ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA
Before Gibbons and Hunter, Circuit Judges, and Gerry,*fn* District Judge.
On August 29, 1978, a consent final judgment bound the Commonwealth of Pennsylvania to implement an inspection and maintenance program for automobile emission systems in the counties in the Pittsburgh and Philadelphia areas. Three years later, after the Commonwealth was found to be in violation of the decree, the state legislature enacted a bill prohibiting further funding for this program. The district court, 533 F.2d 869, on January 22, 1982, held the Commonwealth to be in civil contempt, and as a sanction to coerce compliance ordered the Secretary of the United States Department of Transportation to refrain from approving and awarding certain grants of federal highway funds to the Commonwealth. The Commonwealth appeals from the January 22, 1982 order. We affirm.
This litigation has its origins in the requirements of the Clean Air Act of 1970, as amended, 42 U.S.C. § 7401 et seq. Pursuant to the Act, in April of 1973 the Pennsylvania Department of Environmental Resources (Penn DER) submitted a plan for meeting federal air quality standards for carbon monoxide and ozone levels in the metropolitan Philadelphia and southwestern Pennsylvania regions. As modified and promulgated by the United States Environmental Protection Agency (EPA) in November of that year, the plan included a provision requiring the implementation of a program for the inspection and maintenance of automobile emissions systems (I/M program) by May 1, 1975. 40 C.F.R. § 52.2038 (1981). The Commonwealth petitioned this court for review of certain aspects of the plan, but did not seek review of the I/M program requirement. See Commonwealth of Pennsylvania v. EPA, 500 F.2d 246 (3d Cir. 1974).
When, by mid-1976, an I/M program had not been implemented, the Delaware Valley Citizens' Council for Clean Air (Delaware Valley) brought suit under 42 U.S.C. § 7604 against both the Commonwealth defendants and the EPA (the latter for failing to enforce the Commonwealth's obligation). The EPA also instituted an action of its own against the Commonwealth, pursuant to 42 U.S.C. § 7413(b). It was then dismissed as a defendant in the Delaware Valley suit, and both actions against Pennsylvania were consolidated.
On August 29, 1978, following prolonged discovery and negotiations, the Commonwealth and two of its departments, Penn DER and the Pennsylvania Department of Transportation (Penn DOT), agreed to a final consent judgment terminating both the Delaware Valley and the United States actions. The defendants agreed to implement an I/M program for ten counties in the Philadelphia and Pittsburgh areas by August 1, 1980.*fn1 The consent judgment provided that Penn DOT would first seek legislation instituting a franchise I/M system under which the Commonwealth would enter into contracts with garage owners for establishment of inspection stations. The judgment provided that should the legislature fail to effect such a system, Penn DOT would promulgate regulations providing for a private garage I/M system under which the Commonwealth would certify a number of privately owned facilities to perform the inspections. When the legislature did not enact a franchise system, Penn DOT issued final regulations authorizing the alternative system. 9 Pa.Bull. 4193 (Dec. 22, 1979).
On March 7, 1980, the district court approved a modification of the consent decree, agreed to by the parties, delaying implementation of the I/M program until May 1, 1981. The following year, the Commonwealth sought another delay. After failing to reach agreement with the plaintiffs for a second postponement, purportedly to permit the Commonwealth to require participating private garages to use a more sophisticated but still commercially unavailable type of testing equipment, the Commonwealth filed a motion in the district court on April 29, 1981, for a modification of the decree that would delay implementation until January 1, 1983. The next day, the date implementation was due under the once modified decree, Delaware Valley requested the district court to declare the Commonwealth in violation of the consent decree.
After requesting and receiving certain information from EPA indicating the continuing unsatisfactory state of current air quality in the Philadelphia and Pittsburgh areas, the district court, on May 20, 1981, denied the Commonwealth's request for a modification of the decree, found the Commonwealth in violation, and ordered submission of a plan for immediate implementation of the I/M program. The Commonwealth submitted such a plan, and the court approved it with certain amendments suggested by Delaware Valley. On June 16, 1981, the judgment was modified in several respects including another extension of the deadline for implementation of the I/M program until May 1, 1982. On July 24, 1981, the district court denied a Commonwealth motion for reconsideration of the June 16 order. These district court orders were affirmed by this court on March 1, 1982.*fn2
In the meantime, the state legislature had decided to take the matter into its own hands. Following the district court's decision in June of 1981, the Pennsylvania General Assembly passed House Bill No. 456, § 2 (H.B. 456), which prohibited the expenditure of state funds by the executive branch for the implementation of the I/M program. Although the Governor vetoed the bill, the legislature overrode the veto and enacted H.B. 456 into law. Act of October 5, 1981, No. 99, § 2, 1981 Pa.Legis.Serv. 312 (to be codified at Pa.Stat.Ann. tit. 71, § 523). Penn DOT and the executive branch immediately ceased all efforts toward implementing the I/M program, except for publication of final regulations pertaining to the standards for emission analyzers to be purchased by the private garage owners choosing to participate in the program. 11 Pa.Bull. 3519 (Oct. 10, 1981).
Following the enactment of H.B. 456, two motions were filed in the district court. The Commonwealth and Penn DOT requested a stay and a modification of the consent decree in view of their present alleged inability to comply with the decree's requirements despite the stated willingness of the executive branch to do so. Delaware Valley requested that the defendants be declared in civil contempt and that sanctions be imposed. The United States filed a brief taking the position that defendants' motion should be denied, but that the district court should postpone a ruling on the civil contempt motion and defer to the EPA for the initiation of administrative proceedings and remedies under the Clean Air Act.*fn3
On January 22, 1982, the district court denied the defendants' motion for a stay, declared the Commonwealth and the Secretaries of Penn DOT and Penn DER to be in civil contempt, and as a sanction, ordered the Secretary of the United States Department of Transportation to refrain from approving any projects or awarding any grants under Title 23 of the United States Code for highways in areas in the Commonwealth covered by the consent decree, other than for purposes of safety, mass transit, or transportation projects related to air quality improvement or maintenance.*fn4 Defendants appealed and moved for a stay of the district court civil contempt order pending appeal. A stay was granted by this court on March 19, 1982,*fn5 and a petition by Delaware Valley for a rehearing en banc of that stay was denied on April 6, 1982.*fn6 One other legal maneuver worthy of note is the motion by two groups of Pennsylvania legislators ...