Seacoast Anti-Pollution League v. Costle, ANTI-POLLUTION

• Decision Date: 23 February 1978
• Docket Number: ANTI-POLLUTION,No. 77-1284,77-1284
• Citation: 572 F.2d 872
• Parties: , 8 Envtl. L. Rep. 20,207 SEACOASTLEAGUE et al., Petitioners, v. Douglas M. COSTLE, as Administrator of the Environmental Protection Agency, Respondent, Public Service Company of New Hampshire, Intervenor.
• Court: U.S. Court of Appeals — First Circuit

Page 872

572 F.2d 872

11 ERC 1358, 8 Envtl. L. Rep. 20,207

SEACOAST ANTI-POLLUTION LEAGUE et al., Petitioners, v. Douglas M. COSTLE, as Administrator of the Environmental Protection Agency, Respondent Public Service Company of New Hampshire, Intervenor.

No. 77-1284.

United States Court of Appeals First Circuit.

Argued Nov. 10, 1977.

Decided Feb. 15, 1978.

As Amended Feb. 23, 1978.

Robert A. Backus, Manchester, N. H., and Harvey N. Winchester, Denver, Colo., with whom O'Neill, Backus, Spielman, Little, Manchester, N. H., for petitioner.

Fred R. Disheroon, Atty., Dept. of Justice, and William F. Pedersen, Atty., Environmental Protection Agency, Washington, D. C., with whom Sanford Sagalkin, Acting Asst. Atty. Gen., Juneau, Alaska, was on brief, for respondent.

Harrison A. Fitch, Boston, Mass., with whom Ronald A. Zumbrun, Raymond M. Momboisse, Robert K. Best, Sacramento, Cal., Albert Ferri, Jr., Washington, D. C., Donald C. Simpson, Lawrence P. Jones, Washington, D. C., Wayne S. Henderson, Boston, Mass., and Peter D. Kinder, Columbus, Ohio, were on brief, for intervenor, The New Hampshire Voice of Energy.

John C. Ottenberg, Boston, Mass., and Harvey N. Winchester, Denver, Colo., on brief for amicus curiae, Conservation Law Foundation of New England, Inc.

Thomas G. Dignan, Jr., Boston, Mass., with whom John A. Ritsher and Ropes & Gray, Boston, Mass., were on brief, for intervenor, Public Service Co. of New Hampshire.

Before COFFIN, Chief Judge, CAMPBELL and BOWNES, Circuit Judges.

COFFIN, Chief Judge.

This case is before us on a petition by the Seacoast Anti-Pollution League and the Audubon Society of New Hampshire (petitioners) to review a decision by the Administrator of the Environmental Protection Agency (EPA). We have jurisdiction under 33 U.S.C. § 1369(b)(1). The petition presents several important issues relating to the applicability and effect of the Administrative Procedure Act (APA), 5 U.S.C. §§ 501 et seq., and the interpretation of the Federal Water Pollution Control Act of 1972 (FWPCA), 33 U.S.C. §§ 1251 et seq. In order to place those issues in context we set forth the procedural and factual background of the case.

The Public Service Company of New Hampshire (PSCO) filed an application with the EPA for permission to discharge heated water into the Hampton-Seabrook Estuary which runs into the Gulf of Maine. The water would be taken from the Gulf of Maine, be run through the condensor of PSCO's proposed nuclear steam electric generating station at Seabrook, and then be directly discharged back into the Gulf at a temperature 39o F higher than at intake. The water is needed to remove waste heat, some 16 billion BTU per hour, generated by the nuclear reactor but not converted into electrical energy by the turbine. Occasionally, in a process called backflushing, the water will be recirculated through the condensor, and discharged through the intake tunnel at a temperature of 120o F in order to kill whatever organisms may be living in the intake system.

Section 301(a) of the FWPCA, 33 U.S.C. § 1311(a), prohibits the discharge of any pollutant unless the discharger, the point source operator, has obtained an EPA permit. Heat is a pollutant. 33 U.S.C. § 1362(6). Section 301(b) directs the EPA to promulgate effluent limitations. The parties agree that the cooling system PSCO has proposed does not meet the EPA standards because PSCO would utilize a once-through open cycle system the water would not undergo any cooling process before being returned to the sea. ¹ Therefore, in August, 1974, PSCO applied not only for a discharge permit under § 402 of the FWPCA, 33 U.S.C. § 1342, but also an exemption from the EPA standards pursuant to § 316 of the FWPCA, 33 U.S.C. § 1326. Under § 316(a) a point source operator who "after opportunity for public hearing, can demonstrate to the satisfaction of the Administrator" that the EPA's standards are "more stringent than necessary to assure the projection (sic ) and propagation of a balanced, indigenous population of shellfish, fish, and wildlife in and on the body of water" may be allowed to meet a lower standard. Moreover, under § 316(b) the cooling water intake structure must "reflect the best technology available for minimizing adverse environmental impact."

In January, 1975, the Regional Administrator of the EPA held a non-adjudicatory hearing at Seabrook. He then authorized the once-through system in June, 1975. Later, in October, 1975, he specified the location of the intake structure. The Regional Administrator granted a request by petitioners that public adjudicative hearings on PSCO's application be held. These hearings were held in March and April, 1976, pursuant to the EPA's regulations establishing procedures for deciding applications for permits under § 402 of the FWPCA, 40 C.F.R. § 125.36. The hearings were before an administrative law judge who certified a record to the Regional Administrator for decision. The Regional Administrator decided in November, 1976, to reverse his original determinations and deny PSCO's application.

PSCO, pursuant to 40 C.F.R. § 125.36(n), appealed the decision to the Administrator who agreed to review it. Thereafter, a new Administrator was appointed, and he assembled a panel of six in-house advisors to assist in his technical review. This panel met between February 28 and March 3, 1977, and submitted a report finding that with one exception PSCO had met its burden of proof. With respect to that exception, the effect of backflushing, the Administrator asked PSCO to submit further information, offered other parties the opportunity to comment upon PSCO's submission, and stated that he would hold a hearing on the new information if any party so requested and could satisfy certain threshold conditions (set out below). Petitioners did request a hearing, but the Administrator denied the request.

The Administrator's final decision followed the technical panel's recommendations and, with the additional information submitted, reversed the Regional Administrator's decision, finding that PSCO had met its burden under § 316. ² It is this decision that petitioners have brought before us for review.

Applicability of the Administrative Procedure Act

Petitioners assert that the proceedings by which the EPA decided this case contravened certain provisions of the APA governing adjudicatory hearings, 5 U.S.C. §§ 554, 556, and 557. Respondents answer that the APA does not apply to proceedings held pursuant to § 316 or § 402 of the FWPCA, 33 U.S.C. §§ 1326, 1342. ³

The dispute centers on the meaning of the introductory phrases of § 554(a) of the APA: ⁴"This section applies . . . in every case of adjudication required by statute to be determined on the record after opportunity for an agency hearing . . . ."

Both § 316(a) and § 402(a)(1) of the FWPCA provide for public hearings, but neither states that the hearing must be "on the record". We are now the third court of appeals to face this issue. The Ninth Circuit and the Seventh Circuit have each found that the APA does apply to proceedings pursuant to § 402. Marathon Oil Co. v. EPA, 564 F.2d 1253 (9th Cir. 1977); United States Steel Corp. v. Train, 556 F.2d 822 (7th Cir. 1977). We agree.

At the outset we reject the position of intervenor PSCO that the precise words "on the record" must be used to trigger the APA. The Supreme Court has clearly rejected such an extreme reading even in the context of rule making under § 553 of the APA. ⁵ See United States v. Florida East Coast Ry. Co., 410 U.S. 224, 245, 93 S.Ct. 810, 35 L.Ed.2d 223 (1973); United States v. Allegheny-Ludlum Steel Corp., 406 U.S. 742, 757, 92 S.Ct. 1941, 32 L.Ed.2d 453 (1972). Rather, we think that the resolution of this issue turns on the substantive nature of the hearing Congress intended to provide. ⁶

We begin with the nature of the decision at issue. The EPA Administrator must make specific factual findings about the effects of discharges from a specific point source. On the basis of these findings the Administrator must determine whether to grant a discharge permit to a specific applicant. Though general policy considerations may influence the decision, the decision will not make general policy. Only the rights of the specific applicant will be affected. "As the instant proceeding well demonstrates, the factual questions involved in the issuance of section 402 permits will frequently be sharply disputed. Adversarial hearings will be helpful, therefore, in guaranteeing both reasoned decisionmaking and meaningful judicial review. In summary, the proceedings below were conducted in order 'to adjudicate disputed facts in particular cases,' not 'for the purposes of promulgating policy-type rules or standards.' " Marathon Oil Co., supra at 1262.

This is exactly the kind of quasi-judicial proceeding for which the adjudicatory procedures of the APA were intended. As the Supreme Court has said, "Determination of questions of (the Administrative Procedure Act's) coverage may well be approached through consideration of its purposes as disclosed by its background." Wong Yang Sung v. McGrath, 339 U.S. 33, 36, 70 S.Ct. 445, 448, 94 L.Ed. 616 (1950). One of the developments that prompted the APA was the "(m)ultiplication of federal administrative agencies and expansion of their functions to include adjudications which have serious impact on private rights." Id., 339 U.S. at 36-37, 70 S.Ct. at 448. This is just such an adjudication. The panoply of procedural protections provided by the APA is necessary not only to protect the rights of an applicant for less stringent pollutant discharge limits, but is also needed to protect the public for whose benefit the very strict limitations have been enacted. If determinations such as the one at issue here are not made on the record, then the fate of the Hampton-Seabrook Estuary could be decided on the basis of evidence that a court would never see or, what is worse, that a court...