B-220184.4, Aug 25, 1989

MISCELLANEOUS TOPICS - Environment/Enegy/Natural Resources - Environmental protection - Air quality - Standards - Public notification DIGEST: While the Clean Air Act itself does not require EPA to develop the MOBILE 4 emission factor computer model through a rulemaking, under the Administrative Procedure Act, 5 U.S.C. Sec. 553, if EPA treats MOBILE 4 as a nonbinding policy, responding with an open mind to challenges to its application in individual cases, notice and comment are not required.

Honorable John D. Dingell:

This responds to your letter of March 17, 1989, requesting our views on whether the Environmental Protection Agency (EPA) was required to provide for public participation through rulemaking in developing MOBILE 4. MOBILE 4, as its name implies, is the fourth major revision of a computer model for use in predicting emissions of hydrocarbons, carbon monoxide, and oxides of nitrogen from on-highway motor vehicles.

On February 28, 1989, EPA released the MOBILE 4 emission factor computer model to the public. The model is expected to be used by EPA and states as the basis for various regulatory decisions. You expressed concern about EPA's development of MOBILE 4 without following full rulemaking procedures. As discussed below, while the Clean Air Act itself does not require EPA to develop MOBILE 4 through a rulemaking proceeding, if EPA treats MOBILE 4 as a regulation, MOBILE 4 is subject to notice and comment requirements of rulemaking under the Administrative Procedure Act. However, if EPA treats MOBILE 4 as a general statement of policy, notice and comment are not required.

BACKGROUND

During the development of MOBILE 4, EPA held a series of public workshops at the Ann Arbor Motor Vehicle Emissions Laboratory. These workshops were held in April and November 1987 and in November 1988. Each of these workshops was publicized through notices in the Federal Register and, according to EPA, through letters sent directly to the American Petroleum Institute (API), the motor vehicle manufacturers, and various others who had either attended previous workshops or had asked to be placed on EPA's mailing list.

The November 17, 1988, notice of public workshop stated that the workshop "is intended to be a forum for the exchange of information and has no direct connection to any rulemaking actions. Consequently, this workshop will be very informal. There will not be opportunities for prepared statements by attendees although comment will be welcomed on specific topics as they are brought up for discussion. Although no public docket will be kept, written submissions are welcome at any time. ..." 53 Fed. Reg. 46500, 46501 (1988).

In addition, EPA later stated:

"After the 1987 workshops, there was certainly adequate time for attendees (and others) to submit comments on the development of MOBILE 4, and many did so. EPA has reviewed these comments as development of the model continued. ... This process is essentially an internal one, and the Agency has known volition made attempts to involve interested parties. EPA will continue to encourage public review and comment during the development of future emission factors updates."

(Letter from Administrator Reilly to Chairman Dingell dated April 20, 1989.) API submitted several sets of comments on MOBILE 4 to EPA. According to API, its comments were not considered by EPA. In a December 22, 1988, letter to EPA, API stated:

"In developing MOBILE 4, EPA used a very closed process that did not elicit or use widespread input from all available public sources to produce the most reliable model possible. ... The workshop approach involved a one day massive review of the mobile source emissions inventory model with no time allowed for in-depth discussion and no publication of the draft MOBILE 4 prior to the workshop. As a result, there was neither sufficient time nor any formal mechanism for serious consideration of input by outside organizations. In short, the workshop process permitted only a cursory external review of the EPA development and updating of the mobile source emissions inventory model."

(Letter from Director, Health & Environmental Affairs Department, API to Director, Emission Control Technology Division, Office of Air, Noise and Radiation, EPA dated December 22, 1988.)

LEGAL ANALYSIS

I. Clean Air Act

The only requirement in the Clean Air Act for developing air quality models applies to the prevention of significant deterioration of air quality in attainment areas under Part C of the act. Air quality models to measure the effect of proposed new stationary sources of air pollution in attainment areas must be developed through regulations. Clean Air Act, Sec. 165 and 320, 42 U.S.C. Sec. 7475 and 7620.

In contrast, MOBILE 4 estimates emissions from motor vehicles in nonattainment areas. The Clean Air Act does not contain a similar requirement that EPA develop mobile source models through regulations.

II. Administrative Procedure Act

The Administrative Procedure Act (APA) provides that general notice of proposed rulemaking must be published in the Federal Register unless persons subject to the proposed rule otherwise receive actual notice. U.S.C. Sec. 553(b). After notice is given, the agency must give interested persons an opportunity to participate in the rulemaking through submission of written data and may provide an opportunity for oral presentation. After consideration of the relevant matter presented, the agency must incorporate in the rules adopted a concise general statement of their basis and purpose. Id. 553(c). The notice and comment requirements do not apply to general statements of agency policy. Id. 553(b)(3)(A). /1/ Whether EPA's issuance of MOBILE 4 triggered the APA notice and comment requirements depends upon whether MOBILE 4 is a general statement of policy or a rule of binding effect. McLouth Steel Products Corp. v. Thomas, 838 F.2d 1317 (D.C. Cir. 1988). That determination hinges upon the weight which EPA will give to MOBILE 4 in subsequent proceedings. Alabama Power Co. v. Costle, 636 F.2d 323, 384 (D.C. Cir. 1979). If EPA uses MOBILE 4 as a binding rule, EPA must satisfy the requirements for notice and comment.

If MOBILE 4 is a general statement of policy, notice and comment are not required. McLouth Steel Products Corp. v. Thomas, supra.

According to EPA:

"Primary users of MOBILE 4 will be the States and EPA itself. States will use MOBILE 4 in revising their State Implementation Plans (SIPs), in developing environmental impact assessments, and in their air quality assessments. Among the first uses by the States will be the development of updated baseline emission inventories, as required by the post-1987 preliminary SIP calls.

"EPA will use MOBILE 4 in its assessments of the impacts of mobile source emissions, on the total emission inventories and air quality, and in assessing the impact of potential mobile source regulations." (Letter from Acting Administrator, EPA to Chairman Dingell dated February 3, 1989.)

EPA's statement implies that MOBILE 4 will be relied on as an important factor in subsequent regulatory proceedings. For example, as a result of using MOBILE 4 in developing baseline emission inventories, factories may by regulation (the SIP process) be required to limit their emissions of certain pollutants. In this connection, the preamble to EPA's final rule for the prevention of significant deterioration of air quality due to the emission of nitrogen oxides, states that preliminary analyses of emissions estimates should be made using the latest version of the MOBILE model. Fed. Reg. 40656, 40663 (1988).

While we cannot predict the weight EPA will accord to MOBILE 4 in these and other subsequent proceedings, case law concerning analogous EPA models for air quality and hazardous waste suggests that, if EPA accords significant weight to MOBILE 4, courts are likely to regard it as a regulation subject to notice and comment, rather than simply a nonbinding statement of policy, which is exempt from the APA's notice and comment requirements. In a case concerning EPA's regulations for air quality models, the United States Court of Appeals for the District of Columbia Circuit rejected the agency's contention that its air quality modeling regulations were simply "general statements of policy," exempt under the APA from notice and comment procedures. The court ruled that the air quality models designated in EPA's regulatory guidelines "are granted sufficient weight by EPA in subsequent proceedings to remove the regulations from the ambit of policy statements. ..." Alabama Power Co. v. Costle, supra, 636 F.2d at 384.

Nonetheless, EPA can choose to treat MOBILE 4 as a nonbinding policy. EPA treats MOBILE 4 as a policy, responding with an open mind to challenges to its application in individual cases, then promulgation as a regulation under the APA is not required. In McLouth Steel Products Corp. v. Thomas, supra, EPA was challenged for failure to conduct a rulemaking in developing a model used to predict leachate levels of hazardous waste under the Resource Conservation and Recovery Act (RCRA). EPA argued that the model was a nonbinding general statement of policy, one that is not solely determinative of EPA's regulatory actions, but one of many tools used by EPA. The industry plaintiff argued that EPA applies the model with the inflexibility of a rule. The court held that the model was a binding rule, rather than a statement of policy. The basis for the court's decision was that, while EPA stated in the Federal Register that it retained the discretion to deviate from the use of the model, other language in the Federal Register, and EPA's actual practice, strongly suggested that EPA treated the model as a binding rule.

The court also stated that EPA may choose to treat the model in the future as a nonbinding policy. If it does so, however, it must truly exercise discretion in individual cases, remaining open to all challenges to the use of the model as well as its application in each individual case. Id. at 1324.

The remaining question is whether, in the event EPA treats MOBILE 4 as a binding rule, EPA satisfied the APA's notice and comment requirements. Cleveland Elec. Illuminating Co. v. EPA, 572 F.2d 1150 (6th Cir.), cert. denied, 439 U.S. 910 (1978), a case involving a challenge to the air quality model that had been used by EPA to develop a state implementation plan for Ohio, the United States Court of Appeals for the Sixth Circuit held that the model was a binding rule and therefore, the APA requirements concerning notice and opportunity for written comments applied. The court also held, however, that, because EPA's adoption of the model was based upon "informal rulemaking," the agency had satisfied the requirements of both the Clean Air Act and the Administrative Procedure Act. The "informal rulemaking" in that case consisted of the following: The air quality model was developed as a result of EPA's public hearings on a proposed state implementation plan for Ohio after 5 days of hearings. Interested parties had been given an opportunity at the hearings to testify or submit written comments. The court found that EPA had responded to industry's comments favorably by devising and adopting a model which used the factors requested.

In the case of MOBILE 4, notice was provided through Federal Register notices and letters inviting interested parties to the workshops. EPA stated that it would accept comments (although not prepared statements) during discussion of specific topics at the workshops and that it "welcomed" written submissions "at any time." 53 Fed. Reg. 46500, 46501 (1988). Thus, the workshops, by providing opportunity for comments, might be considered informal rulemaking and thereby at least partially satisfy the APA's requirements for notice and comment. Cleveland Elec. Illuminating Co. v. EPA, supra.

As the court in Alabama Power stressed, however, the notice and comment requirements also impose on EPA a legal duty to respond. The court stated that "the opportunity to comment is meaningless unless the agency responds to significant points raised by the public." Alabama Power, supra, at 384 n.86. Thus, EPA had the duty to respond to comments in issuing MOBILE 4. Absent a "reasoned agency response to substantial questions of fact, policy or science raised in comments," id. at 387, on MOBILE 4, the workshops would not satisfy the requirements of the APA.

As mentioned earlier, the American Petroleum Institute has written to EPA and to you contending that EPA has not responded to its comments on MOBILE 4. In its April 20, 1989, letter to you, however, EPA stated that it "has reviewed API's concerns and has discussed these issues with API." Thus, it is unclear whether EPA adequately responded to API's comments on MOBILE 4 or provided a reasoned response to the other comments it received.

CONCLUSION

While the clean air Act itself does not require EPA to develop MOBILE 4 through a rulemaking, under the Administrative Procedure Act, if EPA treats MOBILE 4 as a regulation, MOBILE 4 is subject to notice and comment requirements. If EPA treats MOBILE 4 as a flexible policy, remaining open to challenges on individual regulatory decisions that are based on MOBILE 4, notice and comment are not required. EPA's workshops, by providing opportunity for comments, might be considered informal rulemaking and thereby at least partially satisfy the APA's requirements for notice and comment. However, the notice and comment requirements also impose a legal duty to respond to comments. It is unclear whether EPA provided a reasoned response to the comments it received. We hope this will be helpful to you. Under our usual procedure, this opinion will be available to the public 30 days from its date, unless you release it sooner. /1/ Robert R. Goodfellow, Washington, D.C., Incorp. by ref., 41 C.F.R. Sec. 101-7.003 (1981). Certain enumerated EPA rulemakings are governed, not by the APA, but by the more detailed rulemaking procedures in the Clean Air Act itself. Clean Air Act, Sec. 307(d), 42 U.S.C. Sec. 7607(d). The promulgation of regulations relating to mobile source models is not among the actions listed in section 307(d)(1). See Sierra Club v. Thomas, 828 F.2d 783 (D.C. Cir. 1987); Ill. State Chamber of Commerce v. EPA, 775 F.2d 1141, 1147 (7th Cir. 1985); Western Oil Gas Assoc. v. EPA, 633 F.2d 803, 812 (9th Cir. 1980); and PPG Industries, Inc. v. Costle, 630 F.2d 462, 465 (6th Cir. 1980).

We hope this will be helpful to you. Under our usual procedure, this opinion will be available to the public 30 days from its date, unless you release it sooner.

/1/ Robert R. Goodfellow, Washington, D.C., Incorp. by ref., 41 C.F.R. Sec. 101-7.003 (1981). Certain enumerated EPA rulemakings are governed, not by the APA, but by the more detailed rulemaking procedures in the Clean Air Act itself. Clean Air Act, Sec. 307(d), 42 U.S.C. Sec. 7607(d). The promulgation of regulations relating to mobile source models is not among the actions listed in section 307(d)(1). See Sierra Club v. Thomas, 828 F.2d 783 (D.C. Cir. 1987); Ill. State Chamber of Commerce v. EPA, 775 F.2d 1141, 1147 (7th Cir. 1985); Western Oil Gas Assoc. v. EPA, 633 F.2d 803, 812 (9th Cir. 1980); and PPG Industries, Inc. v. Costle, 630 F.2d 462, 465 (6th Cir. 1980).