Weyerhaeuser Company v. Douglas M. Costle, Administrator, Environmental Protection Agency, No. 76-1674

Under the aegis of the Federal Water Pollution Control Act Amendments of 1972 (the Act), Pub.L. No. 92-500, 86 Stat. 816, 33 U.S.C. §§ 1251-1376, as amended, Clean Water Act of 1977, Pub.L. No. 95-217, 91 Stat. 1566, the Environmental Protection Agency has embarked upon a *1019 step-by-step process of issuing effluent limitations for each industry that discharges pollutants into the waters of the United States. By these consolidated petitions, members of one such industry, American pulp and paper makers, challenge the validity of EPA regulations limiting the 1977-83 effluent discharges of many pulp, paper, and paperboard mills. See 42 Fed.Reg. 1398-426 (1977). We are satisfied that EPA properly construed and rationally exercised the authority delegated to it by Congress — and that, with one exception, it did so according to the appropriate procedures. Accordingly, we uphold the resulting effluent limitations in all but one instance.

I. THE STATUTE

After several years of judicial experience with the Federal Water Pollution Control Act Amendments of 1972, and, in particular, with industry-wide challenges to effluent limitations promulgated thereunder, little further explanation of the statutory framework is necessary. See, e. g., E. I. duPont de Nemours & Co. v. Train (duPont), 430 U.S. 112, 116-21, 97 S.Ct. 965, 51 L.Ed.2d 204 (1977); American Paper Inst. v. Train, 177 U.S.App.D.C. 181, 186-89, 543 F.2d 328, 333-36, cert. dismissed, 429 U.S. 967, 97 S.Ct. 398, 50 L.Ed.2d 335 (1976); American Frozen Food Inst. v. Train, 176 U.S.App.D.C. 105, 113-122, 539 F.2d 107, 115-24 (1976). As now authoritatively interpreted by the Supreme Court in duPont, supra, 430 U.S. at 126-36, 97 S.Ct. 965, section 301(b) of the Act, 33 U.S.C. § 1311(b), 1 authorizes the Environmental Protection Agency (EPA or the Agency), after orchestrating a process of study, proposal, notice, and comment, to issue two sets of progressively more stringent regulations precisely limiting the effluent discharges of every “category [or] class of [existing] point sources,” i. e., generally, every industry that pollutes the Nation’s waters. According to section 301(b), the first set of regulations must limit discharges between July 2, 1977 and July 1, 1983, inclusive, to levels characteristic of point sources utilizing “BPCTCA,” i. e., the “best practicable control technology currently available.” Section 301(b)(1)(A). The second set applies thereafter and is defined in terms of the more restricted levels of discharges from point sources, using “BA-TEA,” i. e., the “best available technology economically achievable.” Section 301(b)(2)(A).

Section 304 of the Act, 33 U.S.C. § 1314, 2 establishes the minimum cross-industry cri *1020 teria that EPA must use in developing each of the two sets of industry-specific limitations, and requires EPA to identify other factors as well as the model technology (BPCTCA for 1977, BATEA for 1983) relevant to each affected industry. Jurisdiction to review both the 1977 and 1983 sets of industry-wide regulations is conferred upon the United States Courts of Appeals by section 509(b)(1) of the Act, 33 U.S.C. § 1369(b)(1).

Meanwhile, the permit-issuing system established by section 402 of the Act, 33 U.S.C. § 1342, provides a procedure whereby the general effluent limitations for each class of point sources are transformed by EPA, or some EPA-approved state agency, into an authorization for a specific plant or mill to discharge effluents up to specified limits. The statute contemplates a very close correlation between the general effluent limitations promulgated by EPA and the specific discharge authorizations allowed each mill by the permit-issuing agency. The only exception to this rule is the Act’s provision of a “modification” or variance procedure under which EPA may relax the general standards somewhat in individual permits under certain limited circumstances. Section 301(c), 33 U.S.C. § 1311(c). See duPont, supra, 430 U.S. at 128, 97 S.Ct. 965. These permit-related proceedings are also judicially re viewable under the Act. Section 309(b)(1)(F), 33 U.S.C. § 1369(b)(1)(F).

Finally, the regulatory circle is closed by stringent criminal and civil penalties — the latter of which are enforceable both by the government and by private citizens — for any effluents discharged in excess of those provided for in the permit. Sections 301(a), 309 of the Act, 33 U.S.C. §§ 1311(a), 1319.

II. THE PAPER INDUSTRY REGULATIONS

A.

The regulations at issue in this case are the result of a rulemaking process developed by the Agency over the past six years for promulgating industry-wide effluent limitations under sections 301(b) and 304(b) of the Act. See notes 1 and 2 supra. See generally, La Pierre, Technology-Forcing and Federal Environmental Protection Statutes, 62 Iowa L.Rev. 771, 810-13 (1977). The procedures for these regulations began in early 1973 when EPA divided the American pulp and paper industry into two segments for purposes of establishing 1977 and 1983 effluent limitations. In “Phase I” of its rulemaking effort for the industry, it proposed, received several tiers of comments on, and promulgated 1977 and 1983 limitations for the “unbleached” segment of the industry, which produces unbleached pulp and paper. 39 Fed.Reg. 18742 (1974). *1021 This Court reviewed and upheld those regulations in full in 1976, and they are not in issue here. See American Paper Inst., supra.

Promulgation of “Phase II” regulations for the apparently larger, “bleached” segment of the paper industry did not proceed with the same dispatch as in Phase I. 3 Accordingly, along with many of EPA’s responsibilities under the Act, its rulemaking for Phase II of the paper industry became the subject of law suits and settlement agreements between environmental action groups and the Agency, resulting in the establishment of court-enforced time-tables for the promulgation of each industry’s limitations. See Natural Resources Defense Council (NRDC) v. Train, 6 E.R.C. 1033 (D.D.C.1973), rev’d in part & remanded, 166 U.S.App.D.C. 312, 510 F.2d 692 (1975), timetable extended on remand, see NRDC v. Costle, 183 U.S.App.D.C. 11, 17, 561 F.2d 904, 910 n.32 (1977). These efforts apparently put EPA under a judicially enforceable obligation to issue the 1977 limitations by January 30, 1976 which it chose to accomplish by promulgating those limitations separately and more quickly than their 1983 counterparts. Consequently, it is only the 1977-related regulations that are before us.

The actual promulgation procedures used in devising the challenged regulations were not unlike those used in Phase I and delineated in American Paper Inst., supra, 543 F.2d at 334-36. EPA commenced the 1977 part of the Phase II rulemaking process by commissioning two consulting firms in July 1973 to prepare a draft study suggesting possible industrial subcategories, as well as BPCTCA and achievable effluent reduction levels for each. About a year later, in August 1974, EPA made the draft study public and some 22 organizations, including many of the petitioners now before us, made it the target of comment and criticism. 4 Another year passed as the Agency responded to this new wave of solicited information by revising the draft report and by appending it, described as a “draft Development Document,” to an advance notice of proposed regulations. That notice was issued in the fall of 1975, and comments were again solicited. 40 Fed.Reg. 41300 (1975). It was followed a few months later by the issuance of a third contractor’s study of the economic impact of the proposed regulations (“Economic Analysis”).

Comments on this complete package of proposals and supporting analyses were processed and reflected in “Interim Final” regulations published on February 19, 1976 and accompanied by revised drafts of the Development Document and Economic Analysis. The Agency’s obligation to comply with the January 30, 1976 deadline accounted for this quasi-final format as well as for the relatively quick turn-around time between this and the preceding public notices. See NRDC v. Train, supra, 510 F.2d at 711. This procedure also allowed petitioners in these consolidated cases to set the judicial review mechanism in motion even as they were provided — and utilized— one final opportunity to urge the Agency on its own to revise the limitations before their final issuance.

The Agency’s efforts during these intermediate stages attracted thousands of *1022 pages of public comment. The industry, moreover, was offered the opportunity to introduce further testimony at a formal hearing, but it declined. The “Final Limitations” issued on January 6, 1977, with final Development Document and Economic Analysis attached. These regulations, like each of the Agency’s intermediate proposals during the rulemaking process, reflected significant changes — generally favorable to industry — in response to comments received.

The present litigation commenced in early 1976 with a petition for review filed in the United States Court of Appeals for the Third Circuit by petitioners in No. 76-1.675. Subsequently, other review petitions were also filed in the Ninth Circuit but were transferred by that court to the Third Circuit under 28 U.S.C. § 2112(a). EPA then convinced the Third Circuit to transfer all of the cases to this Circuit in light of its experience with the related issues raised in the Phase I litigation, American Paper Inst., supra. This court consolidated the petitions and established briefing and oral argument schedules providing for a single presentation of the issues raised in common by all of the petitioners, as well as for supplemental presentations by individual petitioners, or groups thereof, on specialized issues.

Although for ease of discourse we will generally refer collectively to the challengers before us as “petitioners”, it is important to note that the limitations have somewhat different impacts on, and accordingly have elicited some separate challenges from, different segments of the industry. In order to understand the challenges as they reflect both the common concerns of all members, and the separate concerns of individual subcategories, of the American paper industry, we turn next to a brief discussion of the manufacturing and pollution control processes typical of the industry.

B.

To make paper from trees is an old art; to do it without water pollution is a new science. In papermaking, logs or wooden chips must be ground up or “cooked” in one of several processes until only cellulose pulp is left. The pulp is bleached and made into various types and grades of paper. The cooking solutions and wash water that are left contain a variety of chemicals produced during “cooking” and other processes, including acids and large quantities of dissolved cellulose-breakdown products. Indeed, in some pulping processes, more of the wood is discarded in the waste water than is used to make paper. Appendix (App.) 2116. EPA has selected three parameters for measuring the pollutant content of the industry’s effluent, all of which have been used extensively in this and other industries’ measurements: total suspended solids (TSS), biochemical oxygen demand (BOD), and pH. 5 TSS reflects the total amount of solids in solution, while BOD reflects the amount of biodegradable material in solution, and pH measures the acidity of the solution. 6

*1023 EPA has divided this segment of the industry into 16 subcategories, and further subdivided it into 66 subdivisions, for the purposes of its rulemaking effort. As noted, some of petitioners’ challenges concern all of the regulations for the whole industry, while other challenges are directed to regulations for particular industry subcategories. Actually, of the 16 subcategories in the whole industry, only three — the three that use some form of the “sulfite process” —have evoked particularized challenges. 7 The reaction of sulfite mill operators stems from the limitations’ greater economic impact on them. 8 That impact in turn results from the fact that the sulfite process creates one of the highest pollution loads of any industrial process, and certainly the highest within the pulping industry. 9 In fact, the Act’s legislative history focused in particular on injury to shellfish in rivers and bays caused by sulfite wastes. A Legislative History of the Water Pollution Control Act Amendments of 1972 718-21 (1973) [hereinafter referred to as Legislative History]. Because the sulfite process is central in this case, we describe it in greater detail.

In the sulfite process, wooden chips are “cooked” in hot solutions of sulphurous acid and other chemicals. The cooking dissolves the binding agent in the wood (lignin) and also a good deal of the cellulose. The end product is cellulose pulp and an acid solution called spent sulfite liquor (SSL). There are two types of sulfite processes. In the papergrade sulfite process, which produces cellulose pulp for paper, the cellulose does not need to be very pure, and moderate steps suffice for cooking and separating pulp from SSL. In the dissolving sulfite process, aimed at making the raw cellulose base for materials such as cellophane and rayon, the cellulose must be pure, so the cooking and separation of the SSL are more complete and extra bleaching of the pulp is performed.

The sulfite process results in SSL and other potential pollution solutions containing acids, dissolved cellulose break-down products, and many types of organic compounds. These solutions receive various kinds of waste treatment. SSL is evaporated and burned in “SSL recovery,” eliminating the water pollution potential and producing usable heat and sometimes reusable *1024 chemicals. 10 The non-SSL waste solutions are pumped into sedimentation tanks where some of the suspended solids settle out of solution. The solutions are then pumped into other tanks and lagoons for secondary or “biological” treatment, in which bacteria are grown in the solutions to feed on and break down the waste. Eventually, the water is drained from the bacteria-laden solutions by a variety of methods. After draining, the caked solid or “sludge” that is left is incinerated or used for landfill.

III. SCOPE OF REVIEW

Before turning to the merits of petitioners’ challenges to the 1977 effluent limitations, some mention must be made of the appropriate scope of review under the circumstances of this case. Generally, informal rulemaking such as produced the regulations involved herein is reviewed under section 10(e)(2) of the Administrative Procedure Act (APA), 5 U.S.C. § 706(2). Pursuant to this provision, we must “set aside” any portion of the 1977 effluent limitations that is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law,” is “in excess of statutory . authority ... or short of statutory right,” or is “without observance of procedure required by law.” See American Paper Inst., supra, 543 F.2d at 338; American Frozen Food Inst., supra, 176 U.S.App.D.C. at 130-31, 539 F.2d at 132-33. See generally Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 415-17, 91 S.Ct. 814, 28 L.Ed.2d 136 (1971).

In form, section 10(e)(2) embodies a list of various adjectives or adjectival phrases- — any one of which, if found applicable, requires our disapproval of the administrative action in question. These formulations are far from being entirely discrete as a matter of the ordinary meaning of language, and, indeed, are in some respects cumulative rather than differential in their applicability. This is especially true of the words “arbitrary,” “capricious,” and “abuse of discretion.” In its totality, at all events, section 10(e)(2) is indicative of a multifaceted review function committed to the courts. In the present context, for example, that function is divisible into three categories — statutory, procedural, and substantive.

In the case before us, we first must determine whether the EPA regulations involved herein are “not in accordance with law,” or, more particularly, whether they are “in excess of statutory . . . authority.” APA §§ 10(e)(2)(A), (C), 5 U.S.C. § 706(2)(A), (C). We must also consider whether the process used in arriving at those regulations afforded those affected in their procedural due. More specifically, in the informal rulemaking context involved herein, this inquiry asks whether the agency gave “interested persons an opportunity to participate in the rule making through submission of written [or other] data” and whether it “incorporate[d] in the rule adopted a concise general statement of their basis and purpose.” 11 5 U.S.C. § 553. *1025 See Vermont Yankee Nuclear Power Corp. v. National Resources Defense Council, 435 U.S. 519, 98 S.Ct. 1197, 1202, 55 L.Ed.2d 460 (1978). Finally, we are charged by section 10(e)(2) of the APA to consider whether the agency “abuse[d its] discretion” (or was “arbitrary” or “capricious”) in exercising the quasi-legislative authority delegated to it by Congress, or, on the other hand, whether its “decision was based on a consideration of the relevant factors and [was not the product of] a clear error of judgment.” Citizens to Preserve Overton Park, Inc., supra, 401 U.S. at 416, 91 S.Ct. at 824. See also Vermont Yankee, supra, at 1214.

Due concern both for the intent of Congress in drafting the particular statute at issue, and, more generally, for the “boundaries between the legislative and the judicial function,” Industrial Union Dep’t v. Hodgson, 162 U.S.App.D.C. 331, 339, 499 F.2d 467, 475 (1974), often demands that we exercise certain aspects of our review function with more circumspection than is appropriate to others. Turning to the case at hand, therefore, we are initially confronted with a “complicated and lengthy statute,” American Frozen Food Inst., supra, 176 U.S.App.D.C. at 111, 539 F.2d at 113, aimed at achieving the monumental “national goal” of eliminating “the discharge of pollutants into the [nation’s] navigable waters” within the short span of 13 years. Section 101(a)(1) of the Act, 33 U.S.C. § 1251. The immensity of the planning task thrust upon the Agency by Congress was heightened by the drafters’ insistence upon industry-by-industry uniformity of effluent limitations and control techniques. E. g., Legislative History, at 170 (statement of Sen. Muskie). Not only would the Agency’s regulations have to work almost immediately, but they also would have to achieve cross-industry applicability despite the geographical, technological, and economic diversity that characterizes almost every discrete sector of manufacturing and agriculture in this country.

Yet, ambitious as was their goal, the drafters of the Act labored under no illusions about the uncertain state of current knowledge concerning the creation, effects, and control of water pollution. E. g., Legislative History, at 1332 (remarks of Sen. Buckley). Their intent, therefore, was to rely on EPA’s ingenuity, see, e. g., C & H Sugar Co. v. EPA, supra note 6, 553 F.2d at 286-87 — backed up by the Act’s comprehensive system of administrative rulemaking and stiff penalties — to force each industry on its own to develop the technology necessary to achieve the Act’s aspiring goal. See generally La Pierre, supra. Congress’s commitment to that goal, as well as the severe impact its achievement may have on those immediately affected, is further illustrated by the drafters’ realization that enforcement of the Act would probably shut down some plants around the nation. E. g., Legislative History, at 231 (remarks of Rep. Jones). See American Iron & Steel Inst. v. Train, 526 F.2d 1027, 1052 (3d Cir. 1976).

In light of the structure and aims of the Act, and the breadth of authority delegated by it to the EPA to identify highly sophisticated control technology in an area fraught with scientific uncertainty, our review function encounters significant limitations in the substantive aspect where the given statutory standards are “arbitrary,” “capricious,” or “abuse of discretion.” First, it is elementary that our function is not to weigh de novo the available evidence and to substitute our judgment for that of the Agency. Second, an expansive concept and exercise of the review power in the eleven Courts of Appeals charged with that function could easily impede accomplishment of the Act’s ambitious pollution-ending aspiration as well as its goal of industry-by-industry uniformity. See gen *1026 erally, Currie, Judicial Review Under Federal Pollution Laws, 62 Iowa L.Rev. 1221, 1261-71 (1977). This problem looms larger in the substantive area of review than it does in those areas involving statutory interpretation and procedural integrity because of the technological and scientific uncertainty-that EPA must overcome as best it can in making the discretionary judgments delegated to it by Congress. There are also obvious limitations upon-the capacity of courts to deal meaningfully with arcane areas of knowledge of this kind.

EPA has taken its responsibility quite seriously, employing no less than three highly qualified private consulting firms to augment its own technological expertise. Accordingly, we must not be too quick to draw conclusions, differing from those of the Agency, in this necessarily imprecise area of knowledge. E. g., Industrial Union Dep’t, supra, 162 U.S.App.D.C. at 338-39, 499 F.2d at 474-75 n. 18 (“Where existing methodology or research in a new area of regulation is deficient, the agency necessarily enjoys [a] broad discretion to attempt to formulate a solution to the best of its ability on the basis of available information”). See Permian Basin Area Rate Cases, 390 U.S. 747, 811, 88 S.Ct. 1344, 20 L.Ed.2d 312 (1968); Ethyl Corp. v. EPA, 176 U.S.App.D.C. 373, 396, 399, 541 F.2d 1, 24, 27 (en banc), cert. denied, 426 U.S. 941, 96 S.Ct. 2663, 49 L.Ed.2d 394 (1976); id. 176 U.S.App.D.C. at 438-439, 541 F.2d at 66-67 (Bazelon, C. J., concurring); Society of the Plastics Indus., Inc. v. OSHA, 509 F.2d 1301, 1308 (2d Cir.), cert. denied, 421 U.S. 992, 95 S.Ct. 1998, 44 L.Ed.2d 482 (1975). Indeed, the mere fact that the counsel on both sides in this suit could draw upon the opinions of diverse experts sitting virtually at their elbows during preparation of their briefs, 12 while we are forced to decide between their resulting arguments on the basis of our “generalist” judicial backgrounds, argues for restraint' on our part. 13 In sum, unless we are quite certain of our basis for doing so, we must be slow to overturn the Agency’s judgment, whichever way it may incline, when Congress has required it to act quickly and decisively despite the lack of exact data..

The likelihood of that degree of certainty on our part, we might add, almost inevitably decreases when our review is based on the record of informal rulemaking before the Agency. Because of the nature of such rulemaking, again exaggerated in this case by the complexity of the subject matter, the record’s portrayal of facts is essentially unsystematic (i. e., unaffected by any rules of evidence, or by face-to-face adversarial presentation). See Vermont Yankee, supra, 98 S.Ct. at 1217. Moreover, the greater part of the record will often transcend even an eclectic collection of facts and will instead be oriented towards aiding the Agency in making “pure[ly] legislative judgments.” Industrial Union Dep’t, supra, 162 U.S.App.D.C. at 338, 499 F.2d at 474. As such, it is relatively unhelpful to judges who have no way of testing the veracity of its “extensive and often conflicting” contents, or of analyzing it in the light of the neutral principles in which judicial decisionmaking is grounded. Id. 162 U.S.App.D.C. at 338-340, 499 F.2d at 474-76; accord FCC v. National Citizens Comm. for Broadcasting, 436 U.S. 775, 813-814, 98 S.Ct. 2096, 2121-2122, 56 L.Ed.2d 697 (1978); see Ethyl Corp. v. EPA, supra, 176 U.S.App.D.C. at 392, 541 F.2d at 20; Society of Plastics Indus., Inc., supra, 509 F.2d at 1304; Automotive Parts & Accessories Ass’n v. Boyd, 132 U.S.App.D.C. 200, 208, 407 F.2d 330, 338 (1968).

In these circumstances, therefore, we will be content in carrying out our substantive review (that is, assuming the statute and *1027 the requisite procedures have been followed) first, to insist upon an explanation of the facts and policy concerns relied on by the Agency in making its decision; second, to see if those facts have some basis in the record; and finally, to decide whether those facts and those legislative considerations by themselves could lead a reasonable person to make the judgment that the Agency has made. See Citizens to Preserve Overton Park, Inc., supra, 401 U.S. at 416, 91 S.Ct. 814; Amoco Oil Co. v. EPA, 163 U.S.App.D.C. 162, 180-81, 501 F.2d 722, 740-41 (1974); Industrial Union Dep’t, supra, 162 U.S.App.D.C. at 339-40, 499 F.2d at 475-76.

On the other hand, the Act — its history, intent, and the nature of the duties it delegates to the Agency and the judiciary — does not imply any derogation of the courts’ traditional primacy in interpreting statutory directives and enforcing procedural rectitude. Although calling upon the Agency to make technical judgments, the provisions of the Act that are controlling in this case use common-sense terms that are thoroughly treated in the legislative history, so that their meaning is not inherently more accessible to the Agency than to ourselves. See Texas Gas Transmission Corp. v. Shell Oil Co., 363 U.S. 263, 270, 80 S.Ct. 1122, 4 L.Ed.2d 1208 (1960); Lubrizol Corp. v. EPA, 562 F.2d 807, 816-17 & n.23 (1977). Accordingly, in this statutory area of review, and particularly in the absence of some special indication that the Agency interpretation may coincide with that of Congress, cf. Udall v. Tallman, 380 U.S. 1, 16-18, 85 S.Ct. 792, 13 L.Ed.2d 616 (1965), we are less hesitant to reject the decision of the Agency, if the latter does not comport with the conclusion dictated by established principles of statutory construction. See Adamo Wrecking Co. v. United States, 434 U.S. 275, 98 S.Ct. 566, 570 n.5, 54 L.Ed.2d 538 (1978); ASARCO, Inc. v. EPA, 188 U.S. App.D.C. 77, 83, 578 F.2d 319, 325 (1978), discussing Train v. Natural Resources Defense Council, 421 U.S. 60, 75, 95 S.Ct. 1470, 43 L.Ed.2d 731 (1975).

Even more so than our review of EPA’s statutory interpretations, our review of its procedural integrity in promulgating the regulations before us is the product of our independent judgment, and our main reliance in ensuring that, despite its broad discretion, the Agency has not acted unfairly or in disregard of the statutorily prescribed procedures. E. g., National Asphalt Pavement Ass’n v. Train, 176 U.S.App.D.C. 296, 304-5, 539 F.2d 775, 783-84 (1976). Our assertion of judicial independence in carrying out the procedural aspect of the review function derives from this country’s historical reliance on the courts as the exponents of procedural fairness. 14 E. g., Hurtado v. California, 110 U.S. 516, 4 S.Ct. 111, 28 L.Ed. 232 (1884); Palko v. Connecticut, 302 U.S. 319, 58 S.Ct. 149, 82 L.Ed. 288 (1937); Goldberg v. Kelly, 397 U.S. 254, 90 S.Ct. 1011, 25 L.Ed.2d 287 (1970); Goss v. Lopez, 419 U.S. 565, 95 S.Ct. 729, 42 L.Ed.2d 725 (1975). Recently, this reliance has transcended cases arising under either of the due process clauses and has infused modern notions of administrative law, in particular in the area of informal rulemaking. E. g., Rodway v. Department of Agriculture,