U.S. v. Wheeling-Pittsburgh Steel Corp.

• Decision Date: 12 October 1988
• Docket Number: WHEELING-PITTSBURGH,No. 88-3447,88-3447
• Citation: 866 F.2d 57
• Parties: , 19 Envtl. L. Rep. 20,371 UNITED STATES of America, Appellant, v.STEEL CORPORATION, and Monessen, Inc. (a wholly-owned subsidiary of Sharon Steel Corporation, Appellee.
• Court: U.S. Court of Appeals — Third Circuit

Page 57

866 F.2d 57

28 ERC 1369, 19 Envtl. L. Rep. 20,371

UNITED STATES of America, Appellant, v. WHEELING-PITTSBURGH STEEL CORPORATION, and Monessen, Inc. (a

wholly-owned subsidiary of Sharon Steel

Corporation, Appellee.

No. 88-3447.

United States Court of Appeals, Third Circuit.

Argued Sept. 7, 1988.

Decided Oct. 12, 1988.

Roger J. Marzulla, Asst. Atty. Gen., Robert L. Klarquist, David P. Hackett, Robert R. Kuehn, Jacques B. Gelin (argued), Dept. of Justice, Land & Natural Resources Div., Washington, D.C., James M. Baker, Sr. Asst. Regional Counsel, U.S. E.P.A., Region III, Philadelphia, Pa., for appellant.

Lawrence A. Demase (argued), Edward Gerjuoy, Rose, Schmidt, Hasley & DiSalle, Leonard A. Costa, Jr., Dickie, McCamey & Chilcote, P.C., Pittsburgh, Pa., for appellees.

Carl B. Frankel, Associate General Counsel, Paul Whitehead, Asst. General Counsel, United Steelworkers of America, Pittsburgh, Pa., Bernard Kleiman, Chicago, Ill., for amicus curiae United Steelworkers of America, AFL-CIO and its Local 2698.

Fried, Frank, Harris, Shriver & Jacobson, New York City, Stonecipher, Cunningham, Beard & Schmitt, Pittsburgh, Pa., for amicus curiae Unsecured Creditors of Sharon Steel Corp.

Before BECKER, HUTCHINSON and COWEN, Circuit Judges.

OPINION OF THE COURT

BECKER, Circuit Judge.

This opinion addresses a motion by the United States, on behalf of the Environmental Protection Agency, for summary reversal of an order of the district court amending a consent decree. The decree, entered in 1979 and subsequently amended, required appellee Wheeling-Pittsburgh Steel Corporation (Wheeling-Pitt), inter alia, to install a sulfur dioxide emission control system in its Monessen (Pa.) coke plant by June 30, 1986, or shut down the plant. The desulfurization equipment was not installed by June 30, 1986, and the plant was shut down and has been on "hot idle" since that time to preserve the coke ovens. The recent amendment was sought by Wheeling-Pitt and by intervenor Sharon Steel Corporation to whom Wheeling-Pitt sold the plant, to enable Sharon to start-up the coke ovens before installing the desulfurization equipment.

The district court amended the consent decree to permit the restart prior to installation primarily because of its concern about the grave condition of the economically depressed Mon Valley. The EPA, citing deleterious effects upon the environment of a restart before installation, objected on the grounds that in United States v Wheeling-Pittsburgh Steel Corp., 818 F.2d 1077, 1086-88 (3d Cir.1987) (hereinafter "Wheeling-Pitt I "), a decision addressing the same consent decree though affecting a different plant, we expressly held such economic considerations improper. Although summary reversal is reserved for clear cases, see Third Cir. Int. Op. P. Ch. 17, this is such a case, for the district court's action is in clear contravention of our opinion in Wheeling-Pitt I. We therefore will summarily reverse the order of the district court amending the consent decree. The stay of the district court's order, entered on August 11, 1988, will be vacated as moot.

I.

The original consent decree was entered into among EPA, Wheeling-Pitt, and the states of Pennsylvania, Ohio and West Virginia. It was approved on March 19, 1979, and required installation of the desulfurization equipment by March 1, 1982. The consent decree further required Wheeling-Pitt to demonstrate compliance with the Pennsylvania State Implementation Plan ("SIP") by June 1, 1982. On April 20, 1982, the district court approved amendments to the consent decree, which pushed the respective installation and compliance deadlines to March 1, 1985 and June 1, 1985. On May 13, 1983, in response to Wheeling-Pitt's application to the EPA under the Steel Industry Compliance Extension Act ("SICEA") for relief from the Clean Air Act's December 31, 1982, compliance deadline, 42 U.S.C. Sec. 7502(a)(1) (1982), the EPA Administrator agreed to a further amendment of the consent decree, entitled the Second Amendment to Consent Decree ("Second Amendment"). ¹ The Second Amendment, which was approved by the district court on July 15, 1983, incorporated Wheeling-Pitt's previously agreed-upon compliance schedule for the Monessen coke ovens, requiring installation of the pollution control equipment and compliance with the Pennsylvania SIP by June 1, 1985.

Following the onset of a labor strike, Wheeling-Pitt sought an extension of the March 1, 1985, and June 1, 1985, deadlines, arguing to the district court that the strike constituted a force majeure circumstance under the terms of the consent decree. The district court agreed with Wheeling-Pitt and extended the installation deadline to June 30, 1986, and the compliance deadline to August 31, 1986. EPA and Wheeling-Pitt then negotiated an amendment to the Second Amendment, a provision of which required Wheeling-Pitt to shut down the Monessen coke plant temporarily if installation and operation of the desulfurization equipment did not occur by June 30, 1986. On June 23, 1986, Wheeling-Pitt sought a further extension, which the district court denied. Upon its failure to comply with the district court's extension of the Second Amendment's deadline, the Monessen coke plant was forced to cease producing coke on June 28, 1986. Since then, Wheeling-Pitt has not produced coke at Monessen, but, as noted above, has maintained the coke plant at "hot idle" to prevent deterioration of the ovens.

On May 6, 1988, Wheeling-Pitt and Sharon, a potential purchaser of the Monessen coke ovens, filed a joint motion with the district court to amend the decree to permit Sharon to start the coke ovens before installing the desulfurization equipment. Sharon argued, among other things, that it should not be required to bear the consequences of Wheeling-Pitt's failure to install the equipment; that Sharon needed to produce coke at Monessen in the economically depressed Mon Valley to fuel its steel mill in Farrell, Pennsylvania (in the economically depressed Shenango Valley); that Sharon wished to take advantage of an apparently short-term increase in demand for steel so that it could generate cash to finance its purchase of the Monessen plant; and that a permanent loss of steel industry assets and jobs would result if an immediate start-up was not permitted, because no potential buyer would purchase the Monessen plant otherwise.

Both the United States and Pennsylvania opposed the motion. On May 10, 1988, the court held a thirty-five minute status conference at which the parties briefly presented their views. ² The court declared its intention to grant the steel companies' motion at the conference, stating, "I have decided that I do have the right to amend this decree, that there are sufficient changed circumstances, and that under the circumstances I am going to amend." Status Conference Transcript at 22.

The district court granted the steel companies' motion and issued a memorandum opinion, citing three grounds. First, it reasoned that Wheeling-Pitt's decision not to install the desulfurization equipment was beyond Sharon's control. Second, Sharon's "situation" was said to be unforeseen when the parties agreed upon the consent decree. Third, failure to amend the consent decree would "work a grievous wrong to Sharon, to Wheeling-Pittsburgh, to the creditors of both in the bankruptcy proceedings, and most importantly, to the people of the Mon Valley." Dist. Ct. mem. op. at 3. The order, filed on May 18, 1988, amended the decree, and allowed Sharon to start the coke ovens immediately upon their taking possession and before installation of the desulfurization equipment, so long as the equipment was installed within 180 calendar days.

On June 23, 1988, Sharon's purchase of the Monessen coke ovens was concluded and Sharon took possession of the plant. On July 8, 1988, EPA applied to the district court for a stay of its May 18, 1988, order. On July 27, 1988, the district court denied EPA's request. On August 11, 1988, this Court granted EPA's motion for a stay. EPA seeks summary reversal of the district court's order largely on the ground that the May 18, 1988, amendment was prohibited by this Court's decision in Wheeling-Pitt I. In Wheeling-Pitt I, which also involved a motion for summary reversal, we declared that the standard of review is whether the district court abused its discretion or erred as a matter of law in granting the amendment to the consent decree. Wheeling-Pitt I, 818 F.2d at 1089.

II.

In Wheeling-Pitt I, the consent decree which is the subject of this appeal was also under consideration. In that case, we reversed the district court's grant of Wheeling-Pitt's motion to amend the consent decree, which also required that Wheeling-Pitt install pollution control equipment at its Follansbee, West Virginia, sinter plant by December 31, 1985. The amendment provided no set compliance date, but instead required approval by the West Virginia Air Pollution Control Commission of an alternative proposal by Wheeling-Pitt. We held in Wheeling-Pitt I that the district court had abused its discretion when it allowed amendment of the consent decree for reasons of Wheeling-Pitt's economic losses, the potential closing of the plant and because of a labor strike.

Our decision in Wheeling-PittI provides guidance in this case in three respects. First, Wheeling-Pitt I declared the standard for amendment of a consent decree: " 'Nothing less than a clear showing of grievous wrong evoked by new and unforeseen conditions would lead us to change what was decreed after years of litigation with the consent of all concerned.' " Id. at 1088 (quoting United States v. Swift & Co., 286 U.S. 106, 119, 52 S.Ct. 460, 464, 76 L.Ed. 999 (1932)) (emphasis added).

Second, Wheeling-Pitt I determined the limits on the district court's equitable discretion to extend compliance dates beyond those set by Congress in SICEA:

It is evident ... from the language of the...