Sierra Club v. Costle

Sierra Club v. Costle

657 F.2d 298 (D.C. Cir. 1981)

WALD, Circuit Judge:

This case concerns the extent to which new coal-fired steam generators that produce electricity must control their emissions of sulfur dioxide and particulate matter into the air. In June of 1979 EPA revised the regulations called “new source performance standards” (“NSPS” or “standards”) governing emission control by coal burning power plants. On this appeal we consider challenges to the revised NSPS brought by environmental groups which contend that the standards are too lax and by electric utilities which contend that the standards are too rigorous [...] 

D. Procedural History

In 1970 Congress for the first time authorized the federal government to set performance standards limiting emissions from newly built or modified sources of air pollution. These sources to be controlled were those that EPA determined emitted pollution contributing substantially to the endangerment of the public health or welfare. EPA decided that large coal-fired generators fell within that category. In 1976 the Sierra Club and the Oljato and Red Mesa Chapters of the Navajo Tribe petitioned EPA to revise the NSPS so as to require a 90 percent reduction in sulfur dioxide emissions. Eventually [...] final NSPS were promulgated in June 1979. Several parties petitioned EPA for reconsideration of the revised NSPS. In February of 1980 EPA denied all the petitions for reconsideration. The present appeal followed. 

V. THE 1.2 LBS./MBTU EMISSION CEILING

EPA proposed and ultimately adopted a 1.2 lbs./MBtu ceiling for total sulfur dioxide emissions [which limits the amount of sulfur dioxide that coal-fired generators can emit]. Environmental Defense Fund (“EDF”) challenges this part of the final NSPS on procedural grounds, contending that although there may be evidence supporting the 1.2 lbs./MBtu standard, EPA should have and would have adopted a stricter standard if it had not engaged in post-comment period irregularities and succumbed to political pressures[...]

EDF alleges that as a result of an “ex parte blitz” by coal industry advocates conducted after the close of the comment period, EPA backed away from adopting the .55 lbs./MBtu limit, and instead adopted the higher 1.2 lbs./MBtu restriction [...] Whether or not EDF’s scenario is credible, it is true that EPA did circulate a draft NSPS with an emissions ceiling below the 1.2 lbs./MBtu level for interagency comment during February, 1978. Following a “leak” of this proposal, EDF says, the so-called “ex parte blitz” began. “Scores” of pro-industry “ex parte” comments were received by EPA in the post-comment period, states EDF, and various meetings with coal industry advocates — including Senator Robert Byrd of West Virginia — took place during that period. These communications, EDF asserts, were unlawful and prejudicial to its position.

In order for this court to assess these claims, we must identify the particular actions and incidents which gave rise to EDF’s complaints. Aside from a passing reference to a telephone call from an EPA official to the Chief Executive Officer of National Coal Association, EDF’s procedural objections stem from either (1) comments filed after the close of the official comment period, or (2) meetings between EPA officials and various government and private parties interested in the outcome of the final rule, all of which took place after the close of the comment period.

1. Late Comments

The comment period for the NSPS began on September 19, 1978, and closed on January 15, 1979. After January 15, EPA received almost 300 written submissions on the proposed rule from a broad range of interests. EPA accepted these comments and entered them all on its administrative docket. EPA did not, however, officially reopen the comment period, nor did it notify the public through the Federal Register or by other means that it had received and was entering the “late” comments. According to EDF, most of the approximately 300 late comments were received after the “leak” of the new .55 lbs./MBtu proposal. EDF claims that of the 138 late comments from non-government sources, at least 30 were from “representatives of the coal or utility industries,” and of the 53 comments from members of Congress, 22 were either forwarded by the Congressmen from industry interests, or else were prepared and submitted by Congressmen as advocates of those interests.

2. Meetings

EDF objects to nine different meetings [...] EDF believes that the communications [...], when taken as a whole, were so extensive and had such a serious impact on the NSPS rulemaking, that they violated EDF’s rights to due process in the proceeding, and that these “ex parte” contacts were procedural errors of such magnitude that this court must reverse. EDF does not specify which particular features in each of the [...] communications violated due process or constituted errors under the statute; indeed, EDF nowhere lists the communications in a form designed to clarify why any particular communication was unlawful. Instead, EDF labels all post-comment communications with EPA — from whatever source and in whatever form — as “ex parte,” and claims that “this court has repeatedly stated that ex parte contacts of substance violate due process.”

At the outset, we decline to begin our task of reviewing EPA’s procedures by labeling all post-comment communications with the agency as “ex parte.” Such an approach essentially begs the question whether these particular communications in an informal rulemaking proceeding were unlawful. Instead of beginning with a conclusion that these communications were “ex parte,” we must evaluate the various communications in terms of their timing, source, mode, content, and the extent of their disclosure on the docket, in order to discover whether any of them violated the procedural requirements of the Clean Air Act, or of due process.

C. Standard for Judicial Review of EPA Procedures

This court’s scope of review is delimited by the special procedural provisions of the Clean Air Act, which declare that we may reverse the Administrator’s decision for procedural error only if (i) his failure to observe procedural requirements was arbitrary and capricious, (ii) an objection was raised during the comment period, or the grounds for such objection arose only after the comment period and the objection is “of central relevance to the outcome of the rule,” and (iii) “the errors were so serious and related to matters of such central relevance to the rule that there is a substantial likelihood that the rule would have been significantly changed if such errors had not been made.” The essential message of so rigorous a standard is that Congress was concerned that EPA’s rulemaking not be casually overturned for procedural reasons, and we of course must respect that judgment.

Our authority to reverse informal administrative rulemaking for procedural reasons is also informed by Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council, Inc. In its unanimous opinion, the Supreme Court unambiguously cautioned this court against imposing its own notions of proper procedures upon an administrative agency entrusted with substantive functions by Congress. The Court declared that so long as an agency abided by the minimum procedural requirements laid down by statute, this court was not free to impose additional procedural rights if the agency did not choose to grant them. Except in “extremely rare” circumstances, the Court stated, there is no justification for a reviewing court to overturn agency action because of the failure to employ procedures beyond those required by Congress [...]

D. Statutory Provisions Concerning Procedure

The procedural provisions of the Clean Air Act specifying the creation and content of the administrative rulemaking record are contained in section 307. [The] 1977 Amendments required the agency to establish a “rulemaking docket” for each proposed rule which would form the basis of the record for judicial review. The docket must contain, inter alia, (1) “notice of the proposed rulemaking ... accompanied by a statement of its basis and purpose,” and a specification of the public comment period; (2) “all written comments and documentary information on the proposed rule received from any person ... during the comment period[;] [t]he transcript of public hearings, if any[;] and [a]ll documents ... which become available after the proposed rule has been published and which the Administrator determines are of central relevance to the rulemaking....”; (3) drafts of proposed rules submitted for interagency review, and all documents accompanying them and responding to them; and (4) the promulgated rule and the various accompanying agency documents which explain and justify it.

In contrast to other recent statutes, there is no mention of any restrictions upon “ex parte” contacts. However, the statute apparently did envision that participants would normally submit comments, documentary material, and oral presentations during a prescribed comment period. Only two provisions in the statute touch upon the post-comment period, one of which states that “[a]ll documents which become available after the proposed rule has been published and which the Administrator determines are of central relevance to the rulemaking shall be placed in the docket as soon as possible after their availability.” But since all the post-comment period written submissions which EDF complains of were in fact entered upon the docket, EDF cannot complain that this provision has been violated [...]

[Since] this court can reverse an agency on procedural grounds only if it finds a failure to observe procedures “required by law,” we must first decide whether the procedures followed by EPA between January 15 and June 1, 1979 were unlawful. Only if we so find would we then face the second issue whether the unlawful errors were “of such central relevance to the rule that there is a substantial likelihood that the rule would have been significantly changed if such errors had not been made.” We now hold that EPA’s procedures during the post-comment period were lawful, and therefore do not face the issue whether any alleged errors were of “central relevance” to the outcome.

E. Validity of EPA's Procedures During the Post-Comment Period

The post-comment period communications about which EDF complains vary widely in their content and mode; some are written documents or letters, others are oral conversations and briefings, while still others are meetings where alleged political arm-twisting took place. For analytical purposes we have grouped the communications into categories and shall discuss each of them separately. As a general matter, however, we note at the outset that nothing in the statute prohibits EPA from admitting all post-comment communications into the record; nothing expressly requires it, either. Most likely the drafters envisioned promulgation of a rule soon after the close of the public comment period, and did not envision a months-long hiatus where continued outside communications with the agency would continue unabated. We must therefore attempt to glean the law for this case by inference from the procedural framework provided in the statute.

1. Written Comments Submitted During Post-Comment Period

Although no express authority to admit post-comment documents exists, the statute does provide that:

All documents which become available after the proposed rule has been published and which the Administrator determines are of central relevance to the rulemaking shall be placed in the docket as soon as possible after their availability.

This provision, in contrast to others in the same subparagraph, is not limited to the comment period. Apparently it allows EPA not only to put documents into the record after the comment period is over, but also to define which documents are “of central relevance” so as to require that they be placed in the docket. The principal purpose of the drafters was to define in advance, for the benefit of reviewing courts, the record upon which EPA would rely in defending the rule it finally adopted; it was not their purpose to guarantee that every piece of paper or phone call related to the rule which was received by EPA during the post-comment period be included in the docket. EPA thus has authority to place post-comment documents into the docket, but it need not do so in all instances.

Such a reading of the statute accords well with the realities of Washington administrative policymaking, where rumors, leaks, and overreactions by concerned groups abound, particularly as the time for promulgation draws near. In a proceeding such as this, one of vital concern to so many interests — industry, environmental groups, as well as Congress and the Administration — it would be unrealistic to think there would not naturally be attempts on all sides to stay in contact with EPA right up to the moment the final rule is promulgated. The drafters of the 1977 Amendments were practical people, well versed in such activity, and we decline now to infer from their silence that they intended to prohibit the lodging of documents with the agency at any time prior to promulgation. Common sense, after all, must play a part in our interpretation of these statutory procedures.

EPA of course could have extended, or reopened, the comment period after January 15 in order formally to accommodate the flood of new documents; it has done so in other cases. But under the circumstances of this case, we do not find that it was necessary for EPA to reopen the formal comment period. In the first place, the comment period lasted over four months, and although the length of the comment period was not specified in the 1977 Amendments, the statute did put a premium on speedy decisionmaking by setting a one year deadline from the Amendments’ enactment to the rules’ promulgation [...]

If, however, documents of central importance upon which EPA intended to rely had been entered on the docket too late for any meaningful public comment prior to promulgation, then both the structure and spirit of section 307 would have been violated. The Congressional drafters, after all, intended to provide “thorough and careful procedural safeguards ... [to] insure an effective opportunity for public participation in the rulemaking process.” Indeed the Administrator is obligated by the statute to convene a proceeding to reconsider the rule where an objection of central importance to it is proffered, and the basis of the objection arose after the comment period had closed. Thus we do not hold that there are no circumstances in which reopening the comment period would ever be required.

The case before us, however, does not present an instance where documents vital to EPA’s support for its rule were submitted so late as to preclude any effective public comment. The vast majority of the written comments were submitted in ample time to afford an opportunity for response. Regarding those documents submitted closer to the promulgation date, our review does not reveal that they played any significant role in the agency's support for the rule. The decisive point, however, is that EDF itself has failed to show us any particular document or documents to which it lacked an opportunity to respond, and which also were vital to EPA’s support for the rule [...]

2. Meetings Held With Individuals Outside EPA

The statute does not explicitly treat the issue of post-comment period meetings with individuals outside EPA. Oral face-to-face discussions are not prohibited anywhere, anytime, in the Act. The absence of such prohibition may have arisen from the nature of the informal rulemaking procedures Congress had in mind. Where agency action resembles judicial action, where it involves formal rulemaking, adjudication, or quasi-adjudication among “conflicting private claims to a valuable privilege,” the insulation of the decisionmaker from ex parte contacts is justified by basic notions of due process to the parties involved. But where agency action involves informal rulemaking of a policymaking sort, the concept of ex parte contacts is of more questionable utility.

Under our system of government, the very legitimacy of general policymaking performed by unelected administrators depends in no small part upon the openness, accessibility, and amenability of these officials to the needs and ideas of the public from whom their ultimate authority derives, and upon whom their commands must fall. As judges we are insulated from these pressures because of the nature of the judicial process in which we participate; but we must refrain from the easy temptation to look askance at all face-to-face lobbying efforts, regardless of the forum in which they occur, merely because we see them as inappropriate in the judicial context. Furthermore, the importance to effective regulation of continuing contact with a regulated industry, other affected groups, and the public cannot be underestimated. Informal contacts may enable the agency to win needed support for its program, reduce future enforcement requirements by helping those regulated to anticipate and shape their plans for the future, and spur the provision of information which the agency needs. The possibility of course exists that in permitting ex parte communications with rulemakers we create the danger of “one administrative record for the public and this court and another for the Commission.” Under the Clean Air Act procedures, however, “[t]he promulgated rule may not be based (in part or whole) on any information or data which has not been placed in the docket….” Thus EPA must justify its rulemaking solely on the basis of the record it compiles and makes public.

Regardless of this court’s views on the need to restrict all post-comment contacts in the informal rulemaking context, however, it is clear to us that Congress has decided not to do so in the statute which controls this case [...] 

It still can be argued, however, that if oral communications are to be freely permitted after the close of the comment period, then at least some adequate summary of them must be made in order to preserve the integrity of the rulemaking docket, which under the statute must be the sole repository of material upon which EPA intends to rely. The statute does not require the docketing of all post-comment period conversations and meetings, but we believe that a fair inference can be drawn that in some instances such docketing may be needed in order to give practical effect to section 307(d)(4)(B)(i), which provides that all documents “of central relevance to the rulemaking” shall be placed in the docket as soon as possible after their availability. This is so because unless oral communications of central relevance to the rulemaking are also docketed in some fashion or other, information central to the justification of the rule could be obtained without ever appearing on the docket, simply by communicating it by voice rather than by pen, thereby frustrating the command of section 307 that the final rule not be “based (in part or whole) on any information or data which has not been placed in the docket....”

EDF is understandably wary of a rule which permits the agency to decide for itself when oral communications are of such central relevance that a docket entry for them is required. Yet the statute itself vests EPA with discretion to decide whether “documents” are of central relevance and therefore must be placed in the docket; surely EPA can be given no less discretion in docketing oral communications, concerning which the statute has no explicit requirements whatsoever. Furthermore, this court has already recognized that the relative significance of various communications to the outcome of the rule is a factor in determining whether their disclosure is required. A judicially imposed blanket requirement that all post-comment period oral communications be docketed would, on the other hand, contravene our limited powers of review, would stifle desirable experimentation in the area by Congress and the agencies, and is unnecessary for achieving the goal of an established, procedure-defined docket to enable reviewing courts to fully evaluate the stated justification given by the agency for its final rule.

Turning to the particular oral communications in this case, we find that only two of the nine contested meetings were undocketed by EPA. The agency has maintained that, as to the May 1 meeting where Senate staff people were briefed on EPA's analysis concerning the impact of alternative emissions ceilings upon coal reserves, its failure to place a summary of the briefing in the docket was an oversight. We find no evidence that this oversight was anything but an honest inadvertence; furthermore, a briefing of this sort by EPA which simply provides background information about an upcoming rule is not the type of oral communication which would require a docket entry under the statute.

The other undocketed meeting occurred at the White House and involved the President and his White House staff. Because this meeting involves considerations unique to intra-executive meetings, it is discussed in the section immediately infra.

(a) Intra-Executive Branch Meetings

We have already held that a blanket prohibition against meetings during the post-comment period with individuals outside EPA is unwarranted, and this perforce applies to meetings with White House officials. We have not yet addressed, however, the issue whether such oral communications with White House staff, or the President himself, must be docketed on the rulemaking record, and we now turn to that issue. The facts, as noted earlier, present us with a single undocketed meeting held on April 30, 1979, at 10:00 a.m., attended by the President, White House staff, other high ranking members of the Executive Branch, as well as EPA officials, and which concerned the issues and options presented by the rulemaking.

We note initially that section 307 makes specific provision for including in the rulemaking docket the “written comments” of other executive agencies along with accompanying documents on any proposed draft rules circulated in advance of the rulemaking proceeding. Drafts of the final rule submitted to an executive review process prior to promulgation, as well as all “written comments,” “documents,” and “written responses” resulting from such interagency review process, are also to be put in the docket prior to promulgation. This specific requirement does not mention informal meetings or conversations concerning the rule which are not part of the initial or final review processes, nor does it refer to oral comments of any sort. Yet it is hard to believe Congress was unaware that intra-executive meetings and oral comments would occur throughout the rulemaking process. We assume, therefore, that unless expressly forbidden by Congress, such intra-executive contacts may take place, both during and after the public comment period; the only real issue is whether they must be noted and summarized in the docket.

The court recognizes the basic need of the President and his White House staff to monitor the consistency of executive agency regulations with Administration policy. He and his White House advisers surely must be briefed fully and frequently about rules in the making, and their contributions to policymaking considered. The executive power under our Constitution, after all, is not shared — it rests exclusively with the President. The idea of a “plural executive,” or a President with a council of state, was considered and rejected by the Constitutional Convention. Instead the Founders chose to risk the potential for tyranny inherent in placing power in one person, in order to gain the advantages of accountability fixed on a single source. To ensure the President's control and supervision over the Executive Branch, the Constitution — and its judicial gloss — vests him with the powers of appointment and removal, the power to demand written opinions from executive officers, and the right to invoke executive privilege to protect consultative privacy. In the particular case of EPA, Presidential authority is clear since it has never been considered an “independent agency,” but always part of the Executive Branch [...]

We recognize, however, that there may be instances where the docketing of conversations between the President or his staff and other Executive Branch officers or rulemakers may be necessary to ensure due process. This may be true, for example, where such conversations directly concern the outcome of adjudications or quasi-adjudicatory proceedings; there is no inherent executive power to control the rights of individuals in such settings. Docketing may also be necessary in some circumstances where a statute like this one specifically requires that essential “information or data” upon which a rule is based be docketed. But in the absence of any further Congressional requirements, we hold that it was not unlawful in this case for EPA not to docket a face-to-face policy session involving the President and EPA officials during the post-comment period, since EPA makes no effort to base the rule on any “information or data” arising from that meeting. Where the President himself is directly involved in oral communications with Executive Branch officials, Article II considerations — combined with the strictures of Vermont Yankee — require that courts tread with extraordinary caution in mandating disclosure beyond that already required by statute.

The purposes of full-record review which underlie the need for disclosing ex parte conversations in some settings do not require that courts know the details of every White House contact, including a Presidential one, in this informal rulemaking setting. After all, any rule issued here with or without White House assistance must have the requisite factual support in the rulemaking record, and under this particular statute the Administrator may not base the rule in whole or in part on any “information or data” which is not in the record, no matter what the source. The courts will monitor all this, but they need not be omniscient to perform their role effectively. Of course, it is always possible that undisclosed Presidential prodding may direct an outcome that is factually based on the record, but different from the outcome that would have obtained in the absence of Presidential involvement. In such a case, it would be true that the political process did affect the outcome in a way the courts could not police. But we do not believe that Congress intended that the courts convert informal rulemaking into a rarified technocratic process, unaffected by political considerations or the presence of Presidential power. In sum, we find that the existence of intra-Executive Branch meetings during the post-comment period, and the failure to docket one such meeting involving the President, violated neither the procedures mandated by the Clean Air Act nor due process [...]