CELEBREZZE, Circuit Judge.
This case of first impression arises under the 1972 amendments to the Federal Water Pollution Control Act, P.L. 92-500.
The law in the case consists of three interdependent provisions of the Act which are at the crux of the regulatory scheme to control point sources of water pollution.
Pollution control standards promulgated pursuant to sections 301 and 304 are implemented nationally through a decentralized permit granting mechanism defined in section 402
Subsection 402(b) directs the Administrator to delegate permit granting authority to states which have proposed self-regulatory programs which are operationally compatible with uniform administration of the Act. To ensure that qualifying state environmental agencies apply effluent limitations evenhandedly, subsection 402(d)(2)(B) empowers the Administrator to block issuance of any proposed NPDES permit which he deems to be "outside the guidelines and requirements of [the Act]." Id. Whether federal or state in origin, all NPDES permits must ensure compliance with "applicable requirements" of six enumerated provisions of the Act including section 301. In addition, all permits must issue on or before December 31, 1974, pursuant to subsection 402(k).
In July, 1972, Republic Steel Corporation (Republic) applied for a federal permit to continue discharging effluents from its Canton, Ohio steel mill into Nimishillen Creek. The Canton mill is an integrated steel manufacturing operation engaged primarily in the processing of alloy and stainless steel. In March, 1974, Ohio received approval from EPA under section 402(b) to begin issuing NPDES permits, and Republic immediately commenced to negotiate with the Ohio Environmental Protection Agency (Ohio EPA).
In June, 1974, Ohio EPA issued a draft permit
Understandably, in the absence of controlling federal regulations, Republic sought to exploit available state administrative procedures to secure the most favorable permit terms and conditions. Prolonged hearings and negotiations with Ohio EPA resulted in redefinition of the originally proposed effluent limitations. On August 1, 1975, eight months after the last date envisioned by Congress for routine issuance of NPDES permits, final agreement was reached and the implementation period commenced to run. However, Republic continued to assert that full compliance within 24 months was physically impossible.
In January, 1976, Ohio EPA transmitted the final NPDES permit to EPA's Region V office as required by section 402(d)(1). Within 90 days the Director of the Enforcement Division of Region V objected to its issuance, exercising his authority under section 402(d)(2)(B). He did not expressly question the reasonableness of the state's BPT effluent standards or the 42 month implementation schedule. Rather, he concluded that the permit violated section 301 because full compliance would not be achieved until after July 1, 1977. Republic filed a timely petition for judicial review, pursuant to section 509(b)(1)(F),
We do not question EPA's good faith in attempting to discharge the ambitious and often ambiguous duties imposed upon it by a "poorly drafted and astonishingly imprecise statute." E. I. du Pont de Nemours & Company v. Train, 541 F.2d 1018, 1026 (4th Cir. 1976). Many factors, some admittedly beyond EPA's control, have conspired to frustrate its legitimate compliance efforts. In particular, virtually every exercise of the agency's discretion has precipitated protracted litigation challenging the legitimacy of its authority or the substance of its "final" regulations. See American Petroleum Institute v. Environmental Protection Agency, 540 F.2d 1023, 1027 (10th Cir. 1976) (thirteen relevant cases cited).
The fact remains, however, that the imperative nature of EPA's rule making responsibilities under the Act has been confirmed through litigation. In 1975, the United States Court of Appeals for the District of Columbia affirmed the authority of a federal district court to compel the agency to adhere to a remedial, court imposed timetable for the publication of guidelines for all point source effluent discharges. Natural Resources Defense Council, Inc. v. Train, 166 U.S.App.D.C. 312, 510 F.2d 692 (1975). Unfortunately, judicial intervention did not avert the regrettable situation which confronts us here. The inability of EPA to meet its statutory obligations has distorted the regulatory scheme and imposed additional burdens which must be equitably distributed. This task is a difficult one because of the nature of the available options. Either the affected discharger must be compelled to risk potential enforcement proceedings in spite of an abbreviated compliance schedule, or society must tolerate slippage of an interim pollution abatement deadline.
Natural Resources Defense Council, Inc. v. Train, 166 U.S.App.D.C. 312, 510 F.2d 692, 707-708 (1975) (footnotes omitted).
The crucial role of federal rule making in achieving meaningful pollution control on a national scale is revealed by the Third Circuit's analysis in American Iron and Steel Institute v. EPA:
526 F.2d 1027, 1045 (3rd Cir. 1975). (emphasis added). If no federal standards exist, any state limitations on discharge, no matter how insignificant, become more stringent than nonexistent ceilings imposed by the Act. See section 301(b)(1)(C). Surely Congress did not intend for the Act to be construed to foster token, ad hoc, clean up efforts which would inevitably defeat achievement of the goal of zero pollution by 1985.
EPA answers Republic's argument by exhorting us to accept the "plain meaning" of section 301(b)(1)(A). The agency contends that the language of the section admits to no other interpretation than that July 1, 1977 is to be a "uniform deadline on all industrial dischargers, * * * plain, unequivocal
EPA correctly points out that the Act is devoid of language countenancing exceptions to the July 1, 1977, deadline under any condition. The Act's legislative history is replete with statements attesting to the inflexible nature of the administrative timetable.
EPA attempts to bolster its position by emphasizing its authority under section 402(a)(1), in advance of formally promulgated regulations, to issue and enforce NPDES permits imposing "such conditions as the Administrator determines are necessary to carry out the provisions of the Act." Id. From this, it would have us conclude that the duty of the discharger to achieve BPT by July 1, 1977, must be independent of EPA's obligation to promulgate the necessary guidelines by October 18, 1973. EPA cites Bethlehem Steel Corporation v. Train, 544 F.2d 657 (3rd Cir. 1976), and United States v. Cutter Laboratories, Inc., 413 F.Supp. 1295 (E.D.Tenn.1976), in support of this position.
A careful reading of both opinions confirms that EPA's reliance upon them is misplaced. The Third Circuit correctly categorizes EPA's authority under section 402(a)(1) to issue NPDES permits on a case by case basis as a temporary expedient to ensure immediate progress during the year of rule making contemplated by section 402(b):
Bethlehem Steel Corporation v. Train, 544 F.2d at 659 (emphasis added). In the Bethlehem Steel case EPA granted the permit on December 31, 1974, the last day mandated by Congress for routine issuance of NPDES permits. Therefore, Bethlehem Steel enjoyed a 30 month compliance schedule, the minimum period possible under the statutory scheme assuming no administrative slippage. In contrast, Republic's permit was issued by a state agency eight months after expiration of the permit granting deadline, affording Republic only 24 months for compliance. This factual difference was not overlooked by the Third Circuit which carefully excludes Republic's situation from the purview of its holding in the Bethlehem Steel case.
EPA's final contention is that it complied with the rule making requirements of section 304(b) by implicitly ratifying the effluent limitations defined by Ohio EPA. EPA ignores the actual language of section 301(b)(1)(A)(i) which demands that BPT guidelines be promulgated pursuant to the procedure set forth in section 304(b). Ohio EPA did not follow that procedure for the obvious reason that section 304(b) is exclusively addressed to the Administrator of EPA. We reject the notion that state action can be federalized sub silentio by the mere acquiescence of an administrative agency in the absence of clear statutory provisions to that effect.
Republic urges us to remand the case to EPA with directions that the agency unconditionally approve immediate issuance of Republic's NPDES permit in its original form. However, the record suggests a more appropriate remedy. If we assume that the Administrator satisfactorily performed all the tasks incumbent upon him under sections 301 and 304, Republic could not have received its permit any earlier than September 1, 1974.
EPA is not foreclosed from objecting to Republic's permit on grounds other than the termination date of its compliance schedule. Under the special circumstances of this case, we believe that EPA must be granted a second opportunity to scrutinize the balance of the permit for consistency with the Act.
To guard against the possibility that situations such as this will prompt state agencies to propose extravagant compliance schedules, we remand the case to EPA with directions that the agency acquiesce to issuance by Ohio EPA of Republic's NPDES permit unless, within 30 days, it specifies persuasive new grounds for objection under section 402(d)(2)(B).