ELR Citation: ELR 20607
No(s). 99-1452 (D.C. Cir. Apr 19, 2002)

The court holds that the U.S. Environmental Protection Agency (EPA) was not arbitrary and capricious in its promulgation of pollutant discharge limitations for the bleached papergrade kraft and soda subcategory of the pulp and paper industry. The court first rejects environmental groups' claim that EPA defined a technology option that it did not choose to implement as imposing in-plant limitations on regulated entities, thereby unlawfully inflating EPA's evaluation of the option's cost and invalidating EPA's cost-driven rejection of the option. There is nothing in the record to suggest that EPA defined the option in a way that would have imposed in-plant restrictions. Because EPA did not establish in-plant limitations, there is no occasion to reach the environmental groups' contention that EPA was without authority to impose in-plant technology limitations. Additionally, the court declines to examine the environmental groups' claim that EPA erred by including the cost of oxygen delignification in its determination of the capital costs of extended technology for the rejected option. The groups failed to raise the contention during the administrative phase of the rulemaking process. The court next holds that EPA provided more than adequate explanation of its economic analysis for the rejected option and used an appropriate analysis to predict the likely incident of bankruptcies in the cost analysis of the rejected option. Moreover, the court holds that EPA acted both reasonably and within its authority in adopting a case-by-case approach to color pollution instead of a nationwide standard.

Similarly, the court rejects industry groups' challenge to EPA's decision to set limits on the discharge of a pollutant and to require daily monitoring of the pollutant. EPA was within its authority and was not arbitrary or capricious. The court also rejects industry groups' claim that EPA unreasonably broadened the existing definition of "new source" by designating supplemental fiber lines as "new sources" in the rule's preamble. Likewise, the court rejects industry groups' argument challenging EPA's economic analysis of the rejected option. Finally, the court holds that EPA did not err in setting the monthly maximum effluent limitation to the 95th percentile of the distribution of monthly measurements rather than the 99th percentile.

Counsel for Petitioners
Neil S. Kagan
National Wildlife Federation
1400 16th St. NW, Ste. 501, Washington DC 20036
(202) 797-6800

Counsel for Respondents
Jon M. Lipshultz
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

Before Sentelle, Henderson, and Rogers, JJ.