Federal Facilities Held Subject to State Implementation Plan Permit Requirements as Circuits Split

The extent of the federal government's duty to comply with state pollution control requirements under the Clean Air Act Amendments of 1970 remains a problematic area of environmental law. As was noted in an earlier ELR Comment,¹ § 118 of the statute provides that all federal agencies operating facilities or engaging in activities which may result in the discharge of air pollutants shall comply with federal, state, interstate, and local pollution control and abatement requirements to the same extent that any person is subject to such requirements.²

Although this mandate seems clearly to subject federal facilities to all state pollution control requirements, the initial circuit court decision on the point held instead that while federal facilities must comply with substantive state requirements such as emissions standards set in implementation plans, they are not bound to comply with state procedural requirements, such as permit schemes, also contained in those plans.³ In the most recent circuit court ruling on this question, however, arguments of the federal government identical to those which proved successful in the initial circuit court case were rejected as unconvicing, and facilities of the TVA and U.S. Army were held subject to state implementation plan permit regulations as well as emissions standards.⁴

The makings of this circuit split began with the Sixth Circuit's ruling in Kentucky ex rel. Hancock v. Ruckelshaus,⁵ a decision which was criticized in ELR's previous Comment.⁶ In that case, the court affirmed a lower court's dismissal of an action brought by the Kentucky Attorney General to compel facilities of the TVA, Atomic Energy Commission and Department of the Army to obtain permits from the state Air Pollution Control Commission to operate equipment emitting air pollutants within the state. Under the Kentucky implementation plan, which had been approved by EPA pursuant to § 110 of the Clean Air Act, the owners and operators of all air polluting equipment within the state are required to apply for and obtain such a permit before operating their equipment.

In brief, the court in Hancock ruled that suit against the federal facilities was barred by sovereign immunity since § 118 contained no waiver of the privilege, and by the Supremacy Clause since the legislative history revealed no clear congressional intent to subject federal agencies and officials to state and local regulation.The court also pointed to Executive Order 11752 as an administrative interpretation of § 118 which provides strong evidence in support of its view of the statutory provision's meaning.

Although this rationale was open to question in a number of areas, the court's resolution of the issue seemed to take on considerable weight as precedent in view of the paucity of case law on this exact point. The Fifth Circuit's recent decision in Alabama v. Seeber,⁷ which reached the opposite legal conclusion on analogous facts, thus came as an unexpectedly strong counterattack to the notion of federal immunity from state pollution control permit requirements, joining a battle which will most probably require resolution by the Supreme Court.

The Fifth Circuit's reasoning in Alabama is both defensible and compelling. After examining the statute's regulatory scheme, the court decided that, taken as a [4 ELR 10198] whole, this framework supports the conclusion that federal facilities are subject to state permit requirements. According to the court, § 118 effectively conveys a congressional intent that federal facilities are to be treated equally with private facilities in the scheme of control established by the Act. Under the statute, the primary responsibility for setting and enforcing emission standards or limitations with respect to existing stationary sources of air pollution rests with the states. While EPA retains the authority for enforcement under §§ 111 and 112 regarding federal facilities which are new sources or which emit hazardous pollutants, the states thus have the power under §§ 110 and 118 to enforce the provisions of their implementation plans, including permit requirements, against federal facilities which are existing sources.

Recognizing that in particular instances such treatment might result in unacceptable hardships, § 118 provides for executive exemption of federal emissions sources from any requirement upon a determination that such action is in the paramount interest of the United States. The court noted that in view of the explicit exemptions for federal facilities in §§ 111 and 112, which establish control schemes for new sources and hazardous pollutants, the absence of any such exemption in § 110 supports its conclusion that existing federal facilities are subject to state permit requirements contained in implementation plans adopted and approved pursuant to that section.

The court found the legislative history of § 118 ambiguous on the point at issue, except to the extent that it revealed Congress' dissatisfaction with the performance of federal facilities under the provisions of the Air Quality Act of 1967, which relied primarily on voluntary compliance. During the congressional hearings on the 1970 Amendments, the Senate Public Works Committee noted "many incidents of flagrant violation of air and water pollution standards by Federal facilities,"⁸ and found that "Federal agencies have been notoriously laggard in abating pollution and in requesting appropriations to develop control measures…."⁹ Section 118 was thus clearly intended to be stronger than the provisions of the earlier statute, a fact which weighs heavily against reading the more recent provision so as to effect a return to the discarded policy of voluntary compliance.

The heart of the defendants' argument was that the term "requirements" in § 118 refers only to substantive requirements such as emission standards and limitations, and not to procedural requirements such as permit regulations. This contention was based directly on the Sixth Circuit's holding in Kentucky ex rel. Hancock, but it received little deference from the court in Alabama. Noting that this distinction draws no sustenance from the text of the statute, the court labeled it "a semantical red herring" implicitly designed to denigrate congressionally-mandated mechanisms of enforcement and to recharacterize the statutory scheme. Furthermore, the language of § 116 shows that "requirements" must include more than just emission standards and limitations. Under that section, states retain the right "to adopt or enforce (1) any standard or limitation respecting emissions of air pollutants or (2) any requirement respecting control or abatement of air pollution…."

The court took notice of the Sixth Circuit's contrary ruling in Hancock, and then proceeded to list the factors underlying that decision's rationale along with an explanation as to why each was unconvincing. First, the fact that § 304, the "citizen suit" provision, authorizes the states to sue federal facilities for violations of an emission standard or limitation but not for abrogation of permit requirements does not mean that § 118 does not authorize the latter type of suit. Second, defendants' reading of the legislative history was strained and selective. The legislative history is ambiguous as to the meaning of the term "requirements" in § 118, and under such circumstances the words of that section, the scheme of the Act as a whole, and the congressional purpose, as far as it can be discerned, serve as the best guides to interpreting the statute. And third, defendants' contention that subjecting federal facilities to state permit requirements would be unduly burdensome is substantially undermined by their assertion that they must in any event comply with state emission limitations, compliance schedules, and monitoring requirements. While some burden may remain, § 118 allows the President to exempt federal facilities from any state requirement if the burden becomes excessive.

Because of its conclusion that in § 118 Congress affirmatively declared federal facilities subject to state regulation, including permit requirements, the court held erroneous defendants' assertions that they were immune from suit due to the Supremacy Clause and sovereign immunity. These arguments were identical to those accepted by the Sixth Circuit in Kentucky ex rel. Hancock, after the court there had held that § 118 did not subject federal facilities to state procedural regulations, such as permit requirements.

An additional issue over which the circuit courts disagreed was the effect of Executive Order 11752.¹⁰ That Order directed federal facilities to comply with "Federal, State, interstate, and local substantive standards and substantive limitations," but stated that it was "not intended, nor should it be interpreted, to require Federal facilities to comply with State or local administrative procedures with respect to pollution abatement and control." The Sixth Circuit found this to be weighty evidence supporting its view that federal facilities are subject to substantive state requirements but not to procedural ones, such as permit regulations. The Fifth Circuit, on the other hand, held the Order to be neither an authoritative administrative interpretation of § 118, nor an exercise of the exemption authority granted the President under that section. The Executive Order is instead in the latter court's view, an independent [4 ELR 10199] directive based on the executive authority of the President over federal employees and facilities, and as such cannot in any way modify an Act of Congress.

A dissent in Alabama acknowledged that the majority's reasoning is persuasive, but contended that given the unclear language of § 118, the ambiguous legislative history, and the authority of Kentucky ex rel. Hancock, an implied consent to subject federal facilities to state permit schemes should not be attributed to Congress. While this dissent carries little weight in view of the majority's analysis, it is correct in its description of the majority decision's rationale. The court's examination of the statutory scheme incorporating § 118 is incisive and thorough and provides a firm basis for its decision regarding the proper interpretation of that section. Its step by step consideration and demolition of the reasoning behind the Sixth Circuit's ruling in Kentucky ex rel. Hancock further buttresses this determination, and seems to give a decided edge to the plaintiff states' position if and when the question does arrive for resolution before the Supreme Court.

In Hancock, the Sixth Circuit blithely stated that the "national dedication to improvement of the environment by prevention and control of air pollution is in no way impeded by exempting federal agencies from the permit requirement" of the state implementation plan. But the Fifth Circuit correctly perceived in Alabama that the congressional hearings on the Clean Air Act Amendments in 1970 show that such soothing assurances will no longer wash. The problem of air pollution from federal facilities is acute; the Tennessee Valley Authority alone burns 100,000 tons of coal per day. A scheme of voluntary federal compliance and enforcement has been tried and found wanting; the more comprehensive and cooperative federal-state scheme of the 1970 Amendments would be seriously impaired if federal facilities were immunized from compliance with state permit requirements which in many cases form the central enforcement device of state implementation plans.

Nor are the implications of this split of judicial authority limited to air pollution. Section 313 of the Federal Water Pollution Control Act Amendments of 1972¹¹ and § 4 of the Noise Control Act of 1972¹² both contain language identical to that in § 118 of the Clean Air Act Amendments. Thus a final judicial determination¹³ of the meaning of § 118 will implicitly interpret the limits of state enforcement powers against federal facilities in the areas of water and noise pollution as well. The stakes are high, but the battle has now been squarely joined, and the Fifth Circuit's convincing justification for its acceptance of the state's position is cause for cautious optimism on the part of environmentalists as to the final outcome.

1. Comment, Sixth Circuit Holds Federal Facilities Immune from State Implementation Plan Permit Requirements, 4 ELR 10107 (Aug. 1974).

2. 42 U.S.C. § 1857f; Section 118 is set out verbatim at 4 ELR 10107, n. 4.

3. Kentucky ex rel. Hancock v. Ruckelshaus, 4 ELR 20484 (6th Cir. June 5, 1974).

4. Alabama v. Seeber, 4 ELR 20793 (5th Cir. Oct. 14, 1974).

5. 4 ELR 20484 (6th Cir. June 5, 1974).

6. Comment, supra n. 1.

7. 4 ELR 20793 (5th Cir. Oct. 14, 1974).

8. S. Rep. No. 91-1196, 91st Cong., 2d Sess., at 23 (1970).

9. Id. at 37.

10. ELR 45017, 38 Fed. Reg. 34793 (1973).

11. 33 U.S.C. § 1323; ELR 41120.

12. 42 U.S.C. § 4904; ELR 41501.

13. On September 3, 1974, the plaintiff in Kentucky ex rel. Hancock v. Ruckelshaus filed a petition for certiorari (43 U.S.L.W. 3123). The Supreme Court has not yet acted upon the petition.