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California & Hawaiian Sugar Co. v. Environmental Protection Agency

decided: April 14, 1977.


Petition for review of effluent limitations guidelines promulgated by the Environmental Protection Agency for control of pollutant discharges by the crystalline cane sugar refining industry, on grounds that the agency acted arbitrarily and capriciously. Guidelines upheld and petition denied.

Lumbard, Feinberg and Mulligan, Circuit Judges.

Author: Feinberg

FEINBERG, Circuit Judge:

In March 1974, the Environmental Protection Agency (EPA) promulgated final regulations requiring curtailment of water pollution by crystalline cane sugar refineries in the United States.*fn1 Although four refining companies - Amstar Corporation, California & Hawaiian Sugar Company (C&H), Sucrest Corporation, and National Sugar Refining Company - filed petitions for review*fn2 of the new "guidelines for effluent limitations," only C&H's petition is still before us.*fn3 C&H challenges the EPA's action as arbitrary and capricious in various respects, and urges us to vacate the regulations and remand for further consideration by the agency. For the reasons set forth below, we conclude that the agency acted reasonably. We therefore uphold the regulations.


Crystalline Cane Sugar Refining

Refining is the final step in the transformation of sugar cane into pure, white crystalline sucrose.*fn4 Before refining can begin, the cane must first be crushed in a cane sugar factory. The resulting liquid is then crystallized, producing raw sugar. This "intermediate product consisting of crystals of high purity covered with a film of low quality syrup"*fn5 is then shipped to a cane sugar refinery. The raw sugar unlike its refined descendant, sucrose, is not considered to be a foodstuff, and can therefore be transported without expensive sanitary safeguards. For this reason, refineries tend to be located in heavily populated areas, close to the retail markets.*fn6

The refining process consists of four basic steps: (1) washing the raw sugar crystals; (2) adding water to the crystals to form a solution; (3) clarifying and decolorizing the solution; and (4) recrystallizing and finishing the sucrose. Two types of waste water result - process water and condenser water. Process water includes all waste waters from the refining process except condenser water. The primary component of process water is water used in decolorization, but it also includes such miscellaneous streams as floor and filter washings. The principal pollutants in process water are suspended solids (TSS), Biochemical Oxygen Demand (BOD),*fn7 and pH, a factor of either acidity or alkalinity of the discharge.*fn8 Condenser water is used to condense the water vapors that boil out of the sugar solution during the recrystallization step. The vapor that mixes with the condenser water contains sugar (in an amount the refiner desires to minimize for business reasons), which contributes substantially to BOD. Condenser water is by volume the greatest portion of the waste from cane sugar refining, but process water has a higher concentration of pollutants.

Statutory Regulation

Disposal of the waste water is governed by the Federal Water Pollution Control Act, as amended, 33 U.S.C. § 1251 et seq. (Supp. IV 1974). Since its amendment in 1972, Pub. L. No. 92-500, the Act has focused attention on the discharges from each "point source" of pollutants rather than on the pollutant levels in the public waterways themselves. All discharges are prohibited, under § 301 of the Act, 33 U.S.C. § 1311, unless authorized by a permit issued pursuant to another section of the Act. The permit section relevant here, § 402, 33 U.S.C. § 1342, directs the EPA to transfer authority for issuance of permits to the states as soon as they develop programs that meet the Act's requirements. Section 301(b)(1)(A) requires that by July 1, 1977, each point source must comply with effluent limitations fixed by the EPA on the basis of the "best practicable control technology currently available" (BPT). By 1983, the sources must meet a different, presumably stiffer, standard based on the "best available technology economically achievable" (BAT). In setting the standards, the EPA is directed to consider six factors, all but one of which are phrased in identical terms for both BPT and BAT: age of equipment and facilities involved, the process employed, the engineering aspects of the application of various types of control techniques, process changes, and non-water quality environmental impact (including energy demands). The remaining factor involves costs, and the phrasing for the two standards differs. For BPT, the 1977 standard, the Act refers the EPA to "total cost of application of technology in relation to the effluent reduction benefits to be achieved by such application. . . ." Section 304(b)(1)(B) of the Act, 33 U.S.C. § 1314(b)(1)(B). For BAT, the 1983 standard, the Act mandates consideration of "the cost of achieving such effluent reduction." Section 304(b)(2)(B).

Administrative Action

Charged with establishing effluent limitations for all industrial subcategories, the EPA issued an "Advance Notice of Public Review Procedures." 38 Fed. Reg. 21202 (1973). In accordance with that methodology, the agency had contracted with a private consultant to study waste water flows, pollutant constituents, and treatment technologies for cane sugar refining. The firm submitted a "Draft Development Document for Effluent Limitations Guidelines and New Source Performance Standards" for the cane sugar processing industry, which the EPA published for public comment in July 1973. The EPA twice supplemented the draft, and received a number of comments, including one from the United States Cane Sugar Refining Association (USCSRA). In the following December, the agency published its proposed guidelines. 38 Fed. Reg. 33846 (1973). The proposal limited BOD effluents to 30 milligrams per liter (mg/l) and limited TSS concentration to 40 mg/l.*fn9 The agency proposed requiring reduction of these concentrations by 1983 to 18 mg/l and 15 mg/l, respectively. A second Development Document accompanied the proposed guidelines, and recommended that the 1977 standard could be met by "activated sludge" treatment plants. In fixing the 1983 standard, the agency contemplated, among other things, construction of a new system employing cooling towers and sand filtration. The agency again received various public comments, including another from the USCSRA and one from C&H itself. After considering these comments, the agency on March 20, 1974 promulgated final regulations, 39 Fed. Reg. 10522 (1974), and issued a final Development Document.*fn10 The agency relaxed the 1977 standards for both BOD and TSS to 60 mg/l, and similarly changed the standard that would take effect in 1983 for BOD to 40 mg/l from the 18 mg/l level originally proposed.

C&H does not claim any procedural defect in this administrative proceeding. In C&H's view, however, various agency determinations were arbitrary and capricious in light of all the evidence in the record. We will proceed to consideration of these challenges, but first we note that C&H questions the jurisdiction of this court. It argues that the regulations at issue here are authorized by § 304 of the Act, and are not regulations issued under § 301. Section 304 guidelines are not expressly made directly reviewable in the Court of Appeals by § 509(b), as are § 301 regulations. We rejected this argument in Hooker Chemicals & Plastics Corp. v. Train, 537 F.2d 620, 624-29 (2d Cir. ...

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