TOZZI v. EPA

Before the Court is the defendants' 12(b)(1) motion to dismiss the plaintiffs' complaint for lack of subject matter jurisdiction, and the plaintiffs' motion for a preliminary injunction. The plaintiffs' complaint alleges that the defendants failed to comply with the procedural requirements of the Paperwork Reduction Act (hereinafter "PRA") with respect to the Information Collection Request (hereinafter "ICR"). The plaintiffs also allege that the Office of Management and Budget's (hereinafter "OMB") approval of the ICR was inconsistent with the PRA and resulted in a rule violative of the Emergency Planning Community Right to Know Act (hereinafter "EPCRA"). The defendants maintain that this Court lacks subject matter jurisdiction to hear and decide these claims. The plaintiffs' motion for a preliminary injunction asks this Court to enjoin the EPA from requiring that one of the plaintiffs comply with the filing requirements partially at issue in this case. The Court grants the defendants' 12(b)(1) motion only as to count one of the plaintiffs' second amendment complaint. The Court denies the defendants' motion as to the plaintiffs' second count. The Court also denies the plaintiffs' motion for preliminary injunction.

The PRA was enacted to reduce and streamline the administrative burden created by superfluous paperwork resulting from government information collection requests. 44 U.S.C. § 3501. Another purpose of the PRA is to enhance the public benefit of the information collection process. Id. The cornerstone of the PRA is the ICR, which allows the OMB to control the production and flow of paperwork. Under the PRA, the OMB is granted the authority to determine the necessity of an ICR. The OMB must determine whether the ICR request is necessary to enable the agency to function and of public utility. Id. at § 3508. Pursuant to the PRA, a federal agency may not conduct an information collection request unless the OMB has approved the ICR and issued a control number. Id. at § 3507(a)(2), (3).

Where a federal agency is proceeding through rulemaking, the ICR may be contained in the proposed rule, which satisfies the agency's public comment duty under the PRA. Id. at § 3506(c)(2)(B). Before the notice of proposed rulemaking is published in the Federal Register, the agency must send the proposed rule, the ICR, and any OMB information requests to the OMB. Id. at § 3507(d)(1)(A). Thereafter, the OMB has 60 days to file comments to be included in the public record for rulemaking. Id. at § 3507(d)(1)(A). During this time, the OMB may disapprove the ICR if it deems the agency's response to be inadequate or unreasonable, determines that the final rule substantially modified the proposed ICR, or finds that the agency failed to provide information requested by the OMB. Id. at § 3507(d)(4). The decision of the OMB to approve or not act upon an ICR contained in an agency rule is not subject to judicial review. Id. at § 3507(d)(6).

The EPCRA was enacted to protect public health and the environment by arming communities with the right to know what chemicals manufacturing facilities are emitting into the air, land, and water, and by giving businesses a public relations incentive not to pollute. 42 U.S.C. § 11023. In this pursuit, the EPCRA gives the EPA substantial authority to add new chemicals to the Toxic Release Inventory (hereinafter "TRI") list. Id. The Act, itself, specifically requires facilities subject to the statute to complete a toxic chemical release form for each designated chemical released in excess of the threshold amount. Id.

The named plaintiff, Jim J. Tozzi, is the founder and president of a regulatory consulting firm that specializes in federal information policy issues. Mr. Tozzi also participated in the drafting of the 1980 PRA predecessor (as opposed to the PRA of 1995 invoked in this case) and has filed public comments with the OMB in the past. Additional plaintiffs are the American Wood Preservers Institute, many of whose member companies will come within the scope of the Final TRI Rule, and Wood Protection Products, Inc., who was previously not required to report dioxins and will incur new and significant administrative costs as a result of the dioxin category added to the Final Rule.

§ 313 of the EPCRA requires designated facilities using a toxic chemical in specified amounts to report the annual quantity used above a certain threshold. 42 U.S.C. § 11023. On October 29, 1999, the EPA issued a new Final Rule under § 313 of the EPCRA, "Persistent Bioaccumulative Toxic (PBT) Chemicals; Lowering of Reporting Thresholds for Certain PBT Chemicals; Addition of Certain PBT Chemicals; Community Right to Know Toxic Chemical Reporting." 64 Fed. Reg. 58666. The new Final Rule added dioxin and seventeen related dioxin-like compounds to the TRI list. During the notice and comment period, prior to the promulgation of the new TRI rule, the EPA sought to collect information in relation to it. Information collected in regards to the agency action has to comply with the requirements of the PRA.

The EPA initiated compliance with the PRA when the TRI Final Rule was proposed for public comment. On or about January 5, 1999, the EPA submitted an ICR to the OMB pursuant to the PRA in reference to the proposed TRI rule to be promulgated under the EPCRA. On October 29, 1999, when the Final Rule was published, the EPA submitted a final ICR to the OMB. The OMB approved the ICR on January 31, 2000 and assigned it a control number on that date.

The Final Rule, published on October 29, 1999, established what the plaintiffs claim is a "radically low" reporting threshold of 0.1 gram per year for dioxins and furans. The threshold number identifies those who must report production of 0.1 or more grams per year of the emitted listed chemicals. The Final Rule, which set the reporting requirement at 0.1 grams for total combined release of all dioxins and dioxin-like compounds in a single calendar year, went into effect in January of 2001. The Final Rule did not specify what releases had to be reported, or a methodology explaining how the volume of such reportable releases would be calculated. Information regarding these questions was also omitted from the ICR submitted to the OMB by the EPA in the Final Rule. The EPA stated in the Final Rule that it would request public comment on these issues and provide guidance on the reporting requirements at a later date. The EPA issued notice for comment in the Federal Register on June 15, 2000, and has since promulgated reporting guidelines.

On February 1, 2000, Mr. Tozzi filed a complaint in this matter, which he has twice since amended. The original complaint sought an injunction against OMB's approval of the EPA's ICR under the PRA. That complaint for injunctive relief was withdrawn on February 4, 2000, after the OMB approved the ICR. The plaintiffs filed a motion for leave to file an amended complaint, which this Court granted, seeking only declaratory relief. The first amended complaint, which was filed on March 21, 2000, retracted a motion not at issue here, added the two additional plaintiffs, the American Wood Preservers Institute and Wood Protection Products Inc, and added a third cause of action not at issue in this motion. The first amended complaint was based on three causes of action: (1) the defendants' failure to comply with the procedural requirements of the PRA, (2) the defendants' usurpation of legislative powers in violation of the non-delegation doctrine, and (3) the defendants' adoption of a rule contrary to the statutory standard. On June 12, 2001, the plaintiffs moved for leave to file a second amended complaint, which this Court granted. The second amended complaint added a claim for injunctive relief, withdrew the non-delegation doctrine claim in light of the Supreme Court's decision in Whitman v. American Trucking Ass'ns, 121 S.Ct. 903, 912-914 (US 2001), and clarified the cause of action based on § 313 of the EPCRA (failure to adopt a "toxic equivalent (hereinafter "TEQ")" methodology as arbitrary and capricious). The second amended complaint seeks declaratory and injunctive relief based on two causes of action: (1) the defendant's violation the PRA, and (2) the EPA's arbitrary and capricious failure to satisfy the statutory requirements for establishing a chemical reporting threshold under § 313 of the EPCRA.

On February 5, 2001, the defendants moved to dismiss the plaintiffs' claims for lack of subject matter jurisdiction. The parties' cross summary judgement motions were deferred by order of this Court until the resolution of the defendants' motion to dismiss.

On June 15, 2001, the plaintiffs filed a motion for a preliminary injunction. The plaintiffs seek to enjoin the EPA from requiring one of the plaintiffs to submit "Form R" as required by the dioxin reporting requirement pursuant to the new TRI dioxin Rule. The plaintiffs acknowledge that Wood Protection Products Inc. may have released dioxin and dioxin-like compounds during the year 2000 in excess of the 0.1 gram/year threshold, falling, as such, within the scope of the new TRI rule. Pursuant to the TRI rule, Wood Protection Products Inc., must submit a Form R report detailing the releases by July 1, 2001, unless this Court grants the requested injunctive relief prior to that date.

Whether this Court has subject matter jurisdiction to hear these claims is at the core of this case. Assuming for the moment that this Court does have subject matter jurisdiction, this Court would possess federal question jurisdiction pursuant to 28 U.S.C. § 1331, and have venue pursuant to 28 U.S.C. § 1391.

Under Article III of the United States Constitution, federal courts have limited jurisdiction and may only exercise jurisdiction granted to them by Congress. Bender v. Williamsport Area School District, 475 U.S. 534, 541 (1986). Pursuant to a 12(b)(1) motion for dismissal for lack of subject matter jurisdiction, a case will be dismissed if the court lacks jurisdiction to hear and decide the dispute. Fed Rule Civ. Pro. 12(b)(1). A subject matter jurisdiction challenge under 12(b)(1) may be technical or substantive. United States v. Ritchie, 12 F.3d 592, 598 (6th Cir. 1994). Technically, the pleader must formally aver the basis of the federal court's jurisdiction. Gibbs v. Buck, 307 U.S. 66, 69 (1939). Failure to formally aver exposes the pleading to dismissal. Id. At 59. Substantively, the pleader may have formally averred; but if the actual facts and allegations belie the averment, the case's dismissal may be compelled. Id. At 59. The party invoking the court's jurisdiction bears the burden of proving the accuracy of the subject matter averment. Neitzke v. Williams, 490 U.S. 319, 327 (1989); Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 377 (1994). In its evaluation as to whether subject matter jurisdiction exists, the court must construe the complaint liberally, accept all uncontroverted, well-pleaded facts as true, and attribute all reasonable inferences to the plaintiffs. Scheuer v. Rhodes, 416 U.S. 232 (1974). The court must view the allegation as a whole, and a conclusory averment of subject matter jurisdiction negated by other allegations in the pleading should result in dismissal. Gibbs at 66. To avoid exposure to dismissal, subject matter jurisdiction must have existed on the date that the lawsuit was filed. Rosa v. Resolution Trust Corp., 938 F.2d 383. Generally, the court will permit a party to amend unless it is clear that subject matter jurisdiction cannot be averred. Leaf v. Superior Court of Wisconsin, 979 F.2d 589, 595 (7th Cir. 1992). The parties may produce affidavits and other materials to support their position on subject matter jurisdiction, and the court is free to weigh such evidence in assessing its power to decide the case. Ezekiel v. Michel, 66 F.3d 894, 897 (7th Cir. 1995) A dismissal for lack of subject matter jurisdiction is usually not a decision on merits, and will not preclude the plaintiff from instituting the claim in a court that may properly hear the dispute. Leaf at 595.

If this Court were to decide that it had subject matter jurisdiction, it would have to review the EPA's and OMB's action under the arbitrary and capricious standard of the APA, and pursuant to common law Chevron deference. Chevron, U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837 (1984) Pursuant to the APA, in relevant part, a court may set aside an agency act, finding, or conclusion of law if it is found to be arbitrary and capricious, or otherwise not in accordance with law. 5 U.S.C. § 706. The complaint and motion to dismiss before the Court involve the agency action by the EPA and determination by the OMB. Agency determinations of law and fact are accorded deference under. Id. Under Chevron, if Congressional intent is clear then both the agency and the reviewing court are bound by it. However, if the statute at issue is ambiguous on the point of contention, then the reviewing court must give deference to a reasonable agency interpretation of it. Reasonable interpretation need not ...