United States v. National Steel Corp.

767 F.2d 1176, 22 ERC 2250, 15 Envtl. L. Rep. (Envtl. Law Inst.) 20678, 22 ERC (BNA) 2250, 1985 U.S. App. LEXIS 20915
CourtCourt of Appeals for the Sixth Circuit
DecidedJuly 26, 1985
DocketNo. 83-1600
StatusPublished
Cited by16 cases

This text of 767 F.2d 1176 (United States v. National Steel Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. National Steel Corp., 767 F.2d 1176, 22 ERC 2250, 15 Envtl. L. Rep. (Envtl. Law Inst.) 20678, 22 ERC (BNA) 2250, 1985 U.S. App. LEXIS 20915 (6th Cir. 1985).

Opinions

ENGEL, Circuit Judge.

National Steel Corporation (National) appeals from an order of the United States District Court for the Eastern District of Michigan which required National to pay penalties in excess of $5 million for violating a consent decree entered into between National, the United States, and various intervenors in settlement of an air pollution action brought by the United States [1178]*1178against National. National appeals from the order. We affirm in part, reverse in part, and remand for modification of the final order consistent with this opinion.

On August 14, 1979, the United States filed a complaint against National pursuant to section 113(b) of the Federal Clean Air Act, 42 U.S.C. § 7413(b), alleging that several facilities at National’s Great Lakes Steel Plant, located near Detroit, were not in compliance with certain emission limitation requirements promulgated by the State of Michigan pursuant to the Clean Air Act. The parties entered into an extensive consent decree which settled all of the issues raised in the complaint. The district court approved the consent decree on March 31, 1981.

In April of 1983, the United States filed a motion in the district court alleging that National had violated the consent decree. The district court agreed and found National liable for the penalties stipulated therein. National appeals from the district court’s order contending that the imposition of penalties violated the due process clause of the Fifth Amendment and the terms of the consent decree. In addition, National contends that the district court failed to limit the scope of the stipulated penalties as required under Paragraph V.C.3 of the decree.

I.

The consent decree required National to meet specific emission limitations at various facilities at the Great Lakes Steel Plant in accordance with stated compliance schedules. National agreed to install pollution abatement equipment on its No. 2 Basic Oxygen Furnace according to the following schedule:

(a) December 15, 1980 Issue purchase orders
(b) August 31, 1981 Start construction
(c) August 15, 1982 Complete installation of hooding and control device
(d) November 15, 1982 Achieve and demonstrate compliance with the emission limitations specified in Paragraphs VII A 1 and 2

The consent decree set forth stipulated amounts to be paid by National for failing to meet the construction schedule. Paragraph V.A.1 provided for a $1,000 per day penalty for the first ten days that an interim date in the construction schedule was not met, $2,000 per day for the next ten days, $3,500 per day for the next ten days, and $5,000 per day thereafter. Paragraph V.A.2 provided that if National fails to meet a final date in a schedule for the construction or installation of pollution control equipment on a facility, “it shall be liable for a stipulated amount of $7,500 per day for each facility for each day such failure continues. Any stipulated liability under this subparagraph will be subsequently forgiven if [National] meets the emission limitations by the attainment date set forth in the schedule.”

Paragraph V.B dealt with compliance with emission limitations and provided that if National should fail to meet the final attainment date set forth in a schedule for meeting emission limitations, “[National] shall pay a stipulated amount of $7,500 per day for each day [National] operates the facility without a demonstration that it meets the applicable emission limitations____” Paragraph V.C stated important limitations on the amount of stipulated penalties National would have to pay. Paragraph V.C provided in relevant part:

C. Exclusions:

* * ¡fc * *
2. [National] shall not pay stipulated amounts for failure to meet emission limitations at a facility if it is paying stipulated amounts for failure to meet construction or installation schedules at the same facility.
3. If [National] fails to demonstrate compliance with an applicable emission limitation its obligation to pay under this paragraph shall cease 180 days after the effective date of the limitation.

Paragraph V.D provided that the “provisions of Part B paragraph V ..., including the exclusions in paragraph V C 1 and 2 [1179]*1179above shall not be construed to limit any other remedies available to Plaintiff for violation of this Decree or of other provisions of law.” The consent decree permitted National to seek an alternate emission reduction option for any facility covered by the decree, but required that the option be sought “in compliance with the Clean Air Act, State law and County law.” The decree stated “that an application for such an option shall not be grounds for delaying the requirements of this Decree.”

National sought one type of alternate emission reduction option that is popularly referred to as a “bubble.” A bubble is an air pollution control concept that looks at a group of pollution-emitting sources and the group’s emissions as a whole rather than focusing on each individual emission source. Under a bubble, an emission limit for one pollution source is relaxed, while a limit for another source is made more stringent, so that the resulting pollution from the two sources remains the same. The United States Environmental Protection Agency (EPA) allows states to bubble pollution sources. In Chevron, USA v. National Resources Defense Council, Inc., — U.S. -, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), the Supreme Court upheld the EPA regulation allowing states to bubble pollution sources stating that it was based upon a permissible construction of the Clean Air Act. Under National’s proposed bubble, it would not be required to install the pollution control equipment on its No. 2 Basic Oxygen Furnace, but instead would further limit emissions from its Electric Arc Furnace Shop and plant roadways.

National did not start to install the emission controls at the No. 2 Basic Oxygen Furnace on August 31, 1981 as required by the consent decree. National took no steps toward construction of the emission controls in the expectation that its bubble would be approved and would thus satisfy the requirements of the consent decree. The bubble, however, was not approved. By the time of oral argument before us, further efforts to obtain approval of the bubble had been abandoned, and National had finally brought itself into compliance with the emission limitations for the No. 2 Basic Oxygen Furnace.

In April of 1983, the United States sought payment by National of the stipulated amounts set forth in the consent decree for National’s failure to install the emission controls at the No. 2 Basic Oxygen Furnace. National’s position in the district court and in this court has been that the EPA encouraged National to delay the performance required by the consent decree by suggesting that approval of the bubble application was soon forthcoming. National contends that to impose the penalties of the consent decree in these circumstances would violate the due process clause of the Fifth Amendment and is contrary to the terms of the consent decree.

The district court, however, found that there had been no showing that the EPA’s activities were unreasonable under the circumstances.

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767 F.2d 1176, 22 ERC 2250, 15 Envtl. L. Rep. (Envtl. Law Inst.) 20678, 22 ERC (BNA) 2250, 1985 U.S. App. LEXIS 20915, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-national-steel-corp-ca6-1985.