RSR Corp. v. Browner

• Decision Date: 30 April 1996
• Docket Number: No. 95 Civ. 0354.,95 Civ. 0354.
• Citation: 924 F. Supp. 504
• Parties: RSR CORPORATION and Revere Smelting & Refining Corporation, Plaintiffs, v. Carol BROWNER, as Administrator of the United States Environmental Protection Agency, Defendant.
• Court: U.S. District Court — Southern District of New York

924 F. Supp. 504

RSR CORPORATION and Revere Smelting & Refining Corporation, Plaintiffs, v. Carol BROWNER, as Administrator of the United States Environmental Protection Agency, Defendant.

No. 95 Civ. 0354.

United States District Court, S.D. New York.

April 30, 1996.

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Bickel & Brewer by William A. Brewer, III, Charles H. Steen, New York City, and Whiteman, Osterman & Hanna by Philip H. Gitlin, Albany, New York, for Plaintiffs.

Mary Jo White, United States Attorney for the Southern District of New York by Jeffrey Oestericher, Assistant United States Attorney, New York City, for Defendant Carol Browner.

OPINION

CHIN, District Judge.

Plaintiffs RSR Corporation ("RSR") and Revere Smelting & Refining Corporation ("Revere") (collectively, "plaintiffs") bring this "reverse-Freedom of Information Act" case to enjoin the Environmental Protection Agency (the "EPA") from disclosing certain information submitted to the EPA pursuant to the Clean Water Act and regulations promulgated thereunder. Plaintiffs appeal from a final determination of the EPA's Regional Counsel that Revere's average monthly production data must be made available to the public. Defendant Carol Browner, Administrator of the EPA, moves to dismiss the complaint, or, in the alternative, for summary judgment based on the administrative record. For the reasons set forth below, the defendant's motion for summary judgment is granted and the EPA's determination is affirmed.¹

BACKGROUND

Revere, a subsidiary of RSR, operates a secondary lead smelting plant in Wallkill, New York (the "Wallkill Plant"). In the course of its lead smelting operations, the Wallkill Plant generates industrial wastewater, which is treated at a facility located on-site. After this initial treatment, the water enters the public sewer system and is conveyed to a publicly-owned treatment works ("POTW") owned and operated by the Town of Wallkill (the "Wallkill POTW"). At the Wallkill POTW, Revere's pre-treated wastewater is mixed with other wastewater and, after additional treatment, is discharged into the Wallkill River.

1. Regulatory Framework

The Clean Water Act (the "CWA"), 33 U.S.C. § 1251 et seq., prohibits the discharge of pollutants except in accordance with standards established pursuant to the CWA. See 33 U.S.C. § 1311(a). Pursuant to 33 U.S.C. § 1317(b), the Administrator of the EPA has promulgated regulations establishing limits on the amount of pollutants that may be present in industrial wastewater discharged into a POTW ("pretreatment standards"). The pretreatment standards applicable to secondary lead smelters, expressed in pounds of pollutant allowed per million pounds of lead produced from smelting, are contained in 40 C.F.R. § 421.135(b).

The CWA and the regulations also contain reporting requirements to assist the EPA in monitoring compliance with the pretreatment standards. See 33 U.S.C. § 1318(a); 40 C.F.R. § 403.12(e). Industrial users that are subject to pretreatment standards, such as the Wallkill Plant, must provide semi-annual reports containing information regarding the nature and concentration of pollutants in the user's wastewater. See 40 C.F.R. § 403.12(e)(1). For industrial users whose pretreatment standards are expressed in terms of the amount of pollutant allowed per unit of production, the semi-annual report is to contain the user's actual average production rate for the reporting period. 40 C.F.R. § 403.12(e)(3). In accordance with these regulations, Revere submitted semi-annual compliance reports containing data on the Wallkill Plant's monthly production rate, which Revere designated as confidential.

2. Prior Proceedings

On March 2, 1994, the EPA received a request under the Freedom of Information Act ("FOIA"), 5 U.S.C. § 552, from Carpenter Environmental Associates, Inc. ("Carpenter"). In its FOIA request, Carpenter sought records concerning the Wallkill Plant's compliance with the CWA, including the semi-annual compliance reports.

In a letter dated March 29, 1994, the EPA initially denied Carpenter's request on the grounds that the records requested might contain trade secrets or confidential business information exempt from FOIA's disclosure requirements. The EPA sent RSR a letter on March 31, 1994 notifying it of the FOIA request and giving RSR an opportunity to substantiate its claim of business confidentiality. On April 22, 1994 Revere's counsel responded to the EPA's notification, stating that Revere's production data should be exempt from disclosure due to its proprietary nature and because release of that data could harm RSR's competitive position in the secondary lead smelting industry. Specifically, Revere asserted that making its monthly production data available to competitors would reveal Revere's decision-making strategies regarding production.

In a final determination issued by the EPA's Regional Counsel pursuant to 40 C.F.R. § 2.205, the EPA rejected plaintiffs' claim that the records sought by Carpenter were exempt from disclosure under exemption 4 of FOIA, 5 U.S.C. § 552(b)(4), concluding that the Wallkill Plant's monthly production data was "effluent data," which is not eligible for confidential treatment. The Regional Counsel stated that effluent data is defined as "information necessary to determine the amount of pollutants which, under an applicable standard or limitation, the source was authorized to discharge (including, to the extent necessary for such purpose, a description of the manner or rate of operation of the source)." Murphy Decl.Exh.F. at 2. In concluding that the Wallkill Plant's production data was effluent data, the EPA's Regional Counsel considered the pretreatment standards applicable to the Wallkill Plant, and noted that the standards applicable to a secondary lead smelter are expressed in terms of allowable discharge per unit of production or operation. The Regional Counsel reasoned that "in order to establish the allowable Standards for this type of facility, average production/operation data must be provided. Accordingly, one must know the facility's average production/operation rates to determine if the facility is in compliance with the applicable Pretreatment Standards." See Murphy Decl.Exh.F at 2. Reasoning that "the production data at issue here is necessary to determine the allowable Pretreatment Standards for this facility and, hence, the facility's compliance with an applicable Clean Water Act standard," id., the Regional Counsel concluded that the Wallkill Plant's monthly production rate constituted effluent data which is not entitled to confidential treatment and may not be withheld by the agency under FOIA exemption 4.

On January 18, 1995, plaintiffs filed this action seeking judicial review of the Regional Counsel's determination as well as preliminary and permanent injunctions prohibiting disclosure of the Wallkill Plant's production rate data. It appears that the EPA has stayed disclosure of the data pending resolution of this action.

DISCUSSION

The government moves to dismiss the complaint, or, in the alternative, for summary judgment based on the administrative record. Because the defendant has submitted material outside the pleadings, namely, the administrative record, I will treat the motion as one for summary judgment. See Fed.R.Civ.P. 12(b).

1. Review of Agency's Determination to Disclose Information Under FOIA

FOIA imposes a general obligation on administrative agencies to make information available to the public, subject to exemptions pertaining to, inter alia, trade secrets and confidential commercial information. See 5 U.S.C. § 552(a) & (b)(4); Chrysler Corp. v. Brown, 441 U.S. 281, 292, 99 S.Ct. 1705, 1712-13, 60 L.Ed.2d 208 (1979). In Chrysler, a "reverse-FOIA" case, the Supreme Court held that FOIA's exemptions do not prohibit an agency from disclosing the requested information, but merely set forth instances in which the agency is not subject to FOIA's disclosure obligations. 441 U.S. at 292-94, 99 S.Ct. at 1712-14. Thus, where the requested information falls within an exemption to FOIA, the agency is not required to disclose the information, but may withhold it, in the agency's discretion. See Chrysler, 441 U.S. at 293-94, 99 S.Ct. at 1713-14.

Accordingly, FOIA itself does not provide a cause of action to a party seeking to enjoin an agency's disclosure of information, even if the information requested falls within one of FOIA's exemptions. Chrysler, 441 U.S. at 293, 99 S.Ct. at 1713 ("The FOIA by itself protects the submitters' interest in confidentiality only to the extent that this interest is endorsed by the agency collecting the information."). The remedy available to a party seeking to prevent such disclosure is to appeal the agency's decision under the Administrative Procedure Act (the "APA"), 5 U.S.C. § 500 et seq. Chrysler, 441 U.S. at 317, 99 S.Ct. at 1725.

2. Standard of Review under the APA

Under the APA, the district court shall set aside agency determinations that it finds to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law," 5 U.S.C. § 706(2)(A), or that are "unwarranted by the facts to the extent that the facts are subject to trial de novo by the reviewing court." 5 U.S.C. § 706(2)(F). Contrary to plaintiffs' assertions, a plaintiff in a reverse-FOIA action is not ordinarily entitled to de novo review. See Chrysler, 441 U.S. at 318, 99 S.Ct. at 1725-26. Rather, the district court will conduct a de novo review of an agency's decision to release information under FOIA only if the agency's determination is adjudicatory in nature and the fact-finding procedures employed were inadequate. Acumenics Research & Technology v. United States Dep't of Justice, 843 F.2d 800, 804 (4th Cir.1988) (citing Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 415, 91 S.Ct. 814, 823, 28 L.Ed.2d 136); see Camp v. F.W. Pitts, 411 U.S. 138, 141-42, 93 S.Ct. 1241,...