State of Ala. ex rel. Baxley v. Environmental Protection Agency, s. 75-4435

• Decision Date: 18 August 1977
• Docket Number: Nos. 75-4435,76-1056 and 76-3604,s. 75-4435
• Citation: 557 F.2d 1101
• Parties: , 7 Envtl. L. Rep. 20,690 STATE OF ALABAMA ex rel. William J. BAXLEY, Attorney General, et al., Petitioners, v. ENVIRONMENTAL PROTECTION AGENCY and Russell E. Train, Administrator, Respondents.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1101

557 F.2d 1101

10 ERC 1481, 7 Envtl. L. Rep. 20,690

STATE OF ALABAMA ex rel. William J. BAXLEY, Attorney General, et al., Petitioners, v. ENVIRONMENTAL PROTECTION AGENCY and Russell E. Train, Administrator, Respondents.

Nos. 75-4435, 76-1056 and 76-3604.

United States Court of Appeals, Fifth Circuit.

Aug. 18, 1977.

Henry H. Caddell, David E. Dunn, Asst. Attys. Gen., Montgomery, Ala., Don B. Long, Jr., John D. Quenelle, Birmingham, Ala., for petitioner in Nos. 75-4435 and 76-1056.

MacBeth Wagnon, Jr., Birmingham, Ala., H. Gerald Reynolds, Tampa Fla., and William T. Steen, New Orleans, La., for intervenor in Nos. 75-4435 and 76-1056 and petitioner in 76-3604, U. S. Pipe & Foundry Co.

Russell E. Train, Administrator, EPA, Peter R. Taft, Asst. Atty. Gen., Dept. of Justice, Edmund B. Clark, Alfred T. Ghiorzi and Patrick Mulloy, Attys., Pollution Control Section, Washington, D. C., for respondents.

Albert J. Slap, Public Interest Law Center of Philadelphia, Philadelphia, Pa., amicus curiae.

Petitions for Review of Orders of the Environmental Protection Agency (Alabama Cases).

Before MORGAN and HILL, Circuit Judges, and NOEL, ^* District Judge.

JAMES C. HILL, Circuit Judge:

This case involves two petitions seeking judicial review of certain administrative permits and orders issued by the Environmental Protection Agency ("EPA"), under the Federal Water Pollution Control Act ("FWPCA"). The first petition, filed by the State of Alabama in late 1975, was followed by a petition on behalf of the Alabama Conservancy and several other environmental organizations including the Birmingham Audubon Society and the Sierra Club. This controversy began in November, 1973, when EPA proposed to issue a National Pollutant Discharge Elimination System ("NPDES") permit to the North Birmingham facility of the U. S. Pipe and Foundry Company ("U. S. Pipe"). ¹

The limitations proposed by the EPA for the permit were virtually identical to those contained in an earlier Consent Decree which had resolved a 1971 suit brought by EPA against the same U. S. Pipe facility under the Rivers and Harbors Act of 1899, 33 U.S.C. § 407 (the "Refuse Act"). ² The Consent Decree had been negotiated after the passage in 1972 of the Federal Water Pollution Control Act Amendments ("FWPCAA"), which restructured the whole federal program for water pollution control.

The basic approach of the FWPCAA was to make unlawful all discharges of pollutants into the waters of the United States unless the discharge was made in compliance with conditions contained in a permit issued under Section 402 of the Act. This approach was a significant departure from 1965 legislation which had established water quality standards without simultaneously limiting discharges made by particular point sources. Under the prior legislative scheme, there was always difficulty in proving that a particular discharger of pollutants had caused a violation of water quality standards.

Limitations on discharges were to be achieved in two stages under the 1972 legislation. The FWPCAA provided that all permits should incorporate effluent limitations based upon the use of "Best Practicable Control Technology" ("BPT") by July 1, 1977, and, "Best Available Control Technology" ("BAT"), by July 1, 1983. ³

In October, 1972, EPA published a document known as the Preliminary Guidance Document for the Iron and Steel Industry, which suggested the types of treatment and the numerical limitations which would constitute BPT for certain processes in the iron and steel industry. Although two of the five industrial processes of the U. S. Pipe facility were covered by the Guidance Document coke ovens and blast furnaces three of the processes were not covered, namely cast iron pipe, mineral wool insulation, and aromatic organic chemicals.

In light of the 1972 FWPCAA, the EPA and U. S. Pipe resolved the Refuse Act litigation by negotiating the above-mentioned Consent Decree to establish effluent limitations which they felt would be equivalent to the BPT required to be achieved by July 1, 1977, in all NPDES permits. In doing so, the parties relied heavily upon the Guidance Document for information defining BPT for coke and blast furnace operations and relied upon their own experience, common knowledge, and judgment in setting effluent limitations for the other three processes. EPA experts later testified that the limitations actually established in the Consent Decree represented BPT for the facility.

Recognizing that U. S. Pipe would have to apply for an NPDES permit under the FWPCAA, the parties agreed to and set forth in the Consent Decree the following provision:

Subsequent to the entry of this Decree, a Federal permit will be issued to the company pursuant to the Federal Water Pollution Control Act Amendments of 1972, which permit will, to the fullest extent possible, in view of the requirements of Section 401 (certification) and Section 402(a)(1) (opportunity for public hearing) of the Act, be consistent with the applicable provisions of this decree.

In November, 1973, EPA issued a public notice of proposed permit issuance and a fact sheet concerning U. S. Pipe's NPDES permit. In response, the State of Alabama and a number of environmental groups requested a public hearing to determine if the proposed permit for U. S. Pipe was consistent with the FWPCAA. Such a hearing was held in Birmingham, Alabama in February, 1974, and participants included representatives of the State, environmental groups and U. S. Pipe.

At the time the Consent Decree was negotiated, the state water quality standard for Five Mile Creek was "Treated Waste Transportation." On September 17, 1973, before the U. S. Pipe permit was issued, the Alabama Water Improvement Commission ("AWIC"), changed the use classification for Five Mile Creek to a category denominated as "Fish and Wildlife as a Goal."

EPA issued its permit to U. S. Pipe on April 8, 1974, requiring that the BPT effluent limitations, as taken from the Consent Decree, be met during the period September 1, 1975, through July 1, 1977. The permit also included a new requirement, incorporated in response to comments made at the public hearing, of more stringent limitations necessary to achieve, by July 1, 1979, a Fish and Wildlife water quality standard in Five Mile Creek. Following the issuance of the permit, two requests for an adjudicatory hearing were filed. The office of the Attorney General filed the first request on behalf of the State of Alabama, and the Alabama Conservancy, Alabama Wildlife Federation, the Bass Angler Sportsmen's Society and five other organizations filed the second request. EPA issued public notice that it intended to hold public hearings and, at the same time, announced that there existed a thirty day period during which persons could request to become parties to the proceeding. U. S. Pipe filed such a request which was granted. Subsequently, three other public interest and environmental organizations became parties to the hearing. ⁴ The AWIC, however, did not elect to become a party to the proceedings.

EPA assigned the hearing to an Administrative Law Judge ("ALJ"), who ordered a prehearing conference to identify disputed issues of fact and law, to establish a schedule for submission of written testimony and to consider other matters pertaining to the conduct of the hearing. In the interim period between receipt of requests for hearing and the date of the prehearing conference, EPA amended its procedural regulations governing adjudicatory hearings. See 40 C.F.R. 125.36(m). Pursuant to these procedures, the ALJ was required to identify issues of law and refer them to the Assistant Administrator for Enforcement and General Counsel for resolution. The decision on these legal issues would, in turn, be incorporated into the agency's initial decision.

Accordingly, two issues pertinent to this appeal were referred to the Assistant Administrator for Enforcement and General Counsel for resolution:

1. Does a Consent Decree entered into between U. S. Pipe and Foundry Company and the Department of Justice, acting on behalf of the Environmental Protection Agency, bind the Agency in its consideration of the appropriate limitations, conditions, and terms to be imposed in the permit to be issued to the Company?

2. Does Section 301(b)(1)(C) of the Act require the achievement of effluent limitations more stringent than "best practicable control technology" if such limitations are necessary to implement water quality standards established pursuant to the Act?

A. 110.

The EPA General Counsel responded to the first question essentially in the affirmative. He indicated, however, that although the agency was required to propose conditions consistent with the consent decree, such conditions should not be adopted "unless an agency assessment of comments received pursuant to Section 401 (concerning certification by the states) and Section 402(a)(1) (concerning opportunity for public hearing) concludes that conditions inconsistent with the decree should be imposed." ⁵ With regard to the second question, the General Counsel held that permits must include limitations more stringent than BPT if such limitations are necessary to meet water quality standards.

Following the Decision of the General Counsel, the adjudicatory hearing was held in Birmingham in December of 1974. After the compilation of an extensive record consisting of the testimony of fifteen witnesses, eleven hundred and seventy-four pages of transcript, and thirty-one exhibits, the Regional Administrator issued an Initial Decision upholding the permit in its entirety. The Decision concluded that the BPT limits of the Consent Decree and the permit were reasonable and represented the best evidence of effluent limitations which could be achieved by the use of BPT. ⁶ With respect to the limitations to be achieved by 1979, the Regional Administrator concluded that such limitations were "as...