Ethyl Corp. v. E.P.A.

Decision Date14 April 1995
Docket NumberNo. 94-1505,94-1505
Citation311 U.S. App. D.C. 163,51 F.3d 1053
Parties, 311 U.S.App.D.C. 163, 25 Envtl. L. Rep. 20,817 ETHYL CORPORATION, Petitioner, v. ENVIRONMENTAL PROTECTION AGENCY, et al., Respondents. American Automobile Manufacturers Association, Ferroalloys Association, Intervenors.
CourtU.S. Court of Appeals — District of Columbia Circuit

F. William Brownell argued the cause, for petitioner. With him on the briefs was Kevin L. Fast.

Jon M. Lipschultz, Atty., Dept. of Justice, argued the cause, for respondents. With him on the brief were Lois J. Schiffer, Asst. Atty. Gen., Dept. of Justice, and Timothy D. Backstrom, Atty., E.P.A.

V. Mark Slywynsky argued the cause and filed the brief, for intervenor American Auto. Mfrs. Ass'n.

Mark Brian Benedict filed the brief, for intervenor Ferroalloys Ass'n.

Before EDWARDS, Chief Judge, WALD and SENTELLE, Circuit Judges.

Opinion for the Court filed by Chief Judge EDWARDS.

HARRY T. EDWARDS, Chief Judge:

At issue in this case is a claim that the Administrator of the Environmental Protection Agency ("EPA" or "Agency") has impermissibly construed a provision of the Clean Air Act ("Act") governing the regulation of fuel additives. Title II of the Act, 42 U.S.C. Secs. 7521-7590 (1988 & Supp. V 1993), establishes a comprehensive scheme for regulating motor vehicle emission and fuel standards for the prevention and control of air pollution. 1 Section 211(f)(1) prohibits the introduction into commerce of new fuels or fuel additives which are not "substantially similar" to existing fuels and fuel additives. Id. Sec. 7545(f)(1). A manufacturer may, however, under section 211(f)(4), apply to the Administrator of the EPA for a waiver of the section 211(f) prohibition if the manufacturer can show that the fuel additive "will not cause or contribute to a failure of any emission control device or system ... to achieve compliance by the vehicle with the emission standards." Id. Sec. 7545(f)(4). In this case, Ethyl Corporation ("Ethyl") attempted to secure a waiver for a fuel additive under section 211(f)(4), and the Administrator denied the waiver request for reasons other than those specified in the applicable statutory provision.

Beginning in 1990, Ethyl filed its first of four section 211(f)(4) waiver applications with the Agency for a fuel additive, methylcyclopentadienyl manganese tricarbonyl ("MMT"), designed to prevent auto-engine knocking. The Agency denied the first three applications on the grounds that Ethyl failed to satisfy the emissions criterion; the manufacturer had not shown that MMT "will not cause or contribute to a failure of any emission control devise or system ... to achieve compliance ... with the emission standards." Id. Sec. 7545(f)(4). In response to Ethyl's fourth application, which is the subject of this litigation, the Administrator decided that Ethyl's tests satisfied the emissions criteria. Fuels & Fuel Additives; Waiver Decision/Circuit Court Remand, 59 Fed.Reg. 42,227, 42,259 (1994) ("Waiver Decision"). However, rather than granting the waiver, the Administrator decided that she had discretion under the Act to "consider other factors in determining whether granting a waiver is in the public interest and consistent with the objectives of the Clean Air Act," including the effects of MMT on public health. Id. The Administrator then determined that Ethyl had failed to satisfy the Agency's public health concerns, concluding that there was a "reasonable basis for concern about the effects on public health that could result if EPA were to approve use of MMT in unleaded gasoline." Id. at 42,260. On that basis, the Administrator denied Ethyl's application for a waiver. Id. at 42,261. Ethyl petitioned this court for review of the Administrator's decision and we now grant its petition.

We hold that the Administrator violated the clear terms of section 211(f)(4) in denying Ethyl a waiver for MMT on public health grounds. The language of section 211(f)(4) is clear, directing the Administrator to consider only emission effects, not public health effects, in waiver determinations. Because Congress instructed the EPA to evaluate only the effect on emissions in waiver determinations, and because Ethyl has met the statutory criteria, we hold that the Administrator of the EPA exceeded her authority in denying Ethyl's request for a waiver for MMT. Accordingly, we vacate the Agency's Waiver Decision and order the EPA to grant Ethyl a waiver for its fuel additive.

I. BACKGROUND
A. The Statutory and Regulatory Regime

In enacting section 211 of the Clean Air Act, 42 U.S.C. Sec. 7545, Congress adopted a preventative approach to the regulation of fuels, banning fuels and fuel additives which were not "substantially similar" to existing products. 2 See id. Sec. 7545(f)(1). Section 211(a) authorizes the Administrator to prohibit the sale of fuels and fuel additives unless they have been registered with the Administrator under section 211(b). See id. Sec. 7545(a), (b). Before registering a fuel additive under section 211(b), the Administrator may require the manufacturer "to conduct tests to determine potential public health effects of such fuel or additive" and to furnish information regarding the fuel additive's effect on "the emission control performance of any vehicle ... or the extent to which such emissions affect the public health or welfare." Id. Sec. 7545(b)(2)(A), (B). Under section 211(c), the Administrator may "control or prohibit" the manufacture or sale of any fuel additive, if she determines that "any emission product of such ... fuel additive causes, or contributes, to air pollution which may reasonably be anticipated to endanger the public health or welfare" or "impair to a significant degree the performance of any emission control device or system which is in general use." Id. Sec. 7545(c)(1)(A), (B).

Section 211(f)(1) prohibits the introduction into commerce of new fuel additives, stating that "it shall be unlawful for any manufacturer of any fuel or fuel additive to first introduce into commerce" a fuel additive for general use "which is not substantially similar" to those additives already in use. Id. Sec. 7545(f)(1)(A). Under that section, however, the Administrator may grant a waiver if the manufacturer demonstrates that the fuel additive will not cause or contribute to a failure of any emission system which ensures compliance with the emission standards. See id. Sec. 7545(f)(4). 3 That provision states:

The Administrator, upon application of any manufacturer of any fuel or fuel additive, may waive the prohibitions established under paragraph (1) or (3) of this subsection or the limitation specified in paragraph (2) of this subsection, if he determines that the applicant has established that such fuel or fuel additive or a specified concentration thereof, and the emission products of such fuel or additive or specified concentration thereof, will not cause or contribute to a failure of any emission control device or system (over the useful life of any vehicle in which such device or system is used) to achieve compliance by the vehicle with the emission standards with respect to which it has been certified pursuant to section 7525 of this title.

Id. The provision gives the Administrator 180 days from the receipt of such application to act before "the waiver ... shall be treated as granted." Id.

In 1978, the EPA issued guidelines describing the specific requirements for a waiver under section 211(f)(4). Guidelines for Fuel Additive Waivers, 43 Fed.Reg. 11,258 (1978); Guidelines for Section 211(f) Waivers for Alcohol-Gasoline Blends, 43 Fed.Reg. 24,131 (1978). Those guidelines explain that "[a] request for a waiver should contain data relating to a fuel additive's emissions effects which are derived from vehicle testing," and describe the testing procedures indicative of effects on emissions. 43 Fed.Reg. at 11,259. The guidelines do not mention a public health criterion or any testing procedures for determining public health effects. Before the waiver decision at issue in this case, the Agency had considered twenty-three applications for waivers under section 211(f)(4), and it never previously relied on public health effects in denying a waiver. See Waiver Decision at 42,232, 42, 234.

B. The Waiver Proceedings

The fuel additive, methylcyclopentadienyl manganese tricarbonyl or MMT, commercially labeled by Ethyl as HiTEC 3000, is to be blended in unleaded gasoline. 4 MMT increases octane when it is added to gasoline to prevent auto-engine knocking. Because Ethyl's additive is less expensive than other octane enhancers, EPA assumed that if a waiver was granted, MMT would likely be used in a large proportion of this country's gasoline. See Fuels & Fuel Additives; Waiver Application, 57 Fed.Reg. 2535, 2536, 2547 n. 58 (1992) ("1992 Waiver Decision"). In the past, MMT was used in leaded gasoline in the United States and in unleaded gasoline in Canada. Id. at 2536. MMT's principal component is manganese, which has been the subject of a number of health-related studies, the results of which reveal a debate in the scientific community regarding its potential health hazards. See Waiver Decision at 42,239-55.

Before the proceedings culminating in this action, Ethyl sought and had been denied waivers for MMT use in unleaded fuel on several occasions. Ethyl submitted its first waiver application on March 17, 1978. In denying the waiver application, EPA found that the use of MMT causes or contributes to the failure of vehicles to meet emissions standards. In re Applications for MMT Waiver, 43 Fed.Reg. 41,424, 41,424-25 (1978). Specifically, the EPA determined that, at the concentration level proposed by Ethyl, MMT had "a statistically significant adverse HC [hydrocarbon] emissions effect." Id. at 41,427. On May 26, 1981, Ethyl submitted its second waiver application. Once again, the Administrator denied the...

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