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United States v. Wheeling-Pittsburgh Steel Corp.

filed: May 18, 1987.


On Appeal from the United States District Court for the Western District of Pennsylvania (Pittsburgh), D.C. Civil No. 79-1194.

Author: Sloviter


Before: SLOVITER, MANSMANN, Circuit Judges and SCIRICA, District Judge*fn*

SLOVITER, Circuit Judge

On motion of Wheeling-Pittsburgh Steel Corporation (Wheeling) and over the objection of the United States Environmental Protection Agency (EPA), the district court amended a consent decree which required Wheeling to install pollution control equipment at a Follansbee, West Virginia plant and to achieve compliance with West Virginia's federally approved air pollutant emission limitations by December 31, 1985. The court substituted a provision that contained no fixed compliance date but which was instead dependent upon approval by the West Virginia Air Pollution Control Commission of an alternative proposal submitted by Wheeling. The United States appeals.*fn1



Wheeling, a steel manufacturer, owns and operates a sinter windbox ("Sinter Plant") at its plant in Follansbee, West Virginia. A sinter windbox is used in a process which fuses residual materials from steel production into sinter which is employed as a feed material in blast furnaces. From a lay standpoint, a sinter plant recycles steel. It is undisputed that Wheeling's Sinter Plant releases particulate emissions at levels in excess of the permissible levels for particulates established by the EPA pursuant to the Clean Air Act (as amended), 42 U.S.C. § 7401 et seq., and the West Virginia State Implementation Plan.

The Clean Air Act (the Act) establishes a combined state and federal program to control air pollution. Under the 1970 amendments to the Act, EPA is required to establish primary and secondary National Ambient Air Quality Standards (NAAQS) for those air pollutants which may endanger public health or welfare. 42 U.S.C. §§ 7408, 7409. Primary standards are designed to protect the public health; secondary standards are designed to protect the public welfare. 42 U.S.C. § 7409(b). As required by the Act, EPA established primary and secondary NAAQS for particulate matter. 40 C.F.R. §§ 50.6, 50.7.

The 1970 Amendments require each state to develop a state implementation plan (SIP) for the "implementation, maintenance and enforcement" of each NAAQS. 42 U.S.C. § 7410(a)(1). The SIP must be submitted for approval to the Administrator of EPA. 42 U.S.C. § 7401(a)(1), (a)(2). The Administrator is required to approve a SIP if it satisfies the requirements set forth in section 110(a)(2) of the Act which mandates inclusion in each SIP of, inter alia, air pollutant emission limitations for stationary sources, schedules for compliance, and such other measures as may be necessary to insure attainment and maintenance of the NAAQS. 42 U.S.C. § 7410(a)(2). See Union Electric Co. v. EPA, 427 U.S. 246, 257, 49 L. Ed. 2d 474, 96 S. Ct. 2518 (1976). The statute specifies that the SIP must provide for attainment of the applicable primary standard "as expeditiously as practicable" but no later than three years from the date of approval of such plan. 42 U.S.C. § 7410(a)(2)(A).

The Act also requires that revisions to a SIP must be submitted for approval to the Administrator. 42 U.S.C. § 7410(a)(3)(A). See Train v. Natural Resources Defense Counsel, Inc., 421 U.S. 60, 92, 43 L. Ed. 2d 731, 95 S. Ct. 1470 (1975). As in the case of the original SIP, the Administrator must determine if the revision meets the requirements in section 110(a)(2) of the Act, and has been adopted by the state after reasonable notice and public hearings. 42 U.S.C. § 7410(a)(3)(A). If so, it must be approved. Id.

Under the 1970 Amendments, deadlines were imposed by which the states were required to attain primary NAAQS for particulate matter. See 42 U.S.C. § 7410(a)(2)(A). The deadline for all states was extended to December 31, 1982, by subsequent amendments to the Act. 42 U.S.C. § 7502(a)(1). However, because of the "unique hardships" in the steel industry and in order to encourage plant modernization the Act was amended in 1981 by the Steel Industry Compliance Extension Act (SICEA) to lengthen the time for compliance with SIP air pollution emission standards for steel companies until December 31, 1985. Pub. L. No. 97-23, 95 Stat. 139 (codified at 42 U.S.C. § 7413(e)). H.R. Rep. No. 121, 97th Cong., 1st Sess. 8-9, reprinted in 1981 U.S. Code Cong. & Admin. News 56, 59. Under SICEA, the Administrator has the discretion to "consent to entry of a Federal judicial decree, or to the modification of an existing Federal judicial decree" establishing a schedule for compliance by a steel-producing stationary emission source "extending beyond December 31, 1982, but ending not later than 1985" if several conditions, including investment in plant modifications, are met. 42 U.S.C. § 7413(e)(1).

Wheeling operates several plants, including the Sinter Plant, which EPA determined violated various primary NAAQS requirements. On March 19, 1979, Wheeling signed a consent decree with the United States and West Virginia, Ohio and Pennsylvania, the states where the relevant polluting plants were located, which was entered by the District Court of the Western District of Pennsylvania on November 26, 1979. With respect to the Sinter Plant, the decree required Wheeling to complete installation of particulate matter emission control equipment at the Sinter Plant by November 1, 1982, (later extended to November 30, 1982) and to achieve compliance with the West Virginia SIP air pollution emission limitations by December 31, 1982.

In October 1981, Wheeling applies to EPA for relief under SICEA from, among other things, the compliance deadline for the Sinter Plant. On July 15, 1983, a Second Amendment to the consent decree was entered which extended the compliance dates for various Wheeling plants. Part XXIII dealt with the Sinter Plant and extended the date for its compliance to December 31, 1985. App. at 53-54. Under Paragraph 3 thereof, Wheeling was obligated to install the required emission control system in accordance with a schedule which provided for submission of an emission control plan to West Virginia and EPA by December 31, 1984, required Wheeling to negotiate and let all major contracts for the emission control system by April 30, 1985, and required complete installation by November 30, 1985, and compliance with pollution limitations by December 31, 1985, and compliance with pollution limitations by December 31, 1985. App. at 53-54. Under Part XXVI and Appendix II-A of the Second Amendment, Wheeling obligated itself to make capital expenditures of $3,500,00 for the control system at the Sinter Plant by December 31, 1985. App. at 59, 87.

Wheeling did not make the capital expenditures required by the Second Amendment to the Consent Decree for the Sinter Plant by December 31, 1985, or thereafter. Wheeling did not comply with the pollution limitations for that Plan by December 31, 1985, as required by the Consent Decree, and apparently remains in non-compliance. At least it has never suggested to this court that it has now attained the required ambient air quality standard.

In 1982, EPA issued a policy statement regarding alternative emission systems which allow a state to treat all of the pollution-emitting devices of an existing plant within the same industrial grouping as though they were encased within a single "bubble". See Emissions Trading Policy Statement, 47 Fed. Reg. 15076 (1982). Under the "bubble" concept, which has been upheld as a permissible construction by the EPA of the Clean Air Act Amendments of 1977, Chevron, U.S.A., Inc. v. National Resources Defense Council, Inc., 467 U.S. 837, 81 L. Ed. 2d 694, 104 S. Ct. 2778 (1984), a state in a non-attainment area may, subject to EPA approval, permit revision of a SIP in a manner which allows a polluter from a stationary source to offset a decrease of pollution control at one source of excess emissions from other sources, as long as there is no increase in the original emission limits. 47 Fed. Reg. at 15076, 15078.

The Second Amendment permits Wheeling to seek to implement an alternative emission system. According to the terms of Part XXXI, Paragraph 9 of the Second Amendment, however, Wheeling remains obligated to comply with the consent decree until final approval of an alternative system. The Second Amendment provides:

Defendant is not precluded by this consent decree from applying for an alternative emission reduction option [a "bubble"] involving air pollution emission sources addressed by this Order, pursuant to the Clean Air Act, U.S. EPA's Emission Trading Policy, 47 Fed. Reg. 15076 (April 7, 1982), and any amendments thereto, and applicable State law. Defendant shall remain obligated to comply with all requirements of this Order which apply to a pending alternative emission reduction application unless and until a proposed alternative emission reduction opinion is approved under Section 110 of the Clean Air Act and appropriate amendments implementing such opinion are entered by this Court.

(Emphasis added). App. at 76-77.

On November 27, 1985, Wheeling filed a Motion in the district court To Amend or Stay Certain Provisions of the Consent Decree relating to several of its polluting sources. Wheeling referred to its petition for reorganization under Chapter XI of the Bankruptcy Code filed April 16, 1985, and a 98 day strike against it between July and October of 1985. With respect to the Sinter Plant, Wheeling sought a stay of its obligation under the Consent Decree to expend $3.5 million and to install the emission control system "pending action by the West Virginia Air Pollution Control Commission and EPA on [Wheeling's] application for a bubble for the sinter plant." Supp. App. at 33.

The EPA objected and sought penalties for Wheeling's failure to install the positive windbox controls as required under the Second Amendment.

On December 23, 1985, the district court issued an order amending the Consent Decree with respect to various facilities. App. at 128-131. For the Sinter Plant emissions, the court substituted for Paragraph 3 of the Part XXIII of the Consent Decree which contained the compliance deadlines a new paragraph containing no specific dates for compliance. In effect, the Court indefinitely relieved Wheeling of its obligation to make the expenditures for and install the emission control system at the Sinter Plant. The district court "supplemented" the Second Amendment to the Consent Decree to provide:

3. Compliance Strategy

Defendant has proposed that this source be brought into compliance through an alternative emission reduction option or "bubble" proposal. Defendant's "bubble" proposal, which was submitted on May 24, 1984, is pending with the West Virginia Air Pollution Control Commission, hereinafter referred to as "WVAPCC". To facilitate progress on control of this source, the WVAPCC is encouraged to complete its evaluation of Defendant's proposal at the earliest possible date. If the WVAPCC approves the "bubble" proposal within thirty (30) days of this Order and in accordance with Section 110 of the Clear Air Act, 42 U.S.C. § 7410, and the regulations promulgated thereunder, including but not limited to, EPA's Emission Trading Policy, 47 Fed. Reg. 15076 (April 7, 1982), Defendant shall implement the "bubble" proposal within sixty (60) days after the approval by the WVAPCC. If the "bubble" proposal is not approved by the WVAPCC within thirty (30) days from the date of this Order, Section 5 of this Order shall be vacated and a hearing shall be had to determine an expeditious schedule of implementing pollution control equipment at the Follansbee Sinter Plant.

App. at 130-131.

On January 7, 1986, EPA filed a Motion to Reconsider and Partially Vacate the December 23 order to the extent that it dealt with the Sinter Plant. EPA also filed a Motion for Civil Contempt and to Enforce Judgment; on February 24, 1986, EPA filed a Motion to Extend Time to Appeal; and on February 25, 1986, EPA filed a Motion for Summary Judgment.

On May 21, 1986, the district court denied all of EPA's motions. In a Memorandum Opinion filed concurrently therewith, the district court stated that the Clean Air Act permits district courts to extend statutory compliance dates when circumstances warrant and held that the bankruptcy proceeding, the 98 day strike, Wheeling's change in management, and its financial losses, together with Wheeling's development of a dust suppressant program to reduce Sinter Plan emission, constitute changed circumstances which warrant relieving Wheeling of its obligations to install positive windbox controls pending its implementation of and EPA approval of its bubble proposal. App. at 133-142. EPA appeals from the Order of May 21, 1986, denying its motions and from the Order of December 23, 1985, amending the Consent Decree.


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