Dow Chemical v. U.S. E.P.A.
| Decision Date | 17 November 1987 |
| Docket Number | No. 86-4276,86-4276 |
| Parties | , 18 Envtl. L. Rep. 20,297 DOW CHEMICAL, Petitioner, v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, Respondent. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Robert Brager, Charles F. Gauvin, Beveridge & Diamond, Washington, D.C., Samuel P. Jordan, Jr., Dow Chemical Co., U.S.A., R. Dean Cooper, Plaquemine, La., for petitioner.
Lee M. Thomas, Adm'r, E.P.A., Washington, D.C., Stephen L. Samuels, Dept. of Justice, for respondent.
Petition for Review of an Order of the Environmental Protection Agency.
Before WISDOM, HIGGINBOTHAM, and DAVIS, Circuit Judges.
This case is part of a lively dispute about the meaning of a regulation governing industrial discharges of vinyl chloride, a colorless and carcinogenic gas. The petitioner is the Dow Chemical Company (Dow). The respondent is the U.S. Environmental Protection Agency (EPA). Because we conclude that we lack subject matter jurisdiction under the applicable statute, we dismiss the petition.
Dow owns and operates a vinyl chloride plant near Plaquemine, Louisiana. During production, the vinyl chloride is kept in tanks known as "process units". Each process unit has a relief valve that allows vinyl chloride to escape if pressure in the tank rises above a certain level. At the Plaquemine plant, any gas that passes through these relief valves is routed to a continuously burning flare. The flare is said to destroy about 99 percent of all vinyl chloride that reaches it. 1 The remainder is discharged into the atmosphere.
The EPA regulations for vinyl chloride production distinguish between "discharges" 2 and "fugitive emission sources". 3 A discharge occurs when a relief valve opens to allow gas to escape; fugitive emissions are mainly low-level leaks, including "leakage from relief valves". 4 To minimize relief valve leakage, the EPA requires producers to use rupture discs or to take "equivalent" measures that significantly reduce the environmental impact of leaking vinyl chloride. 5
In January 1978 Dow asked EPA for an equivalency determination that would permit "substitution of the header/flare system for rupture discs" at the Plaquemine plant. On November 21, 1978, EPA ruled that the flare system satisfied the regulation governing relief valve leakage so long as Dow reported to EPA, on a semi-annual basis, unusually high concentrations of vinyl chloride in the flare. The parties agree that Dow has regularly filed these reports.
The EPA deals with "discharges" in a separate regulation, 40 C.F.R. Sec. 61.65(a). 6 Section 61.65(a) is based upon the assumption that relief valve discharges "can be prevented in almost all cases". 7 EPA refers to the standard as a "zero emission limit". 8 No discharges to the atmosphere are permitted. If discharges do occur they must be reported to the EPA within ten days, and the producer must explain both why the discharge took place and what it has done to prevent similar discharges in the future. Dow has apparently never reported a discharge at the Plaquemine plant under this regulation.
On December 2, 1985, an EPA Regional Administrator, Dick Whittington, wrote to Dow requesting information "to determine whether [the Plaquemine plant is] complying with applicable air pollution requirements". More specifically, Whittington announced that the agency's inquiry would "focus on whether Dow has reported all discharges of vinyl chloride from relief valves in vinyl chloride service to the flare header in accordance with applicable reporting requirements ...". Whittington asked for data pertaining to every relief valve discharge that had occurred at the plant since December 1980--regardless of whether the data had already been supplied to EPA in the semi-annual reports that Dow was filing in accordance with the rupture disc equivalency determination.
Whittington attached two enclosures to his letter. 9 The second enclosure (Enclosure II) purported to clarify "an apparent misunderstanding by Dow" about the scope and effect of the rupture disc equivalency determination. 10 After acknowledging the acceptability of the flare for dealing with the problem of leakage, Enclosure II concludes by noting that:
discharges into the collection header/flare system ... are not covered by the equipment equivalency ... and should, therefore, be reported within ten days under the applicable requirements of 40 CFR Sec. 61.65(a). Dow's use of a flare to significantly reduce the quantity of vinyl chloride that is released to the atmosphere during relief valve discharge incidents is commendable protection of the environment, but has not been demonstrated to meet compliance with 40 CFR Sec. 61.65(a).
This statement lies at the heart of the petition before us today.
Dow responded to the Whittington letter by providing EPA with the requested information. At the same time, however, Dow filed suit in the Middle District of Louisiana to enjoin EPA from applying the requirements of Sec. 61.65(a) to valve discharges at the Plaquemine plant. 11 Because the discharges are routed to the flare, Dow argued, they cannot rationally be governed by a regulation that deals with discharges "to the atmosphere".
The district court determined that it lacked subject matter jurisdiction over the dispute. This ruling rested upon two grounds. The court found that Dow's complaint failed to raise a federal question. 12 It also held that neither the Whittington letter nor Enclosure II constituted "final agency action". 13 We eventually affirmed this decision on other grounds. 14
Four days after the district court dismissed the complaint, Dow filed--in this Court--the petition that is presently under review. Again Dow presents the argument that discharges to the flare are not governed by Sec. 61.65(a). Dow also contends that Enclosure II represents "rulemaking" that does not comply with the procedural requirements of section 307(d) of the Clean Air Act. 15 Both parties have submitted extensive briefs on the jurisdictional issues and on the merits.
Finally, on August 25, 1986, four months after Dow had filed the petition now under review, the EPA amended its complaint in an ongoing enforcement action against Dow to include allegations that Dow failed to report eleven relief valve discharges at the Plaquemine plant in violation of Sec. 61.65(a). 16 After a partial settlement, these allegations are now the only area of dispute remaining in the enforcement action before the district court. The court stayed discovery and other proceedings in that case, however, pending this Court's disposition of Dow's second attempt to obtain judicial review of the Whittington letter and Enclosure II.
Congress has granted the circuit courts exclusive original jurisdiction to review EPA action taken under several specific sections of the Clean Air Act. 17 The same jurisdictional provision also gives us similar authority to review "any other final action of the Administrator under this chapter ... which is locally or regionally applicable ..." (emphasis added). 18 The question we now face is whether the Whittington letter and the other actions associated with it constitute "final action" subject to direct review by this Court. 19
The EPA contends that Dow should be bound by the adverse judgment in its first effort to challenge the Whittington letter in federal court. EPA reminds that "a court has jurisdiction to determine its jurisdiction; and once it has made that determination its decision is binding unless reversed on appeal". 20 But as EPA implicitly concedes, Dow is not barred from filing its petition in this court by the district court's conclusion that it lacked subject matter jurisdiction. 21 Instead, EPA argues that Dow should be estopped from contending that the Whittington letter constitutes a "final action" because this was "precisely the issue determined by the Middle District of Louisiana in an action brought by Dow itself". 22
Dow maintains that it cannot be bound by the district court's decision because this Court affirmed on other grounds. 23 We agree. "The federal decisions agree that once an appellate court has affirmed on one ground and passed over another, preclusion does not attach to the ground omitted from its decision." 24 We decline to depart from this accepted rule. 25
Having rejected EPA's res judicata argument, we must now decide whether Dow has identified "final" EPA action over which we have jurisdiction. As we observed in Geyen v. Marsh, "[a] final agency action is one that imposes an obligation, denies a right, or fixes a legal relationship". 26 The EPA action at issue in this case does none of these things.
To be sure, the trial judge in Civil Action No. 85-294-A may ultimately order Dow to report all discharges into the flare within ten days. In effect, this is what the Whittington letter predicts will happen. 27 Dow may also be penalized for not having properly reported its vinyl chloride discharges in the past. But the legal source for these orders--if indeed the district court concludes that they are warranted--will be 40 C.F.R. Sec. 61.65(a), and not any later EPA interpretation of that regulation.
EPA's construction of 40 C.F.R. Sec. 61.65(a) is "final" only in the sense that no one at the agency currently plans to revise it. 28 The same could be said of countless other instances of legal "interpretation" that inevitably occur whenever the EPA requests information, opens a new file, schedules a plant inspection, and the like. When these interpretations do not establish new rights or duties--when they do not fix a legal relationship--they do not constitute "final action" by the agency and they are not reviewable in this Court under 42 U.S.C. Sec. 7607(b).
In this case, EPA expressed a view on the scope of 40 C.F.R. Sec. 61.65(a) while requesting certain data. Under section 114 of the Clean Air Act, which Dow does not challenge, EPA could arguably...
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