ELR Citation: ELR 21421
No(s). 89-6056 (5th Cir. Sep 14, 1990)

The court holds that a company, which imported five cargoes of petroleum products from Mexico and classified the cargoes as gasoline, did not violate the Environmental Protection Agency's (EPA's) gasoline specification standards promulgated under the Clean Air Act. After the company reported the cargoes to EPA and claimed lead usage credits based on the cargoes being classified as gasoline, the United States sought $9 million in penalties claiming that the cargoes were not gasoline as defined under Clean Air Act regulations, and thus the company's claim of credits was invalidly created. Although the trial court found that four of the five cargoes were not gasoline and that the lead credits on those cargoes were thus not validly created, it held that §211(d) of the Clean Air Act, which imposes a mandatory $10,000 per day penalty for a violation of the regulations issued under §211(c), was unconstitutional. The court first finds that although EPA's regulatory definition of "gasoline" is nontechnical and provides no objective test, standards of the American Society for Testing and Material (ASTM) provide an objective standard. The court holds that because all five cargoes met all of the ASTM requirements for gasoline, including octane content, the cargoes were properly classified as gasoline by the company and the lead credits properly claimed. Moreover, the court holds that EPA's Clean Air Act regulations requirement that an imported petroleum product must be "sold in any state" for use in motor vehicles to be classified as gasoline was satisfied, since evidence was presented that a service station in the United States had posted gasoline for sale with an octane rating of 80, which was lower than all of the company's cargoes octane ratings. The posting of such an octane rating presents prima facie evidence as to the actual octane level of the gasoline at that station and that postings are evidence of sales. The court next rules that §211(d) of the Clean Air Act, by establishing mandatory penalties, does not unconstitutionally violate the separation of powers. The mandatory penalty and the mitigation authority provided the EPA Administrator in §211(d) are not an aggrandizement of power by one branch at the expense of the other, nor an encroachment of one branch on the other. The constitutionality of congressionally established mandatory penalties, such as that found in §211(d), and the granting to the executive branch the power to remit or mitigate a congressionally established and judicially imposed penalty have long been recognized and approved by the Supreme Court. Finally, the court holds that the mandatory penalty provision of §211(d) does not violate due process, since the judiciary has no inherent power to mitigate congressionally mandated penalties.

[The district court opinion is published at 20 ELR 20001.]

Counsel for Plaintiff-Appellant
Kenneth W. Starr
Solicitor General's Office
U.S. Department of Justice
10th & Constitution Ave., NW, Rm. 5143, Washington DC 20530
(202) 514-2201

Counsel for Defendant-Appellee
Keith A. Jones
Fulbright & Jaworski
1150 Connecticut Ave., NW, Washington DC 20036
(202) 452-6800

Before REAVLEY, DUHE, and WIENER, Circuit Judges.