Opinion ID: 413378
Heading Depth: 3
Heading Rank: 1

Heading: Sources in Compliance with Consent Decrees

Text: 52 The regulations require noncompliance penalties to be assessed against major stationary sources operating under consent decrees. They explicitly provide that a major source is liable for failures to comply with emission limitations set for that source in the SIP of the state in which the source is located, 40 C.F.R. Sec. 66.3(c)(1) (1981), even though the source has been sued for violation of the limitations in question, the suit has resulted in a consent decree, and the consent decree sets out a schedule for the source to come into compliance with the limitations in exchange for an agreement by EPA not to pursue the civil or criminal penalties set out in the enforcement section of the Act, Sec. 113(c). 53 Industry petitioners concede that the statutory parenthetical (whether or not such source is subject to a Federal or State consent decree), Sec. 120(a)(2)(A)(i), permits assessment of noncompliance penalties against some major sources operating under consent decrees. They contend, however, that such penalties may be assessed only in two kinds of cases: (1) if the source fails to comply with a different emission limitation that was not the subject of the consent decree and (2) if the source fails to comply with the terms of the consent decree itself. Petitioners argue that by assessing penalties against major sources for failure to comply with emission limitations that were themselves the subject of consent decrees, EPA has misinterpreted the statutory parenthetical. In the alternative, they contend that if EPA's interpretation of the statute is correct, the statute interferes with previous court decrees in an unconstitutional manner. 54 EPA rested its decision to permit assessment of noncompliance penalties against major stationary sources operating under consent decrees squarely on its reading of the statutory language. 45 Fed.Reg. 50,086-87 (1980). EPA also pointed out that assessing penalties against sources operating under consent decrees would further the purposes of section 120, for sources out of compliance with emissions limitations derive benefits from their noncompliance regardless of whether they have been subject to consent decrees. Id. at 50,087. 55 We think that EPA's interpretation of the statute is sound. Section 120 distinguishes three categories in which noncompliance penalties are to be assessed. See supra pp. 465-466. The disputed parenthetical language appears in the first of these--major sources failing to comply with any SIP limitations. Reference to consent decrees also appears in the third category, which provides for the assessment of penalties against sources failing to comply with the terms of consent decrees or other interim orders. Industry petitioners' reading of the parenthetical--that it principally indicates that penalties may be assessed against sources failing to comply with their consent decrees--accounts only for the reference to consent decrees in the third category. It would render the parenthetical superfluous, for the third category makes absolutely plain that sources failing to comply with consent decrees may be subject to penalties for that very failure. Thus the function of the initial parenthetical is to make clear that consent decrees do not bar the imposition of penalties against major sources in violation of any emission limitation. 56 The legislative history, although limited, also supports the interpretation of the parenthetical chosen by EPA. Section 120 as originally enacted did not include the disputed parenthetical. See Pub.L. No. 95-95, 91 Stat. 714 (1977). The parenthetical was added as one of a number of technical amendments to the Clean Air Act Amendments of 1977, in the Safe Drinking Water Amendments of 1977, Pub.L. No. 95-190, Sec. 14(a)(28), 91 Stat. 1401. An item-by-item summary of the technical amendments offered to the House explained that the parenthetical 57 [c]larifies that a noncompliance penalty applies to any noncomplying source (which is not exempted) including a source which has received a Federal or State consent decree extending a final compliance date. 58 123 CONG.REC. 36,331 (1977). The universal scope of the explanation--that penalties are to apply to any source, in spite of a consent decree--clearly expresses the understanding of the statute urged by EPA. 10 59 Moreover, EPA's interpretation furthers the statutory purpose of section 120: recouping the economic benefits of noncompliance. The legislative history of section 120 repeatedly emphasizes the goal of removing the benefits derived by sources from delayed compliance with the Act. A source under a consent decree reaps such benefits, although the benefits may be expected to shrink as the source follows the course of compliance set out under the decree. Industry petitioners are surely correct that sources would be encouraged to enter consent decrees if the decrees provided shelter from noncompliance penalties, but it does not follow that Congress meant the decrees to abrogate the penalties. The penalties are intended to provide a swift, even-handed, economic incentive for compliance with the Act's standards, but would not do so if sources could escape the penalty by means of consent decrees. 60 Industry petitioners alternative argument is that if we find EPA's interpretation of the parenthetical sound--as we do--we must find the statute itself constitutionally defective. Full statement of their constitutional concerns requires further description of the enforcement scheme of the Act. 61 The Act empowers EPA to order a major stationary source to comply with any applicable SIP requirement. Sec. 113(a). Should the source fail to comply with EPA's order, EPA may sue in federal district court to enforce the order. Sec. 113(b). EPA's power to enforce the provisions of the Act, moreover, is not exclusive. States are under a duty to enforce their implementation plans. Sec. 113(a)(2). States may bring suit either in federal district court or in state court to enforce any emission limitation, provided only that the limitation is at least as stringent as the state's SIP. Sec. 116, 42 U.S.C. Sec. 7416 (Supp. IV 1980). Citizens, too, are welcome participants in the vindication of environmental interests, Friends of the Earth v. Carey, 535 F.2d 165, 172 (2d Cir.1976), cert. denied, 434 U.S. 902, 98 S.Ct. 296, 54 L.Ed.2d 188 (1977); see also Metropolitan Washington Coalition for Clean Air v. District of Columbia, 511 F.2d 809 (D.C.Cir.1975), and may bring suit in federal district court against any person, including the United States, in violation of any emission standard, Sec. 304(a), 42 U.S.C. Sec. 7604(a) (Supp. IV 1980), unless EPA or the state has brought suit to compel compliance, Sec. 304(b)(1)(B). See Baughman v. Bradford Coal Co., 592 F.2d 215 (3d Cir.1979) (federal district court has jurisdiction of citizen suit to enforce emission limitation despite fact that action by Pennsylvania Department of Environmental Resources is pending before Pennsylvania Environmental Hearing Board, an entity lacking full enforcement powers of federal courts). 62 Suits brought by any of these plaintiffs--EPA, the individual states, or private citizens--may terminate with consent decrees. In the case of a suit brought by EPA or the state, such decrees typically set out a schedule for compliance by the source in settlement of the source's further liability for civil and criminal penalties under the Act for the violations at issue. 11 EPA may intervene as of right in a suit brought by a private citizen, Sec. 304(c), and there, too, the consent decree may settle the source's then-existing liability for civil or criminal penalties under the Act. 63 Consent decrees entered into before the 1977 Amendments to the Act of course do not mention or purport to settle the section 120 noncompliance penalties. Since 1977, consent decrees entered into by states have been required to include notice to the source that it may be assessed noncompliance penalties despite the fact that the decree sets out a schedule for delayed compliance with SIP requirements, Sec. 113(d)(1)(E). 12 In the rulemaking at issue here, EPA announced its intention not to enter into any consent decrees without explicit provision that the source may be required to pay noncompliance penalties unless exempted by EPA. Notice of Proposed Rulemaking, 44 Fed.Reg. 17,315 (1979). Nevertheless, in some cases EPA has continued to enter into consent decrees that neither settle section 120 penalties nor give notice that they may continue to be assessed, 13 so that EPA's present practice is not quite clear. 64 Industry petitioners' principal constitutional complaint is that by assessing a noncompliance penalty against a source subject to a consent decree, EPA interferes with the res judicata effect of the decree, in violation of the separation of powers. Petitioners' position is that EPA, should it wish to assess a penalty, may do so only by petitioning the issuing court for modification of the decree. Although petitioners are correct that consent decrees, like final judgments, do have a res judicata effect, they misconstrue the statutory situation. 65 Congress always has the power to impose a new penalty on continuing activity. Here, under its power to regulate interstate commerce, 14 Congress has imposed a new penalty. As it specifically noted in passing this section, [a]ny orders, payments, sanctions, or other requirements under [section 120] shall be in addition to any other permits, orders, payments, sanctions, or other requirements established under this Act. Sec. 120(f). Thus, when EPA promulgated its regulations, it was not seeking to relitigate, revise, or otherwise overturn a validly entered consent decree; rather, it was merely acting in furtherance of the additional, constitutionally proper, mandate Congress gave it in the 1977 Amendments. 66 Industry petitioners raise two other constitutional objections to the imposition of section 120 penalties on sources operating under consent decrees. Each can be disposed of quickly. First, petitioners argue that imposition of the penalties without a hearing and findings of fact by the initial issuing court would violate a source's right to due process of law. This argument, however, relies on the mistaken assumption that in imposing the section 120 penalties, EPA is unilaterally revising the terms of consent decrees, rather than imposing a new statutory penalty on a continuing violation. Second, petitioners argue that the imposition of section 120 penalties on sources operating under state court consent decrees violates the tenth amendment by interfering with state judicial proceedings. This argument, too, falters because of its mistaken assumption that section 120 permits the revision of decrees setting liability for prior violations. Petitioners do not argue that the penalties per se are invalid intrusions upon state powers. In applying noncompliance penalties to sources operating under consent decrees, Congress has made a permissible choice: to recoup the benefits of noncompliance from sources that continue to fall short of the Act's standards. 15 67