UNION ELECTRIC CO. v. EPA
Legal provision: Clean Air
Argument of William H. Ferrell
Chief Justice Warren E. Burger: We will hear arguments first this morning in number 1542, Union Electric Company against the Environmental Protection Agency.
Mr. Ferrell, you may proceed whenever you are ready.
Mr. William H. Ferrell: Mr. Chief Justice and may it please the Court.
This case arose in the United States Court of Appeals for the Eighth Circuit.
It arose by a petition brought under the Judicial Review Section of the Clean Air Act Amendments of 1970, to review the sulfur emission regulation in the Missouri Implementation Plan.
Section 307 (b) (1) says that petitions may be brought within two different time periods.
In the first place, the petition may be brought within 30 days after the administrator of the EPA approves the implementation plan.
In that event, it is probable that there would be an administrative record which is susceptible of review by the Court of Appeals.
The Section secondly says that petitions may be brought at a later date if tMr. Justice Rehnquisthey arise solely on grounds that have occurred more than 30 days after the EPA approved the state devised implementation plan.
So far as we have been able to ascertain, this is the only case in the United States that has been brought more than 30 days after the EPA approved the implementation plan, and of course, brought on grounds that arose more than 30 days after such group.
There were a substantial number of cases that have been filed within this initial 30-day period which in 99% of the cases occurred within the month of June 1972 and those cases have resulted in a apparently substantial number of opinions by the several United States Courts of Appeals and the various Circuits because this implementation plan review petitions must be brought in the appropriate Circuit, First to Tenth.
The results have differed in those decisions and I think that it is the differing results that have occurred vis-à-vis themselves and the different result in many of those cases with the result reached by the Eighth Circuit in the instant case is now before Your Honors, there is the reason this case is here, that is the basis for us to grant of certiorari.
Now, let us take a quick look at the allegations of the petitioner’s petition.
Union Electric alleges that three of its base load electric generating plants and base load plants are the one that supply the bulk of the electricity, three of them, all located in the State of Missouri in the Eighth Circuit do not meet the sulfur emission regulation in the state devised implementation plan, that by EPA approval has become a federal law.
We allege that grounds which of a reason more than 30 days after the EPA approval make it impossible for Union Electric on technical grounds to comply with this regulation and we allege that it would be manifestly against the public interest for Union Electric to make an attempt to comply.
Now, going on a scientific possibility of compliance, I am not saying that it may work out, there are as far as we know and as far as we allege in the petition only two scientific basis of which a compliance could hope to be attempted.
One is by the utilization of what is called sulfur dioxide removal equipment, in the industry is commonly known as scrubbers and perhaps that is what we actually refer to it from time to time.
The other method would be the use of a low sulfur content coal.
It is ordinarily found in the Midwest and it is not too frequent these days.
We allege in our petition that in the time following the period 30 days after the administrator approved the EPA plan, I mean, the administrator of the EPA approve the implementation plan, thereby making it federal law that it has been demonstrated that no scrubbers have been developed or invented that would permit or enable a compliance with this sulfur emission regulation.
So we demonstrate that it is technically impossible to comply with this federal law and we allege that those grounds have a reason more than 30 days following the EPA approval.
Now, it is true that a considerable number of years ago, utilities and suppliers began to work on what are called scrubbers, development, invent them, Union Electric was deeply engaged in this project.
There were high hopes, high expectations, but unhappily in light and in this case, the expectations have not been realized and this (Inaudible) in our complaint, one that we think that is susceptible of proof and I think should be taken by this Court in these deliberations as being a fact.
Now, going to low sulfur coal I think even and I am not saying this in any derogatory manner, but my brethren of the Department of Justice, the respondent EPA would agree that there is unhappily is just not enough low sulfur coal at this time.
And if we go on to the market and corner it, beat it up, up, up, we are going to run into electric rates.
Money has to come from somewhere and it comes from the consumers.
So we are going to have electric rate so high, that we corner the market on low sulfur coal that it would topple, virtually destroy the economy on the St. Louis area, much of Missouri, Illinois, and Iowa.
So we contend that it would be manifestly against the public interest for us to attempt if we could to corner the market.
Now, turning a minute to scrubbers if I may, I am sure all of Your Honors are familiar with the fact, there has been a series of inflation in the world today, unhappily the price of these ineffective scrubbers, these inefficient scrubbers that will not enable us to comply have increased so enormously that to install them on our three electric generating plants would cost us over $500 million.
Assuming that we can go on to the market in New York and ask and get $500 million for non-productive equipment, we have terrible carrying charges as we allege, it is worth hundred million dollars per year, that would call for terrible increase on electric rates.
We do not allege the percentage, but it would be so high that we say it would be manifestly against the public interest and again it would be imposing upon our economy and economic condition there would be manifestly against the public interest.
I think there is one variant part of allegation in our complaint that has to be realized and considered in this entire case and that is our allegation that although Union Electric, the petitioner is not meeting the state sulfur emission standard in the federally approved implementation plan, it is fulfilling the national ambient air quality standards, both primarily and secondary and these national ambient air quality standards are really thrust the purpose of our Clean Air Act.
I suppose that when you get down to precise question as you have to at some time or should in any lawsuit, perhaps make an existence precisely as possible to do, what do we mean by the word “grounds” in the judicial review section?
Well it is a word of general import; lawyers use it all the time.
Judges use it.
I do not know if whether we always know exactly what we mean by it, but here I do not think we can take that word alone.
We have to look at to congressional history.
We have a somewhat ambiguous statute here.
We have to look at the congressional history and there is one other thing that I want to point out and that is this Court is familiar with the rule that you should construe an Act of Congress to be constitutional or rather than unconstitutional for the reason of the concept.
So sometimes in the constructional process itself, we are confronted with constitutional questions.
Now, let me divert, if I may for just one second, there has been a kind of a thread that is running through this litigation and that is that where really you should not and maybe you do not intend to place a fact-finding original type jurisdiction on the Court of Appeals, for we claim that you have here, but the statute has, the Congressional Act has, maybe that is unfortunate, I suppose it is unfortunate the courts have more than they can do anyway, but it has been done here and the question is, what are the facts to be found?
We say that these technical and economic factors making it impossible for petitioners to comply with the regulation, although we are fulfilling the federal standard.
Chief Justice Warren E. Burger: Are you suggesting Mr. Ferrell that none of these of factors could have been anticipated in time for a different type of review?
Mr. William H. Ferrell: Well, I do in my brief and I will now point out that we think from constitutional point of view, there are three different methods that the constitutional requirement should be met and when you talk about a different type of review in a sense you have to look at the two periods of time.
I hope I am not taking too long to answer your question, but when you have it in the Court of Appeals 30 days after the administrator of the Environmental Protection Agency has approved the plan then you do have some kind of a record before the Court.
But when you are alleging in your petition in the Court of Appeals grounds that arose long after the Federal Agency has acted, you do not have an administrator or administrative record or review with one possible exception which I refer to in my brief and I think it is a possible one, one that might be adapted by this Court.
Maybe it is the best one, I do not know, we are unhappily dealing with a sort of ambiguous Act of Congress and presented with a very difficult problem, well, you do not want to throw it out completely as being too ambiguous.
Justice William H. Rehnquist: But did not the Eighth Circuit say in effect that even if you had raised this within a 30-day period, they would not have listen to it?
Mr. William H. Ferrell: They did say that.
They did say that and I have been anticipating whether there would be a question as to whether the time period really makes a difference.
Procedurally, I think it probably might.
In my initial brief, I skirted around it, in my reply brief and the adversary have sometimes, I have got a little more definitely to it, but I am not at all assured.
I mean, I am rather inclined to think that technical and economic factors must be considered at any time.
Justice William H. Rehnquist: Yes, but I thought Judge Gibson's opinion said you cannot consider that until you bring in an employee?
Mr. William H. Ferrell: Yes, I mean, it is a little hard to say what is exactly part of the opinion, what is the dicta, but he did say that this is a political matter that these technical factors and economic factors are matters of politics, matters which the judiciary cannot touch matters beyond the judiciary.
That to me brings in sort of a constitutional feeling I have, but here we have something that the person can lose his business for it.
It is a Federal Law.
Justice William H. Rehnquist: How would Union Electric -- what constitutional problem would Union Electric ran into, at least if its allegations were in fact true, but it could not raise this until the enforcement proceeding?
Mr. William H. Ferrell: Well, there is the other.
I do say that in enforcement proceeding that is possible.
I question whether that is a very clear interpretation from the statute that it should be raised in enforcement proceeding.
Justice William H. Rehnquist: But whether you say there is a constitutional issue if we do not rule let us say under --
Mr. William H. Ferrell: No, in fact I say that if you rule as has I think the Seventh Circuit in the Indiana in Michigan Electric Company case, former Justice of this Court was ahead of the time there.
Mr. Justice Clark, I think it s a Buckeye case.
I think that is a Sixth Circuit that held that the constitutional difficulty is same and I would agree with him if the point may be raised in enforcement proceeding.
Now, of course, the statute itself says that you may not raise anything in an enforcement proceeding, there is a preclusionary provision, if it may be raised in a judicial review proceeding.
Maybe -- may I mention just one practical matter?
Maybe it is not a legal matter, but the utility industry is engaged in a very large capital raising campaign and it maybe true that it will come about, but you hate to go to the Wall Street when you right sitting in an enforcement proceeding that may close down all of your plants or require to pay as much as a $50,000.00 a day in fine per plant to keep them open which would mean you could not get the working capital to go on and you kind of hate to go on and try to raise money to build new plants and we must build new plants.
In fact, new plants must be built just to stay on even line. Everybody has --
Justice John Paul Stevens: Mr. Ferrell as I listen to you I was just thinking about the interest of the State of Missouri.
I suppose that people in Missouri would be unhappy if you had to close up the utility and not serve the community anymore.
Is it that your reaction they are not proceeding in that area, that arena because they ruled against you on the merits whereas there is no procedure in Missouri at all in which you can raise any of these questions?
Mr. William H. Ferrell: Well, the variance procedure this Court did, I think Mr. Justice Rehnquist was the author of the opinion, decided one and only one case under the Clean Air Act and that is a variance approved by the state under the state law may thereafter be consider a revision of an implementation plan and approved by the Environmental Protection Agency under to be precise I think it is 101 or 110 (c) of the Clean Air Act, if there will not be any jeopardy to the maintenance of the National Air Quality Standards.
But at least in Missouri and I will not go down Missouri, there is one difficulty about that.
The statute that governs the EPA’s approval of a variance, a revision section 101 (c) says there must be a public hearing and the Missouri statute that provides for variances and I think others too as well as Missouri, say that a variance may be granted without a hearing and at least 90% of them are.
The executive secretary, I do not like to say percentages, I do not really know or many of them are, the executive secretary proves the grant of the variance to the Air Act Conservation permission as granted without a hearing.
So, at least in Missouri we cannot have EPA approved variances unless there is a hearing.
Now, if there is a hearing, the EPA still proceeds with the enforcement of the Federal Law, you see we have separate verification, we have a state law, we have a federal law, I mean, that does not really have any particular concern on what state is doing, the state can have a proceeding that goes on for four or five six years --
Justice William J. Brennan: Mr. Ferrell, what is the government referring to at page 10 of its brief with a year before some appropriate state agency now on matters of a Missouri Clause?
Mr. William H. Ferrell: Well, we say that that is not correct.
We are trying to get variances, but they are not –- we would hope that --
Justice William J. Brennan: But do you have a proceeding pending before some --
Mr. William H. Ferrell: We always have application, whenever we have a variance we have an application for it.
We do that yes.
Justice William J. Brennan: And what is the --
Mr. William H. Ferrell: But right now they are all applications.
Justice William J. Brennan: What is the status of that proceeding at the moment?
Just resting, well, any reason, are you not pressing it or what?
Mr. William H. Ferrell: I think the reason is just waiting on this decision and I think everybody quit.
But we would anticipate, we have a recommendation by the way for the granting of a variance by the executive secretary.
Now, if those recommendations are approved, we will have a variance given they have not been approved by the Air Conservation of Missouri, but if the Air Conservation does approve, we will have a variance grant without a hearing and then that cannot be approved by the EPA.
It cannot be an EPA approved variance.
So we do not have any variances as far as Federal law is concerned and then there may be --
Justice John Paul Stevens: Under Missouri practice are you permitted to ask for a hearing if you need that in order to validate your defenses?
Mr. William H. Ferrell: Well, it would be on collusive.
Justice John Paul Stevens: Pardon me?
Mr. William H. Ferrell: It will only be collusive.
Justice John Paul Stevens: But would it satisfy the Federal requirement if that is the only problem –-
Mr. William H. Ferrell: Well, there are two methods of getting a hearing.
One is, if the executive secretary does not recommend against the variance then there is a hearing if the attorney requests and the second is if there is intervenor or some party that, normally the environmental agency would be that intervenes the proceedings as they do not want a variance granted then there is a hearing and then we would have a procedure.
During that procedure the federal law would be enforced, we would be fined $50,000.00 a day, $25,000.00 a day, we would be subject to a fine for all this time and there is no break vindication after four or five years to have an EPA approved variance if during that four or five years is spent, wither you have shut down your plants.
If you were an individual, you were jailed or you had to pay an enormous amount in fines and of course Your Honors, no, we are not going to shut down any plants under any circumstances until the army tells us to do so or this Court.
I notice that my white light is on.
I would like to, if I may retain just a few minutes.
Chief Justice Warren E. Burger: Very well Mr. Ferrell.
Argument of Taft
Mr. Taft: Mr. Chief Justice and may it please the Court.
I think the question has been well presented here.
Primarily we are concerned with whether or not in approval of the State Air Implementation Plan, the EPA must consider the economic and technological feasibility of the plan before approving it.
The Court below said no.
They said no at anytime as a matter of law whether 30 days, within 30 days or after.
We believe that from the face of the statute that is clear.
We believe from the history of it is clear and also from its structure.
If there is one thing that is clear on pollution control law when you go to Congress, it is technology and economics and the Water Pollution Control Act, it is a Technology Act.
Under section 301, they refer to for 77 to the best practicable control technology available.
For 83, they refer to the best available technology, economically achievable.
In the Clean Air Act, it comes up again and again.
It comes up with respect to technology.
It is relevant to Air Craft.
It is relevant to fuels, to motor vehicles, to new source performance standards and Section 110 itself twice brings technology into play, in Section 110 (e) and Section 110 (f).
So that I think that when the standards are set forth in Section 110 (a) (2) as to what the EPA shall review when it reviews a plan, it sets eight of them out and when it chooses to omit technology and economics, I think it is very clear that that choice by Congress was clear and intentional.
In fact, when you go to the history of the Act, it is even more clear, set forth well in the Court of Appeals, set forth well in our briefs.
The Act adapted the Senate language.
The reports, the floor debates, statements after the fact all make very, very clear that as far as Congress was concerned, the primary Air Quality Standards were to be met where the plants were to close or they were to return and get an extension from Congress itself.
Chief Justice Warren E. Burger: I take if you will agree with your friend that there are no circumstances under which a plant like this can be closed as it might be true in some other types of --
Mr. Taft: Yes, yes I would.
I think the one case that is clear is that I do not think any Court would turn the lights out.
I happened to be in New York when the blackout came on for 12 hours.
The health damage by a blackout within 12 hours will outweigh the advantage to help the Clean Air Act over the years.
Chief Justice Warren E. Burger: What is the ultimate solution then, Mr. Taft?
Suppose, it finally occurs that is accompanied, the utilities are conflict to financing with this without drastic rate structure and suppose they cannot satisfy the rate making authority, that does mean the Federal District Court or the EPA must take over the operation of the plant until standards are met?
Mr. Taft: No, Your Honor, I would suggest that this can be brought up in enforcement that in this case of a shutdown of electric plants, you would have to balance again the health factors involved.
I think that a decree to be fashioned by the Trial Court that will take into consideration what could be done as fast as it could be done.
You have an adjudicatory hearing at that time.
The decree could for instance, it could require that low sulfur coal be used in those plants in high concentration area.
It could require that a particular plant might be close down.
It may require that a research program be instituted by the utility to find the kind of equipment that can work.
It can fashion under its powers of equity which could be reviewed every six months for instance, the kind of decree that could be as effective as possible.
Justice Lewis F. Powell: Mr. Taft, when would an equitable decree of this kind be handed down by Court?
I understand the position of the Solicitor General to be in accord with that of Eighth Circuit that the Courts no longer have a new power to review the plan to consider whether it is economically or technologically feasible.
When would this decree you describe come down and why and under what circumstances?
Mr. Taft: That Your Honor, I think it would be in a Trial Court when an enforcement proceeding is brought under such in 113 because at that time that could be heard.
Justice Lewis F. Powell: When the parties have reached an impasse?
Mr. Taft: That would be correct, Your Honor.
Justice Lewis F. Powell: The utility would say we got to put the lights out.
The administrator would then bring a suit to turn the lights on.
All you need is $500 million.
Mr. Taft: I would suggest to the Court that if you look under Section 113 that when he enters an order first, an order of compliance, it requires a conference.
It also requires that the administrator when he issues his order under Section 113, it requires that he in the order itself after conference that he consider the nature of the violation and set forth a time for compliance that is reasonable, taking into account the seriousness and the good faith efforts to comply.
In other words, before you even get to Court, the EPA administrator must satisfy these kinds of terms before he can seek a decree from the Court.
So that when I think that when you come into the Court, what you ask for would necessarily be effected by those kinds of considerations and it is not a white or black by the time that you ask the judge what he requires.
Justice Lewis F. Powell: You are suggesting that the decree of the Eighth Circuit, the judgment of the Eight Circuit be affirmed and that the parties then proceed to the point where they have a type of hearing you are now describing?
Mr. Taft: Yes, Your Honor.
Justice Lewis F. Powell: That it would be any res judicata the effect of the Eighth Circuit decision, would the company be free to raise every issue that it raised there?
Mr. Taft: They would be free to raise any question or issue that has not been reviewed by the Court of Appeals on the action of the administrator of the EPA.
307 (b) (1) which is what they came in to the Court of Appeals on, only permits a review of the action of the administrator.
It is not a review of the plan as a whole.
This is only of what he acts as or what he does and we claim that as a matter of law, under Section 110 (a) (2) he cannot consider economic or technology factors and as a result as far as that Section is concerned or the exclusionary or preclusion of review is concerned, he would not be affected --
Justice Lewis F. Powell: Is that the section that provides in substance that the plan must be implemented as promptly as practicable and in any event within three years?
Mr. Taft: Yes, Your Honor, 110 (a) (2), yes.
Justice Lewis F. Powell: Well, do you think the requirement that the plan be put into effect as promptly as practicable is affected by the feasibility of the plan as it affects a given utility for example?
Mr. Taft: May it please the Court, three years has passed and as result we have run into the absolute barrier of the three years.
At that point, the practicable language has no application whatsoever to --
Justice Lewis F. Powell: However impractical the plan may be after the three years?
Mr. Taft: That is correct, Your Honor.
Your Honor, the question is where that can be heard and that can be heard, we believe in the state.
It is a state plan and as I say, the Court of Appeals is not there to review the plan.
They only review the narrow grounds that EPA acts on approving the plan.
An overall review of the plan must be under state law.
It can be reviewed in the state and it can be reviewed as we say if it is a constitutional type ground, it can be reviewed on enforcement.
Chief Justice Warren E. Burger: I am not sure I can reconcile that with your footnote on the bottom page 36, Mr. Taft.
The last full paragraph of the footnote where you say it is the administrator’s duty however that claims of infeasibility are not relevant to whether that there has been a violation of the implementation program.
Some claims in other words may not be used to render invalid the emission limitations and so forth.
Now, I am not sure I understand that.
Does that mean that a District Court cannot make some adjustment in light of the intervening events or events subsequent to the three-year period?
Mr. Taft: May it please the Court.
That is what the administrator claims under the Act, applying the Act.
If there is a constitutional ground, a substantive process ground, a balancing of health factors where to close a plant would be more adverse to help in the advantages of the Clean Air Act.
That is a matter which the Court can consider at that time.
Well, I cannot begin to set forth what those factors may be.
I only admit one which is the closing of the plant.
Justice William H. Rehnquist: That is not a (Inaudible) constitutional.
Congress could require every electric utility in the country to shut down tomorrow, subject only do the eminent domain clause, could it not?
Mr. Taft: Right.
Yes, Your Honor.
I will suggest that Health Code, Health Inspectors that closed down plants for a long time and Congress has the power and has exercised the power here under Section 110 (a) (2), it has exercised that power that if necessary to meet the primary air quality standards then they must close.
So that I think that constitutionally the power is there.
There may be a balancing factor, I say on health if you are going to try and turn the lights out.
If I may, let me just go back again to 110 (a) (2).
The way the statute is structured, EPA sets the primary air quality standard in sulfur dioxide that has been set.
The state had nine months to come up with the plan which had to comply.
Section 110 (a) (2) states that the administrator must approve a plan which does comply with the primary air quality standards.
It is for that reason to meet that standard that Congress was prepared to face the closure problem and did.
The rest of the Act and the good deal of the rest of Section 110 deals with softening the effects of the strictness of that standard.
I will suggest to the Court that under Section 110 (a) (3) (a) that the plan can be revised by the state and this Court in Train gave that the broadest interpretation it could in the sense that they can be revised plant by plant.
It can be revise source by source and company by company as long again as the primary air standards are met.
Under Section 110 (e) when the plan was submitted to the EPA, the governor of the state could request a two-year extension to five years if technology was not available and they did not expect it within the three years.
Under Section 110 (f) after the three years or when the three years is up, the governor may come in and request a postponement, again because of technology not being available.
I would suggest to the Court especially to look at Section 110 (f).
If the petitioner is correct, Section 110 (f) is a nullity because if he says it is infeasible technologically or economically, the petitioner claims the plan as void.
Section 110 (f) gives four grounds for postponement of one year of the plan.
The second ground is technology is not available.
Now, it seems to me under Section 110 (f) as soon as he proves the second ground, he is not postponing the plan, he just voided it.
The plan is void at that point and as a result you do not have to go through good faith compliance with national interest with health or welfare requirements as set forth in the rest of 110 (f).
Just as soon as he proves technology is unavailable, he voided the plan.
Justice John Paul Stevens: Excuse me, I do not have the statute, that is part of the statute in front of me just to follow you.
In what kind of a proceeding does he raise the 110 (f) issue?
Mr. Taft: The governor of the state must --
Justice John Paul Stevens: Supposing that the state is against the utility as it is here and the state is satisfied, what can the utility do to raise a 110 (f) issues?
Can it do anything?
Mr. Taft: It cannot.
No, Your Honor.
Justice John Paul Stevens: So, that really is not relevant to Union Electric’s argument here then, is it not?
Mr. Taft: I do not know if they tried.
Justice John Paul Stevens: Let me put it just a little differently.
Let us just for a moment, 307 (b) (1) which is where they seek to come in --
Mr. Taft: That is correct.
Justice John Paul Stevens: -- they may not raise technological factors as I understand your position.
Is there anything they can raise in the 307 (b) (1) proceeding if you assume that the state has complied with the minimum requirements in the 8 sub paragraphs of one amici.
What grounds would be reviewable at the petition of the utility in the 307 (b) (1) proceeding?
Mr. Taft: I am not sure if many would.
Justice John Paul Stevens: I do not think there will be any?
Mr. Taft: (Voice Overlap) Most of them would be for a different kind of plaintiff.
Most of them would be, for instance that they --
Justice John Paul Stevens: So really, if we are talking about the review of the request of a utility, this provision really is a nullity?
Mr. Taft: Well, I do not think it would have tremendous benefit to them, no.
There may be one, but I cannot think of --
Justice John Paul Stevens: I just could not think of any one.
I was trying to think of what it might?
Mr. Taft: But there are many that could come in under that.
Namely, for instance had the air quality standards have not been met after the fact.
Then you would come in --
Justice John Paul Stevens: Yes, an environmental proof might come in and say the standards are not strict enough that sort of thing?
Mr. Taft: It is more likely to be the kind you get.
Justice Lewis F. Powell: Mr. Taft, before you go on, do you consider the decisions in this area in I think the Fourth, Sixth, and Seventh Circuits are in conflict with the decision of the Eighth Circuit in this case?
Mr. Taft: I would say that the Sixth and Seventh as far was directly before the Court namely that under Section 307 (b), a review proceeding of the plan where the administrator’s action on the plan cannot bring up these factors.
The Sixth and Seventh, I believe said that they could be brought up on enforcement, but they agree with the Eighth Circuit that they could not be brought up now.
Justice Lewis F. Powell: What about the Fourth?
Mr. Taft: The Fourth and Third, both I think are in direct conflict, yes.
As I say 110 (f) would not need to be there if the petitioner were correct because the plan would be void as soon as he proves that technology is not there.
May it please the Court, may I also just point out the timing.
Congress set out nine months for the state to adapt its plan after hearings.
It then set up only four months for the EPA to approve.
Not just one plan, but 55 plants.
Effectively, the EPA had two days per plan to approve 55 state implementation plans.
I think it as the Third Circuit makes clear in the Duquesne case if Congress had ever expected these factors of technology and economy to be considered, there is no way within that period of time it could have been done.
Again, this just goes, as I say to the structure of the Act.
The Act is strict, upfront, and then sets up the means whereby it can be soft, relaxed and softened.
But I also point out 110 (a) 3 (b), the Energy Act of 1974 where again Congress suggested, in fact required the EPA to review state plans and when they were more strict than required could suggest to the states that they be softened.
So long again as they stay within the primary air quality standards.
So that, and as I pointed out before in Section 113 on enforcement, they make it very clear that the enforcement process through the EPA is take into consideration, good faith attempts at compliance in a reasonable time schedule.
So that I think the structure of the Act is very strict up front and then softens issue attempts to soften as you go through the other parts of the Act.
Justice John Paul Stevens: Mr. Taft, may I ask another procedural question.
Apart, from the variance procedure in Missouri, is there a state procedure by which the utility may challenge the basic plan that Missouri submits for approval by the EPA?
Mr. Taft: I am informed that they can bring a declaratory judgment action any time.
I have been informed by the --
Justice John Paul Stevens: (Voice Overlap) State Court.
Mr. Taft: Yes, in the State Courts.
I might also point out on the hearing point on the variant variance.
The state now as a matter of course always grants a hearing on variances complied with.
Section 110 (a) (2) only requires the fact that a hearing took place, not that the law requires it.
So when the agency in fact provides the hearing that satisfies the Act.
I have here the notice of hearing for the sui plant variance just to show that the in fact Missouri is going through that procedure there.
Justice William H. Rehnquist: But Missouri is under some constraint I suppose in granting a variance in that it may not so amend its plan that it could no longer meet the approval of the administrator?
Mr. Taft: That is correct.
I might point out one other, it is an error I believe, in our brief and the footnote, the variances that were applied for in merit plans were in fact denied by EPA.
They are not pending, they were denied.
They were denied by the EPA because it simply was a postponement as opposed to the modification setting for the times for compliance and increased compliance.
Chief Justice Warren E. Burger: What happens, Mr. Taft, if the state runs a variance which the EPA does not agree with or approve?
Mr. Taft: Well, whether the EPA agrees or not, if it meets the primary air quality standards under 110 (a) (2) it must approve.
Chief Justice Warren E. Burger: Well, who decides that?
Mr. Taft: Well, the EPA must.
Chief Justice Warren E. Burger: Suppose I am proposing a confrontation?
Mr. Taft: Well, if the EPA says that they do not meet the primary air quality standard under the variance, then you have a question that will go to the Court of Appeals on review under 307.
Chief Justice Warren E. Burger: Are the sanctions done against the state or against the utility?
Mr. Taft: Well, the review itself, if the review upheld the utility would be that the revision would direct I suppose a number of things among other things, it could direct the EPA to approve the change if in fact the utility was right that the primary air quality standards were still met under the variance.
I might suggest to the Court that in fact the Courts of Appeals are not the right place to consider the kinds of things that petitioner wants to have heard.
They said if he claims there is a right to be heard some place for constitutional grounds, for substantive due process grounds of some kind, then I do not think the Court should have it heard at the one place where Congress said it should not, which is at the point of approval the plan and review there from.
Justice Lewis F. Powell: You do not question, I take it, the right to be heard somewhere, do you?
Mr. Taft: I do, Your Honor.
Justice Lewis F. Powell: You do?
Mr. Taft: Well, I believe that they can be heard under the state implementation plan in the state courts?
Justice Lewis F. Powell: But again, are you suggesting no right to a due process hearing before a utility plan is closed down?
No right to have such a hearing anywhere?
Mr. Taft: Your Honor, I think that there may be constitutional grounds or maybe due process grounds.
They are not statutory grounds.
Justice Lewis F. Powell: Well, you are entitled to a due process hearing before the automobile can be repossessed?
Mr. Taft: Well, that clearly is an enforcement type hearing where absolutely you are entitled to an adjudicatory hearing before a court.
That would be in the enforcement stage.
Justice Lewis F. Powell: So you agree that the utility is entitled to a due process hearing somewhere?
Mr. Taft: Yes, I do not know what the grounds could be heard on.
The grounds might not be all the grounds that he would like to have heard.
Justice Lewis F. Powell: The ground would be either that the plant would shutdown.
While I have interrupted you, let me say this.
This is not really an adversary case in the normal sense.
The government perhaps has a greater interest than the petitioner here in seeing that the public is served and served at reasonable rates and served without polluting the atmosphere.
The briefs indicate that half a billion dollars would have to be raised to meet the standards and keep the plant going.
They ought to be, there must be some way to bring this issue before a fact finding tribunal with authority to decide the issue of properly or improperly.
Now, these people went to court, you say they went to the wrong court.
I would like you to review again so that it would be clear to me what the next step ought to be.
You represent the government of the United States, what should this utility do?
It cannot go to the market and raise a half a billion dollars, that is perfectly absurd in the present climate of affairs.
What should be done?
Mr. Taft: May it please the Court, I think and this goes into the enforcement on where it should be heard, assuming that there is a thing there to be heard.
Assuming that what you have put forward is going to the market for 500 million is a legitimate ground under some standard.
Assuming that I would suggest that really what they did was they had an order of violation from the EPA.
Rather than go through the 113 procedure of a conference of going through the various grounds that the EPA must incorporate into its order of compliance, it chose to go to the Court of Appeals and I think there is a good reason why they did.
They did that because if they can win the Court of Appeals, if those things can be heard in the Court of Appeals under 307, they have avoided the plan and they start the procedure all over again back at the state.
If you look at what the Third Circuit did in Duquesne, they have been back and forth the EPA four times in the original plan on economic and technological grounds.
The Court of Appeals could not keep up with the change in technology.
Our argument last March, they were still submitting new studies on technology to the Court of Appeals and all they were getting to was avoiding the plan which would require going back to the state, back to the EPA, back to the Court of Appeals and then finally only at that time could you get an enforcement started again.
And when you have two years, in the Ninth Circuit Court of Appeals for the case to be heard, you are talking about the fact that if they can win by this route, we cannot get back to enforcement, to a compliance schedule for perhaps up to three years.
In fact, if you go through compliance hearing in order to enforce and a case to enforce by the EPA which the state could moot it anytime by revising the plan provided they still come under the primary air quality standards, they could revise the plan along the way.
But assuming that you get to an enforcement proceeding, assuming they have an equitable ground that must be heard, like going to the market, like they cannot close down all the plants, assuming they have such a ground, the Court at that point can fashion an order after full adjudicatory type hearing, could fashion an order which will make the Clean Air Act as effective as it can immediately.
Then you go up to the Court of Appeals on review at that time and they review the record before the Trial Court which must have findings of fact in conclusion to go and the decree is in effect at that point unless the Court of Appeals were to stay it, if new technology comes up, if a new report comes up, you go back under Rule 60 (b) under Federal Rules and you re-open at the Trial Court.
You do not submit technology reports to the Court of Appeals on oral argument as was done in Duquesne.
The fact is the one should get into economics and to technology, inevitably is not a broad standard you are concerned about.
You get down how it affects one plan.
All the plan does is set an emission standard.
How the plant complies is up to it.
It may be, if it has an old plant, it cannot use a particular kind of technology.
It may be if it is financial structure is weak it cannot get to the market.
Maybe if it is financial structure is strong it could, but as Duquesne indicates, you are getting to the point where to consider these you have to consider it case by case.
And if you are going to consider it case by case, enforcement is the only way you can because at that point you call witnesses, you have your experts on the stand, they are under cross-examination at that time and that is the way that this kind of issue must be heard.
So that I think that enforcement is the stage where if they have a ground then that is where it must be raised.
It may be equitable.
It may be -- I just do not know what they will be, but that will be fashioned as you go, but to have it heard on the Court of Appeals is impossible.
I think if the Court would look at the State of Texas, the EPA, which had to do with t the Texas Plan where the EPA changed the plan because they did not think the model use on oxides would work.
And the Court of Appeals at that point had to go through a diffusion model on oxide as it applies not just to electric utilities, but to all the various kinds of sources to put oxides out, including automobiles and every kind of plant that uses heat of any kind.
And if you see there, I believe it was Mr. Justice Cork in concurring said that this is no way to review this kind of matter as to technical.
They did not have findings of fact to conclusions of law.
In fact, after it was argued, they had hold hearings informally with the parties from both sides and in fact with experts so that for the benefit of the Court, the expert could take them through the diffusion model used by the state and the one use by the EPA and I think if you look at that and that is just the overall model used, that did not even get into the question whether or not it was feasible as to particular plants and sources.
As far as the SO2 Standard is concerned, 60% of your SO2 according to the EPA comes out and as reported in Duquesne, comes out from electric power plants.
Justice John Paul Stevens: Mr. Taft, let me just get one thing off my mind.
You have been assuming I think that the issue can be raised in an enforcement proceeding and that such a proceeding would be an equitable proceeding.
Is it not possible if the enforcement proceeding would be a criminal proceeding and would the issue be raisable in such a proceeding?
Mr. Taft: May it please the Court, I am not sure what -- I am not conceding what the standards would be or what could be raised.
The only one that will concede is that they cannot turn out the lights and that is a health balance that would be drawn by the --
Justice John Paul Stevens: You are not -- you are saying it is possible that their argument might be successful in an enforcement proceeding.
You do not concede as you do not necessarily agree with the Seventh Circuit then?
Mr. Taft: Well, the question is what the grounds could be that they would raise and I think you have to go case by case when that happens.
Well, in a similar case --
Justice John Paul Stevens: Is it the position of the Solicitor General or does he have a position on whether these issues maybe raised in an enforcement proceeding?
Mr. Taft: Your Honor, I think that it would not be strictly that the plan is void if feasibility is not economically or technologically achievable because the power to close was there and Congress saw it.
The question would be a different kind of choice.
The question would be that if it is impossible for this plant at that point I do not think your grounds will be that it is impossible.
Your ground would be that --
Justice John Paul Stevens: (Voice Overlap) danger of close, I mean, it is always possible to close?
Mr. Taft: Well, at that point the Health --
Justice John Paul Stevens: I think the question would be if the defendant could show that it was impossible to comply without closing would that be a defense in an enforcement proceeding or an issue that could be properly be raised in enforcement proceeding?
Mr. Taft: If it were electricity and turning out the lights, if it were a marginal and weak plant that is not involved with utilities which is producing say some product and produces SO2, it is a marginal plan, it is a weak company, it cannot comply.
I think the answer is yes, it would close.
Justice John Paul Stevens: Well, the question, if that is an issue that the defendant in the judgment of the Solicitor General, is that an issue which can appropriately be raised in an enforcement proceeding (a) civil (b) criminal?
Mr. Taft: (a) Yes, I think it can be raised.
The scope of it would be decided by the Court’s at that time.
As far as criminal is concerned, I would suggest that if it is an electric plant if you could not close it you cannot put them in jail for not closing it and so that I think that that would just have to wait and see how it comes up in fact.
I do not believe that they will bring that particular case if they do [Laughter] I will be surprised.
Chief Justice Warren E. Burger: Meanwhile the utilities must be a little bit uncertainty, is that not so?
Mr. Taft: Yes, Your Honor.
I think that the statute does shift the risk.
It puts the risk on them and the risk was intentional by Congress to force them to do the best they can.
If perhaps under the fear they may not prevail on enforcement and that is the technology forcing act and that is a very powerful persuading -- to persuade them to in fact develop the technology if they can.
Justice Byron R. White: Mr. Taft, we are dealing with the utility and I supposed that it is regular industry, I suppose it is regulated by the state, is it not?
Mr. Taft: That is correct.
Justice Byron R. White: And its rate will have to have state approval?
Mr. Taft: Yes, Your Honor.
Justice Byron R. White: And I suppose that it is obligated to perform service until it is permitted to close.
So that the state, it is going to the state one way or the other, so the state can make up its mind?
Mr. Taft: The state is heavily involved.
I would suggest that under the utility laws that they have to give them a rate of return against proper expenditures in the Clean Air Act to be a proper expenditure.
The Circuit got into that and wanted the Court of Appeals to make a judgment as to whether the PUC would apply the law and that I think --
Justice John Paul Stevens: There is no chance any way the utility will say, well, I must obey the law, namely the Clean Air Act and therefore I shall shutdown and tell nobody.
They have to go?
Mr. Taft: If you helping me out.
I think you are actually right.
Unknown Speaker: Yes.[Laughter]
Chief Justice Warren E. Burger: Thank you.
Mr. Ferrell do you have anything further?
Rebuttal of William H. Ferrell
Mr. William H. Ferrell: If I may Your Honor, I would like to take only one or two minutes to not to respond point by point and then extend the argument that have been made.
I would refer to our briefs on that, but I want to make one unique point that arises for the first time I think in American juridical history.
And that is that we have here the very anomalous situation where a state can place an emission and an emission limitation in a plant that exceeds the national air quality standards and that by EPA approval of that plan, it becomes Federal Law whereas the Federal Government itself, if it made an implementation plan could not place an emission limitation that exceeds the national air quality standards.
That is due, I think to a clear misreading of Section 116, both as to congressional history and as to the Section itself.
So we pray for a reversal into accordance with our prayer and petition.
Chief Justice Warren E. Burger: Thank you gentlemen.
The case is submitted.