Chemical Manufacturers Assn. v. Nrdc - Oral Argument

ORAL ARGUMENT OF SAMUEL A. ALITO, JR., ESQ. ON BEHALF OF THE PETITIONER

Chief Justice Burger: Mr. Alito, I think you may proceed whenever you're ready.

Mr. Alito: Mr. Chief Justice, and may it please the Court.

This is a case under the Clean Water Act, and it concerns the Environmental Protection Agency's authority to issue what are known as fundamentally different factors for FDF variances from its effluent limitations and standards for toxic pollutants.

Let me begin by briefly describing how these effluent limitations are set and the important role that FDF variances play in the process.

An effluent limitation is simply a figure that tells a facility how much of a particular pollutant it is permitted to discharge.

These are usually expressed in pounds or kilos of pollutants per 1,000 pounds of product.

For example, one pound of pollutant per 1,000 pounds of steel, plastic, or whatever.

There are separate sets of effluent limitations for what are known as direct dischargers, facilities that discharge their wastes directly into the navigable waters, and indirect dischargers, facilities that discharge into public treatment works.

This case concerns indirect dischargers, but the basic arguments are the same in both the direct and indirect discharger contexts.

Direct dischargers were required to meet two sets of effluent limitations.

By 1977, they were required to meet the effluent limitations associated with what is known as BPT, the best practicable control technology currently available, and between 1984 and 1987, depending on the type of pollutant, they are required to satisfy the stricter standards of what is known as the AT, the best available technology economically achievable.

Indirect dischargers have similar requirements called pre-treatment standards.

Effluent limitations are set on what is known as a categorical basis, that is by industrial category and subcategory.

EPA has identified those categories of industry where pollution control is most urgently needed, and it has taken the larger categories and further sliced them into numerous subcategories, some fairly broad and some quite narrow.

In fact, some of these subcategories have included as few as one or two facilities.

The Clean Water Act itself does not set any of these effluent limitations or standards.

That is EPA's job using factors that are generally set out in the Act.

For example, some of the factors that are used for BAT and for pre-treatment include the age of facilities and equipment involved, the energy requirements of different types of pollution control technology, the different manufacturing processes that may be used, and the cost of achieving effluent reduction.

Let me give an example using the factor of cost to which I may return later in the argument.

EPA may determine that for a particular subcategory there is a new advanced form of pollution control technology that will cost between, let's say, between three-quarters of a million and one million dollars per facility to install, and EPA may find that a cost of one million dollars per plant is economically achievable, so EPA may conclude that for this subcategory, this technology represents BAT.

It is the best available technology economically achievable.

Gathering information on all of the relevant factors in making these determinations for all of these categories and all of these subcategories is an enormous task.

Just in the indirect discharger category there are more than 30... there are more than 60,000 facilities in the 34 primary industrial categories, and EPA was supposed to go about this work at a really breathtaking pace.

Under the Act, EPA was given 180 days to proposed the pre-treatment standards for all of American industry.

EPA has not been able to meet these impossible deadlines and as a result Respondent has had law suits pending against the Agency for the past decade, seeking to compel the Agency to move more quickly.

EPA's only hope of issuing effluent limitations on a reasonably expeditious basis has been to concentrate on the typical plants during the rulemaking phase, and not on the atypical ones, and consequently one of EPA's problems has been these unusual plants.

These may be older.

They may use different manufacturing processes.

Their energy costs may be different because of location, or some other factor.

Let me return to my example where BAT was calculated to cost between three-quarter of a million and a million dollars for a facility.

For one of these unusual plants, the cost may be two million dollars, far beyond what is economically achievable for any of the facilities in that subcategory.

How is EPA supposed to deal with this problem of the unusual plant?

One solution, and this is one that Respondent recommends in his brief, would be for EPA simply to withhold issuing its categorical limitations until it has tracked down every single facility and every single subcategory of the category under consideration, and has determined that... what the requirements and factors are for that facility.

This may be theoretically possible, but it would certainly delay the issuance of the categorical limitations and that would not serve the purposes of the Clean Water Act.

Unidentified Justice: Suppose regulations could be issued and then amended to care of refinements as time went on, could they not?

Mr. Alito: Yes, Justice O'Connor, and that is essentially what we believe the FDF variance mechanism does.

Respondent argues that--

Unidentified Justice: It accomplishes the same goal, but I suppose not with the same procedural accoutrements that a regulatory change would encompass.

Mr. Alito: --That is precisely correct.

They achieve the same substance in that they would be--

Unidentified Justice: Is that what we are really concerned about here as to whether the EPA should have to follow the regulatory procedural requirements and adopted regulations versus issuance of individual--

Mr. Alito: --Based on the concessions that I perceive in Respondent's brief, I think that's what the issue in the case boils down to.

The Agency, of course, argues that it may use FDF variances for all pollutants.

Respondent says, no, at least in the case of toxics.

But I take Respondent to concede that EPA may amend its effluent limitations regarding toxic pollutants irrespective of the language of 301(1) which they have argued categorically prohibits anything that may be termed a "modification".

Unidentified Justice: --Well, 307 permits a revision, does it not?

Mr. Alito: That's correct, but if I take Respondent to have made in one part of its brief the argument that 301(1) is clear on its face, and it is not necessary to look any further, and I think--

Unidentified Justice: Does EPA claim that an FDF variance is a revision--

Mr. Alito: --An FDF--

Unidentified Justice: --under the meaning of 3O7?

Mr. Alito: --No, it is not a revision within the meaning of 307, but neither is the modification within the meaning of 301(1).

The other concession made by Respondent that I want to mention was their concession that an amendment of an effluent limitation may appropriately create a subcategory for one or a few plants.

So if you put those two concessions together, I take them to concede that EPA may do essentially what it is doing with the FDF variance mechanism, but it has to do it by a different procedure.

I think that once it is understood that this is what the dispute in the case boils down to, then the Agency's position surely must prevail, because an Agency should be permitted to follow the procedure that it prefers unless Congress has dictated another procedure.

Unidentified Justice: Mr. Alito, has the Agency requested the appropriate congressional committee to grant an amendment to Section 301 to take care of the problem we are dealing with in this case?

Mr. Alito: My understanding is that during the testimony in the House during this session, EPA mentioned the fact that the Third Circuit's decision in this case should be overturned, but that no--

Unidentified Justice: Did it go further and offer specific language by EPA to the committee to take care of this problem?

Mr. Alito: --I'm not aware whether that occurred or not, Justice O'Connor.

Unidentified Justice: It was my understanding that it had.

Mr. Alito: My understanding was that no specific bill containing such a provision had been proposed and, in fact, no amendments to the Clean Water Act were adopted by this session.

In Any event, whatever this Congress did, I certainly don't think that it's possible to infer an intent to adopt the Third Circuit's decision.

In any event, what this Congress intends concerning 301(1) is a poor guide to the intent of the Congress that adopted 301(1) in 1977.

Unidentified Justice: Mr. Alito, may I just ask one clarifying question.

When you're dealing with variances, the FDF variances outside of the toxic area, just in the regular area, what is the statutory source of the Agency's authority to grant such variances?

Mr. Alito: I think it stems from 501 which authorizes the Agency to issue regulations necessary to implement the Act, and I think it stems from two potentially conflicting statutory commands in the Clean Water Act, namely, to issue these limitations on a categorical basis, and then to do it based on factors that vary significantly among seemingly similar plants.

There is tension between these two statutory commands, and the FDF variance mechanism, I think, is a permissible way of reconciling that.

I think in th DuPont case, this Court recognized that the FDF variance was an appropriate and perhaps even a necessary mechanism in the BPT context, and I see no reason to draw a distinction between BPT and and BAT in pre-treatment in this area.

The statutory authority is the same, and EPA's practical problem is the same: How do you issue defensible categorical regulations on a reasonably expeditious basis, while taking into account factors that may vary greatly from plant to plant.

Unidentified Justice: Are... Sections 301(c) and 301(g), they're not sources of authority, right?

Mr. Alito: No, they certainly are not.

At the heart of our submission is that those statutory modifications are very different from the FDF variances.

That Congress intended 301(1) to apply exclusively to those statutory modifications, and did not intend for 301(1) to apply to FDF variances.

I think the center of the Third Circuit's misunderstanding was its inability to understand the difference between those statutory modifications and FDF variances.

What the FDF variance does is to correct a mistake, that's all that it does.

It corrects a mistake.

It establishes the kind of effluent limitation that should have been set in the first place.

The statutory modifications do something very different.

Under 301(c) a facility may be eligible for a modification if it can show, not that there was any mistake in the effluent limitation, but that it can't afford compliance.

If I can return to my example where BAT was calculated to cost between three-quarters of a million and a million dollars, if a plant came in and said,

"I can't comply because I can't afford three quarters of a million dollars."

it would be ineligible for an FDF variance, but it might be eligible for a 301(c) modification.

Similarly, under Section 301(g), a facility may be eligible for a modification based on the quality of the water into which it is making its discharge.

Now that is a fact that EPA may not consider in setting its technology-base effluent limitations.

Once this difference between statutory modifications and FDF variances is understood, this Court has already clearly recognized the difference and explained it at some length in the National Crushed Stone case... One this difference is understood, then I think it becomes apparent what Congress did in 1977.

It makes perfect sense for Congress to have said, as we believe it did, that statutory modifications are prohibited for toxic pollutants, but that FDF variances are available for all pollutants, because the FDF variance just corrects a mistake, and whether that mistake has to do with a toxic pollutant, or any other pollutant, it should be corrected.

But the statutory modification--

Unidentified Justice: Can you help me once more.

You said, it is kind of hard to follow this, a correcting mistake variance rather than a statutory 301(c).

Would you give me an example, again, I think you did, but I didn't quite follow it, one that would be a mistake correction, but would not qualify under 301(c)?

Mr. Alito: --Yes.

If EPA had calculated that BAT for a subcategory was between three quarters of a million and a million dollars, and a plant came in and said,

"Because of the age of my equipment."

let us say,

"my cost is going to be two million dollars, and that is beyond the economic capability of anybody or group, it is not economically achievable for the group."

that plant might be eligible for an FDF variance.

On the other hand, if the plant came in and said,

"I know you calculated the cost between three quarters of a million and a million dollars, and I can see that that's accurate, but I can't pay even three quarters of a million dollars, or I will go out of business."

that plant is ineligible for an FDF variance because it would not have shown that the Agency did not consider the proper range of factors, only that the individual plant was economically weak and could not afford compliance.

I think that is the distinction Congress drew in 1977.

What the statutory modifications do is not to correct an incorrect effluent limitation, they excuse compliance with a proper limitation based on factors such as the weak economic condition of a particular plant, because under certain circumstances, those factors take precedence, but Congress said, when it comes to toxic pollutants, these other factors must take a backseat.

That is the distinction Congress drew, and that is the reason why we think Congress limited 301(1) to the statutory modifications and not to FDF variances.

The FDF variance has been a device that EPA has used to deal with this problem of the unusual, and it has worked very well.

It has allowed the agency to issue its regulations more quickly than would otherwise have been possible if it had to stop and worry about every unusual facility in the country.

It has helped the agency to defend against court challenges to those regulations by facilities claiming to be fundamentally different.

It has been specifically cited by several courts of appeal in turning away those challenges, and it has not been necessary to use this safety device very often, which speaks, I think, to the accuracy of the effluent limitations.

The issue in this case, of course, is the meaning of 301(1), which prohibits modifications of effluent limitations for toxic pollutants.

As I said, EPA's position has always been that this is limited exclusively to statutory modifications under 301(c) and (g).

Respondent says that it is contrary to the plain language of 301(1).

Respondent says that a modification is any change in an effluent limitation that makes the effluent limitation more lenient.

But if that interpretation were correct, then what would happen if EPA issued an effluent limitation for a toxic pollutant and then discovered that its analysis was mistaken, or circumstances changed, energy costs skyrocketed for example, and a technology that was previously economically achievable became unaffordable?

Under that plain meaning argument, EPA would be powerless to amend its own rules, and that can't be what Congress intended.

Unidentified Justice: Would that trigger the revision of Section 307, Mr. Alito?

Mr. Alito: Well, we think it would, Justice O'Connor, but our point is that a provision that prohibits modifications but permits revisions is not a provisions that is clear on its face, and it is necessary to take into account the interpretation of the Agency with expertise under this Act.

It is necessary to look at the legislative history.

Unidentified Justice: You think the word "modify" is a term of art requiring Agency expertise to define it?

Mr. Alito: I think it is indeed a term of art in 301(1).

Congress used 301(1) in the same way that it used 301(c) and (g).

Everything in the legislative history supports that.

There is the evolution of 301(1).

301(1) derives from the Senate bill.

There wasn't anything comparable in the House bill.

In the Senate, however, in the Senate bill, there was not a separate provision like 301(1).

301(c) was amended to include the prohibition against that particular type of modification for toxic pollutant, and similarly there was a prohibition in 301(g) which was a new provision prohibiting that type of modification for a toxic.

What the conference committee did was to take this language out of 301(c) and (g) and create a new section 301(1).

When they did that, they did not provide any notice to their colleagues that they were expanding the substance of each of those provisions, and they provided no explanation for the change which suggests to us that the change was intended to be purely stylistic.

There is also what Congress said about 301(1), and admittedly it did not say very much, but almost every time it referred to it, it was specifically linked with 301(c) and (g).

There is also the inference that we believe may fairly be drawn from what Congress did not say.

At no point in the legislative history of 301(1) did any Member of Congress suggest that 301(1) was intended to reach EPA's well-established and well-known practice of granting FDF variances.

If any Member of Congress had had such an intent, we believe that they would have said something, but nobody did.

Respondent says, Congress was not aware of the fact that EPA had been issuing FDF variances, but that is incorrect for at least two reasons.

First of all, EPA had been including FDF variance provisions in its BPT regulations for some time, and I think this was well known in the environmental community.

Respondent says that Congress was not worried about BPT in 1977, it had put it out of its mind, but BPT was going to remain in effect for seven more years.

So that seems completely implausible.

Unidentified Justice: May I interrupt once more, Mr. Alito?

Had they talked about the variance practice that had been in effect at the time of these amendments?

Were the variances pertaining to toxic pollutants that were well established?

Mr. Alito: There were variances pertaining to pollutants that were later designated by Congress to be toxic.

Unidentified Justice: Were there variances with respect to pollutants that had been designated as toxic pollutants at the time the variance was granted?

Mr. Alito: No, but that is because the way that toxic pollutants were handled under the Clean Water Act was radically changed in 1977.

Before 1977, I believe they were supposed to be dealt with primarily under Section 307, which is a separate set of effluent limitations for toxic pollutants.

Then in 1977, it was decided that they would be dealt with primarily through the regular technology-based effluent limitations that are issued under 301.

Those effluent limitations had been issued.

There had been FDF variances from those limitations for pollutants that were later designated as toxic pollutants, and the pollutants to which 301(1) applies are those on a list that was included in a consent degree between NRDC and the Government prior to the 1977 amendments.

It is now referred to in Section 307 of the Act, and those pollutants, there are 65 of them, are set out in a provision of the Code of Federal Regulations.

Returning to my argument that Respondent maintains that Congress was not aware of EPA's practice of granting FDF variances, I think the thing that really refutes that argument is this Court's decision in DuPont, which occurred in early 1977, and the Clear Water Act was enacted in late 1977.

DuPont referred prominently to FDF variances.

This was pivotal case under the Act, and I think the Members of Congress, and surely the congressional staff members who were concerned with the Clean Water Act Amendments of 1977 must have been aware of the FDF variance mechanism.

If anybody had any intent of restricting EPA's practice of granting those FDF variances, I think someone would have said something but, as I mentioned, no one did.

It is also important to realize that granting an FDF variance for a toxic pollutant is completely consistent with Congress's intent in 1977 to take strong measures against toxic pollutants because, as I said, all an FDF variance does is to correct a mistake.

It just establishes the kind of effluent limitation that should have been set in the first place.

Chief Justice Burger: We will resume at 1:00 o'clock.

You may proceed anytime you are ready, Ms. Dubronski.

ORAL ARGUMENT OF FRANCES DUBROWSKI, ESQ. ON BEHALF OF THE RESPONDENT

Mr. Dubrowski: Mr. Chief Justice, and may it please the Court.

The issue here is a very straightforward one.

Can EPA grant variances from national pre-treatment standards for toxic pollutants?

Congress amended the Clean Water Act in 1977 to strengthen EPA's ability to regulate toxics.

it identified BAT and pre-treatment standards as the key elements of a toxic control strategy.

It carefully considered when and under what conditions EPA could grant variances from these standards, and each time it considered the idea of a variance for toxics, it rejected it.

At the same time, Congress enacted 301(1) of the law, which tells EPA in broad and unqualified language not to modify any BAT for pre-treatment standard for toxics.

EPA urges this Court to take a very narrow reading of 301(1).

EPA says that the broad ban on variances in that section was intended to apply to the statutory variances from BAT that Congress had created.

In other words, the economic capability variance in Section 301(c) of the law, or the water quality variance in Section 301(g).

Congress, says EPA, did not mean to cut off any implied authority that EPA might have at some future time to creates administrative variances from BAT for pre-treatment.

Of course, if Congress had this very narrow purpose in mind, it would have had no reason to create 301(1).

Both 301(c) and what became 301(g) in the Senate bill already contained provisos limiting their applicability to non-toxics.

EPA says that when the conference moved the ban on variances out of Section 301(c) and into a separate subsection, it did so for purely stylistic reasons.

Not substitute change was intended, it simply reflected the drafters' desire to put the words in the statute somewhere else.

But EPA's analysis is plainly wrong, because Congress did not simply move the words, it changed them to reaffirm the intent that we maintain here.

The original ban on variances had said, don't modify any requirement of 301(b)(2)(A), in other words, don't modify a BAT or pre-treatment standard.

The new subsection (1) said, don't modify any requirement of 301.

It included within its scope not only pre-treatment and BAT standards, but the more stringent toxic effluent standards that were not technology based.

In addition, Congress moved subsection (1) out of the sections of the conference bill that were entitled "waivers", or "modifications", and into a section of the conference bill that was entitled "Toxic Pollutants".

The latter section identified for the first time the toxics of concern to Congress, and told EPA to regulate those quickly.

In other words, Congress deliberately wrote 301(1) as a comprehensive ban on variances.

It wanted to curtail all variances.

It did not simply mean to plus the loophole that had been created in 301(c) and 301(g) of the law.

Ignoring this evolution of 301(1), EPA argues, that if Congress wanted to cut off other variances, it must have believed that there were such other variances, and if so, it is odd that Congress didn't mention them.

So EPA searches for legislative history to reference the FDF.

In coming up empty-handed, it says, this search is dispositive.

This analysis begs the question.

The broad language of 301(1) prohibits all variances.

It isn't necessary for Congress to have had the FDF variance in mind to curtail it.

Unidentified Justice: What does it say?

It doesn't speak... Does it speak of a variance?

Mr. Dubrowski: It says, do not modify any requirement of Section 301, and the term 301, means the variance.

Unidentified Justice: It includes a variance.

Mr. Dubrowski: It includes the variance, yes.

Congress uses the term--

Unidentified Justice: What else does it prohibit, other than variances?

Mr. Dubrowski: --I think it is limited to variances.

Unidentified Justice: For toxic pollutants.

Mr. Dubrowski: That's right.

Unidentified Justice: Do you think they could amend the standard?

Mr. Dubrowski: There is a provision in Section 307 to revise standards from time to time.

Unidentified Justice: So that 301(1) doesn't mean what it says.

Mr. Dubrowski: No, 301(1) means modification, i.e., variance.

Unidentified Justice: The word 307 permits, is that right?

Mr. Dubrowski: The word "modify" in this context means variance, it does not mean revision.

The same problem arises with the new source standards.

Unidentified Justice: "Modify", that is a strange word to use just to apply to variances.

Mr. Dubrowski: Congress used to encompass waivers and variances.

Unidentified Justice: So it does permit the changes of standards.

Mr. Dubrowski: It does permit EPA to revise the standard from to time, yes, it does.

The same question comes up in the context of new source standards.

Unidentified Justice: Do you think, then, that a variance... You just don't accept that a variance could be a revision of a standard.

Mr. Dubrowski: A variance, as the FDF variances, is an attempt to relax pollution control requirements for a single source, and that is what 301(1) prohibits.

That is different from revising the requirements for the entire category of sources.

Unidentified Justice: What if anybody who is in a similar situation to the person who gets the variance, would also get a variance.

What if they were to give a variance to everyone who was in the position as the first person who got a variance; isn't that equivalent to a revision of the standard?

In other words, a group variance.

Certainly that is what the Government argues.

Mr. Dubrowski: Yes, they argue that you can... They argue that the FDF variance is a tailoring to an individual source.

It is not a group variance.

Unidentified Justice: They must believe they would give a variance to everybody else who is in the same situation.

Mr. Dubrowski: The FDF variance doesn't contemplate looking at the group as a whole.

It says, consider... In the argument that EPA has used here today, the example, consider a source and determine whether that source's pollution control requirements are out of proportion to the group as a whole, and if so, you can get a variance.

Unidentified Justice: Yes, but that kind of a variance is based on what they claim to be a mistake.

There were some factors that they hadn't considered, and if those factors are present anywhere else, I suppose, they would recognize those factors with respect to other people.

Mr. Dubrowski: There is a difference between a variance that is an individual tailoring of a standard, and a revision that considers the category as a whole.

Unidentified Justice: So you would say... You would say that surely under 307, the Government could say to itself: Well, this person has applied for a variance and has claimed that there were factors we didn't take into consideration.

We made a mistake.

So we ought to make a subcategory under the standard and say, under 307, we are going to publish a new standard and say, for this category of sources, the following is the standard.

Mr. Dubrowski: EPA would have the authority, if it had information--

Unidentified Justice: But it shouldn't go about it by purporting to issue a variance.

Mr. Dubrowski: --If EPA had information that the standard as a whole was wrong, it could change it.

There is a difference between saying that--

Unidentified Justice: Or that it needed to be tailored, or it needed to recognize some subgroups.

Mr. Dubrowski: --Congress told EPA to set these standard across classes.

It told EPA expressly to avoid single plant determinations.

You cannot use the revision authority to do what you couldn't do in the rulemaking anyway.

You couldn't use the revision to set up a case by case, plant by plant decision-making the way the FDF variance does because that is what Congress said do not do.

Furthermore, if you use the... whatever mechanism you use, the question that arises is, is this the maximum technology that is affordable for this source, because that is the BAT standard, and the pre-treatment standards are supposed to be set equal to BAT.

BAT in the statute asks those questions--

The FDF variance, as EPA has written it, does not look at the question of affordability.

It looks only to costs, and if your costs are out of proportion to someone else's, you would get a variance.

Unidentified Justice: Right--

Mr. Dubrowski: That is not what Congress intended.

Congress didn't say, are you costs higher.

Congress said, this is the best technology achievable for the class as a whole.

Unidentified Justice: --Ms. Dubrowski, this case, of course, involves BAT standards.

Mr. Dubrowski: That's right.

Unidentified Justice: Would you say that EPA is barred under 301(1) from granting FDF variances for BPT toxic effluent guidelines?

Mr. Dubrowski: We would say that EPA is, although I should point out that that question is at this point legally irrelevant.

Unidentified Justice: I understand that it is phasing out, but I want to know what your view is.

Mr. Dubrowski: We would say, yes, 301(1) would apply to BPT.

Unidentified Justice: How do you square that with the language this Court used in the DuPont decision?

Mr. Dubrowski: 301(1) was enacted after DuPont, it changes the law.

EPA says, DuPont should be read to cover BAT and pre-treatment, a reading of DuPont which we don't think is supported.

But, in any evert, whatever authority EPA had, 301(1) is written broadly enough to curtail those variances.

I'd like to return to the question of how is this different from happened in a rulemaking.

This Court said in National Crushed Stone that the FDF variance does precisely what Section 301(c) variance does, that is, it takes the statutory criteria for the category as a whole and it tailors it to an individual source.

The questions that you ask in a BPT variance proceeding, as opposed to in a 301(c) variance, are different because BPT and BAT are different.

If EPA were to reword its FDF variance so that it did encompass the tests that it is supposed to, the BAT tests, they would have to ask the question: Is this the maximum technology achievable for this source?

That is the precise question that 301(c) asks, and EPA concedes that 301(1) bars that question.

301(1), therefore, bars asking the same question under the name of an FDF variance.

That is why the Third Circuit said, these two variances serve the same function.

It makes no sense to assume that Congress prohibited one and not the other for toxics.

There are other differences between subcategorization during a rulemaking and a revision after.

One very critical difference is that a revision afterwards takes place in the context of a statutory compliance deadline.

Congress said that sources had only three years from the date the standards were issued to come into compliance.

In that sense, pre-treatment is different from BPT and BAT.

There is no permit mechanism here.

There is no mechanism to tailor these standards to individual plants.

Sources don't have the luxury of waiting for that permit, they must comply automatically with that standard once it is issued.

The FDF variance is anti-factidal to that statutory scheme because it takes EPA seven or eight years to decide these variance applications.

If it takes seven or eight years, you can't meet a three year compliance deadline.

Also during the rulemaking, EPA cannot categorize sources on the basis of cost, the way it purports to do in an FDF variance.

All sources must come up to the level of the best performer, that means that some sources will have higher costs than others.

Congress anticipated that, and it was envisioned in BAT that that would happen.

If you could subcategorize on the basis of cost, you wouldn't need a 301(c) variance, you wouldn't need reference in the legislative history to fact that sources might close, or that everyone had to come up to the level of the best performer because the subcategorization would take care of that.

EPA cannot subcategorize on the basis of cost as the FDF variance would allow it to do.

It must, for each source, brings that source up to the level achievable across the category as a whole.

The new sources standards in the Act are not subject to variances as this Court held in DuPont.

Those standards can be revised from time to time to reflect new developments in technology.

In fact, Congress used the same language to tell EPA to revise new source standards as it did to tell EPA to revise the pre-treatment standards.

So the ability of EPA to revise the standards does not in any way interfere or conflict with their duty to prevent case by case decision-making, plant by plant tailoring of the standards to individual sources, especially after the rulemaking, when the compliance set time is running.

I would like to turn to a moment to the legislative history because the legislative history here is very clear.

Senator Muskie said, there are no waivers or modifications for toxics, a statement that was also made in the Senate Committee report.

Senator Muskie is the principal author of the 1977 amendments on toxics.

Likewise, Congressman Roberts, the House floor manager, referring to the very portion of the conference bill that contained 301(1), said,

"Strict requirements are in effect for damaging pollutants such as toxics."

"For certain other pollutants, industry may get a waiver."

In fact, one House Member said,

"Listing all these substances, and denying any waiver with respect to these substances at all, may lead to new regulations more stringent than any previously contemplated."

EPA cannot point to a single sentence in the legislative history which supports its reading, its authority to grant these variances.

Instead, EPA tries to dismiss all the statements which run the other way.

EPA says, those statements were made in the context of 301(c) or 301(g) of the law.

EPA is wrong.

The statement that I quoted from Congressman Roberts discusses Section 53 of the conference bill, which contains 301(1).

Senator Muskie's statement that there could be no waivers or modifications takes place in the context of a floor statement entitled, BAT> ["].

It is true that Senator Muskie mentions only the 301(c) and the 301(g) variance, but that is because they were the only identifiable variances at that time.

In 1977, EPA had a well established practice of drawing a distinction between the BPT standards on the one hand for which it had FDF variances, and the BAT and pre-treatment standards for which it did not have such variances.

So EPA's analysis of the legislative history hinges on a single word, when Congressman Roberts said, in another statement,

"Due to the nature of toxics, there will be no waivers or modifications, specifically no variances under 301(c) or 301(g)."

EPA hinges on that word "specifically", and said that is a word of limitation.

In context, it is more appropriately viewed as an example of the types of variances that Congress was prohibiting.

EPA's argument is not based on support in the legislative history, it is based on silence.

That argument is hardly sufficient to overcome a statutory provision which tells you not to modify BAT on pre-treatment standards.

It ignores much that cuts the other way.

When Congress created BAT in 1972, it said, except as provided in 301(c), these standards will be uniform across the class.

When it reexamined BAT in 1977, it considered the fact that these standards might be viewed by the courts as not sufficiently flexible, and they created 301(g) for that purpose, but it said, that is not available for toxics.

When it examined pre-treatment, it considered the problem of people who could not meet the standards and said, the answer to that is to let the municipality do the controls.

It carefully circumscribed each opportunity to create a variance.

It inconceivable that Congress would have gone to that detail if, as EPA maintains, it intended to leave open the question of what variances could be given, and what could not.

Indeed, this Court has said, where Congress considers exceptions to a statute, non-statutory exceptions are not available.

This case is not simply an extension of DuPont, as if Congress did nothing in 1977.

In fact, if Congress read DuPont the way EPA does, so that DuPont authorized variances from BAT and pre-treatment, it is strange that Congress would not have said, in enacting its subsection (1), we want to be very clear here to draw a distinction to say that this is not intended to rule out FDF variances.

Congress didn't do that.

This Court in DuPont said that variances were not available from new source standards.

Pre-treatment standard are like new source standards.

There is no variance for pre-treatment standards.

301(c) and (g) that are applicable to BAT standards are not available in the context of indirect dischargers.

There is no mechanism for tailoring these standard to individual plants.

There is no permit mechanism.

The deadlines here are very different.

Congress told EPA to set the pre-treatment standards more quickly than it told EPA to set the BAT and BPT limits, and it gave sources only three years, as opposed to a 1977 or 1974 deadline for meeting pre-treatment... excuse me, for meeting BPT or BAT.

That makes sense when you consider that pre-treatment is a program with several goals.

It is not simply to protect water quality, it is also a program to protect the integrity of a capital investment in pollution control equipment, the pollution control equipment at the municipal sewage treatment plant.

Pre-treatment standards are to prevent industries from discharging toxics that could interfere with the operation of that sewage treatment plant, or that could contaminate large volumes of municipal sludge.

Unidentified Justice: Ms. Dubrowski, what do you think... what do you suggest the standard should be, that we should apply in this situation where the Agency has construed the statute in a way that you think is wrong.

Should we independently decide whether it's wrong, or should we give some deference or should we ask... What questions should we ask?

Is it a rational construction of the statute even though not the best one, or what?

Mr. Dubrowski: This is not a case of an ambiguous statutory provision.

This is not, for instance, the Chevron case which this Court decided last year.

Unidentified Justice: Now, how about my question, what questions should we ask?

Is this a rational construction of the statute or a permissible construction of the statute, or what, or just the best one?

Mr. Dubrowski: If this Court decides contrary to our argument that 301(1) is not clear, then the question arises, what could EPA do outside of the context of 301(1).

Unidentified Justice: If it is clear like you say it is, any other construction would just be irrational, wouldn't it.

It just wouldn't be permissible.

Mr. Dubrowski: That's right.

Unidentified Justice: So is that our question that we should ask?

Mr. Dubrowski: I am not quite sure I understand the question.

Unidentified Justice: Well, here the Agency is pressing a construction of the statute, and what should we do, say, well, we think there is a better construction of it, or should we say, or should we ask, is this a permissible construction, a rational construction, even though there are other constructions.

You say there is no other construction than yours, I take.

Mr. Dubrowski: That's right.

We think that this was in the context of 301 clearly met to prohibit variances.

Unidentified Justice: Of course, the Agency, certainly and obviously, has not agreed with you for some time, and neither does the Solicitor General.

They think there is another permissible construction of the statute, other than yours.

Mr. Dubrowski: Then the question becomes, is that valid?

Is this a permissible construction of the Statute?

We think that it is not because the notion of going back and correcting mistakes after you set a standard takes place during a statutory compliance period of three years.

Experience shows that EPA can't make those corrections within that three-year period.

In fact these variance applications are pending for seven or eight years.

That is why Congress said, we want these decisions made during the rulemaking, and make these standards as uniform as possible.

That is why Congress said, don't do a tailor in a BAT context under 301(c), because it was concerned about maintaining that statutory deadline.

The FDF variance thwarts that statutory scheme.

You cannot wait seven or eight years for a variance application to be decided, and still meet the three year statutory deadline.

Unidentified Justice: May I ask a question there.

Have you finished your answer?

If you haven't, I don't want to interrupt you.

Mr. Dubrowski: I just wanted to add one other point to the answer there, and that is that Congress wanted these standards to be uniform, or as uniform as possible across the class, because it wanted sources who paid for pollution control equipment to know that their competitors were doing likewise.

The FDF variance also thwarts that goal of uniformity because sources may delay compliance while they have a variance application pending, even though that application may be prove to be totally lacking in merit.

Unidentified Justice: I just would like to know whether you agree with your opponent that there was statutory authority for variances in the non-toxic area, and that the statutory authority is what he described, namely, 501 and of the general scheme of the Act.

Mr. Dubrowski: 501 simply... No.

The direct answer is no.

We do not think there is statutory authority for variances for BAT and pre-treatment, except as in 301(c), which was eliminated in 1977.

Unidentified Justice: Is it part of your position, then, that before... Was 301(c) part of the '77 amendments?

Mr. Dubrowski: 301(c) existed in 1972.

In 1977, it was clearly eliminated as far as toxic pollutants.

Unidentified Justice: So your position is that variances in the non-toxic area all had to be pursuant to 301(c) or 301(g)?

Mr. Dubrowski: That is correct.

Unidentified Justice: If that were true, then the prohibition would have cut them out in the toxic area.

Mr. Dubrowski: That is correct.

Unidentified Justice: So you disagree with your opponent's reading of what the basic statutory for any variance was before '77?

Mr. Dubrowski: That is correct.

That is correct.

Unidentified Justice: May I ask one other question which was prompted by what Justice White asked you, the extent to which we should give deference to the Agency's construction of the statute.

This is unlike Chevron, if I get the history right here, in that the Agency has had this construction of the statute through the change of Administration.

There is, I think, this Section 403.13 that was in effect in 1975, was it, and then it was not changed when the new--

Mr. Dubrowski: That is correct.

Unidentified Justice: --At least, we have a consistent agency interpretation of the Act.

Mr. Dubrowski: Actually, no, we don't.

It that sense, it is very different from Chevron.

In Chevron, the Agency had an interpretation of the statute which preceded the reauthorization.

Here the interpretation of the statute, prior to the reauthorization, at least as far as practice would indicate, is directly contrary to what EPA said it could do after the reauthorization, that is, before 1977, EPA granted FDF variances only from BPT, and the only variances that you could have for BAT were the 301(c) variances.

The FDF variance was not created in a BAT or pre-treatment context until after the law was amended in 1977.

Unidentified Justice: Yes, but the Agency in '78, and the Agency since 1980 has taken the same view of the statute.

Mr. Dubrowski: Yes.

This is not a question of a change in Administration leading to a different interpretation of the statute.

However, there was a change.

Unidentified Justice: I understand what you are saying.

Mr. Dubrowski: One other argument that EPA makes is that this variance is necessary to the rulemaking.

It is necessary either for information that EPA doesn't get in a rulemaking, or for information that it can't consider.

That argument does not withstand analysis.

Section 308 of the law gives EPA ample authority to require, during the rulemaking, all the information that is relevant to the standard.

The record suggests that EPA should be making more use of 308, and less use of FDF variance mechanism, because EPA says, we sent questionnaires to 500 electroplates and only 200 of whom responded with some of the information that we requested.

If those sources failed to bring the information to EPA's attention during a rulemaking, there is no reason to give them a second bite of the apple, to challenge the standard after the rulemaking.

Likewise, EPA has data that it doesn't consider during the rulemaking.

There is no reason to sanction EPA's failure to consider that data.

In fact, its rules might be vulnerable.

Thank you.

Chief Justice Burger: Do you have anything further, Mr. Alito?

Mr. Alito: I have no rebuttal.

Chief Justice Burger: Thank you, Counsel.

The case is submitted.