Environmental Defense Fund, Inc. v. Costle, s. 79-1473

• Decision Date: 16 September 1980
• Docket Number: Nos. 79-1473,s. 79-1473
• Citation: 636 F.2d 1229,205 U.S.App.D.C. 101
• Parties: , 205 U.S.App.D.C. 101, 10 Envtl. L. Rep. 20,803 ENVIRONMENTAL DEFENSE FUND, INC., a Nonprofit New York Corporation, et al. v. Douglas M. COSTLE, as Administrator, Environmental Protection Agency, et al. Appeal of AMERICAN IRON AND STEEL INSTITUTE et al. NATURAL RESOURCES DEFENSE COUNCIL, INC., et al. v. Douglas M. COSTLE, as Administrator, Environmental Protection Agency, et al. Appeal of AMERICAN IRON AND STEEL INSTITUTE et al. NATURAL RESOURCES DEFENSE COUNCIL, INC. v. James I. AGEE, as Assistant Administrator for Water and Hazardous Materials, Environmental Protection Agency, et al. Appeal of AMERICAN IRON AND STEEL INSTITUTE et al. CITIZENS FOR A BETTER ENVIRONMENT and Dennis L. Adamczyk v. Douglas M. COSTLE, as Administrator, Environmental Protection Agency, et al. Appeal of AMERICAN IRON AND STEEL INSTITUTE et al. to 79-1476.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 1229

636 F.2d 1229

14 ERC 2161, 205 U.S.App.D.C. 101, 10

Envtl. L. Rep. 20,803

ENVIRONMENTAL DEFENSE FUND, INC., a Nonprofit New York

Corporation, et al. v. Douglas M. COSTLE, as Administrator, Environmental

Protection Agency, et al.

Appeal of AMERICAN IRON AND STEEL INSTITUTE et al.

NATURAL RESOURCES DEFENSE COUNCIL, INC., et al. v. Douglas M. COSTLE, as Administrator, Environmental

Protection Agency, et al.

Appeal of AMERICAN IRON AND STEEL INSTITUTE et al.

NATURAL RESOURCES DEFENSE COUNCIL, INC. v. James I. AGEE, as Assistant Administrator for Water and Hazardous Materials, Environmental Protection

Agency, et al.

Appeal of AMERICAN IRON AND STEEL INSTITUTE et al.

CITIZENS FOR A BETTER ENVIRONMENT and Dennis L. Adamczyk v. Douglas M. COSTLE, as Administrator, Environmental

Protection Agency, et al.

Appeal of AMERICAN IRON AND STEEL INSTITUTE et al.

Nos. 79-1473 to 79-1476.

United States Court of Appeals, District of Columbia Circuit.

Argued March 25, 1980.

Decided Sept. 16, 1980.

Appeals from the United States District Court for the District of Columbia (D.C. Civil Actions Nos. 75-0172, 2153-73, 75-1267, and 75-1698).

Richard E. Schwartz, with whom Thomas L. Anderson, Washington, D. C., was on the brief, for appellant American Iron and Steel Institute.

Charles F. Lettow, McLean, Va., for appellants Firestone Tire and Rubber Co. et al.

Douglas E. Kliever and Mary W. Ennis, Washington, D. C., were on the brief for appellants Union Carbide Corp. et al.

Jacqueline M. Warren, New York City, entered an appearance for appellees Environmental Defense Fund, Inc. et al.

James T. Banks, McLean, Va., with whom Ronald J. Wilson, Washington, D. C., was on the brief, for appellees Natural Resources Defense Counsel, Inc. et al.

Steven Schatzow, Deputy Associate Gen. Counsel, Environmental Protection Agency, Washington, D. C., with whom James W. Moorman, Asst. Atty. Gen., and Jacques B. Gelin and Michael A. McCord, Attys., Dept. of Justice, Washington, D. C., were on the brief, for appellee Environmental Protection Agency. E. J. Shawaker, Atty., Dept. of Justice, and Richard G. Stoll, Atty., Environmental Protection Agency, Washington, D. C., also entered appearances for appellee Environmental Protection Agency.

Before J. SKELLY WRIGHT, Chief Judge, and SWYGERT ^* and ROBINSON, Circuit Judges.

Opinion for the court filed by Chief Judge J. SKELLY WRIGHT.

J. SKELLY WRIGHT, Chief Judge:

A group of companies, in the chemical, petroleum, rubber, and steel industries ¹ and an industry association ² (collectively "the Companies") appeal from a District Court order denying their motion to vacate a settlement agreement (the Agreement) previously adopted by the court, ³ and granting a motion for modification of the settlement agreement filed by the signatories to the Agreement-five environmental groups ⁴ and the Environmental Protection Agency (EPA or Agency). Natural Resources Defense Council, Inc. v. Costle, 12 ERC 1833 (D.D.C.1979). The Companies contend that the settlement agreement must be vacated both because it has been superseded by legislation enacted by Congress in 1977, and because each of the lawsuits that were resolved by the Agreement is now moot and must be dismissed. The Companies further contend that in proposing the modifications to the settlement agreement approved by the District Court EPA violated rulemaking and public participation requirements of the Administrative Procedure Act, the Clean Water Act, and its own regulations, as well as requirements of constitutional due process.

I.

Between 1973 and 1975 five environmental groups (collectively "NRDC") brought four separate lawsuits against EPA to rectify the Agency's alleged failure to implement several provisions of the statute then known as the Federal Water Pollution Control Act (FWPCA). 33 U.S.C. § 1251 et seq. (1976). ⁵ The first lawsuit challenged the criteria EPA was using to decide which pollutants to include in a list of toxic pollutants the Agency was required to compile by Section 307(a) of the FWPCA, and also sought to expand EPA's then existing list of toxic pollutants (the toxic criteria case). ⁶ The second and third lawsuits were aimed at compelling EPA to promulgate effluent discharge standards for the substances already on the Agency's list of toxic pollutants (the deadlines cases). ⁷ The fourth lawsuit sought an order requiring EPA to promulgate pretreatment standards under Section 307(b) of the FWPCA covering approximately 35 industries and a wide variety of pollutants (the pretreatment case). ⁸

While these lawsuits were pending EPA officials conducted a thorough review of the Agency's strategy for controlling toxic pollutant emissions. They concluded that there was a need to replace the Agency's then existing approach with a new strategy calling for an integrated program for controlling toxic pollutants. Furthermore, EPA officials felt that development of the new approach could provide a basis for resolving the controversies between the environmental groups and the Agency. ⁹ After the general outlines of the new program were developed EPA and NRDC, joined by four industry intervenors in one of the lawsuits, ¹⁰ began settlement negotiations. After tentative agreement was reached between EPA and NRDC a proposed settlement agreement was submitted to the District Court. ¹¹ The District Court held several hearings on the proposed agreement and allowed interested parties to file comments on it. The Companies intervened in the proceedings in the District Court and filed comments vigorously opposing the proposed agreement. ¹² After requiring several modifications the District Court approved the settlement agreement, finding it a "just, fair, and equitable resolution of the issues raised." Natural Resources Defense Council, Inc. v. Train, 8 ERC 2120, 2122 (D.D.C.1976). ¹³ No appeal was taken from the court's order adopting the settlement agreement.

The settlement agreement outlined a comprehensive strategy for regulation of toxic pollutant discharges under the FWPCA, including details concerning the timing, scope, and nature of the regulatory programs EPA agreed to initiate. Insofar as is relevant to the instant case, EPA proposed to regulate discharge of toxic pollutants by developing effluent limitations, guidelines, and performance standards for new and existing emission sources, as well pretreatment standards regulating introduction of pollutants into treatment works. These limitations, guidelines, and standards were to cover 21 major industries and 65 specified pollutants or groups of pollutants. In promulgating effluent limitations and guidelines EPA agreed that it would employ technology-based controls such as "best available technology" (BAT) performance standards for existing emission sources, and performance standards reflecting the "best available demonstrated control technology" (BADCT) for new sources. ¹⁴ The pretreatment standards EPA undertook to promulgate were to apply to any of the 65 pollutants listed in the Agreement and any other pollutants that proved to be "incompatible" with "publicly owned treatment works" (POTWs). ¹⁵ Promulgation of the regulations envisaged by the Agreement was to take place according to a phased schedule running through December 31, 1979 and compliance with the regulations by affected industries was to be achieved by June 30, 1983. ¹⁶

Adoption of the industry-by industry, technology-based approach, using statutory authority conferred by various sections of the FWPCA, ¹⁷ marked a change in EPA's regulatory strategy. Its previous efforts to control discharge of toxic pollutants had relied on authority conferred by Section 307 of the FWPCA in developing health-based standards on a pollutant-by-pollutant basis. ¹⁸ The new strategy offered substantial advantages over the old. First, it allowed EPA to cover far more substances and emission sources than could have been handled under the old approach. ¹⁹ Second, it allowed the Agency to develop a single regulatory package which would apply to all of the problem pollutants in the discharge of a particular industry, enabling the industry to predict the entire cost of pollution control. ²⁰ Third, the Agency could allow considerations of cost and technology to enter into its decisionmaking and industry was allowed a longer compliance period. ²¹ Finally, EPA also expected that the new program would be easier to administer. ²²

After the Agreement was adopted by the District Court Congress began a review of the FWPCA and EPA's progress toward implementing its provisions. Committees of both Houses of Congress held hearings at which various difficulties EPA was experiencing under the then existing statutory scheme were discussed and the new regulatory framework and strategy established by the settlement agreement was explored. ²³ In testimony before the congressional committees NRDC's representatives emphasized that the Agreement was working well, ²⁴ and EPA's spokesman, while acknowledging that the Agency was having trouble meeting the deadlines set by the Agreement, strongly supported the Agreement. ²⁵ The outcome of these hearings was the enactment in December 1977 of several amendments to the FWPCA which was renamed the Clean Water Act (CWA). ²⁶ We shall discuss the nature and importance of those provisions of the 1977 Amendments that are pertinent to this case later. At this point we simply note that the Companies and NRDC disagree about the effect of the 1977 Amendments on the settlement agreement. ²⁷

Meanwhile, NRDC's monitoring of EPA's implementation of the Agreement's provisions convinced it that the Agency would not meet any of the deadlines for proposing and promulgating regulations. ²⁸ Accordingly, on September 26, 1978 NRDC moved for an order to show cause why EPA should not be held in contempt of the District Court's order approving the settlement agreement. ²⁹ EPA responded on October 20, 1978 with a motion to amend the...