Weyerhaeuser Co. v. Costle, No. 76-1674

CourtUnited States Courts of Appeals. United States Court of Appeals (District of Columbia)
Writing for the CourtBefore McGOWAN, TAMM; Opinion for the Court filed by McGOWAN; McGOWAN
Citation191 U.S.App.D.C. 309,590 F.2d 1011
Decision Date05 September 1978
Docket NumberNo. 76-1674
Parties, 191 U.S.App.D.C. 309, 9 Envtl. L. Rep. 20,284 WEYERHAEUSER COMPANY, Petitioner, v. Douglas M. COSTLE, Administrator, Environmental Protection Agency, Respondent. *

Page 1011

590 F.2d 1011
11 ERC 2149, 191 U.S.App.D.C. 309, 9
Envtl. L. Rep. 20,284
WEYERHAEUSER COMPANY, Petitioner,
v.
Douglas M. COSTLE, Administrator, Environmental Protection
Agency, Respondent. *
No. 76-1674.
United States Court of Appeals,
District of Columbia Circuit.
Argued Feb. 23, 1978.
Decided Sept. 5, 1978.

Page 1016

Syllabus by the Court

Section 301(b) of the Federal Water Pollution Control Act Amendments of 1972, as amended by the Clean Water Act of 1977, 33 U.S.C. § 1311(b), authorizes EPA to issue two sets of industrial effluent limitation regulations: regulations effective in 1977-83 based on "the best practicable control technology currently available" (BPCTCA), and regulations effective after 1983 based on the "best available technology economically achievable" (BATEA). In a separate prior proceeding, EPA regulations for part of the American pulp and paper industry were upheld in full. American Paper Inst. v. Train, 177 U.S.App.D.C. 181, 186-89, 543 F.2d 328, 333-36, Cert. dismissed, 429 U.S. 967, 97 S.Ct. 398, 50 L.Ed.2d 335 (1976). After four periods of notice and comment in 1973-76, EPA promulgated BPCTCA regulations for the remainder of the paper industry, including 300 plants divided into 16 subcategories and 66 subdivisions. Industry representatives petitioned for review of the regulations. Held: EPA properly construed and rationally exercised the authority delegated to it by Congress and, with one exception, it did so according to the appropriate procedures. The regulations are upheld with the exception of the "BOD" limitation for acetate grade dissolving sulfite mills.

(1) The scope of judicial review to be brought to bear upon the EPA's regulations is governed by § 10(e)(2) of the Administrative Procedure Act, 5 U.S.C. § 706(2). The standards there set out variously relate to questions involving the reach of the statutory authority purported to be exercised, the procedural propriety of the course followed in formulating and issuing the regulations, and the rationality of the substantive determinations embodied in the regulations. In dealing with each of these questions, it is the task of the reviewing court to adhere to the particular standard or standards relevant to each with due regard for the varying functions and capacities of court and agency in differing contexts. Pp. ---- - ---- of 191 U.S.App.D.C., pp. 1024-1028 of 590 F.2d.

(2) EPA's procedures, with one exception, satisfied the statutory requirements. Pp. ---- - ---- of 191 U.S.App.D.C., pp. 1028-1031 of 590 F.2d.

(a) In providing multiple opportunities for public comment, and in fully considering the information brought forth, EPA "bent

Page 1017

over backwards to accommodate public participation." Pp. ---- - ---- of 191 U.S.App.D.C., p. 1028 of 590 F.2d.

(b) In deriving an effluent limitation for the acetate grade dissolving sulfite mills, EPA made both hidden and concededly erroneous assumptions, thereby tainting the Agency's explanation of its action and denying petitioners their opportunity to comment. Accordingly, this limitation is remanded for further proceedings. Pp. ---- - ---- of 191 U.S.App.D.C., pp. 1028-1031 of 590 F.2d.

(3) As elaborated in In re Louisiana-Pacific, 10 E.R.C. 1841 (1977), EPA's interpretation of its authority with regard to its variance clause satisfies the statutory requirements. Pp. ---- - ---- of 191 U.S.App.D.C., pp. 1031-1041 of 590 F.2d.

(a) Inclusion of a proper variance clause is necessary for valid BPCTCA regulations. E. I. duPont de Nemours & Co. v. Train, 430 U.S. 112, 97 S.Ct. 965, 51 L.Ed.2d 204 (1977). Because EPA's interpretation of its variance clause is no longer a "matter of speculation" after In re Louisiana-Pacific, supra, courts may no longer presume that the variance clause is proper and judicial review must be conducted in this proceeding to determine whether the variance clause is capable of the requisite degree of flexibility under DuPont, supra. Pp. ---- - ---- of 191 U.S.App.D.C., pp. 1031-1033 of 590 F.2d.

(b) The EPA's variance clause for BPCTCA regulations must parallel the statutory variance clause for BATEA regulations in section 301(c), 33 U.S.C. § 1311(c), DuPont, supra, 430 U.S. at 127-28, 97 S.Ct. 965, I. e., the clause must allow consideration of the factors used for setting BPCTCA for each industrial subcategory, in order to allow particular mill operators to seek a variance from regulations that, as a whole, demand more of them than EPA may demand of the industry. Pp. ---- - ---- of 191 U.S.App.D.C., pp. 1033-1036 of 590 F.2d.

(c) Accordingly, the variance clause must allow consideration of economic factors, including "cost in relation to effluent benefits." However, so long as that cost-benefits relation is not different for a particular operator from that which EPA may impose on the industry, the inability of the particular operator to absorb the cost need not control the variance decision, since Congress and the EPA envisaged plant shutdowns as a result of the regulations. Pp. ---- - ---- of --- U.S.App.D.C., pp. 1036-1037 of 590 F.2d.

(d) Under these principles, EPA's current construction of its variance clause in In re Lousiana-Pacific, supra, in contrast to earlier constructions, satisfies the statutory requirements because it allows all the relevant factors to be considered. Moreover, the clause's "fundamental difference" standard is permissible because it prevents the creation of a yawning loophole and takes into account the flexibility and liberality already reflected in the regulations. Pp. ---- - ---- of 191 U.S.App.D.C., pp. 1037-1041 of 590 F.2d.

(4) EPA's interpretation of its statutory authority with regard to the factors relevant to BPCTCA is correct. Pp. ---- - ---- of 191 U.S.App.D.C., pp. 1041-1053 of 590 F.2d.

(a) Congress ruled out consideration by the EPA in setting BPCTCA regulations of "receiving water capacity," I. e., the ability of the waters into which effluent is discharged, and especially of oceans, to absorb or dilute pollution. Pp. ---- - ---- of 191 U.S.App.D.C., pp. 1041-1044 of 590 F.2d.

(b) Congress made two kinds of factors relevant to BPCTCA: "comparison factors" (cost and benefit), for which Congress mandated a particular structure and weight of consideration (limited balancing), and "consideration factors" (age, process, non-water quality environmental impacts, etc.), for which Congress left the structure and weight of consideration to EPA to decide. Pp. ---- - ---- of 191 U.S.App.D.C., pp. 1044-1047 of 590 F.2d.

(c) EPA's comparison of cost and benefit for the industry as a whole was not challenged. Its comparison for the sulfite subcategories, which was challenged, was adequate. See Permian Basin Area Rate

Page 1018

Cases, 390 U.S. 747, 88 S.Ct. 1344, 20 L.Ed.2d 312 (1968). Pp. ---- - ---- of 191 U.S.App.D.C., pp. 1047-1049 of 590 F.2d.

(d) Policies enunciated in the legislative history and embodied in the "functional equivalence" doctrine indicate that the judicial review function for EPA's consideration of "non-water quality environmental impacts" is complete once it is found that EPA developed and considered estimates of those impacts. Pp. ---- - ---- of 191 U.S.App.D.C., pp. 1049-1053 of 590 F.2d .

(5) EPA did not abuse its discretion with respect to subcategorization of the industry. Pp. ---- - ---- of 191 U.S.App.D.C., pp. 1053-1060 of 590 F.2d.

(a) In light of its conclusions about the utility of "activated sludge" and "SSL recovery" treatment methods, EPA did not abuse its discretion in declining to subcategorize further on the basis of climate and manufacturing process. Pp. ---- - ---- of 191 U.S.App.D.C., pp. 1055-1056 of 590 F.2d.

(b) In light of its recently enunciated policy concerning excursion provisions, NPDES Decision of the General Counsel No. 57 (1977), and the congressional policies encouraging EPA to stimulate new technology and to have "swift and direct" enforcement, EPA did not abuse its discretion in denying an excursion provision. Pp. ---- - ---- of 191 U.S.App.D.C., pp. 1056-1059 of 590 F.2d.

(c) In setting effluent limitations based on average rates of flow within subcategories, EPA did not abuse its discretion because it relied on internal controls that it properly determined are in "common use." Pp. ---- - ---- of 191 U.S.App.D.C., pp. 1059-1060 of 590 F.2d.

(6) EPA did not abuse its discretion with respect to the identification of BPCTCA (a) for dewatering sludge when it relied on a diverse technological array rather than on one specific treatment method, and (b) for removing suspended solids when it relied in part on technology that has been put into use in the past primarily to meet state antipollution laws. Pp. ---- - ---- of 191 U.S.App.D.C., pp. 1060-1062 of 590 F.2d.

Petitions for Review of an Order of the Environmental Protection Agency.

David R. Berz and Thomas H. Truitt, Washington, D. C., for petitioners in Nos. 76-1674, 76-1676 through 76-1690.

W. Reece Bader, for petitioner in No. 76-1683.

Allan J. Topol, Washington, D. C., with whom Roberts B. Owen and Theodore L. Garrett, Washington, D. C., were on brief, for petitioner in No. 76-1675.

Burroughs B. Anderson and John M. Cary, Seattle, Wash., were on brief for petitioner in No. 76-1684.

Douglas E. Kliever and Daniel B. Silver, Washington, D. C., for petitioner in No. 76-1690.

Donald W. Fowler, Atty., Dept. of Justice, and Bruce M. Diamond, Atty., Environmental Protection Agency, Washington, D. C., with whom G. William Frick, Gen. Counsel, Environmental Protection Agency, and James W. Moorman, Acting Asst. Atty. Gen., Dept. of Justice, Washington, D. C., were on brief, Peter R. Taft, Asst. Atty. Gen., Dept. of Justice, Washington, D. C., Ray McDevitt, Atty., Environmental Protection Agency, Washington, D. C., entered an appearance for respondent.

Before McGOWAN, TAMM, Circuit Judges, and RICHEY **, United States District Judge for the District of Columbia.

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    ...and account for the innumerable types of potential malfunction events in setting emission standards. See, Weyerhaeuser v Costle, 590 F.2d 1011, 1058 (D.C. Cir. 1978) (``In the nature of things, no general limit, individual permit, or even any upset provision can anticipate all upset situati......
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    • March 30, 1979
    ...for "arbitrary and capricious" review of informal rulemaking under the Administrative Procedure Act. In Weyerhauser Co. v. Costle, 191 U.S.App.D.C. 309, 590 F.2d 1011, No. 76-1674 (D.C.Cir. Sept. 5, 1978), the court defined its duty to insist upon an explanation of the fact and policy conce......
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    • United States
    • United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
    • April 30, 1986
    ...reasons for its new rule that "could lead a reasonable person to make the judgment that the Agency has made." Weyerhaeuser v. Costle, 590 F.2d 1011, 1026-27 In 1981, when EPA reduced the consistency requirement from 95% to 75%, it acknowledged that this reduction might lead to violations of......
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    • December 10, 1998
    ...to accord each statutory factor under the CWA, see Natural Resources Defense Council, 863 F.2d at 1426; Weyerhaeuser Co. v. Costle, 590 F.2d 1011, 1045 (D.C.Cir.1978) (Congress left the EPA "discretion to decide how to account for the [BAT] factors, and how much weight to give each factor."......
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    ...for "arbitrary and capricious" review of informal rulemaking under the Administrative Procedure Act. In Weyerhauser Co. v. Costle, 191 U.S.App.D.C. 309, 590 F.2d 1011, No. 76-1674 (D.C.Cir. Sept. 5, 1978), the court defined its duty to insist upon an explanation of the fact and policy conce......
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