660 F.2d 954 (4th Cir. 1981), 79-1613, American Paper Institute v. United States E.P.A.

Docket Nº:79-1613, 79-1694, 79-1738, 79-1782, 79-1787 and 79-1804.
Citation:660 F.2d 954
Party Name:AMERICAN PAPER INSTITUTE, National Forest Products Association, James River Paper Company, Georgia-Pacific Corporation, the Mead Corporation, Westvaco Corporation, Weyerhaeuser Company, St. Regis Paper Company, Union Camp Corporation, Boise Cascade Corporation, Petitioners, and The Corn Refiners Association, Inc., Miller Brewing Company, the Great
Case Date:July 28, 1981
Court:United States Courts of Appeals, Court of Appeals for the Fourth Circuit
 
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Page 954

660 F.2d 954 (4th Cir. 1981)

AMERICAN PAPER INSTITUTE, National Forest Products

Association, James River Paper Company, Georgia-Pacific

Corporation, the Mead Corporation, Westvaco Corporation,

Weyerhaeuser Company, St. Regis Paper Company, Union Camp

Corporation, Boise Cascade Corporation, Petitioners,

and

The Corn Refiners Association, Inc., Miller Brewing Company,

the Great Western Sugar Company, Intervenors,

v.

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY and Douglas M.

Costle, Administrator, Respondents.

AMERICAN FROZEN FOOD INSTITUTE, Petitioner,

v.

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY and Douglas M.

Costle, Administrator, Respondents.

NATIONAL FOOD PROCESSORS ASSOCIATION, Petitioner,

v.

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, Respondent.

TANNERS' COUNCIL OF AMERICA, INCORPORATED, Petitioner,

v.

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY and Douglas M.

Costle, Administrator, Respondents.

FROZEN POTATO PRODUCTS INSTITUTE, Petitioner,

v.

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY and Douglas M.

Costle, Administrator, Respondents.

AMERICAN TEXTILE MANUFACTURERS INSTITUTE, INC., Petitioner,

v.

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY and Douglas M.

Costle, Administrator, Respondents.

CHAMPION INTERNATIONAL CORPORATION, Potlatch Corporation,

The Proctor & Gamble Paper Products Company, Petitioners,

v.

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY and Douglas M.

Costle, Administrator, Respondents.

CHEMICAL MANUFACTURERS ASSOCIATION, American Cyanamid

Company, Arizona Chemical Company, J. T. Baker Chemical

Company, E. I. du Pont de Nemours & Company, FMC

Corporation, Glyco Chemicals, Inc., The Goodyear Tire &

Rubber Company, Mallinckrodt, Inc., Northern Petrochemical

Company, Olin Corporation, Stauffer Chemical Company, Union

Carbide Corporation, Petitioners,

v.

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, Respondent.

Nos. 79-1511, 79-1512, 79-1535, 79-1542, 79-1550, 79-1612,

79-1613, 79-1694, 79-1738, 79-1782, 79-1787 and 79-1804.

United States Court of Appeals, Fourth Circuit

July 28, 1981

Argued Oct. 7, 1980.

Page 955

Henry L. Diamond, Washington, D. C. (John N. Hanson, Jonathan Z. Cannon, Beveridge, Fairbanks & Diamond, Washington, D. C., Richard L. Williams, James L. Sanderlin, Robert E. Payne, David E. Evans, Thomas W. McCandlish, McBuire, Woods and Battle, Richmond, Va.; Russell S. Frye, Smith & Schnacke, Dayton, Ohio, William M. Bradner, Jr., New York City, Michael K. Glenn, Chadbourne, Parke, Whiteside & Wolff, Charles F. Lettow, Janet L. Weller, Cleary, Gottlieb, Steen & Hamilton, Norton F. Tennille, Jr., Thomas H. Milch, Robert S. Angyal, Arnold & Porter, Washington, D. C., Lewis T. Smoak, Eric C. Schweitzer, Ogletree, Deakins, Smoak, Stewart & Edwards, Greenville, S. C., Richard E. Schwartz, Thomas L. Anderson, Collier, Shannon, Rill, Edwards & Scott, H. Edward Dunkelberger, Steven S. Rosenthal, Theodore L. Garrett, Covington & Burling, Washington, D. C., on brief), for petitioners and intervenors.

Ronald C. Hausmann, Pollution Control Section, U. S. Dept. of Justice, Washington,

Page 956

  1. C. (Michelle B. Corash, Gen. Counsel, Barry Malter, E. P. A., James W. Moorman, Asst. Atty. Gen., Angus MacBeth, Deputy Asst. Atty. Gen., Donald W. Stever, Jr., Chief, Pollution Control Section, Jeffrey M. Gaba, E. P. A., Washington, D. C., on brief), for respondents.

    Before WIDENER, PHILLIPS and ERVIN, Circuit Judges.

    ERVIN, Circuit Judge:

    The petitioners in these consolidated cases seek judicial review of the actions of the Administrator of the Environmental Protection Agency (EPA) in issuing regulations pursuant to section 304(b)(4)(B) of the Clean Water Act ("the Act") 1 promulgating effluent water limitations controlling conventional pollutants 2 from private industrial sources in accordance with section 301(b)(2)(E) of the Act. 3 This court is vested with the responsibility and authority for making a pre-enforcement examination of the EPA guidelines by section 509(b)(1)(E) of the Act. 4

    Although the petitioners challenge the best conventional technology (BCT) regulations issued pursuant to section 304(b)(4)(B), their primary objection is to the methodology used by the Administrator in promulgating the regulations. In particular, the petitioners contend that Congress in section 304(b)(4)(B) mandated that EPA incorporate two main factors in its methodology for determining BCT: an industry cost-effectiveness test and a test that compares the cost for private industry to reduce its effluent levels with that incurred by publicly owned treatment works (POTWs) for a similar purpose. The petitioners assert that EPA considered only the latter factor and that EPA's benchmark for this latter factor was arbitrary and capricious. Some of the other challenges that the petitioners raise are that EPA used statistically unreliable and internally inconsistent data, and that it deprived petitioners of their right to comment. 5 We hold that all the regulations promulgated pursuant to section 301(b)(2)(E) must be invalidated on the ground that EPA did not consider all the factors mandated by section 304(b)(4)(B). 6 The only other contention that has merit is that the data on which EPA relied in formulating its POTW benchmark are statistically unreliable.

    Page 957

    I. BACKGROUND

    In 1972, Congress amended the Federal Water Pollution Control Act 7 to establish a timetable for achieving certain water pollution control objectives. Congress declared as its policy that the discharge of pollutants in our nation's navigable waters "be eliminated by 1985." 33 U.S.C. § 1251(a)(1). With respect to private industrial sources, such as these petitioners, this achievement was to be accomplished in two stages: an interim level of control effective in 1977, and a final level effective in 1983. The 1977 standard was designated "best practicable technology" (BPT) and the more stringent 1983 standard was "best available technology" (BAT).

    Five years later Congress undertook to re-examine these standards. Ultimately, the Federal Water Pollution Control Act was amended again, and the Act as amended became known as the Clean Water Act. 8 Under the Clean Water Act, the 1977 requirements (BPT) were left intact, but changes were made in the 1983 requirements (BAT). As part of these changes, Congress established various standards and schedules for three classifications of pollutants: (1) conventional pollutants; (2) toxic substances; and (3) non-conventional non-toxic pollutants not otherwise classified. 33 U.S.C. § 1311. The strict BAT standards were retained for toxic pollutants known to be dangerous and for non-conventional non-toxic pollutants, the effects of which are uncertain, but the effective date for both categories was delayed.

    While the parties disagree over precisely what Congress intended to do when it enacted the 1977 amendments to the Act and draw markedly different conclusions from the language of the amendments and the legislative history, it is clear that Congress felt that the results produced by the BPT had provided a high degree of water quality improvement, and that in some instances, BAT for conventional pollutants about which much was known might require treatment not deemed necessary to meet the 1983 water quality goals of the Act. 9 Concern was expressed about requiring "treatment for treatment's sake," 10 and there was much discussion about comparing the cost of treatment with the benefits obtained from the reductions achieved.

    Out of this came the development of a new standard, best conventional pollutant control technology (BCT). The new requirement was described by one Senate-House conferee as "the equivalent of best practical technology or something a little bit better, even as far as best available technology in some circumstances." 11

    In directing EPA to promulgate regulations concerning BCT standards, Congress passed section 304(b)(4)(B) of the Act, which provides in part:

    Factors relating to the assessment of best conventional pollutant control technology (including measures and practices) shall include consideration of the reasonableness of the relationship between the costs of attaining a reduction in effluents and the effluent reduction benefits derived, and the comparison of the cost and level of reduction of such pollutants from the discharge from publicly owned treatment works to the cost and level of reduction

    Page 958

    of such pollutants from a class or category of industrial sources, and shall take into account the age of equipment and facilities involved, the process employed, the engineering aspects of the application of various types of control techniques, process changes, non-water quality environment impact (including energy requirements), and such other factors as the Administrator deems appropriate. 33 U.S.C. § 1314(b)(4)(B).

    In addition, in section 73 of the 1977 amendments, Congress directed EPA to "review every effluent guideline promulgated prior to the enactment of this Act which is final or interim final." 12 This required review of all outstanding BAT limitations for

    Page 959

    conventional pollutants for all secondary industrial sources within 90 days after the effective date of the amendments.

    Pursuant to this Congressional directive, EPA proceeded to carry out its duties. On August 23, 1978, proposed rules were published relating to 13 secondary industry categories. These rules also contained a methodology for determining the reasonableness of any proposed effluent limitation under the BCT criteria. Critical comments were received, and on April 2, 1979, a notice was published...

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