Document y0N92p0pKbJQ3y2wZVpz4RmV

NEWELL W ELLISON H 'HOMAB AUSTENN HOWARD C. WESTWOOD CHARLES A. MORSKY DONALD HISS JOHN T BAPIENZA JAMES H. MeOLOTHLIN ERNEST W. JENNES STANLEY L. TEMKO JAMES C. Me KAY JOHN W. OOUOLAS HAMIL'ON CAROTHERS J RANDOLPH WHOM ROBERTS B. OWENRL EDGAR r CZARRA.^Hfc W LLIAM N. ALLEN V DAVID B ISBELL JOHN B JONES, JR 8l PAUL R. DUKE PHILIP R. BTANSBURY^ CHARLES A. MILLER *> RICHARD A. BRADY g} ROBERT C. O'MALLEJ^. EUGENE I. LAMBERWT JOHN VANDERSTl^ti . NEWMAN T. HALVOWSON. JR HARVEY M. APPLEBAUM MICHAEL S HORNE JONATHAN D. SLAKE CHARLES E. SUTTON ROBERT N SAYLER E. EDWARD BRUCE DAVID N. BROWN PAUL J. TAOLIABUE ANDREW W. SINGER DAVID M HICKMAN RUSSELL H. CARPENTER, JR. NICHOLAS W. TELS THEODORE L. GARRETT JOHN G. LAYLIN FONTAINE C. BRADLEY EDWARD BURLING, JR. JOEL BARLOW J. HARRY COVINGTON W. CROSBY ROPER. JR. DANIEL M, GRIB BON HARRY L. SHNIDERMAM DON V. HARRIS, JR. WILLIAM STANLEY, JR. WEDEWAVINERM.WZ. IMDUMNENRAMNAN JEROME ACKERMAN HENRY P. SAILER JOHN H.SCHAFER ALFRED H. MOSES JOHN Ll MOYNE ELL'COTT DAVID E. McGlFFERT H. EDWARD OUNKELBCRGCR, JR. BRICE MeADOO CLAGETT JOHN S. KOCH PETER BARTON HUTT HERBERT DYM CYRIL V. SMITH, JR. MARK A. WEISS HARRIS WEINSTEIN JOHN B. DENNI3TON PETER J. NICKLES MICHAEL BOUDIN BINGHAM B. LEVERICH ALLAN J. TOPOL VIRGINIA G. WATKIN RICHARD O. COPAKEN CHARLES LISTER PETER O. TROOBOFF WESLEY S. WLLIAMS, JR. DORIS D. BLAZEK WILLIAM D. IVERSON MEMBER D. C. BAR CO VI N GTO N/7& BTJRTiNG 886 SIXTEENTH STREET, N. W. WASHINGTON. D. C. 20006 TELEPHONE; (202) 432-6000 writer's direct dial number 452-6100 \ TW* 710 822-0003 TELEX: B9-B03 CABLE COVLING i 0 EDWIN S. COHEN OF COUNSEL April 25, 1977 Mr. Tyler Nourse Staff Vice President Parts Division Electronic Industries Association 2001 Eye Street, N.W. Washington, D. C. 20006 Dear Ty: You have asked that we review the various options available to the capacitor industry should EPA-proposed regulations on marking and disposal of items containing PCB, promulgated pursuant to the Toxic Substances Control Act (TSCA), prove unacceptable to members of the PCB Ad Hoc Committee and their customers who use PCB-impregnated capacitors. As you are aware, there appears to be a serious risk that EPA may propose regulations that apply to manu facturers who use capacitors in completed products. Such an extension of TSCA is arguably improper, and might seriously affect the ability of the capacitor industry to sell capacitors. If the EPA takes this position in its final regulations, it might be appropriate to seek a court review of EPA's construc tion of TSCA. ' Although EPA's proposed regulations on the marking and disposal of PCBs have not as yet been published in the F^jjeral Register, we expect that EPA will issue the proposed regulation shortlysince TSCA requires that final PCB regula tions must be in force no later than July 1, 1977. In order to insure that the industry's position is presented to EPA as forcefully and persuasively as possible, steps must begin im mediately to formulate an industry position on marking and disposal, and to find knowledgeable individuals who would be 0266533 PCB-ARCH0746863 000000055.00000 COVINGTON & BURLING Mr. Tyler Nourse April 25, 1977 Page Two willing to submit statements for the record. Even if the pffipposed regulations are satisfactory, the industry sbfculd nonetheless submit comments and perhaps participate in hearings b#fore the Agency in order to protect the industry's right to initiate a court challenge should the final regulations differ markedly from those originally proposed. In this letter we will review the proposed pro cedures the EPA will follow in adopting substantive PCB regulations, and then offer our recommendation concerning action the industry may wish to take to protect its rights under TSCA. 1. Proposed Procedural Rules Section 6 of TSCA, which pertains to PCB's generally as well as to regulation of any potentially hazardous chemicals, requires that the public be permitted to participate in the development of all rules promulgated under the Act. EPA on Thursday of last week issued proposed regulations seeking to implement these provisions to TSCA. (42 Fed. Reg. 20640, April 21, 1977.) The proposed regulations limit the ability of an interested party to participate in rulemaking proceedings before the adoption of rules, such as PCB marking and disposal regula tion, and thus arguably violate TSCA. We discuss these proposed rules below. A copy of the Notice of Proposed Rulemaking is enclosed herewith. The proposed procedural rules contempate a threetier process by which rules such as those relating to PCB labeling and disposal may be adopted by the EPA. First, after such rules have been proposed and published in the Federal Register, members of the public may file written submissions which "shall contain all comments on and criticisms of" the proposed regulations. These submissions which are called "main comments" will have to include all arguments and factual material industry wishes to submit. -4^ Second, the Agency will hold a "legislative hearing", to be conducted by Agency employees "having special responsi bility for the final rule or special expertise in the topics under discussion." Members of the panel conducting the legis lative hearing may question any person participating in the \ hearing. While persons in the hearing audience may request that the panel ask certain questions, the decision whether to ask ques j tions and to what extent is within the panel's discretion. ( 0266534 PCB-ARCH0746864 000000055.000002 I . COVINGTON & BURLING j Mr. Tyler Nourse April 25, 1977 Page Three % * a Finally, after the close of the "legislative hearing," an? participant in that hearing may request cross-examination asPpart of what the proposed procedural rules describe as an 'JEnformal hearing." It is not clear from the rule whether such a request must be limited to participants in the legislative hearing or may be of any individual who has relevant informa tion to provide. (It should be noted in this regard that the Agency has the power to compel witnesses to appear by issuing subpoenas.) Within one week after a request for cross-examina tion is made, the hearing panel must determine whether to grant the request and, if granted, whether to limit the scope of i cross-examination. Following the completion of cross-examination, parties will be permitted two weeks within which to file reply comments. These comments may only be based upon other comments, material in the hearing record, and any additional materials not rea sonably available when the "main comments" were submitted. 2. Criticism of Proposed Procedural Rules The proposed procedural rules vary in several im I portant ways from the procedures described in TSCA, and may have a serious effect on the ability of interested parties i to participate in rulemaking proceedings concerning PCBs. TSCA makes no provision for a "legislative hearing." There fore, it can be argued that participation at such a hearing ought not to be a necessary predicate before being permitted to request cross-examination. In addition, the proposed rules do not provide for the submission of rebuttal evidence, nor do j they set forth procedures by which rebuttal witnesses can be cross-examined. The absence of such a right is particularly important since the Agency will be the principal party sub mitting rebuttal evidence. Finally, the rules place severe restrictions on the right to cross-examine both in terms of procedures to be followed by requesting parties, and in terms of the restrictions that appear to be contemplated on its ex ercise. These objections to the proposed procedural rules a&e sufficiently serious to merit the submission of comments by the industry. All such comments are due by May 9, and if we are to prepare such comments we should begin almost immediately. 3* PCB Regulations; Recommendations f The EPA Administrator will shortly propose rules as to the labeling and disposal of PCBs and products containing PCBs. i These rules will be adopted pursuant to the final procedures 0^66535 PCB-ARCH0746865 000000055.000003 COVINGTON S, BURLING Mr. Tyler Nourse April 25, 1977 Page Four ^ftablished by the EPA under Section 6 of TSCA, and th$s the Agency's decision with respect to its procedural > rifles will directly affect the capacitor industry's ability tA participate in substantive rulemaking proceedings con- ^rning PCBs. . TSCA permits judicial review in an appropriate United States Court of Appeals of all final substantive rules adopted by the EPA. Thus, if the final regulations adopted by the EPA are arbitrarily adopted, or violate TSCA (or if the EPA's procedures violated TSCA), we can seek re view in any circuit in which a member company has a princi pal place of business. On review, we can raise such issues as (i) whether procedures followed by EPA were proper; (ii) whether the EPA's proposed rules violate TSCA; (iii) whether the proposed rules are supported by the evidence in the re cord; and (iv) whether the EPA evaluated and responded to the comments submitted by the public. Naturally we cannot pre dict at this time whether such an appeal will be necessary, or what issues might be appropriate to be raised. EPA has already placed itself in a difficult posi tion by not as yet proposing PCB marking and disposal regula tions. The Agency may therefore seek to limit the exercise of rights provided for in the proposed rules and in TSCA itself, in order to adopt final PCB rules by July 1, 1977. Even under the proposed procedural rules (which fall short of guaranteeing all parties the opportunity fairly to par ticipate in the rulemaking proceeding), it will be impossible to permit comments and a hearing on proposed PCB rules prior to adoption by July 1, 1977. In effect, industry would be prejudiced in its hearing and comment rights by the Agency's delay in proposing labeling and disposal regulation. Attention should therefore be given to whether a letter should be sent to the Administrator bringing this delay to his attention and indicating the industry's intention not to permit the delay to prejudice its rights to comments both orally and in writing, should that prove necessary. In sum, we recommend the following: First, the capacitor industry should object to thp procedural rules proposed by the EPA last week, which wfuld have the effect of impairing the industry's opportunity to participate in substantive rulemaking proceedings. This must be done by May 9, and we would be able to prepare a brief set of comments preserving our right later to raise the issues upon adoption of substantive rules. 0266536 PCB-ARCH0746866 000000055.000004 COVINGTON S BURLING Mr. Tyler Nourse April 25, 1977 Page Five Second, the capacitor industry should prepare a position on marking and disposal of PCBs, so that jj- full Response can be submitted when the EPA proposes its regula tions sometime during the next several weeks. Third, the capacitor industry should consider whether it wishes to participate in a rulemaking proceeding concerning the substantive disposal and labeling PCB regula tions. This decision can only be made following the promul gation of the proposed rules, but it should be borne in mind that a failure to participate in the rulemaking proceeding may severely limit the industry's ability later to protest the adoption of final regulations. Fourth, we suggest that the EPA be put on notice that the industry objects to the failure of the Agency ' promptly to propose substantive PCB labeling and disposal regulations in time to permit full rulemaking proceedings prior to July 1, 1977. If you have further questions as to the legal options available to the industry in connection with PCB regulations, please feel free to call us. In addition we will notify you as soon as any proposed regulations are pro mulgated by EPA. Enclosure cc: * . Raymond E. Johnson Roger E. Wills, Jr. David Wood Fred Windover James Flynn, Esq. Jessie Butner N. Ray Clark Richard L. Rollins Bud Dibble Richard Hauser Philip Murray Clifford Tuttle Peter J. Nickles Steven S. Rosenthal John Michael Clear 02t>t>537 PCB-ARCH0746867 000000055.00000