Asarco, Inc. v. U.S. E.P.A.

• Decision Date: 14 April 1980
• Docket Number: No. 77-2822,77-2822
• Citation: 616 F.2d 1153
• Parties: , 10 Envtl. L. Rep. 20,433 ASARCO, INC., Appellee, v. U. S. ENVIRONMENTAL PROTECTION AGENCY et al., Appellants.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1153

616 F.2d 1153

14 ERC 1340, 10 Envtl. L. Rep. 20,433

ASARCO, INC., Appellee, v. U. S. ENVIRONMENTAL PROTECTION AGENCY et al., Appellants.

No. 77-2822.

United States Court of Appeals Ninth Circuit.

April 14, 1980.

Todd M. Joseph, Environmental Protection Agency, Washington, D. C., for appellants.

Newman Porter, Phoenix, Ariz., argued for appellee; Evans, Kitchel & Jenckes, P. C., Phoenix, Ariz. James W. Moorman, Washington, D. C., on brief.

Appeal from the United States District Court for the District of Arizona.

Before PECK ^* and TANG, Circuit Judges. ^**

TANG, Circuit Judge.

The Environmental Protection Agency (EPA) appeals the district court's finding that the EPA's order requiring Asarco, Inc. to install a sampling station in the 1000 foot stack at Asarco's copper smelter was arbitrary and capricious. The case requires us to consider the extent to which the district court may go outside the administrative record to review agency action. Although we find that the district court went too far in its consideration of evidence not in the administrative record, we find, based on our own review of the administrative record, that the EPA's order was arbitrary and capricious, and remand the matter for further consideration by the agency.

Asarco is a copper producer that owns and operates a copper smelter in Hayden, Arizona. In 1974, Asarco constructed and commenced operation of a 1000 foot stack, which emits into the atmospheres gases and particulate matter that enter and mix in the stack from two separate flues or ducts. One flue carries gases and particulate matter from the Smelter's roaster and reverberatory furnaces. The other carries gases and particulate matter ¹ from its converters. Asarco has sampling facilities on each flue to test emissions passing through the flues. The sampling station in the roaster and reverberatory flue is approximately 175 feet from the stack; the sampling station in the converter flue is about 1000 feet from the stack. Although there is a porthole at the 400-foot level of the stack for gas sampling, the stack has no sampling facilities to test particulate matters. Consequently, Asarco cannot measure the amount of particulate matter that exists after the gases from the two ducts are mixed in the stack.

Pursuant to the Clean Air Act, 42 U.S.C. § 7401-7626, ² the state of Arizona adopted a plan to regulate the allowable discharges of particulate matter into the atmosphere from air pollution sources such as Asarco. The EPA Administrator disapproved the portion of the Arizona implementation plan as it related to the control of particulate matter in the Phoenix-Tucson Intrastate Air Quality Control Region, of which Asarco's Hayden facility was a part. The EPA then adopted a substitute "process weight" regulation, prescribing limitations on the amount of particulate emissions from process sources such as those of the Hayden facility. See 40 C.F.R. § 52.126(b). The regulations also incorporated the test methods and procedures that were to be followed by operators of these process sources, i. e., Methods 1, 2, 3, 4, and 5 contained in Appendix A to 40 C.F.R. Part 60. The EPA's replacement regulation was to remain in effect until Arizona adopted an implementation plan approved by the EPA.

In 1973, the EPA first notified Asarco of the air quality standards and specified dates by which it should be in compliance. Asarco contended that it was unable to comply because it was unable to operate at full capacity, as required by EPA test regulations. The EPA reiterated its position that testing must be done at full capacity. After this exchange of correspondence between the EPA and Asarco, the EPA notified Asarco in April 1975 that it was in violation of EPA regulations because of Asarco's failure to submit performance test data and to demonstrate compliance.

Pursuant to § 113(a)(4) of the Clean Air Act, 42 U.S.C. § 7413(a)(4), a conference was held in Phoenix on May 1975 at which representatives of the EPA, Asarco, and the state of Arizona attended to discuss Asarco's non-compliance. At the conference, Asarco agreed to conduct performance tests at the two sampling facilities in the flues while operating at full capacity. The Arizona representatives remarked that it believed that chemical reactions were occurring in the stack by the mixture of the gases from the two flues, and that Asarco should install a sampling fixture in the stack to measure the mixture. Asarco's attorney objected to the state's position. He argued that the purpose of the proceeding was to discuss Asarco's compliance with the testing requirements, and that Asarco was unprepared to "battle" on the issue of where the testing was to take place. The parties appeared to agree that Asarco would be given the opportunity to supply data on the need for testing in the stack before any action on the matter would be taken. Accordingly, on June 17, 1975, L. G. Cahill, Asarco's plant manager, sent a letter to the EPA discussing the possibility that chemical reactions might occur in the stack and restating Asarco's position that accurate tests could be conducted at the existing sampling sites.

On June 19, 1975 the EPA issued an order finding Asarco in violation of § 114(a)(1) of the Clean Air Act, 42 U.S.C. § 7414(a)(1), for failing to conduct the required performance testing for particulates emanating from the two flues. The order contained no mention that stack testing would be required. The EPA made no response to Cahill's letter.

As agreed, Asarco conducted further performance testing at the sampling facilities in the two flues on June 30, 1975. In an internal memorandum, the EPA concluded that the test data was inadequate to demonstrate compliance with the emissions standards contained in 40 C.F.R. 52.126(b). It added that it was concerned that the testing took place in the ducts rather than the stack because of the particulate reactions that would be expected to occur because of the interaction of the two exhaust systems.

In September 1975, Asarco again conducted compliance testing for particulate emissions. Upon receipt of the test results, the EPA internally concluded that, with a few reservations, the procedures had complied with EPA regulations. The memo noted that source tests should be conducted in the stack rather than the flues.

In February 1976, the Acurex Corporation, an independent consulting firm, completed a study for the EPA on sampling at the Hayden smelter. The study was prepared by its employee, James Steiner, who visited the plant for several hours on February 6, 1976. Steiner concluded the present sampling sites were inadequate and that it would be possible to make measurements at the existing locations only if there were expensive modifications of those facilities. He recommended that Asarco construct the proper sampling facilities on their 1000 foot stack to insure measurement accuracy. Steiner's report was not furnished to Asarco.

On April 20, 1976, the EPA advised Asarco that it was required to install sampling facilities in the 1000 foot stack so that source tests could be conducted in accordance with EPA test methods. It specified guidelines for the construction of the facility, and required that Asarco conduct performance tests in the stack within 150 days.

Asarco responded by letter ten days later. It stated that installation of sampling facilities in the stack, while technically feasible, was not economically feasible because it would cost in excess of $300,000. Asarco also asserted that the present sampling facilities, as evidenced by three series of tests (including the June and September tests), demonstrated compliance with EPA testing requirements.

On June 2, 1976 the EPA reiterated its position that a sampling site must be constructed within the stack. Several days later, representatives of the EPA and Asarco met to discuss the proposed monitoring requirements. At the meeting, Asarco provided the EPA with technical comments in support of its position that stack testing was unnecessary because the amount of particulate matter formed in the stack was indeterminable. Asarco provided the EPA with additional technical data a few days later, and expressed its willingness to modify the converter flue and conduct new tests in both flues. The EPA issued an order of violation on July 22, 1976, citing Asarco's failure to install a sampling site in the stack and conduct adequate performance tests. A conference was held between the EPA and Asarco to discuss the monitoring requirements, and Asarco reiterated its position that, although it was willing to rectify the deficiencies in its present compliance testing, a sampling facility in the stack was unnecessary. On September 15, 1976 the EPA issued a revised order requiring construction of stack testing facilities, and informed Asarco that non-compliance could lead to potential civil or criminal liability.

Asarco then filed its present action, claiming that the EPA's finding of violation and its order and revised order were invalid as arbitrary and capricious insofar as it required Asarco to construct stack testing facilities at its Hayden smelter. It also requested a stay of enforcement pending judicial review. The EPA moved to dismiss the action on the ground that the district court did not have jurisdiction to conduct preenforcement review. When this motion was denied, the EPA counterclaimed for enforcement.

The district court then conducted a four-day hearing on the merits of Asarco's complaint. Numerous experts testified during the hearing about the necessity for the EPA's stack testing requirement. The administrative record was also admitted. The district court found that the evidence did not support the conclusion that significant chemical reactions occurred after combination of the two gas streams and held that the orders requiring stack-testing were arbitrary and capricious.

I. CONSIDERATION OF EVIDENCE OUTSIDE THE...