Opinion ID: 781047
Heading Depth: 2
Heading Rank: 6

Heading: Draft Permit Case

Text: 75 Next, we consider NYPIRG's contention that the EPA improperly failed to object to the three draft Title V permits issued by the DEC to Yeshiva University, Action Packaging and Kings Plaza. Notwithstanding minor differences in the permits, the EPA's actions with respect to each of the petitions raise the identical issue of statutory construction under § 505(b)(2). NYPIRG contends that under that section, the EPA must object to draft permits if the petitioner demonstrates to the [EPA] that the permit is not in compliance with the requirements of this chapter. 42 U.S.C. § 7661d(b)(2). 9 76 In its response to NYPIRG's petition and on this appeal, the EPA concedes that the draft permits had not complied with certain provisions of Title V and its corresponding regulations. The EPA contends, however, that, even though the three draft permits did not comply with Title V, objections were unnecessary because it was entitled to rely on a harmless error rule and the lack of compliance caused no harm. In responding to NYPIRG's objections to the Kings Plaza permit, for example, the EPA declined to object based upon a deficiency in the public notice procedure, because the deficiency did not hinder [NYPIRG's] ability to request a hearing on this draft permit. 10 Kings Plaza Order at 4. NYPIRG, on the other hand, contends that the CAA does not require a showing of harm and any showing of noncompliance triggers a nondiscretionary duty to object. 77 The EPA attempts to locate its harmless error rule in two places: § 505(b) of the CAA and § 706 of the APA. Because we are unable to find such a rule in either of these locations, we conclude that it does not exist. Focusing on § 505(b)(2), the EPA acknowledges that this subsection imposes a series of obligations, including the requirement that, in response to a petition, the EPA must decide whether the administrative petitioner has demonstrated that `the permit is not in compliance' with the requirements of statutes that the EPA is charged with interpreting, as well as the Agency's own regulations. EPA Brief (02-4077) at 23 (quoting § 505(b)). But because this decision requires the application of agency expertise, the EPA argues the statute affords it discretion to determine the practical consequences of a specific deficiency, including whether the deficiency is harmless. 78 We think, however, that this argument blurs the important distinction between the discretionary part of the statute (whether the petition demonstrates non-compliance) with the nondiscretionary part (if such a demonstration is made, objection must follow). This is not a case in which the EPA remained unconvinced and thus is not a challenge to its exercise of judgment. 11 Since the EPA has conceded that the draft permits were deficient, it is, instead, a challenge to the EPA's failure to take actions resulting from the judgment it made. But those actions are not discretionary ones since § 505(b)(2) specifies that the Administrator shall issue an objection if a demonstration of non-compliance is made. 12 79 The EPA contends that this requirement is modified by a harmless error rule which is an integral part of administrative law, EPA Brief (02-4077) at 24, arising from the APA's command that due account shall be taken of the rule of prejudicial error by federal courts in reviewing agency action. 5 U.S.C. § 706. But the rule of prejudicial error is quite different from the rule of harmless error that the EPA seeks to apply here. The rule of prejudicial error typically eliminates the necessity of remand following judicial review when the error that the agency has made was not prejudicial and did not impinge on fundamental rights. 80 For example, in Waldron v. INS, 17 F.3d 511 (2d Cir.1994)-the case primarily relied upon by the EPA-we affirmed a decision of the Board of Immigration Appeals, which found an alien deportable, although certain technical errors had occurred in the deportation proceedings. Id. at 519. We concluded that the INS has convincingly demonstrated that Waldron is ineligible for relief from deportation and that a remand of this case to the BIA to correct technical errors that did not affect either the outcome or the overall fairness of the proceeding was not required and would be an inappropriate use of limited agency resources. Id.; see also Economic Opportunity Comm'n, Inc. v. Weinberger, 524 F.2d 393, 400 (2d Cir.1975) (rejecting argument that any procedural infirmity results in arbitrary administrative action which must be set aside by a reviewing court). The rule of prejudicial error informs our review of an agency's adherence to its statute and regulations; it has never been used to introduce discretion into actions made mandatory by Congress. 13 81 Finally, we note that the statutory provisions governing the issuance of objections to draft permits differ in crucial respects from those governing the issuance of a NOD. Section 505(b) of the CAA provides a step-by-step procedure by which objections to draft permits may be raised and directs the EPA to grant or deny them, depending on whether non-compliance has been demonstrated. 42 U.S.C. § 7661d(b)(2). Section 502(i), on the other hand, does not compel the EPA to determine whether a permitting authority is adequately administering or enforcing its permitting program, nor does it provide a substantive standard by which this determination is to be made. Moreover, although § 505(b) refers strictly to compliance, § 502(i) refers more broadly to issues of administration and enforcement. These differences further convince us that although the EPA has discretion to determine whether to issue a NOD, it does not have discretion whether to object to draft permits once noncompliance has been demonstrated. We hold, therefore, that once NYPIRG demonstrated to the EPA that the draft permits were not in compliance with the CAA, the EPA was required to object to them. Its failure to do so requires us to vacate its denial of NYPIRG's petitions seeking objections to the draft permits.