United States v. Alcan Foil Products

No. 87-0434-L (CS) (694 F. Supp. 1280 at 1284, 28 ERC 1326) (W.D. Ky. September 15, 1988)

The court, on a motion for reconsideration, holds that the environmental Protection Agency (EPA) may not bring a Clean Air Act enforcement action for violation of an existing state implementation plan (SIP) when a proposed SIP revision is pending against a source that has complied with the proposed revision. The Sixth Circuit's decision in United States v. National Steel Corp., 15 ELR 20678, does not require reversal of the court's original decision holding that EPA may not bring an enforcement action against an alleged SIP violator until EPA acts on a proposed SIP revision, where EPA has delayed acting on the revision for more than four months and the source is in compliance with the revised SIP. A footnote in National Steel stating that the Clean Air Act's requirement that EPA approve general state plans within four months does not apply to SIP revisions is dictum. Even if the four-month rule does not apply to SIP revisions, EPA should not be allowed to bring an enforcement action against a polluter that has complied with a SIP revision pending before EPA. The states have the primary rulemaking responsibility under the Clean Air Act, while EPA's role is to determine whether the states' regulatory schemes further the overall purpose of the Act. EPA's delay in making this determination should not hamper the states' regulatory authority. If EPA ultimately rejects a SIP revision, the question of whether penalties should be imposed for the period that the revision was pending should depend on the equities of each individual case.

[The court's original decision appears at 18 ELR 21006. Briefs in the United States' appeal to the Sixth Circuit are digested at ELR PEND. LIT. 66034.]

Counsel for Plaintiff
Richard Dennis
U.S. Attorney's Office
510 West Broadway, Louisville KY 40202
(502) 582-5911

Robert Foster
Land and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 633-1448

Counsel for Defendant
Lawrence A. Salibra II
Alcan Aluminum Inc.
29th Fl., 100 Erieview Plaza, Cleveland OH 44114
(216) 523-6865

[19 ELR 20592]

SIMPSON, District Judge.

ON MOTION FOR RECONSIDERATION

This matter is before the Court on the motion of the United States Environmental Protection Agency ("EPA") for reconsideration of this Court's prior summary judgment ruling. By order dated March 15, 1988, this Court granted summary judgment in favor of defendant, Alcan Foil Products Division of Alcan Aluminum Corporation ("Alcan"), dismissing the EPA's complaint seeking, penalties and injunctive relief for Alcan's alleged violation of the Clean Air Act, 42 U.S.C. §§ 7401 et seq. The pertinent facts have already been fully set forth and will not be repeated here.

The Court has considered the authorities submitted in support of and in opposition to the EPA's motion for reconsideration. The Court has given special scrutiny to United States v. National Steel Corporation, 767 F.2d 1176 (6th Cir.1985), and, as explained herein, concludes that National Steel does not require that this Court vacate its previous order granting summary judgment in Alcan's favor.

In National Steel, the EPA sued National Steel for violation of the Federal Clean Air Act. In resolution of that action, as part of a consent decree, National Steel agreed to begin, by August 1, 1981, installation of pollution-control equipment on a furnace at one of its facilities. The consent [19 ELR 20593] decree imposed penalties for noncompliance, but permitted National Steel to seek alternative emission reduction options. National Steel sought such an option by seeking a "bubble" plan for the facility at which the offending furnace was located. The consent decree expressly provided that application for a "bubble" would not excuse delay in complying with the consent decree deadline. Id. at 1179. Apparently in hopes that the bubble would be approved, National Steel did not begin installing the pollution-control equipment the consent decree required. After some delays and extensions of time, on December 10, 1982, the EPA approved the proposed bubble. However, during public comment, the bubble was shown to violate air quality standards. On March 30, 1983, the EPA advised National Steel that it would not grant final approval. In April, 1983, the Justice Department sought enforcement of the consent decree, the requirements of which National Steel had hoped to avoid by submission of the bubble.

As its defense to the consent-decree enforcement action, National Steel argued that "mixed signals" from the EPA and the EPA's delay in approving the bubble had induced National Steel to forego installation of the required emission control equipment. As a result, argued National Steel, it should not be subject to penalties for failure to comply with the terms of the consent decree. The Sixth Circuit disagreed, reasoning that National Steel had merely lost its gamble that the bubble would be approved. The Sixth Circuit upheld the award of consent-decree penalties against National Steel, subject to a 180-day limitation contained in the consent decree. The Sixth Circuit expressly rejected National Steel's argument that failure of the EPA to approve or disapprove of the bubble within four months of submission excused it from the consent-decree penalties. In rejecting that argument, the Sixth Circuit stated in cursory fashion that the four-month rule applicable to approval of general state plans is not applicable to revisions of state plans. 767 F.2d at 1183, n. 1.

While the National Steel footnote suggests that the Clean Air Act does not require the EPA to act on proposed SIP revisions within four months, National Steel does not require this Court to reverse its previous summary judgment ruling. First, the consent decree in National Steel expressly provided its requirements would not be excused by submission of a bubble proposal; therefore, the question of the proposed bubble's effect on a SIP's enforceability was not before the Court. Accordingly, the footnote is mere dictum. Second, even if the four-month rule does not apply to submitted SIP revisions, the real issue is whether the EPA should be allowed to bring enforcement proceedings against a polluter who has complied with its state's proposed SIP revision, which the EPA may yet approve, but on which the EPA has neglected to act.

For guidance on this issue, this Court has considered the seminal case of Train v. National Resources Defense Counsel, 421 U.S. 60, 95 S. Ct. 1470, 14 L. Ed. 2d 731 (1975). Train, like National Steel, does not specifically address the issue of the judicial "limbo" created when a state submits a SIP revision and the EPA takes no action on it. However, Train makes it very clear that the primary rule-making role for Clean Air Act standards is allocated to the States, not to the EPA.

The Agency is plainly charged by the Act with the responsibility for setting the national ambient air standards. Just as plainly, however, it is relegated by the Act to a secondary role in the process of determining and enforcing the specific, source-by-source emission limitations which are necessary if the national standards it has set are to be met. Under § 110(a)(2), the Agency is required to approve a state plan which provides for the timely attainment and subsequent maintenance of ambient air standards, and which also satisfies that section's other general requirements. The Act gives the Agency no authority to question the wisdom of a State's choices of emission limitations if they are part of a plan which satisfies the standards of § 110(a)(2). . . . Thus, so long as the ultimate effect of a State's choice of emission limitations is compliance with the national standards for ambient air, the State is at liberty to adopt whatever mix of emission limitations it deems best suited to its particular situation.

. . . [T]he third paragraph of § 110(a), and the one immediately following the paragraphs which specify that States shall file implementation plans and that the Agency shall approve them if they satisfy certain broad criteria, is the section which requires the Agency to "approve any revision of an implementation plan" if it "determines that it meets the requirements" of § 110(a)(2). . . . [T]his provision applies to any revision, . . . Agency approval is subject only to the condition that the revised plan satisfy the general requirements applicable to original implementation plans. Far from evincing congressional intent that the Agency assume control of a State's emission limitations mix once its initial plan is approved, the revision section is to all appearances the mechanism by which the States may obtain approval of their developing policy choices as to the most practicable and desirable methods of restricting total emissions to a level which is consistent with the national ambient air standards.

Train at 79-80, 95 S. Ct. at 1481-82 (footnotes omitted).

Allocating to the EPA secondary responsibility recognizes the state's interest in protecting its own citizens, both from air pollution and from unnecessary or unduly restrictive regulations on the operation of its industry and business. The EPA's interest is merely in determining whether the state's regulatory scheme furthers the overall purpose and plan of the Clean Air Act. Delay on the part of the EPA in making that determination should not hamper the state's right and duty to regulate and protect its own citizens as it sees fit. Accord United States v. General Motors Corp., No. 87-2068-MC (D.Mass. May 16, 1988) [available on WESTLAW, 1988 WL 82247].

In an effort to balance the state's interest against the EPA's, appellate courts in three federal circuits have concluded that the EPA is required to act on SIP revisions within four months of submission. See generally, American Cyanamid v. U.S. E.P.A., 810 F.2d 493 (5th Cir.1987); Duquesne Light Co. v. E.P.A., 698 F.2d 456 (D.C.Cir.1983); Council of Commuter Organizations v. Gorsuch, 683 F.2d 648, 651-52 (2nd Cir.1982) ("CCO # I"). These decisions implicitly recognize the unfairness of imposing penalties on a polluter who complies with a state-proposed SIP revision that the EPA may ultimately approve, because it adequately provides for attainment and maintenance of national air quality standards. To mitigate that unfairness, American Cyanamid concluded that the EPA's failure to act on proposed revisions within four months precludes enforcement actions until the EPA rejects the proposed revision; Duquesne prohibited the collection of penalties until the EPA rejects the revision; the Gorsuch Court expressed concern that it took the EPA years to approve SIP revisions which were supposed to be effective in 1978, Council of Commuter Organizations v. Thomas, 799 F.2d 879, 888 (2nd Cir.1986) ("CCO # II").

The unfairness that concerned the Second, Fifth and District of Columbia Circuits, as well as this Court, is ameliorated by simply requiring that the EPA rule on submitted SIP revisions before it begins enforcement proceedings against polluters to which the revisions are applicable. If the EPA approves the revision as meeting the requirements of the original SIP, then compliance with the revision during the pendency of that approval will have furthered the goals of the Clean Air Act, and the question of penalties and enforcement proceedings rightfully becomes moot.

[19 ELR 20594]

If the EPA rejects the revision, those aggrieved will be entitled to seek judicial review of the EPA's action. In the meantime, the EPA would apparently be free to bring enforcement proceedings for violation of the unrevised SIP.¹ How penalties should be assessed for noncompliance with the approved revision or with the original SIP, if the revision is rejected, is not ripe for decision until the EPA acts on the proposed revision, thereby establishing its right to bring enforcement proceedings. Once that right is established, and it is determined whether revised or unrevised SIP guidelines apply, then the Court can address the question of whether penalties should be imposed for the period the SIP revision stood submitted for approval. That answer ought to depend on the equities of each individual case.

Barring enforcement proceedings while the EPA considers a proposed SIP revision comports with Congressional intent that the EPA defer to the state's wisdom in deciding how best to achieve the goals of the Clean Air Act. It also encourages the EPA to rule promptly on revisions submitted to it. Judicial review of any rejection by the EPA will assure that prompt action by the EPA is not hasty or unfounded. Cf. American Cyanamid at 499 (recognizing that the Duquesne approach of allowance of retroactive penalties may encourage the EPA to reject revisions it should approve). Similarly, if the proposed revision fails to meet the necessary requirements for approval, the risk that "retroactive" penalties might be imposed would discourage polluters from petitioning for revisions which are not good faith efforts to comply with the standards of the Clean Air Act. Cf. Duquesne at 472 (polluter could be liable for penalties calculated back to the approval deadline, with interest).

Finally, the EPA argues that "noncomplying sources" who escape penalties or avoid enforcement proceedings because of pending SIP revisions gain "an unfair advantage over those that seek to comply" with the unrevised SIP. This argument disregards the fact that a SIP revision which protects a particular polluter is promulgated by the state, not by the private polluter itself. Unless the state concludes that the revision is warranted, in the interest of the public it serves, the revision will not be submitted to the EPA for approval to begin with. Penalizing those who comply with what a state deems reasonable air-pollution control guidelines is contrary to the spirit and intent of the Clean Air Act, and to the allocation of responsibility the Act contemplates.

The EPA urges this Court to reconsider its refusal to hold its decision on Alcan's summary judgment motion in abeyance under Fed.R.Civ.P. 56(f). The EPA claims it has been unable to get affidavits concerning Alcan's alleged violation of the revised SIP guidelines. However, the present action is not based on noncompliance with the revised SIP. Accordingly, affidavits concerning any revised SIP noncompliance are immaterial to the present action, and cannot contain facts essential to justify defendant's opposition to Alcan's motion for summary judgment. Fed.R.Civ.P. 56(f).

For the foregoing reasons, by separate order this Court reaffirms and reiterates its order of March 15, 1988, granting summary judgment in favor of Alcan.

1. Train recognizes that right: "Should either [the state or the EPA] determine that granting the variance [under the revision authority of § 110(a)(3)] would prevent attainment or maintenance of national air standards, the polluter is presumably within his rights in seeking judicial review." Train, 421 U.S. at 92, 95 S. Ct. at 1488. This litigation would be on the "polluter's time, not the public's", for during the pendency of the litigation "the original regulations remain in effect . . ." Id. Implicit in Train's logic is the presumption that the EPA will act on revision proposals; not even Train suggests that the Clean Air Act confers on the EPA power to exercise" pocket voters" over state proposed revisions, by simply failing to take action on them.