Court Opinion

ID: 8972025
Source: CourtListenerOpinion
Date Created: 2022-11-27 10:35:57.083034+00
Date Added: 2024-06-11T17:10:27.282292
License: Public Domain

BECKER, Circuit Judge,
concurring.
I join in the court’s judgment and in Parts I, II and III-A of its opinion. I do not, however, join in Part III-B. Although I ultimately conclude, as does the majority, that the order in question here is not final and therefore not reviewable in the court of appeals, I believe that the question whether a section 167 cease and desist order is final is far closer than the majority opinion renders it, and I approach the issue quite differently.
I
Where a statute allows for appellate review of agency action, the Supreme Court has held that such jurisdictional provisions should be construed generously, absent clear and convincing evidence of a contrary congressional intent. See Lindahl v. Office of Personnel Management, 470 U.S. 768, 778, 105 S.Ct. 1620, 1626, 84 L.Ed.2d 674 (1985). The question whether a statute precludes judicial review “is determined ‘not only from its express language, but also from the structure of the statutory scheme, its objectives, its legislative history, and the nature of the administrative action involved.’” Id. (citation omitted). *1083Relevant considerations in discerning whether judicial review would likely further the purposes of the statute include the fitness of issues for judicial resolution, the hardship to the parties of deferring judicial review, the extent to which the agency action represents a definitive statement of the agency’s position rather than a tentative view, and the extent to which judicial review will disrupt the regulatory process. See generally Abbott Laboratories v. Gardner, 387 U.S. 136, 149-55, 87 S.Ct. 1507, 1515-19, 18 L.Ed.2d 681 (1967).
The challenged order in this case required the immediate cessation of construction of Solar’s gas turbine facility. It further ordered that Solar certify its compliance with the order within 10 days after its receipt. EPA’s cover letter accompanying the order stated that “[failure to comply with this Order could subject your firm to civil and criminal liabilities pursuant to the Clear Air Act, as amended.” This language has the clear ring of finality to it. Indeed, the majority concedes that the order reflects EPA’s definitive position on the question of Solar Turbine’s compliance with the requirements of PSD, thus satisfying one of the Abbott Laboratories criteria.
The acknowledged linchpin of the majority opinion lies in its conclusion that the order has no adverse legal consequences on Solar Turbines, Maj. Op. at 1081, and that the sole source of sanction against it is the incipient enforcement action. I am not so sure. Pursuant to 40 C.F.R. § 15.31(a) (1988), Solar Turbines may be placed, prior to resolution of the enforcement action, on the EPA’s blacklist, making it ineligible for the award of many federal government contracts. Moreover, section 304, 42 U.S. C. § 7604(a)(1)(B), states that citizens may bring suit against any person who is alleged to be in violation of an order issued by the Administrator; the order would therefore seem to submit Solar Turbines to the possibility of citizen suits, a serious threat to Solar’s economic interests. But even assuming that the majority has the better of the argument as to the order’s absence of adverse legal consequences, we must confront the fact that the Supreme Court has frequently held agency action to be final and reviewable even though no civil or criminal liabilities accrue from the action.
In Harrison v. PPG Industries, Inc., 446 U.S. 578, 100 S.Ct. 1889, 64 L.Ed.2d 525 (1980), for example, the Supreme Court confronted the issue whether the EPA’s informal adjudication that certain boilers constituted a “new source” under section 111 of the Clean Air Act was a final agency action within the meaning of section 307(b). The Fifth Circuit had held that although the informal proceeding had been completed, the court of appeals did not have jurisdiction to review it because of the practical difficulties of direct appellate review in light of the “skeletal” character of the administrative record. See PPG, 587 F.2d 237, 244 (5th Cir.1979). The Supreme Court reversed, holding that “[s]hort of an enforcement action, EPA has rendered its last word on the matter” and that the adjudication fell within the “any other final action” catchall of section 307(b)(1). See 446 U.S. at 586, 100 S.Ct. at 1894; see also 446 U.S. at 603-04, 100 S.Ct. at 1903-1904 (Stevens, J., dissenting) (agreeing with majority that agency action was final). This same reasoning applies in the instant case. As far as I can tell, the EPA’s informal adjudication in PPG had no more legal effect than does the administrative order in this case.
In Frozen Food Express v. United States, 351 U.S. 40, 76 S.Ct. 569, 100 L.Ed. 910 (1956), the Supreme Court held that an order by the Interstate Commerce Commission was subject to judicial review. Justice Harlan argued in dissent that “no administrative or criminal proceeding can be brought for violation of the order itself”; the “order” was simply an announcement that the Commission “interpret[ed] the [Interstate Commerce] Act in a particular way.” 351 U.S. at 45, 47, 76 S.Ct. at 572, 573. The other eight justices did not respond to the no-legal-effect premise of Justice Harlan’s dissent, but nevertheless held that the “order” was reviewable:
The determination by the Commission ... has an immediate and practical impact on carriers.... The “order” of the Commission warns every carrier, who *1084does not have authority from the Commission to transport [certain] commodities, that it does so at the risk of incurring criminal penalties.
361 U.S. at 43-44, 76 S.Ct. at 670-71. Solar Turbines was similarly warned in the section 167 order that it could face civil and criminal penalties if it continued its present course of action. To be sure, the agency action in Frozen Food Express affected more businesses than did the section 167 order in the instant case, but that other businesses were not immediately affected in this case does not lessen the hardship to Solar Turbines in deferring judicial review.1
I understand the majority as distinguishing such cases on the ground that “there is no basis on this record to find that Solar Turbines is currently facing a Hobson’s choice.” Maj. Op. at 1082. This conclusion is apparently based on counsel’s representations at oral argument that “construction of the cogeneration facility was continuing ... if its operation has not commenced already.” Id. at 1082. I will not engage the majority as to the precise meaning of a “Hobson's choice” 2 or its legal significance as a measure of administrative finality. I do note, however, that to the extent that construction of the facility has been completed, Solar Turbines must choose between not operating the completed plant (an extremely costly option) and operating the plant despite the attendant risk of enormous penalties.3 To the extent that construction of the facility is not yet complete, Solar Turbines must choose among installing the technology that the EPA asserts is required, continuing to install the technology approved by PADER with the attendant risk that the facility will later have to be retrofitted at enormous expense, and halting construction until the dispute has been adjudicated. Hence, in the absence of a declaratory judgment as to whether its technology meets the BACT standard, I believe that Solar Turbines is faced with a problem as serious as that faced by PPG or Frozen Food Express regardless of whether it has completed the construction of its facility. This dilemma suggests compliance with another of the Abbott Laboratories criteria. Moreover, we have been cited to no indicia of congressional intent to deny review of a section 167 order.
II
Where deferring judicial review of informal agency adjudication creates hardship *1085to a party subject to the adjudication, the agency action has frequently been held to be reviewable. This is not to say, however, that such adjudications are always reviewable. In West Penn Power Co. v. Train, 522 F.2d 302 (3d Cir.1975), cert. denied, 426 U.S. 947, 96 S.Ct. 3165, 49 L.Ed.2d 1183 (1976), we held that a section 113 notice of violation was not final agency action and hence not reviewable.4 Judge Adams wrote a forceful dissenting opinion relying principally on the acute hardship caused by holding EPA adjudication unreviewable in this context. The majority, however, rejected these arguments, stating that a notice of violation merely “trigger[ed] the statutory mechanism for informal accommodation which precedes any formal enforcement measures.” 522 F.2d at 311. Since the majority rejected the arguments for reviewability in West Penn in a context not wholly dissimilar to a section 167 order, West Penn may be the best case supporting EPA’s non-finality position. Indeed, a section 113 notice of violation arguably has greater legal effect than a section 167 order because the section 113 notice is a necessary precondition for the assessment of penalties of $25,000 per day of violation. See 42 U.S.C. § 7413(c)(l)(A)(ii); United States v. Louisiana-Pacific Corp., 682 F.Supp. 1141, 1163 (D.Colo.1988); United States v. SCM Corp., 667 F.Supp. 1110, 1122-23 (D.Md.1987).
One could argue that a section 113 notice of violation seems more like the FTC complaint held non-final in FTC v. Standard Oil Co., 449 U.S. 232, 101 S.Ct. 488, 66 L.Ed.2d 416 (1980), than a section 167 order: like the FTC complaint, a notice of violation could he said to involve not a final determination of the agency’s position on a matter but merely an agency decision that it may be necessary to bring an enforcement suit. As the majority notes, the statute envisions that section 113 notices are to be followed by informal consultation between the EPA and the polluter, so that the polluter has an opportunity to dissuade the EPA from its position. Although both a section 167 order and a section 113 notice are pre-enforcement agency actions, a section 167 order does seem to have a greater ring of finality to it; there can be no doubt from the language of the section 167 order in this suit that it represents the EPA’s final position as to whether Solar Turbines has complied with its BACT obligations.
Although these arguments have considerable force, they are somewhat awkward as applied to the instant case. Since the section 167 order in this case preceded the section 113 notice, it would indeed seem untoward to hold that the section 167 order represented final agency action while a section 113 notice is analogous to a mere decision to sue held non-final in Standard Oil. In addition, although it is disturbing to establish a judicial review regime that denies declaratory relief to those in Solar Turbine’s position, it is also awkward for a court of appeals to conduct judicial review of the type of informal adjudication rendered in this case, for there is no record here to speak of. The lack of a record in a case which might require one is, in my view, a powerful factor inveighing against a finding of finality. See Abbott Laboratories, 387 U.S. at 149, 87 S.Ct. at 1515.
Although the question here is extremely close and the applicable law quite muddy, I am inclined to think that we should follow West Penn and hold the section 167 order in this case to be non-final. A holding that the order is non-final has the advantage of permitting development of a record in an orderly way and is also consonant with our decision in West Penn.
It is true that the Supreme Court in PPG held that an EPA informal adjudication that certain boilers constituted a section 111 “new source” was final agency action within the meaning of section 307(b); the Court rejected the argument that the courts of appeals are ill-suited to the task of review of such action by noting that in a *1086case in which the administrative record is inadequate “an appellate court may always remand a case to the agency for further consideration.” 446 U.S. at 694, 100 S.Ct. at 1898. PPG is (at least somewhat) unlike the instant case, however, in that were we to exercise appellate review in this case and vacate the section 167 order for want of an adequate record, it would lead to nothing but confusion. Vacating the order on this ground would not render to Solar Turbines the declaratory judgment that it seeks. Moreover, if we did hold that the section 167 order were final and hence subject to review, section 307(b)(2), on its face, would preclude Solar Turbines from challenging the substance of the section 167 order in the EPA’s enforcement action. See PPG, 446 U.S. at 592 n. 9, 100 S.Ct. at 1897 n. 9 (Under § 307(b)(2) any agency action that was reviewable in the courts of appeals cannot be challenged in an enforcement proceeding, whether or not review was actually sought.). Hence the EPA enforcement proceeding would presumably be placed in limbo while the EPA conducted an administrative proceeding to create a record fit for review in this court. In PPG, the EPA had not brought an enforcement proceeding subsequent to its informal adjudication.
The Supreme Court has held that a “relevant consideration[ ] in determining finality [is] whether the process of administrative decisionmaking has reached a stage where judicial review will not disrupt the orderly process of adjudication.” Port of Boston Marine Terminal Association v. Rederiaktiebolaget Transatlantic, 400 U.S. 62, 71, 91 S.Ct. 203, 209, 27 L.Ed.2d 203 (1970). Similarly, Judge Leventhal writing for the D.C. Circuit has stated that “[t]he ultimate question is whether the problems generated by pre-enforcement review are of such a nature that, taken together, they outweigh the hardship and interest of plaintiffs members and establish that judicial review of [an agency’s] interpretative ruling should be deferred.” National Automatic Laundry & Cleaning Council v. Shultz, 443 F.2d 689, 702 (D.C.Cir.1971). In light of the potential that a holding of finality would disrupt the regulatory process in this case, these practical perspectives on reviewability also support the conclusion that the section 167 order in this case is non-final. Therefore, although I am unpersuaded by the cases upon which the majority relies5 and believe the issue to be extremely close, I join in the judgment.
*1087It is to be hoped, however, that future Supreme Court cases will clarify the import of cases such as PPG and Frozen Food Express upon the finality doctrine in terms of the need to show immediate operative effect to hold declaratory agency action final. Moreover, since section 167 has proven so problematic, perhaps the EPA and ultimately the Congress will reconsider its utility. That section seems to provide an anomalous and perhaps unnecessary remedy, neither fish nor fowl, which skews the administrative enforcement scheme and forces the courts to engage in lengthy exegeses such as this, adding to the pages of the federal reporter without noticeable benefit to our polity. At the very least, Congress could clarify its intent with respect to the finality of section 167 orders.

.Other cases have also held that agency action with no independent legal effect is reviewable. See Red Lion Broadcasting Co. v. FCC, 395 U.S. 367, 89 S.Ct. 1794, 23 L.Ed.2d 371 (1969) (reviewing declaratory ruling by the FCC); Modine Mfg. Corp. v. Kay, 791 F.2d 267 (3d Cir.1986) (holding ripe for review an EPA informal adjudication that regulations promulgated under the Federal Water Pollution Control Act applied to certain brass cleaning facilities); Better Gov’t Ass’n v. Department of State, 780 F.2d 86 (D.C.Cir.1986) (holding ripe for review advisory guidelines for processing Freedom of Information Act requests); National Automatic Laundry & Cleaning Council v. Shultz, 443 F.2d 689 (D.C.Cir.1971) (holding ripe for review letter written by administrative agency construing legislative history of statute).
The language of the APA also suggests that final declarations of an agency are reviewable. The APA states that "[ajgency action made reviewable by statute and final agency action for which there is no other adequate remedy in a court are subject to judicial review.” 5 U.S.C. § 704. "Agency action" is defined as including an agency "order.” 5 U.S.C. §§ 701(b)(2), 551(13). And "order" is defined as "the whole or a part of a final disposition, whether afflrma-tive, negative, injunctive, or declaratory in form, of an agency in a matter other than rule making but including licensing." 5 U.S.C. § 551(6) (emphasis added). Although review under the Clean Air Act is controlled by § 307(b) rather than the APA, we have suggested that "[i]t makes sense to define ‘finality1 under the Clean Air Act in the same way that it is defined in administrative law generally.” West Penn Power Co. v. EPA, 860 F.2d 581, 584 (3d Cir.1988).

. Liveryman Thomas Hobson, who died in 1630 at the age of eighty-five or eighty-six, obliged customers “to take the horse which stood near the stable door” or none at all. Steele, The Spectator, no. 509 (Oct. 14, 1712).

. On June 16, 1988, the EPA issued a notice of violation, pursuant to § 113(a)(1) of the Clean Air Act, 42 U.S.C. § 7413(a)(1), asserting that Solar was violating the Clean Air Act on the same grounds as that asserted in the prior section 167 order. The next day the EPA filed suit in the Middle District of Pennsylvania. Under § 113(c)(l)(A)(ii), Solar is potentially liable for fines of $25,000 per day of violation if it is still in violation of the Act more than 30 days following notification of violation.

. Although West Penn was decided before the addition of the "final action” language to § 307(b)(1), West Penn concluded that the notice of violation was not "final agency action" within the meaning of the Administrative Procedure Act. See 522 F.2d at 310-11. That we are now construing the finality language of § 307(b)(1) rather than the APA, in my view, does not make a difference. See supra 'typescript at 5 n. 1.

. FTC v. Standard Oil Co., 449 U.S. 232, 101 S.Ct. 488, 66 L.Ed.2d 416 (1980), held that an FTC complaint was not final agency action subject to immediate judicial review, but the complaint in that case stated only that the Commission had " ‘reason to believe'" that the companies were violating the Federal Trade Commission Act. 449 U.S. at 234, 101 S.Ct. at 490. The Court reasoned that “a reason to believe” averment was “not a definitive statement of position” and hence did not constitute final agency action. Id. at 240-41, 101 S.Ct. at 493-94. In addition, the oil company in that case did not contend that the issuance of the complaint had any practical effect on the conduct of its business, except to impose upon it the burden of responding to the charges made against it. In the instant case, however, the EPA’s order forces Solar to change its way of doing business in order to avoid the risk of heavy penalties or the need to retrofit its facility.
Wearly v. FTC, 616 F.2d 662 (3d Cir.), cert. denied, 449 U.S. 822, 101 S.Ct. 81, 66 L.Ed.2d 25 (1980), is distinguishable first on the ground that the court there concluded that the FTC had not taken a final position on the type of confidential treatment to be accorded the documents and second that the plaintiff had not established that it was "on the horns of a dilemma.” 616 F.2d at 667. The court concluded that there was no disadvantage to the plaintiff of ignoring the subpoena and waiting to enforcement proceedings. Id. at 667-68. In the instant case, by contrast, the EPA has made a final decision and Solar Turbines may be fined $25,000 per day of violation at the enforcement proceedings, making a delay in adjudication quite costly.
Hooker Chemical Co. v. EPA, 642 F.2d 48 (3d Cir.1981), did state that “[t]he absence of a requirement to comply with the orders of the EPA at this time ... militates against a finding that the hardship factor has been met.” 642 F.2d at 53. I agree that it does militate against finality, but as PPG, Frozen Food Express, and other cases indicate, an absence of a requirement to comply is not dispositive. In Hooker, we concluded that because "the EPA admitted that further investigation was necessary before it could properly act ... [, it] has yet to take a position with respect to an interpretation of the regulation that can be deemed as ‘final’ in the present posture of this case.” 642 F.2d at 53. There is no lack of finality as to the EPA’s position in the instant case.
Wilmac Corp. v. Bowen, 811 F.2d 809 (3d Cir.1987), held that the plaintiff was not faced *1087with the type of situation that has led courts to hold agency action final. The court reasoned that “[t]he threatened injury alleged is merely the risk that if [the plaintiff] decides to build [a nursing home addition], [it] will not be able to rely on Medicaid refunds to recoup its invest-ment_ No sanctions whatever attend a decision not to build if the addition appears to be an unreasonable economic risk. Mere economic uncertainty affecting the plaintiffs planning is not sufficient to support premature review." 811 F.2d at 813. The Clean Air Act, unlike the statute involved in Wilmac, does provide for sanctions for noncompliance. There is also an intuitive difference between agency action which may potentially deny a corporation a state subsidy and agency action which may result in severe penalties against a corporation. Under the jurisprudence, the state retains greater discretion in distributing its largesse than in assessing penalties.