OAR Box 1781 

Prepped by Ollie Stewart 

Document Number: 

11)11-1- 3 

Docket Number: 

A-90-37 

Printed 10/29/2008 10:46:18 AM Sheet 11 of 142 

_J__ 
P.2 

1 

2 

' 3 

4 

5 

ti 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

-Vai SHELLEY K. MclNTYRE 

Assistant Attorney General 

GENERAL COUNSEL DIVISION 

Natural Resources Section 

"E-r-3 

FILED /f 

^riis?« « —

o i

 p—^ 0 3 '

229

-

572 5 

92SEP2L PM i.: 37 

CLERK, us DISTRICT COURT 

DISTRICT OF OREGON 

PORTLAHO.OREGON 

OCT og ?9^. 

E\ 

is * 

"">»-. A i\::--: 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF OREGON 

Civil No. 91-13-FR 

ORDE R 

OREGON ENVIRONMENTAL COUNCIL 

and THE SIERRA CLUB, 

Plaintiffs, 

v. 

OREGON DEPARTMENT OF 

ENVIRONMENTAL QUALITY 

and FRED HANSON, Director. 

Defendants. 

IT IS HEREBY ORDERED that plaintiff's motion for partial 

summary judgment (#9) is GRANTED. 

DATED this J? J day of September, 1992. 

^fe^jz 

HELEN J. FRYE 

United States District Judge 

AO 72 

(Rev 8/82) 

PAGE 1 - ORDER 
P.3 

i! rn 

aC9 cr p

 o|

, c::, ?.. in 

^.. S.:.I _. .• 11 1 '..• i.: / 

C

ir--re\*.-.-; n—• r.'Tr-r.:- u li\!_ i vr &r.)i\.-'j:t 

fcr;TLA.;L..rr;i?i; 

BY___ _ ..:__> ?__.... 

6 

7 

6 

9 

:0 

H 

-.2 

12 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF OREGON 

Civi l No. 91-13-FR 

OPINIO N 

OREGON ENVIRONMENTAL COUNCIL 

and THE SIERRA CLUB, 

Plaintiffs, 

v. 

OREGON DEPARTMENT OF 

ENVIRONMENTAL QUALITY , 

and FRED HANSON, Director, 

Defendants. 

David Paul 

Paul & Sugerman 

610 S. W. Alder Street, Suite 805 

Portland, Oregon 97205 

Victor M. Sher 

Todd D. True 

Sierra Club Legal Defense Fund 

203 Hoge Bldg. 

705 Second Avenue 

Seattle, Washington 98104-1711 

John B. Arum 

Ziontz, Chestnut, Varnell, Berley & Slonim 

2101 Fourth Avenue, Suite 1230 

Seattle, Washington 98121 

Attorneys for Plaintiffs 

PAGE 1 - OPINION ^ 7 
P.4_ 

•Si-a-3" 

- !l 

• ol! 

14 

• c 

16 

17 

18 

.3 

20 

21 

22 

23 

24 

Charles S. Crookham 

Attorney General 

Denise G. Fjordbeck 

Assistant Attorney General 

450 Justice Building 

Salem, Oregon 97310 

Shelley K. Mclntyre 

A?_:ist.a--L Attorney General 

1515 S. W. Fifth Avenue, Suite 410 

Portland, Oregon 97201 

Attorneys for Defendants 

FRYE, Judge: 

This is a citizens' suit brought under the Clean Air Act, 

42 U.S.C. SS 7401 et seg., by plaintiffs, the Oregon Environmental Council and the Sierra Club, against defendants, the 

Department of Environmental Quality of the State of Oregon and 

its director, Fred Hanson (collectively, the DEQ). The matter 

before the court is the motion of plaintiffs for partial summary judgment (#9). 

STATUTORY BACKGROUND 

In the Clean Air Act, Congress charged the Environmental 

Protection Agency of the United States government (the EPA) 

with setting primary air quality standards for certain air 

pollutants in order to protect the public health. 42 U.S.C. 

§ 7409(b)(1). Congress also charged the EPA with setting 

secondary air quality standards for certain air pollutants 

in order to protect the public welfare. 42 U.S.C. S 7409 

(b)(2). 

The Clean Air Act mandates each state to prepare a state 

implementation plan (a SIP) for achieving and maintaining the 

PAGE 2 - OPINION 
P.5 

5 

6 

7 

8 

9 

)0 

11 

.2 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

air quality standards set by the EPA. 42 U.S.C. S 7410(a)(1). 

Each state is required to submit its SIP to the EPA for approval. Id. The EPA will approve a SIP submitted by a state 

only if the SIP meets all of the requirements of the Clean 

* <,. » _ *. 

g* aa, T » <y »~* .."* • r 0 y .55 74_0(a;(oj(A), /JU4(C). unce tne EPA 

approves a SIP, the requirements and commitments contained in 

the SIP are binding as a matter of federal law upon the state 

which had submitted the SIP until that state submits a formal 

revision of the SIP and that formal revision is approved by 

the EPA. 42 U.S.C. S 7413(a)(2); American Luno Ass'n v. Kean, 

871 F.2d 319, 322 (3rd Cir. 1989). 

In 1977, Congress amended the Clean Air Act to provide 

more stringent requirements for those geographical areas that 

had failed to meet federal standards (nonattainment areas) 

for pollution control. Pub. L. 95-95; 42 U.S.C. SS 7501-08. 

In the 1977 amendment to the Clean Air Act, Congress required 

those states that had failed to meet federal standards for 

pollution control to submit revised SIPs to the EPA. 42 

U.S.C. § 7502. In the revised SIPs, these states were to 

document all reasonably available measures for pollution 

control and meet all of the requirements set out in 42 U.S.C. 

§ 7410(a)(2)(I). Any state that had failed to meet federal 

standards for pollution control was instructed by the EPA to 

provide in its revised SIP for reductions in emissions sufficient to demonstrate that the primary standard for ozone would 

be achieved as expeditiously as practicable, but in any event 

PAGE 3 - OPINION 
P.6 

6 

7 

8 

g 

'0 

11 

"2 

13 

14 

:5 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

no later than December 31, 1987. 42 U.S.C. SS 7502(a)(2) and 

(c). 

In section 7502(c)(1) of the Clean Air Act, Congress 

requires, in part, that each state shall provide in its SIP 

for reductions in emissions from existing sources of pollutants through the adoption of "reasonably available control 

technology." 42 U.S.C. S 7502(c)(1), formerly codified at 

42 U.S.C. S 7502(b)(2). The EPA publishes control technology 

guidelines which set technology-based numerical limits on the 

emissions of volatile organic compounds from various manufacturing processes and which define reasonably available control 

technology in terms of emission rates for each process. 45 

Fed. Reg. at 42,269. 

In section 7502(c)(1), Congress also requires each state 

to establish permit programs in its SIP to regulate the construction and operation of major, new or modified sources of 

air pollutant emissions. 42 U.S.C. S 7502(c)(4), formerly 

codified at 42 U.S.C. S 7502(b)(5). Under the system for the 

review of a new or modified source of air pollutant emissions 

("new source review"), a state may issue a permit for the 

construction of a proposed major, new or modified source of 

air pollutant emissions only if the state requires the source 

of these air pollutant emissions to comply with the lowest 

achievable emission rate. 42 U.S.C. § 7503(a)(2). Prior to 

issuing a permit to a new source of air pollutant emissions, 

the state must require an analysis of alternative sites, 

PAGE 4 - OPINION 
P.7_ 

12 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

sizes, production processes, and environmental control" techniques for the proposed source that demonstrates that the 

benefits of the proposed source significantly outweigh the 

environmental and social costs to be attributed to the pro-r 

posed source . 42 U.S.C. $ 7502(b) (11) (A), now codified at 

42 U.S.C. S 7503(a)(5). If the Administrator of the EPA 

determines that a state is not properly implementing the 

provisions of its SIP in issuing a permit to a new source of 

air pollutant emissions, that state cannot issue the permit. 

42 U.S.C. S 7503(a)(4). 

UNDISPUTED FACTS 

A. Ozone 

Ozone is one of the pollutants for which the EPA has 

established primary and secondary standards pursuant to the 

Clean Air Act. Ozone is the chemical combination of two 

pollutants (oxides of nitrogen and hydrocarbons), which are 

referred to as volatile organic compounds. The EPA has set 

the national ambient air quality primary and secondary standards for ozone at 0.12 parts per million. This standard is 

met when the expected number of days per calendar year that 

the maximum hourly concentrations of ozone exceeds 0.12 parts 

per million is equal to or less than one. 40 C.F.R. S 50.9 

(1988). 

The emission of volatile organic compounds by industries 

is a major source of ozone. Accordingly, ozone concentrations 

in the atmosphere can only be reduced when industries reduce 

PAGE 5 - OPINION 
«5S*.-

11 

• 2 

12 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

their emission of volatile organic compounds. Volatile organic compounds are emitted by industries as by-products of processes, such ae paper making and can coating, metal painting, 

and the degreasing and cleaning that occurs in the manufacture 

of computer„chi£_:.•••--

B. The SIP 

The DEQ is the agency responsible for meeting the obligations imposed upon the State of Oregon by Congress in the 

Clean Air Act. In 1973, the DEQ submitted a SIP for the State 

of Oregon to the EPA. The EPA approved the SIP. However, by 

March 3, 1978, the EPA had designated the Portland-Vancouver 

metropolitan area a "nonattainment area" with respect to concentrations of ozone pursuant to 42 U.S.C. S 7407(d). The 

Portland-Vancouver metropolitan area is a "nonattainment area" 

today. 

On June 29, 1979, the DEQ submitted a revised SIP for the 

Portland-Vancouver metropolitan area to the EPA in order to 

address the problem of nonattainment in the Portland-Vancouver 

metropolitan area. In the revised SIP, the DEQ argued that 

despite the implementation of those control measures which 

were reasonably available, it did not believe that the State 

of Oregon could meet the standards set by the EPA by December 

31, 1982. On July 20, 1982, the DEQ submitted a revised SIP 

to the EPA as required by the 1977 amendments to the Clean 

Air Act. The SIP submitted by the DEQ on July 20, 1982 was 

/// 

PAGE 6 - OPINION 
_EJ_ 

•I 

I. 

approved by the EPA and is the SIP in effect today for the 

State of Oregon. 

The SIP in effect for the State of Oregon today contains 

a general emissions standard thai, provides as follows: 

Notwithstanding the general and specific emission standards and regulations contained in this 

Division, the highest and best practicable treatment 

and control of air contaminant emissions shall in 

every case be provided so as to maintain overall 

air quality at the highest possible levels, and to 

maintain contaminant concentrations . . . and other 

deleterious factors at the lowest possible levels. 

In the case of new sources of air contamination 

. . . the degree of treatment and control provided 

shall be such that degradation of existing air quality is minimized to the greatest extent possible. 

O.A.R. 340-20-001. 

14 

;5 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

The SIP in effect for the State of Oregon today also 

contains specific measures to control emissions of volatile 

organic compounds in and around the City of Portland. Specifically, the SIP provides that: "The [DEQ] has adopted 

emission standards that require reasonably available control 

technology to be applied to all sources of volatile organic 

compounds for which [the] EPA has published control technology guidelines." State Implementation Plan for the State 

of Oregon, p. 45. 

The SIP in effect for the State of Oregon today provides 

that compliance with the standards set for emissions of volatile organic compounds was required by the end of the year 

1982. See id. The SIP in effect for the State of Oregon 

today also provides that in order to qualify for a permit, 

PAGE 7 - OPINION 
P.10 

9 

.0 

11 

- O 

• _ _ 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

a new source of emissions of volatile organic compounds 

must comply with the lowest achievable emission rate, obtain 

offsets or a growth increment, and prepare an alternatives 

analysis. The SIP in effect for the State of Oregon today 

fl) establishes a permit program . for; _a.lj!.existing .stationary 

sources of air contaminants; (2) requires all persons constructing or operating a stationary source of air contaminants 

to obtain a permit from the DEQ; and (3) requires that the 

permit include overall numerical emission limits based on a 

baseline emission rate that is the average emission rate for 

the year 1977 or the year 1978. The SIP in effect for the 

State of Oregon today further provides that plant site emission limits must be established on the basis of short-term 

periods of emissions and must be compatible with the operations of the source and with air quality standards. 

The Portland-Vancouver metropolitan area had failed to 

attain the national standards for ozone concentrations by the 

end of the year 1987 as required by the Clean Air Act. The 

Portland-Vancouver metropolitan area has failed to attain the 

national standards for ozone concentrations at this time. 

C. Enforcement of Regulations Relating to Reasonably Available Control Technology 

1. Bubbles 

a. Gunderson. Inc. 

Gunderson, Inc. (Gunderson) operates a rail car and 

marine barge manufacturing plant in the City of Portland. 

This manufacturing plant emits volatile organic compounds as 

PAGE 8 - OPINION 
P.11 

_ 

6 

7 

8 

9 

10 

n 

•2 

13 

14 

15 

16 

17 

18 

19 

20 

21 

25 

26 

the result of painting and coating operations. Gunderson is 

subject to a reasonably available control technology emission 

limit of 3.5 pounds of volatile organic compounds for every 

gallon of coating used. Gunderson obtained its permit from 

the FMC Corporation. 

In April, 1982, the FMC Corporation informed the DEQ that 

it would be unable to attain compliance with the applicable 

emission limit because the coatings which would have allowed 

the FMC Corporation to meet the applicable emission limit had 

not been developed to meet the requirements of the railcar 

industry. The FMC Corporation proposed achieving compliance 

with the applicable emission limit by January 1, 1987 through 

a two-step process: 1) the search for coatings which would 

meet the requirements of the railcar industry and the applicable emission limit; and 2) the construction of a new building 

with equipment capable of handling these coatings. 

In October, 1982, the Environmental Quality Commission 

approved the two-step process, granted the request of the FMC 

Corporation for a variance, and approved the compliance schedule of the FMC Corporation. In June, 1983, the DEQ issued 

the FMC Corporation an air contaminant discharge permit which 

22 incorporated this compliance schedule. 

•^3 In March, 1985, Gunderson purchased the plant from the 

24 FMC Corporation. Gunderson projected that its annual production rate would be substantially lower than that of the FMC 

Corporation. 

PAGE 9 - OPINION 
«^£tf,.* 

_ I 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

In September, 1985, the DEQ issued Gunderson a modified 

permit allowing Gunderson to "bubble" excess emissions of volatile organic compounds from its coating operations against 

the unused production capacity of the plant. Pursuant to the 

rules set out in the SIP for the State of Oregon, the DEQ set 

Gunderson's annual plant site emission limit at 640 tons and 

its daily plant site emission limit at about 3.15 tons. Pursuant to the modified permit, the DEQ allowed Gunderson to 

exceed the reasonably available control technology limit of 

3.5 pounds of volatile organic compounds per gallon of coating 

used provided that the total plant site emissions were less 

than the annual and daily plant site emission limits. 

In August, 1990, the DEQ issued Gunderson a modified permit containing the identical "bubble" provision found in the 

1985 permit. 

b. Continental Can Company 

Continental Can Company (Continental Can) fabricates 

three-piece steel cans in the City of Portland. Continental 

Can applies coatings containing volatile organic compounds to 

the steel from which the cans are made, to the side seam welds 

of the cans, and to the lid welds of the cans. The emissions 

of volatile organic compounds from the spraying of the steel 

from which the cans are made are controlled in part by an 

incinerator installed in 1971. However, the spraying of the 

coatings to the side seam welds and to the lid welds have no 

such controls. 

PAGE 10 - OPINION 
P.13 

6 

7 

:0 

11 

-2 

13 

14 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

•"is*--

Continental Can emits annually more than 40 tons., of volatile organic compounds and is subject to federal regulations 

for the coating of cans set forth in O.A.R. 340-22-170(5) (a). 

O.A.R. 340-22-170(5)(a) provides for a limit of 2.8 pounds of 

volatile organic compounds per gallon of coating applied to 

the steel from which the cans are made; 5.5 pounds of volatile 

organic compounds per gallon of coating for the spraying of 

side seam welds; and 3.7 pounds of volatile organic compounds 

per gallon of coating for the spraying of lid welds. Id. at 

(A), (C) and (D). 

On January 8, 1987, the DEQ issued Continental Can a 

modified permit which allows Continental Can to exceed the 

specific per gallon limits set forth above, provided that 

the total emissions from the plant are not greater than the 

15 emission limits set per month or per year. The application 

10 review report of the DEQ represented that Continental Can's 

spray coating to the side seam welds and to the lid welds 

were "bubbled" with the sheet basecoat line which was "overcontrolled" by the incinerator. 

c. Pacific Coatings, Inc. 

Pacific Coatings, Inc. (Pacific Coatings) operates an 

aluminum coating facility in the City of Portland. Pacific 

Coatings is limited to 3.5 pounds of volatile organic compounds per gallon of coating used. O.A.R. 340-22-170(5) (j). 

Pursuant to its air contaminant discharge permit, Pacific 

Coatings is allowed to exceed the limit of 3.5 pounds of 

PAGE 11 - OPINION 
P.14 

14 

15 

15 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

volatile organic compounds per gallon of coating used when it 

uses a brand of coating known as "Duranar," provided that its 

total emissions of volatile organic compounds are less than 

the annual plant site emission limit of 66 tons and the daily 

plant site emission limit of 743 pounds, and that emissions 

of volatile organic compounds from the Duranar coatings do not 

exceed 5.6 pounds,per gallon. The air contaminant discharge 

permit does not require the use of any add-on equipment. The 

plant site emission limits set for Pacific Coatings are based 

on production rates that, if uncontrolled, would result in the 

emission of 99 tons of volatile organic compounds per year. 

Pursuant to SIP rules, the DEQ applied its reasonably available control technology rules to the 99-ton emission rate, 

which resulted in a plant site emission limit on volatile 

organic compounds of approximately 66 tons. 

2. Fatty Foods Rule 

The SIP for the State of Oregon provides for an emission 

limit on volatile organic compounds of 3.7 pounds per gallon 

of coating used for the end-sealing of cans. On October 31, 

1986, the Environmental Quality Commission amended the rules 

for the end-sealing of cans designed to hold fatty foods to 

allow the emission of 4.4 pounds of volatile organic compounds 

per gallon of coating used because the use of end-sealing compounds which were in conformance with the SIP resulted in the 

spoilage of the fatty foods. The DEQ submitted this rule 

/// 

PAGE 12 - OPINION 
P.15 

•2 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

change to the EPA as a revision of the SIP. The EPA has never 

acted on the proposed rule change. 

After relaxing the emission limit on the emissions of 

volatile organic compounds for end-sealing compounds from 3.7 

rw-ninrfa TV»T* na 11 o n r.r» — . A nonnH c no r —-a 1 1 on .. t^-10 HPQ i r-nr _ 

porated this change into a permit held by Silgan Containers 

Corporation (Silgan Containers). The DEQ also included the 

revised limit in the "bubble" issued to Continental Can on 

January 8, 1987. 

In November, 1990, Silgan Containers claimed that it had 

begun using a surface coating that complied with the limit in 

the SIP of 3.7 pounds of volatile organic compounds per gallon. On April 11, 1991, the DEQ issued Silgan Containers an 

amended permit requiring the use of end-sealing compounds that 

complied with the SIP/ On April 11, 1991, the DEQ also issued 

Continental Can an amended permit for cans designed to hold 

fatty foods which requires a level of no more than 3.7 pounds 

of volatile organic compounds per gallon. 

On May 15, 1991, the Environmental Quality Commission 

amended the limit for the end-sealing of cans containing fatty 

foods from 4.4 pounds of volatile organic compounds per gallon 

to 3.7 pounds of volatile organic compounds per gallon, consistent with the SIP. 

3. Architectural Coatings Rule 

The SIP imposes an emission limit of 3.5 pounds of volatile organic compounds per gallon on the air dried coatings of 

PAGE 13 - OPINION 
P.16 

:0 

miscellaneous products and metal parts. On October 31, 1986, 

the Environmental Quality Commission adopted a rule allowing 

applicators of "high performance architectural coatings on 

aluminum" to emit up to 6.2 pounds of volatile organic comoounds.oer gallon. Parties' stirmlat**'* Statement of Fscts, 

p. 9. As with the amended rule for fatty foods, the EPA never 

approved the rule applicable to high performance architectural 

coatings on aluminum as a SIP revision. The DEQ incorporated 

the amended rule in a permit held by Pacific Coatings. 

On May 15, 1991, the Environmental Quality Commission 

amended the rule allowing application of high performance 

architectural coatings on aluminum from 6.2 pounds of volatile organic compounds per gallon to 3.5 pounds per gallon, 

consistent with the SIP. The DEQ has not yet amended the 

permit of Pacific Coatings to reflect this rule change. In 

mid-1991, Pacific Coatings terminated its operations, and all 

equipment related to volatile organic compounds was removed 

from the facility. The permit of Pacific Coatings is still 

in force, however. 

20 D. Enforcement of New Source Review Requirements 

2i a. Precision Castparts Corporation 

22 Precision Castparts Corporation (Precision Castparts) 

23 owns and operates an investment casting foundry located in 

t he City of Clackamas, which is referred to as the Small 

25 Structural Business Operation (SSBO). On June 6, 1979, 

26 Precision Castparts submitted an application for an air 

PAGE 14 - OPINION 

12 

14 

15 

16 

17 

18 

19 

24 

rC1 
14 

15 

16 

17 

18 

19 

20 

21 

22 

23-

24 

25 

26 

contaminant discharge permit to the DEQ in conjunction with 

the construction and operation of the SSBO. On October 31, 

1979, the DEQ issued an air contaminant discharge permit to 

Precision Castparts. The permit did not allow Precision 

Castparts to emit any volatile organic compounds. 

On June 24, 1980, the EPA conditionally approved the new 

source review rules of the State of Oregon. Final approval 

of these new source review rules was granted on November 5, 

1981. 

In January, 1988, Precision Castparts submitted a report 

to the DEQ indicating that the SSBO was emitting quantities 

of volatile organic compounds, primarily alcohol and trichloroethylene solvent, a suspected human carcinogen. On July 27, 

1988, the DEQ notified Precision Castparts that the facility 

was exceeding its allowable limit for the emission of volatile 

organic compounds and required Precision Castparts to submit a 

"compliance schedule" within two weeks. 

On August 2, 1988, Precision Castparts submitted a compliance schedule in which it proposed (1) completion of a 

study of its emissions of volatile organic compounds and 

its suggested control alternatives within six months; and 

(2) final compliance eighteen months later. In the interim, 

Precision Castparts proposed that it be permitted to continue 

the existing level of emissions of volatile organic compounds. 

On September 7, 1988, the DEQ issued Precision Castparts 

an addendum approving this schedule. Under the addendum, 

PAGE 15 - OPINION 
P.18 

2 

2 

4 

5 

6 

7 

6 

9 

10 

11 

"2 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

Precision Castparts was to comply with the regulations relating to volatile organic compounds mandated by the SIP by 

September 1, 1990. No interim controls of the emissions of 

volatile organic compounds were required before that date. 

On September 15:. 19fl.9._-_ Precision Castparts submitted 

a letter summarizing the emissions of volatile organic compounds estimated for the baseline (1978), current (1989), 

and projected (1995) years. The baseline level of volatile 

organic compounds for Precision Castparts was zero. Precision 

Castparts has estimated that the volatile organic compounds 

currently being emitted are 303 tons and its projected emissions are 473 tons. This estimation of emissions did not take 

into account the effect of any pollution controls that could 

be added. 

In its letter of September 15, 1989, Precision Castparts 

informed the DEQ that an internal investigation showed emissions of alcohol and ether, both of which Precision Castparts 

"'had not previously been aware,'" and that "'the assumptions 

(both technical and economic) underlying the control strategies discussed last Spring have become invalid.'" Parties' 

Stipulated Statement of Facts, p. 11. Precision Castparts 

proposed submitting a revised final control strategy by 

October 31, 1989. 

On November 7, 1989, Precision Castparts submitted a 

"Final VOC Control Strategy" to the DEQ. In its "Final VOC 

Control Strategy," Precision Castparts proposed aggregating 

PAGE 16 - OPINION 
P.19 

13 

14 

15 

15 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

emissions from the SSBO with emissions from its other facilities for the purposes of complying with the regulation 

limiting plant site emissions. Precision Castparts made no 

proposal regarding compliance with the requirements for review 

of.new sources of polIntents. 

On December 29, 1989, the DEQ rejected the "Final VOC 

Control Strategy" for the SSBO because Precision Castparts 

had proposed "to bubble" the emissions from the SSBO with an 

older, non-contiguous facility. Wendy Sims, manager of program operations for the Air Quality Division of the DEQ stated 

at that time as follows: 

The SSBO facility is required to come into compliance with the New Source Review regulations without 

delay. The Portland area was designated a nonattainment area for ozone prior to construction of 

the SSBO facility, therefore the SSBO facility was 

subject to New Source Review at the time of construction and is still subject to New Source Review. 

Since the SSBO facility emits in excess of 40 tons/ 

year, this requires the application of LAER (lowest 

achievable emission rate) for control of all [volatile organic compound] emissions (including alcohol 

emissions and the trichloroethylene (TCE)). 

Parties' Stipulated Statement of Facts, p. 12. Sims added 

that if the emissions of Precision Castparts, after the lowest 

achievable emission rate was imposed, were not below 40 tons 

per year, then offsets and a net air quality benefit would 

be required. However, if the emissions were brought below 

40 tons per year through the application of technology for 

achieving the lowest achievable emission rate, she stated that 

offsets and a net air quality benefit would not be required. 

PAGE 17 - OPINION 
She concluded that "'the prolonged operation of this facility 

in substantial non-compliance with state and federal new 

sourcea review requirements cannot be allowed.'" Id. 

On May 17, 1990, the DEQ released for public comment a 

notice of permit modification proposed by Precision Castparts. 

In the release for public comment of the notice of permit 

modification proposed by Precision Castparts, the DEQ stated 

that the application "'is for a modification and renewal for 

an existing permit which does not require review under the 

New Source Review rules.'" Parties' Stipulated Statement of 

Facts, p. 13. In the notice, the DEQ did not state why the 

modification and renewal was not subject to review under the 

new source review rules. The notice of permit modification 

proposed by Precision Castparts states that the permit incorporates a schedule of compliance for the control of emissions 

of volatile organic compounds, and that "'[u]pon completion of 

the compliance schedule in 1992, [volatile organic compound] 

emissions will be reduced from 341.0 tons per year to no more 

than 37.8 tons per year.'" Id. 

2 0 On August 27, 1990, the DEQ issued Precision Castparts a 

new permit for the SSBO. The new permit contains a two-part 

compliance schedule which requires Precision Castparts to 

2 3 (1) install an afterburner control system within 260 days and 

24 be capable of operating in continuous compliance within 270 

days; and (2) phase out all use of trichloroethylene within 

460 days. The permit also provides that upon completion of 

PAGE 18 - OPINION 

14 

15 

16 

17 

18 

19 

21 

25 

26 
P.21 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

these steps, but no later than 460 days after issuance of the 

permit, Precision Castparts shall limit its annual emission 

rate of volatile organic compounds to 39.9 tons. The permit 

does not require Precision Castparts to demonstrate compliance 

with the lowest achievable emission r*r.e anrf offset requirements or to submit the alternative analysis described in the 

new source review regulations. 

b. Tektronix. Inc. 

Tektronix, Inc. (Tektronix) manufactures electronic and 

other equipment at its plant in the City of Beaverton. Emissions of volatile organic compounds come from a painting line, 

degreasers, electroplating operations, and miscellaneous other 

sources. 

On November 12, 1985, the DEQ issued a modification to 

Tektronix's "minimal source" permit. In doing so, the DEQ 

calculated the "baseline" annual emission rate for Tektronix 

for the emission of volatile organic compounds to be 278 tons. 

Tektronix requested permission to increase its "baseline" 

annual emission rate for the emission of volatile organic 

compounds by 140 tons over the course of the life of the fiveyear permit in order to accommodate its expected growth in 

production. The DEQ granted this request and set the annual 

emission limit for Tektronix at 418 tons per year. In the 

permit application review report, the DEQ concluded that 

"'[t]he increase above baseline can be approved within the 

available [volatile organic compound] growth margin for the 

PAGE 19 - OPINION 

^ a P 'c"\ 
•2 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

Portland Metropolitan area.'" Parties' Stipulated Statement 

of Facts, p. 15. In the permit application review report, 

the DEQ did not discuss compliance with new source review 

requirements, including the lowest achievable emission rate 

and the alternative analysis. In the permit application 

review report, the DEQ was allowed to reclaim all or part of 

the growth margin allocated to Tektronix for redistribution 

to other industries if it was not used by Tektronix. 

Tektronix did not experience its expected growth in 

production and, therefore, did not increase its emissions 

of volatile organic compounds. Therefore, when the permit 

issued on November 12, 1985 came up for renewal on January 1, 

1990, the DEQ exercised its power to reclaim the growth margin 

and to set the plant site emission limit for Tektronix back 

to the "baseline" level. There were no physical modifications 

or changes in operation at Tektronix which resulted in a net 

increase of more than 40 tons above the "baseline" level. 

c. Port of Portland 

The Port of Portland operates a ship repair yard on 

Swan Island in the City of Portland. The facility is a major 

source of emissions of volatile organic compounds because of 

the evaporation of solvents used in ship painting. The annual 

production capacity of the ship repair yard is approximately 

216,000 gallons of marine paints and primers. The painting of 

the ships is performed by private contractors who lease dry 

26 dock facilities from the Port of Portland. 

PAGE 20 - OPINION 
4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

As of 1978, the Port of Portland operated three dry dock 

facilities. In 1978, emissions of volatile organic compounds 

from the Port of Portland totalled 147 tons. In 1979, the 

Port of Portland constructed a fourth "supertanker-size" dry 

deck. By 1384, -imuoi *=___._»si_u_; o£ volatile organic compounds from the Port of Portland were 348.7 tons. The Port 

of Portland did not apply to the DEQ for a modification of its 

permit until April 15, 1985. In its application to the DEQ 

for a modification of its permit, the Port of Portland noted 

that "'projected annual [volatile organic compound] emissions 

by the year 2000 are expected to be 374.45 tons or 227.49 

tons above the baseline year of 1978.'" Parties' Stipulated 

Statement of Facts, p. 16. The Port of Portland requested a 

"growth margin allocation" of 227.49 tons and an annual plant 

site emission limit of 375 tons. Id. 

The DEQ issued a permit to the Port of Portland on June 

9, 1986. As requested by the Port of Portland, the permit 

provided for an annual plant site emission limit of 375 tons. 

In the permit application review report, the DEQ explained 

that because the fourth dry dock would result in an increase 

of more than 40 tons per year of emissions of volatile organic 

compounds, the construction of the "supertanker-size" dry dock 

was a major modification subject to new source review requirements . 

In the permit application review report, the DEQ stated: 

"'The standard ship coatings are considered [lowest achievable 

PAGE 21 - OPINION 
14 

; C 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

emission rate] for this industry.'" .Id. The quantitative 

limits on emissions of volatile organic compounds from the 

expanded operations of the Port of Portland proscribed in the 

June 9, 1986 permit consisted solely of the limits on plant 

site emissions. Lastly, tne permit application review report 

does not contain an "alternative analysis" which demonstrates 

that the benefits resulting from the increased emission of 

227.49 tons of volatile organic compounds "significantly outweigh" the environmental and social costs of the increased 

emissions of volatile organic compounds. Ld. at 16-17. 

E. Enforcement of O.A.R. 340-20-001 (Highest and Best Practicable Treatment and Control 

1. Control Technology Guidelines and Reasonably Available Control Technology 

The process-specific rules relating to the emission of 

volatile organic compounds which were promulgated in the late 

1970's and early 1980's were based on control technology 

guidelines issued by the EPA as the "presumptive norm" for 

reasonably available control technology. The EPA did not 

issue control technology guidelines for various industries, 

such as computer chip manufacturing, ship repair yards, and 

investment foundries. At the time plaintiffs filed their 

complaint, the process-specific rules of the DEQ which relate 

to the emission of volatile organic compounds did not address 

emissions of volatile organic compounds from the processes for 

which the EPA had not issued control technology guidelines. 

As a matter of general policy, the DEQ has not required that 

PAGE 22 - OPINION 
P.25 

major sources of volatile organic compounds which use processes for which no control technology guideline has been 

issued by the EPA comply with reasonably available control 

technology. 

On May 15, 1991, the Environmental Quality Commission 

adopted a rule, O.A.R. 340-22-104, which establishes a process for setting reasonably available control technology 

limits for major sources of air contaminants (over 100 tons 

per year) not covered by an EPA-issued control technology 

guideline. Under that rule, the DEQ must first notify the 

source in writing that it is subject to the rule. The source 

then has three months to submit a reasonably available control 

technology analysis to the DEQ. Upon receipt of the analysis, 

the DEQ will establish reasonably available control technology 

requirements for each source on a case-by-case basis. Upon 

approval by the EPA of the requirements as a source-specific 

SIP revision, the source then has up to one year to achieve 

compliance. O.A.R, 340-22-104(5)-(6). 

The DEQ submitted the rule to the EPA as a SIP revision, 

20 but as of December 15, 1991, the EPA had not approved it. The 

DEQ has not yet sent any of the written notices required to 

commence the process for establishing reasonably available 

control technology limits set forth in O.A.R. 340-22-104. 

_ i 

14 

.16 

17 

18 

19 

21 

22 

25 

^c 

2. Reguiring State-of-the-Art Controls when Permitting 

"Minor" Modifications 

James River II, Inc. (James River) operates a paper 

PAGE 23 - OPINION 
a 

9 

iO 

M 

•2 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

coating and flexible packaging printing plant in the City 

of Portland. The process of printing used by James River 

includes the printing of packaging (wrapping) sheet for 

frozen foods and other uses on flexographic and rotogravure 

printing presses. As of June, 1991, James River had a permit 

to operate six flexographic presses. 

On June 27, 1991, the DEQ amended the permit of James 

River to allow the company to install a seventh flexographic 

press. In the permit application review report, the DEQ 

noted that the additional flexographic press would not cause 

an increase in plant site emissions beyond the annual emission limit of 2,889 tons. In the review report, the DEQ 

explained that its finding of compliance with the "highest 

and best" requirement, O.A.R. 340-20-001, included the following: 

a. The use of an enclosed ink delivery system 

which are [sic] estimated to reduce press 

emissions by 10%. 

b. The paper coating lines were over controlled 

to provide a 600 ton per year [volatile organic compound] bubble to allow the presses to 

operate without exhaust emission controls. 

Parties' Stipulated Statement of Facts, p. 19. 

F. Requirement and Enforcement of Short-Term Plant Site 

Emission Limits 

A plant site emission limit imposes an overall cap on 

emissions over a period of time. The SIP for the State of 

Oregon requires that plant site emission limits be established 

on both an annual and a "short term period emission basis 

PAGE 24 - OPINION 
P.27 

7 

1 1 

_ 

13 

•14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

that is compatible with source operation and air quality standards." O.A.R. 340-20-310(2). 

As of June 15, 1990, there were at least six major 

sources of volatile organic compounds in the City of Portland 

nonattainment area when the DEQ permitted the averaging of 

annual emissions data to demonstrate "compliance" with shortterm plant site emission limits. These sources of volatile 

organic compounds were Intel Corporation, Gunderson, Freightliner Corporation, Silgan Containers, Tektronix, and Brod & 

McClung Pace Company (now known as Sinko America, Inc.). In 

August and September of 1990, the DEQ issued permit modifications regarding the monitoring and reporting of short-term 

emissions to the following companies: Gunderson, Freightliner 

Corporation, Brod & MCClung Pace Company, Silgan Containers, 

Continental Can, and James River. In the case of Continental 

Can, although the DEQ requires the reporting of maximum daily 

emissions, it has not set a daily plant site emission limit. 

The DEQ has set a monthly plant site emission limit, but this 

limit applies only during the summer season. The DEQ has not 

modified reporting requirements with regard to Intel Corporation, Tektronix, the Port of Portland and Pacific Coatings. 

Current permits for these sources of volatile organic compounds do not require the demonstration of compliance with 

daily plant site emission limits. The Port of Portland is 

in the "100-ton miscellaneous reasonably available control 

technology" category that is subject to O.A.R. 340-22-104, 

PAGE 25 - OPINION 
which was adopted by the Oregon Environmental Quality Commission on May 15, 1991. The DEQ states that it will review 

short-term plant site emission limits at the Port of Portland 

through implementation of" this rule. Pacific Coatings lias 

ter__ir-_t_ed its or*erations= The DEQ contends ..that. no.practical, technically meaningful method of measuring short-term 

emissions for the operations at Tektronix and Intel Corporation is known, and that an annual plant site emission limit 

is compatible both with the operations at Tektronix and Intel 

Corporation and the applicable air quality standards. 

CONTENTIONS OF THE PARTIES 

In their complaint, plaintiffs allege that the DEQ is 

violating the Clean Air Act by failing to require compliance 

with four types of emission standards contained in the SIP for 

the State of Oregon. First, plaintiffs contend that the DEQ 

6 has failed to enforce mandated, reasonably available control 

technology emission standards and limitations set in the SIP 

for the State of Oregon at major sources of volatile organic 

compounds in the City of Portland nonattainment area. Next, 

plaintiffs contend that the DEQ has granted permit applicants 

the right to operate major new or modified sources of volatile 

22 organic compounds without requiring the permit applicants to 

-

3 comply with the new source review requirements mandated by the 

24 SIP. Third, plaintiffs contend that the DEQ has failed to 

25 provide for the "highest and best practicable treatment and 

control" in all cases involving emissions of volatile organic 

PAGE 26 - OPINION 

14 

•5 

15 

17 

18 

19 

20 

21 

25 
P.29 

• 1 

•2 

12 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

compounds in the City of Portland nonattainment area. Finally, 

plaintiffs contend that the DEQ has failed to provide for and 

thereafter enforce short-term plant site emission limits for 

emissions of volatile organic compounds as required by the 

SIP, allowing sources instead to demonstrate compliance with 

hourly or daily plant site emission limits by dividing the 

total annual emissions of volatile organic compounds by the 

number of hours or days the plant operated in that year. 

The DEQ contends that the enforcement of the SIP and 

source-specific permits is committed to its discretion and is 

not reviewable by this court; that this case must be reveiwed 

under the standard of review found in the Oregon Administrative Procedures Act (Oregon APA); and that it has adequately 

enforced its SIP. 

APPLICABLE STANDARD 

Summary judgment is appropriate where "there is no genuine issue as to any material fact and . . . the moving party 

is entitled to a judgment as a matter of law." Fed. R. Civ. 

P. 56(c). The initial burden is on the moving party to point 

out the absence of any genuine issue of material fact. Once 

the initial burden is satisfied, the burden shifts to the 

opponent to demonstrate through the production of probative 

evidence that there remains an issue of fact to be tried. 

Celotex Corp. v. Catrett. 477 U.S. 317, 323 (1986). On a 

motion for summary judgment, all reasonable doubt as to the 

existence of a genuine issue of fact should be resolved 

PAGE 27 - OPINION 

-f v 5'S?1 
P.30 

8 

9 

10 

11 

•2 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

against the moving party. Hector v. Wiens, 533 F.2d 429, 

432 (9tn Cir. 1976). 

ANALYSIS AND RULING 

A. Enforcement of the SIP and the Standard of Review 

•phe initial * row-en t. of the HEO Is that enforcement 

of the SIP and source-specific permits is committed to the 

discretion of the DEQ and is therefore not subject to review 

by this court. The DEQ argues that "there is nothing in the 

Clean Air Act that compels [the] DEQ to take enforcement 

action . . . against an alleged violator." Defendants' Memorandum in Opposition, p. 5. Plaintiffs, however, are not 

seeking to compel the DEQ to take action against the alleged 

violators; rather, plaintiffs seek a declaration of the court 

"(a) that [the] DEQ has a duty under the SIP and the Clean 

Air Act to require compliance with . . . four [specific] 

'emission standards and limitations'; and (b) that [the] DEQ 

has systematically failed to require compliance with these 

emission standards and has violated the SIP and the Act." 

Plaintiffs' Reply Memorandum, p. 2. 

The court concludes that plaintiffs do not seek an order 

of the court requiring the DEQ to act in its regulatory capacity because it is the DEQ itself that is the regulated party 

in this action.1 The requirements and commitments found in 

Once a pollution source is issued a permit by an 

authorized state permitting agency, the permit, and not the 

Clean Air Act, becomes binding upon the source. In other 

(continued...) 

PAGE 28 - OPINION 
P.31 

• 1 

•2 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

the SIP for the State of Oregon became binding on the DEQ as 

a matter of federal law after the approval of the SIP by the 

EPA. See American Luna Ass'n, 871 F.2d at 322. Although it 

authored the SIP, the DEQ is nonetheless bound by its provisions and is afforded no deference when a court interprets 

the plan. See American Lung Ass'n v. Kean, 670 F. Supp. 1285, 

1291 (D. N.J. 1987), aff'd, 871 F.2d 319 (3rd Cir. 1989). A 

determination of whether the DEQ has violated the SIP for the 

State of Oregon and the Clean Air Act by failing to require 

compliance with four emission standards and limitations contained in the SIP approved by the EPA is not a matter committed to the discretion of the DEQ and therefore is properly 

before this court. 

The DEQ next contends that its alleged violations in 

issuing permits and in enforcing the SIP are in essence 

challenges to the DEQ's interpretation of its rules, which 

must be reviewed under the Oregon APA. The DEQ argues that 

the only way this court may rule against it is if the "court 

finds a particular permit does not comply with [the] DEQ's 

/// 

(...continued) 

words, a violation of the permit is a violation of the Act. 

Thus, even if a permit was improperly issued, a source 

remains free from enforcement action against it so long as 

it complies with its permit. United States v. Solar Turbines. Inc.. 732 F. Supp. 535 (M.D. Pa. 1989). Consequently, 

plaintiffs cannot obtain an order of this court to require 

the DEQ to take enforcement action against sources which 

have committed no violation other than to act in accordance 

with their permits. 

PAGE 29 - OPINION 
: 1 

"2 

12 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

I 

rules when reviewed under the [Oregon APA] standard." Defendants' Memorandum in Opposition, p. 8. 

The sole issue in a citizen's suit seeking enforcement 

of a SIP under the Clean Air Act is whether there has been 

CO__r»lianc° Vlth the SIP- ftwori ca- T...n<r Ass'n. fi70 V. Ruon. 

at 1289; Citizens for a Better Env't v. Deukmelian, 731 F. 

Supp. 1448, 1458 (N.D. Cal. 1990). Accordingly, this court 

has heretofore rejected the argument of the DEQ that this case 

is "a review of the actions of the DEQ on a permit-by-permit 

basis" and has ruled instead that "[t]his case concerns the 

claim of plaintiffs that the DEQ is violating federal law as 

embodied by the Clean Air Act and the implementation plan for 

the State of Oregon." Oregon Envtl. Council v. Oregon Dep't 

of Envtl. Quality. 775 F. Supp. 353, 364 (D. Or. 1991). Since 

the DEQ's compliance with the SIP for the State of Oregon and 

the provisions of the Clean Air Act are to be determined in 

resolving this case, the court will not employ the deferential standard of review of the actions of the DEQ provided 

for under the Oregon APA. 

B. Reasonably Available Control Technology 

The SIP for the State of Oregon and the provisions of 

the Clean Air Act mandate emission standards to control emissions of volatile organic compounds. These emission standards require the application of "reasonably available control technology" at all sources of volatile organic compounds 

covered by a control technology guideline published by the 

PAGE 30 - OPINION 
P.33 

14 

15 

16 

17 

18 

19 

20 

21 

22. 

23 

24 

25 

26 

EPA. Plaintiffs contend that the DEQ has failed to enforce 

these standards. 

The SIP for the State of Oregon and the provisions of the 

Clean Air Act require the DEQ to enforce compliance with reasonably available control technology standards at all sources 

of volatile organic compounds for which the EPA has issued a 

control technology guideline. The Clean Air Act states that 

SIPs for nonattainment areas "shall provide for . . . reductions in emissions from existing sources in the area as may 

be obtained through the adoption, at a minimum, of reasonably 

available control technology." 42 U.S.C. § 7502(c)(1). The 

SIP for the State of Oregon is more specific in mandating that 

the DEQ "require reasonably available control technology to 

be applied to all sources of volatile organic compounds for 

which [the] EPA has published control technology guidelines." 

State Implementation Plan for the State of Oregon, p. 45. 

As "the agency responsible for meeting the State's obligations under the Clean Air Act," State of Oregon Air Quality 

Control Program, Vol. 1, p. 3, the DEQ acknowledges its duty 

to require compliance with the SIP-mandated reasonably available control technology standards at all sources of volatile 

organic compounds for which the EPA has issued a control technology guideline. The DEQ also acknowledges that "the SIP and 

the Act require the use of [reasonably available control technology] " at the sources identified in plaintiffs' complaint. 

Defendants' Memorandum in Opposition, p. 10. However, the 

PAGE 31 OPINION 
1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12' 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

DEQ argues that it is not confined to a rigid set of emission 

standards or control technology guidelines in achieving reasonably available control technology requirements since the 

SIP provides for a degree of flexibility in achieving reasonably available control technology. Consequently, the DEQ 

contends that it is "in full compliance with the [reasonably 

available control technology] emission standards through its 

federally approved Plant Site Emission Limits rules, which 

allow sources to achieve [reasonably available control technology] by 'bubbling.-'?' Id. at 12. Plaintiffs, on the other 

hand, contend that 1) a plant site emission limits rule is 

neither the factual nor legal equivalent of reasonably available control technology; and 2) the DEQ is substituting compliance with a plant site emission limits rule for compliance 

with SIP-mandated reasonably available control technology 

rules in violation of the SIP and the Clean Air Act. 

While agreeing that the DEQ is obligated to require compliance with SIP-mandated reasonably available control technology emission standards, which are in essence the control 

technology guideline for the particular source, 45 Fed. Reg. 

at 42,269; see National Steel Corp. v. Gorsuch. 700 F.2d 314, 

322 (6th Cir. 1983), the parties dispute whether the DEQ has 

required reasonably available control technology at all of 

the sources of volatile organic compounds for which the EPA 

has published a control technology guideline. The DEQ has 

issued at least three permits to sources of volatile organic 

PAGE 32 - OPINION 

AO

 72 

• =ev6'62) 
1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

compounds covered by EPA-approved control technology guidelines, "which exempt the sources from compliance with reasonably available control technology emission standards provided 

that the sources remain in compliance with the rules relating 

.;.&%__._ kS_.a_.a_ a. _. a. ' 0 9XWI 1 —. A "a**—. _-_?"a 

Compliance with a plant site emission limits rule is 

not in fact compliance with the reasonably available control 

technology emission standards at issue in this case. The 

SIP-mandated reasonably available control technology emission 

standards set specific limits on the concentration of volatile 

organic compounds in raw materials used in various manufacturing processes via a formula for pounds of volatile organic 

compound per gallon of raw material used. See O.A.R. 340-22-

170. A plant site emission limits rule, on the other hand, 

controls emissions of volatile organic compounds by placing 

an overall cap on the emissions of volatile organic compounds 

from a plant over a period of time. See O.A.R. 340-20-305(5). 

Plant site emission limits are calculated by multiplying the 

Gunderson and Pacific Coatings are each subject to 

the SIP-mandated reasonably available control technology 

emission limit of 3.5 pounds of volatile organic compounds 

per gallon of coating used. However, each of their permits 

contains an exemption from the reasonably available control 

technology emission limit, provided that their total plant 

site emissions do not exceed annual or daily plant site 

emission limits. Similarly, Continental Can is subject 

to specific SIP-mandated reasonably available control 

technology emission limits, which it is allowed to exceed 

provided that the total emissions from its plant are not 

greater than its rules for monthly or yearly plant site 

emission limits. Parties' Stipulated Statement of Facts, 

pp. 4-8. 

PAGE 33 - OPINION 

AO 72 

r~- r. <• 
1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

plant's average production rate of a particular pollutant 

during'the baseline year (either 1977 or 197S) by the amount 

of emissions of volatile organic compounds allowed by the SIPmandated reasonably available control technology limits. See 

O.A.R. 340-20-310(1). 

An example will serve to illustrate the difference 

between compliance with reasonably available control technology limits and compliance with plant site emission limits. 

If a plant used 1000 gallons of a material containing volatile 

organic compounds in 1977, and the applicable reasonably 

available control technology limits for the material is a 

volatile organic compound concentration of 3.5 pounds per 

gallon, its plant site emission limit would be 3,500 pounds 

of volatile organic compounds. However, if the plant reduced 

its production rate from that of the baseline year so that 

only 500 gallons of the material were used, it could still 

remain in compliance with the plant site emission limits 

rules, despite using a material with a volatile organic compound content of 7 pounds per gallon, while violating the reasonably available control technology limit of 3.5 pounds per 

gallon. Thus, compliance with plant site emission limits does 

not ensure compliance with SIP-mandated reasonably available 

control technology standards. 

Regardless of the factual differences between the two 

emission control strategies, the DEQ argues that "the [plant 

site emission limits] is an EPA-approved means for imposing 

PAGE 34 - OPINION 

AO 
2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12' 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

[reasonably available control technology] standards on sources of"[volatile organic compound] emissions." Defendants' 

Memorandum in Opposition, p. 17 (emphasis in original). The 

EPA approved the plant site emission limits rules of the State 

of Oregon as a SIP revision. 47 Fed. Reg. 35191 (August 13, 

1982). The plant site emission limits rules contained in 

the SIP for the State of Oregon provides that the plant site 

emission limits rules "shall not allow emissions in excess 

of those allowed by any applicable federal or state regulation . . . unless specific provisions of OAR 340-20-315 [the 

"bubble rule"] are met." O.A.R. 340-20-310(6). Compliance 

with reasonably available control technology emission standards is a regulation applicable to sources of volatile 

organic compounds for which the EPA has issued a control 

technology guideline;- thus, if the specific provisions of 

the "bubble rule" are not met, then a permit issued to such 

a source which authorizes emissions in excess of reasonably 

available control technology limits violates the SIP and the 

Clean Air Act despite requiring compliance with the plant 

site emission limits rules. 

The "bubble rule" provides, in pertinent part, that: 

Alternative emission controls may be approved 

for use within a plant site such that specific mass 

emission limit rules are exceeded provided that: 

(2) Net emissions for each pollutant are not 

increased above the Plant Site Emission Limit. 

AO 72 

.°ev8'82) | 

PAGE 35 - OPINION 
P.38 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

(5) Best Available Control Technology (BACT) 

and Lowest Achievable Emission Rate (LAER) where 

required by a previously issued permit and New 

Source Performance Standards (NSPS) and National 

Emission Standards for Hazardous Air Pollutants 

(NESHAP) where required, are not relaxed. 

O.A.R. 340-20-315. The DEQ contends that the "bubble rule" 

prohibits sources of pollutants from exceeding the specific 

SIP-mandated reasonably available control technology emission 

limits for volatile organic compounds in two instances: 1) if 

to allow sources of pollutants to exceed would increase net 

emissions for the particular pollutant above the plant site 

emission limits; and 2) if to allow sources of pollutants to 

exceed would create a relaxation of any of the four standards 

(Best Available Control Technology, Lowest Achievable Emission 

Rate, New Source Performance Standards, and National Emission 

Standards for Hazardous Air Pollutants) named in the rule. 

The DEQ argues that the omission of reasonably available control technology from the above list of emission control strategies allows reasonably available control technology to be 

"bubbled," provided that the "bubble" conforms to the plant 

site emission limits rules. However, the DEQ fails to indicate precisely what "alternative emission control strategy" is 

being used within the plant sites at issue in this case which 

would allow the specific SIP-mandated limit on mass emissions 

to be exceeded. Instead, the DEQ argues that independent compliance with the plant site emission limits rules is enough to 

PAGE 36 - OPINION 

AO 72 
P.39 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

trigger the "bubble rule," thereby permitting the reasonably 

available control technology standards to be relaxed. The DEQ 

states that "sources that meet [plant site emission limits] 

also meet [reasonably available control technology] requirements." De_Cal_._.i't__ ' H__a__!_iii-l__u 111 CppC5_.__.Gii, p. lj . 

The court finds that compliance with a rule for limits 

on plant site emissions is not an "alternative emission control;" rather, compliance with a rule for limits on plant 

site emissions is a condition necessary for approval of the 

use of "alternative emission controls" within a plant site. 

Any other interpretation of the language of the bubble rule 

would render the provision requiring that net emissions not 

be increased above the rules for plant site emission limits, 

O.A.R. 340-20-315(2), superfluous and in violation of the 

settled rule of statutory construction, whereby every word 

in a statute must have some operative effect, if possible. 

United States v. Nordic Village, Inc.. U.S. , 112 S.Ct. 

1011, 1015 (1992). Moreover, as illustrated by the example 

on page 34 of this opinion, a source of pollutants has the 

ability to comply with the rules relating to its plant site 

emission limits without the use of any emission controls by 

reducing its production rate. Thus, it would be a fallacy 

The court declines to explore possible examples of 

"alternative emission controls." It is sufficient for the 

adjudication of this case to note that compliance with the 

rules relating to plant site emission limits is not such an 

example. 

PAGE 37 - OPINION 

AO 72 
P.40 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

to construe compliance with the rules relating to plant site 

emission limits as an "alternative emission control." 

The DEQ next contends that its practice of issuing a 

permit which allows a source of pollutants to "bubble" excess 

or .unused, production capacity to offset exceedences of SIPmandated reasonably available control techology emission 

limits was consistent with a proposed policy of the EPA at 

the time the permits were issued.4 The DEQ cites the 1982 

"Emissions Trading Policy Statement" of the EPA as its authority to issue permits which incorporate "production bubbles." 

However, "production bubbles" that result in a source of pollutants being in compliance with a rule for plant site emission limits absent any "alternative emission controls" are not 

sufficient to exempt a source of pollutants from compliance 

with specific mass emission limit rules of volatile organic 

compounds, such as the rules relating to reasonably available 

control technology contained in a SIP. 

Moreover, the proposed policy statement of the EPA is 

not determinative. It is the SIP itself that creates the 

obligations with which a state must comply. American Lung 

The final "Emissions Trading Policy Statement" of 

the EPA issued in 1986, 51 Fed. Reg. 43814 (Dec. 4, 1986), 

did not favor the "bubbling" of unused or excess production 

capacity. However, the DEQ contends that this policy statement contains unambiguous language which grandfathers all 

"bubbles" existing at the time of its publication. Thus, 

according to the DEQ, the "bubbles" contained in the permits 

it issued before publication of the final policy statement 

of the EPA need only be consistent with the EPA's "production bubble" policy of 1982. 

PAGE 38 - OPINION 

A O 72 

;Rev fl'82) 
P.41 

1 

2 

' 3 

4 

5 

6 

7 

'a 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

Ass'n, 670 F. Supp. at 1291; American Lung Ass'n, 871 F.2d 

at 322r The policy statements of the EPA do not exempt a 

state from complying with the terms of its SIP or the Clean 

Air Act.5 Thus, even if "production bubbling" was acceptable 

under the 1982 "Emissions Trading Policy" of the EPA, this 

does not excuse the DEQ from requiring compliance with the 

SIP-mandated reasonably available control technology emission 

standards. 

Lastly, plaintiffs contend that the DEQ has issued permits to industrial sources which incorporate relaxations of 

existing SIP-mandated reasonably available control technology 

emission standards without proper approval from the EPA of 

these SIP revisions. A SIP revision is not effective until 

it is approved by the EPA. 42 U.S.C. S 7410(a)(3)(A); See 

General Motors Corp. v. United States. 496 U.S. 530, 540 

(1990). The DEQ concedes that it issued permits containing 

unauthorized relaxed emission limits, Parties' Stipulated 

Statement of Facts, pp. 8-10, yet it claims not to be violating the Clean Air Act because 1) at the time the permits were 

issued, the law relating to the effectiveness of unapproved 

Only two methods exist which will relieve a state 

from carrying out the mandates of its SIP. The first method 

is that an EPA-approved revision of its SIP may be obtained 

pursuant to 42 U.S.C. S 7410(a)(3). The second method is 

that a state may postpone implementation of the SIP for not 

more than one year, provided that it meets the stringent 

requirements imposed by 42 U.S.C. S 7410(f). Absent either 

of these methods, a state has only one option, compliance 

with its SIP. Friends of the Earth v. Carev. 535 F.2d 165, 

169 (2d Cir. 1976). 

PAGE 39 - OPINION 

AO 72 

•.Rev 3-821 
1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

SIP revisions was unclear; and 2) the issue is moot since all 

of the-offending permits have been corrected or are no longer 

in use. . 

General Motors did not, as the DEQ contends, create new 

approved SIP is the applicable implementation plan during the 

time a SIP revision proposal is pending." General Motors. 496 

U.S. at 540. The Court cites to a long line of cases, the 

earliest of which pre-dates the issuance of any of the permits 

in question, that stand for the proposition that the existing 

SIP, in its original form, remains controlling until a revision is approved by the EPA. Id. (citing, among other cases, 

Train v. Natural Resource Defense Council, Inc., 421 U.S. 60, 

92, (1975)). Thus, the claim of the DEQ that it lacked clear 

precedent is unsubstantiated. Furthermore, even following the 

General Motors decision, the DEQ failed to correct certain 

permits that contain unapproved revisions.6 

In the previous motion for summary judgment of the DEQ, 

this court held that the case should not be declared moot as 

6 Pacific Coatings is governed by a SIP provision 

which limits the emissions of volatile organic compounds to 

3.5 pounds per gallon for air dried coating of miscellaneous 

products and metal parts. The permit of Pacific Coatings 

reflected this SIP-mandated emission limit until the DEQ 

revised its permit allowing it to emit 6.2 pounds of volatile organic compounds per gallon. This revision was never 

approved by the EPA. Pacific Coatings ceased its operations 

in mid-1991, and all equipment which emitted volatile organic compounds was removed from the facility; however, the 

DEQ has not amended its permit, which remains in effect. 

Parties' Stipulated Statement of Facts, pp. 9-10. 

PAGE 40 - OPINION 

AO 72 

ao.., O<PO\ 
1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

to those permits which the DEQ has amended in accordance with 

the SIP. Oregon Envtl. Council, 775 F. Supp. at 364*. The DEQ 

has not alleged that the facts have changed since the filing 

of its prior motion for summary judgment; therefore, the court 

declines the invitation of the DEQ to reconsider its ruling on 

the previous motion of the DEQ for summary judgment. 

Finally, while none of the permits are now in use7, the 

claim is not moot since plaintiffs seek prospective relief 

in that they wish to bar similar future actions of the DEQ. 

See Presbyterian Church v. United States. 870 F.2d 518, 528 

(9th Cir. 1989) ("burden of demonstrating mootness is a heavy 

one and mootness will not be found if the underlying dispute 

between the parties is capable of repetition, yet evading 

review") (citation and internal quotations omitted). 

In summary, the DEQ has issued permits to sources of 

volatile organic compounds covered by control technology 

guidelines issued by the EPA which 1) allow non-compliance 

with SIP-mandated reasonably available control technology 

emission limits; and 2) fail to require the use of "alternative emission controls" within the given plant site. The 

DEQ has, therefore, violated both the SIP for the State of 

Oregon and the Clean Air Act. 

The permits held by Silgan Containers and Continental 

Can have been amended in accordance with the approved SIP. 

The permit held by Pacific Coatings has not been amended so 

as to comply with the approved SIP, but the company has terminated its operations. 

PAGE 41 - OPINION 

AO 72 

•Rev 8/82) 
1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

C. New Source Review 

The Amendments to the Clean Air AC_ enacted in 1977 

required that states with nonattainment areas must amend their' 

SIPs to provide for new source review. 42 U.S.C. S 7502(b) 

(6). It is uncontested that the SIP for the State of Oregon 

prohibits the construction of a major source of air contaminants or the major modification of a source of air contaminants without having first satisfied new source review rules. 

O.A.R. 340-20-220 through 276. Under the new source review 

rules, major new sources of air contaminants or major modifications of existing sources of air contaminants must meet 

the requirements listed in O.A.R. 340-20-240, including the 

following: 

(1) Lowest Achievable Emission Rate. The 

owner or operator of the proposed major source or 

major modification must demonstrate that the source 

or modification will comply with the lowest achievable emission rate (LAER) for each nonattainment 

pollutant. . . . 

(3) Growth Increment or Offsets. The owner 

or operator of the proposed major source or major 

modification must demonstrate that the source or 

modification will comply with any established emissions growth increment for the particular area in 

which the source is located or must provide emission reductions ("offsets") as specified by these 

rules. . . . 

• • • • 

(5) Alternative Analysis: 

(a) An alternative analysis must be conducted 

for new major sources or major modifications of 

AO 72 

•^ev 6'82) 

PAGE 42 - OPINION 
2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

sources emitting volatile organic compounds or 

carbon monoxide locating in nonattainment areas;.. 

(b) This analysis must include an evaluation 

of alternative sites, sizes, production processes, 

and environmental control techniques for such proposed source or modification which demonstrates 

that benefits of the proposed source or modification significantly outweigh the environmental and 

social costs imposed as a result of its location, 

construction or modification. 

These new source review requirements must be satisfied 

prior to the beginning of construction through a formal, public review process. O.A.R. 340-20-220(1). An applicant for 

a permit in the State of Oregon must first submit all relevant 

information concerning the construction or modification of a 

major source of air contaminants. O.A.R. 340-20-230(1). The 

DEQ is then obligated under the SIP to take the following 

steps: 1) to notify the public, local officials and the EPA 

of the permit application; 2) to make all relevant information 

available for public review; 3) to provide for public hearings 

if requested; 4) to consider all written comments; and 5) to 

formulate a written determination of whether the applicant 

meets all applicable new source review requirements. O.A.R. 

340-20-230(3), 235. The DEQ may not issue a permit to a major 

new or modified source of volatile organic compounds in the 

Portland nonattainment area without complying with the preconstruction review process. O.A.R. 340-20-230(3)(G). 

Plaintiffs contend that the DEQ granted to the SSBO at 

Precision Castparts, to the Port of Portland Ship Repair Dock, 

and to Tektronix the right to operate major new or modified 

PAGE 43 - OPINION 

AO 72 

Pev 6/82) 
2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

sources of volatile organic compounds without requiring them 

to comply with the rules mandated by the SIP for review of 

major new or modified sources of volatile organic compounds. 

Plaintiffs also contend that the DEQ has breached its duty 

-i.-. I _11_ _._ — w—'—.w^ . _._.__ _w_taau-lt____U U a—'-. -U_IU_xail_ C »»_.«. 

«- «. a. _ 

. 1.11 cite 

new source review requirements and to make that documentation 

available for public review. 

The DEQ contends that no violation of new source review 

rules has occurred, either because the necessity for new 

source review was never triggered, or if it was triggered, 

because the DEQ took appropriate action. 

1. Precision Castparts 

It is undisputed that the permit issued to Precision 

Castparts for its SSBO does not comply with either the lowest 

achievable emissions rate, growth increments or offsets, or 

alternative analysis requirements set forth in O.A.R. 340-20-

240(1), (3)/ (5). The DEQ, however, contends that the SSBO of 

Precision Castparts was not a "major modification" requiring 

new source review. 

For purposes of the new source review rules, a "major 

modification" is: 

any physical change or change of operation of 

a source that would result in a net significant 

emission rate increase . . . for any pollutant 

subject to regulation under the Clean Air Act. 

This criteria also applies to any pollutants not 

previously emitted by the source. Calculations 

of net emission increases must take into account 

all accumulated increases and decreases in actual 

emissions occurring at the source since [the 

PAGE 44 - OPINION 

AO 72 

O,-. O/O" 
2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

baseline year, either] January 1, 1978, or . . . 

the time of the last construction approval issued 

for the source pursuant to the New Source Review 

Regulations for that pollutant, whichever time is 

more recent. If accumulation of emission increases 

results in a net significant emission rate increase, 

the modification causing such increases become subject to the New Source Review requirements including 

the. retrofit of required controls. 

O.A.R. 340-20-225(15). A "significant emission rate" for 

volatile organic compounds is 40 tons per year. Jd. Thus, 

any physical or operational alteration of a source of pollutants which results in a net increase in emissions of volatile 

organic compounds of 40 tons per year over its actual emissions since the baseline year is a "major modification" triggering the new source review requirements. Id. 

On October 31, 1979, the DEQ issued Precision Castparts 

a permit for construction of the facility housing its SSBO. 

The permit did not provide for the emissions of volatile 

organic compounds. This permit was issued before the final 

approval by the EPA of the new source review regulations of 

the State of Oregon on November 5, 1981. 46 Fed. Reg. 54950 

(1981). Thus, the approval of the DEQ for the construction 

of the facility housing its SSBO was not issued pursuant to 

new source review regulations. Accordingly, the baseline year 

for Precision Castparts is 1978, and the actual emissions of 

volatile organic compounds from its facility housing the SSBO 

in the year prior to the construction of the facility were 

zero. 

On September 15, 1989, Precision Castparts disclosed 

AO 72 

•3ev6.'82) 

PAGE 45 - OPINION 
P.48 

-5^3., 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

that its annual emissions of volatile organic compounds were 

approximately 303 tons, thereby exceeding the net increase 

of 40 tons per year that defines a "major modification." 

Consequently, Precision Castparts was subject to the new 

source review regulations applicable to major modifications. 

Nevertheless, on August 27, 1990, the DEQ issued Precision 

Castparts a new permit for its SSBO which did not require 

Precision Castparts to demonstrate compliance with the new 

source review requirements. 

The DEQ offers two reasons why the SSBO of Precision 

Castparts was not subject to new source review requirements 

prior to the issuance of the permit in 1990 to Precision 

Castparts. First, the DEQ argues that irrespective of its 

actual emissions of volatile organic compounds at the time 

it was issued the permit, the potential of Precision Castparts 

to emit volatile organic compounds was less than 40 tons per 

year, and this figure is dispositive in determining whether 

the SSBO is a potential "major source" of pollutants or a 

"major modification." The DEQ bases its conclusion that the 

potential of the SSBO to emit volatile organic compounds at 

the time of the issuance of the permit was less than the 

"significant emission rate" for volatile organic compounds 

on the fact that the permit contained a schedule of compliance 

requiring Precision Castparts to limit its annual emissions 

rate of volatile organic compounds to 39.9 tons within 460 

days of issuance. The compliance schedule specifically 

PAGE 46 - OPINION 

AO 72 
•«_..-

P.49 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

requires Precision Castparts to add certain equipment for 

emissions control in order to reduce emissions of volatile 

organic compounds to the appropriate level, and according 

to the DEQ, "the phrase 'potential to emit' includes air 

pollution control equipment." r»f<i-Ha-to' M°!_o_"_nd!___ in 

Opposition, p. 43 (citing O.A.R. 340-20-225(19)). 

Regardless of whether the DEQ has appropriately defined 

the phrase "potential to emit" within the meaning of the SIP 

for the State of Oregon , the DEQ has neglected the language 

of the SIP by defining a "major modification" in terms of 

"potential to emit" and not in terms of "actual emissions." 

The new source review regulations are triggered by major 

modifications when net emissions, which are calculated by 

accounting for "all accumulated increases and decreases in 

actual emissions occurring at the source since January 1, 

1978," result in a "net significant emission rate increase." 

O.A.R. 340-20-225(15) (emphasis added). The DEQ disregarded 

the "actual emissions" of the SSBO of Precision Castparts in 

determining that emissions of volatile organic compounds from 

the source would not rise above the "significant emission 

rate." The determination of the DEQ is, therefore, flawed. 

The SIP of the State of Oregon defines "potential 

to emit" as "the maximum capacity of a source to emit a pollutant under its physical and operational design." O.A.R. 

340-20-225(22).Pollution control equipment that is to 

be added to a source is arguably not part of the source's 

"physical and operational design." Thus, it may be incorrect to account for any control equipment not currently in 

place when determining a source's "potential to emit." 

PAGE 47 - OPINION 

AO 72 

iPev 6'S2) 
1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

A source's potential to emit volatile organic compounds may 

not be-used to excuse a source from new source review rules 

if its actual emissions so require, see United States v. 

Louisiana-Pacific Corp.. 682 F. Supp. 1122, 1133 (D. Colo. 

198?^,- and it is nnoontested thai- i-he actual emissions of 

volatile organic compounds from the SSBO of Precision Castparts exceeds the 40-ton per year emission rate increase that 

requires compliance with the new source review rules. 

The second contention of the DEQ is that the permit originally issued to Precision Castparts by the EPA was issued 

prior to the approval of the new source review program of the 

State of Oregon, thereby exempting Precision Castparts from 

the new source review regulations of the State of Oregon. 

Although the DEQ had no federally-enforceable new source 

review rules when it' issued the original permit to Precision 

Castparts, such rules were in existence and were federallyenforcable in 1990 when the DEQ issued a new permit to Precision Castparts for its SSBO. 

The court finds that the DEQ violated the SIP for the 

State of Oregon and the Clean Air Act by issuing Precision 

Castparts a permit in 1990 that failed to require Precision 

Castparts to demonstrate its compliance with the lowest 

achievable emission rate and offset requirements or to submit an alternatives analysis as described in the new source 

review regulations. 

/// 

AO 72 

PAGE 48 - OPINION 
P.51 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

2. Tektronix 

Plaintiffs next contend that the DEQ allowed Tektronix 

to increase its emissions of volatile organic compounds by 

140 tons per year above the baseline levels without requiring 

Tektronix to comply with

 new source review requirements. ThcDEQ contends that 1) this issue is moot; 2) no major modification was authorized; and 3) even if a major modification was 

authorized, the lowest achievable emission rate was required. 

On November 12, 1985, the DEQ issued to Tektronix a modification to an existing "minimal source" permit thereby allowing Tektronix an annual increase of 140 tons in emissions of 

volatile organic compounds above its baseline rate. Although 

authorized by the modification to increase its emissions of 

volatile organic compounds by 140 tons, Tektronix never did 

so. Consequently, when the minimal source permit came up for 

renewal in 1990, the DEQ exercised its power under Condition 8 

of the minimal source permit to reclaim the increase of 140 

tons that it had allocated to Tektronix. Additionally, the 

DEQ issued a new permit on November 13, 1991, which returned 

limits on the emissions of volatile organic compounds to the 

baseline level. In light of the new permit of November 13, 

1991, the DEQ contends that "even if the permit originally 

was issued inappropriately, the issue is moot." Defendants' 

Memorandum in Opposition, p. 52. 

In order to render an action under the Clean Air Act 

moot, [t]he defendant must demonstrate that it is 'absolutely 

PAGE 49 - OPINION 

AO 72 

•3ev8'82) 
1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

clear that the allegedly wrongful behavior could not reasonably be expected to recur.'" Gwaltnev of Smithfield. Ltd. v. 

Chesapeake Bav Found.. Inc.. 484 U.S. 49, 66 (1987) (quoting 

United States v. Phosphate Export Ass'n. 393 U.S. 199, 203 

(1968,. (emohasis in Gwaltnev.. Thus, defendants mav not 

% ##«'- — 1 — • — . mm 

evade sanctions under the doctrine of mootness "by predictable 'protestations of repentance and reform.'" Gwaltney, 

484 U.S. at 67 (quoting United States v. Oregon State Medical 

Soc'v. 343 U.S. 326, 333 (1952)). The DEQ maintains that 

it was justified in issuing the modification to the existing 

"minimal source" permit, thereby allowing an increase in 

the emissions of volatile organic compounds, the "allegedly 

wrongful behavior." The fact that the DEQ believes it was 

justified in issuing the modification to the existing "minimal 

source" permit is evidence indicating that the conduct of the 

defendants will recur, and therefore this claim is not moot. 

The DEQ next contends that the sanctioned increase in 

emissions of volatile organic compounds by Tektronix was not 

a "major modification" requiring new source review. The DEQ 

points out that "[t]here were no physical modifications or 

operational changes at Tektronix resulting in a net increase 

of more than 40 tons above the baseline level." Defendants' 

Memorandum in Opposition, p. 50. The SIP for the State of 

Oregon defines a "major modification" as "any physical change 

or change of operation of a source [of pollutants] that would 

result in a net significant emission rate increase." O.A.R. 

PAGE 50 - OPINION 

iO 72 

=ev 8'S2) 
2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

340-20-225(15) (emphasis added). Therefore, a "major modification" under the SIP need not actually result in a "net 

significant emission rate increase;" rather, a physical or 

operational change with the potential to result in a net significant emission rate increase constitutes * "m»jor modification. " 

The DEQ asserts that the modification of the permit in 

1985 only authorized increases in emissions of volatile organic compounds resulting from increases in production, thereby 

not meeting the definition of "major modification" under the 

SIP, which requires a physical change or a change in operation. However, the permit, after being modified, granted to 

Tektronix the right to increase its emissions of volatile 

organic compounds by 140 tons, without limiting the manner in 

which such increases in emissions might arise. Tektronix was 

not prohibited from making physical or operational changes. 

Moreover, the DEQ itself has referred to the permit 

modification granted to Tektronix in 1985 as a "major modification" within the meaning of the SIP. The DEQ responded 

to the letter of plaintiffs when they gave notice of their 

intent to file suit by stating that "the modifications [at 

Tektronix] were treated as 'major modifications' under the 

rule and were subject to the new source requirements. The 

emissions increase was permitted in accordance with the new 

source review rules." Exhibit E of Parties' Joint Exhibits, 

p. 6. Thus, the DEQ is estopped to argue now that the 

A O 72 

'<5ev 8/82) 

PAGE 51 - OPINION 
P.54 

1 

2 

3 

4 

5 

6 

7 

.8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

increase in emissions of volatile organic compounds at 

Tektronix was not a "major modification1 subject to the new 

source review requirements. 

Finally, the DEQ contends that any "major modification" 

uutatCiiZcd puz-Uuut• tu _.ii_ penult uOui_xi;<_L_uri ui 13o5'iias 

satisfied the new source review requirements. However, the 

DEQ has failed to provide sufficient evidence to support its 

claim. The DEQ has presented no documentary evidence to 

show that it conducted an alternatives analysis or required 

Tektronix to submit one as mandated by O.A.R. 340-20-240(5). 

The new source review rules contained in the SIP for the State 

of Oregon are requirements, and the failure to comply with 

those rules is a violation of the SIP for the State of Oregon 

and the Clean Air Act. 

3. Port of Portland 

Plaintiffs contend that the DEQ issued a permit to 

the Port of Portland on June 9, 1986 authorizing an annual 

increase in the emissions of volatile organic compounds of 

228 tons over the baseline levels, without requiring the 

Port of Portland to demonstrate compliance with new source 

review rules. The DEQ contends that 1) the construction 

giving rise to the increased emissions of volatile organic 

compounds occurred before the State of Oregon had a federallyenforceable new source review program; 2) the requirements 

of the new source review program only apply to applicants 

for permits to construct a major new or modified source 

PAGE 52 - OPINION 

AO 72 
P.55 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

of volatile organic compounds; and 3) even if the Port of 

Portland was subject to the requirements of the new source 

review program in 1986, compliance with those requirements 

would have been futile. 

As the court found with respect to Precision Castparts. 

the relevant time for determining the enforceability of the 

new source review requirements is not the time of the construction of the source of emissions of the volatile organic 

compounds. The relevant time is the time when the permit 

to construct the source of emissions of the volatile organic 

compounds is issued. On June 9, 1986, the DEQ issued to the 

Port of Portland a permit incorporating emissions of volatile 

organic compounds from the fourth dry dock, which was an 

unpermitted construction in 1979, and at this time the State 

of Oregon had federally-enforceable new source review rules. 

Similarly, the claim of the DEQ that the Port of Portland 

is exempt from the new source review requirements because the 

fourth dry dock had been constructed at the time when the permit application was submitted is meritless. The DEQ argues 

that "the New Source Review requirements are ore-construction 

requirements [and more specifically that] [t]here is nothing 

in the rules to suggest that an alternative analysis should 

be conducted after construction." Defendants' Memorandum in 

Opposition, p. 54. The only support for the position of the 

DEQ is the phrasiology found at page 40 of Plaintiffs' Memorandum in Support of Motion for Partial Summary Judgment, 

PAGE 53 - OPINION 

AO 72 

(Rev 8/82) 
2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

whereby "pre-construction review" is the label plaintiffs 

bestow upon the SIP-mandated process designed to ensure compliance with the new source review requirements. However, 

a label cannot compel an interpretation different from the 

exrjres — J s 1 anmiaa e o f .-he SIP . J _ — _ — — 

The SIP imposes without exception the new source review 

requirements on all "[n]ew major sources and major modifications which are located in designated nonattainment areas." 

O.A.R. 340-20-240(1). The DEQ concedes that the construction 

of the fourth dry dock was a "major modification" within the 

meaning of the SIP. Parties' Stipulated Statement of Facts, 

p. 16. The SIP does not exempt a source of pollutants from 

the new source review requirements simply because the "major 

modification" was constructed prior to the issuance of a 

requisite permit. 

Moreover, if such an exemption were allowed, a windfall 

would be created for those major new or modified sources that 

disregarded the SIP-mandated requirements. The SIP provides, 

in pertinent part, that "[n]o owner or operator shall begin 

construction of a major source or a major modification of an 

air contaminant source without having received an Air Contaminant Discharge Permit from the Department of Environmental 

Quality and having satisfied [new source review requirements]." O.A.R. 340-20-220(1). If the court was to accept 

the argument of the DEQ, an air contaminant source which 

neglected the requirements under O.A.R. 340-20-220(1) would 

AO 72 

PAGE 54 - OPINION 
4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

escape the exemptionless new source review requirements contained-in O.A.R. 340-20-240. The State of Oregon could not 

have intended to create such a loophole for industrial sources 

of pollutants to avoid compliance with its SIP. 

Additionally, ir. ths SIP-itccif, the Stats of Oregon 

acknowledges that compliance with new source review requirements is a requirement for existing constructions that meet 

the definition of "major modifications." O.A.R. 340-20-

225(15) provides that all "major modifications" are "subject 

to the New Source Review requirements including the retrofit 

of required controls." That the retrofitting of controls 

is among the new source review requirements indicates that 

these requirements apply to air contaminant sources already 

constructed. 

Lastly, the DEQ contends that even if the construction of 

the fourth dry dock was subject to new source review requirements, its failure to require post-construction compliance 

with the new source review rules is excusable since it would 

have been futile to require compliance with these rules. The 

DEQ focuses on the futility of the alternatives analysis and 

outlines why no alternatives exist for each of the SIP-mandated areas of evaluation — source site, size, production 

processes, and environmental control techniques. However, 

the DEQ'8 post hoc analysis is not a proper substitute for 

an alternatives analysis conducted prior to the issuance of a 

permit. Furthermore, the DEQ's post hoc alternatives analysis 

AC 72 

ifev S-82) 

PAGE 55 - OPINION 
1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

is flawed since many of the findings of futility are premised 

on the-fact that the fourth dry dock had already been constructed. If this court was to accept post hoc findings of 

futility, it would create an incentive, whereby exemption from 

iiew source review requirements becomes feasible provided that 

air contaminant sources commence major construction projects 

without applying for mandatory permits. Such a result is contrary to the SIP for the State of Oregon and the Clean Air Act 

which provide, without exception, for the application of new 

source review to those sources which trigger it. 

The SIP for the State of Oregon requires that an air contaminant source subject to new source review must demonstrate 

compliance with each of the requirements before receiving a 

permit to construct anew or modify. O.A.R. 340-20-220(1). 

The construction of the fourth dry dock was a "major modification" subject to new source review; thus, the alternatives 

analysis should have occurred prior to the time the DEQ 

granted the permit in 1986. 

Though the DEQ claims to have required the lowest 

achievable emission rate at the Port of Portland, it neither 

required the Port of Portland to demonstrate compliance 

with the growth increment requirement, nor did it conduct 

or require the Port of Portland to conduct an alternatives 

analysis before issuing to the Port of Portland a permit for 

a "major modification." Thus, the DEQ has violated the SIP 

for the State of Oregon and the Clean Air Act. 

PAGE 56 - OPINION 

AO 72 
P.59 

1 

2 

3 

.4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

D. Highest and Best Practicable Treatment and Control 

The third contention of plaintiffs is that the DEQ failed 

to provide for the "highest and best practicable treatment and 

control" in all cases involving emissions of volatile organic 

coiiipouii-la in tilts Portland nonattainmerit area. Sp—___ic_iiiy, 

plaintiffs argue that the DEQ has failed 1) to require compliance with reasonably available control technology emission 

standards and limitations; 2) to define and enforce reasonably 

available control technology emission standards and limitations for manufacturing processes for which the EPA has not 

published control technology guidelines; 3) to enforce new 

source review rules; and 4) to require state of the art controls at non-major new or non-major modified sources of volatile organic compounds. 

The DEQ contends that 1) the standard of the "highest and 

best practicable treatment and control" is not an enforceable 

emission standard under the SIP; and 2) even if the standard 

of the "highest and best practicable treatment and control" is 

an enforceable emission standard under the SIP, that standard 

has been fully implemented since a) reasonably available control technology is required at all major sources of volatile 

organic compounds for which the ETA has published control 

technology guidelines; b) the SIP does not require reasonably 

available control technology at sources of volatile organic 

compounds not covered by EPA-approved control technology 

guidelines; c) new source review requirements have been 

PAGE 57 - OPINION 

AO 72 
1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

enforced; and d) state of the art controls are required at 

non-major new sources of volatile organic compounds and nonmajor modifications of existing sources of volatile organic 

compounds. 

—al • . .. _ _. _. _ a ._ . * . „ J _._.__ . _ _ _ ^ - ^ J __ J_*a _ _,.£_ _ _ -C 

X'UXO _;(_!__._. iictct _.<_ _.-:-.--_.ii_-L cua u ail a__c^c u v_._/_.<_—xun _ _ 

the "highest and best practicable treatment and control" rule 

is sufficient to establish the subject matter jurisdiction of 

this court since the "highest and best practicable treatment 

and control" rule meets the definition of an emission standard 

or limitation under the Clean Air Act. Oregon Envtl. Council, 

775 F. Supp. at 361-62. Accordingly, the DEQ is foreclosed 

from relitigating this issue. 

That the "highest and best practicable treatment and control" rule is an enforceable emission standard has been decided; however, the parties disagree on the level of control of 

emissions required by O.A.R. 340-20-001. Plaintiffs argue 

that "[a]t a minimum, the 'highest and best practicable treatment and control' standard requires the use of 'reasonably 

available control technology' at [all] existing sources [of 

volatile organic compounds in the Portland nonattainment area, 

and] . . . [i]t is undisputed that [the] DEQ has failed to 

require that all major sources of [volatile organic compounds] 

in Portland comply with [reasonably available control technology] . " Plaintiffs' Reply Memorandum, pp. 39-40 (emphasis 

in original). 

On the other hand, the DEQ contends that 1) it has 

PAGE 58 - OPINION 

AO 72 
. , 

P.61 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

required reasonably available control technology at all existing sources of volatile organic compounds covered by an EPAissued control technology guideline; and 2) the rule requiring 

the highest and best practicable treatment and control does 

not require that reasonably available control technology be 

employed at sources not covered by an EPA-issued control technology guideline. 

The court has heretofore determined that the DEQ did not 

require compliance with reasonably available control technology standards at all sources of volatile organic compounds 

for which the EPA has published a control technology guideline. Thus, the DEQ has violated the SIP for the State of 

Oregon and the Clean Air Act by failing to require compliance 

with O.A.R. 340-20-001, which mandates the application of 

reasonably available control technology at these sources. 

The court is not compelled to address whether the emission controls required by O.A.R. 340-20-001 are applicable to 

an air contaminant source for which the EPA has not published 

a control technology guideline. Similarly, the court is not 

compelled to address claims that the DEQ has not enforced new 

source review rules and failed to require state of the art 

controls at all new or modified sources. 

E. Plant Site Emission Limits 

The final contention of plaintiffs is that the DEQ failed 

to provide for and enforce short-term plant site emission 

limits on emissions of volatile organic compounds as required 

PAGE 59 - OPINION 

AO 7; 
2 

3 

4 

... .5. 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15. 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

by the SIP. A plant site emission limit imposes a cap on 

emissions over a period of time, and the SIP mandates that 

"[plant site emission limits] shall be established on at least 

an annual emission basis and a short term period emission 

a_ab_3 ciic-L. i s COiupc.cl_Jxe wlt.ii suuiC c Optsla-iCii ciii\_ ___ vj__.iity 

standards." O.A.R. 340-20-310(2). 

The EPA has set the national ambient air quality standard for ozone at 0.12 parts per million. This standard is 

attained when the "expected number of days per calender year 

with maximum hourly average concentrations above 0.12 part per 

million .. . is equal to or less than 1." 40 C.F.R. S 50.9 

(1988). Plaintiffs argue that the SIP contemplates hourly 

plant site emission limits for sources of ozone, since the 

short-term period is to be compatible with air quality standards. Plaintiffs contend that the DEQ has failed to comply 

with the SIP by not establishing hourly plant site emission 

limits for sources of ozone. 

The DEQ does not dispute that the SIP requires the establishment and the enforcement of short-term plant site emission limits; however, the parties disagree on the duration of 

term and the means by which sources of pollutants may demonstrate compliance with these limits. 

Initially, the position of the DEQ was that compliance 

with hourly or daily plant site emission limits would be 

demonstrated by dividing the plant's total annual emissions 

of volatile organic compounds by the number of hours or days 

PAGE 60 - OPINION 

AO 72 
•«_..• 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

the plant was in operation in that year. The DEQ later acknowledged that this method of computation provided no means 

to detect if a source was exceeding its short-term emission 

limits. Accordingly, the DEQ amended the permits held by 

several sources tc req-irs the -ccraitcrir.g ar.d ths reportiny 

of short-term emissions. Plaintiffs no longer consider these 

sources to be in violation of the SIP. However, plaintiffs 

contend that the DEQ remains in violation of the SIP and the 

Clean Air Act, since all of the permits issued to sources of 

volatile organic compounds in the Portland nonattainment area 

have not been amended "to require compliance with or allow for 

the enforcement of short-term [plant site emission limits]." 

Plaintiffs' Reply Memorandum, p. 52. Specifically, plaintiffs 

argue that the DEQ has not imposed monitoring and reporting 

requirements on plants operated by Intel and Tektronix. 

The DEQ contends that the SIP does not require compliance with a short-term plant site emission limit — an hourly 

or daily limit — at the Intel and Tektronix plants, since 

such compliance would be incompatible with source operations. 

Specifically, the DEQ asserts that "[f]or these sources, 

annual (plant site emission limits] may be the only standards 

compatible with their large and complex source operations 

[and] [n]o meaningful method of measuring emissions from 

such sources on an hourly or daily basis has been discovered." 

Defendants' Memorandum in Opposition, p. 70. 

Plaintiffs agree that compatibility with the operation 

PAGE 61 OPINION 

AO 72 
1 

2 

3 

4 

r 

_ 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

of the source is a prerequiste for imposing a short-term plant 

site emission limit on a particular source. Plaintiffs also 

concede that the "DEQ offers a plausible explanation . . . for 

why the SIP may not require compliance with a daily [plant 

site emission limit] at Tektronix and Intel." Plaintiffs' 

Reply Memorandum, p. 52. Although both plaintiffs and the DEQ 

state that short-term plant site emission limits mav not be 

required at these sources, neither party disputes that final 

resolution of this issue requires additional analysis of the 

operation at these sources. Since additional analysis is 

required, this issue is not ripe for summary adjudication. 

Plaintiffs next contend that the DEQ has failed to 

require compliance with short-term plant site emission limits 

at three sources of volatile organic compounds in the Portland 

nonattainment area: Continental Can, the Port of Portland, 

and Pacific Coatings. It is undisputed that the DEQ has not 

established a daily plant site emission limit at Continental 

Can. Rather, the DEQ has instituted a monthly plant site 

emission limit, which applies only during the summer season. 

It is further undisputed that the DEQ has not amended the 

permits held by the Port of Portland and Pacific Coatings to 

require monitoring and reporting of daily emissions. Parties' 

Stipulated Statement of Facts, pp. 19-20. 

The DEQ argues that "allowing a limited number of sources 

to determine their short-term [plant site emission limit] is 

a perfectly legitimate construction of the rule which allows 

PAGE.62 - OPINION 
• ,' • -

« « - •> 

«_*,- • 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

[plant site emission limits] to be set as 'compatible^ with 

source"operation.'" Defendants' Memorandum in Opposition, 

p. 73. However, unlike the situations at Tektronix and 

Intel, the DEQ does not claim that operations at the Port 

of Fox'-i-Liui ale so'complex'that a short-term plant site emission limit — hourly or daily — is inappropriate. Instead, 

the DEQ indicates that an analysis of short-term reporting 

possibilities at the Port of Portland will occur during the 

implementation of the miscellaneous 100-ton source [reasonably available control technology] rules adopted by the 

Environmental Quality Commission on May 15, 1991. Parties' 

Stipulated Statement of Facts, p. 20. Similarly, the DEQ 

does not contend that a short-term plant site emission limit 

is incompatible with operations at Pacific Coatings.9 

The DEQ, as the agency responsible for enforcing the SIP 

for the State of Oregon, must ensure that short-term plant 

site emission limits are not exceeded, so long as such limits 

are compatible with source operations and air quality standards. O.A.R. 340-20-310(2). However, the DEQ has acknowledged that, absent short-term monitoring or reporting of 

emissions, it is incapable of determining if short-term plant 

site emission limits are being exceeded. Moreover, the DEQ 

Operations at Pacific Coatings ceased in 1991, but 

its permit remains in effect. The parties dispute whether 

the closure of the Pacific Coatings plant moots the issue 

regarding its permit. The court agrees with plaintiffs that 

this issue is not moot, since plaintiffs are seeking prospective relief. 

PAGE 63 - OPINION 

AO 72 
1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

14 

15 

16 

17 

18 

19 

20 

21 

22 

23 

24 

25 

26 

has made no showing that compliance with short-term plant 

site emission limits is incompatible with the operations at 

Continental Can, the Port of Portland, or Pacific Coatings. 

Thus, the DEQ is violating the SIP and the Clean Air Act 

by 1) failing to require the Port of Portland and Pacific 

Coatings to monitor or report their short-term emissions; 

and 2) by failing to establish an hourly or daily plant site 

emission limit at Continental Can. 

CONCLUSION 

The motion of plaintiffs for partial summary judgment 

(#9) is granted. 

DATED this #Y day of September, 1992. 

HELEN Jr. rov FRYE r / 

United States District Judge 

PAGE 64 - OPINION