Navistar Intern. Transp. Corp. v. U.S. E.P.A.
| Decision Date | 10 November 1988 |
| Docket Number | No. 87-3474,87-3474 |
| Citation | 858 F.2d 282 |
| Parties | , 18 Envtl. L. Rep. 21,405 NAVISTAR INTERNATIONAL TRANSPORTATION CORPORATION, Petitioner, v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, Respondent. |
| Court | U.S. Court of Appeals — Sixth Circuit |
James H. Schink, Jonathan B. Newcomb, Steven A. Smith argued, Kirkland and Ellis, Steven K. Covey, Navistar Int. Transp. Corp., Chicago, Ill., for petitioner.
Laurence M. Groner, Lee M. Thomas, EPA--General Counsel's Office, Pollution Control Section, Land & Natural Resources Div., U.S. Dept. of Justice, Washington, D.C., EPA--Region V, Chicago, Ill., Karen L. Egbert [EPA] argued, Dept. of Justice, Land & Natural Res, Environmental Defense Sect, Washington, D.C., Stephen P. Mendoza, Chicago, Ill., for respondent.
Before KENNEDY and RYAN, Circuit Judges, and PECK, Senior Circuit Judge.
Petitioner, Navistar International Transportation Corporation (Navistar) (formerly International Harvester), seeks review of the decision of the administrator of the Environmental Protection Agency finding petitioner liable for violations of the Clean Air Act. We affirm.
Navistar appeals the decision of the administrator (EPA) finding Navistar liable for violating Sec. 120 of the Clean Air Act, 42 U.S.C. Sec. 7420. Navistar operates a truck assembly facility in Springfield, Ohio. Within the assembly plant are located ten "painting booths" which are used to paint the various parts which are manufactured or assembled at the plant. Following the painting, the parts are moved by conveyor into drying and baking ovens, with the exception of three painting booths which do not employ ovens. Six of the booths paint only metallic parts while four paint both metallic and other parts. Three of the booths are used to touch up paint which has been scratched or to paint areas that have been missed.
Pursuant to the Clean Air Act, the EPA has set National Ambient Air Quality standards (NAAQS). Each state is responsible for drafting a State Implementation Plan (SIP) to provide for implementation and enforcement of standards such as NAAQS. 42 U.S.C. Sec. 7410(a)(1). The SIPs must be approved by the EPA and meet statutory requirements. A SIP must include "emission limitations, schedules, and time tables for compliance for such limitations, and such other measures as may be necessary to insure attainment." 42 U.S.C. Sec. 7410(a)(2)(B). Emission limitations pursuant to a SIP are enforceable as federal law. 42 U.S.C. Sec. 7410(d). Violators of the emission limitations can be penalized pursuant to 42 U.S.C. Sec. 7420 which allows a penalty equal to the amount of economic benefit gained by delaying compliance with a SIP. "A brief but reasonably specific notice of noncompliance" must be sent to one not in compliance with a SIP. 42 U.S.C. Sec. 7420(b)(3).
The particular regulation at issue here is contained within the Ohio SIP. Section 3745-21-09(U) of the Ohio Administrative Code provides, in pertinent part:
(U) Surface coating of miscellaneous metal parts and products.
(1) Except where exempted under paragraph (U)(2) of this rule, no owner or operator of a miscellaneous metal part or product coating line may cause, allow or permit the discharge into the ambient air of any volatile organic compounds from such coating line after the date specified in paragraph (C)(28) for rule 3745-21-04 of the Administrative Code unless the requirements of either paragraph (U)(1)(a) or (U)(1)(b) of this rule are satisfied.
(a) The volatile organic compound content of each coating employed in the miscellaneous metal part or product coating line, as determined under paragraph (B) of rule 3745-21-10 of the Administrative Code, does not exceed the least stringent of any of the following limitations which are applicable:
* * *
(ii) 4.0 pounds per gallon of coating, excluding water, for a zinc rich primer coating;
(iii) 3.5 pounds per gallon of coating, excluding water, for an extreme performance coating;
On September 24, 1984, the EPA notified Navistar that it was not in compliance with the Ohio SIP, as its painting lines emitted pollutants beyond the emission limitations. The notice of noncompliance included a transmittal letter which stated the following were included in the notice package: (1) the notice of noncompliance, (2) a technical support document and an instruction manual, and (3) relevant code of federal regulations sections. The package, however, did not contain the technical support document nor the instruction manual. The notice informed Navistar it could either calculate the penalty owed and a payment schedule, or file a petition for reconsideration.
After three extensions, Navistar filed its petition for reconsideration on March 4, 1985. Navistar raised four issues: (1) that two painting lines were not within the definition of "coating lines," (2) that four painting lines were subject to the SIP refinishing exemption, (3) that four painting lines were not subject to regulation as they paint plastic as well as metallic parts, and (4) that the EPA was without jurisdiction due to insufficiency of the notice of noncompliance. A hearing was held before an Administrative Law Judge (ALJ) on March 4 and 5, 1986. The ALJ excluded evidence of technological and economic infeasibility in that it was irrelevant to the issue of liability. He held that the offer of proof on economic infeasability evidence could be retained as proof on the penalty phase of the hearing.
The ALJ found Navistar in violation of the Ohio SIP (Sec. 3745-21-09)(U) of the Ohio Administrative Code). Navistar appealed to the administrator, who affirmed the ALJ's decision through the EPA's chief judicial officer. Navistar then sought review in this court.
Before addressing the merits of Navistar's arguments regarding the proper interpretation of the Ohio SIP, it is necessary to discuss whether the notice of noncompliance sent to Navistar was defective to such a degree as to render the EPA without jurisdiction in this case. Section 66.12, describing the contents of a notice of noncompliance, states:
(a) Each notice of noncompliance shall be in writing and shall include:
(1) A specific reference to each applicable legal requirement of which the source is in violation;
(2) A brief statement of the factual basis for the finding of violation, together with a reference to any supporting materials and a statement of when and where they may be inspected.
(3) Instructions on calculating the amount of the penalty owed and the schedule for payments. Such instructions shall include (i) a statement of the date from which penalties should be calculated and (ii) a copy of the Technical Support Document and the Manual;
(4) Notice of the right to petition for a hearing to challenge the finding of noncompliance or to claim an exemption; and
(5) Notice that the penalty continues to accrue during the pendency of any hearings granted under this part or Part 67.
(b) Each notice of noncompliance shall be transmitted to the source owner or operator either by personal service or by registered or certified mail, return receipt requested.
40 C.F.R. Sec. 66.12.
It is undisputed that the notice of noncompliance sent to Navistar did not contain the technical support document nor the instruction manual as required by 40 C.F.R. Sec. 66.12(a)(3). Navistar argues that the omission of the material required by Sec. 66.12(a)(3)(ii) renders the notice defective and leaves the EPA without jurisdiction in this case.
Several grounds require this court to reject Navistar's jurisdictional argument. First, Sec. 66.12 provides no consequences for failure of the notice to comply with its requirements. Second, jurisdiction to assess noncompliance penalties is conferred upon the EPA pursuant to 42 U.S.C. Sec. 7420. 42 U.S.C. Sec. 7420(b)(3) requires only that a "reasonably specific notice of noncompliance" be sent.
Regulations under subsection (a) of this section shall--
....
(3) require the States, or in the event the States fail to do so, the Administrator, to give a brief but reasonably specific notice of noncompliance under this section to each person referred to in subsection (a)(2)(A) of this section with respect to each source owned or operated by such person which is not in compliance as provided in such subsection, not later than July 1, 1979, or thirty days after the discovery of such noncompliance, whichever is later; ...
42 U.S.C. Sec. 7420(b)(3).
The notice sent to petitioner notified it of each painting activity that was in violation of the SIP. It notified petitioner of its rights under the statute and of a right to a hearing. The only documents missing had to do with penalty calculations which would not be relevant at the liability hearing pursuant to 40 C.F.R. Sec. 66.41-43 but would be relevant only later at the penalty hearing pursuant to 40 C.F.R. Sec. 66.51-54. Thus, the notice complied with the "brief but reasonably specific" requirement of 42 U.S.C. Sec. 7420(b)(3).
Finally, Brock v. Pierce County, 476 U.S. 253, 106 S.Ct. 1834, 90 L.Ed.2d 248 (1986), instructs that failure to follow all procedural requirements does not automatically render an agency without jurisdiction to proceed. In Brock, a statute required that the agency must make a final determination within 120 days after receiving the complaint. Although this requirement was in mandatory language, no consequences for failure to comply were listed. The Court found that the failure of the agency to meet the 120-day requirement did not divest it of the power to seek penalties under the statute. The Court stated:
We would be most reluctant to conclude that every failure of an agency to observe a procedural requirement voids subsequent agency action, especially when important public rights are at stake.
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