A federal appeals court, in a ruling that American industries contend could save them as much as $2 billion, today struck down Environmental Protection Agency regulations governing the most common forms of water pollution.
The ruling, on a 2-to-1 decision, was a major victory for 34 of the nation's largest chemical and paper manufacturers, food processors and trade associations -- firms such as du Pont, Union Carbide, Boise Cascade and Procter & Gamble. They had sought to reverse the 1979 EPA regulations on so-called "conventional pollutants" on the grounds the rules were too costly and unnecessary.
At issue in the case was whether the EPA can direct industries to undertake extremely costly water pollution abatement measures instead of less costly measures that may not be as effective in protecting the environment. Industry lawyers contended Congress had wanted a great relaxation in regulations than the agency was willing to allow.
The 4th Circuit ycourt of Appeals agreed, saying that the EPA has issued the water pollution regulations without adequately assessing the cost of implementing the regulations. That failure, the court held, was a violation of 1977 Clean Water Act.
Unless reversed on appeal, the ruling means that the EPA will be forced to redraft the regulations, which were widely applauded by conservationists when they were issued two years ago by the Carter administration.
"It's a strong signal to EPA that the courts will make it follow what Congress has told it to do," said Washington attorney Henry L. Diamond. He and other industry lawyers had argued in court that the agency and its former administrator, Douglas M. Costle, had ignored Congress's intent as expressed in the Clean Water Act.
The agency, which under Reagan appointee Anne Gorsuch already had begun to review the regulations, had no comment today on the decision. James Banks, water pollution specialist for the Natural Resource Defense Council, which supported the regulations, called the court's ruling "a definite setback and one probably worth appealing. . . We believe the court is, in fact, clearly reversing what at least the Senate wanted. . ."
At issue in the complex legal dispute was how to control the thousands of pounds of industria wastes and byproducts dumped each year that are not toxic, but still dirty enough to foul the nation's waterways and kill plant and fishlife.
Prodded by the Water Pollution Control Act of 1972, Congress believed industries generally had made considerable progress in cleaning discharges of these effluents, which make up the vast bulk of pollutants.
As a result, Congress amended the law in 1977 to ease the federal requirement that many industries use the "best available technology" to complete their cleanup. In its place, Congress ordered EPA to formulate regulations ordering the "best conventional technology," a subtle and, some experts contend, ambiguous distinction.
EPA contended that the new law required at only to make certain private industry would not be forced to spend more per pound of pollution for cleanup than publicly owned sewage treatment plants were spending. The companies argued EPA also should have taken into account the amounts companies already had spent on pollution controls.
"We didn't feel it was cost-effective to be forced to spend vast sums more to clean up say the last 5 percent than we'd spent on the first 95 percent," said one industry spokesman yesterday.
The dispute was not merely technical. According to an estimate by the American Paper Institute, one of the 34 parties in the suit, the industry's cleanup concept would have cost $200 million to $300 million, while EPA's would have been $2 billion or more.
Today's ruling by Appeals Court Judges Sam J. Ervin III and H. Emory Widener Jr. upholds the industry's contention that Congress intended both the public and private standards to be considered by EPA in formulating its rules. Ervin, son of the former North Carolina senator, wrote that EPA's interpretation of the law was "contrary to the plain meaning of the words contained therein."
In a strong dissenting opinion, Judge J. Dickson Phillips Jr. called the petitioners' interpretation of the law "a construct out of whole cloth . . . that has the happy effect of resolving the issue in their favor." He argued Congress intended only that cost-effectiveness be a "general standard" for EPA to follow and that the agency's method of rule-making was "wholly reasonable."
Diamond, the attorney for the industries, said he believed the ruling's impact could force EPA to reconsider other regulations that he contended went beyond the bounds authorized by Congress. As an example, he cited agency rules governing ocean dumping of sludge and other pollutants, currently the subject of another industry challenge.
"EPA in a number of instances has simply not allowed the relaxation of standards even when Congress has wanted them to," he said.
The Defense Council's Banks said the 4th Circuit, noted for overturning EPA regulations, has been overturned itself on appeal. He cited a 1980 Supreme Court ruling rejecting a ruling from the Richmond count which had allowed Appalachian Power Co. a "variance" from pollution standards requested for economic reasons.