U.S. v. City of Painesville, Ohio, 78-3551

• Decision Date: 26 March 1981
• Docket Number: No. 78-3551,78-3551
• Citation: 644 F.2d 1186
• Parties: , 11 Envtl. L. Rep. 20,630 UNITED STATES of America, Plaintiff-Appellee, v. CITY OF PAINESVILLE, OHIO, Defendant-Appellant.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 1186

644 F.2d 1186

15 ERC 1849, 11 Envtl. L. Rep. 20,630

UNITED STATES of America, Plaintiff-Appellee, v. CITY OF PAINESVILLE, OHIO, Defendant-Appellant.

No. 78-3551.

United States Court of Appeals, Sixth Circuit.

Argued Sept. 17, 1980.

Decided March 26, 1981.

James Van Carson, Squire, Sanders & Dempsey, Lee E. Larson, Cleveland, Ohio, Charles E. Cannon, Painesville, Ohio, for defendant-appellant.

James R. Williams, U. S. Atty., Cleveland, Ohio, Michael P. Carlton, Lawrence A. Hammond, James W. Moorman, Larry G. Gutterridge, Robert L. Klarquist, Dept. of Justice, Washington, D. C., for plaintiff-appellee.

Before KEITH and BROWN, Circuit Judges, WISEMAN, District Judge. ^*

WISEMAN, District Judge.

The first of two questions before the Court is whether the district court erred in holding that a boiler operated by the Painesville Municipal Electric Utility is a "new source" under section 111(a)(2) of the Clean Air Act (the Act), 42 U.S.C. § 7411(a)(2) (Supp. III 1979). ¹ The second issue is whether the district court was required to hold an evidentiary hearing before permanently enjoining the City of Painesville from emitting sulfur dioxide from its boiler in excess of the Environmental Protection Agency's (EPA's) "new source" standards for sulfur dioxide (SO 2). The Court answers both questions negatively, and accordingly the actions of the district court are affirmed.

Section 111 and the New Source Performance Standards

In ASARCO, Inc. v. EPA, 578 F.2d 319, 321-22 (D.C.Cir.1978), Judge Skelly Wright provided a succinct overview of the 1970 amendments to the Clean Air Act, and it serves equally well as an introduction to the instant case. According to Judge Wright (now Chief Judge of the D.C. Circuit), the 1970 amendments to the Clean Air Act were passed in recognition of the failure of state governments to cooperate with the federal government in effectuating the Act's commitment "to protect and enhance the quality of the Nation's air resources so as to promote the public health and welfare and the productive capacity of its population." Clean Air Act § 101(b)(1), 42 U.S.C. § 7401(b) (1). See generally W. Rodgers, Environmental Law § 3.1 (1977). The 1970 changes were designed to increase the federal government's role in the battle against air pollution. See Train v. Natural Resources Defense Council, Inc., 421 U.S. 60, 64, 95 S.Ct. 1470, 1474, 43 L.Ed.2d 731 (1975). The amendments require the states to develop pollution control programs (State Implementation Plans) that will keep levels of certain air pollutants below the National Ambient Air Quality Standards set by EPA. Clean Air Act §§ 109, 110, 42 U.S.C. §§ 7409, 7410.

The 1970 amendments also added section 111, which is at issue on this appeal. Section 111 directs EPA to set specific, rigorous limits on the amounts of pollutants that may be emitted from "new sources" of air pollution. The New Source Performance Standards established under this section are designed to force new sources of targeted air pollutants to employ the best demonstrated systems of emission reduction. 42 U.S.C. § 7411(a)(1). Because these New Source Performance Standards are likely to be stricter than emission standards under State Implementation Plans, plant operators have an incentive to avoid application of the new source standards. Such a situation is presented by the instant case; EPA's new source standard for coal-fired steam generators allows 1.2 lbs. SO 2/mBtu, while the Ohio plan would impose a limit of 2.1 lbs./mBtu on Painesville's boiler.

The Facts

The government, at the request of EPA, filed a complaint in the Northern District of Ohio against the City of Painesville on April 4, 1976. The complaint alleged that the coal fired boiler in Unit No. 5 of the electrical generating plant operated by the Painesville Municipal Electric Utility (Boiler No. 5) was emitting sulfur dioxide in excess of the permissible standards established by EPA pursuant to section 111(b) of the Act. EPA's SO 2 standard for new sources, which is published at 40 C.F.R. § 60.43 (1980), allows 1.2 lbs. SO 2/mBtu derived from solid fossil fuel. The complaint alleged that Boiler No. 5 emits 4.8 lbs. SO 2/mBtu heat input, thereby constituting a violation of section 111(e) of the Act, ² which makes it unlawful to violate the standards of performance established by EPA.

The City has never denied that Boiler 5 exceeds the SO 2 new source standard, but it has consistently maintained that Boiler No. 5 is not a new source at all. Ultimately, the issue of whether Boiler No. 5 is a new source was the sole issue presented to the district court on cross-motions for summary judgment, and the district court's holding that Boiler No. 5 is a new source under section 111(a)(2) established the City's liability for violating the Act. See United States v. City of Painesville, 431 F.Supp. 496, 501 (N.D.Ohio 1977).

In his January 19, 1977, Memorandum awarding summary judgment to the government, District Judge Manos ordered the parties to prepare plans for the operation of Boiler No. 5 so that it would comply with the 1.2 lbs./mBtu standard. The parties entered "lengthy and thorough discussions" ³ under the court's supervision, but they failed to reach agreement on a plan. Consequently, on June 18, 1978, the district court issued an injunction ordering the City to comply with the SO 2 standard, Judge Manos having concluded that further negotiations would be fruitless. There was no hearing on this injunction, but the judge stayed the effect of his order pending this appeal.

Discussion

On this appeal, the City challenges both the district court's finding of liability in its award of summary judgment and its issuance of an injunction without a prior evidentiary hearing. The City raises three arguments in opposition to the finding of its liability. First, the City maintains that the D.C. Circuit's remand in Essex Chemical Corp. v. Ruckelshaus, 486 F.2d 427, 441 (D.C.Cir.1973), cert. denied sub nom. Appalachian Power Co. v. EPA, 416 U.S. 969, 94 S.Ct. 1991, 40 L.Ed.2d 588 (1974), operated to remove the boiler's status as a new source. Second, the City asserts that EPA erroneously applied its own regulations in determining that Boiler No. 5 was a new source or, third, that EPA, in its regulations, misinterpreted the statutory definition of "new source" found at section 111(a)(2). In challenging the district court's granting of injunctive relief, the City maintains that equitable principles required the court to hold an evidentiary hearing before issuing the permanent injunction. These arguments will be discussed in order.

A. The District Court's Summary Judgment

1. The Effect of Essex Chemical Corp. v. Ruckelshaus

In Essex Chemical Corp. v. Ruckelshaus, supra, the D.C. Circuit reviewed EPA's sulfur dioxide, particulate matter, and nitrogen oxide standards for coal-fired steam generators. The court approved the particulate matter and nitrogen oxide standards, but it remanded the record for further consideration by EPA of the adverse environmental effects that might result from requiring a 1.2 lbs./mBtu standard for coal-fired steam generator plants that must use a "lime slurry scrubbing system" in order to achieve the SO 2 standard. Such systems produce a great deal of solid waste in the form of sludge, and the circuit court concluded that EPA had not given adequate consideration to the environmental problems posed by this form of solid waste. ⁴ Essex was decided on September 10, 1973, approximately two years after the proposed 1.2 lbs./mBtu standard had been published on August 17, 1971. 36 Fed.Reg. 15,704 (1971).

The City argues that the Essex remand retroactively voided the proposed SO 2 standard published on August 17, 1971, so that there was no new source standard for SO 2 in effect when the City entered its contract to purchase Boiler No. 5 on July 28, 1972. ⁵ This proposition is taken one step further, however, by the City's argument that the remand of the SO 2 standard lifted Boiler No. 5 out of the class of new sources altogether, with the result that the new source standard for SO 2 ultimately adopted by the EPA after the Essex remand (1.2 lbs. SO 2/mBtu, the same standard) was inapplicable to Boiler No. 5. ⁶ In other words, the City maintains that if the D.C. Circuit remands a record for a new source standard so that the EPA can reconsider the substantive standard, that action effectively obliterates not only the standard, but the class of new sources to which the standard was applicable. Moreover, the former new sources are forever relieved of complying with any future new source standards. Another class of new sources would come into existence only when EPA publishes a response to the remand, and that class becomes fixed only when the D.C. Circuit approves the reconsidered standard.

The City's argument is completely at odds with the plain meaning of the statute. Section 111(a)(2) provides as follows:

The term "new source" means any stationary source, the construction or modification of which is commenced after the publication of regulations (or, if earlier, proposed regulations) prescribing a standard of performance under this section which will be applicable to such source.

42 U.S.C. § 7411(a)(2).

The statute unambiguously establishes the benchmark for determining which sources of a particular pollutant are new sources. "(T)he publication of regulations (or, if earlier, proposed regulations) prescribing a standard of performance ... which will be applicable to such source" determines what sources are new; a source whose construction commenced after such publication is subject to the new source standards, whatever they might be or become. The City argues, in effect, that new sources of SO 2 remain unknown until the D.C. Circuit approves an "ultimate" SO 2 standard. This argument must fail, however, because Congress provided that even the publication of proposed regulations establishes the...