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Sharon Steel Corp. v. Environmental Protection Agency

decided: April 25, 1979.



Before Aldisert, Adams and Rosenn, Circuit Judges.

Author: Rosenn


Pursuant to the 1977 amendments to the Clean Air Act ("the Act") enacted by Congress, 42 U.S.C.A. § 7401 Et seq. (West Supp.1977), the Administrator of the Environmental Protection Agency ("Administrator") issued a final rule by which he determined the status of air quality for certain areas in the country in relation to national ambient air quality standards for various air pollutants. In his haste to implement the new Congressional provisions within the statutory deadline set by Congress, the Administrator dispensed with prior notice and comment before adopting the rule.

In this case we are asked to decide whether the Administrator had good cause to adopt the final rule without prior notice and comment and, if so, whether the rule was arbitrary and capricious. We hold that the Administrator lacked good cause and that this matter must be remanded to him for further action. We need not determine whether the rule was arbitrary and capricious.


Sharon Steel Corporation ("Sharon") and Bethlehem Steel Corporation ("Bethlehem") (collectively, the "companies") have brought petitions for review of the final rule issued by the Administrator. 42 U.S.C.A. § 7607 (West Supp.1977). The challenged rule embodies the Administrator's determination that in four areas of Pennsylvania*fn1 the air does not meet the national ambient air quality standards for a pollutant known as "total suspended particulate."

We begin our analysis by placing this rule in its statutory context. The Administrator has issued standards for air quality under authority of the amended Act. That Act calls for the Administrator to formulate two types of standards: (a) "primary ambient air quality standards," which set such restrictions on pollution as are necessary to protect public health with an "adequate margin of safety"; and (b) "secondary ambient air quality standards," which decree those limits necessary to advance the public welfare (for example, by preventing damage to property). See 42 U.S.C.A. §§ 7409(b), 7602(h) (West Supp.1977). In accordance with the Act, the Administrator has now promulgated primary and secondary standards governing six pollutants, including total suspended particulate.

According to the Act, each state must draw up a "state implementation plan," under which the air throughout the state must be brought into conformity with first the primary and later the secondary standards by certain statutory deadlines. To begin the procedures leading eventually to an implementation plan, every state, by December 5, 1977, had to collect data about air quality and submit to the Administrator a list designating each area of the state as "attainment," "non-attainment," or "unclassifiable." 42 U.S.C.A. § 7407(d)(1) (West Supp.1977); 43 Fed.Reg. 40412 (September 11, 1978). The designation "attainment" meant that the quality of the air in an area already met both the primary and secondary standards; "non-attainment" meant that the air contained pollutant levels higher than those permitted by national ambient air quality standards. When there was insufficient information to decide whether the standards had been satisfied in a particular area, the state designated that area as "unclassifiable." After the states submitted their lists, the Administrator had until February 3, 1978, in which to "promulgate each such list with such modifications as he deem(ed) necessary." 42 U.S.C.A. § 7407(d)(2) (West Supp.1977). The states then had until January 1, 1979, to compose their implementation plans, under which they detailed measures for achieving compliance by the statutory deadlines.

Pennsylvania duly submitted its list of designations to the Administrator. Without providing notice or an opportunity for comments, the Administrator issued the modified designations as a final rule.*fn2 In dispensing with the notice and comment requirement of the Administrative Procedure Act ("APA"), 5 U.S.C. § 553 (1976), the Administrator relied on the APA's exception for "good cause," 5 U.S.C. § 553(b)(B) (1976): "(T)his subsection does not apply . . . when the agency for good cause finds . . . that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest." The statutory schedule for state implementation plans, the Administrator declared, created an urgency that precluded prior notice and comment. Although omitting prior notice and comment, the Administrator did invite comments in the sixty days after he promulgated the rule, and he promised to modify the rule if the comments should show any modification to be necessary.

Among the areas designated by the rule as "non-attainment" were the four involved in this case. In each of these areas, either Bethlehem or Sharon operates a plant, and the companies assert that the non-attainment designations will impose stringent limits on their operations. See n.8 Infra. Contesting the designations on both procedural and substantive grounds, Bethlehem and Sharon filed petitions for review.


Disputing the Administrator's declaration of good cause, the companies argue that the Administrator did not have sufficient justification for dispensing with prior notice and comment. We agree.*fn3

The Administrator concedes that the action now under review was "rule making" under 5 U.S.C. § 553 (1976). Absent good cause, the APA requires prior notice of a proposed rule and an opportunity for interested persons "to participate in the rule making through submission of written data, views, or arguments . . . ." 5 U.S.C. § 553(c) (1976). In the Administrator's view, the statutory schedule decreed by the amended Clean Air Act, 42 U.S.C.A. §§ 7401 Et seq. (West Supp.1977), made prior notice and comment "impracticable" and "contrary to the public interest," so that the Administrator had good cause to forego these usual requirements. Had there been prior notice and comment, the Administrator contends, the states would not have had enough time to draw up their implementation plans. Because the states, under the terms of the Act, did not submit their initial designations until December 5, 1977, and because the Administrator needed until ...

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