Supreme Court Limits Ability of Groups
                     to Bring Citizen Suits
               for the Recovery of Civil Penalties


In an important decision issued on March 4,
the U.S. Supreme Court ruled that a party
lacks standing under Article III of the
Constitution to bring a citizen suit to recover
civil penalties unless the party can also show
that it is entitled to injunctive relief to remedy
a concrete injury to itself.  The Court's
decision was issued in Steel Co. v. Citizens For
A Better Environment (S.Ct. No. 96-643),
which involved a company's failure to file
certain reports under the Emergency Planning
and Community Right-To-Know Act
(EPCRA).

     The Court's broad ruling will have a
substantial impact on the ability of groups to
bring citizen suits under the Clean Air Act as
well as all other environmental statutes with
citizen suit provisions.  Because the ruling was
based on fundamental constitutional
principles, not the statutory language of
EPCRA, its scope is not in any way limited to
EPCRA citizen suits.  The decision establishes
that a party may not bring a citizen suit for
civil penalties under the environmental
statutes unless it can allege and ultimately
prove that it is entitled to injunctive relief
based on the existence of  "a continuing
violation or the imminence of a future
violation."

               Amicus Curiae Brief Filed by Clean
                   Air Implementation Project

     The Clean Air Implementation Project
(CAIP) filed an amicus curiae brief before the
Supreme Court because of the potential
significance of the Court's ruling on Clean Air
Act citizen suits.  In ruling below that
EPCRA citizen suits could be brought based
on "wholly past" violations, the Seventh
Circuit had specifically pointed to the Clean
Air Act citizen suit provision as
demonstrating Congress' intent that such
actions be allowed.  CAIP's brief 
maintained that the Clean Air Act citizen suit
provision should not be interpreted in the
expansive manner suggested by the Seventh
Circuit and that parties have standing to bring
citizen suits only if they can demonstrate that
they are entitled to injunctive relief to remedy
an ongoing compliance problem.

     In particular, CAIP's amicus curiae
brief sought to focus the Supreme Court's
attention on the following points:

    Under the Clean Air Act, there is the
     potential for massive numbers of
     citizen suits to be filed seeking
     substantial civil penalties where no
     real compliance problems exist.

    If the Court were to consider the
     Clean Air Act citizen suit provision
     relevant to its analysis of EPCRA, the
     Act "should . . . be interpreted only to
     authorize the filing of citizen suits to
     recover civil penalties for past
     violations that are ongoing, i.e.,
     violations which are virtually certain
     to recur and require injunctive relief to
     compel compliance."  The brief
     analyzed the language of the Clean Air
     Act citizen suit provision and showed
     that Congress intended to impose civil
     penalties only where injunctive relief
     is necessary.  The brief further noted
     that a number of district courts have
     erroneously held that citizens can
     bring actions to recover civil penalties
     for "wholly past" violations under the
     Clean Air Act, i.e., violations which
     would not entitle the plaintiffs to
     injunctive relief.

    In the case before the Court, the
     violations were cured between the
     time the 60-day notice of intent to sue
     was sent and the complaint was filed. 
     For that reason, there was concern
     that the Court might narrowly hold
     that citizen suit actions involving the
     failure to comply with the reporting
     requirements of EPCRA are
     impermissible because they are
     "wholly past" violations, without
     clarifying the conditions under which
     citizen suits for civil penalties could be
     brought.  Accordingly, the brief
     emphasized that the Court should
     broadly rule that citizen suits for civil
     penalties may be brought only where
     violations are ongoing or likely to
     recur.

    Under Article III of the Constitution,
     citizens lack standing to bring suit
     unless violations are ongoing or likely
     to recur, because they otherwise
     cannot demonstrate that the action
     will redress an injury-in-fact.  The
     brief maintained that, in view
     of the Article III requirement
     to demonstrate the existence of
     an injury that can be redressed,
     a citizen must establish that it
     is entitled to injunctive relief
     before it may seek to recover
     civil penalties or obtain other
     relief.

                  The Supreme Court's Decision

     Writing for the majority, Justice Scalia
first concluded that the Court must address
the constitutional standing issue before
determining whether the language of EPCRA
authorized a court to consider an action based
on wholly past violations.  In a separate
opinion concurring in the judgment, Justice
Stevens argued that the question of whether
EPCRA authorized citizen suits for wholly
past violations was a jurisdictional issue and
that the Court should have considered that
statutory authority issue first, thereby making
it unnecessary to rule on the constitutional
standing issue.  Three other Justices also filed
separate concurring opinions in which they
took different positions on whether and to
what extent the Court was required to address
the constitutional standing issue first.  In the
end, all nine Justices concluded that the
Seventh Circuit's decision should be reversed,
although they disagreed in varying degrees as
to the reasons why.

     Having determined that the Court
must address the issue of standing before
proceeding further, Justice Scalia ruled that the
citizens group lacked standing under Article
III because it had not satisfied the
"redressability" requirement for establishing
standing.  (The Court did not actually
determine whether the injuries alleged by the
group would have constituted sufficiently
concrete injuries because it concluded that
they would not be redressable in any event.) 
Justice Scalia's opinion analyzed the items of
relief sought by the group and rejected each as
a basis for redressing the group's claimed
injuries:

    Declaratory relief   Although the
     plaintiff had sought a declaration from
     the district court that the company
     had violated EPCRA by not filing the
     reports, the majority opinion stated
     that this would not help the plaintiff. 
     The opinion stated that, since there
     was no controversy regarding whether
     the reports had been filed or whether
     violations had occurred, such
     declaratory relief would have no
     impact.

    Recovery of civil penalties   The
     majority opinion concluded that an
     order awarding civil penalties would
     not redress any injury to the plaintiff
     because the penalties would be paid to
     the Treasury.  To the extent the
     plaintiff claimed that it had an interest
     in the penalties being paid in
     accordance with the statute, the
     opinion held that this merely
     constituted an "undifferentiated public
     interest" in carrying out the laws -- an
     interest which the Court previously
     had held is not a cognizable injury for
     Article III purposes.

    Recovery of investigation costs  
     Although the group had contended
     that it had been injured because it had
     expended funds to investigate the
     company's EPCRA compliance
     problems, the Court ruled that the
     expenditures were not an injury to be
     redressed in a citizen suit.  The Court
     explained that such investigation costs
     could be recovered only if authorized
     by the citizen suit provision.  In
     relevant part, that provision authorizes
     recovery of litigation costs but is silent
     as to pre-litigation investigation costs. 
     However, even if the investigation
     costs were considered to be litigation
     costs, the group would lack standing
     because the Court has previously ruled
     that the expenditure of litigation costs
     is not sufficient, by itself, to give a
     party Article III standing to continue
     pursuing a federal court action.

    Request for injunctive and other relief  
     The Court rejected the group's
     contentions that its requests for an
     order directing the company to allow
     inspections by the group and to
     provide copies of reports to the group
     were adequate to establish standing. 
     The Court ruled that the allegations of
     the complaint were insufficient to
     show that this requested relief would
     redress any injury suffered by the
     group.

     The majority opinion's discussion of
     the group's request for injunctive relief
     provided the single most important
     element of the Court's decision. 
     Although the Court acknowledged
     that a request for injunctive relief
     could satisfy the redressability test, it
     concluded that injunctive relief could
     only be proper where the plaintiff has
     alleged the existence of  "a continuing
     violation or the imminence of a future
     violation."  The Court stated that,
     otherwise, the plaintiff's interest is
     merely a "generalized interest in
     deterrence, which is insufficient for
     purposes of Article III."  In short, the
     Court has made clear that allegations
     based on past violations that are not
     continuing or are not likely to recur
     are insufficient to establish Article III
     standing to bring a citizen suit under
     the environmental statutes.  Thus, in
     order to establish its standing to bring
     suit, a plaintiff seeking civil penalties
     under a citizen suit provision must
     allege and demonstrate entitlement to
     injunctive relief based on an ongoing
     compliance problem.  

Stakeholder Discussions on
Part 70 Permit Revisions
Continue

The Title V "small stakeholder group"
convened last summer by EPA to address
Part 70 permit revisions issues is continuing its
discussions with the Agency.  However,
progress has been much slower than expected. 
The latest indications are that EPA will
probably not promulgate a final rule revising
Part 70 until mid-1999 at the earliest.  EPA
recently announced that it is establishing a
new public comment period for those portions
of its draft final rule that do not involve the
permit revisions sections.  These developments
are discussed below.

                      Status of the Small 
                      Stakeholder Process

     On May 14, 1997, EPA released a draft
Part 70 rulemaking package for review and
public comment by interested parties.  The
draft rule would have created a permit
revisions scheme that differed from EPA's
August 1995 supplemental proposal in ways
that caused great concern for both industry
and states.  In particular, the draft rule would
have created a three-tiered scheme under
which most changes would fall into the
"middle" or "minor revisions" tier and would
likely be subject to substantial delays under
the proposed review procedures.

     In light of the negative reactions to the
May 1997 draft rule, EPA agreed to attempt to
develop a more acceptable permit revisions
scheme.  To help achieve this goal, EPA
convened a small stakeholder group to
discuss possible approaches to improving the
permit revisions scheme.  This group  
generally consisting of six industry
representatives, five state and local agency
representatives, and one environmental
group representative -- has met with EPA
representatives at various times since June
1997.

     Industry and state representatives
believed that significant progress was being
made in the early stages of the stakeholder
discussions.  For example, EPA
representatives agreed to limit the kinds of
changes which fall into the middle tier and
to allow for "post hoc" review of changes
falling into the middle tier.  

     However, certain key issues have still
not been resolved, and it is unclear whether
mutually acceptable approaches can be
agreed upon.  Among the principal points of
disagreement are:

    Major netouts   Under the scheme
     being considered, major netouts would
     fall into the "significant revisions" tier
     while minor netouts would fall into
     the "minor revisions" tier.  The
     principal issue that remains is how
     netouts are to be defined.  According
     to EPA, a major netout occurs
     whenever emissions increases
     associated with a project (without
     consideration of project decreases)
     exceed the major source threshold
     level.  (A minor netout occurs when
     the project increases exceed the
     relevant significance threshold.) 
     Industry has emphasized that it is
     important that netouts be defined in
     terms of the "project net," i.e.,
     emissions decreases associated with the
     project should be considered along
     with emissions increases in
     determining whether the threshold has
     been exceeded.  State representatives
     have supported this position. 
     Although EPA originally seemed to
     accept this approach, EPA stated in
     February that it wanted to consider
     only project increases in determining
     whether the relevant threshold has
     been exceeded.

    Trial operation period   The state and
     industry representatives have proposed
     that a source have up to 270 days after
     issuance of a construction permit in
     which to operate before obtaining its
     Title V permit.  However, EPA has
     contended that section 502(a) of the
     Act precludes this approach, because
     the source would not have a Title V
     permit covering the changes associated
     with the project.  EPA has suggested a
     compromise under which EPA would
     have an opportunity to object to
     proposed permit terms during the
     construction permit comment period
     rather than solely during the operating
     permit issuance phase.  There appears
     to be no resolution immediately in
     sight.

    Potential to emit (PTE) limits   PTE
     limits are source-specific limits that are
     taken to restrict the source's PTE for
     purposes of "major source" or "major
     modification" determinations.  The
     principal issue concerns whether, and
     to what extent, PTE limits will fall
     into the "minor revisions" tier rather
     than the "de minimis revisions" tier. 
     EPA has proposed various approaches
     for defining PTE limits that must be
     processed as minor revisions.  For
     example, some EPA representatives
     have suggested that PTE limits that are
     as low as 50 percent of the relevant
     threshold level may not be treated as
     "de minimis revisions."

                   New Comment Period on the
                  Remainder of the Draft Rule

     On March 25, EPA published a Federal
Register notice announcing the availability of
a draft preamble and draft regulatory sections
addressing Part 70 matters other than permit
revisions or public and EPA review.  63 Fed.
Reg. 14,392.  The matters addressed include
definitions, applicability, permit programs,
permit applications, and permit content. The
draft sections available for review "are the
same as those contained in the May 14, 1997
draft preamble and regulatory revisions."  The
notice further states that the sections are being
made available for comment at this point so
that any public comments may be considered
before the close of the stakeholder discussions. 
The public comment period will end on April
24, 1998.

     Although industry and states have
primarily focussed their efforts on improving
the permit revisions sections of Part 70,
certain of the remaining provisions of the
rulemaking package are potentially very
important as well.  Among the principal issues
arising in connection with the draft sections
are ones associated with the Part 70 definition
of "major source" as it relates to such matters
as support facilities, research and development
facilities, and fugitive emissions.  Other
significant issues relate to the Part 70
compliance certification requirements and
emergency defense provisions.  

EPA Issues New Guidance for
Permit-related Environmental
Justice Claims 

On February 5, EPA issued an "Interim
Guidance for Investigating Title VI
Administrative Complaints Challenging
Permits" to establish the ground rules for
EPA's investigation of citizen complaints that
state or local permitting actions violate Title
VI of the Civil Rights Act of 1964.  The
guidance will likely lead to citizens groups
raising more environmental justice claims,
especially in the context of air, water and
waste permitting actions.

     Title VI of the Civil Rights Act
prohibits discrimination on the basis of race,
color or national origin.  Under EPA's
regulations implementing Title VI, recipients
of EPA funding (which include states and local
environmental agencies) may not use "criteria
or methods . . . which have the effect of
subjecting individuals to discrimination
because of their race, color, national origin or
sex. . . ." 40 C.F.R  7.35(b).  EPA's
implementing regulations appear to prohibit
actions that simply result in a discriminatory
effect or "disparate impact" on racial or ethnic
minorities, regardless of intent. 

     The interim guidance document
confirms that it is the Agency's position that
citizens may file Title VI complaints with
EPA alleging that discriminatory effects
resulted from a state or local agency's issuance
of pollution control permits.  The guidance
document also establishes the framework that
EPA's Office of Civil Rights ("OCR") will use
to process complaints filed under Title VI.  In
addition, it sets forth the administrative steps
EPA will follow after a complaint is filed and
includes criteria for the Agency to use when
determining the merits of a Title VI
complaint. 

     Various groups have expressed
concerns with the guidance because it was
drafted with little or no input from state
agencies or the regulated community.  In
particular, the Environmental Council of
States ("ECOS") recently raised serious
concerns with the content of the guidance
document and issued a resolution that requests
the Agency to withdraw this version of the
guidance.   

     Following is an overview of the
procedures and criteria set forth in the interim
guidance document.

                    Acceptance or Rejection 
                        of the Complaint

     Within 20 days of receiving a Title VI
complaint, the OCR will determine whether
a claim should be accepted for further review
or rejected.  EPA states that its general policy
is to "investigate all administrative complaints
that have apparent merit" and are timely and
complete.  EPA's policy further provides that
under most circumstances a Title VI complaint
must be filed within 180 days of issuance of
the final permit.  However, the Agency may
waive this time limit.  The interim guidance
indicates that EPA will encourage the parties
to negotiate a settlement after the Agency
accepts a complaint for processing.   

                   Investigation   Disparate 
                        Impact Analysis

     After EPA accepts a Title VI
complaint, it will conduct an investigation to
determine "whether the permit(s) at issue will
create a disparate impact, or add to an existing
disparate impact, on a racial or ethnic
population."  The guidance sets forth a series
of steps that will be used to determine if a
disparate impact has occurred.

     First, the OCR will identify the
population affected by the permit that is the
subject of the complaint.  EPA indicates that
it believes "proximity to a facility will often be
a reasonable indicator of where impacts are
concentrated."  The second step in the analysis
is to determine the racial and/or ethnic
composition of the affected population that
was identified in Step 1.  The third step
involves determining what other permitted
facilities, if any, should be included in the
disparate impact analysis. The interim
guidance indicates that the EPA is most likely
to consider Title VI complaints in which "the
permitted facility at issue is one of several
facilities, which together present a cumulative
burden or which reflect a pattern of disparate
impact."  EPA goes on to state that "permits
that satisfy the basic public health and
environmental protections contemplated
under EPA's programs nonetheless bear the
potential for discriminatory effects where
residual pollution and other cognizable
impacts are distributed disproportionately to
communities with particular racial or ethnic
characteristics."  

     After information is gathered in the
first three steps, EPA will use that information
to conduct the disparate impact analysis.  EPA
states that this will involve comparing the
racial or ethnic characteristics within the
affected population, as well as comparing the
characteristics of the affected population to the
non-affected population.  According to the
guidance, "[t]his approach can show whether
persons protected under Title VI are being
impacted at a disparate rate."  The Agency also
indicates that other methods of analysis may
also be used, depending on the facts of the
particular case.  The final step in the disparate
impact analysis is to determine whether any
disparity is "significant" by using statistical
analyses.  After this step in the analysis is
complete, EPA may make a prima facie
finding that there is a disparate impact or
determine that there is no disparity. 
  
                                
                                
                      Rebuttal/Mitigation

     If EPA issues an initial finding of
disparate impact after conducting the
investigation outlined above, the Agency will
provide the state or local permitting authority
(the recipient of the federal funds) an
opportunity to rebut the finding, justify the
disparate impact, or propose a plan to mitigate
the impact.

                     Preliminary Finding of
                         Noncompliance

     OCR will issue a preliminary finding
of noncompliance if the recipient fails to
mitigate, rebut, or justify the permitting
action.  The interim guidance provides that
EPA is to issue such a finding within 180
calendar days after the investigation is
initiated. The Agency's preliminary finding
may include recommended actions the
recipient can take to remedy the
noncompliance.

                    Formal Determination of
                         Noncompliance

     After the recipient receives the
preliminary finding of noncompliance, it has
50 days to either achieve compliance
voluntarily or "submit a written response
demonstrating that OCR's preliminary finding
is incorrect."  If the recipient fails to take such
actions, EPA will issue a formal determination
of noncompliance.  The recipient must come
into compliance within 10 days after receiving
the formal determination.  If this is not
accomplished, EPA "will start procedures to
deny, annul, suspend or terminate EPA
assistance" to the recipient, and/or refer the
matter to the Department of Justice for
litigation.

     The Agency is accepting public
comment on the interim guidance document
until May 6, 1998.  The guidance is available
on the Network's web site in the
"Enforcement" category.  

Environmental Groups
Challenge EPA Guidance
Document on
Implementation of Ozone
and PM Standards

On February 27, several environmental
groups filed a petition for review in the
D.C. Circuit challenging an EPA guidance
document addressing implementation of the
ozone and particulate matter (PM) standards in
effect prior to EPA's promulgation of revised
and new ozone and PM standards in July 1997. 
Delaware Valley Citizens' Council for Clean Air,
et al. v. EPA (No. 98-1079). That guidance
document, entitled Guidance for Implementing
the 1-Hour Ozone and Pre-existing PM10 NAAQS
(December 1997), explains how EPA plans to
handle the transition from the old standards to
the new standards and sets forth the conditions
under which the old standards will be
revoked.  The principal theme of the guidance
document is that states are to maintain their
"momentum" in carrying out existing ozone and
PM programs while they are developing new
programs to implement the revised ozone and
PM standards. 

     The judicial challenge by the
environmental groups   the Sierra Club,
NRDC, the Natural Resources Council of
Maine, as well as the Delaware Valley
Citizens' Council for Clean Air   was largely
unexpected.  Many industry observers had
regarded the guidance document as relatively
non-controversial for the most part.

     The environmental groups' decision to
challenge this guidance document may be
highly significant.  It appears to signal the
groups' intention to attack all or most of 
EPA's efforts to provide additional flexibility
for states and sources as the Agency
implements the revised ozone and PM
standards.  In the July 1997 "Implementation
Plan" accompanying the revised ozone and
PM standards (62 Fed. Reg. 38,421), EPA
stated that it intended to lessen the economic
and administrative impacts of the new
standards by devising flexible, cost-effective
implementation schemes through subsequent
guidance documents and rulemaking
proceedings.  For example, EPA announced
that it would create a new category of 
"transitional" ozone nonattainment areas that
purportedly would be subject to innovative
new source review requirements and would
likely not be required to implement additional
local controls to meet the revised ozone
standard.  EPA has reiterated its intention to
develop flexible implementation schemes for
the new standards many times in various
contexts.

     The environmental groups' willingness
to seek review of such a seemingly innocuous
document seems to confirm industry's
concerns that EPA's stated intentions to create
flexible, innovative implementation schemes
might not be carried out.  Many industry
representatives believe that, despite EPA's
assurances that workable approaches will be
devised, the final implementation schemes for
ozone and PM will likely end up being much
more rigid than EPA has previously indicated. 
It is unclear how EPA will respond to the
environmental groups' attack on the
implementation scheme.  EPA may be willing
to compromise with environmental groups on
"flexible" elements of its implementation
schemes to avoid, or settle, litigation or to gain
concessions on other matters.  The result may
well be that the flexible elements of the
implementation scheme will not be retained
while the harsher elements of the scheme   the
very elements that the flexible elements were
meant to counterbalance   will remain intact.

     Because a petition for review is not
required to set forth detailed legal arguments
and other documents filed in the case to date
have been preliminary in nature, it is unclear
precisely what legal theories the
environmental groups will rely upon. 
However, they generally contend that the
guidance document unlawfully postpones
compliance obligations in certain
nonattainment areas.

                                                                
               EPA Withdraws List of Areas Where
                 1-Hour Ozone Standard Would Be
                            Revoked

     In a somewhat related development,
EPA recently withdrew a "direct final rule"
setting forth a list of areas where EPA intends
to revoke the 1-hour ozone standard because it
has determined that attainment of that
standard has been achieved.   In a Federal
Register notice of January 16, 1998, EPA had
listed hundreds of counties where the 1-hour
standard would be revoked and stated that the
direct final rule containing the list would
become effective in 60 days unless adverse
comments on the rule were received.  63 Fed.
Reg. 2726.  However, in a March 16 notice,
EPA stated that, because adverse comments
had been submitted, the direct final rule is
withdrawn and a proposed rule containing the
list will be finalized at some point.  63 Fed.
Reg. 12,652. Among the parties submitting
adverse comments on the direct final rule were
NRDC and the Environmental Defense Fund.
 

SAVE THE DATE   
Clean Air Act Information
Network Spring Meeting,
May 20-21, 1998, Park
Hyatt Hotel, Washington,
D.C.  

Send your registration in now by mail, fax
(202-467-7176), or phone (202-467-7878).  For
complete details, see the January 1998
Washington Report at WR-175.