UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, PETITIONER V. NORTHERN PLAINS RESOURCE COUNCIL, ET AL. No. 82-1828 In the Supreme Court of the United States October Term, 1982 The Solicitor General, on behalf of the United States Environmental Protection Agency, petitions for a writ of certiorari to review the decision of the United States Court of Appeals for the Ninth Circuit in this case. Petition for a Writ of Certiorari to the United States Court of Appeals for the Ninth Circuit PARTIES TO THE PROCEEDING In addition to the parties shown by the caption of this case, Montana Power Company, Washington Water Power Company, Puget Sound Power and Light Company, Portland General Electric Company and Pacific Power and Light Company were intervenor-respondents below. The interests of these parties are not implicated by the question presented in this petition. TABLE OF CONTENTS Opinions below Jurisdiction Statute involved Statement Reasons for granting the petition Conclusion Appendix A Appendix B Appendix C OPINIONS BELOW The opinion of the court of appeals (App. A, infra, 1a-4a) holding the Environmental Protection Agency liable for attorneys' fees is reported at 670 F.2d 847. The order of the court of appeals (App. B, infra, 5a) fixing the amount of those fees is unreported. JURISDICTION The judgment order of the court of appeals (App. B, infra, 5a) was entered on March 3, 1983. The jurisdiction of this Court is invoked under 28 U.S.C. 1254(1). STATUTE INVOLVED Section 307(f) of the Clean Air Act, 42 U.S.C. (Supp. IV) 7607(f), provides in pertinent part as follows: In any judicial proceeding under this section, the court may award costs of litigation (including reasonable attorney and expert witness fees) whenever it determines that such award is appropriate. QUESTION PRESENTED Whether it was "appropriate," within the meaning of Section 307(f) of the Clean Air Act, 42 U.S.C. (Supp. IV) 7607(f), to award attorneys fees to a party who failed to prevail on any aspect of its challenge to the issuance of a permit by the Administrator of the Environmental Protection Agency. STATEMENT Following a wholly unsuccessful challenge to the issuance of a permit by the Environmental Protection Agency ("EPA") to a consortium of utilities headed by Montana Power Company allowing construction of two coal-fired steam electric generating units in Colstrip, Montana, respondent Northern Plains Resource Council ("NPRC") sought an award of attorneys' fees against the government under Section 307(f) of the Clean Air Act, 42 U.S.C. (Supp. IV) 7607(f). Although it had rejected every aspect of respondent's challenge to the permit, the court of appeals determined that NPRC was entitled to attorneys' fees. Before discussing the court's ruling on attorney's fees, we briefly describe the underlying merits litigation. As the court of appeals noted, respondent raised "(t)wo rather technical issues" in that proceeding. Northern Plains Resource Council v. United States Environmental Protection Agency, 645 F.2d 1349, 1350 (9th Cir. 1981). 1.a. Part C, subpart I of the Clean Air Act, 42 U.S.C. (Supp. IV) 7470-7479, is designed to prevent significant deterioration ("PSD") of air quality in areas designated as having air quality better than that required by existing ambient air quality standards. Areas subject to PSD regulation are divided into three classes, and maximum allowable increases ("increments") in emissions for particulate matter and sulfur dioxide are established for each class. /1/ Major emitting facilities must secure a PSD permit prior to commencement of construction of a new plant or modification of an existing plant (42 U.S.C. (Supp. IV) 7475). Among other things, a permit applicant must show that emissions from operation of the new or modified plant will not cause or contribute to a violation of the applicable maximum allowable increase or "increment" (42 U.S.C. (Supp. IV) 7475(a)(3)). Furthermore, the facility must utilize the "best available control technology" to limit emissions (42 U.S.C. (Supp. IV) 7475(a)(4)). Although best available control technology determinations must take into account energy, economic and other factors, emissions may not exceed the emissions limitations incorporated in any new source performance standard ("NSPS") promulgated by EPA that is applicable to the industrial category to which the source belongs (42 U.S.C. (Supp. IV) 7475(a)(3)). /2/ Whether any given major emitting facility is subject to the PSD provisions of the Act turns on whether it "commenced construction," as defined in Section 169(2)(A) of the Act, 42 U.S.C. (Supp. IV) 7479(2)(A), prior to the effective date of those provisions. PSD review is required unless the owner or operator of the facility is able to demonstrate that (1) all permits under federal, state and local air pollution laws have been received and a continuous program of physical on-site construction has begun or (2) the owner of operator has entered into binding agreements or contractual obligations that cannot be cancelled or modified without substantial loss (42 U.S.C. (Supp. IV) 7479(2)(A)). In contrast to the definition of "commenced construction" for purposes of new source performance standards, discussed below, the statutory definition of that term for PSD purposes applies to the entire plant rather than to particular pieces of equipment within a plant. b. Section 111 of the Clean Air Act, 42 U.S.C. (Supp. IV) 7411, requires EPA to set performance standards limiting emissions from new or modified air pollution sources that reasonably may be anticipated to endanger the public health or welfare. Section 111(a)(2), 42 U.S.C. (Supp. IV) 7411(a)(2), defines a "new source" as any stationary source the construction or modification of which commenced after the publication of regulations (or, if earlier, proposed regulations) prescribing a standard of performance that is applicable to such source. Unlike the PSD provisions, however, the new source provisions of the Act contain no statutory definition for the term "commenced construction." Accordingly, EPA promulgated regulations providing that construction will be deemed to have commenced if the owner or operator of the source has entered into a "contractual obligation to undertake and complete, within a reasonable time, a continuous program of construction * * *" (40 C.F.R. 60.2). In 1971, EPA promulgated new source performance standards for fossil-fuel fired steam electric generators. EPA published proposed revisions to those standards on September 19, 1978, and adopted final revised standards on June 11, 1979. The final standards imposed more stringent emission limitations than those contained in the 1971 standards. /3/ New source performance standards apply to specific elements of process equipment, defined as "affected facilities," 40 C.F.R. 60.40(a), 60.41, and, in the case of fossil-fuel steam electric generating units, the "affected facility" is the boiler. Thus, the NSPS purposes, boilers on which construction commenced, in accordance with the regulatory definition of that term, 40 C.F.R. 60.2, before September 19, 1978 (the date of publication of the proposed NSPS revisions), are subject to the 1971 NSPS. 2. In July 1976, a consortium of electric utilities headed by Montana Power Company applied to EPA for a permit to construct Units 3 and 4 of a four-unit steam electric generating complex in Colstrip, Montana. /4/ On September 11, 1979, EPA granted a permit for Units 3 and 4. /5/ Shortly thereafter, respondent filed a petition for review in the Ninth Circuit, and the utility consortium intervened on EPA's side to defend the permit. /6/ Respondent challenged EPA's issuance of a PSD permit to the consortium on two grounds. First, it claimed that the units would not utilize the "best available control technology" as required by the PSD provisions. Respondent argued that because actual on-site construction for Units 3 and 4 had not "commenced" before September 18, 1978, the units were required to comply with emission standards established by the 1978 proposed NSPS regulations instead of the 1971 regulations. Therefore, according to respondent, EPA's decision to allow the units to emit pollutants in excess of the 1978 proposed standards was unlawful. Respondent also claimed that EPA's decision to accept the control system proposed by the company to limit particulate emissions was without a rational basis because other available control technologies could achieve greater emission reductions. The second aspect of respondent's challenge related to EPA's failure to "validate" the air quality dispersion model, used to predict the impacts of emissions from Units 3 and 4, with certain monitoring data proffered by respondent. Respondent argued that consideration of its data would have shown that emissions from the units would violate the applicable Class I PSD increment for sulfur dioxide at the nearby Northern Cheyenne Reservation. The court of appeals rejected respondent's arguments and upheld EPA's decision in its entirety. NPRC v. EPA, supra. First, as to respondent's technological arguments, the court ruled that the applicable new source performance standard for Units 3 and 4 was that published in 1971. This conclusion was based on a finding that, with respect to Units 3 and 4, construction of the boilers had "commenced" in 1974, well before proposed revisions to the new source performance standards were published in 1978. See 40 C.F.R. 60.2, 60.40(a). Relying on the structure of the Clean Air Act and its legislative history, the court agreed with EPA that the applicable definition of "commenced construction" was the new source definition, which applies to "affected facilities," i.e., the boilers, and rejected respondent's argument that the broader PSD definition of that term controlled (645 F.2d at 1355-1357). As for EPA's approval of the emissions control technology for the units, the court agreed with EPA's position that the Act requires such determinations to be made on case-by-case basis. NPRC v. EPA, supra, 645 F.2d at 1359. Accordingly, the court held that even though another control technology might provide greater emissions reductions, EPA's approval of the proposed system was not irrational in view of all the factors the agency is required to consider when making a technological judgment of that sort (645 F.2d at 1361-1362). Finally, the court rejected respondent's challenge to the model utilized by EPA to predict emissions from the proposed units, holding that EPA's rejection of the monitoring data proffered by respondent was not irrational (NPRC v. EPA, supra, 645 F.2d at 1362-1363); indeed, the court noted that respondent's data was "completely irrelevant" (id. at 1363) to EPA's model. 3. After losing on every aspect of its challenge to the PSD permit, respondent moved for an award of fees /7/ under Section 307(f) of the Clean Air Act, 42 U.S.C. (Supp. IV) 7607(f). In support of its motion, respondent argued that it was entitled to fees because, although it had not prevailed on any issues, the suit was of the type Congress sought to encourage, i.e., it had been brought with the objective of protecting air quality and it had aided in the construction and implementation of the Act. The court of appeals agreed with respondent's position (App. A, infra, 1a-4a). The court found that Congress "sought to facilitate challenges of EPA decisions in order to insure that EPA fulfilled its designated function of preserving air quality" (id. at 2a). Relying on Metropolitan Washington Coalition for Clean Air v. District of Columbia, 639 F.2d 802, 804 (D.C. Cir. 1981), the court stated "that in determining whether a party -- prevailing or nonprevailing -- can recover attorneys' fees under Section 307(f) from the Government, the test is whether in light of what was known * * * when the action was instituted, the action was of the type Congress sought to encourage when it authorized awards of attorneys' fees" (App. A, infra, 2a). The court concluded that respondent's action presented issues important to the construction of the Act and was, therefore, precisely the type of suit Congress wished to encourage in enacting Section 307(f) (App. A, infra, 3a). The court allowed respondent 14 days in which to specify the size of its requested fee award and allowed EPA a like period of time in which to file an opposition. In April 1982, EPA and respondent ultimately agreed that $15,000 was a reasonable fee for respondent's unsuccessful litigation efforts. The parties stipulated, however, that EPA reserved its right to seek further review on the underlying question of entitlement of fees and moved the court to enter a final order to that effect. The court took no immediate action on the parties' stipulation and motion. /8/ By letter dated July 12, 1982, counsel for respondent inquired about the status of the matter (App. C, infra, 6a-7a), but the court did not respond. By October 18, 1982, the date on which this Court granted the government's petition for a writ of certiorari in Administrator, Environmental Protection Agency v. Sierra Club, No. 82-242 (argued Apr. 25, 1983), the court of appeals still had not entered any order in response to the parties' stipulation and motion. Accordingly, by motion dated October 25, 1982, the government asked the court of appeals to stay the entry of final judgment pending this Court's decision in Sierra Club. On March 3, 1983, the court denied the motion and ordered EPA to pay $15,000 in attorneys' fees to respondent (App. B, infra, 5a). REASONS FOR GRANTING THE PETITION This case raises precisely the same issue that is now pending before the Court in Administrator v. Sierra Club, supra, No. 82-242. /9/ We have set forth our arguments against the construction of Section 307(f) adopted by the United States Court of Appeals for the District of Columbia Circuit in our briefs in Sierra Club, and the same arguments are fully applicable here. /10/ Accordingly, this case will be controlled by the Court's decision in Sierra Club. CONCLUSION The petition for a writ of certiorari should be held and disposed of in light of this Court's decision in Administrator v. Sierra Club, No. 82-242. Respectfully submitted. REX E. LEE Solicitor General MAY 1983 /1/ The areas are classified as Class I, Class II and Class III (42 U.S.C. (Supp. IV) 7472, 7474). The smallest allowable increases in pollution apply to Class I areas and the greatest apply to Class III areas (42 U.S.C. (Supp. IV) 7473(b)). /2/ The provisions of the Act pertinent to new source performance standards are explained at pages 4-5, infra. /3/ The 1979 regulations were upheld in Sierra Club v. Costle, 657 F.2d 298 (D.C. Cir. 1981). /4/ Colstrip Units 1 and 2 were completed in 1976. See NPRC v. EPA, supra, 645 F.2d at 1351. /5/ As described by the court of appeals, the permit proceedings, in which respondent participated, were protracted, in part because of intervening changes in the law. See NPRC v. EPA, supra, 645 F.2d at 1351-1352. /6/ Jurisdiction in the court of appeals was properly predicated on Section 307(b)(1) of the Clean Air Act, 42 U.S.C. (Supp. IV) 7607(b)(1), which provides that judicial review of "final action of the Administrator * * * which is locally or regionally applicable may be filed only in the United States Court of Appeals for the appropriate circuit." /7/ Respondent did not indicate the amount of fees it sought. /8/ Even if the government had decided against seeking review in this Court, a final judgment from the court of appeals would have been required before the General Accounting Office would pay respondent's fee award. See 28 U.S.C. 2414. Thus, the case remained in limbo while the parties awaited the entry of final judgment by the court of appeals. /9/ In the court below, the government also argued that, in the event any fee award was made, the intervenor-respondents should be required to share the costs of that award with EPA. The court of appeals rejected this argument (App. A, infra, 3a n.4). We doubt the correctness of the court's ruling, but we do not now seek this Court's review of that subsidiary issue. /10/ We are furnishing respondent's counsel with copies of our opening and reply briefs in Sierra Club, in which those arguments are set forth. Appendix Omitted