Opinion ID: 346899
Heading Depth: 1
Heading Rank: 1

Heading: The Validity of the BPT Limitations Contained in the Permit.

Text: 24 Although the Consent Decree resolved pending litigation initiated under the Refuse Act, it was negotiated in anticipation of the requirements of the FWPCAA. Provision XIV of the Decree contemplated that the Decree would not relieve U.S. Pipe of its obligation to obtain a permit following adoption of the Decree: 25 XIV. This decree is not and shall not be interpreted to be a permit for discharge of matter into navigable waters or their tributaries which may be required by federal or state law, nor shall it in any way affect the company's obligation to secure any such permit. Subsequent to the entry of this decree, a Federal permit will be issued to the company pursuant to the Federal Water Pollution Control Act Amendments of 1972, which permit will, to the fullest extent possible, in view of the requirements of Section 401 (certification) and Section 402(a)(1) (opportunity for public hearing) of the Act, be consistent with the applicable provisions of this decree. United States v. U. S. Pipe & Foundry, CA. No. 71-536-S, N.D. Ala. (1973). 26 By stating that the permit would be consistent with the applicable provisions of the Decree only to the fullest extent possible, in view of the requirements of Section 401 (certification) and Section 402(a)(1) (opportunity for public hearing) of the Act, the parties indicated their understanding that the Decree would not be entirely binding in the permit proceeding. EPA's General Counsel later confirmed the approach expressed by the parties in the Decree. In his response to questions certified by the ALJ, he concluded that the terms of the Decree were binding unless the state certification procedure or 8 the public hearing demonstrated the need for other conditions. 27 It is also apparent from the record that EPA did not consider itself absolutely bound by the terms of the Decree. The agency issued public notice and a fact sheet concerning the proposed permit. Representatives of the State, various environmental organizations and U.S. Pipe participated in the ensuing public hearing. After consideration of the comments, EPA issued the permit to U.S. Pipe, requiring the company to meet the BPT effluent limitations, as established in the Consent Decree, during the period September 1, 1975, through July 1, 1977. Moreover, in response to testimony given at the public hearing, the permit went beyond the terms of the Consent Decree to require more stringent limitations necessary to meet a fish and wildlife water quality standard in Five Mile Creek as required by Section 301(b)(1)(C) of the Act. The permit required the Company to achieve these additional limitations by July 1, 1979. 9 28 Despite this background, the State argues that EPA, by incorporating the effluent limitations of the Consent Decree into the permit, has violated the public hearing requirement of section 402(a)(1). Since no changes were made in the discharge limitations set for the period December 1, 1975, through July 1, 1977, they urge that the numerous objections from members of the public, including the State of Alabama and other petitioning organizations, were ignored by EPA. The State argues further that EPA should have incorporated into the permit the limitations set forth in the Preliminary Guidance Document (Guidance) for the Iron and Steel Industry. Although the regulations were promulgated after the initial issuance of the permit, and after the request for and determination to hold an adjudicatory hearing, the State argues that the Guidance limitations were the best indication of BPT for the U.S. Pipe facility. Since the permit did not become final for purposes of judicial review until the Administrator had acted on the appeal, they argue that EPA was obligated to amend the permit upon issuance of the proposed regulations. This same argument has been rejected by the Administrator, whose Decision stated: 29 As a matter of general policy in the administration of a nationwide permit system, I agree with the arguments put forward by EPA staff counsel and U.S. Pipe that to allow permit limitations and conditions to change according to a floating standard or guideline during the pendency of a permit review proceeding would be highly disruptive and counter-productive. The Act clearly contemplates that NPDES permits will be issued prior to the taking of necessary implementing actions relating to requirements under 301, 302, and other sections of the Act. In such instances, the Act provides that permit conditions will be determined by the Administrator as necessary to carry out the provisions of this Act. I recognize that permit review proceedings may consume many months, during which standards and guidelines for determining permit conditions may change (or take on greater specificity). These changes may mean that if the permit was being initially issued today, the conditions might be either more lenient or more stringent. It is not a one-way street. 30 The Administrator's review (of the Regional Administrator's action) must be based on the record of the proceedings. Although matters contested in an adjudicatory hearing do not become final for purposes of judicial review until the Administrator has acted on an appeal, the Administrator's review of the original action taken by the Regional Administrator should be based on the standards and guidelines in existence at the time the original action was taken, and thus, to that extent, finality must be accorded the original action taken. To conclude otherwise would mean that the Administrator would become the sole and final arbitrator of every permit limitation where a party (EPA included) might want to gamble on the likelihood of an intervening change in the applicable standards or guidelines. Such a result would be inimical in the extreme to the nation's water pollution control program. As a matter of policy, EPA should do its utmost to avoid problems associated with the moving target criticism so often asserted by those subject to the regulatory requirements of this and other government agencies. The standards and guidelines for the preparation of NPDES permits must be fixed at some point in time so permit terms can become final and pollution abatement can proceed. I believe the proper point in time for fixing applicable NPDES standards and guidelines is when the Regional Administrator initially issues a final permit. Decision of the Administrator, A. 178-79. 31 The FWPCA requires that all NPDES permits contain limitations necessary to assure application of BPT by July 1, 1977. Section 301(b)(1)(A). When such regulations are promulgated by the Administrator, they become the basis for permit conditions for facilities within the class or category. Prior to promulgation of such regulations, the Administrator is authorized to include conditions which he determines are necessary to carry out the provisions of the Act: 32 Except as provided in . . ., the Administrator may, after opportunity for public hearing, issue a permit for the discharge of any pollutant, or combination of pollutants . . . upon condition that such discharge will meet either all applicable requirements under sections 301, 302, 306, 307, 308 and 403 of the Act or prior to the taking of necessary implementing actions relating to all such requirements, such conditions as the Administrator determines are necessary to carry out the provisions of this Act. Section 402(a)(1) (emphasis added). 33 In order to determine whether the limitations contained in the permit were in compliance with the BPT requirements of the Act, therefore, the ALJ did not have the benefit of final regulations for the Iron & Steel industry. Nonetheless, he placed considerable weight on a comparison of the limitations contained in the Guidance Document and those specified in the Consent Decree. 10 He determined that in some instances the Consent Decree parameters were more stringent than the Guidance Document and in some instances less stringent. Initial Decision, A. 126. He also noted that the Guidance Document specified no limits whatsoever for many of the parameters covered by the Consent Decree and that, according to one of EPA's witnesses, the permit might well have included none of the limits for these parameters in the absence of the Decree. 11 34 The ALJ, on behalf of the Regional Administrator, also reviewed the testimony of expert witnesses familiar with U.S. Pipe's facilities. The testimony had indicated that the North Birmingham complex consisted of five major manufacturing facilities: a by-product coke plant, a chemical plant, a blast furnace plant, a mineral wool plant and a cast iron pipe plant. Of these, only the coke and blast furnace operations were covered by the Guidance Document. In his decision, the ALJ took into consideration the Guidance Document, where applicable, as well as the testimony of expert witnesses and, based on his review, upheld the numerical limitations in the permit as taken from the Consent Decree. The Administrator again reviewed the record and affirmed the ALJ's Decision. 35 We affirm EPA's conclusion that the appropriate BPT limitations to be applied in a permit are those in effect at the time of initial permit issuance. Permit review proceedings may consume many months during which standards and guidelines might change more than once. Until proposed regulations withstand the rigors of the full administrative process, they are too tentative to govern the actions of regulated companies. Moreover, ongoing proceedings should not be interrupted when proposed regulations become final. A contrary rule would create havoc in EPA's permit development procedures. Thus, it was entirely appropriate for EPA to rely principally upon its own  personalized BPT, as established in the Consent Decree, for the U.S. Pipe facility. 36 We conclude further that U.S. Pipe's permit was issued in full compliance with the public participation requirement of section 402(a)(1). Notice was given and a full public hearing was conducted. It was neither arbitrary nor capricious for EPA to propose for the U.S. Pipe permit the limitations previously established in the Consent Decree. Although the litigation resolved by the Decree was initiated under the Refuse Act, the Decree was entered more than two months after the effective date of the 1972 Amendments to the FWPCA. The analysis, evaluation, and negotiation which culminated in the Decree was based on the knowledge that section 301(b)(1)(A) of the Act required the development of effluent limitations consistent with the achievement of BPT by July 1, 1977. The right of the public to participate in the permit proceeding was not diminished simply because EPA proposed for the permit the limitations established in the Decree. 37 The State argues that the public participation which occurred in the permit proceeding was rendered meaningless because EPA, over strenuous objection from several parties, incorporated into the permit exactly the same limitations contained in the Decree. We disagree. The right of public participation under section 402(a)(1) does not guarantee that a particular result will flow from the administrative process. In deciding on the permit limitations, EPA considered an extensive administrative record, as well as the exhaustive analysis which culminated in the Consent Decree. The agency was required to choose between competing interest and to weigh the testimony of expert witnesses whose conclusions were in conflict. In the exercise of its discretion, the agency decided that the effluent limitations of the Decree were also appropriate for the period specified in the permit. That decision was well within EPA's authority. 38 The State relies on United States v. Rohm & Haas, 500 F.2d 167 (5th Cir. 1974), cert. denied, 420 U.S. 962, 95 S.Ct. 1352, 43 L.Ed.2d 439 (1975), for the proposition that a consent decree resolving Refuse Act litigation cannot be deemed binding in the determination of effluent limitations under the 1972 amendments. In Rohm & Haas, the district court had entered an injunction, prior to adoption of the 1972 FWPCAA, requiring the company to implement comprehensive effluent limitations. On appeal Rohm & Haas sought dissolution of the injunction during the period in which EPA was considering the issuance of an NPDES permit to the company. This court held that the Refuse Act injunction was valid and properly issued, but stressed that it could have no effect beyond the date on which Rohm & Haas was issued an NPDES permit: 39 Because the issue is what an equity court should do pending EPA action, however, the District Court's order must be modified so as not to govern the Company's conduct after a permit had been issued. A polluter discharging wastes in accordance with the terms and conditions of an NPDES permit is not in violation of the Refuse Act. See FWPCAA § 402(a)(4), 33 U.S.C.A. § 1342(a)(4) (Supp.1974). The decree should be effective only as long as Rohm and Haas remains in violation of the Act. In contrast to the regulations implementing the earlier U.S. Army Corps of Engineers Refuse Act Permit Program, the EPA rules governing the National Pollution Discharge Elimination System do not require that the permit include limitations embodied in the resolution of a civil action under the Refuse Act. Compare 33 C.F.R. § 209.131(d)(4) (1973) with 40 C.F.R. §§ 125.11, 21-.24, .42 (1973). (emphasis supplied) 500 F.2d at 175. 40 In any event, the effect of the District Court's decree will not survive the issuance of a permit, which will depend upon the application of FWPCAA standards to Rohm and Haas equally with all other applicants. 500 F.2d at 178. 41 Rohm & Haas is instructive, but in light of several distinguishing factors in this appeal, it is not dispositive of the issues here under consideration. First, EPA did not treat the Consent Decree, as carried out by EPA's Region IV, as completely binding. The Decision of EPA'S General Counsel provided that the Decree was binding only to the extent consistent with the agency's responsibilities under sections 401 and 402(a)(1) of the Act. Since the State waived its right of certification, and adequate public participation was afforded, the Consent Decree merely served as the starting point of the permit proceedings. 42 Second, unlike the court-ordered limitations of the Rohm & Haas injunction, the effluent limitations contained in the U.S. Pipe Consent Decree were negotiated with the intention of complying with the 1972 Amendments. Third, the U.S. Pipe limitations were given an administrative imprimatur of validity, whereas the Rohm & Haas limitations were judicially imposed, as a temporary measure, pending the type of administrative proceeding which has occurred here. 43