03/01/91
Revised Guidance on Enforcement During Pending SIP Revisions>
E.32
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
MEMORANDUM
SUBJECT: Revised Guidance on Enforcement During Pending SIP
Revisions
FROM: /s/ Michael S. Alushin
Associate Enforcement Counsel for Air
Office of Enforcement
/s/ John B. Rasnic, Acting Director
Stationary Source Compliance Division
Office Of Air Quality Planning and Standards
TO: Addressees
Attached is final guidance on the above-referenced subject. We issued
this guidance in draft on December 19, 1990. The final policy attempts to
reflect comments received from several of the Regions submitted in response
to that draft.
Existing guidance ( Aug. 29, 1989 ) attempted to adapt Agency policy to
the unsettled judicial landscape which prompted the Supreme Court to grant
certiorari to hear the General Motors case. Now that the Supreme Court has
overturned unfavorable precedents which had restricted EPA authority, and
the Clean Air Act Amendments of 1990 have added a new twelve month SIP
revision review deadline, we have developed this guidance to encourage more
vigorous federal enforcement of State implementation plans.
Some commenters asked for clarification of the meaning of "high
probability" in Subpart D of the new policy. The draft has been amended to
make clear that only SIP revisions which have been formally proposed by the
State may have a high probability of approval. Assessing the likelihood of
approval, prior to reviewing the supporting data contained in a formal
application by the State, in most instances would be inherently difficult.
Moreover, timely submittal of complete SIP revision applications should be
encouraged.
One commenter asked that we define "adverse environmental impacts" in
Part I, Subpart C, to include non-quantifiable impacts such as damage to the
Agency's integrity. We have done so. This same commenter asked that we
remove the paragraph discussing the old guidance to avoid confusion. Since
the new
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guidance supersedes the old, we are in agreement that inclusion of this
paragraph would be surplusage and potentially confusing to cursory readers.
We, therefore, have removed it.
Another commenter suggested that we expand the discussion on factors
contributing to prejudice to defendants. In response we have asked that
Regions consider, among other added factors, whether the existence of a
collateral suit indicates the defendant has been prejudiced.
In conclusion, the need for more vigorous SIP enforcement has been
amplified by our continuing ozone nonattainment problem and an anticipated
increase in the number of proposed SIP revisions resultant from the 1990
Amendments. We are hopeful this document will provide valued assistance to
the Regions in their efforts to enforce state implementation plans.
This guidance supersedes the "Revised Guidance on Enforcement of State
Implementation Plan Violations Involving Proposed SIP Revisions," dated
August 29, 1989. Please insert this document in its place at Part E,
Document #32 of the Clean Air Act Policy Compendium.
Attachment
Addressees:
Regional Counsels
Regions I - X
Regional Counsel Air Contacts
Regions I - X
Air and Waste Management Division Director
Region II
Air Management Division Directors
Region I, III, and IX
Air and Radiation Division Director
Region V
Air, Pesticides, and Toxics Management Division Directors
Regions IV and VI
Air and Toxics Division Directors
Regions VII, VIII, and X
Air Compliance Branch Chiefs
Regions I - X
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Alan Eckert
Office of General Counsel
Robert Van Heuvelen, Acting Chief
Environmental Enforcement Section
U.S. Department of Justice
cc: James M. Strock
Assistant Administrator for Enforcement
William G. Rosenberg
Assistant Administrator for Air and Radiation
Attachment I
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
MEMORANDUM
SUBJECT: Revised Guidance On Enforcement During Pending SIP
Revisions
FROM: /s/ Michael S. Alushin
Associate Enforcement Counsel for Air
Office of Enforcement
/s/ John B. Rasnic, Acting Director
Stationary Source Compliance Division
Office Of Air Quality Planning and Standards
TO: Addressees
Less than a year following our last guidance document addressing the
above subject ( August 29, 1989 ) the United States Supreme Court handed
down its decision in General Motors Corp. v. United States ( GM ), ___
U.S. ___, 110 S. Ct. 2528 ( 1990 ), which affirmed the Agency's authority to
bring enforcement actions even after EPA review of proposed State
Implementation Plan ( SIP ) revisions has exceeded four months. In
addition, the Clean Air Act was amended in October, 1990 to include, inter
alia, a new 12 month review period for proposed SIP revisions.
In the wake of both this ruling and the recent amendments 1/ to the
Act, this revised guidance is intended to assist the Regions in deciding
when to bring enforcement actions while SIP revisions are pending.
1/ Section 110(a)(3), 42 USC Section 7410, of the amended Act imposes a
twelve month deadline for EPA SIP revision review:
Within 12 months of a determination by the Administrator ( or a
determination deemed by operation of law ) under paragraph (1) that
the State has submitted a plan or plan revision ( or, in the
Administrator's discretion, part thereof ) that meets the minimum
criteria established pursuant to paragraph (1), if applicable ( or,
if those criteria are not applicable, within 12 months of
submission of the plan or revision ), the Administrator shall act
on the submission in accordance with paragraph (3).
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It should be emphasized from the outset that the Supreme Court's ruling in
GM has substantially lowered the level of caution which must be exercised in
deciding whether to bring cases involving proposed SIP revisions, even in
those instances where the new 12 month period has been exceeded.
This document begins with a statement of the Agency's new policy on SIP
enforcement during the pendency of proposed revisions. Background material
and a summary of the Supreme Court ruling in GM follow the policy statement.
I. POLICY
The Supreme Court's recent ruling in GM, in conjunction with the 1990
amendments to the Clean Air Act, have resulted in a marked shift in the law
regarding EPA's enforcement authority during the review of proposed SIP
revisions. The ruling in GM affirms the Agency's authority to enforce
existing SIPs, even when the Agency has unreasonably delayed the review of
proposed revisions. The remedy for unreasonable Agency delay is a suit to
compel Agency action or a diminution in penalties depending on the degree of
prejudice caused to the defendant. Although the amendments create a
presumption that Agency review beyond 12 months constitutes unreasonable
delay, our authority to enforce the existing SIP, through penalties or
injunctive relief, remains after that date. In short, GM has effectively
reduced, but not eliminated, the level of caution to be exercised when the
Agency has consumed more than 12 months in reviewing SIP revisions.
This guidance encourages Regions to vigorously pursue violators of
existing SIPs with a sensitivity for the particular facts of individual
cases. The guidance sets forth factors to consider, in addition to those
enumerated in the October 10, 1990, memorandum on Enhanced Regional Case
Screening, in selecting appropriate enforcement responses to SIP violations
involving pending review of proposed SIP revisions. The list has been
developed in consideration of GM's holding on the issue of the appropriate
remedy for unreasonable Agency delay in reviewing proposed SIP revisions.
The holding is two-fold; (1) a defendant may obtain reductions in penalties
commensurate with a trial court's determination of the degree of prejudice
caused to a defendant by EPA's delay; and, (2) EPA will be subject to
collateral citizen suits to compel Agency action for unreasonable delays in
reviewing SIP revisions. Following is a list of factors Regions should
consider in determining appropriate enforcement responses in SIP cases
affected by proposed revisions which have been pending before the Agency for
more than 12 months.
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A. Need For Injunctive Relief In Cases of Ongoing Noncompliance
Despite the existence of unreasonable Agency delay in reviewing a
particular SIP revision for more than 12 months, if a case justifies
injunctive relief for an ongoing violation, the Region should proceed with
civil enforcement. Since the primary purpose of such cases is to compel
compliance, the risk of any diminution in penalties is of secondary concern.
Cases involving compliance with a proposed revised SIP, which is likely to
be approved, are discussed in Subpart C of this Part.
B. Penalty-Only Cases Involving A Long Period of Noncompliance In
Comparison To The Length of Agency Delay
In the wake of GM, trial courts in enforcement actions will take into
consideration the degree of prejudice caused to defendants by Agency delay
in reviewing proposed SIP revisions for longer than the 12 months allotted
by the Act. Therefore, the utility of proceeding with penalties-only
actions diminishes in proportion to the degree of prejudice caused to a
defendant. Regions should consider the period of noncompliance 2/ in
relation to the period of unreasonable EPA delay in reviewing SIP revisions
beyond 12 months in deciding whether to pursue a penalties-only action.
2/ Please note that the Clean Air Act Amendments of 1990 amended paragraph
(e) of Section 113, 42 USC Section 7413, to effectively shift the burden
of proof to defendants on the issue of ongoing violations. New Section
113(e) states that, for the purposes of determining the number of days
of violation for which a penalty may be assessed, once the Government
makes a prima facie showing, the days of violation shall be presumed to
include the date of notice issued to the source of the violation, and
each and every day thereafter until the violator establishes continuous,
or intervening, compliance.
Therefore, in those cases which involve a comparatively long period of
noncompliance in relation to the length of EPA'S delay in reviewing a
proposed SIP revision beyond 12 months, the Region should proceed, absent
other factors militating against the suit. If, however, the period of
noncompliance is short in comparison to the period of EPA delay, and other
factors which would tend to increase the penalty ( ie. significant
environmental impact and economic benefit ) are absent, Regions may want to
consider withholding the action. The anticipated penalty recovery in such
cases may not justify the resource burden placed on the Agency and the
Department of Justice to litigate the case. Once again, if there exists a
need for injunctive relief, Regions should proceed irrespective of any
elevated risk that the penalty will
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be reduced.
C. Cases Involving A High Probability That The Proposed SIP Revision
Will Be Approved
In instances where the source is in compliance with a proposed SIP
revision submitted in a formal application by the State, and which has a
high probability of approval, the need for injunctive relief does not exist.
However, there may still exist a justification for pursuing penalties,
particularly where the source has been in violation of the existing SIP for
a substantial period.
Therefore, where there exists a high probability that the proposed SIP
revision will be approved, the Region should once again consider the length
of noncompliance in relation to the length of unreasonable Agency delay in
reviewing the proposed revision. If the length of noncompliance is
substantial in relation to the length of EPA delay, the Region may still
wish to pursue a penalties-only claim despite imminent approval of the
pending SIP revision.
However, as in any case, the Region should weigh the particular equities
of each case in deciding whether a penalties-only claim is merited. If the
source's noncompliance with the existing SIP is technical in nature, and
does not have adverse environmental impacts, 3/ a penalties-only action
may be inappropriate notwithstanding a lengthy period of noncompliance.
3/ Adverse environmental impacts are not limited solely to quantifiable
environmental impacts. They also may include damage to the Agency's
broader deterrence aims in the regulated community which may result
from unaddressed noncompliance with the existing SIP.
Alternatively, in those rare cases where a source obtains relief through a
SIP revision which allows it to gain some economic advantage with adverse
environmental consequences, a penalties-only claim may be warranted;
especially if the period of noncompliance with the existing SIP is lengthy.
4/
4/ An example is an emission violation caused by the source turning off
control equipment prior to obtaining the SIP revision allowing it to
do so. In this case, the source has obtained an economic benefit from
noncompliance, while causing adverse environmental impact. A
penalties-only action is merited for the regulatory process violation.
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D. Whether The Existence of A Collateral Suit Compelling Agency Action
On A Proposed SIP Revision Indicates Prejudice
An additional remedy available to regulated entities for Agency delays
in reviewing proposed SIP revisions is a collateral suit to compel the
Agency to act. Although the Supreme Court in GM clearly ruled that the
existing SIP remains enforceable regardless of the pendency of any proposed
revisions, 5/ the existence of a collateral suit to compel Agency action
on a pending SIP revision may affect the selection of the enforcement
response to the extent that it indicates the source is being prejudiced by
the delay.
5/ The GM Court recognized that the existing SIP remains enforceable
despite delay in review of a proposed revision. "The language of the
( CAA ) plainly states that EPA may bring an action for penalties or
injunctive relief whenever a person is in violation of any requirement
of an 'applicable implementation plan' ... (t)here can be little doubt
that the existing SIP remains the 'applicable implementation plan' even
after the State has submitted a proposed revision ... (t)here is nothing
in the statute that limits EPA's authority to enforce the 'applicable
implementation plan' solely to those cases where EPA has not
unreasonably delayed action on a proposed SIP revision." 110 S.Ct. at
2533-34.
Therefore, the Regions should consider whether the defendant has sought
to compel Agency action of the proposed revision when evaluating whether the
defendant is suffering any actual prejudice from EPA's delay on the SIP
revision.
E. Assessing The Degree of Prejudice To The Defendant
Additional considerations may bear on the extent of possible prejudice
to the defendant. Clearly, if a defendant is not in compliance with the
proposed SIP revision, then little prejudice has resulted. However, if the
defendant is in compliance with the proposed revised SIP, and the revisions
to the SIP will significantly reduce the defendant's compliance costs, then
EPA delay in processing the proposed revision may very well cause prejudice
to the defendant. In this case, the Region should weigh the period of
noncompliance against the period of EPA delay as outlined above. Related
factors which may support a decision to bring a SIP enforcement action
include whether the defendant failed to make a good faith effort to comply
with the existing SIP or failed to plan for the possibility that the SIP
revision could be denied.
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F. Pre-Amendments Cases
Certain cases may involve a period of noncompliance, and a now completed
review of a proposed revision, both of which occurred prior to the 1990
Amendments to the Act. Since the new 12 month period cannot be applied
retroactively, EPA's conduct in reviewing proposed SIP revisions will be
subject to the standard existing before the amendments. In other words, the
reasonableness standard set forth in GM is applicable. Under that standard,
the court will look to the particular circumstances surrounding EPA's review
of the proposed SIP revision to determine if the length of time taken by the
Agency was "reasonable" pursuant to the mandates of the APA. If the Agency
can demonstrate that the length of time consumed in reviewing the SIP
revision was reasonable, then a fortiori a defendant cannot be prejudiced by
that delay and a district court cannot reduce penalties on this ground.
Factors which may support a decision to bring a SIP enforcement action
under these rather limited circumstances include whether: (1) the notice
and comment period has been extended; (2) significant comments on proposed
SIP revisions were received after the comment period ended; (3) the Office
of Management and Budget reviewed the disapproval; (4) negotiations between
the Region and the State occurred to resolve issues in advance; (5) the
proposed revision required a complex equivalency determination; and, (6) the
proposed revision required a determination of "Reasonable Further Progress"
in a nonattainment area.
II. Background
EPA currently reviews approximately 150 to 200 SIP revisions each
calendar year. Although the projected review time for such revisions is
fourteen months, in fact less than half of these revisions are processed
within this time period. Moreover, in some instances, SIP revisions have
taken four to five years to review. Even with the administrative steps
taken by EPA to streamline the process ( See State Implementation Plan
Processing Reform: Notice of Procedural Changes, 54 FR 2214, January, 19,
1989 ), and legislation establishing a longer deadline, SIP enforcement
cases will continue to be affected by SIP revisions.
In the past several years, the number of SIP enforcement cases has
declined substantially. This drop-off is cause for some concern since the
number of SIP violations during this period had probably remained constant
or even increased. Although there are a number of reasons for this
diminution, a principal reason is that recent lower court decisions have
ruled against the agency in SIP enforcement actions for what was deemed
unreasonable agency delay when review of proposed SIP revisions exceeded
four months. The Agency is hopeful, however, that the
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Supreme Court's recent decision in GM, in conjunction with the amendments,
will result in an increase in the number of SIP enforcement actions in the
coming months.
In the near future, proposed SIP revisions are also expected to increase
substantially. With the amendments, SIP calls for ozone nonattainment, and
new SIPs resulting from NAAQS revisions ( e.g., PM(10) ), the Agency's
workload will no doubt become heavier. Thus the need for effective new
guidance on exercising enforcement discretion in cases involving proposed
SIP revisions has been magnified.
In recent years, a number of regulated parties successfully argued in
SIP enforcement actions that the four month limitation on EPA review of
original SIP submittals likewise applied to the Agency's review of proposed
SIP revisions. 6/
6/ See Duquesne Light v. EPA, 698 F.2d 456 ( D.C. Cir. 1983 ); Council of
Commuter Organizations v. Thomas, 799 F.2d 879 ( 2d Cir. 1986 );
American Cyanamid v. EPA, 810 F.2d 493 ( 5th Cir. 1987 ); United States
v. General Motors, 876 F.2d 1060 ( 1st Cir. 1989 ); United States v.
Alcan Foil, 889 F.2d 1513 ( 6th Cir. 1989 ).
In light of these adverse opinions, we promulgated revised guidance on
August 29, 1989 in an attempt to adapt agency policy to the unsettled
judicial landscape.
The combined effect of GM and the amendments have largely superseded our
existing policy guidance on this issue. We have therefore determined that a
summary of GM and the amendments is needed to clarify the current law and
provide a guidepost for deciding when to bring SIP enforcement actions while
proposed SIP revisions are pending.
III. Summary of General Motors
In order to fully understand the significant shift in the law governing
SIP enforcement, it is helpful to examine the Supreme Court's opinion in GM
in light of the new 12 month review period for proposed SIP revisions.
A. No Statutory Deadline
In GM, 7/ the Supreme Court ruled that EPA review of proposed SIP
revisions was not limited to a four month period.
7/ In United States v. General Motors Corp., 876 F.2d 1060 ( 1st Cir. 1989
), the First Circuit construed Section 110(a)(3) to implicitly contain the
same four month deadline set forth in Section 110(a)(2) governing EPA review
of original SIPs. Apparently concerned that EPA's institutional interest in
enforcing existing SIPs conflicted with its responsibility to approve SIP
revisions, the court stated: "we think it dangerous to defer in a situation
such as this where the Agency has a substantial institutional interest in
not imposing constraints on itself." Id. at 1066.
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GM's principal argument was that since Section 110(a)(3) pertaining to SIP
revision review requires EPA to approve such revisions if they meet the
requirements of Section 110(a)(2), the four month deadline contained in
Section 110(a)(2) also applies to proposed SIP revision review. In
disposing of GM's argument, the Court concluded that Section 110(a)(3)'s
reference to the "requirements of Section 110(a)(2)" was only directed to
the substantive aspects of the proposed SIP revision, not the procedural. A
contrary conclusion, stated the Court, would obviate the need for the
additional procedural requirements of Section 110(a)(3). Since Section
110(a)(3), like Section 110(a)(2), mandated that proposed SIP revisions
required reasonable notice and public hearings at the state level, to
incorporate the procedures of (a)(2) into (a)(3) would be duplicative and
result in a discordant reading of the statute.
Moreover, the Court marshalled further support for this conclusion by
pointing to numerous other provisions in the statute which expressly imposed
the same type of deadlines GM argued existed implicitly in Section
110(a)(3). Applying the rule of statutory construction which posits that
the "expression of one is the exclusion of all others" the Court decided
that, had Congress intended a four month deadline for review of proposed SIP
revisions to apply, it would have said so.
GM's final argument was grounded on the language of Section 110(g),
which gives the Governor of any state the authority to suspend any part of
an exisiting SIP that would result in severe economic disruption if EPA has
failed to act on a proposed SIP revision ( which would alleviate the
economic disruption ) "within the required four month period". In summarily
disposing of this contention, the Court concluded that reference to any
required four month period in Section 110(g) did not by itself impose on EPA
a general requirement to process all proposed revisions within four months.
Rather, it merely authorized the Governor in such instances to suspend that
portion of the existing SIP. "Whatever may be the correct interpretation of
Section 110(g) ... we do not think this passing mention can be inflated into
a requirement that the (EPA) process each and every proposed revision within
four months." 110 S. Ct. at 2538.
B. No Enforcement Bar
After deciding that no statutory deadline governed EPA review of
proposed SIP revisions, the Court next held that rather than an enforcement
bar, the appropriate remedy for unreasonable
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Agency delay in processing proposed SIP revisions was either a citizen suit
pursuant to Section 304, compelling agency action, or a reduction in
penalties by the district court in those cases where the source is
prejudiced by the unreasonable delay. 8/
8/ According to the First Circuit, in those cases where the Agency's
unreasonable delay has resulted in prejudice to the defendant, the
District Court is endowed with the authority to reduce penalties. "If,
for example, a trial court finds that the review process should have
taken ten months rather than two years, it may decline to award
penalties for the fourteen months of unwarranted delay." GM, 876 F.2d
at 1068.
The Court grounded its ruling on the absence of any reference to an
enforcement bar in the statute, as well as Section 113(b)(2)'s express
authorization of actions for penalties or injunctive relief whenever a
source is in violation of the applicable SIP.
CONCLUSION
With the recent amendments to the Act, Congress expressly determined
that 12 months is a reasonable period to review proposed SIP revisions.
Therefore, the amendments have probably created a statutory presumption that
failure to review a proposed SIP revision within the allotted 12 months is
unreasonable. The GM ruling makes clear, however, that notwithstanding this
new 12 month statutory period, enforcement of existing SIPs is authorized
even when the Agency has exceeded its statutory review deadline. In
determining whether to bring SIP enforcement actions involving proposed SIP
revisions which have been reviewed beyond 12 months, Regions should consider
the factors enumerated in this document on a case-by-case basis.
Our staff will be available to discuss specific cases with you. Please
contact Peter Fontaine of the Air Enforcement Division if you have any
questions regarding this policy.
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Addressees
Regional Counsels
Regions I - X
Regional Counsel Air Contacts
Regions I - X
Air and Waste Management Division Director
Region II
Air Management Division Directors
Regions I, III, and IX
Air and Radiation Division Director
Region V
Air, Pesticides, and Toxics Management Division Directors
Regions IV and VI
Air and Toxics Division Directors
Regions VII, VIII, and X
Air Compliance Branch Chiefs
Regions I - X
Alan Eckert
Office of General Counsel
Robert Van Heuvelen, Acting Chief
Environmental Enforcement Section
U.S. Department of Justice
cc: James M. Strock
Assistant Administrator for Enforcement
William G. Rosenberg
Assistant Administrator for Air and Radiation
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