehem Steel Corp. v. EPA, 14 ELR 20090.

[A related decision is published at 11 ELR 20294 — Ed.]

Counsel for Petitioner
Bryant G. Tabler, Stanley Fickle
Barnes & Thornburg
1313 Merchants Bank Bldg., Indianapolis IN 46204
(317) 638-1313

Counsel for Respondent
Carey Rosemarin
Office of Regional Counsel
Environmental Protection Agency, 230 S. Dearborn St., Chicago IL 60604
(312) 353-2094

Jose R. Allen, Raymond W. Mushal
Land and Natural Resources Division
Department of Justice, Washington DC 20530
(202) 633-2219

Before CUDAHY and POSNER, Circuit Judges, and WILKINS, Senior District Judge.^*

[14 ELR 20296]

CUDAHY, Circuit Judge.

The petitioner, Bethlehem Steel Corporation ("Bethlehem"), petitions for review of an order (the "1982 Order") of the United States Environmental Protection Agency (the "EPA") disapproving a Delayed Compliance Order ("DCO") issued to Bethlehem by the Indiana Air Pollution Control Board ("Indiana Board"). EPA's only stated ground, at this stage of the proceedings, for disapproving the DCO is that the DCO does not require compliance with the version of the Indiana Air Pollution Control Regulation APC-3 ("APC-3") which EPA contends it had previously approved in 1975. Bethlehem, therefore, also petitions for review of the 1975 EPA order ("1975 Order") approving the EPA version of APC-3. We have jurisdiction to review these EPA orders under section 307(b)(1) of the Clean Air Act, 42 U.S.C. § 7307(b)(1) (Supp. V 1981). We hold that the version of APC-3 which EPA claims to have approved in 1975 is the only valid and enforceable version of that regulation and that the DCO refers to an incorrect version of APC-3. We therefore affirm the EPA's 1982 Order disapproving the DCO issued to Bethlehem by the Indiana Board.

Bethlehem owns and operates an integrated steel mill in Burns Harbor, Porter County, Indiana.¹ The mill contains two coke oven batteries of 84 coke ovens each. Coke oven operations include "charging" (dumping the coal from a lorry car into the oven), "coking" (destructive distillation of the coal turning it into coke by heating it in an oxygen-free atmosphere so that no combustion occurs), and "pushing" (ramming the hot coke into a quench car to be taken to the quench tower for dousing with water). According to Bethlehem, none of these processes causes the emission of combustion products which are regulated by the Indiana Board's DCO at issue here. However, the pushing and charging and, to a lesser extent, coking operations do result in particulate emissions.

The Clean Air Act (the "Act") established a combined state and federal program to protect the public health and welfare from the adverse effects of air pollution. 42 U.S.C. § 7401 et seq.; Train v. Natural Resources Defense Council, Inc., 421 U.S. 60, 65 (1974). The Act requires the EPA Administrator to establish both primary standards to protect the public health and secondary standards to protect the public welfare. §§ 108 and 109, 42 U.S.C. §§ 7408, 7409. Primary responsibility for the measures necessary to achieve these standards, however, remains with the individual states. Each state must develop and submit to the EPA for approval a state implementation plan ("SIP") providing for the implementation, maintenance and enforcement of these standards. § 110(a)(1), 42 U.S.C. § 7410(a)(1).

To be enforceable, the SIP must be approved by the Administrator, who must grant approval if the proposed SIP satisfies the criteria set out in section 110(a)(2)(A) - (K) of the Act. 42 U.S.C. § 7410(a)(2)(A) - (K); Union Electric Co. v. Environmental Protection Agency, 427 U.S. 246, 257 (1976). If the SIP does not meet statutory criteria, the Administrator may approve parts of the proposed SIP or may promulgate substitutes for the defective measures. § 110(c)(1), 42 U.S.C. § 7410(c)(1). The EPA is empowered to enforce the SIP, but primary enforcement responsibility remains with the state. § 113(a), (b), 42 U.S.C. § 7413(a), (b). A state may also voluntarily submit revisions to its SIP, and these must also be reviewed and approved by the Administrator on the basis of compliance with the same criteria which the original SIP must meet. § 110(a)(3)(A), 42 U.S.C. § 7410(a)(3)(A).

Statutory deadlines for compliance with the primary standard for particulate emissions require compliance within three years of approval of the SIP, but not later than December 31, 1982, or, in particular circumstances not relevant here, December 31, 1987. §§ 172 and 173, 42 U.S.C. §§ 7502, 7503. Before 1977, EPA and the states adopted the practice of issuing "enforcement orders" which often extended the deadline for a source's compliance with a SIP. Congress disapproved of this practice and so adopted section 113(d), 42 U.S.C. § 7413(d).

This section limits the extension of compliance deadlines and requires that, when a state issues a DCO, the DCO [14 ELR 20297] can only extend the deadline by which a source must comply, and it must require compliance with the applicable underlying SIP. § 113(d)(1)(D), 42 U.S.C. § 7413(d)(1)(D). The DCO is also subject to EPA veto, and, in the case of a major stationary source like the Bethlehem plant, the DCO may not take effect until the Administrator determines that it has been issued in accordance with the Act's requirements. That determination is to be made within ninety days of receipt of notice of the DCO's issuance. § 113(d)(2), 42 U.S.C. § 7413(d)(2).

In January 1972, the State of Indiana submitted a SIP which the Administrator approved in May 1972. The SIP included two regulations at issue here, 1972 APC-3 and 1972 APC-5 (both originally promulgated in 1968). The former regulation established a limitation on the opacity of smoke emitted from combustion sources, while the latter set specific numerical limits for particulate matter emissions from "process" sources. It is unclear whether the Bethlehem coke batteries were covered by these regulations. These two regulations together represented a unified approach to controlling particulate emissions, and 1972 APC-3 provided a practical means of enforcing 1972 APC-5.²

In 1974, Indiana proposed a voluntary revision of its SIP. This proposed revision referred to "any" equipment, instead of process sources, thereby clearly including the Bethlehem coke batteries within the ambit of the SIP provisions. This revision (to be referred to as the "Indiana version of 1974 APC-3") also included "other visible emissions" but, at the same time, granted a cumulative fifteen-minute exemption in each 24-hour period. In October 1975, the Administrator published the 1975 Order concerning the proposed revisions including the following statement:

New APC-3, the visible emissions regulation, varies from the approved regulation in several respects, the most significant of which is the introduction of a 15-minute exemption period in each 24-hour period. The power companies submitted comments to the effect that such an exemption is necessary for them when starting fires or cleaning units. Since sections 2(a) and 2(b) of APC-3 already provide an exemption to visible emission requirements for fuel-burning sources in such circumstances, this comment appears to be superfluous . . . . [C]ertain intermittent sources, such as coke batteries and roof monitors, may cause gross visible emissions and remain within the exempted time limits. For such sources at least, APC-3 would be ineffective and impractical as a surveillance technique if indeed it could be deemed available . . . . Accordingly, APC-3 must be disapproved to the extent that the 15-minute exemption provision in section 1 fails to meet the requirements of §§ 51.13(e)(1) and 51.19(c).

40 Fed. Reg. 50032-33 (October 28, 1975), 40 C.F.R. § 52.776(c) (1981).

EPA claims that this order constituted a partial approval of 1974 APC-3 and that the only valid, enforceable regulation extends to all relevant operations, including Bethlehem's coke batteries, but does not include the fifteen-minute exemption. Bethlehem and the Indiana Board have contended that the EPA's purported partial disapproval was ineffective and its attempt served instead to invalidate the entire proposed revision leaving 1972 APC-3 in effect (i.e., with the coke batteries exempted from regulation).³

On November 15, 1978, the Indiana Board issued a DCO to Bethlehem delaying Bethlehem's required compliance with APC-3 and APC-5 until July 1, 1979.⁴ The precise date on which the Indiana Board notified the EPA of the issuance of the DCO is in dispute, but EPA admits that it received notice by December 26, 1978. Although required to issue an approval or disapproval within ninety days of receipt of notice, the Administrator did not release a final disapproval until September 17, 1979. 44 Fed. Reg. 53746-48. This original disapproval was based upon six premises, which were challenged in Bethlehem I, 638 F.2d at 999, 1004-08. The Bethlehem I decision concluded that the record presenting the reasons for the EPA's decision was inadequate to allow the court to review the EPA's action effectively. The only ground relied on by EPA which remains of interest here is that the DCO referred to the incorrect version of APC-3. The court in Bethlehem I stated:

[14 ELR 20298]

Without any input from the state Board, we are totally uninformed as to which APC-3 the state intended to apply to Bethlehem, or whether the APC-3 applied incorporated the 15-minute exemption. It would seem the state intended to apply the APC-3 the Administrator wishes enforced, yet he has boldly concluded otherwise. Without some support in the record, we cannot accept this as an adequate basis for the Administrator's decision.

Id. at 1008. The issue of whether EPA had validly approved parts of the proposed 1974 APC-3 was also not decided in Bethlehem I. Instead, the court remanded the case to the EPA for reconsideration of its disapproval of the DCO and for supplementation of the record so that this court could properly review the EPA order.

On October 1, 1982, the EPA published an order once again disapproving the DCO. 47 Fed. Reg. 43377-79. In this 1982 Order the EPA relied on only one fact for its disapproval — that the proposed DCO required compliance with the Indiana version of 1974 APC-3, rather than with the EPA-approved version, in violation of section 113(d)(1)(D) of the Clean Air Act, 42 U.S.C. § 7413(d)(1)(D). Bethlehem is now appealing this 1982 Order which again disapproves the issuance of the DCO.

The only two issues⁵ which Bethlehem now raises on this appeal are: 1) whether the EPA's attempt to approve part of 1974 APC-3 was valid, and 2) whether EPA's disapproval of the DCO, because it required compliance with the incorrect regulation, was proper.

In the interim between the Bethlehem I decision and this current appeal, the validity if EPA's partial approval of 1974 APC-3 was once again litigated in this court. In Public Service Co. of Indiana v. United States Environmental Protection Agency, 682 F.2d 626 (7th Cir. 1982), cert. denied, 103 S. Ct. 762 (1983) ["PSI"], PSI moved to quash search warrants based on potential violations of Indiana's regulation 1974 APC-3. This is the same regulation underlying the DCO contested in the present case. Like Bethlehem, PSI argued that the EPA's attempt to approve only a part of the Indiana proposed revision was invalid.

PSI's first contention was that, on the basis of Bethlehem I, EPA was collaterally estopped to assert that its partial approval of 1974 APC-3 was valid.⁶ 682 F.2d at 629. The PSI court rejected that contention for two reasons. First, the Bethlehem I court's remand was based primarily on the inadequacy of the record: "[i]t does not appear from the language of the opinion that the court intended to conclusively resolve the question of the approval status of the 1974 APC-3." Id. at 630. Second, the Bethlehem I court's determination of the status of 1974 APC-3 was not necessary to the judgment in the case and therefore would not serve to estop EPA to relitigate the issue.

The court in PSI then held that EPA has the authority to approve part of a state's revision of its SIP and that, in this case, it did in fact do so. The Act clearly grants EPA the authority to approve a SIP "or any portion thereof." 42 U.S.C. § 7410(a)(2). However, in thesection concerning EPA approval of voluntary revisions of a SIP, the statute states only that EPA "shall approve any revision of an implementation plan" if it meets the proper requirements. 42 U.S.C. § 7410(a)(3)(A).

EPA argued, nonetheless, that its power to approve revisions to a SIP includes the flexibility of partial approval which was expressly granted in connection with the power to approve the original SIP.⁷ The PSI court noted that "considerable deference is to be accorded an administrative agency's construction of an Act it is charged with enforcing." 682 F.2d at 632; Udall v. Tallman, 380 U.S. 1, 16 (1965). The same principle has been applied to the EPA's interpretation of the Clean Air Act. Train v. Natural Resources Defense Council, Inc., 421 U.S. 60 (1975).

Without going so far as to hold that the Agency's construction of the Act was the only one it permissibly could have adopted, we conclude that it was at the very least sufficiently reasonable that it should have been accepted by the reviewing courts.

Id. at 75; 682 F.2d at 632. See also Mobil Oil Corp. v. United States Environmental Protection Agency, 716 F.2d 1187, 1189 (7th Cir. 1983).

The PSI court then concluded that EPA's interpretation of its own authority under the Act in this case "is sufficiently reasonable that we should accept it" and that the Congressional policies which enabled EPA to approve portions of an original SIP would be the same in the context of EPA partial approval of a revision to a SIP. 682 F.2d at 632-33. While each state is given wide discretion in the formulation of both the SIP and any revisions to it, EPA still has the ultimate authority and responsibility to ensure that the plan, with any revisions, complies with the relevant criteria contained in the Act. Further, while in a particular case partial approval may alter the plan devised by a state, forced total disapproval of an entire regulation, only part of which did not comply with the Act, would also radically alter a state's plan; in addition, [14 ELR 20299] total disapproval would involve disapproval of provisions which did comply with the Act. Thus the PSI court concluded, "[w]e do not construe the adoption requirement to prevent the EPA from approving only those portions of revisions to a SIP that comply with the criteria of 42 U.S.C. § 7410(a)(2)(A)-(K)." Id. at 633.

PSI raised two main arguments contrary to the EPA position. The first was that partial approval of a revision would allow EPA to approve something not adopted by the state. The court's answer to this was that the same situation could result whether partial approval of a SIP or partial approval of a revision was involved and that PSI had failed to distinguish adequately between them. Second, PSI argued that partial approval would allow the EPA to evade the promulgation procedures outlined in 42 U.S.C. § 7410(c). The court, however, found that requiring EPA to repromulgate either the old regulation with the unsatisfactory portions excised or an entirely new but satisfactory regulation would be "duplicitous and . . . inconsistent with the congressional policy underlying the approval process . . . ." Id. at 634.

Having determined that EPA had the authority to approve part of a revision to a SIP, the PSI court then held that the agency did, in fact, exercise that power in partially approving 1974 APC-3. Id. at 635-36. In reaching this decision, the court rejected PSI's argument that the 1975 Order was vague. The court also relied on regulations promulgated simultaneously with the EPA's 1975 Order which codified its actions and clearly approved the proposed Indiana regulations with certain exceptions, 40 C.F.R. § 52.773, § 52.776(c) and § 52.794(a) (1983).

PSI also argued, as does Bethlehem in the current case, that it could attack the merits of the 1975 Order. EPA refuted this, and the court agreed. The court held that the only means of reviewing the substantive elements of the EPA approved version of 1974 APC-3 would have been by filing a petition in the appropriate court of appeals within thirty days of the EPA's action of approval. 42 U.S.C. § 1857h-5(b)(1) (1976).⁸

In attempting to decide this current appeal by Bethlehem, we are thus faced with our prior decision on the validity and enforceability of the same regulation. Ordinary principles of stare decisis therefore dictate that PSI governs the case before us. At least this is true unless additional facts not before the court in PSI require a different result.

A litigant who attacks the validity of a patent before a court that has held the patent valid in a prior case has the burden of persuading the court that there is a "material distinction" between that case and the case at bar. For reasons of stability in the law and judicial economy, we ordinarily will not re-examine de novo the decision of the court in the prior case but rather will limit ourselves to a consideration of whether, assuming the correctness of the earlier decision, additional facts not before the court in the prior case require a different result. This is but an application of the doctrine of stare decisis. [citations omitted]

Mercantile National Bank of Chicago v. Howmet Corp., 524 F.2d 1031, 1032 (7th Cir. 1975); Illinois Tool Works, Inc. v. Foster Grant Co., Inc., 547 F.2d 1300, 1302-3 (7th Cir. 1976), cert. denied, 431 U.S. 29 (1977).⁹ The burden is therefore on Bethlehem to demonstrate the existence of "'persuasive new evidence' of invalidity and . . . a 'material distinction' between the cases," id. at 1302, if we are not to follow PSI.

Bethlehem has contended both in its brief and at oral argument that the PSI decision, "to the extent that [it] holds that EPA had authority to 'partially approve' 1974 APC-3, . . . should be overruled as erroneous." Petitioner's brief at 17. Bethlehem relies on three factors which it says were not in the record before the court when it decided the PSI case. Id. at 15, 17. These are: 1) Indiana submitted 1974 APC-3 as a voluntary revision; 2) the state never adopted or enforced EPA's version of the regulation; and 3) the state determined that the EPA version was infeasible as applied to intermittent sources, such as Bethlehem's coke batteries. We believe, however, that all of these points are adequately answered in PSI.

In response to Bethlehem's first two arguments, the PSI court's analysis comparing EPA authority to approve part of a SIP with its authority to approve a revision applies equally whether the revision is voluntary or not. Deference to an agency's own interpretation of its authority under its enabling statute remains an equally persuasive principle of statutory interpretation. More importantly, the PSI court's emphasis on EPA's ultimate responsibility for ensuring that all state plans — both original and revised — remain in compliance with statutory criteria also applies, regardless of whether the revision is voluntary. Similarly, if a state refused to adopt or refused to enforce an original SIP because the EPA had approved only parts of it, presumably the EPA would still have the authority to adopt and enforce the approved version of the plan. As the court in PSI stated, Bethlehem "has provided no reason why regulations should be severable for approval purposes when submitted as part of the original SIP but not when they are submitted as revisions to the SIP." 682 F.2d at 633.

Bethlehem's third point — that the EPA version of 1974 APC-3 is not feasible — was also addressed in PSI. PSI argued that it was denied an opportunity to challenge the technical feasibility of the EPA version. The PSI court responded by noting that "technical feasibility is not an issue for the EPA to considerwhen it evaluates a state submitted SIP . . . and probably is not relevant when it promulgates provisions for a SIP," although technical feasibility is relevant to the fashioning of a compliance order and may be relevant in enforcement proceedings. 682 F.2d at 636 n.16. See also Union Electric Co. v. Environmental Protection Agency, 427 U.S. 246, 257-260, 268 (1976); Cleveland Electric Illuminating Co. v. Environmental Protection Agency, 572 F.2d 1150, 1164 (6th Cir.), cert. denied, 439 U.S. 910 (1978); Indiana & Michigan Electric Co. v. Environmental Protection Agency, 509 F.2d 839, 847 (7th Cir. 1975); Buckeye Power, Inc. v. Environmental Protection Agency, 481 F.2d 162, 173 (6th Cir. 1973), cert. denied sub nom. Big Rivers Electric Corp. v. Environmental Protection Agency, 425 U.S. 934 (1978). Therefore, even if Bethlehem could establish technical infeasibility, this would be irrelevant to EPA's evaluation of Indiana's proposed version.

Although Bethlehem apparently did not raise this argument [14 ELR 20300] in its brief, we have also considered whether it would be possibile to distinguish the PSI decision from the case now before us on the basis that the PSI installations were combustion sources which therefore were clearly covered by the prior existing SIP regulation (i.e., 1972 APC-3), while the Bethlehem coke batteries were non-combustion sources which therefore arguably were not covered by the prior existing regulation. While the published opinion in PSI does not state that the only sources contested there were combustion sources, it is certainly far from clear that the Bethlehem coke batteries were not covered by the pre-existing regulation.

In fact, at oral argument, counsel for the EPA stated:

We do not agree with Mr. Tabler [counsel for Bethelehem] that the 1972 APC-3 did not apply to non-combustion sources. I think the record shows that Indiana was enforcing APC-3 against coke oven batteries in 1973 and 1974, because in their original extensions of the compliance deadline that they issued they included APC-3 in those extensions. Therefore, it is pretty clear that they thought it applied to coke oven batteries. Therefore, the way that the SIP revision worked was that it was essentially a relaxation for all types of sources — non-combustion and combustion [sources].

If the coke oven batteries were not covered by 1972 APC-3, it is difficult to understand why Bethlehem needed extensions of the compliance deadline for this regulation for its coke oven batteries.¹⁰

If the Bethelem batteries were covered by 1972 APC-3, then the positions of Bethlehem and PSI would be indistinguishable. However, even if the Bethlehem batteries were not covered by 1972 APC-3, the issue of the legitimacy of the EPA's partial approval was litigated in PSI apparently without respect to whether the sources involved were previously regulated, and therefore the principles enunciated there should be generally applicable.

Because Bethlehem has failed to convince us that there were any significant errors in the PSI analysis and has failed to distinguish the facts of its case from those of PSI, the resolution of this issue in the PSI decision must control our resolution of this same issue in the present case. We therefore hold that the only valid and enforceable [14 ELR 20301] version of the Indiana regulation 1974 APC-3 is that approved by the EPA in its 1975 Order and affirmed in the PSI decision.

III

We turn next to consideration of the EPA order disapproving the DCO issued by the Indiana Board in 1978. The EPA first disapproved this DCO in 1979. In Bethlehem I, this court considered the validity of this disapproval. The court found that EPA had inadequately supported the reasons for its disapproval and so remanded for reconsideration and supplementation of the record. On October 1, 1982, the EPA once again disapproved the DCO. 47 Fed. Reg. 43377-79. Although the EPA had relied on several criteria in its first disapproval, 638 F.2d at 999, 1004-08, the second disapproval was based on only one factor — that the DCO required compliance with the Indiana, not the EPA, version of 1974 APC-3. The DCO therefore violated the Clean Air Act which mandates that the DCO require compliance with the applicable EPA-approved SIP. § 113(d)(1)(D), 42 U.S.C. § 7413(d)(1)(D). In its 1982 Order, EPA cited PSI as authority for its position that the only valid and enforceable version of 1974 APC-3 was the version which the EPA had approved in its 1975 Order.

As in its 1982 Order, EPA on this appeal relies on only this basis — that the DCO is invalid because it requires compliance with the incorrect regulation. Bethelehem has also declined to continue its attack on the disapproval on several grounds raised in the Bethlehem I decision, including an apparent impropriety involving an EPA attorney¹¹ and EPA's failure to approve or disapprove the DCO within the statutory deadline of ninety days.¹²

Given our holding that, in accordance with PSI, the only valid version of the regulation is the one approved by the EPA in its 1975 Order, we must next determine to which version of the regulation the Indiana DCO refers. In Bethlehem I, we stated that the record was unclear as to which version of 1974 APC-3 the state DCO referred. 638 F.2d at 1008. To clarify this point, the EPA in its 1982 Order cited a letter written by the Technical Secretary of the Indiana Board to the U.S. EPA Assistant Regional Counsel, dated May 13, 1981. Supra n.3. Another letter from Ralph Pickard, Technical Secretary of the Indiana Board, to EPA Regional Counsel, dated January 20, 1981, states that the Board intended in the DCO to apply the version of 1974 APC-3 promulgated by the state. Record Document 9. Both these letters make it explicit that the Indiana Board did not accept the EPA's interpretation of its authority to permit partial approval of a SIP regulation. The Indiana Board also took the position that the EPA-approved version could not contain different provisions than the state-approved version, unless the EPA had undertaken separate rulemaking procedures. Because EPA had not done so, the Indiana Board indicated that the only version which it recognized was the state-approved version.¹³ It is clear that the DCO does not refer to the EPA version of 1974 APC-3, and the DCO thus violates the Clean Air Act. The EPA was, therefore, correct in disapproving the DCO in its 1982 Order, and we affirm that action.

Bethlehem asserts, both in its brief and at oral argument, that the EPA was required, at the least, to approve the DCO insofar as it required compliance with APC-5, about the validity of which there is no underlying dispute, or to issue its own DCO. Petitioner's brief at 47. First, section 113(d) does not at any point require the EPA either to approve a state DCO or to issue its own even if the DCO requires compliance with the correct underlying SIP provision. The only requirement, as will be discussed, is that the EPA issue an enforcement order or a compliance order, under either section 113(a) or section 113(d), respectively. However, EPA's issuance of its own delayed compliance order is clearly intended to be discretionary, since section 113(d)(1) states that "[a] state (or . . . the Administrator) may issue . . . an order . . . ." 42 U.S.C. § 7413(d)(1) (emphasis supplied). Second, EPA has stressed that it viewed the provisions of 1972 APC-3 and 1972 APC-5 as closely connected because 1972 APC-3 served as the means of enforcing 1972 APC-5, supra n.2. Given the EPA's emphasis on the interrelatedness of these provisions, it seems reasonable that the EPA would deal with both in the same manner. However, as will be discussed below, EPA's failure to issue either an enforcement order or a compliance order should constitute a significant factor in any future judicial determination assessing a penalty against Bethlehem, particularly if EPA attempts to collect a separate fine for Bethlehem's violation, if any, of APC-5.

The last argument raised by Bethlehem is that once EPA disapproved the Indiana Board's DCO, EPA was under a statutory obligation either to issue an enforcement order or to issue its own delayed compliance order. § 113(d)(2), 42 U.S.C. § 7413(d)(2). EPA answers this argument by claiming that the applicable section which concerns enforcement orders gives the EPA discretion whether to issue an enforcement order or to institute a civil action against the alleged violator. § 113(a)(1) and (b), 42 U.S.C. § 7413(a)(1) and (b). A literal reading of the statute seems to indicate that Bethlehem is correct — section 113(d)(2) does not give the EPA a third choice of initiating a civil action as an appropriate response following its disapproval of a state-issued DCO. It clearly would have been preferable for EPA to follow strictly the statutory requirements, just as it should have made its disapproval decision within the ninety day statutory period. However, by reading section 113(a) and section 113(b) together, we conclude that the issuance of an enforcement order can be a prelude to the institution of a civil action, but such an order is not a necessary precondition. Other than perhaps ensuring adequate notice to an alleged violator that the EPA considers that it is committing a violation (a fact of which Bethlehem has surely had adequate notice), the issuance of an enforcement [14 ELR 20302] order appears to have little practical consequence.

If, in fact, the EPA did not follow adequate and appropriate procedures in the initiation of its civil suit against Bethlehem, then the court which will hear this claim should take this properly into account. United States v. Bethlehem Steel Corp., No. H78-491 (N.D. Ind.). We also note that Bethlehem has instituted a suit against EPA to compel it to issue its own delayed compliance order. Bethlehem Steel Corp. v. United States Environmental Protection Agency, No. H82-517 (N.D. Ind.). Further, if, as Bethlehem claims, the state of Indiana has attempted to revise its SIP and 1974 APC-3 and EPA has delayed in taking appropriate administrative action in considering this proposed revision, then this is again a factor for that district court to consider. Petitioner's brief at 10; respondent's brief at 7 n.9. However, neither of these factors affects the validity of the EPA's disapproval of the Indiana DCO, although both may affect the equities of the eventual assessment of any penalties against Bethlehem. We believe that a scenario whereby the EPA delays excessively in acting upon the state's attempt to revise its SIP and, in the interim, Bethlehem remains liable for an escalating fine for its presumably continuing violation would provide a defense by Bethlehem against the imposition of civil penalties. Any court which deals with this issue should provide Bethlehem with the benefit of such a defense if the scenario has been as we suggest.

We conclude that the EPA properly disapproved the Indiana DCO issued to Bethlehem and therefore affirm the EPA action.

* The Honorable Philip C. Wilkins, Senior District Judge for the Eastern District of California, is sitting by designation.

1. For discussion of the factual and statutory background, see also Bethlehem Steel Corp. v. United States Environmental Protection Agency, 638 F.2d 994 (7th Cir. 1980) [Bethlehem I].

2. 1972 APC-3 limited visible emissions from sources to 40% opacity. The parties disagree as to whether 1972 APC-3 was applicable to operations such as the coke batteries at the Bethlehem plant. See Bethlehem, I, 638 F.2d at 997 n.3. Bethlehem contends that the 1972 regulations applied only to combustion sources and that its coke batteries are non-combustion sources. The EPA contends that "process" sources include coke oven batteries at steel mills and cites the definition of "process" given in Indiana regulation 325 IND. ADMIN. CODE section 1.1-1(61) as "any action, operation or treatment, and the equipment used in connection therewith, in all methods or forms of manufacturing or processing that may emit air contaminants." Respondent's brief at 5 n.5.

EPA also points out that 1972 APC-3 provided an easy method of enforcing 1972 APC-5 because a determination of compliance with opacity standards can be made relatively simply through visual observation. Determination of compliance with numerical emission limits requires an expensive, time-consuming stack test. 1972 APC-3 provided that a violation of that regulation constituted prima facie evidence of a violation of 1972 APC-5. Respondent's brief at 5 n.6.

The dissent asserts that the EPA concedes in its brief that only 1972 APC-5, and not 1972 APC-3, could have applied to the Bethlehem coke batteries. But the EPA has consistently contended that 1972 APC-3 and 1972 APC-5 present a "unified approach to controlling particulate emissions, and they are intended to complement one another." Respondent's brief at 5. EPA also specifically stated at oral argument that 1972 APC-3 did apply to non-combustion sources. Infra n.10. The dissent's reading of the EPA's "concession" therefore appears entirely unwarranted.

3. Bethlehem argues that "the existing SIP regulation (i.e., 1972 APC-3), previously approved by the EPA and never subsequently found to be inadequate, remains in effect and federally enforceable under the Act." Petitioner's brief at 23 (emphasis in original); Bethlehem I, 638 F.2d at 998. The Indiana Board also adopts the interpretation that the currently valid regulation is the Indiana version of 1974 APC-3. Ralph Pickard, Technical Secretary of the Indiana Board, wrote in a letter to the U.S. EPA Assistant Regional Counsel, dated May 13, 1981, that:

[i]t is the state's position that the [DCO] does, in fact, require compliance with the SIP, because the Order requires the source to meet limits contained in the applicable State SIP regulations. Although the State is aware of U.S. EPA's position that the 'federally approved' SIP is the determining document, it is the State's position that your interpretation is not legally permissible. The Clean Air Act(CAA) does not authorize EPA to partially approve or disapprove regulations in order to create a 'federally approved' SIP which contains different requirements than the State-adopted SIP regulations, unless U.S. EPA follows separate rulemaking procedures. Since U.S. EPA has never taken such rulemaking action, the applicable SIP requirements are contained in the State regulation.

Appendix to petitioner's brief at 21. A letter from Pickard to EPA Regional Counsel, dated January 20, 1981, states more explicitly that the Indiana Board intended the state version to apply in the DCO (Record Document 9).

4. Indiana had granted Bethlehem five extensions for compliance with the 1972 regulations. The first four occurred prior to the 1977 amendments to the Clean Air and so EPA approval was not needed. The fifth extension also was not submitted to the EPA. Bethlehem I, 638 F.2d at 997 n.2.

5. A third issue which Bethlehem raises is that it is not barred by section 307(b)(1), 42 U.S.C. § 1857h-5(b)(1) (1976), from attacking the substantive elements and procedures utilized by EPA in approving its version of 1974 APC-3. This section requires that review of agency action in approving or disapproving the promulgation of a SIP be initiated by filing a petition in the appropriate court of appeals within thirty (now sixty) days of the agency action. See also 42 U.S.C. § 7607(b)(1) (Supp. V 1981). This court held, in Public Service Co. of Indiana v. United States Envirnonmental Protection Agency, that a challenge to this same regulation was time-barred by this section. 682 F.2d 626, 638 (7th Cir. 1982). We agree that Bethlehem is similarly barred. However, as the court in PSI also acknowledged, this section does not preclude our review of the agency's statutory authority to act as it purports to have acted or our determination of what the agency did in fact do. These were the issues decided in PSI. ID. at 636-38 and n.17.

EPA also argues that, in fact, it followed the proper procedures in partially approving 1974 APC-3. EPA points both to the public hearings held by the State of Indiana and to the public comment period provided by EPA which, EPA claims, satisfy the requirements of the Clean Air Act and the Administrative Procedure Act, 5 U.S.C. § 551 et seq. Respondent's brief at 27. Bethlehem, of course, disagrees. Petitioner's brief at 33-37. We do not find it necessary to decide this issue in light of our adoption of the PSI holding that review of EPA procedure is barred by the time limitation of section 307(b)(1), 42 U.S.C. § 1857h-5(b)(1) (1976).

6. Bethlehem also argues on this appeal that EPA is estopped to litigate the validity of its version of 1974 APC-3 on the basis of the Bethlehem I decision. For the same reasons presented in PSI, we hold that the EPA is not estopped. Further, the court in Bethlehem I remanded to the EPA for supplementation of the record. EPA has supplemented the record, particularly on the issue of which regulation the Indiana Board intended to incorporate in the DCO. Supra n.3. Because the Bethlehem I court remanded and did not decide any of these issues, it is difficult to see how that opinion could have collateral estoppel effect unless EPA had not supplemented the record. Our holding here to follow the PSI decision is based on the doctrine of stare decisis and not on collateral estoppel.

7. As discussed below, the PSI court held, and we have found no reason to disagree, that there is apparently no difference in the policies underlying the procedures for approval of a SIP and for approval of a revision of a SIP. All of the arguments raised by both PSI and Bethlehem would seem to apply equally to both situations. Further, if this interpretation of EPA's authority does not accord with legislative intent, it is for Congress, and not the courts, to change the grant of authority.

8. The time period was subsequently extended to sixty days. 42 U.S.C. § 7607(b)(1) (Supp. V 1981). Bethlehem also attacks many of the same "procedural defaults" raised by PSI. Petitioner's brief at 33-37; supra n.5. In addition, Bethlehem, relying on the Bethlehem I decision, argues that the 1975 Order was "legally insufficient notice to Bethlehem to trigger the running of § 307(b)(1)'s time limitation on review." Id. at 37. However, as discussed infra at n.10, Bethlehem apparently had adequate notice, even prior to its challenge to the EPA's disapproval of the DCO, that the agency's action on proposed 1974 APC-3 and 1974 APC-5 would have adverse consequences for its coke batteries.

9. In Illinois Tool Works, Inc., the court stated that "the court in the second action should either take judicial notice of the contents of the record in the earlier action or admit it in evidence." Id. at 1303. Both Bethlehem and EPA request that we take judicial notice of the entire record in the PSI case. Petitioner's reply brief at 4 n.2; respondent's brief at 18 n.14. While we would be willing to do so, it is possible to evaluate Bethlehem's arguments concerning "new" facts purportedly not before the PSI court on the basis of the published PSI opinion.

10. In Bethlehem I, the court stated:

In 1972, the state of Indiana submitted its SIP to the Administrator for his review and approval and the Plan was approved on May 31 of that year. Since that time, the state has regulated the steel industry, including the Bethlehem coke operations at Burns Harbor, pursuant to that Plan and its amendments.

638 F.2d at 997 (emphasis added). Although the court noted that Bethlehem had obtained five extensions of the deadline for compliance with the SIP, it concluded that it was unclear whether 1972 APC-3 applied to Bethlehem coke batteries. Id. at nn.2 and 3; respondent's brief at 5.

The dissent essentially adopts the position of "distinguishing" the situation of PSI from that of Bethlehem on the ground that the only source at issue in PSI was a combustion source, clearly regulated by 1972 APC-3, while the Bethlehem coke batteries were not clearly regulated by 1972 APC-3. Although at oral argument Bethlehem attempted to argue this difference from PSI, when specifically asked, counsel for Bethlehem relied on his request to overrule, rather than to distinguish, the PSI decision:

Q: "PSI decides those questions against you, doesn't it? You're asking us to overrule PSI?"

Bethlehem: "I am asking you to overrule PSI, Your Honor, and the terms of PSI probably are against me, but I don't think the court understood in PSI that the state had never adopted this regulation."

In addition, EPA does not concede that 1972 APC-3 did not apply to non-combustion sources. As previously discussed at considerable length, supra n.2, 1972 APC-3 was merely a simplified and practical means of enforcing 1972 APC-5. Although, according to the dissent, 1972 APC-3 refers only to the opacity of "smoke," the close interrelatedness of APC-3 and APC-5 suggests that the analysis should not turn on particular scrutiny of this single word, for EPA contends, and the dissent apparently concedes, that 1972 APC-5 did apply to non-combustion sources. The argument about the scope of 1972 APC-3 is therefore, as the dissent puts it, "not conclusive." Nonetheless, the version of 1974 APC-3 promulgated by the state would have provided the fifteen-minute exemption both to Bethlehem's previously regulated smoke stacks and to its coke batteries, the previous regulation of which is the subject of this considerable disagreement. As to the smoke stacks, in any event, the state-issued 1974 APC-3 was all relaxation and no burden. How this benefit balanced off against the burden on the coke batteries, even as argued by Bethlehem and accepted by the dissent, is conjectural. We therefore disagree with the dissent's approach because it accepts as fact and depends on the acceptance as fact of matters which are merely argued but are not in the record of this case.

The dissent asserts that Bethlehem is not time-barred by section 307(b)(1), 42 U.S.C. § 1857h-5(b)(1) (1976), from seeking judicial review of the EPA action, supra nn.5 and 8. The dissent relies on Bethlehem Steel Corp. v. United States Environmental Protection Agency, No. 82-2608, slip op. at 4 (7th Cir. Dec. 13, 1983), in arguing that the time limitations of the Clean Air Act are not triggered until agency action is ripe. But, in this last-cited case, the issue was Bethlehem's challenge to an interpretive regulation long before the regulation had ever been applied to Bethlehem. The present situation is quite different. It was apparent that EPA action concerning 1974 APC-3 and 1974 APC-5 would directly affect Bethlehem. Further, Bethlehem sought the DCO at issue here, as well as earlier extensions of its compliance deadline, because it apparently knew that these regulations concerned it. Bethlehem I, 638 F.2d at 997 n.2 and 1008. In Bethlehem I, the court stated, "[t]he parties' subsequent behavior . . . indicates that they believed thatthe 1974 APC-3 was at least partially approved. . . . This behavior raises a question regarding Bethlehem's contention that the State of Indiana meant to apply [1972] APC-3 in the DCO." Id. at 1008. This is clearly not a situation of requiring Bethlehem "to challenge a regulation just because the regulation might some day harm it." Bethlehem Steel Corp., No. 82-2608, slip op. at 4. Finally, Bethlehem I did not address the issue of a time-bar because the only issue that case considered was Bethlehem's challenge to EPA's statutory authority to make partial approvals. It is therefore difficult to understand how the dissent can assert that Bethlehem I establishes the law of the case on this issue. We therefore think it appropriate to follow, as recent and controlling precedent, the holding in PSI that review of agency action would now be barred. 682 F.2d at 638.

In addition, the dissent, in approving PSI but not reaching the same result in this case, apparently applies a reasonableness standard. It was reasonable for EPA to excise the fifteen-minute exemption as it applied to combustion sources (i.e., PSI) but unreasonable to do so for non-combustion sources (i.e., Bethlehem). The dissent also compares EPA's authority to make partial approvals to the line-veto power of a governor. These procedures are, however, quite different. The EPA, unlike a governor, does not have absolute discretion in approving or disapproving a SIP or a SIP revision. The EPA's discretion is limited by statutory specification of conditions where approval is required. Thus, according to the Clean Air Act, the EPA must grant approval of a SIP or a revision if the proposed SIP or revision satisfies the criteria set out in section 110(a)(2)(A)-(K) and section 110(a)(3)(A); 42 U.S.C. § 7410(a)(2)(A)-(K) and § 7410(a)(3)(A). See Connecticut Fund for Environment, Inc. v. Environmental Protection Agency, 696 F.2d 169, 172 (2d Cir. 1982). Bethlehem, albeit in a different context, concedes that EPA is required to approve a SIP or SIP revision if it complies with the statutory criteria.The EPA's discretion is thus controlled by a reasonableness standard, which is defined to a significant extent by statute. Therefore, the scenario of unfettered agency abuse of discretion seems implausible and unwarranted by the record here. Under some other scenario, presumably, a reasonableness analysis might prevail.

11. In Bethlehem I, this court noted that the same EPA attorney was involved in reviewing the Indiana DCO and, at the same time, in instituting an enforcement proceeding against Bethlehem. This court therefore requested EPA, on remand, to respond to this concern. 638 F.2d at 1008-10. In its 1982 Order, EPA claimed that this attorney's participation in both proceedings "was necessary to ensure adequately informed decision-making and agency consistency," but that he was not directly responsible for either the enforcement litigation or the DCO review. 47 Fed. Reg. at 43378-79. Bethlehem has not raised this issue again on this appeal and it is not before us now.

12. Section 113(d)(2) of the Act provides that the EPA Administrator shall approve or disapprove a DCO within ninety days of receipt of notice of the issuance of the DCO. In the case of a major stationary source, such as the Bethlehem plant, the DCO does not take effect until the Administrator approves it. 42 U.S.C. § 7413(d)(2). While it is unclear exactly when the EPA received notice of the Indiana DCO, EPA concedes that it had adequate notice by December 26, 1978. 638 F.2d at 998. EPA did not announce its disapproval until September 17, 1979, clearly more than ninety days later. The Bethlehem I court criticized this unexcused dilatoriness, and we join in its criticism. However, the Act clearly lacks any provision which allows a DCO to be automatically approved if the EPA does not act within the ninety day period. Therefore, this excessive delay cannot affect our decision as to the validity of EPA's disapproval, although, as we note later, the delay should be taken into consideration in any proceedings against Bethlehem for its alleged violations during the period in which EPA delayed in taking final action.

13. On this appeal Bethlehem does not apparently attempt to argue that the DCO refers to the EPA version of the regulation.

[14 ELR 20302]

WILKINS, Senior District Judge, concurring.

I join in Judge Cudahy's opinion. All members of the panel were concerned in this case about the possible hardships of a holding that the EPA may partially approve and disapprove a state submitted revision. As Judge Posner notes, it gives the EPA the power selectively to edit state rules, thereby producing rules that the state had never considered. But that is how the EPA has interpreted its powers, and that interpretation has been sanctioned by a prior panel of this court in Public Service Co. of Indiana v. United States Environmental Protection Agency, 682 F.2d 626 (7th Cir. 1982), cert. denied, 103 S. Ct. 762 (1983) ("PSI").

Deference to an agency's interpretation of its powers and the principle of stare decisis command our result in this case. Bethlehem has not put before us any new material facts which would justify our reaching a different result. Further, as demonstrated by Judge Posner's dissent, distinguishing PSI has the effect of creating two different state rules, one rule for companies such as PSI and another rule for companies such as Bethlehem. Judge Posner would thus have the court partially approve and partially disappove the EPA's action. The process of piecemeal approvals must come to an end.

The EPA's behavior in this matter has not been exemplary. It has ignored the time limits and procedures established for it by Congress. The EPA delayed in issuing its disapproval of the Indiana DCO, and Bethlehem claims the EPA is delaying action on another revision proposed by Indiana. Further, instead of issuing an enforcement or compliance order regarding Bethlehem, the EPA filed suit. See 42 U.S.C. § 7413(a)(1), (b). Bethlehem was thus denied the thirty-day period mandated by Congress during which Bethlehem could negotiate with the state and the EPA or try to conform to federal standards. By filing suit, the EPA placed the parties in a litigation posture, a posture in which the parties remain. These administrative errors will be dealt with as later courts litigate civil suits filed by the EPA against companies such as Bethlehem. We are confident that these courts will not allow an unfair imposition of liability and damages.

[14 ELR 20302]

POSNER, Circuit Judge, dissenting.

The central issue is the validity of the cropped form in which the EPA in 1975 "approved" a pollution control regulation proposed by the State of Indiana. The regulation, 1974 APC-38, was the state's voluntary revision of an earlier regulation, 1972 APC-3, which had forbidden the emission from any combustion installation of smoke that was more than 40 percent opaque. 1974 APC-3 broadened the coverage of the 40 percent opacity limitation from smoke emitted by any combustion installation to all visible emissions from any equipment but also provided that the limitation could be exceeded for up to 15 minutes every 24 hours. As broadened, the regulation reached the noncombustion process by which Bethlehem Steel makes coke at its Burns Harbor Works. Bethlehem contends that it cannot comply with a 40 percent opacity limitation unless the coke batteries are allowed to blow off denser clouds of dust for 15 minutes every day and that this is why the 15-minute exemption period was included in the regulation as proposed by the state. The EPA approved 1974 APC-3 except for the 15-minute provision and promulgated it in the edited form in which it had approved it.

Under the scheme of state-federal cooperation established by the Clean Air Act Amendments of 1970 the state proposes and the EPA disposes: the state proposes an implementation plan for achieving the air quality standards established by the EPA and the EPA must approve or disapprove the plan. The EPA may approve the plan "or any portion thereof," 42 U.S.C. § 7410(a)(2); and as we held in Public Service Co. v. EPA, 682 F.2d 626, 631-34 (7th Cir. 1982), partial approval is permissible even when as in this case the state is proposing to revise an earlier plan, though the section that authorizes the EPA to approve revisions (42 U.S.C. § 7410(a)(3)(A)) does not contain "any portion thereof" language. State implementation plans, original or revised, are lengthy documents that contain many different regulations. Indiana's current plan covers 67 pages. See Atlantic Environmental Associates, Inc., Regulations and Non-Regulatory Revisions to State Implementation Plan: Indiana, EPA 450/2-81-034, July 1981. It is only common sense that the EPA should be allowed to approve some of the regulations and disapprove others, rather than have to approve or disapprove the whole package. Otherwise delay in attaining the objectives of the Clean Air Act would be even greater than it has been.

But for the EPA under the guise of partial approval to take key words of limitation out of a single regulation and thereby make it more stringent than the state would ever have dreamed of proposing is a horse of a different color. Suppose an electrical utility were required to submit all of its proposed marketing plans to the state public utility commission, and to put into effect those that the commission approved in whole or in part; and the utility submitted a plan to give all customers who purchased at least 1000 kilowatts a month another 100 kilowatts free of charge. The commission could not say, "We approve just the part of the plan that provides all customers with 100 kilowatts a month free of charge." But that is the sort of thing the EPA had done here.

Now it is true that when the EPA disapproves a regulation it can revise it itself and promulgate the revised regulation. See 42 U.S.C. § 7410(c)(1)(B); Kennecott Copper Corp. v. Train, 526 F.2d 1149, 1151 (9th Cir. 1975). But the EPA did not follow that course here. And it is not just a case of the EPA's having been maladroit in failing to describe what it did as the promulgation of a revised state implementation plan rather than the partial approval of the state's proposed plan. If it had followed the revision route it would have had to promulgate a proposed regulation first and give the state, at the very least, a chance to submit a substitute regulation. See 42 U.S.C. § 7410(c)(1). More might have been required. See Buckeye [14 ELR 20303] Power, Inc. v. EPA, 481 F.2d 162, 170-71 (6th Cir. 1973); Currie, Air Pollution: Federal Law and Analysis § 4.10 at p. 4-24 (1981). In particular, since the revision raised issues that may not have been adequately canvassed in the state hearing that preceded the proposal of 1974 APC-3, another state hearing might have been required notwithstanding Indiana & Michigan Elec. Co. v. EPA, 509 F.2d 839, 846-47 (7th Cir. 1975), and Appalachian Power Co. v. EPA, 477 F.2d 495, 502-03 (4th Cir. 1973). And while it is true that the State of Indiana could, and within a few months of the EPA's "partial approval" did, propose to revise 1974 APC-3 (as rewritten by the EPA) to restore a blow-off period for noncombustion emissions, after seven years the EPA has not yet finally acted on any of the state's numerous proposals for revision. The procedural difference between the authorized route and the short cut actually taken has turned out to be profound. Of course, as with any other procedural default it is possible that if the EPA had followed the procedures required by statute it would have come to the same conclusion that it did without following those procedures. But that is not a good reason for our excusing its noncompliance.

The distinction between partial approval and revising by deleting is well recognized in other areas of the law. A governor who has line-veto power is not allowed to extend the scope of a bill submitted to him by using his veto power to eliminate a limitation in the bill. See, e.g., Washington Ass'n of Apartment Ass'ns v. Evans, 88 Wash. 2d 563, 564 P.2d 788 (1977). "The power of partial veto . . . is not the power to enact or create new legislation by selective deletions." State ex rel. Sego v. Kirkpatrick, 86 N.M. 359, 365, 524 P.2d 975, 981 (1974). No more may a court invalidate a part of a statute on constitutional grounds and leave the rest in effect if the result is to create a law that the legislature would not have enacted. See, e.g., Norman's on the Waterfront, Inc. v. Wheatley, 444 F.2d 1011, 1019 (3d Cir. 1971); Extension Versus Invalidation of Underinclusive Statutes: A Remedial Alternative, 12 Colum. J.L. & Soc. Probs. 115 (1975). And a court that refuses to enforce a provision in a contract because it is against public policy will not enforce the remainder of the contract if the result will be to give the promisee a substantially better deal than he had bargained for. See Farnsworth, Contracts § 5.8 at p. 361 (1982); Restatement (Second) of Contracts § 185, comment b (1981).I fail to understand why a similar principle should not apply to partial approvals by the EPA of state-proposed air pollution regulations.

Although Public Service Co. v. EPA, supra, 682 F.2d at 635-36, upheld the EPA's "partial approval" of Indiana's 1974 APC-3, it did so in a critically different factual context from that of the present case. Public Service Company is an electrical utility that was complaining about the application of the EPA's version of 1974 APC-3 to an electrical generating plant — a combustion source. Combustion sources were fully covered by 1972 APC-3. As to them the only effect of the 1974 revision was to create a 15-minute exemption period; as to them, therefore, in "partially approving" 1974 APC-3 EPA was disapproving the whole of the relevant portion of 1974 APC-3 and thus continuing those sources under 1972 APC-3. The effect was not to subject Public Service Company to a more stringent regulation than the state had submitted, but merely to prevent the state from relaxing a previous regulation (1972 APC-3) by revision; and the EPA has express authority to disapprove a state-proposed revision. See 42 U.S.C. § 7410(a)(3)(A).

Noncombustion sources had not been subject to the opacity limitation of 1972 APC-3. Coking is not a combustion (i.e., burning) process; coke is made by heating coal in an oxygen-free environment.The heating of the coke ovens is done by combustion, but the smoke from that combustion (which is vented through combustion stacks) was fully subject to 1972 APC-3 and is not in issue in this case. Bethlehem contends that it is the noncombustion emissions for which a 15-minute daily blow-off is necessary, that 1972 APC-3 had no application to them, and therefore that with regard to them the EPA's "partial approval" of 1974 APC-3 created a regulation more stringent than the state had ever proposed. Bethlehem's view of the scope of 1972 APC-3 is supported by the fact that the Indiana state implementation plan defines "smoke" as "small gas-borne particles from incomplete combustion," Atlantic Environmental Associates, Inc., supra, at 6. 1972 APC-3 was explicitly limited to smoke, and so by definition excluded noncombustion emissions. Maybe this point is not conclusive. But putting it together with the fact that Bethlehem argued emphatically in its opening brief to this court that 1972 APC-3 was not applicable to the emissions which the EPA is seeking to limit in this case by enforcing its version of 1974 APC-3 and that the EPA in its answering brief did not contest the point but on the contrary described 1972 APC-3 as "a limitation on the opacity of smoke emitted from combustion sources," I am reasonably confident that 1972 APC-3 was indeed inapplicable to the coke batteries' noncombustion emissions; the EPA counsel's spur-of-the-moment oral recantation is unpersuasive. Nor is it true that because 1972 APC-3 and 1972 APC-5 were complementary, and APC-5 was not limited to smoke from combustion sources, APC-3 must not have been so limited either. APC-5 limits the amount of particulates that may be emitted into the air. APC-3 (in its 1972 form) limited the opacity of smoke, and by doing so limited indirectly the amount of particulates that could be emitted in the form of smoke. In that sense it was a complement to APC-5. But it did not limit the opacity of the dust clouds stirred up by noncombustion sources.

If we had not already remanded this case to the agency once, see Bethlehem Steel Corp. v. EPA, 638 F.2d 994 (7th Cir. 1980) — more than three years ago — I would suggest that we remand it for findings on the scope of 1972 APC-3. Instead I suggest we decide the case on the record we have — and on that record it is far more likely than not that the regulation excluded the coke ovens' noncombustion emissions.

In suggesting that the EPA exceeded its authority in this case, I am not just splitting hairs over the meaning of "partial approval." This is a case where an administrative agency has stretched the statutory language not to complete but to obstruct the legislative scheme which that language imperfectly embodies. If a state cannot propose an extension of regulation without thereby inviting the EPA to edit the regulation to make it stricter and then summarily to promulgate the edited regulation, states will be reluctant to propose such extensions, and attainment of the statutory objectives through cooperative efforts of state and federal government will be delayed still further. (Delay has been an endemic affliction of the administration of the Clean Air Act.) I emphasize that the proposal of 1974 APC-3, insofar as it related to noncombustion emissions, was a voluntary effort by the state to extend regulation. The state has now been punished for its forwardness. I do not think that the innocent statutory words "or any portion thereof" authorized the EPA to do this.

I have left for last what is logically the first question — whether Bethlehem's attack on the "partial approval" of the 1974 APC-3 was timely. As another panel of this court noted just the other day, the time limitations governing judicial review under the Clean Air Act do not come into play until agency action is ripe. Bethlehem Steel Corp. v. EPA, No. 82-2608, slip op. at 4 (7th Cir. Dec. 13, [14 ELR 20304] 1983). When the EPA first acted with respect to 1974 APC-3 — the action that we now know was the approval of all but the 15-minute exemption — the force of its action was completely unclear. Bethlehem had reasonable grounds to believe that the agency had actually disapproved 1974 APC-3 in its entirety. In that event Bethlehem would have had no reason in the world to challenge the agency's action, since it would have meant that Bethlehem's coke batteries were subject to no opacity limitation at all. Bethlehem attacked the agency's action when it discovered what it was. All this was found the last time this case was here, see Bethlehem Steel Corp. v. EPA, supra, 638 F.2d at 997-98, 1007-08, is the law of the case, and precludes a dismissal of the petition for review as untimely.