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CENTRAL HUDSON GAS & ELEC. CORP. v. UNITED STATES

February 10, 1978

CENTRAL HUDSON GAS & ELECTRIC CORPORATION; CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.; ORANGE AND ROCKLAND UTILITIES, INC.; and POWER AUTHORITY OF THE STATE OF NEW YORK, Plaintiffs,
v.
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, DOUGLAS M. COSTLE, as Administrator, U.S. Environmental Protection Agency, ECKARDT C. BECK, Regional Administrator, Region II, U.S. Environmental Protection Agency, NEW YORK STATE DEPARTMENT OF ENVIRONMENTAL CONSERVATION, and PETER A.A. BERLE, Commissioner, New York State Department of Environmental Conservation, Defendants, and HUDSON RIVER FISHERMEN'S ASSOCIATION, Intervenor-Defendant


Carter, District Judge.


The opinion of the court was delivered by: CARTER

CARTER, District Judge

This is a suit by four power utilities that challenges the jurisdiction of the United States Environmental Protection Agency ("EPA") with regard to certain National Pollution Discharge Elimination System permits ("NPDES permits") presently pending before the EPA. *fn1" Plaintiffs' claim is that the EPA has been deprived of jurisdiction by virtue of 33 U.S.C. § 1342(c)(1), *fn2" which is § 402(c)(1) of the Federal Water Pollution Control Act Amendments of 1972 (the "Act"). *fn3" Plaintiffs have moved for summary judgment, and the defendants have cross-moved for dismissal on the grounds that the court lacks subject-matter jurisdiction, or in the alternative, for summary judgment on the merits. The cross-motion for dismissal is granted.

 Facts

 The plaintiffs own and/or operate four electric generating plants situated on the banks of the Hudson River. Operation of such a plant requires that heat be continuously removed from the power generation system, and for that purpose, each of the plants has what is known as a "once-through" cooling system. That is, water is drawn in from the nearby river, circulated through elements of the plant, and is then discharged back into the river at an elevated temperature. Insofar as is relevant here, federal law requires that pollution of this kind can only be engaged in pursuant to an NPDES permit, which the EPA is empowered to issue. 33 U.S.C. §§ 1311(a) and 1342(a)(1). The EPA is given wide latitude to prescribe conditions for the permit in order to assure that the anti-pollution goals of the Act will be attained. 33 U.S.C. § 1342(a)(1) and (2).

 Although the permit-issuing authority is vested in the first instance in the EPA, the Act envisions that ultimately the states will be the primary enforcers of federal clean water standards. If a state establishes a permit program that fully satisfies statutory requirements, the EPA is required to approve the program, *fn4" and then to "suspend the issuance of permits . . . ." 33 U.S.C. § 1342(c)(1). *fn5"

 The plaintiff utilities applied to the EPA for discharge permits for their four plants. Pursuant to 40 C.F.R. § 125.31, the regional staff prepared tentative determinations regarding the applications and formulated draft permits for the facilities. By May 1975, the office of Region II of the EPA had given public notice of its tentative determination and the draft permit for each of the applications. 40 C.F.R. § 125.32. Pursuant to the terms of the notice and the federal regulation, each plaintiff submitted to the EPA comments and data with regard to the permit for its facility.

 Subsequent to these events, the EPA Regional Administrator issued, between February and July, 1975, a "Notice of Issuance of Final Determination" and an enclosed NPDES "Discharge Permit" for each plant. Each permit *fn6" contained a condition that the plant reduce by more than 90% the heat discharged into the river by the present cooling system, by dates that ranged from July 1, 1979 to July 1, 1981, depending on the plant. Meeting this requirement would necessitate that the utilities abandon the once-through cooling system in favor of a closed-cycle system that employs what are known as "cooling towers," large and costly structures that would have to be built next to the power stations by the utilities. Although not directly at issue in this suit, it is the heat reduction condition that the utilities object to, and this is the substantive basis of the utilities' challenge to the NPDES permits for their plants.

 Following receipt of these notices and permits, defendants requested and were granted an "adjudicatory hearing," pursuant to both the notice itself and 40 C.F.R. § 125.36(b), to contest several of the provisions of the permit, including the heat reduction condition. No formal proceedings with regard to these hearings occurred until February, 1977, when a pre-hearing conference was held before an Administrative Law Judge.

 At about the same time that the EPA was formulating permits for the plaintiffs' facilities, New York State, pursuant to 33 U.S.C. § 1342(b), was formulating a plan by which the New York State Department of Environmental Conservation ("DEC") would administer a discharge permit system in New York, superseding the EPA's program. The state's program was approved and became effective in October, 1975, after the EPA had promulgated the above-discussed "Notice of Issuance of Final Determination" and "Discharge Permit," but before any part of the adjudicatory hearings on those permits had occurred.

 In conjunction with the EPA's approval of the state program, the DEC and Region II of the EPA entered into a Memorandum of Agreement regarding a number of areas of responsibility of the two agencies under the operation of the state-run program. Both the DEC and the EPA argue that by Article I of the Agreement, the two agencies agreed that the EPA would retain jurisdiction over those cases in which adjudicatory hearings were pending at the time the state program went into force. Although the language of the Agreement is ambiguous on this point, it is clear from their practice that the two agencies had this understanding. Since October 1975, the EPA has forwarded to the DEC all permit applications for which a "Notice of Issuance of Final Determination" had not yet been issued at that time, but retained some 200 cases -- including the plaintiffs' -- in which adjudicatory hearings had been requested and granted. As of November 30, 1977, the EPA had fully resolved 86 of those cases.

 As noted above, the first formal action in plaintiffs' adjudicatory hearings was a pre-hearing conference in February, 1977. At that conference, plaintiffs first raised the issue that is the basis of their complaint in this suit. *fn7" The plaintiffs argued that the EPA had no jurisdiction over the permits for the power plants, and thus no jurisdiction to hold adjudicatory hearings, because 33 U.S.C. § 1342(c)(1) *fn8" mandated that the EPA suspend the issuance of permits in New York following the approval of New York's permit program. As required by 40 C.F.R. § 125.36(m), this issue, among others, was immediately referred to the EPA General Counsel for resolution. On July 29, 1977, the General Counsel ruled that the EPA did have jurisdiction over these permits and jurisdiction to conduct the adjudicatory hearing. According to 40 C.F.R. § 125.36(m)(4), this decision by the General Counsel is binding upon the hearing judge and upon the Regional Administrator when he reviews the record of the hearing. Administrative review of the General Counsel's decision can only be obtained by appealing the Regional Administrator's eventual decision on the permits to the Administrator of the EPA. See 40 C.F.R. § 125.36(n)(1).

 Following the General Counsel's decision, the proceedings were returned to the hearing judge, who established a schedule for the receipt of testimony. According to that schedule, the hearing has already commenced and may very well continue into the summer of this year, if not later. On October 5, 1977, plaintiffs filed the complaint in this suit.

 The Jurisdiction of This Court

 Plaintiffs assert that jurisdiction over this action lies with this court under 28 U.S.C. §§ 1331 (general federal question), 1337 (cases arising under the commerce clause) and 1361 (mandamus). However, 33 U.S.C. § 1369(b)(1) provides that jurisdiction over cases which seek review of six specific types of action by the EPA lies with the court of appeals. *fn9" That "jurisdiction is, absent extraordinary conditions, exclusive." Sun Enterprises, Ltd. v. Train, 532 F.2d 280, 287 (2d Cir. 1976). *fn10" Plaintiffs do not contest that circuit court jurisdiction under § 1369 is, by and large, exclusive, nor do they urge that there are ...


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