American Cyanamid Co. v. U.S. E.P.A.

Decision Date20 February 1987
Docket NumberNo. 85-4899,85-4899
Citation810 F.2d 493
Parties, 17 Envtl. L. Rep. 20,642 AMERICAN CYANAMID COMPANY, Petitioner, v. U.S. ENVIRONMENTAL PROTECTION AGENCY, Respondent.
CourtU.S. Court of Appeals — Fifth Circuit

Theodore L. Garrett, Covington & Burling, Washington, D.C., for petitioner.

Michael D. Rowe, U.S. Dept. of Justice, Lee M. Thomas, Admin., Laurence M. Groner, E.P.A., Washington, D.C., for respondent.

Petition for Review of an Order of the Environmental Protection Agency.

Before THORNBERRY, JOHNSON and WILLIAMS, Circuit Judges.

JERRE S. WILLIAMS, Circuit Judge:

American Cyanamid Co. appeals a decision of the Administrator of the Environmental Protection Agency ("EPA") that it violated Louisiana's EPA-approved air pollution regulations and that the EPA may commence enforcement proceedings to determine American Cyanamid's liability and calculate a non-compliance penalty for the violation. We affirm the finding that American Cyanamid violated Louisiana's regulations, but we reverse the finding that the EPA may now commence enforcement proceedings, because American Cyanamid would not be in violation of Louisiana's proposed amended regulations. For greater clarity, we alter the usual order of a court opinion to set out in detail the controlling statutory scheme and then apply that scheme to the facts of the case before us.

I. The Clean Air Act

The Clean Air Act ("Act"), 42 U.S.C. Secs. 7401 et seq, provides a comprehensive scheme for controlling air pollution. In 1970, Congress amended the Act to reapportion responsibility between federal agencies and the states over pollution control. 1 Under the 1970 Amendments, the EPA promulgates "National Ambient Air Quality Standards" ("NAAQS"), and each state may adopt a "State Implementation Plan" ("SIP") to implement and maintain such standards within its borders. See 42 U.S.C. Secs. 7409(a)(1) (NAAQS); 7410(a)(1) (SIPs). A state, through its SIP, may order particular factories and other sources of pollution to reduce emissions to a target level by a certain date. 42 U.S.C. Secs. 7407; 7410(a)(2). The states that adopt SIPs must submit them to the EPA for approval, and the Act provides specifically that the EPA "shall, within four months" approve a proposed SIP that meets certain statutory requirements. 42 U.S.C. Sec. 7410(a)(2).

Congress recognized that a state might need to revise its SIP to reflect changed local needs, new technology, or other developments. Accordingly, the Act provides that a state may propose revisions of its SIP to the EPA. As with original proposals, the EPA must approve revisions that satisfy the requirements listed in 42 U.S.C. Sec. 7410(a)(2). See 42 U.S.C. Sec. 7410(a)(3). Section 7410(a)(3) does not specify how long the EPA has to accept or reject a proposed revision. In Duquesne Light Co. v. EPA, 698 F.2d 456, 471 (D.C.Cir.1983), however, the court held that the EPA must act on proposed revisions within four months, the same time given for rulings on original proposals. See also Council of Commuter Organizations v. Gorsuch, 683 F.2d 648, 651 n. 2 (2nd Cir.1982) and Council of Commuter Organizations v. Thomas, 799 F.2d 879, 888 (2nd Cir.1986) (EPA must act on revisions within four months); but see United States v. National Steel Corp., 767 F.2d 1176, 1182 n. 1 (6th Cir.1985) (four month rule applies only to "general state plans" and not to revisions). We agree with the D.C. Circuit and the Second Circuit and hold that the four month time limit for EPA action on original proposals also applies to proposed revisions. To hold otherwise would intrude upon the logical pattern of the state and federal relationship set up in the statute which recognized in the time limit the important role of the states.

The EPA and the states have joint authority to enforce the approved SIPs. Emissions limitations may be enforced in many ways. The case before us involves 42 U.S.C. Sec. 7420, which provides one of the mechanisms for enforcing SIPs. It provides that the EPA or a state may charge a "Noncompliance Penalty" against an entity that violates an SIP.

II. Noncompliance Penalties Under 42 U.S.C. Sec. 7420

The Act regulates emissions from "major stationary sources," ones with the capacity to emit more than 100 tons of air pollutants in a year. See 42 U.S.C. Sec. 7602(j) (defining "major stationary source"); 40 C.F.R. Sec. 66.3(g). Under 42 U.S.C. Sec. 7420, the EPA may charge a noncompliance penalty against a major stationary source that violates "applicable legal requirements." See 42 U.S.C. Sec. 7420(a)(2)(A)(i); 40 C.F.R. Sec. 66.11. "Applicable legal requirements" means, among other things, the requirements of an "EPA--approved state implementation plan." 40 C.F.R. Sec. 66.3(c)(1). Thus, when a state submits a revision for EPA approval, the existing SIP remains the standard by which compliance is measured until the EPA approves the revision. Id.; Duquesne, 698 F.2d at 470; Train, 421 U.S. at 92, 95 S.Ct. at 1488. That is, a proposed revision is not an "applicable legal requirement" unless and until the EPA approves it.

The first step in a Sec. 7420 action is the sending by the EPA of a "Notice of Noncompliance," which briefly states why the EPA believes the recipient has violated an approved SIP. 2 The receipt of this Notice begins a so-called "Period of ... Noncompliance." 42 U.S.C. Sec. 7420(d)(3)(C); 40 C.F.R. Sec. 66.11(c). The EPA may collect a penalty only for violations that occur during the Period of Noncompliance; it may not collect for violations that occur before it issues a Notice of Noncompliance. 42 U.S.C. Sec. 7420(d).

Next, the EPA or the recipient of the Notice calculates the amount of the Noncompliance Penalty. Section 7420 authorizes the EPA to collect a penalty equal to at least the economic value of noncompliance, that is, the amount the recipient saves by failing to comply with the SIP. 42 U.S.C. Sec. 7420(d)(2)(A). The recipient must pay the penalty quarterly during the Period of Noncompliance. 42 U.S.C. Sec. 7420(d)(2, 3).

One who receives a Notice of Noncompliance may challenge the Notice by showing that he is exempt from the regulation in question or that he is in compliance with the applicable legal requirements. 42 U.S.C. Sec. 7420(b)(4); 40 C.F.R. Sec. 66.13. One who contests the Notice may request a hearing before an Administrative Law Judge (ALJ). 42 U.S.C. Sec. 7420(b)(4, 5); 40 C.F.R. Sec. 66.13(a). The recipient may appeal an adverse decision of the ALJ to the Administrator of the EPA. The Administrator's decision, in turn, is appealable directly to the United States Court of Appeals. 42 U.S.C. Sec. 7607(b)(1).

III. Standard of Review of the Administrator's Decision

We may reverse agency decisions that are "arbitrary, capricious, an abuse of discretion, ... not in accordance with law[,] in excess of statutory ... authority, [or] unsupported by substantial evidence." 5 U.S.C. Sec. 706(2); see also 42 U.S.C. Sec. 7607(d)(9). "Substantial evidence" means "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." J.H. Rose Truck Line, Inc. v. ICC, 683 F.2d 943, 948 (5th Cir.1982).

As set out above, the EPA is required by the statute to approve a proposed SIP or revision if it meets the requirements of 42 U.S.C. Sec. 7410(a)(2). Once approved, an SIP becomes part of the nationwide plan that either the EPA or the states can enforce. In our judicial review we give great deference to the EPA's interpretation of the statutory scheme that Congress entrusted it to administer. Chevron U.S.A., 467 U.S. at 840, 104 S.Ct. at 2782; State of Connecticut v. EPA, 696 F.2d 147, 155 (2nd Cir.1982); Quarles v. St. Clair, 711 F.2d 691, 698 (5th Cir.1983). Such deference is justified because the EPA has developed special expertise in implementing and enforcing the Act. Florida Power & Light, 650 F.2d at 584-85. Thus, we may not substitute our own judgment for the EPA's, Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 416, 91 S.Ct. 814, 824, 28 L.Ed.2d 136 (1971), although we will disapprove EPA decisions that contradict the Act's plain meaning or intent. Quarles, 711 F.2d at 707.

With this standard of review in mind, we turn to the facts of the case before us.

IV. Louisiana's SIP and the American Cyanamid Plant

The EPA has established an NAAQS for ozone. See 40 C.F.R. Sec. 50.9. Louisiana has adopted an SIP (the "Louisiana Air Quality Regulations" ("LAQR")) that, among other things, implements the EPA's ozone NAAQS. The EPA approved Louisiana's SIP on October 29, 1981.

To control ozone emissions, Louisiana regulates the storage of Volatile Organic Compounds in "large" tanks, that is, tanks with a capacity of more than 40,000 gallons. LAQR 22.3 directs that such tanks must be equipped with "submerged fill pipe[s]" and "one or more of the vapor loss control devices described [in LAQR 22.3.1.1-22.3.1.4]." These devices include an internal floating roof (22.3.1.1), an external floating roof (22.3.1.2), a vapor gathering and disposal system (22.3.1.3), and "other equivalent equipment or means as may be approved by [Louisiana]." (22.3.1.4).

American Cyanamid owns and operates a chemical plant (the "Fortier Plant") in Westwego, Louisiana, near New Orleans. This plant has the capacity to emit more than 100 tons of pollutants per year, so it is a "major stationary source" of ozone pollution subject to the Act. American Cyanamid stores Volatile Organic Compounds in fourteen "large" tanks at its Fortier Plant. 3 These tanks together emit between 100 and 150 tons of hydrocarbons per year, a small part of the Fortier Plant's total air pollution. The major source of air pollution at the Fortier Plant is a "Waste Gas Disposal Stream," or "AOG Vent." LAQR 22.8 regulates emissions from the vent.

In 1977, the Fortier Plant emitted a total of 16,300 tons of pollution. Of this, the Vent accounted for 13,200 tons. Louisiana's SIP called for American Cyanamid to...

To continue reading

Request your trial
18 cases
  • U.S. v. Marine Shale Processors
    • United States
    • U.S. Court of Appeals — Fifth Circuit
    • April 18, 1996
    ...consideration of its permit applications.3 We note that one of the cases upon which MSP relies for its argument, American Cyanamid Co. v. EPA, 810 F.2d 493 (5th Cir.1987), may no longer be good law after General Motors. See 496 U.S. at 536 n. 1, 110 S.Ct. at 2531 n. 1.4 We note that MSP doe......
  • US v. AM General Corp.
    • United States
    • U.S. District Court — Northern District of Indiana
    • December 9, 1992
    ...version of § 107(d)(2) and the same authority referred to in support of its original summary judgment motion: American Cyanamid Company v. EPA, 810 F.2d 493 (5th Cir.1987); Bethlehem Steel Corp. v. EPA, 723 F.2d 1303, 1306 (7th Cir.1983); Western Oil & Gas v. EPA, 633 F.2d 803, 805 (9th Cir......
  • Luminant Generation Co. v. U.S. Envtl. Prot. Agency
    • United States
    • U.S. Court of Appeals — Fifth Circuit
    • October 12, 2012
    ...We do not agree. The EPA's interpretation of approved SIP regulations, and not the state's, is authoritative. See Am. Cyanamid Co. v. U.S. E.P.A., 810 F.2d 493 (5th Cir.1987) (emphasis added). However, the portion of the SIP provision containing an affirmative defense for planned SSM activi......
  • United States v. Duke Energy Corp.
    • United States
    • U.S. District Court — Middle District of North Carolina
    • November 6, 2013
    ...should defer to EPA's interpretation of North Carolina's SIP, including [981 F.Supp.2d 454]Am. Cyanamid Co. v. U.S. Envtl. Prot. Agency, 810 F.2d 493 (5th Cir.1987), United States v. Ford Motor Co., 736 F.Supp. 1539 (W.D.Mo.1990), United States v. S. Ind. Gas & Elec. Co., No. IP99–1692–CM/F......
  • Request a trial to view additional results
1 books & journal articles
  • Civil Enforcement of the Clean Air Act
    • United States
    • Air pollution control and climate change mitigation law
    • August 18, 2010
    ..., 698 F.2d 456, 13 ELR 20251 (D.C. Cir. 1983) (upholding EPA’s regulation found at 40 C.F.R. pt. 66.), and American Cyanamid Co. v. EPA , 810 F.2d 493, 17 ELR 20642 (5th Cir. 1987). 130. 22 Env’t Rep. (BNA) 721 (1991). Page 276 Air Pollution Control and Climate Change Mitigation Law Rules o......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT