U.S. E.P.A. v. Alyeska Pipeline Service Co., 86-4427

• Decision Date: 05 January 1988
• Docket Number: No. 86-4427,86-4427
• Parties: , 56 USLW 2407, 18 Envtl. L. Rep. 20,491 In the Matter of The Petition of the Administrator, UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, for Subpoena Enforcement, Plaintiff-Appellee, v. ALYESKA PIPELINE SERVICE COMPANY; George M. Nelson, its President, Defendants-Appellants.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 443

836 F.2d 443

26 ERC 2129, 56 USLW 2407, 18 Envtl.

L. Rep. 20,491

In the Matter of The Petition of the Administrator, UNITED

STATES ENVIRONMENTAL PROTECTION AGENCY, for

Subpoena Enforcement, Plaintiff-Appellee, v. ALYESKA PIPELINE SERVICE COMPANY; George M. Nelson, its

President, Defendants-Appellants.

No. 86-4427.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Aug. 3, 1987.

Decided Jan. 5, 1988.

Edward J. Shawaker, and John T. Stahr, U.S. Dept. of Justice, Washington, D.C., for plaintiff-appellee.

Robert Sussman, Washington, D.C., for defendants-appellants.

Before GOODWIN, ANDERSON and BRUNETTI, Circuit Judges.

BRUNETTI, Circuit Judge:

The United State Environmental Protection Agency (EPA) sued in federal district court for enforcement of its subpoena requiring that Alyeska Pipeline Services (Alyeska) and Alyeska's president George Nelson testify and produce documents for an EPA investigation conducted pursuant to the Toxic Substances Control Act, 15 U.S.C. Sec. 2601 et seq. (TSCA). Judge Fitzgerald limited the scope of the subpoena somewhat and then ordered compliance. Alyeska failed to obtain a stay of the order pending this appeal and is currently obeying the enforcement order.

Alyeska operates a "ballast water treatment" (BWT) plant at Valdez, Alaska in connection with its operation of the Trans-Alaska pipeline. Oil tankers arrive in Valdez full of ballast water, which is pumped out and replaced with oil at the pipeline terminal. This water is subject to a physical separation process at Alyeska's treatment facility before it is released into Valdez Bay.

When the EPA issued the subpoena at issue in this case, it was also processing Alyeska's application for a renewal of its permit to operate the BWT pursuant to the Clean Water Act (CWA), 33 U.S.C. Sec. 1251 et seq. (1982). The EPA does not have the power to issue subpoenas under the CWA, but does have that power under the TSCA. Alyeska contends that the EPA improperly used the investigatory powers under the TSCA to further its CWA investigation of the BWT plant. The EPA maintains that it is conducting a separate investigation under the TSCA. In particular, the EPA is investigating reported incidents in which tankers dumped contaminated tank washings from other ships as ballast at the Valdez terminal before loading crude oil. These incidents, claim the EPA, are outside the scope of a CWA relicensing investigation because the BWT is not designed (or licensed) to handle water soluble chemical mixtures or solutions that may have been involved in the suspect dumpings.

Discussion

A. REVIEWABILITY

An order of a District Court enforcing an administrative subpoena is final and ripe for review. Casey v. Federal Trade Commission, 578 F.2d 793, 798-99 (9th Cir.1978) ("Casey "). Even though Alyeska has complied with EPA requests under the subpoena and enforcement order, this appeal is not moot. First, records still in the government's possession should be returned to Alyeska if they were wrongfully subpoenaed. See Casey, 578 F.2d at 796; Federal Trade Commission v. Browning, 435 F.2d 96, 97-98 (D.C.Cir.1970). Next, the EPA has served subpoenas, which are similar to the one served on Nelson, on other Alyeska employees. These subpoenas have not yet been satisfied. Because it would be difficult to fully contest the validity of each subpoena in subsequent actions because of the need for prompt response to the subpoenas, the case is "capable of repetition, yet evading review" and is therefore not moot. See Olagues v. Russoniello, 797 F.2d 1511, 1516 (9th Cir.1986).

B. APPELLATE STANDARD OF REVIEW

Alyeska argues on appeal that the district court erroneously applied a standard of review too deferential to the EPA Administrator and merely "rubber stamped" the subpoena enforcement request. We hold that the question whether the district court correctly limited the scope of judicial inquiry in the EPA subpoena enforcement proceeding is a question of law, reviewable de novo in this court. See United States v. McConney, 728 F.2d 1195, 1201 (9th Cir). (en banc), cert. denied, 469 U.S. 824, 105 S.Ct. 101, 83 L.Ed.2d 46 (1984). The application of that standard to the facts of this case is also reviewable de novo since appellate review requires consideration of legal concepts rather than an essentially factual inquiry. McConney, 728 F.2d at 1204.

C. JUDICIAL REVIEW OF EPA SUBPOENA

An EPA subpoena is not self-enforcing. A recipient of an EPA subpoena may refrain from complying with it, without penalty, until directed otherwise by a federal court order. See SEC v. Jerry T. O'Brien Corp., 467 U.S. 735, 741, 104 S.Ct. 2720, 2724-25, 81 L.Ed.2d 615 (1984). The EPA Administrator is authorized to petition a federal district court to order compliance. 15 U.S.C. Sec. 2610(c).

In considering the subpoena in this case, the district court correctly articulated and applied the Ninth Circuit standard of judicial scrutiny. In EEOC v. Children's Hospital Medical Center of Northern Nevada, 719 F.2d 1426 (9th Cir.1983), an en banc panel of this court announced the following test to determine when a court should enforce administrative investigative subpoenas:

The scope of the judicial inquiry in an EEOC or any other agency subpoena enforcement proceeding is quite narrow. The critical questions are: (1) whether Congress has granted the authority to investigate; (2) whether procedural requirements have been followed; and (3) whether the evidence is relevant and material to the investigation.

Id. at 1428 (citing Endicott Johnson Corp. v. Perkins, 317 U.S. 501, 508-09, 63 S.Ct. 339, 342-43, 87 L.Ed. 424 (1943)). If the agency demonstrates the existence of these factors, the court should enforce the subpoena unless the party subpoenaed proves the inquiry is unreasonably overbroad or unduly burdensome. Id. (citing Oklahoma Press Publishing Co. v. Walling, 327 U.S. 186, 217, 66 S.Ct. 494, 509-10, 90 L.Ed. 614 (1946)).

Each prong of the Children's Hospital test is met in this case. Although the EPA has no power to subpoena sworn testimony under the CWA, it does under the TSCA. 15 U.S.C. Sec. 2610(c). Alyeska concedes that the EPA has regulatory jurisdiction to investigate its BWT plant under TSCA. [Blue at 40]. The first requirement is thus met. The district court also specifically found that procedural requisites to issuing a subpoena have been satisfied. [Memo at 13-14]. Alyeska does not contest this point on appeal.

Finally, the district court considered whether specific requests for documents in the subpoena are relevant to an investigation under the TSCA. [Memo at 14-17]. Alyeska argued below, as it does on appeal, that requests seeking information about any chemical substance or mixture, including oil spills, are outside the scope of a TSCA investigation, since that Act only regulates PCBs and "imminently hazardous" chemicals. The term "imminently hazardous chemical substance or mixture" is not limited to any particular list of chemicals. The term "imminently hazardous chemical substance or mixture" is defined to mean a substance or mixture that presents an unreasonable risk of "serious or widespread" injury to health or the environment which is likely to result before the EPA has a chance to promulgate a final rule under TSCA 2606(f), 15 U.S.C. Sec. 2606(f)(1982). Although several sections of the TSCA specifically address PCBs, the Act is designed to cover the regulation of all chemical substances. Environmental Defense Fund, Inc. v. Environmental Protection Agency, 636 F.2d 1267, 1271 (D.C.Cir.1980). The district court thus correctly sustained the EPA's argument that the documents requested are relevant to a TSCA investigation.

D. IMPROPER PURPOSE

Although Alyeska concedes that the EPA has regulatory jurisdiction to investigate its BWT plant under the TSCA, it claims that the subpoena was issued for an improper purpose and that the district court failed to review the EPA's purpose. District courts should enforce administrative subpoenas if the evidence sought is not plainly incompetent or irrelevant to any lawful purpose of the agency. Children's Hospital, 719 F.2d at 1429 (citing Endicott Johnson Corp., 317 U.S. at 509, 63 S.Ct. at 343). But it is clear that the district court did consider this claim, as it stated that the "heart of the controversy" was Alyeska's contention that the "EPA is circumventing the law by using TSCA to attain testimony otherwise unattainable under the Clean Water Act." [Memo at 5]. The district court limited the scope of the subpoena, finding that certain requests were not relevant to any lawful purpose under the TSCA. [Memo at 14-17].

The district court considered the EPA's claim that it was investigating Alyeska's operations under TSCA and noted that the "EPA provides this court with no basis in fact for justifying their suspicion that Alyeska processes, uses or disposes of PCBs or imminently hazardous chemical substances." [Memo at 11]. The court additionally found that Alyeska's representation that "it does not dispose of chemical substances in violation of TSCA" to be uncontroverted. [Memo at 11]. Alyeska incorrectly argues that these findings require a conclusion that the subpoena was issued for an improper purpose.

An "independent regulatory administrative agency has the power to obtain the facts requisite to determining whether it has jurisdiction over the matter sought to be investigated." Federal Maritime Comm'n v. Port of Seattle, 521 F.2d 431, 434 (9th Cir.1975). An administrative agency, unlike parties relying on the judicial discovery process, need not first allege a violation of the law before it can investigate. Alyeska cites three cases [Blue at 41] for the proposition that "a district court must carefully scrutinize the agency's purported justification when the party resisting a subpoena has raised a 'substantial question' as to the propriety of the agency investigation." The three cases, EEOC v. K-Mart...