Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-94-01516/USCOURTS-caDC-94-01516-0/pdf.json

Parties Involved:
American Automobile Manufacturers Association
Intervenor
Carol M. Browner
Respondent
Environmental Protection Agency
Respondent
Ethyl Corporation
Petitioner

Document Text:

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 11, 1995 Decided October 20, 1995

No. 94-1516

ETHYL CORPORATION,

PETITIONER

v.

CAROL M. BROWNER, ADMINISTRATOR OF THE

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, AND

THE UNITED STATES ENVIRONMENTAL PROTECTION AGENCY,

RESPONDENTS

AMERICAN AUTOMOBILE MANUFACTURERS ASSOCIATION,

INTERVENOR

On Petition for Review of an Order of the

Environmental Protection Agency

F. William Brownell, with whom Kevin L. Fast was on the brief, argued the cause for petitioner.

Timothy D. Backstrom, Attorney, Environmental Protection Agency, with whom Lois J. Schiffer,

Assistant Attorney General, and Jon M. Lipshultz, Attorney, U.S. Department of Justice, were on

the brief, argued the cause for respondents.

Samuel I. Gutter, with whom V. Mark Slywynsky was on the brief, argued the cause for intervenor.

Before: WILLIAMS, SENTELLE and RANDOLPH, Circuit Judges.

Opinion for the Court filed by Circuit Judge WILLIAMS.

WILLIAMS, Circuit Judge: For the second time in less than a year we address the legality of

decisions bythe Environmental Protection Agency blocking EthylCorporation's distribution of a fuel

additive, "MMT," also known as "HiTEC 3000." Because of a ban deriving from § 211(f)(1) of the

Clean Air Act, 42 U.S.C. § 7545(f)(1), Ethyl has long been unable to sell MMT for use as a bulk

additive in unleaded gasoline without a waiver from the Environmental Protection Agency under §

211(f)(4), 42 U.S.C. § 7545(f)(4). On November 30, 1993 the EPA found that MMT had no adverse

effects on automobiles' emissions control systems, but simultaneously withheld the f(4) waiver in

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1These are dated May 27, 1994 but appear in the June 27, 1994 Federal Register. EPA

asserted that the regulations were effective May 27, 1994, see 59 Fed. Reg. 33042, but did not

reconcile that claim with 5 U.S.C. § 553(d), specifying that with limited exceptions rules take

effect 30 days after publication. Whether they took effect May 27, 1994 or at any of the various

later possible dates is irrelevant under the view we take of the matter. 

order to look into MMT's possible public health effects. 58 Fed. Reg. 64761, 64764-45 (1993). In

Ethyl Corp. v. EPA, 51 F.3d 1053 (D.C. Cir. 1995) ("Ethyl I"), we held that § 211(f)(4) allowed EPA

to consider only emission control effects; once the EPA found MMT innocent of any adverse effect

on those systems, it was legally required to grant the waiver, and we ordered it to do so.

Lawfulsale of MMT, however, requires not only the f(4) waiver but also that the additive be

registered under § 211(b) of the Clean Air Act, 42 U.S.C. § 7545(b). Ethyl claims that MMT has in

fact been registered for sale for use in unleaded gasoline since 1970, while EPA asserts that in the

period when an f(4) waiver was required for lawfulsale, but no waiver had been issued, MMT could

not have been registered for such sales. The fight may seem trivial; now that MMT has been held

entitled to the waiver, EPA'ssole ground for claiming non-registration has disappeared,so, one might

expect, registration would flow ineluctably. But EPA's contention has an important collateral

consequence. Under § 211(e)(2), 42 U.S.C. § 7545(e)(2), an additive that is already registered on

the date that EPA promulgates regulations for certain testing remains registered (subject to possible

loss of registration if the test results are bad), while an additive not registered on that date must

satisfy the testing requirements before being registered. On May 27, 1994 EPA adopted fuel additive

testing regulations.1 See Fuels and Fuel Additives Registration Regulations, 59 Fed. Reg. 33042

(1994). Since EPA had not granted the waiver on that date (or indeed until after our decision in

Ethyl I, see 60 Fed. Reg. 36414/1 (July 17, 1995) (effective date July 11, 1995)), MMT could not,

on EPA's theory, secure registration until it overcame this new testing hurdlea matter surely of

years, perhaps of decades.

We find it unnecessary, however, to sort out the parties' claims as to whether MMT's

registration ever ceased to embrace its sale for use in unleaded gasoline. Because EPA should have

granted the f(4) waiver on November 30, 1993, when it published its finding that Ethyl had met the

only legal requirement for obtaining the waiver, we will treat the waiver as having been granted as

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of that date, nunc pro tunc. As EPA has consistently indicated that there has been no other obstacle

to registration, it followsthat MMT, assuming it ever lost itsregistration for use in unleaded gasoline,

would have regained it on or about November 30, 1993, well before promulgation ofthe 1994 testing

regulations. Accordingly, we order EPA to register MMT for use as an additive in unleaded gasoline,

as of November 30, 1993. We do not reach Ethyl's other legal challenges to EPA's actions.

MMT's Registration Status Before the 1977 Amendments

MMT was developed as a fuel additive for increasing octane in the late 1950s, and its sales

reached several hundred thousand pounds per year in the '60s. In the Air Quality Act of 1967,

Congress established a registration program for fuel additives, Pub. L. No. 90-148, § 210, 81 Stat.

485, 535-36, and the U.S. Public Health Service published implementing regulationsin 1970, 35 Fed.

Reg. 9282 (1970). The regulations made registration a condition of sale and required that

manufacturers provide information on recommended range of concentration and use, and chemical

composition and structure. The same year, Ethyl registered MMT for use in "motor gasoline." Ethyl

thereafter sold MMT for use in both leaded and unleaded gasoline.

Also in 1970, Congress amended the Act to transfer authority over the registration program

to EPA. Following the Public Health Service regulations, Congress required that EPA designate fuels

and fuel additives for registration, and prohibited sale of designated fuels that were not registered.

Clean Air Act § 211(a). The Act required that manufacturers provide information on chemical

composition, § 211(b)(1), and gave EPA discretion to require information on the effect of additives

on emission control performance and public health or welfare, § 211(b)(2). Once EPA received the

information it required, the Act said, the Administrator "shall register" the fuel or fuel additive. §

211(b)(3). In § 211(c), Congress permitted EPA to control or prohibit use of fuels or fuel additives

that "endanger" public health or that significantly impair emissions control systems.

In1975EPApromulgated regulationsimplementing §§ 211(a) and (b)(1). For additives, EPA

designated one general category for registration: "[a]ll additives" used in motor vehicle fuels, except

for motorcycle fuels. 40 CFR § 79.31(a) (1993). The rules had a grandfathering clause deeming as

registered under the new regulations all additives that had been registered before. Id. § 79.23(b).

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To maintain registration, manufacturers were simply required to file an information update within six

months after promulgation ofthe rules. The rules spelled out the basic information needed to register

an additive or to maintain registration, which included "[f]uels in which the use of the additive is

recommended." Id. § 79.21(d).

Ethyl filed an information update within six months of promulgation of the 1975 rules. EPA

prepared a list of registered fuel additives and put MMT on the list. Thereafter, during the 1970s,

1980s, and 1990s, EPA continually confirmed to Ethylthat MMT wasregistered. Indeed, as recently

as February 1994, EPA sent Ethyl a "list of additives currently registered to Ethyl" and included

MMT on the list.

The Effect of the 1977 Amendments to the Clean Air Act

In its 1977 amendments to the Clean Air Act, Congress made two important changes to the

statutory scheme. First, § 211(e) required EPA to promulgate regulations under § 211(b)(2) for

emissions and health testing no later than one year after August 7, 1977. Makers of fuels or additives

already registered were required merely to submit the required testing results within three years of

promulgation of the testing rules, whereas makers of ones not registered on that date were required

to submit the data before registration. In the event, EPA promulgated the testing regulations nearly

16 years late, on May 27, 1994.

Second, as catalytic converters could not be used with leaded fuel, their adoption had led to

a sharp rise in the use of MMT as an octane booster, and Congressresponded to concernsthat it and

other fuel additives might harmthe effectiveness ofthose converters. The 1977 amendments created

a separate program for protecting emissions control systems by banning some additives, subject to

a possible waiver. Section 211(f)(3) required that manufacturers of certain existing additivesthose

that were not "substantially similar" to constituents of fuel used in the certification of vehicles for

emissions purposes for 1975 or later model yearsstop distributing such additives effective

September 15, 1978. The practical effect of this for MMT was to create a problem as to its use with

unleaded gasoline only. The Report from the Senate Committee on Environment and Public Works

had explained that use of MMT and other additives in unleaded gasoline was the only target, see S.

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Rep. No. 127, 95th Cong., 1st Sess. 90 (1977), and in 1980 EPA promulgated an interpretive rule

defining "substantially similar" under § 211(f) in such a way asto cover only use in unleaded gasoline,

not use in leaded gasolines and dieselfuels, 45 Fed. Reg. 67443 (1980). See also 46 Fed. Reg. 38582

(1981) (a revision maintaining that interpretation); 56 Fed. Reg. 5352 (1991) (similar). In any event,

all agree that § 211(f)(3) barred MMT for use with unleaded gasoline. In order to temper the effects

of § 211(f)(3)'s ban, Congress directed EPA in § 211(f)(4) to grant a waiver once it determined that

the additive would not "cause or contribute to the failure of an emission control device or system."

To spur prompt action by EPA, Congress provided that where the agency failed to act on an

application within 180 days, the waiver would be "treated as granted."

In May 1990 Ethyl applied for a waiver under § 211(f)(4), thereby initiating a process in

which EPA several times required further testing. Cf. Ethyl Corp. v. Browner, 989 F.2d 522, 524

(D.C. Cir. 1993) (remanding case to EPA for consideration of data said to undermine data on which

EPA had relied in denial of a waiver). Ultimately, on November 30, 1993, EPA found that MMT did

not "cause or contribute" to the failure of emissions controlsystemsthe sole criterion for granting

an f(4) waiverbut nonetheless asserted authority to deny the waiver on the ground that Ethyl had

not yet established the absence of any health effects. 58 Fed. Reg. 64761 (Dec. 9, 1993). In response

to this assertion of authoritywhich we held invalid in Ethyl IEthyl agreed to withdraw and

resubmit its application to give EPA additional time to consider health effects, but with EPA's

favorable finding on emissions effects now firmly on record. Ethyl also reserved the right to argue

that health was an irrelevant factor under § 211(f)(4). Under a later agreement the parties agreed to

extend the deadline on the renewed application from May 27, 1994 to July 13, 1994, with Ethyl

agreeing not to argue that the delay caused a default grant of the waiver under § 211(f)(4)'s 180-day

rule.

In April 1992 EPA issued proposed testing rules under § 211(b)(2). 57 Fed. Reg. 13168

(April 15, 1992). The proposal called for a three-tier system. Tier 1 involved a literature search. If

it proved inadequate, the applicant would move to Tier 2, short-term animal tests. Where these were

thought to leave a likelihood of unacceptable health risks, the applicant would move to Tier 3, with

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tests to be devised specific to the particular additive. In the case of new additives, Tier 3 could be

completed after registration. In a February 1994 reopening notice, however, EPA proposed to

reverse the sequence, requiring the more extensive case-specific testing for new additivescalled Tier

3 or "alternative Tier 2"before registration. 59 Fed. Reg. 8886 (February 24, 1994).

On May 27, 1994 EPA promulgated its final testing rule, 59 Fed. Reg. 33042, differing in

several important respects from the proposed rule, and from the 1975 rules. First, it provided that

in order to register an additive for use in unleaded fuel, a manufacturer must demonstrate either that

the additive is "substantially similar" to constituents of unleaded fuel used for certification of vehicles

for emissions control purposes or that the manufacturer has obtained a waiver under § 211(f)(4). Id.

at 33093/2; 40 CFR § 79.21(h). Second, EPA required that registration of an additive be specific

to its use in particular types of fuel. 59 Fed. Reg. at 33092/3; 40 CFR § 79.4(b)(1). Thus it

establishedor, as it claims, clarifiedthat a manufacturer's entry for "recommended usage" on

EPA'sregular form for filing updating information was not a mere recommendation but a limit on the

type of fuel for which the additive was legally registered. Finally, EPA adopted its proposed

three-tier testing program, as modified by its February 1994 notice.

EPA's July 1994 Decisions

On July 13, 1994, EPA simultaneously dealt two separate blows to Ethyl's expectations. It

denied Ethyl'sf(4) waiver application, 59 Fed. Reg. 42227 (August 17, 1994), and, in a letter to Ethyl

(the "Registration Letter"), it found that, under the 1994 regulations, MMT was not registered for

use in unleaded gasoline. In denying the f(4) waiver, EPA continued to acknowledge the absence of

effects on emission controls, but, said that "[a]lthough it is impossible to state whether a health risk

would definitely exist at the projected exposure levels, neither can the possibility of such a risk be

ruled out." Id. at 42259/3. We reversed the waiver denial on April 14 of this year, as it "violated the

clear terms ofsection 211(f)(4) in denying Ethyl a waiver for MMT on public health grounds." Ethyl

I, 51 F.3d at 1055. Because EPA had made the sole determination necessary to grant the waiver, we

instructed it to do so. Id. at 1065.

EPA's finding that MMT was not registered for use in unleaded gasoline took the form of a

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response to Ethyl's April 27, 1994 letter to EPA enclosing what Ethyl regarded as simply an update

of its MMT registration. EPA's Registration Letter treated Ethyl's update as an effort to "amend" its

registration of MMT to encompass use in unleaded fuel. It relied on the newly promulgated testing

regulations, 40 CFR § 79.21(h), for the conclusion that an additive could not be registered for a

particular use unless it met the "substantially similar" criterion or had received an f(4) waiver, which

of course EPA wassimultaneously denying. Further, because the registration of MMT for unleaded

gasoline was "new" under the 1994 rules, the Registration Letter said that Ethyl would have to

perform all required testing before registration. Ethyl has filed a timely petition to review the 1994

testing regulations and the Registration Letter.

Nunc Pro Tunc Treatment of the MMT Waiver and Registration

An order nunc pro tunc (literally "now for then") is an equitable remedy traditionally used to

apply a court's own order or judgment retroactively. Nunc pro tunc relief is "available in order to

promote "fairness to the parties,' and "as justice may require' ". Weil v. Markowitz, 898 F.2d 198,

200 (D.C. Cir. 1990) (quoting Mitchell v. Overman, 103 U.S. 62, 65 (1881)). This circuit has

extended the traditional doctrine to embrace agency conduct, where necessary to put the victim of

agency error "in the economic position it would have occupied but for the error." Delta Data

Systems Corp. v. Webster, 744 F.2d 197, 206-07 (D.C. Cir. 1984). For example, where the FCC

demanded strict compliance with requirements for filing license applications under a deadline but

failed to give adequate notice of what those requirements were, we vacated the FCC's order

dismissing the applications and remanded to the agency to reinstate them nunc pro tunc. Salzer v.

FCC, 778 F.2d 869, 875-76 (D.C. Cir. 1985). See also McElroy Electronics Corp. v. FCC, 990 F.2d

1351, 1353 (D.C. Cir. 1993) (same); Maxcell Telecom Plus v. FCC, 815 F.2d 1551, 1560 (D.C. Cir.

1987) (same); Delta Data Systems Corp., 744 F.2d at 206-07 (where agency erred in treatment of

bidder, court held that bidder could require the agency to reselect a winning contractor nunc pro

tunc). And in Office of Consumers' Counsel v. FERC, 826 F.2d 1136, 1139 (D.C. Cir. 1987), where

the Commission had found rates unlawful but failed to order a remedy, we ordered (though without

use of the Latin tag) that it provide the necessary remedy, retroactive to the date of its finding of

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unlawfulness.

This court in Ethyl I has already found that EPA's denial of Ethyl's requested f(4) waiver on

November 30, 1993 rested exclusively on an unlawful ground. Although the question of the date the

waivershould have been granted was not before the court, it is undisputed that the statutory 180 days

ran on November 30, 1993, and that only the EPA's unlawful infusion of health issues into the f(4)

process prevented the issuance of the waiver on that date. EPA's refusal to do so hasunder EPA's

view of the registration processcaused MMT not to be registered when the new regulations were

promulgated in June 1994. Ethyl can be put "in the economic position it would have occupied but

for the error" if the waiver and registration for unleaded gasoline are treated as granted as of

November 30, 1993; our cases amply support that result.

EPA arguesthat Ethyl's agreementsto extend the deadline to May 27, 1994 (and then to July

13, 1994) bar it from this relief. EPA Br. at 53. But Ethyl's first deferral agreement arose from one

sourceEPA's unlawful interpretation of its authority under § 211(f)(4) and concomitant threat to

deny the f(4) waiver unless Ethyl agreed to the withdrawal and resubmission. The second deferral

arose out of the same problem. As to the latter, EPA points to Ethyl's agreement not to claim a

waiver on the basis of EPA's exceeding the (extended) 180-day limit. But Ethyl's position here is

consistent with that promise. Ethyl is not invoking the 180-day default: it is asking only that EPA's

favorable decision on the legally relevant standard be given full effect.

This treatment of the waiver compels nunc pro tunc treatment of MMT's registration.

Because the only barrier to Ethyl's registering MMT as an additive for use in unleaded fuel before

promulgation of the 1994 regulations was lack of a § 211(f)(4) waiver, as EPA counsel

acknowledged at oral argument, Tr. at 31, a complete remedy for Ethylrequiresthat the registration

be treated as taking effect on approximately the date it would have occurred if EPA had acted

lawfullyNovember 30, 1993.

Issues Not Reached

There are a number of claims by Ethyl that we do not reach, either because our holding above

makes their resolution unnecessary or because they are unripe. First, in view of the registration of

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MMT per this decision, there is no need to reach Ethyl's contentions that EPA has acted arbitrarily

and capriciously in asserting that the registration of MMT for use in unleaded fuel wasrevoked when

the 1977 amendments to the Clean Air Act barred its sale for those purposes without a waiver, or

that, even if EPA could reasonably interpret its regulations as implying such a revocation, it denied

Ethyl fair notice of that interpretation. Cf. General Electric v. EPA, 53 F.3d 1324, 1333-34 (D.C.

Cir. 1995) (holding that where the regulations are unclear and petitioner'sinterpretation isreasonable,

"a regulated party is not "on notice' ofthe agency's ultimate interpretation ofthe regulations, and may

not be punished"); Satellite Broadcasting Co. v. FCC, 824 F.2d 1 (D.C. Cir. 1987) (applying similar

principle to denial of license). Nor need we reach Ethyl's contention that EPA lacked statutory

authority to limit additive registration to sale for use in specific fuels.

Second, Ethyl challenges the 1994 testing rules apart from their purported effect on

registration. Ethyl's challenge is two-fold. First, it contends that the rules are unlawfully open-ended.

They provide that "EPA retains the authority to modify the standard Tier 2 test requirements" in any

specific case, with the exercise of this authority to be "wholly at EPA's initiative and discretion." 59

Fed. Reg. at 33081/2. Ethyl claims that this reservation of power to up the ante at any time, and to

delaytesting bythe time-consuming establishment of new protocols, is contraryto § 211(b)(2), which

provides that testing under the section "shall be conducted in conformity with test procedures and

protocols established by the Administrator," and to § 211(e), which providesthat "the Administrator

shall promulgate regulations which implement the authority under subsection (b)(2)(A) and (b)."

Ethyl also objectsto the standard that EPA hasindicated it mayapplyin evaluating test results

under the 1994 regulations implementing § 211(b)(2)a standard suggested not in the 1994

regulationsthemselves but inEPA'sJuly13, 1994 decision purporting to deny the f(4) waiver. There,

EPAimplicitlyconstrued § 211(c)(1)(A) (permitting EPAto controlor prohibit fuels or fuel additives

that "may reasonably be anticipated to endanger" public health or welfare based on information

gathered under § 211(b)(2)) as justifying non- registration (or deregistration) where there was "a

reasonable basis for concern about the [health] effects" of an additive. 59 Fed. Reg. at 42460/3. In

Ethyl I we characterized this formulation as "a bizarre departure from existing practice [under §

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211(c) ], in complete defiance of the plain terms of the statutory criterion and with no explanation

whatsoever for the application of a different standard." 51 F.3d at 1063. More important for our

purposes, EPA's waiver decision stated that it was applying the standard established by the 1994

testing regulations, see 59 Fed. Reg. 42257/3, and that the standard is "consistent with the general

policy" established by the 1994 regulations under § 211(b)(2), id. at 42260/3. If this is what the 1994

testing regulations mean, Ethyl argues, we must find them invalid to that extent, even though the

regulations themselves do not articulate a substantive standard.

Neither set of claims is ripe in this context. In the first place, our decision ordering the

registration of MMT effective November 30, 1993 goes far to eliminate any harm that Ethyl might

suffer fromdelay in resolution of its claims. See Abbott Laboratories v. Gardner, 387 U.S. 136, 149,

151-54 (1967). With MMT registered, nothing in the statutory scheme suggests that Ethyl would

suffer the burden of any delay in the testing process. Further, the relation of the testing scheme to

the statutory requirements invoked by Ethyl seems precisely the sort of issue that can proceed "on

a much surer footing in the context of a specific application ... than ... in the framework of the

generalized challenge made here." Toilet Goods Ass'n v. Gardner, 387 U.S. 158, 164 (1967). As

to the substantive standard expressed in the waiver denial, we think Ethyl'stheory requirestoo much

of a stretch. Even though the waiver denial may have reflected an assumption that the 1994 testing

regulations adopted the substantive standard stated there for § 211(c) purposes, the testing

regulations themselves never said so and Ethyl I has already nullified the waiver denial itself; there

just isn't enough to review.

Accordingly, the EPA must treat MMT for all purposes as registered under § 211(a) no later

than November 30, 1993. Ethyl's other claims are not reached, either because it is unnecessary to do

so or because the claims are unripe in this context.

So ordered.

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