Fourth Circuit Rules EPA May Issue Presumptively Valid Effluent Limitations under § 301 of the FWPCA

The Fourth Circuit Court of Appeals has become the latest court to hand down a decision in the welter of litigation¹ surrounding EPA's establishment of single-number effluent limitations for industrial point sources under the Federal Water Pollution Control Act Amendments of 1972 (FWPCA). Jumping foursquare into the effluent limitations controversy, the court held in E.I. DuPont de Nemours & Co. v. Train² that EPA has the authority to issue such limitations under § 301 of the FWPCA, but that such numbers are only "presumptively applicable" to individual point sources.

This ruling gives continuing judicial momentum to the view, already advanced by the Third³ and Seventh⁴ Circuits, that EPA has the power to promulgate discharge limitations under § 301. However, the decision serves to confuse even further the related question of the form and effect those limitations should have, and thereby leaves uncertain the achievability of nationally uniform discharge standards within each category or class of industrial polluters.

National uniformity was seen by the framers of the FWPCA as crucial to the facilitation of administration and enforcement under the statute, and to the prevention of industrial threats to move to a state with weaker discharge standards against states making a vigorous effort at water pollution control.⁵ Notwithstanding the framers' intent, the FWPCA's regulatory scheme was left ambiguous on this point. While § 301⁶ requires point sources to achieve"effluent limitations," neither the EPA Administrator nor anyone else is given explicit authority to issue regulations establishing such limitations.

Section 304,⁷ however, mandated the Administrator to publish "regulations, providing guidelines for effluent limitations" within a year of the statute's enactment. After missing this deadline, EPA, in response to a court-ordered publication schedule,⁸ began to promulgate rules entitled single-number "Effluent Limitations Guidelines" for particular point source categories, and claimed that they were uniformly applicable throughout the nation. The agency also asserted that the regulations were issued pursuant to both § 301 and § 304, and that under § 509(b)(1)⁹ they were thus directly reviewable in the appropriate United States court of appeals rather than in the federal district court.

Predictably, numerous industrial dischargers filed suit, at both the district and appellate court level, challenging EPA's actions. In the first court of appeals ruling on this issue, the Eighth Circuit¹⁰ rejected the [6 ELR 10104] Agency's interpretation of the statutory scheme and held that its regulations constituted only non-binding advisory guidelines to be considered by the issuer of a National Pollutant Discharge Elimination System (NPDES) permit to each particular source. Six months later, however, the Third¹¹ and Seventh Circuits¹² found that the Administrator did have authority to promulgate effluent limitations under § 301, and that these limitations are to be uniformly and automatically applied to individual dischargers through the NPDES permit program, at least as the upper limit, or ceiling, of permissible pollutant discharges.

The Fourth Circuit's recent ruling in DuPont v. Train partially reinforces the latter position. Judge Breitenstein of the Tenth Circuit, sitting by designation, did not undertake an extensive analysis of the FWPCA statutory structure and its legislative history as had the Third and Seventh Circuits. Rather, he simply stated that "the Act is vague, uncertain and inconsistent. Support can be had for diametrically opposed conclusions." A pragmatic rather than a legalistic approach is thus called for:

We are faced with the problem of making workable a vague, regulatory statute so as to attain the Congressional objective that the discharge of pollutants can be eliminated. This end may not be reached by quibbling over semantics. Ambiguity must be transformed into practicality.

Noting that the Act is unworkable unless someone takes the initiative in setting effluent limitations, and that the control technology is determined by the Administrator, the court found it reasonable that he should be the one to establish by regulation generally applicable limitations. EPA's promulgation of these rules under both § 301 and § 304 was also unobjectionable in view of the unrealistic statutory deadlines and the court-imposed timetable. As an additional ground for upholding EPA's action, the court invoked Train v. Natural Resources Defense Council¹³ for the proposition that the agency's interpretation of its own authority under an ambiguous statute must be accepted by a reviewing court if the interpretation is "sufficiently reasonable."

The finding that EPA has the authority to promulgate effluent limitations, as Judge Breitenstein emphasized, resolves only half the dispute, however. The question remains as to the legal effect of the limitations. The Third Circuit, in American Iron and Steel Institute v. EPA,¹⁴ had ratified EPA's position that the limitations are uniformly binding throughout the nation and, with some limited exceptions (variances), must be mechanically cranked into each NPDES permit by the issuing authority as the upper limit of permissible discharges. Industry, on the other hand, had argued that the limitations were to be viewed as only informational, for the consideration of the permit issuer, but not binding upon it. The ultimate discharge limitation for each point source is, under this interpretation, to be set by the permitting authority in the context of that individual permit proceeding.

Judge Breitenstein chose a middle position. EPA's effluent limitations are presumptively applicable to permit applications; that is, they control unless the discharger can demonstrate that he merits an exception from the uniform national standard. In the Fourth Circuit's view, this solution represents a necessary compromise between national uniformity and practicality.

Thus, national uniformity, subject to specific narrow exceptions, is attained. The balance of general rule and narrow exception assures all possible uniformity without sacrifice of the flexibility needed to adjust for disparate plants in dissimilar circumstances.

While this notion that an effluent limitation presumptively applies to a particular dischargers facially resembles EPA's established variance procedure, it is actually less rigorous. To win a variance from the agency a discharger must show that the technological factors relevant to his point source are "fundamentally different from the factors considered in the establishment of the guidelines,"¹⁵ rather than that his plant is simply in "dissimilar" economic as well as technological circumstances.

As to the form which the limitations must take, the Third Circuit had ruled that they could be set as single numbers, but that EPA was also required under § 304 to designate a range below this single-number discharge ceiling within which individual permit limitations can be set by the permitting authority in view of economic and technological factors relating to each particular point source. The Fourth Circuit's view of the single-number issue was somewhat different. According to Judge Breitenstein, nothing in the Act prohibits the use of single numbers, and s single-number limitation in any case permits a discharge within the range from zero up to the allowed amount. No separate ranges need be designated. The Third Circuit, in contrast, had expressly rejected this notion of de facto ranges from zero up to the effluent limitations. If a range is required, however, the Fourth Circuit noted that a zero discharge standard would violate the Act, a conclusion which seemed anomalous to the court since an objective of the statute is to eliminate all pollutant discharges by 1985. Suggesting that ranges may be desirable for some categiries but not for others, Judge Breitenstein concluded that the expertise of the Administrator was persuasive as to whether the limitations should be fixed in single numbers or ranges, but that such a determination for any particular category could of course be challenged as arbitrary under § 509(b)(1)(E)¹⁶ in the context of court review of the issuance or denial of a permit.

In keeping with its view that ranges are not generally required, the Fourth Circuit also concluded that the factors specified in § 304(b)(1)(B) and (b)(2)(B),¹⁷ such as age of the equipment and facilities involved and the cost of effluent reduction, are to be weighed by the permit issuer in determining whether the presumptively valid single-number effluent limitations should apply to [6 ELR 10105] a particular point source. If not, a higher just as well as a lower discharge level could be written into the permit. This is opposed to the Third Circuit's position that the specified factors are to be used by the permit issuer in determining at what level below this national ceiling the permissible discharge level should be set, while the single-number effluent limitations may be exceeded only via a formal variance.

A comparison of the attitudes of all four circuits which have spoken on the question of discharges exceeding the single-number effluent limitations set by EPA is instructive. In the Eighth Circuit's view, whether or not discharges above those limits are allowed is up to the permit issuer, subject of course to EPA's ultimate veto power over any permit, with the limitations themselves serving only as advisory guidelines as to what the permitted level of discharge should be. The Third and Seventh Circuits held instead that discharges above the single-number limitations could be permitted only through the formal variance procedure, under which the discharger would have to show that the technological factors relevant to his plant were "fundamentally different" from those considered by EPA in setting the single-number limitations. And the Fourth Circuit would allow permit issuers to sanction such discharges from a particular point source if the discharger could rebut the presumptive applicability of the single-number limitation by demonstrating that the plant was faced with "dissimilar" technological or economic circumstances.

Since the idea of national uniformity in effluent reduction really translates as the relative inviolability of EPA-designated upper limits of allowable pollution, the Fourth Circuit's interpretation is clearly less helpful than the Third and Seventh Circuits' rulings in achieving that goal.

On the more specific subject of the validity of particular limitations, the Fourth Circuit, as had the Third and Seventh Circuits, remanded for reconsideration large portions of the challenged regulations for lack of adequate evidentiary or explanatory support in the record. Thus while EPA again won judicial vindication of its general authority to promulgate effluent limitations with nationwide application, its exercise of this power as to particular industrial categories was again held less than adequate.

The Fourth Circuit's decision in DuPont v. Train, although it further solidifies the developing judicial position that EPA can establish national effluent limitations under § 301, also serves to complicate the overall effluent limitations controversy and cloud the prospects for national uniformity in effluent reduction by introducing legal uncertainties at other points in the regulatory process. The divergent judicial decisions on this point demonstrate both the complexity and ambiguity of the statutory scheme and the enormity of the regulatory problems involved. While the courts seem to be making progress in settling some points of dispute, the logjam of litigation surrounding EPA's effluent limitations has not yet broken. And the beleaguered agency's less than adequate performance in setting certain of the limitations casts a shadow on optimistic predictions that the standard-setting phase of the national water pollution control program will soon be behind us.

Other courts have yet to speak on the various issues surrounding EPA's effluent limitations, and the body of judicial opinion on the subject is sure to increase in the near future. Unfortunately, this increase promises only to breed more confusion until either the Supreme Court or Congress definitively clarifies the matter.

1. See Comment, National Uniformity Under the Water Act: Two Circuits Uphold EPA's Authority to Issue Effluent Limitations Under § 301, 6 ELR 10006 (Jan. 1976).

2. __ F.2d __, 6 ELR 20371 (4th Cir. Mar 10, 1976). See also, FMC Corp. v. Train, __ F.2d __, 6 ELR 20382 (4th Cir. Mar. 12, 1976) and Tanners' Council of America, Inc. v. Train, __ F.2d __, 6 ELR 20379 (4th Cir. Mar. 10, 1976).

3. American Iron and Steel Institute v. EPA, __ F.2d __, 6 ELR 20068 (3d Cir. 1975).

4. American Meat Institute v. EPA, __ F.2d __, 6 ELR 20029 (7th Cir. 1975).

5. See Congressional Research Service, A Legislative History of the Water Pollution Control Act Amendments of 1972 at 162 (1973).

6. 33 U.S.C. § 1311, ELR 41112.

7. 33 U.S.C. § 1314, ELR 41113.

8. Natural Resources Defense Council v. Train, 4 ELR 20108 (D.D.C. 1973), aff'd in part, 510 F.2d 692, 5 ELR 20046, 20696 (D.C. Cir. 1975).

9. 33 U.S.C. § 1369(1), ELR 41127.

10. CPC International, Inc. v. Train, 515 F.2d 1032, 5 ELR 20392 (8th Cir. 1975).

11. Supra note 3.

12. Supra note 4.

13. 421 U.S. 60, 5 ELR 20264 (1975).

14. Supra note 3.

15. 39 Fed. Reg. 28926 (Aug. 12, 1974), 39 Fed. Reg. 30073 (Aug. 20, 1974) (emphasis supplied).

16. 33 U.S.C. § 1369(b)(1)(E), ELR 41127.

17. 33 U.S.C. § 1314(b)(1)(B) and (b)(2)(B), ELR 41113.