Opinion ID: 413378
Heading Depth: 2
Heading Rank: 1

Heading: EPA Denial of Hearings

Text: 139 The position taken by both respondent EPA and petitioners is that the discretion of the EPA Administrator to deny a hearing is the same regardless of the issue involved. EPA stands by its regulations, 40 C.F.R. Secs. 66.23(b), 66.41(a)(2), 66.53(c) (1981), allowing the Administrator to deny a hearing if the petition is unsupported. Petitioners, on the other hand, argue that the Administrator has no discretion to deny a hearing if one is provided for by statute and requested by a source. Although we agree with petitioners that the Administrator has no discretion to deny a hearing if the petition challenges a noncompliance notice or a reassessment by EPA of the penalty or alleges an entitlement to exemptions, we agree with EPA that if a petition by a source for reconsideration of a penalty assessment is unsupported the Administrator may deny a hearing. Because we do not agree completely with either party's contentions, we will treat each regulation separately. 140
141 EPA regulation 40 C.F.R. Sec. 66.41(a)(2) (1981) provides that, if the petition presents no information regarding the issues of whether the source is in violation of applicable legal requirements or is entitled to exemption which, if true, would alter the liability of the source owner or operator, a hearing on the petition may be denied. Petitioners argue that this regulation is inconsistent with section 120(b)(5) which requires the Administrator to provide a hearing on the record if a petition is submitted. EPA argues that the regulation is consistent because as administered, the bare denial of EPA's preliminary findings on assertion would [sic] given agency practice [sic] suffice to put in issue the facts asserted so that a hearing would result. EPA Response to Order Requesting Information Dated June 30, 1982, at 2 (July 9, 1982). The Response goes on to state, however, that the Administrator can request additional information under 40 C.F.R. Sec. 66.41(a)(4) (1981) and that, if the information would not alter the liability of a source, the Administrator can deny the hearing. 142 We agree with the petitioners that EPA's regulation is inconsistent with the statute. The regulation cannot, as EPA claims it can, both allow the Administrator to deny a hearing if no information is presented and require the Administrator to grant a hearing, given agency practice, if no information is presented. The statute clearly states a hearing is required. EPA's regulation does not. Therefore, we remand 40 C.F.R. Sec. 66.41(a)(2) (1981) to the agency and direct EPA to develop a new regulation such that the Administrator is required to grant a hearing if a source files a petition challenging the notice of noncompliance or alleging entitlement to an exemption. 143
144 EPA regulation 40 C.F.R. Sec. 66.53(c) (1981) authorizes the Administrator to deny a hearing [on a petition challenging a penalty reassessment by EPA] to the extent he concludes that the petition of the owner or operator does not present information which, if true, would alter the amount of the penalty. The statute clearly states, however, that the Administrator may readjust a penalty only after notice and opportunity for a hearing on the record. Sec. 120(b)(8). The statute gives EPA no leeway here, and neither can we. The regulation is remanded. 145
146 EPA regulation 40 C.F.R. Sec. 66.23(b) (1981) authorizes a source owner or operator to petition the Administrator to accept a revised penalty calculation but states that [t]he decision to accept the interim calculation or to grant a hearing on this issue shall be solely within the discretion of the Administrator. The statute does not speak to attempts by a source to lighten its penalty load; nor is there evidence that Congress intended such a burdensome hearing requirement. Sources have a right to a hearing when their penalty is assessed or reassessed by EPA. The statute does not entitle them to a second chance. We hold, therefore, that EPA's regulation is reasonable and entirely proper in this instance. 147 Before turning to the other procedural issues involved, we note that petitioners have challenged EPA regulation 40 C.F.R. Sec. 66.4 (1981) which states that issues that could have been raised in this proceeding may not be raised in a petition filed in an individual section 120 proceeding. This regulation tracks the review provisions of section 307(b)(2) which states that: 148 [a]ction of the Administrator with respect to which review could have been obtained under [section 307(b)(1) ] shall not be subject to judicial review in civil or criminal proceedings for enforcement. 149 42 U.S.C. Sec. 7607(b)(2) (Supp. IV 1980). To allow review of the legal requirements in an administrative proceeding under section 120 would allow a source to circumvent the sixty-day time limit for seeking judicial review of section 120 regulations. Sec. 307(b)(1). 20 There is no denial of due process here, as the petitioners are able to and have challenged the validity of the regulations in this proceeding. We hold that regulation 40 C.F.R. Sec. 66.4 (1981), which limits review to this proceeding, is neither arbitrary nor capricious and we therefore affirm it.