Marathon Oil Company v. EPA

564 F.2d 1253 (9th Cir. 1977)

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Holding & Decision

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Nature Of The Case

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Facts

In these consolidated cases, Ps challenge effluent limitations contained in permits issued to them under section 402 of the Federal Water Pollution Control Act. Ps operate offshore platforms in Cook Inlet, Alaska. The platforms are self-contained structures with live-on crews that can number up to 50 men during drilling operations. In addition to drilling, a number of related and necessary operations are conducted regularly on board the platforms and contribute to the platforms' waste. Relevant to this dispute are cleaning activities, rig moving, and rig conditioning. Three forms of waste are disposed of from the platforms; deck drainage, produced water, and sanitary wastes. At present, only sanitary wastes are disposed of offshore by all the platforms in Cook Inlet. Some of the platforms pump their deck drainage to shore. All of the platforms pump their produced water to shore for treatment before disposal. All of the platforms expect to discharge all three of the wastes offshore. Under the Federal Water Pollution Control Act to discharge any pollutant into navigable water you must first obtain a permit under section 402 of the Control Act. Section 402(a) authorizes the Administrator to issue a permit if he determines, that the discharge would meet the requirements of section 301 of the Control Act. Section 301(b)(1)(A), limits discharges prior to July 1, 1983, to those achievable by use of 'the best practicable control technology currently available' (BPCTCA), as defined by section 304(b)(1) of the Control Act. Before issuing a permit under section 402, D makes Ps obtain from the appropriate state government a certificate stating that the permit limitations will comply with relevant state law. A state can waive its certification right either explicitly or by failing to respond to a certification request within 30 days. Before an effluent limit is set by D it must determine that the limit is representative of BPCTCA and obtain a certification from the state government. The Administrator should provide an 'opportunity for public hearing.' D has not interpreted this mandate as requiring a full adjudicatory hearing under sections 554, 556, and 557 of the Administrative Procedure Act (APA). Pursuant to 40 C.F.R. § 125.36, 'interested persons' may request and D, in its discretion, may grant an adjudicatory hearing. This adjudicatory hearing, however, will not necessarily incorporate all of the procedural requirements of sections 554, 556, and 557 of the APA. Ps applied for discharge permits from the Army Corps of Engineers pursuant to the Federal Refuse Act. The Refuse Act was superseded by the Federal Water Pollution Control Act Amendments of 1972. Ps then applied to the EPA for permits under section 402 of the Control Act. The permits were tentatively issued in December of 1973. The permits contained limits on the discharge of deck drainage and made no provision for upsets or malfunctions in the pollution control system. The permits also prohibited bypassing of the control system 'except (i) where unavoidable to prevent loss of life or severe property damage, or (ii) where excessive storm drainage or runoff would damage any facilities necessary for compliance with the effluent limitations and prohibitions of their permit.' Ps requested a hearing under 40 C.F.R. § 125.36 including an adjudicatory hearing with the right of cross-examination. Ps argued that the discharge standards had been set at too low a level. The Regional Administrator reaffirmed the limit with respect to deck drainage and refused to enact any limit with respect to produced water due to a paucity of data and the 'uncertainty' of Ps' plans to begin discharging produced water offshore. Ps requested and were granted direct review by the Administrator pursuant to 40 C.F.R. § 125.36(n). The Administrator accepted written briefs and held oral arguments. The Administrator, with the aid of a Chief Judicial Officer and D technical personnel, issued his decisions on September 25, 1975, raising the limits for deck drainage and setting new limits for produced water. The Administrator affirmed the Regional Administrator's decision to deny upset provisions and liberalized bypass provisions. Ps sued D. Ps contend that D, before issuing permits under section 402 of the Control Act, must afford Ps formal adjudicatory hearings that adhere to the requirements of sections 554, 556, and 557 of the APA. Ps argue that, while they were given adjudicatory hearings, those hearings diverged in certain important respects from the strict requirements of the APA. The Regional Administrator, rather than the Administrative Law Judge, rendered the initial decision, in contravention of sections 554(d) and 557(b) of the APA, and the Administrator considered evidence outside of the record, in conflict with section 556(e) of the APA.

Issues

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Legal Analysis

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