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Full Opinion
The Environmental Protection Agency (“EPA”) concluded that the Tennessee Valley Authority (“TVA”) violated the Clean Air Act (“CAA”)
We hold that we lack jurisdiction to review the ACO because it does not constitute “final” agency action. Although the CAA empowers the EPA Administrator to issue ACOs that have the status of law,
This opinion consists of six parts. In part I, we describe the CAA’s enforcement scheme. An important component of this discussion is the following observation: Congress clearly intended that ACOs be issued without any sort of adjudication, and the EPA has always (until now) abided by this obvious interpretation. This part also describes the course of this litigation, detailing the EPA’s decision to conduct an adjudication prior to the issuance of the ACO — an adjudication that employed procedural rules that were invented by the EAB and administrative law judge (“ALJ”) and applied on an ad hoc basis. Part II provides an overview of the Supreme Court’s finality doctrine. This part concludes by focusing the discussion on one essential finality factor: whether the agency’s action fixes a legal right or obligation. Although we ultimately believe that the CAA clothes ACOs with the status of law, part III explains why this conclusion is not axiomatic, notwithstanding the plain language of the statute. Several factors that might inform our interpretation of the CAA — agency practice, legislative history, the canon of statutory construction which requires courts to interpret statutes in a way that renders them constitutional, the problem of judicial review, and statutory structure — all point to the conclusion that Congress did not intend that ACOs have the status of law. Part IV explains how the plain language of the CAA leads to the unavoidable conclusion that Congress did, in fact, authorize the issuance of ACOs with the status of law. In this vein, the tension between parts III and IV reveals that the CAA was poorly drafted. Part V explains why the CAA is unconstitutional to the extent that monetary penalties and imprisonment can be imposed merely for noncompliance with an ACO. This part also explains why the statute cannot be saved by a voluntary pre-ACO adjudication. Part VI, the conclusion, makes the following point: since a deprivation of liberty or property cannot stem from mere noncompliance with an ACO, ACOs have no legal consequence and therefore do not constitute final agency action. Not only is this result constitutionally compelled, it also enables future courts to sidestep the thorny problems presented by part III, such as the fact that ACOs are typically issued without a record and the fact that an EPA adjudication of liability conflicts with other provisions of the statutory scheme.
I. Background
A. The Statutory Scheme
When the EPA finds that a regulated party is engaging in some sort of unlawful activity — such as emitting pollutants in excess of that allowed by EPA regulations or constructing a pollution source without a permit required by a state implementation plan (“SIP”) — the EPA has four enforcement options. First, the EPA can request that the Attorney General commence a criminal prosecution. See 42 U.S.C. § 7413(a)(3)(D), (c).
The EPA also has a fourth option: it can issue an ACO directing the regulated party to comply with various requirements. See 42 U.S.C. § 7413(a)(1)(A), (a)(2)(A), (a)(3)(B), (a)(4). ACOs can be issued so long as the following requirements are met: (a) they must be based upon “any information available to the Administrator”; (b) they must be issued thirty days after the issuance of a Notice of Violation; and (c) the regulated party must be given an “opportunity to confer” with the Administrator. See 42 U.S.C. § 7413(a)(1), (4).
The problem with ACOs stems from their injunction-like legal status coupled with the fact that they are issued without an adjudication or meaningful judicial review. First, ACOs are issued without any sort of adjudication that a party has violated the CAA. Like the decision to pursue a civil enforcement action in district court and the decision to refer a potential criminal violation to the Attorney General, the decision to issue an ACO is made “on the basis of any information available to the Administrator.” 42 U.S.C. § 7413(a)(1). That is, the Administrator need only have a staff report, newspaper clipping, anonymous phone tip, or anything else that would constitute “any information.” The standard is less rigorous than the probable cause standard required for the issuance of search warrants; certainly no pre-ACO adjudication that a party has violated the CAA (such as by modifying a pollution source in violation of an SIP) is contemplated. This observation is confirmed not only by the language of the statute, but also by agency practice. ACOs are rarely, if ever, issued after an agency adjudication.
A second aspect of ACOs is that they have the status of law. The other three enforcement options dovetail with the ACO provisions, making a violation of an ACO a
Scenario One: The EPA Administrator reads a newspaper report stating that Energy Co. has modified a power plant without a permit. The EPA also receives an anonymous phone tip “confirming” the report. Based upon the newspaper’s discussion of the precise nature of the modifications, the Administrator believes that the modifications are so extensive that Energy Co. is in violation an SIP. That is, the Administrator finds that there has been a violation of an applicable implementation plan based upon “any information available to the Administrator.” 12 U.S.C. § 7113(a). The Administrator gives the requisite “Notice of Violation” to Energy Co., and Energy Co. vehemently disagrees with the EPA It believes that the EPA has based its finding upon an erroneous view of the law and facts, and so it does nothing in response to the Notice of Violation. After 30 days, the Administrator issues a highly detailed administrative compliance order pursuant to 12 U.S.C. § 7113(a)(1). The Administrator provides Energy Co. with an “opportunity to confer,” see § 7113(a)(If), hoping that she can settle the matter with Energy Co. and thereby avoid the difficult and costly task of proving a violation in court. The Administrator revises the ACO several times, but to no avail; Energy Co. continues to believe that the Administrator’s view of the law and facts is wrong. After conducting an investigation so that it can make out a complaint against Energy Co., the EPA takes the following course of action: first, the EPA seeks to administratively assess civil penalties against Energy Co. pursuant to section 7113(c); second, the agency seeks an injunction in district court pursuant to section 7113(b); third, because the EPA believes that Energy Co. is a “knowing violator” of the SIP under section 7113(d), it asks the Attorney General to bring a criminal action against Energy Co. In all three forums — the civil suit seeking an injunction, the intra-agency proceeding seeking civil penalties, and the criminal prosecution seeking imprisonment— Energy Co. is allowed to contest EPA’s view of the facts and law. In each case, the original tribunal or a reviewing court might decide that the EPA has failed to prove that Energy Co. has violated an SIP or EPA regulation.
Scenario Two: Just like Scenario One, the EPA Administrator reads a newspaper report stating that Energy Co. has been undertaking various modifica*1243 tions to a power plant without a permit. She also receives an anonymous phone tip “confirming” the report. Based on the newspaper’s discussion of the precise nature of the modifications, the Administrator believes that the modifications are so extensive that Energy Co. is in violation of an SIP. That is, the Administrator finds that there has been a violation of an applicable implementation plan based upon “any information available to the Administrator.” 12 U.S.C. § 7118(a). The Administrator then gives a “Notice of Violation” to Energy Co. Energy Co., believing that the EPA has based its finding upon an erroneous view of the law and facts, does nothing in response to the Notice of Violation. The Administrator responds by issuing a highly detailed administrative compliance order pursuant to 4,2 U.S.C. § 7413(a)(1).
At this point, the story begins to change dramatically from Scenario One. The Administrator provides Energy Co. with an “opportunity to confer,” see 4% § 7418(a)(4), although the “opportunity” is really no opportunity at all because the Administrator has no intention of changing the ACO. After a few weeks, Energy Co. still has not complied with the terms of the ACO, because Energy Co. continues to believe that the Administrator has an incorrect understanding of the law and facts. The EPA responds by filing an action for the assessment of civil fines pursuant to section 7413(d), in addition to referring the matter to the Attorney General for prosecution. The only issue in each proceeding is whether Energy Co. did, in fact, violate the terms of the ACO. Energy Co. does not have a chance to contend that the EPA has an incorrect view of the facts and law; these issues are irrelevant. Each proceeding involves a brief hearing, with the EPA proffering irrefutable evidence that (a) an ACO was properly issued by the Administrator based upon “any information” available to her (i.e., the newspaper article and anonymous phone tip) and (b) Energy Co. refused to comply with the ACO. Energy Co. is subsequently fined $25,000 per day, and the CEO of Energy Co. is hauled off to prison for five years.
In short, because an ACO can be issued “on the basis of any information available” to the Administrator, and because noncompliance with an ACO automatically triggers civil and criminal penalties, Energy Co. and its corporate officers never get an opportunity to argue, before a neutral tribunal, that the modifications in question do not violate an SIP. The EPA is the ultimate arbiter of guilt or innocence, and the courts are relegated to a forum that conducts a proceeding, akin to a show-cause hearing, on the issue of whether an EPA order has been flouted. As will be discussed infra, this scheme violates the Due Process Clause and the separation-of-powers principle. Our task for the moment is merely to describe how the scheme works.
B. This Litigation
The Tennessee Valley Authority (“TVA”), an agency of the United States, was established pursuant to the Tennessee Valley Authority Act of 1933, 16 U.S.C. §§ 831-831ee. One of its primary responsibilities is to provide electric power at reasonable rates. 16 U.S.C. § 831n-4(h). To satisfy the statutory directive, TVA owns and operates eleven coal-fired electric power plants,
On November 3, 1999, the EPA issued its first ACO,
Rather than issuing a seventh amended ACO after staff deliberation, the EPA took a step that it describes as “exceedingly unusual”:
The EAB crafted a reconsideration procedure which, to say the least, lacked the virtues of most agency adjudications.
The EAB ultimately “affirmed” most of the sixth amended ACO on September 15, 2000. Both during the EAB proceeding and after it concluded, the EPA operated under the mistaken assumption that an ACO issued after an ad hoc “adjudication” could somehow possess a different legal status than an unadjudicated ACO. The EAB, for example, consistently called the product of the EAB decision a “Final Order” while calling all prior ACOs “compliance orders.” The EAB also said that “since the Administrator has directed us to reconsider the Compliance Order, we will characterize the Compliance Order’s findings as allegations that must be proven in
On November 13, 2000, TVA petitioned this court for review of the EAB Order pursuant to 42 U.S.C. § 7607(b), which provides for appellate review of any “final agency action of the Administrator.” We bifurcated our review of TVA’s petitions for review, dealing first with several threshold issues in our opinion of January 8, 2002. See Term. Valley Auth. v. EPA, 278 F.3d 1184 (11th Cir.2002). We held that the petitions for review of the pre-adjudication ACOs were moot because the EAB Order rendered the first ACOs “of no force and effect.” Id. at 1191. We also held that TVA possessed independent litigating authority; that the dispute presented a justiciable case or controversy; that Executive Orders 12146 and 12088 did not preclude jurisdiction;
II. Discussion of Finality, Part One: The Law of Finality and Why it Matters
A. Appellate Review Provision: Why Finality Matters for Jurisdiction
The CAA provides that judicial review of any final EPA action is available “in the United States Court of Appeals for the appropriate circuit.” 42 U.S.C. § 7607(b); Harrison v. PPG Indus., Inc., 446 U.S. 578, 100 S.Ct. 1889, 64 L.Ed.2d 525 (1980).
B. Finality Doctrine: An Overview
The Supreme Court has established five factors for determining finality: (1) whether the agency action constitutes the agency’s definitive position; (2) whether the action has the status of law or affects the legal rights and obligations of the parties; (3) whether the action will have an immediate impact on the daily operations of the regulated party; (4) whether pure questions of law are involved; and (5) whether pre-enforcement review will be efficient. See FTC v. Standard Oil of Calif., 449 U.S. 232, 239-43, 101 S.Ct., 488, 493-95, 66 L.Ed.2d 416 (1980). The second prong is especially important in this case. In Standard Oil, the Court distinguished the regulations at issue in Abbott Labs. v. Gardner, 387 U.S. 136, 149, 87 S.Ct. 1507, 1516, 18 L.Ed.2d 681 (1967), on the ground that the regulations had a “direct and immediate ... effect on the day-to-day business” of the complaining parties because they had “ ‘the status of law.’ ” Standard Oil, 449 U.S. at 239-40, 101 S.Ct. at 493. In this vein, the Court rejected the petitioner’s argument that the FTC’s actions had legal significance: “Socal does not contend that the issuance of the complaint had any such legal or practical effect, except to impose upon Socal the burden of responding to charges made upon it. Although this burden is certainly substantial, it is different in kind and legal effect from the burdens attending what heretofore has been considered to be final agency action.” Id. at 242, 101 S.Ct. at 494. Similarly, in Bennett v. Spear, 520 U.S. 154, 117 S.Ct. 1154, 137 L.Ed.2d 281 (1997), which was recently affirmed in Whitman v. American Trucking Ass’ns, Inc., 531 U.S. 457, 121 S.Ct. 903, 149 L.Ed.2d 1 (2001), the Court explained as follows:
As a general matter, two conditions must be satisfied for agency action to be “final”: First, the action must mark the “consummation” of the agency’s decision making process — it must not be of a merely tentative or interlocutory nature. And second, the action must be one by which “rights or obligations have been determined,” or from which “legal consequences will flow.”
Bennett, 520 U.S. at 177-78, 117 S.Ct. at 1168 (citation omitted). The second Standard Oil prong, then, is not merely thrown into a totality-of-the-factors balancing test; it is mandatory. The second Bennett factor — whether the agency action is one in which “rights or obligations have been determined” or from which “legal consequences will flow” — is central to our position that ACOs are not final.
III. Discussion of Finality, Part Two: Why Congress May Not Have Empowered the EPA to Issue ACOs with the Status of Law
It is entirely possible that Congress wanted the EPA to issue inconsequential, complaint-like instruments rather than ACOs with the status of law. That is, one can make a solid argument that Congress never clothed ACOs with the status of law, and that Congress believed that ACOs would not be subject to judicial review.
A. Avoiding an Unconstitutional Interpretation
One reason that a court might interpret the CAA in a way that diminishes the legal significance of ACOs is the fact that the statutory scheme dictated by the plain language of the statute is constitutionally re
B. Statutory Structure and the Problem of Superfluous Provisions
To ascertain the true meaning of a statute, courts are often forced to delve into the structure of a statute and the context in which different provisions are written. See, e.g., United States v. Tinoco, 304 F.3d 1088, 1105 (11th Cir.2002). Using this methodology, it becomes apparent that an interpretation that would give ACOs the status of law renders several statutory provisions useless or absurd.
1. U.S.C. § 760S
Perhaps most telling is 42 U.S.C. § 7603, which gives the EPA special “emergency powers.” When a pollution source presents an “imminent and substantial endangerment to public health or welfare, or the environment,” the EPA may bring suit for appropriate relief. If it is “not practicable to assure prompt protection of public health or welfare” by recourse to a judicial forum, then the EPA may issue an “order” on its own initiative. This order “remains in effect” for, at most, sixty days. To secure a permanent injunction, the EPA must sue in district court. If the order is flouted by the alleged violator, the full panoply of penalties can be imposed, including imprisonment pursuant to 42 U.S.C. § 7413(c)(1).
It is clear from the text of section 7603 that Congress enabled the EPA to issue orders with the status of law, but only in an extremely narrow context. There must be an emergency rising to the point of an “imminent and substantial endangerment.” Moreover, the EPA order attains an injunction-like status only for an extremely short time period; any extension must be made by a federal court based upon proof that the defendant has caused extremely harmful pollution. And in the event of an “imminent and substantial endangerment,” the EPA does not have unfettered discretion to enter a short-term, injunction-like order. The agency must first resort to a judicial forum; only if that option proves to be impracticable is the EPA justified in issuing such an order. Finally, the EPA is forced to “consult with appropriate State and local authorities and attempt to confirm the accuracy of the information on which the action proposed to be taken is based.”
Congress thus authorized the issuance of EPA orders with the status of law, but only in an extremely narrow setting (public emergency), as a last resort (if suing in federal court is impracticable), for a very limited time (sixty days), and after the EPA confirms its information with state and local authorities. Why would Congress cabin EPA orders in this way if the EPA can always issue an identical order (i.e., an ACO) pursuant to 42 U.S.C. § 7413? After all, section 7413 ACOs are of an infinite duration, and they can be issued without going to court — even if recourse to a judicial forum is not “impracticable.” Moreover, section 7413 ACOs can be issued “on the basis of any information” that a violation has been committed; there is no need to worry about whether the violation constitutes a rare public emergency, and there is no need to consult sate and local authorities. In sum, section 7603 evidences a congressional intent to permit the EPA to issue orders with the force of law, but only so long as rigorous requirements are met. Section 7413 apparently erases all of those requirements.
£ m U.S.C. § 7W
Section 7413(c)(1) states that “any person who knowingly violates any ... order
This interpretation is, to say the least, bizarre when one reads the rest of the statute. The other criminal provisions require the Government to prove that a defendant has negligently or knowingly released hazardous pollutants. See 42 U.S.C. § 7413(c)(4), (5). Why would Congress bother with requiring the use of the full panoply of procedural rights found in the Federal Rules of Criminal Procedure when the EPA could simply issue an ACO based upon “any information,” and, upon noncompliance with the ACO, obtain a conviction? For that matter, the EPA has a strong incentive to avoid proving a violation of an EPA regulation or SIP in any forum — including a civil proceeding in district court or an administrative proceeding before an ALJ. If the EPA issues an ACO, it can always avoid the arduous task of proving the violation in court. The ACO provision appears to be a loophole of the highest order.
Section 7413 also provides that ACOs cannot take effect until the regulated party has had an “opportunity to confer” with the EPA. See 42 U.S.C. § 7413(a)(4). Why did Congress include this language? If ACOs do not have the status of law, then this provision makes sense: ACOs are merely complaint-like devices that are used in an effort to avoid recourse to litigation. They are, in short, the beginning of the bargaining process. See Lloyd A. Fry Roofing Co. v. EPA, 554 F.2d 885, 890-91 (8th Cir.1977); Asbestec Const. Servs., Inc. v. EPA, 849 F.2d 765, 769 (2d Cir.1988). But if noncompliance with an ACO can really trigger civil and criminal penalties, then what incentive does the EPA have to “confer” with the regulated party? If the EPA can issue what is, in effect, an injunction, the EPA would rarely feel compelled to compromise.
C. Agency Practice
An agency’s interpretation of its enabling legislation often deserves deference. See Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). The Supreme Court’s decision in United States v. Mead Corp., 533 U.S. 218, 121 S.Ct. 2164, 150 L.Ed.2d 292 (2001), held that Chevron deference is confined to those instances in which the agency renders its interpretation in the course of a rulemaking proceeding or adjudication. Even so, most courts would not completely ignore an agency’s interpretation of its organic statutes — even if that interpretation is advanced in the course of litigation rather than a rulemaking or agency adjudication.
The EPA has long taken the litigating position that ACOs lack the status of law and are therefore not subject to pre-en-forcement review. In Solar Turbines Inc. v. Seif, 879 F.2d 1073 (3d Cir.1989), for example, the EPA argued that the section 7603 compliance order at issue “merely statefd] EPA’s position and [is] best analogized to a complaint.” Id. at 1079.
D. The Problem of Judicial Review
Had Congress wanted ACOs to have the force of law, it surely would have made them subject to judicial review. And had Congress wanted judicial review of ACOs, it surely would have required the EPA to create a record that would facilitate judicial review. But Congress clearly contemplated that ACOs would be issued without a record, and so there would be no way that a reviewing court could review the decision to issue an ACO. The existence of this fact belies the notion that Congress intended to enact a statute in which ACOs have the force of law.
One might respond to this observation by saying that this case does, in fact, have a record, and, in any event, courts are always free to remand for the creation of a record. See Harrison v. PPG Indus., Inc., 446 U.S. 578, 100 S.Ct. 1889, 64 L.Ed.2d 525 (1980). But this retort misses the point, avoiding an argument based upon likely congressional intent and relying upon the particularities of one bizarre case. The point is this: Congress created a statutory scheme in which ACOs are issued without any sort of adjudication, and, accordingly, the EPA has never (until now) undertaken a proceeding that even marginally resembles an adjudication prior to the issuance of an ACO. Given this fact, did Congress really think that a violation of the terms of an unadjudicated ACO (which are 99.9% of them) could trigger civil and criminal penalties? If Congress intended that ACOs have the force of law, then Congress surely would have facilitated judicial review. Yet in almost every ease, the EPA does not go about making a record, and the statute clearly countenances this result. The impossibility of judicial review in this setting demonstrates the unlikelihood that Congress ever believed that noncompliance with the terms of an ACO could trigger civil and criminal penalties.