Detroit Edison Co. v. UNITED STATES ENVIRONMENT. PRO. AG., 73-1552.

• Decision Date: 18 April 1974
• Docket Number: No. 73-1552.,73-1552.
• Citation: 496 F.2d 244
• Parties: The DETROIT EDISON COMPANY, Petitioner, v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, Respondent.
• Court: U.S. Court of Appeals — Sixth Circuit

496 F.2d 244 (1974)

The DETROIT EDISON COMPANY, Petitioner, v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, Respondent.

No. 73-1552.

United States Court of Appeals, Sixth Circuit.

Argued November 30, 1973.

Decided April 18, 1974.

Harry H. Voigt, Washington, D. C., for petitioner; Arvin E. Upton, Henry V. Nickel, Washington, D. C., on brief; LeBoeuf, Lamb, Leiby, & MacRae, Washington, D. C., Leon S. Cohan, Peter A. Marquardt, The Detroit Edison Co., Detroit, Mich., of counsel.

James R. Walpole, Dept. of Justice, for respondent; Wallace H. Johnson, Asst. Atty. Gen., Edmund B. Clark, Martin Green, Attys., Dept. of Justice, Washington, D. C., on brief.

Before WEICK, PECK and MILLER, Circuit Judges.

JOHN W. PECK, Circuit Judge.

This case is before us upon petition by the Detroit Edison Company for judicial review pursuant to § 307(b) (1) of the Clean Air Act, 42 U.S.C. § 1857h-5(b) (1) (1970), of a May 14, 1973, regulation promulgated by the Administrator of the Environmental Protection Agency (EPA). The May 1973 regulation specifically amended an earlier EPA regulation promulgated in October of 1972 although the subject matter thereof had been neither previously published nor the subject of a public hearing. The EPA terms the amendment a "clarification" of the October 1972 regulation, while the petitioner Detroit Edison characterizes it as a "revision" to the State's plan, but more than a matter of semantics is involved. A revision would necessitate compliance with the necessary procedural requirements in promulgating the May 1973 regulation, while a mere clarification would not. We conclude that the amendment amounted to a revision.

In early 1972, pursuant to the requirements of § 110 of the Clean Air Act,¹ 42 U.S.C. § 1857c-5(a) (1970), the State of Michigan submitted a plan describing its implementation of Federal primary (health-related) and secondary (welfare-related) ambient air quality standards. The EPA Administrator reviewed the plan and in May of 1972 timely approved it with certain exceptions. 37 Fed.Reg. 10842 (1972). Included in the plan as submitted was a provision referred to as "R 336.49." This provision is entitled "Emission of sulfur dioxide from power plants" and R 336.49(1)² thereof details that it shall be unlawful to burn fuel whose sulfur content exceeds the levels established for July 1975 and July 1978 by a Table 3 (of R 336.49(7)) or whose sulfur dioxide emissions exceed the levels of Table 4 (of R 336.49(7)). R 336.49(1) further provides that variances or exemptions to the requirements of Tables 3 and 4 may be approved if the emission source furnishes evidence no later than July 1, 1973, that it does not create or contribute an ambient level of sulfur dioxide in excess of the applicable national ambient air quality standards. R 336.49(3) provides that persons operating sources in July 1973 which exceed either the Table 4 emission level or the July 1978 sulfur content level of Table 3 must submit written compliance schedules no later than January 1, 1974.

The submission of individual compliance schedules by January 1, 1974, was one of the Administrator's objections to the Michigan plan for the reason that this date was later than the due date for the State's first semiannual progress report on the implementation plan. 37 Fed.Reg. 10842, 10873 (1972). According to 40 C.F.R. § 51.15(a) (2), individual compliance schedules must be submitted no later than the due date for that first progress report. In addition, in his comments relevant to all the states' plans, the Administrator also objected to the several proposals regarding variances:

"Optional Control

"Several State plans include regulations under which a source owner or operator could be exempt from compliance with an applicable emission limitation if he can show that emissions from the source will not interfere with attainment or maintenance of the national standards. The Administrator neither approves nor disapproves such optional control features. States are advised, however, that action taken to allow any such exemptions will constitute revision of a State plan and therefore will be subject at that time to the Administrator\'s approval." 37 Fed.Reg. 10842, 10845-46 (1972).

Subsequently, pursuant to § 110(c) of the Act, 42 U.S.C. § 1857c-5(c) (1970), the Administrator published his proposed revisions for those portions of the plan that he disapproved. 37 Fed.Reg. 11826, 11835-36 (June 14, 1972). Public hearings followed on the EPA proposals with the result that in October of 1972 revised regulations were promulgated. 37 Fed.Reg. 23085, 23089 (October 28, 1972). The revised regulations required, in relevant part, that:

"§ 52.1175 Compliance schedules.

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"(b) Federal compliance schedule. (1) Except as provided in subparagraph (2) of this paragraph, the owner or operator of a stationary source subject to R 336.49 . . . shall comply with such regulation on, or before, December 31, 1973 . . . .

* * *

"(2) Any owner or operator of a stationary source subject to subparagraph (1) of this paragraph may, no later than 120 days following the effective date of this paragraph, submit to the Administrator for approval a proposed compliance schedule that demonstrates compliance with R 336.49 as expeditiously as practicable but no later than the dates specified in R 336.49(7) . . . ."

* * *

This October 1972 regulation was not challenged by Detroit Edison and is not being challenged here.³

After the October 1972 regulation was published, the EPA claimed that it detected misinterpretations of the regulation and accordingly on May 14, 1973, published an amendment to the October 1972 regulation that replaced the general reference to compliance with R 336.49 with the specific reference to "the emission limitations in table 3 or 4 of R 336.49." In addition, the date for achieving compliance was extended from December 31, 1973 to January 31, 1974, for the claimed purpose of maintaining consistency with the provisions of 40 C. F.R. § 51.15(c). 38 Fed.Reg. 12711, 12712-13 (1972).

The petitioner's position can be summarized as follows. Under R 336.49 the sulfur limitations are not effective until July 1, 1975 and July 1, 1978, and those limitations do not apply until 1980 to sources obtaining a variance. Under the May 1973 regulation, all sources not submitting compliance schedules are required to comply with the 1978 sulfur limitations by January 31, 1974. In addition, the 1980 compliance date for sources obtaining a variance is eliminated. Petitioner presently has an application for a variance pending.

In examining the contentions of the parties, we first observe that the actual emission limitations are set forth in Tables 3 and 4 of R 336.49. The other parts of R 336.49 refer to schedules for achieving compliance with the limitations. In this respect, the EPA argues that there are three alternative courses of action available to emission sources, namely: (1) to obtain a variance from the requirements pursuant to R 336.49(1)⁴; (2) to submit a certification to the EPA that the source is, or will be by December 31, 1973, in compliance with the requirements⁵; or, (3) to submit to the EPA a compliance schedule showing how compliance with Table 3 or 4 will be accomplished.⁶ Although our reading of the regulations as amended through October of 1972 indicates that these alternatives are available to the petitioner, we cannot find authority therefore from a reading of the regulations as amended in May of 1973.

It is well settled that an agency's interpretation of its regulations is properly entitled to deference by the courts unless it is plainly erroneous or inconsistent with the regulations. Udall v. Tallman, 380 U.S. 1, 85 S.Ct. 792, 13 L.Ed.2d 616 (1965); Gulf Oil Corp. v. Hickel, 140 U.S.App.D.C. 368, 435 F.2d 440 (1970). But by changing the language of compliance to specify the emission limitations of Tables 3 and 4, we can only conclude that the May 1973 regulation specifically excludes the variance alternative indicated at R 336.49(1) from its purview. In contrast, the October 1972 regulation, by its broad language in referring to the entire R 336.49, encompasses the alternative of obtaining a variance. If, as the EPA would have us believe, the May regulation does not in fact alter the terms of the October regulation and allows the petitioner to proceed as if three alternatives exist, then we are faced with the fact that there is no controversy before us.⁷ It would follow then that the May regulation is unnecessary except as regards the change in the compliance date which is apparently conceded by the petitioner to be a valid administrative change.

Giving merely the meaning its plain language imparts, it is clear that the May 1973 regulation in fact deletes the variance alternative from the provisions of the implementation plan and thus effects a substantial change thereto. Since the Administrator has not complied with the informal rulemaking requirements of the Administrative Procedure Act (APA), 5 U.S.C. § 553 (1967), the promulgation of the May 1973 regulation must be vacated and the case remanded with instructions to comply with the APA. Buckeye Power, Inc. v. EPA, 481 F.2d 162 (6th Cir. 1973).

The EPA urges that certain statutory exceptions to APA requirements are applicable but our view is that...