566 F.2d 451 (4th Cir. 1977), 76-1474, Appalachian Power Co. v. Train

Docket Nº:76-1474, 76-2057.
Citation:566 F.2d 451
Party Name:APPALACHIAN POWER COMPANY, Baltimore Gas and Electric Company, Carolina Power & Light Company, Duke Power Company, Monongahela Power Company, Ohio Power Company, Potomac Edison Company, Potomac Electric Power Company, South Carolina Electric & Gas Company, Virginia Electric and Power Company, West Penn Power Company, Indiana & Michigan Electric Com
Case Date:November 11, 1977
Court:United States Courts of Appeals, Court of Appeals for the Fourth Circuit
 
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566 F.2d 451 (4th Cir. 1977)

APPALACHIAN POWER COMPANY, Baltimore Gas and Electric

Company, Carolina Power & Light Company, Duke Power Company,

Monongahela Power Company, Ohio Power Company, Potomac

Edison Company, Potomac Electric Power Company, South

Carolina Electric & Gas Company, Virginia Electric and Power

Company, West Penn Power Company, Indiana & Michigan

Electric Company, Kentucky Power Company, Boston Edison

Company, Cincinnati Gas & Electric Company, Cleveland

Electric Illuminating Company, Columbia & Southern Ohio

Electric Company, Commonwealth Edison Company, Consolidated

Edison Company of New York, Inc., Dayton Power & Light

Company, the Detroit Edison Company, Florida Power & Light

Company, Houston Lighting & Power Company, Illinois Power

Company, Long Island Lighting Company, Arkansas Power &

Light Company, Mississippi Power & Light Company, Louisiana

Power & Light Company, New Orleans Public Service, Inc.,

Montaup Electric Company, National Rural Electric

Cooperative Association, New England EVSv.

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, Respondent.

Nos. 76-1474, 76-2057.

United States Court of Appeals, Fourth Circuit

November 11, 1977

Argued March 17, 1977.

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[Copyrighted Material Omitted]

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George C. Freeman, Jr., Richmond, Va. (Henry V. Nickel, Michael B. Barr, Washington, D.C., Hunton & Williams, Richmond, Va., on brief), for petitioners.

James T. Harrington, Chicago, Ill., for U.S. Steel Corp.

Thomas A. Larsen, Atty., Environmental Protection Agency, Washington, D.C., Sarah Chasis, New York City, for Natural Resources Defense Council, Inc. (Peter R. Taft, Asst. Atty. Gen., Alfred T. Ghiorzi and Michael P. Carlton, Attys., Dept. of Justice, G. William Frick, Gen. Counsel, Washington, D.C., on brief), for Environmental

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Protection Agency and the Natural Resources Defense Council, Inc.

Before HAYNSWORTH, Chief Judge, and WIDENER and HALL, Circuit Judges.

WIDENER, Circuit Judge:

These cases come before us on petitions to review EPA's regulations issued under § 316(b) 1 of the Federal Water Pollution Control Act Amendments of 1972, 33 U.S.C. § 1251, § 1326(b). 2 Section 316(b) and the regulations under review are discussed in our companion case decided today, Virginia Electric and Power Co. v. Train, 566 F.2d 446, in which we hold that the court of appeals, and not the district court, has jurisdiction to entertain these petitions under § 509(b)(1)(E) of the Act, 33 U.S.C. § 1369(b)(1)(E). The motion in these cases that we dismiss for want of our own jurisdiction is denied.

To recapitulate briefly, § 316(b) provides that standards established pursuant to §§ 301 and 306 of the Act must require cooling water intake structures to reflect the best technology available for minimizing adverse environmental impact. EPA implemented § 316(b) by issuing regulations providing that, in determining the best available technology for cooling water intake structures, "(t)he information contained in the Development Document shall be considered." 20 C.F.R. §§ 402.10-402.12.

Petitioners in No. 76-1474 are 58 electric utility companies (the utilities), challenging the validity of the regulations on the ground that, in their promulgation, EPA violated the Administrative Procedure Act, 5 U.S.C. § 552(a) (1). 3 A remand for republication in accordance with proper procedures is sought. Petitioner in No. 76-2057 is United States Steel Corp., which, while joining in the utilities' brief, asserts that § 316(b) and the regulations issued thereunder may not be construed to apply to steel manufacturing facilities, but only to steam-electric generating plants.

These questions, as well as the jurisdictional issue addressed in No. 76-2081, are preliminary to our review of the merits of EPA's § 316(b) regulations. Briefing has not yet been had on the merits, and consequently we do not know what other grounds of invalidity will be asserted. Petitioners urge, and EPA accepts, a result that will have us defer review of the substance of the regulations and of the "information" contained in the Development Document until the regulations are actually applied in a discharge permit proceeding under § 402, 33 U.S.C. § 1342. This matter, too, will be addressed below.

I

By stipulation entered into on January 10, 1977, 4 it is agreed that the "information

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contained in the Development Document" is intended by EPA to be incorporated by reference into 40 C.F.R. Part 402. It is not EPA's position that a word-for-word incorporation by reference of the Development Document was intended. In either case, it is petitioners' position that the Development Document is not a validly issued part of the regulations, because it has not been published in the Federal Register, nor have the procedural requisites for incorporation by reference been complied with. With this position we agree, and hold that 40 C.F.R. § 402.12 is not enforceable for want of proper publication.

The Administrative Procedure Act, 5 U.S.C. § 552(a)(1), provides:

"Except to the extent that a person has actual and timely notice of the terms thereof, a person may not in any manner be required to resort to, or be adversely affected by, a matter required to be published in the Federal Register and not so published. For the purpose of this paragraph, matter reasonably available to the class of persons affected thereby is deemed published in the Federal Register when incorporated by reference therein with the approval of the Director of the Federal Register."

Our first inquiry is whether the APA requires publication of the challenged regulations. It is provided in 5 U.S.C. § 522(a)(1)(D) that, "(1) Each agency shall separately state and currently publish in the Federal Register for the guidance of the public

(D) substantive rules of general applicability adopted as authorized by law, and statements of general policy or interpretations of general applicability formulated and adopted by the agency."

It is clear that 40 C.F.R. § 402.12 is a "substantive rule (. . .) of general applicability" required to be published in the Federal Register. As we stressed in our accompanying jurisdictional opinion, the § 316(b) regulations impose mandatory obligations upon members of the public and permit issuing authorities, all of whom, as required by the regulation, must now consider the information contained in the Development Document in designing and approving cooling water intake structures. Any agency regulation that so directly affects pre-existing legal rights or obligations, Lewis v. Weinberger, 415 F.Supp. 652 (D.N.Mex.1976), indeed that is "of such a nature that knowledge of it is needed to keep the outside interests informed of the agency's requirements in respect to any subject within its competence," is within the publication requirement. United States v. Hayes, 325 F.2d 307, 309 (4th Cir. 1963). As the substance of a regulation imposing specific obligations upon outside interests in mandatory terms, Piercy v. Tarr, 343 F.Supp. 1120 (N.D.Cal.1972), the information in the Development Document is required to be published in the Federal Register in its entirety, or, in the alternative, to be both reasonably available and incorporated by reference with the approval of the Director of the Federal Register. 5 U.S.C. § 522(a)(1).

The Development Document was not itself published in the Federal Register, nor was the "information" contained therein. And it is undisputed that the approval of the Director of the Federal Register was not obtained for a proper incorporation by reference. This omission cannot be disregarded. The regulations of the Office of the Federal Register governing incorporation by reference contain numerous safeguards that must be complied with in order to obtain the director's approval. 5 And the

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legislative history of the APA indicates Congress' desire to achieve a degree of centralized control over incorporations by reference: "Permission to incorporate material in the Federal Register by reference would have to be granted by the Director of the Federal Register, instead of permitting each agency head to decide what should be published." H.R.Rep.No.1497, 89th Cong., 2d Sess. (1966), 2 U.S.Code Cong. & Admin.News, pp. 2418, 2424.

In defense, EPA relies upon the principle, derived from the language of 5 U.S.C. § 552(a)(1), that an unpublished regulation, required to be published, may nevertheless be effective against persons with "actual and timely notice of the terms thereof." In support of its contention that petitioners had actual notice of the information contained in the Development Document, EPA stresses the availability of the document, and the fact that petitioners had actual notice of the document's existence. 6

One difficulty with the agency's position is that there is no indication in the record that the petitioners actually obtained notice of the information contained in the Development Document. But considering that they did, as might be inferred from oral argument, an insurmountable obstacle for EPA is the fact that nowhere does it appear exactly, or even approximately, what the term "information" is intended to comprise. The most that can be said of EPA's position is that it establishes the ability of petitioners to have acquired actual notice of the pertinent information because of the availability of the document in which it is contained.

This alone cannot avail the agency. The Administrative Procedure Act sharply distinguishes between the concepts of actual notice and reasonable availability. The former is in a sense a substitute for publication; one who has actual notice of an unpublished regulation is bound...

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