American Paper Institute, Inc. v. USEPA

• Decision Date: 04 December 1989
• Docket Number: Civ. A. No. 89-0655-B.
• Citation: 726 F. Supp. 1256
• Parties: AMERICAN PAPER INSTITUTE, INC., et al., Plaintiffs, v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, et al., Defendants.
• Court: U.S. District Court — Southern District of Alabama

726 F. Supp. 1256

AMERICAN PAPER INSTITUTE, INC., et al., Plaintiffs, v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, et al., Defendants.

Civ. A. No. 89-0655-B.

United States District Court, S.D. Alabama, S.D.

December 4, 1989.

G. Sage Lyons and Charles L. Miller, Jr., Mobile, Ala., and Russell S. Frye, Washington, D.C., for plaintiffs.

Richard B. Stewart, Letitia J. Grishaw and Diane Regas, U.S. E.P.A., Washington, D.C., Jacqueline F. Colson and Craig A. Higgason, U.S. E.P.A., Atlanta, Ga., and Edward Vulevich, Mobile, Ala., for defendants.

MEMORANDUM OPINION AND ORDER

BUTLER, District Judge.

This matter is before the Court on a motion for preliminary injunction whereby the plaintiffs, a group of pulp and paper mills located within Region IV and their trade association, American Paper Institute ("API")¹, seek to enjoin the United States Environmental Protection Agency ("EPA") from implementing a policy statement issued by EPA. This statement offers guidance to the states within EPA's Region IV regarding the discharge of dioxin into rivers and streams from pulp and paper mills. The plaintiffs contend that the EPA should be enjoined from implementing the policies set forth in the Region IV policy statement because EPA has failed to follow certain rulemaking procedures applicable to final agency action. The Court, having considered the motion for preliminary injunction, the briefs, affidavits, and documentary evidence submitted in support and in opposition thereto and the testimony and oral argument presented at the hearing on this motion, finds that the plaintiffs are not entitled to a preliminary injunction.

FINDINGS OF FACT

The document at issue in this case is entitled "EPA-Region IV Regulation of Dioxin Discharges from Pulp and Paper Mills That Bleach With Chlorine" and was issued to the states within Region IV by the EPA's Region IV administrator in May, 1989.² The Region IV document was based on a national EPA guidance document regarding the regulation of dioxin. The document sets forth several changes to be made regarding the regulation of dioxin discharges from pulp and paper mills including interim control procedures, a suggested water quality-based criterion of dioxin concentration of .013 parts per quadrillion, listing requirements under § 304(l) and the EPA's expectation of the states' permitting requirements.

Prior to issuing this document, the director of the EPA's Region IV Water Management Division submitted the guidance document or policy statement to the states for review and comment. Four states submitted favorable comments. (Plaintiffs' Exhibit 1). In his letter transmitting the guidance document to the Georgia Department of Natural Resources, the director referred to the enclosed document as the "final revised EPA-Region IV approach to regulation of dioxin discharges from pulp and paper mills that bleach with chlorine". The letter also requested that the state "begin implementation of the approach immediately and inform EPA regarding its plans as soon as possible."

The policy statement challenged by API consists of guidance by the EPA issued to states within Region IV on designing technology-based and water quality-based permit limitations under the CWA to control the discharge of dioxin into the region's waters by pulp and paper mills. The CWA established a bifurcated system to regulate the discharge of pollutants into the nation's waters.

The application of the policy statement in question is set against a regulatory framework of the CWA by which regulatory responsibilities are split between the states and the EPA. Each state is required to adopt water quality standards which specify the amount of pollutants which may be present in that state's waters. 33 U.S.C. § 1313(c)(1). These standards must be approved by the EPA, or if not approved, the EPA must adopt water quality standards for the state. 33 U.S.C. § 1313(c)(3). In order to ensure that these water quality standards are met, the states also must issue permits called National Pollutant Discharge Elimination System ("NPDES") permits to mills which discharge pollutants into the states' waters. 33 U.S.C. § 1342(b). These permits contain limitations on the amount of pollutants discharged by each mill or point source. 33 U.S.C. § 1311(b)(1)(C). State-issued NPDES permits also must be approved by the EPA. The Administrator of the EPA may object to the issuance of a permit in which case the state must submit a revised permit meeting the Administrator's objection. 33 U.S.C. § 1342(d). If the state fails to submit a revised permit, the Administrator may issue a federal NPDES permit. 33 U.S.C. § 1342(d)(4).

Because Congress has placed a high priority on regulating the discharge of toxic pollutants, § 304(l) of the CWA now requires states to submit to EPA a list of waters that are not expected to achieve applicable water quality standards due to the discharge of certain toxic pollutants such as dioxin, called "short lists". 33 U.S.C. § 1314(l). In addition, for each waterway listed, the state is required to list the point source, or mill, discharging the pollutant and to develop an individual control strategy ("ICS") for that mill to achieve water quality standards within three years. 33 U.S.C. § 1314(l)(1)(C), (D). Once again, the EPA has the authority to approve or disapprove a state's list or ICS and develop its own lists and ICS's in cooperation with the state.

Whenever the EPA disapproves a state action and substitutes its own NPDES permit or ICS, it must follow certain rulemaking procedures. See 40 C.F.R. § 123.44 (1988), 40 C.F.R. §§ 124.6—124.15, 54 Fed. Reg. at 23,897 (to be codified at 40 C.F.R. § 123.46(e)). The EPA's denial or issuance of a NPDES permit or ICS under § 304(l) is subject to judicial review by the court of appeals.

At least two Region IV states, Alabama and Georgia, have begun to implement new regulations based on the EPA policy statement. Both states have begun listing pulp and paper mills on § 304(l) short lists. Following notice and comment procedures, Georgia adopted the EPA's suggested water quality standard for dioxin. Alabama is in the process of adopting more stringent water quality standards for dioxin. The adoption of more stringent water quality standards governing the discharge of dioxin requires the reopening of the mills' state-issued permits. At this time EPA has not reviewed any Region IV state's water quality standards regarding dioxin, nor any permit issued by a Region IV state regulating the discharge of dioxin by any of the plaintiffs nor any § 304(l) short list of dioxin dischargers submitted by a Region IV state.

According to the testimony presented by the plaintiffs, some pulp and paper plants within Region IV have begun to implement changes to reduce the discharge of dioxin from their mills based on the Region IV guidance document. It is undisputed that any such changes will be costly. Thus far, the Court finds that no final action has been taken by any of the states which would require immediate implementation of more stringent dioxin controls.

CONCLUSIONS OF LAW

API seeks to enjoin enforcement of the Region IV policy statement based on the fact that the EPA failed to follow rulemaking procedures established by the Administrative Procedures Act, 5 U.S.C. §§ 551-706. The EPA contends that API's motion for a preliminary injunction is due to be denied for three reasons. First, the document is not a final agency action and is not subject to the rulemaking procedures set forth in the Administrative Procedures Act; therefore, the Court lacks subject matter jurisdiction because there has been no final agency action. Next, EPA contends that this Court is precluded from litigating the issue of finality by the doctrine of collateral estoppel. Finally, according to EPA, the plaintiffs have failed to meet their burden of proof on the merits of the motion for a preliminary injunction. For the reasons stated below, the Court finds that the motion for preliminary injunction is due to be denied.

JURISDICTION

Under the Administrative Procedures Act, 5 U.S.C. §§ 551-706, this court has the power to review "final agency action". 5 U.S.C. § 704. If the agency's action is not final, then this Court has no subject matter jurisdiction. According to EPA, the issue of finality has already been determined by the United States Court of Appeals for the Seventh Circuit in American Paper Institute v. E.P.A., and this Court is precluded from relitigating the issue by the doctrine of collateral estoppel. Alternatively, EPA argues that the Region IV policy statement is not a final agency action.

COLLATERAL ESTOPPEL

The doctrine of collateral estoppel precludes the relitigation of an issue which was decided in a prior lawsuit. In order for collateral estoppel to apply, certain prerequisites must be met:

(1) the issue at stake must be identical to the one involved in the prior litigation, (2) the issue must have been actually litigated in the prior suit, (3) the determination of the issue in the prior litigation must have been a critical and necessary part of the judgment in that action, and (4) the party against whom the earlier decision is asserted must have had a full and fair opportunity to litigate the issue in the earlier proceeding.

S.E.L. Maduro v. M/V Antonio De Gastaneta, 833 F.2d 1477 (11th Cir.1987).

The Court is not convinced that all the elements necessary for the application of collateral estoppel are present in this case. First, the Court cannot say with certainty that the issue at stake in this action is identical to the issue involved in the prior litigation. Although both involve the finality of an EPA policy statement regarding dioxin, the policy statements apparently are not identical and were issued by different EPA regions.³ Likewise, other than API, the parties against whom the issue is asserted were not parties to the prior action. The pulp and paper mills which are plai...