The U.S. Court of Appeals here ruled yesterday that the Reagan administration acted illegally when it loosened air pollution rules to help industries expand in areas that don't yet meet federal clean air standards.
The ruling restricts the use of the so-called "bubble concept," which lets industry average its emissions over several plants or pollution sites, rather than making each source of pollution meet stringent air pollution standards.
The concept was initiated during the Carter administration to permit expansion in areas that meet overall clean air standards, but the Reagan administration last October expanded it to include areas that do not meet those standards.
It was the second key court battle the Environmental Protection Agency has lost in as many months. In July, the U.S. Court of Appeals in Philadelphia ruled that the EPA had illegally suspended regulations on toxic waste discharges into municipal waste treatment plants and ordered the regulations retroactively reinstated.
David D. Doniger, attorney for the Natural Resources Defense Council, which brought the suit, hailed yesterday's ruling as "a major victory," saying the expansion of the bubble concept was "the first significant" regulatory change in the Clean Air Act made by the Reagan administration.
Kathleen Bennett, EPA assistant administrator, said, "We are disappointed with the appeals court's decision, as we felt that EPA had a sound legal argument." She said the EPA has not decided whether to appeal the ruling.
Bennett said some state air quality plans, known as state implementation plans, "will have to be changed as a result of today's decision." She added that the EPA "would welcome amendment of the [Clean Air] Act to make it clear that our regulations are a correct interpretation of their congressional intent."
The suspended regulation was issued in October, when EPA decided, at the urging of industry, to change its policy for issuing permits for industrial expansion in nonattainment or "dirty air" areas.
Previously, EPA had treated each individual piece of equipment at a plant in a nonattainment area as a pollution source. Thus whenever a company wanted to expand the plant significantly, it had to get a new permit certifying that it would meet strict air pollution criteria.
Under Carter, EPA applied a bubble policy in areas that met federal air quality standards, allowing the entire plant to be considered as a single source of pollution.
Industry urged EPA to apply the bubble to dirty air areas as well, and the Reagan administration EPA's new rule allowed a company that wanted to modify a plant significantly to avoid the permit process by cutting emissions from another source at the plant.
NRDC's Doniger estimated that the rule would eliminate about 90 percent of the permits required in nonattainment areas. NRDC, Citizens for a Better Environment and Northwestern Ohio Lung Association filed a petition asking the appeals court to review the regulation.
Several industry groups, including the Chemical Manufacturers Association, the Rubber Manufacturers Association and the American Petroleum Institute, intervened in support of the revised regulation.
Judge Ruth Bader Ginsburg, writing for the three-member panel, said that Congress intended the Clean Air Act to "promote the cleanup of nonattainment areas," not simply to maintain the air quality. She said, "We are therefore impelled" to hold that EPA's change "is impermissible.