Document OJy6wDxLer5kD1op23M2mEgeQ

IN THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT THE SOCIETY OF THE PLASTICS INDUSTRY, INC. Petitioner, v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY and LEE THOMAS, Administrator, U.S. Environmental Protection Agency, Respondent. ) ) ) ) ) ) No. ) ) ) ) ) ) ) ) PETITION FOR REVIEW Pursuant to Rule 15 of the Federal Rules of Appellate Procedure and Section 307(b)(1) of the Clean Air Act, 42 U.S.C. 7607(b), The Society of the Plastics Industry, Inc. hereby petitions the Court for review of a Final Rule promulgated by the United States Environmental Protection Agency. 51 Fed. Reg. 34,904-34,915 (Sept. 30, 1986). This Rule revises the standard governing emissions of vinyl chloride found in Subparts F and V of 40 C.F.R. Part 61. We respectfully request that the Court grant this Petition. Respectfully submitted. Jerome H. Heckman Peter L. de la Cruz Keller & Heckman 1150 17th Street, N.W., Suite 1000 Washington, D.C. 20036 (202) 956-5600 Gary H. Baise Robert Brager Beveridge and Diamond 1333 New Hampshire Ave., Suite 900 Washington, D.C. 20036 N.W. Counsel for The Society of the Plastics Industry, Inc. SPI-07809 CERTIFICATE OF SERVICE I certify that a copy of the Petition for Review of the Society of the Plastics Industry, Inc. was mailed, postage prepaid, this day of November, 1986 to: Lee Thomas Administrator Environmental Protection Agency 401 M Street, S.W. Washington, D.C. 20460 Gerald Yamnada, Esq. Acting General Counsel Environmental Protection Agency 401 M Street, S.W. Washington, D.C. 20460 Edwin Meese III, Esq. Attorney General Department of Justice Constitution Avenue & 10th Street, N.W. Washington, D.C. 20530 Peter L. de la Cruz SPI-07810 IN THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT THE SOCIETY OF THE PLASTICS INDUSTRY, INC., ) ) Petitioner, ) ) ) v. ) UNITED STATES ENVIRONMENTAL ) ) PROTECTION AGENCY and LEE THOMAS,) Administrator, U.S.E.P.A., ) Respondent. ) ) ) No. ON PETITION FOR REVIEW OF AN ORDER OF THE U.S. ENVIRONMENTAL PROTECTION AGENCY MOTION FOR STAY 1. The Society of the Plastics Industry, Inc., (SPI) has this day filed its petition for review of a Final Rule promulgated by the respondent United States Environmental Pro tection Agency (EPA). 51 Fed. Reg. 34,904-34,915 (Sept. 30, 1986). The Final Rule revises the standard governing emissions of vinyl chloride found in Subparts F and V of 40 C.F.R. Part 61. Pursuant to Rule 18 of the Federal Rules of Appellate Procedure, Petitioner respectfully moves this Court to stay enforcement of the Final Rule. 2. Without adequate notice or explanation, EPA has revised key provisions with the effect of (1) overturning existing case law, (2) imposing new penalties, (3) creating SPI-07811 2 multiple penalties for the same event, and (4) expanding the types of equipment subject to the standard. In addition, as a result of prior enforcement action, some Vinyl Institute members have entered into consent decrees requiring compliance with the vinyl chloride standard. Since EPA chose to make these changes effective immediately upon publication in the Federal Register, member companies may be held in contempt for violating their consent decrees unless a stay is granted during the pendency of this review proceeding. 3. As more fully described in the memorandum accompanying this motion, SPI is likely to succeed on the merits of its claims, member companies will suffer irreparable damage without adequate legal remedy if the Final Rule is enforced prior to a decision on appeal, other parties will suffer no harm if a stay is granted, and the public interest will be promoted rather than harmed by a grant of a stay. 4. Application for the relief sought by this motion was made to the Respondent EPA on November, 1986. The Agency has not yet reached a decision on the request. SPI-07812 3 WHEREFORE, Petitioner SPI respectfully moves this Court to enter an order staying the enforcement of the provisions of the Final Rule promulgated by Respondent until final determina tion in this Court of the issues raised by the Petition for Review. Respectfully submitted, Jerome H. Heckman Peter L. de la Cruz Keller and Heckman 1150 17th Street, N.W. Suite 1000 Washington, D.C. 20036 (202) 956-5600 Gary H. Baise Robert Brager Beveridge and Diamond 1333 New Hampshire Ave., Suite 900 Washington, D.C. 20036 (202) 828-0200 N.W. Counsel for The Society of the Plastics Industry, Inc. SPI-07813 IN THE UNITED STATES COURT OP APPEALS FOR THE DISTRICT OP COLUMBIA CIRCUIT THE SOCIETY OF THE PLASTICS INDUSTRY, INC. ) ) Petitioner, ) ) ) v. ) UNITED STATES ENVIRONMENTAL ) ) PROTECTION AGENCY AND LEE THOMAS,) ADMINISTRATOR, U.S. ENVIRONMENTAL) PROTECTION AGENCY, ) Respondent. ) ) ___) No. ON PETITION FOR REVIEW OF AN ORDER OF THE U.S. ENVIRONMENTAL PROTECTION AGENCY MEMORANDUM IN SUPPORT OF MOTION TO STAY The Vinyl Institute a division of The Society of the Plastics Industry, Inc. (SPI), requests that this Court stay a final rule revising the emission standard for vinyl chloride promulgated by the United States Environmental Protection Agency (EPA) on September 30, 1986. 30, 1986).-/ 51 Fed. Reg. 34,904 (Sept. V The Vinyl Institute's members collectively account for approximately 82% of the domestic production of vinyl chloride and 63% of the domestic production of polyvinyl chloride. The members include: Air Products and Chemicals, the BFGoodrich Chemical Group, Borden Chemical, Certain-Teed, Dow Chemical U.S.A., Georgia Gulf, Occidental Chemical, PPG Industries, Tenneco Polymers and Vista Chemical. SPI is a 1,800 member not-for-profit corporation organized under the laws of the State of New York. The Society's members include processors and manufacturers of plastics or plastics products, suppliers of raw materials, processors and converters of plastic resins and manufacturers of accessory equipment for the plastics industry. Founded in 1937, the Society is the "voice" of the plastics industry. SPI-07814 2 Without adequate notice or explanation, EPA has revised key provisions with the effect of: (1) overturning existing case law, (2) imposing new penalties, (3) creating multiple penalties for the same event, and (4) expanding the types of equipment subject to the standard. In addition, as a result of prior enforcement action, some Vinyl Institute members have entered into consent decrees requiring compliance with the vinyl chloride standard. Since EPA chose to make these changes effective immediately upon publication in the Federal Register, member companies may be held in contempt for violating their consent decrees unless a stay is granted during the pendency of this review proceeding. A. FACTS 1. Regulatory Proceedings Vinyl chloride monomer is a gas at ambient temperatures and pressure. Although vinyl chloride is reactive, it is used principally to produce polyvinyl choride (PVC), an inert plastic which can be fabricated into many items including blood transfusion bags, medical devices, records, water and sewage pipes, food wraps and bottles. SPI-07815 3 In December 1975, EPA designated vinyl chloride as a hazardous air pollutant under Section 112 of the Clean Air Act 42 U.S.C. 7412, and published a proposed standard. 40 Fed. Reg. 59,532 (1975). That notice outlined data linking vinyl chloride to various carcinogenic and non-carcinogenic disorders and proposed emission levels which would provide an ample margin of safety while taking the limitations of the available technology into consideration. Id. at 59,534. EPA promulgated final rules for vinyl chloride on October 21, 1976. 41 Fed. Reg. 46,560 (1976); 40 C.F.R. 61.60 to 61.71. The standard created a comprehensive regulatory scheme for minimizing emissions of vinyl chloride from ethylene dichloride plants, vinyl chloride plants and polyvinyl chloride plants. In general, the rules applied only to those portions of the plant that were in "in vinyl chloride service," which is defined as equipment contacting a liquid or gas that is at least 10% vinyl chloride. In a chemical process called polymerization, vinyl chloride is converted to polyvinyl chloride in pressurized reactors. The reaction generates heat. As a necessary pre caution dictated by insurance and safety code concerns, the SPI-07816 4 reactors are equipped with relief valves. The relief valves are set to open at a pressure safely below the explosion limit of the reactor vessel. The standard prohibits all but emergency discharges. Vinyl chloride in exhaust gas from normal operations must be controlled to no more than 10 parts per million (ppm). Other provisions require the institution of detailed leak detection and elimination programs. To ensure compliance with these programs, periodic reports and records detailing emission testing and monitoring must be maintained. The Environmental Defense Fund (EDF) sought review of the 1976 rules in this Court but later dismissed its petition as part of a settlement between EDF and EPA. SPI and industry were excluded from the settlement process. The Agency agreed to propose new and more stringent rules and did so in June 1977. 42 Fed. Reg. 28,454 (June 2, 1977). In January 1985, EPA published a notice withdrawing the 1977 proposal and simultaneously proposing a new set of revisions to the standard. 50 Fed. Reg. 1,182 (Jan. 9, 1985). The Agency's withdrawal of the 1977 proposal was upheld by this SPI-07817 5 Court in National Resources Defense Council, Inc, v. EPA, No. 85-1150 (D.C. Cir. Nov. 4, 1986). The 1985 proposals suggested: (1) replacing the industry-specific leak detection and elimination with a generic program initially designed for benzene producers; (2) substi tuting the "emergency" relief valve discharge provision with a numerical limitation; (3) revising some key definitions; and (4) adding several new definitions. EPA issued a final rule on September 30, 1986. 51 Fed. Reg. 34,904 (1986). The final rules differ significantly from the 1985 proposals and adversely change the definitions and standard. For example, the final rule reverts to the 1976 rule permitting only "emergency" discharges as compared to the pro posed numerical limitation. Other provisions of particular importance to this motion for a stay are explained more fully in the following section. 2. Provisions of the Standard For Which A Stay Is Required Although the vinyl chloride standard is complex, for purposes of this motion to stay the Vinyl Institute is focusing SPI-07818 6 on five specific provisions, the adverse impact of which is outlined below. (a) Definition of Exhaust Gas--Under the 1976 standard, exhaust gases must be routed to a control device which limits the amount of vinyl chloride discharged to 10 parts per million. In contrast, there is no specific emission limitation for leaks. Rather, companies subject to the standard must adhere to their leak detection and elimination program. Failure to adhere to the program constitues a violation. In prior enforcement actions, EPA attempted to categorize leaks as exhaust gases and allege a violation of the 10 ppm emission limitation requirement. In United States v. Conoco, Inc., Civ. Action No. 83-2518 (W.D.La. June 1, 1984), the court held that leaks are not exhaust gases and, therefore, are not subject to the 10 ppm emission limitation. A copy of the decision is attached. The 1976 standard contained no definition of exhaust gas. In its January 1985 proposal, EPA presented a definition for exhaust gas which included the following statement: "A leak . . . is not an exhaust gas." 50 Fed. Reg. 1,194; proposed 61.61(x). Without explanation, the definition for exhaust SPI-07819 7 gas promulgated as a final rule in September 1986 deleted this key sentence. According to normal standards of interpretation, EPA enforcement personnel can now argue that leaks are exhaust gases. There is no explanation for this change in the preamble of the final rule; it represents an unjustified change in the standard that attempts to silently overturn the Conoco decision. Such a rule is fundamentally unfair because almost any leak of pure vinyl chloride will exceed the 10 ppm emission limitation for exhaust gases, thus subjecting the companies to a potential fine of $25,000 per day for each leak regardless of their best efforts to eliminate all leaks. (b) Definition of Relief Valve Discharge--The interpretation of the relief valve discharge provisions of the vinyl chloride standard have been the primary point of conten tion between industry and EPA. Although serious questions of technological feasibility, safety and cost exist, EPA has urged industry to develop methods for routing relief valve discharges through equipment to minimize emissions of vinyl chloride to the atmosphere. Although no definition for a relief valve discharge existed in the original rule, EPA's 1985 proposal defined relief valve discharge to mean "any nonleak discharge though a relief valve." Again, without explanation and without SPI-07820 8 any support in the record of which we are presently aware, FDA added the following language to this definition. 'Relief valve discharge' does not include discharges ducted to a control system from which the concentration of vinyl chloride and exhaust gases does not exceed 10 ppm (average for 3-hour period), or equivalent as provided in 61.66. Although this additional language superficically appears to treat relief valve discharges ducted through a control device as exhaust gases rather than relief valve discharges, closer examination reveals that, if vinyl chloride discharged through a relief valve is ducted to a control system that exceeds the 10 ppm limitation, the involved company may be subject to a double penalty for both a relief valve discharge and a violation of the 10 ppm exhaust gas limitation. A stay for this provision is necessary because it is arbitrary and conflicts with stated Agency policy to subject parties who connect their relief valves to emission minimize equipment to double penalties. Moreover, the status of relief SPI-07821 9 valve discharges that are not released directly to the atmos phere are currently being litigated before the United States Court of Appeals for the Fifth Circuit. Dow Chemical Company v. EPA [CITE]. A stay of the revised definition pending consideration by this court and the Fifth Circuit is warranted. (c) Leak Detection and Elimination--Under the 1976 standard, companies installed area monitors and developed plant-specific leak detection and elimination program. Since that time, as part of the benzene standard, EPA developed a generic leak detection and elimination program which is codified in Subpart V of EPA's regulations establishing national emission standards for hazarous air pollutants (NESHAPS). 40 C.F.R. 61.240-61.247 (Subpart V). The final rule imposes significant, additional require ments. Examples include open-ended valves, pump standards and compressor standards. Since Subpart V was promulgated as part of the benzene standard and benzene producers are not required to maintain continuous monitoring systems like vinyl chloride and polyvinyl chloride producers (See Section 61.65(b)(8)), as well as other specifications, there is clearly disparate and discriminatory treatment of vinyl chloride and polyvinyl SPI-07822 10 chloride producers and users which is adverse. Given the differences in industries and a decade of successful leak detection and elimination programs under the vinyl chloride standard, retention of the original program is appropriate. EPA's desire for a single uniform program is not sufficient to justify the imposition of more burdensome requirements, especially when existing programs have been effective. (d) Definition of Ethylene Dichloride Purification-- For reasons that are not altogether clear, the 1986 rule amends the definition of ethylene dichloride purification found in 40 C.F.R. 61.61(o). The definition excludes product storage following the vinyl finishing column. Again, while differences between the proposed and final rule are unexplained, based on EPA's background information document, the Agency intended to exclude not only final product storage but also intermediate product storage. See, Vinyl Chloride Standards; Responses to Comments on January 1985 Proposed Revisions, pp. 2-43, 2-44 and 1-2 (Sept. 1986) (EPA-450/3-86-004). The final rule failed to reflect exclusion of intermediate storage equipment. Even if EPA intended to include intermediate storage, the cost affect ing these ratios shown on page 2-44 of the background informa tion document, exceeds EPA's own reasonableness criteria for SPI-07823 11 control of extremely low quantities of vinyl chloride emissions. Because the provisions of the final rule are unexplained and conflict with the Agency's supporting materials, they are arbitrary and should be stayed pending final review. (e) Definition of "Three-Hour Period"--In adding a definition of three-hour period to the vinyl chloride standard, EPA was attempting to clarify that the emission limits prescribed in certain sections of the standard are considered to be three-hour averages. This is consistent with the intent of the original regulation as discussed by EPA. See 50 Fed. Reg. 1,192. While we agree that the emission limitations are properly evaluated on the basis of a three-hour average, the final rule presents a rolling three-hour period beginning on the hour, that is, "any three consequtive one-hour periods, each hour commencing on the hour." It is our understanding that EPA intends to have 24 three-hour periods each day. However well intended, this definition can result in double or treble penalties since a single discharge during the one-hour period could cause the average in three 3-hour periods to exceed 10 ppm. Defining a single event in this fashion can lead to double or treble penalties. This is an unwarranted position that is unsupported by the record and should be stayed pending final reveiw. SPI-07824 12 B. ARGUMENT Because the requirements for a stay of agency action have been met, the Court should stay enforcement of the final rule pending a final decision on the issues raised in the petition to review. The Court has clear authority to stay agency actions pending judicial review. 5 U.S.C. 705. In deciding whether to issue a stay pending appellate court action, appeal, the Court must consider four factors: "(1) the likelihood that the party seeking the stay will prevail on the merits of the appeal; (2) the likelihood that the moving party will be irreparably harmed absent a stay; (3) the prospect that others will be harmed if the court grants the stay; and (4) the public interest in granting the stay." Wisconsin Gas Company v. FERC, 758 F. 2d 669, 673-74 (D.C. Cir. 1985)(citing Virginia Petroleum Jobbers Assn, v. FPC, 259 F. 2d 921, 925 (D.C. Cir. 1958)). These factors are not to be applied in accordance with some precise mathematical formula, but rather should be considered together in arriving at a "balance of equities." Washington Metro Area Transit Comm'n. v. Holiday Tours, Inc., 559 F. 2d 841, 844 (D.C. Cir. 1977). SPI-07825 13 In its discussion of the balancing approach to interim injunctive relief, the Court in Holiday Tours described the function and purpose of a stay pending appeal: Generally, such relief is preventative, or protective; it seeks to maintain the status quo pending a final determination of the merits of the suit. An order maintaining the status quo is appropriate when a serious legal question is presented, when little if any harm will befall other interested persons or the public and when denial of the order would inflict irreparable injury on the movant. 559 F. 2d at 844. The Court also endorsed an earlier approach taken by the Second Circuit in Charlies Girls, Inc, v. Revlon, Inc., 483 F.2d 953, 954 (2d Cir. 1973) (per curiam), which stated that a party seeking preliminary injunctive relief could prevail by demonstrating that the case raised serious legal issues and that the balance of equities favored the party seeking relief. Id. Thus, the Court may rest its decision to grant a stay on a consideration of the four individual factors or on an overall balancing of the equities. In either case, the following discussion of each of the four factors will demonstrate that the balance of equities tips sharply in favor of granting a stay in this case. SPI-07826 14 1 - Probability of Success on the Merits In order to obtain a stay, SPI must show the Court that it is likely to prevail on the merits of this appeal. While it is no longer necessary for SPI to demonstrate a "substantial" probability of success, Holiday Tours, 559 F.2d at 844 (the court "should not be required at an early stage to draw the fine line between a mathematical probability and a substantial probability of success"), VI believes that it has not only pre sented a "difficult legal question," i^d., but that it also has a very strong probability of succeeding on the merits. EPA's promulgation of this final rule evidences the Agency's significant disregard and violation of the notice and comment procedures contained in the rulemaking provisions of the Clean Air Act, 42 U.S.C. 7607(d)(3), and the Administra tive Procedure Act, 5 U.S.C. 553. Certain provisions of the 1985 proposed rule have been changed without adequate notice or justification by EPA. For example, the final rule excises a critical sentence in the definition of exhaust gas which would have made clear that "a leak ... is not an exhaust gas." 50 Fed. Reg. 1182. No reasons are given for the deletion of that sentence, even though the result is to silently nullify prevailing case law. See discussion, supra, at p.. SI'I-07827 15 Another example of EPA's failure to adequately explain or justify the changes made by the final rule is its definition of "relief valve discharge" which has the effect of discourag ing the use of control devices on relief valve discharges. It would impose double penalties on regulated parties whose relief valve emissions were vented to control devices which would significantly reduce the emission of vinyl chloride but which still might exceed the 10 ppm exhaust gas standard. The regulated party is encouraged to discharge directly into the atmosphere without controls and be subject only to the relief valve discharge standard. This result is not only unfair to those parties that do use controls, it is also in conflict with the aims of the Clean Air Act. EPA's final definition of "EDC purification" also indicates a change in the final rule that is at odds with EPA's expressed intentions throughout the rulemaking history. The Agency apparently intended to exclude both final product storage and intermediate storage from the EDC purification process, see BID pp. 2-43,44, but the final rule does not reflect this intention. In this and other instances, SPI has had no opportunity to present its views and oppose the rules other than to request review. This is particularly true for those provisions that SPI considered acceptable in 1985. SPI-07828 16 The Agency's present disregard of the record, including the history and development of the proposed rules and the factors EPA previously stated it would consider, forces SPI to conclude that the decisions leading to the final rule were arbitrary and capricious. 42 U.S.C. 7607(d)(9)(A). 2. Irreparable Injury Industry members represented by the SPI in this litigation will suffer irreparable harm if the enforcement of the final rule is not stayed during the period of review by the Court of Appeals. Member companies have entered consent decrees with EPA which require these companies to fully comply with all EPA standards and regulations. If a stay is not granted, these members will be technically in contempt for violating the consent decrees. An example using provisions from the final rule will serve to illustrate the type of irreparable injury at issue. The definition of "exhaust gas" in the final rule fails to make clear, as the proposed rule did, that a "leak" as defined in the rule does not also fall within the definition of exhaust gas. Compare proposed definition at 50 Fed. Reg. 1194 (Jan. 9, SPI-07829 17 1985) with definition in final rule at 51 Fed. Reg. 34909 (Sept. 30, 1986). If leaks are treated as exhaust gases, every leak could potentially subject a company to a contempt citation for failure to comply with the 10 ppm limitation. While this review proceeding is likely to result in clarification of these definitions, a regulated party, obligated by a consent decree to comply with the final rule despite ambiguities which make rational action impossible, will be in technical contempt and subject to a contempt citation if it awaits further guidance from the Court of Appeals. This is the type of injury for which there is no adequate legal remedy. A temporary stay of the final rule should be granted to avoid this inequitable and irreparable injury. 3. A Stay Will Cause No Harm to Other Parties or the Public Interest The two final factors which the Court must consider in determining whether to grant a stay are: (i) whether possible harm to other parties would be caused by the stay, or (ii) whether a stay would adversely affect the public interest. Here, a stay of the final rule pending a decision by the Court SPI-07830 18 of Appeals should be granted because it will result in no harm to other parties and will promote the public interest. Despite the immediate and detrimental impact of the final rule on the regulated industry, EPA characterized the rule as making only "administrative and clarifying revisions" to the VC standard. 51 Fed. Reg. 34904 (Sept. 30, 1986). In the Agency's view, it did not attempt to change the substantive regulatory framework now in place. Thus, EPA can hardly argue that immediate implementation is necessary to serve some public health goal. If a stay is granted, the existing vinyl chloride standard will remain in effect and will continue to provide adequate protection for human health and the environment during the period of appellate review. It is impossible to assert that any harm would result from maintaining the status quo for the relatively brief amount of time necessary to obtain final judicial resolution of the issues raised by the final rule. Far from having an adverse impact on the public interest, a stay will ensure that both industry and the Agency do not engage in wasteful and unnecessary efforts, at taxpayers' and consumers' expense, to comply with a standard that is likely to undergo significant revision by the appellate court. Thus, SPI-07831 19 the public interest is promoted by delaying enforcement of the rule until the court has an opportunity to provide the added clarity and guidance which the rule failed to provide. C. CONCLUSION For the reasons set forth above, SPI respectfully requests that a stay of the 1986 amendments to the vinyl chloride standard be issued. Respectfully submitted. Jerome H. Heckman Peter L. de la Cruz Keller and Heckman Suite 1000 1150 17th Street, N.W. Washington, D.C. 20036 (202) 956-5600 Gary H. Baise Robert Brager Beveridge & Diamond, P.C. 1333 New Hampshire Avenue, Washington, D.C. 20036 (202) 828-0200 N.W. SPI-07832 CERTIFICATE OF SERVICE I certify that a copy of the Motion for Stay by The Society of the Plastics Industry, Inc., was mailed, postage prepaid, this day of November, 1986 to: Lee Thomas Administrator Environmental Protection Agency 401 M Street, S.W. Washington, D.C. 20460 Gerald Yamnada, Esq. Acting General Counsel Environmental Protection Agency 401 M Street, S.W. Washington, D.C. 20460 Edwin Meese III, Esq. Attorney General Department of Justice Constitution Avenue and 10th Street, N.W. Washington, D.C. 20530 Peter L. de la Cruz SPI-07833