860 F.

2d 581
28 ERC 1489, 57 USLW 2293, 19 Envtl.
L. Rep. 20,221

WEST PENN POWER COMPANY, Petitioner,

v.
UNITED STATES ENVIRONMENTAL PROTECTION
AGENCY and Lee M.
Thomas, Administrator, Respondents.
No. 87-3220.

United States Court of Appeals,

Third Circuit.
Argued Nov. 6, 1987.
Decided Nov. 1, 1988.
Rehearing and Rehearing In Banc Denied Jan. 18, 1989.

Lawrence A. DeMase (argued), Stanley R. Geary, Edward Gerjuoy, Rose,

Schmidt, Chapman, Duff & Hasley, Pittsburgh, Pa., for petitioner.
Gerald H. Yamada, Deputy Gen. Counsel, Alan W. Eckert, Associate
Gen. Counsel, Charles S. Carter (argued), Asst. Gen. Counsel, Joseph
Feller, Asst. Gen. Counsel, U.S. E.P.A., Washington, D.C., Roger J.
Marzulla, Acting Asst. Atty. Gen., Lisa F. Ryan, Environmental Defense
Section, Land and Natural Resources Div., U.S. Dept. of Justice,
Washington, D.C., Robert Smolski, Office of Regional Counsel, U.S.
E.P.A., Region III, Philadelphia, Pa., for respondents.

John M. Elliott, Stephen C. Braverman, Philip J. Katauskas, Baskin Flaherty

Elliott & Mannino, P.C., Philadelphia, Pa., for amicus curiae Pennsylvania Coal
Min. Ass'n.

Richard P. Mather, Asst. Counsel, Com. of Pa., Dept. of Environmental

Resources, Harrisburg, Pa., for amicus curiae Com. of Pa.

Before SLOVITER and BECKER, Circuit Judges, and COWEN, District

Judge.*
OPINION OF THE COURT
4

BECKER, Circuit Judge.

This is a petition for review of the Environmental Protection Agency's denial of

a request to redesignate an area in Western Pennsylvania to "attainment" status
under the Clean Air Act. 42 U.S.C. Secs. 7401-7642 (1982). Resolution of the
petition itself would require us to determine whether petitioner West Penn
Power Company's construction of a tall (307-meter) smokestack in reliance on
EPA's formal approval of a state implementation plan incorporating the
construction of such stack can insulate the company from future, more stringent
regulations, which render the state's plan inadequate because of the stack's
excessive height. This opinion, however, addresses the question whether we
have jurisdiction over the petition in view of the fact that there is a petition for
reconsideration still pending before the agency.

Long after this case was argued, in a footnote to a supplemental letter-brief,

West Penn brought to our attention that prior to bringing its petition for review
in this Court it had petitioned EPA for reconsideration of its determination that
Armstrong County was not in attainment status and that the reconsideration
petition was still pending before EPA. Believing that this might raise serious
questions about our jurisdiction, we solicited memoranda from the parties as to
the effect of the outstanding petition for reconsideration on our jurisdiction. In
their responsive submissions, the parties both argued that it had no effect.
However, we have an independent duty to examine our jurisdiction. See Bender
v. Williamsport Area School District, 475 U.S. 534, 541, 106 S.Ct. 1326, 1331,
89 L.Ed.2d 501 (1986).

Whether an agency order is final and thus reviewable in a court of appeals

when a party has petitioned for agency reconsideration is a difficult question
that has divided the courts of appeals. Compare Northside Sanitary Landfill,
Inc. v. Thomas, 804 F.2d 371, 378-79 (7th Cir.1986) (allowing simultaneous
agency and court jurisdiction) and American Trucking Associations, Inc. v.
ICC, 697 F.2d 1146, 1148 n. * (D.C.Cir.1983) (same) with Winter v. ICC, 851
F.2d 1056, 1062 (8th Cir.1988) (disallowing simultaneous jurisdiction).1 The
language of 5 U.S.C. Sec. 704 (1982), the relevant portion of the
Administrative Procedure Act ("APA"), seems on its face to permit such
simultaneous jurisdiction, see infra. The American Trucking and Northside
opinions of the D.C. Circuit and 7th Circuit, supra, rely on that plain language.
However, the Supreme Court's recent decision in ICC v. Brotherhood of

Locomotive Engineers, 482 U.S. 270, 107 S.Ct. 2360, 2368-69, 96 L.Ed.2d 222
(1987), interprets section 704 differently. For the reasons that follow, we come
to the conclusion that the pendency of the reconsideration petition deprives the
agency decision of finality and thus puts it beyond our present ability to review.
I.
8

West Penn is an electric utility in Western Pennsylvania. West Penn's coal-fired

Armstrong generating station is primarily responsible for the high levels of
sulfur dioxide in the local (Armstrong County) air quality region. Attainment
status for the region depends on the extent of credit allowable for improvements
in local air quality that stem from the dispersive effect of the 307-meter
smokestack.

This dispute results from a long-standing controversy about the extent to which
a power company can obtain Clean Air Act credit for reducing pollutants in the
immediate vicinity of a power plant by sending the pollutants elsewhere by
means of an extraordinarily high smokestack. The "elsewhere" is the rub, for
smoke from high stacks, while avoiding the downward-pulling effect of wind
currents hitting low-lying obstacles, tends to catch the high winds and is
generally regarded as the cause of "acid rain." The original Clean Air Act
Amendments of 1970 left this issue open and led to varying policy decisions
and statutory interpretations among the courts and EPA. See Sierra Club v.
EPA, 719 F.2d 436, 440 (D.C.Cir.1983), cert. denied, 468 U.S. 1204, 104 S.Ct.
3571, 82 L.Ed.2d 870 (1984) (discussing case law and regulatory history).
However, in 1977, Congress attempted to resolve the issue by adding section
123 to the Clean Air Act, clearly pronouncing a preference for pollution
reduction rather than pollutant dispersion, and "bann[ing] virtually all reliance
on tall stacks or 'any other dispersion technique' in achieving compliance with
ambient air quality standards." Id. (quoting Sec. 123(a), 42 U.S.C. Sec. 7423(a)
(Supp. V 1981)).

10

Section 123 declares that no source of pollution can get credit for any
improvements in local air quality that merely stem from the dispersive effect of
a stack that exceeds that height mandated by "good engineering practice," or
"GEP." West Penn's huge Armstrong Station stack was nonetheless built in
conformity with and in reliance upon proposed regulations promulgated by
EPA pursuant to section 123 on January 12, 1979. In fact EPA approved
Pennsylvania's 1981 revision to its state implementation plan ("SIP"), which
required West Penn to replace its two 70-meter stacks with one 307-meter stack.
A SIP is a statutorily required roadmap for achieving and maintaining air
quality attainment status in each of a state's air quality regions, and the SIP

approval indicated EPA's belief that this new stack would allow Armstrong
County to attain national ambient air quality standards ("NAAQS").
11

However, EPA's proposed regulations, upon which West Penn relied in

constructing its tall stack, were significantly altered in their final form. Final
regulations, which were much less stringent than the 1979 proposed rules, were
promulgated in 1982, but were in turn invalidated by the decision inSierra Club,
supra. This decision led EPA to promulgate, in 1985, regulations so stringent
that they rendered West Penn's previously conforming 307-meter stack well
beyond GEP height.

12

Applying these more stringent stack height regulations to the Armstrong stack,
it became clear that their disallowance of credit for any pollution reduction that
stems from the extraordinary height of the stack would render Armstrong
County no longer in attainment status. Pennsylvania nevertheless requested that
EPA act on the state's long-standing request to redesignate the county to
attainment status, insisting that EPA "honor its previous commitment" under the
1979 regulations and 1981 SIP approval. EPA solicited notice and comment on
Pennsylvania's proposal and, on February 5, 1987, published a final rule
denying Pennsylvania's reclassification request, primarily because no showing
had been made that the Armstrong stack was in compliance with the 1985 stack
height regulations. 52 Fed.Reg. 3,646 (1987). West Penn thereupon filed in this
Court a timely petition for review of that decision,2 as well as a petition for
reconsideration with EPA.

II.
13

The parties agree that this Court's jurisdiction must derive from Section 307(b)
(1) of the Clean Air Act (codified at 42 U.S.C. Sec. 7607(b)(1) (1982)). That
section, in relevant part, provides that "[a] petition for review of ... any other
final action of the Administrator under this chapter ... which is locally or
regionally applicable may be filed only in the United States Court of Appeals
for the appropriate circuit." (emphasis added). There is no question that the
Administrator's order with respect to Armstrong County was "other final
action" for purposes of the statute at the time it was issued. The only question
is whether West Penn's subsequent filing of a petition for reconsideration
"rendered the orders under reconsideration nonfinal" for purposes of obtaining
appellate jurisdiction. Locomotive Engineers, 107 S.Ct. at 2369.

14

It makes sense to define "finality" under the Clean Air Act in the same way that
it is defined in administrative law generally. The APA provides a general
definition of administrative finality. It states that an "agency action otherwise

final is final for the purposes of this section whether or not there has been
presented or determined an application for ... any form of reconsideration." 5
U.S.C. Sec. 704 (emphasis added). 3 As then Judge Scalia put it, "[t]he
Administrative Procedure Act explicitly permits judicial appeal and request for
agency reconsideration to be pursued simultaneously." American Trucking, 697
F.2d at 1148 n. *.
15

However, doubt has been cast on this facially correct interpretation of section
704 by a line of cases construing agency finality for purposes of determining
when the time limit for appeal expires. Notwithstanding the language of section
704, the courts of appeals have consistently held that the filing of a petition for
reconsideration stays the running of the limitations period, because the filing of
the petition renders the prior decision "nonfinal." See, e.g., Outland v. CAB,
284 F.2d 224 (D.C.Cir.1960);4 cf. Cities of Newark, New Castle, & Seaford v.
FERC, 763 F.2d 533 (3d Cir.1985) (construing the Federal Power Act to
require that the time limit for an appeal will be tolled when a timely petition for
reconsideration of the action is before FERC).

16

In Locomotive Engineers, Justice Scalia, writing for the Supreme Court,

adopted this view. He explained that the language of section 704 "has long been
construed by this and other courts merely to relieve parties from the
requirement of petitioning for rehearing before seeking judicial review ... but
not to prevent petitions for reconsideration that are actually filed from
rendering the orders under reconsideration nonfinal." 107 S.Ct. at 2369
(emphasis in original).5 Justice Scalia did not give reasons for adopting this
approach, but cited with approval an earlier D.C. Circuit case, Outland, 284
F.2d at 228. That case explained that if the running of the limitations period
were not stayed, litigants petitioning for reconsideration would be required to
file "protective appeals" in the federal courts to preserve their right to an Article
III forum, since the period for timely review is likely to have expired by the
time the agency acts on the reconsideration petition. Such additional procedural
hoops would serve no function. Furthermore, such requirements set a trap for
the unwary, who, if they are not intimately familiar with the intricacies of the
finality doctrine, may inadvertently lose their right to judicial review.

17

The court also noted that forcing parties immediately into court could lead to
judicial waste, because "when the party elects to seek a rehearing there is
always a possibility that the order complained of will be modified in a way
which renders judicial review unnecessary." Id. at 227. The Supreme Court
thus interpreted section 704 against its literal meaning because to do otherwise
would create a crabbed, potentially unfair, and possibly inefficient result.

18

When, as in this case, a party decides to request simultaneous review from both
the agency and the court of appeals within the appropriate time frame, there is
no problem of a party inadvertently losing its right to appeal. Thus some of the
reasons that motivated the decision in Locomotive Engineers do not apply to
the case at bar. On the other hand, concern for judicial efficiency still applies.
In this case permitting simultaneous jurisdiction raises the possibility that a
court of appeals will expend extensive judicial time on a case only to have
agency reconsideration nullify its efforts, see Outland, 284 F.2d at 227.
Moreover, the legislative history of section 704 suggests that Congress enacted
the provision only to make clear that there was no requirement that a party seek
administrative rehearing as a prerequisite to judicial review. There is no
evidence that Congress intended to alter the prior practice that the pendency of
a reconsideration petition was jurisdiction defeating. See Comment, "Final"
Orders: Section 10(c) of the APA, 6 Stanford L.Rev. 531 (1954); see, e.g.,
Southland Industries v. FCC, 99 F.2d 117, 120 (D.C.Cir.1938) (exemplifying
the prior practice).

19

Given these considerations, the critical question becomes whether the rule of
Locomotive Engineers can be cabined so as not to be applied to this case. In
analytic terms, the question is whether we can hold that an agency decision is
nonfinal for purposes of the timing of a Petition for Review but final in terms of
conferring jurisdiction upon the appellate court. We believe, however, that
there is no principled way to distinguish between the concept of finality for
purposes of triggering the running of a time limit for appeals and the concept of
finality for the purpose of appellate court jurisdiction. The reason that the time
limit for appeal begins to run when a final judgment is entered is precisely that
once the final judgment is entered the petitioner has the opportunity to bring its
case to the Court of Appeals.

20

In policy terms the question is whether the obvious potential for duplication or
wasted effort is outweighed by countervailing considerations. We know of
none. However, we test our conclusions against the best arguments that we can
construct for the contrary position. We are left to our own devices in this regard
since the submissions of the parties on jurisdiction were essentially conclusory.

III.
21

First, it can be argued that one of the policy justifications for the result in
LocomotiveEngineers--the desire to avoid a de facto requirement of protective
appeals--does not apply to the situation of simultaneous jurisdiction;
consequently "finality" need not be defined the same way in the case at bar.
Second, it can be argued that one cannot discern whether an agency action is

"final" in this area of the law simply by noting that the same agency action has
been characterized as "final" for another purpose. It is well established, for
example, that when two parties are adversely affected by an agency's action,
one can petition for reconsideration before the agency at the same time that the
other seeks judicial redetermination. See American Farm Lines v. Black Ball
Freight Service, 397 U.S. 532, 541, 90 S.Ct. 1288, 1293, 25 L.Ed.2d 547
(1970). This scheme arguably renders a single determination by the agency
nonfinal for purposes of timely review with respect to the petitioning party but
final with respect to the party who went straight to court.
22

In the end, however, we find these counterarguments to be unpersuasive. Even

though the policy reasons may vary based on the context in which we are
defining finality, there is still incoherence in defining the term differently for
triggering time limits for review and for purposes of making an action
reviewable. See supra. Furthermore, as we have explained, the Supreme Court
in Locomotive Engineers stated that section 704 was only designed to get rid of
the requirement that parties petition for reconsideration before getting judicial
review, 107 S.Ct. at 2369, and it does not alter the prior practice which held
that a timely filed reconsideration petition was a bar to judicial jurisdiction.
See, e.g., Southland Industries, Inc. v. FCC, supra.

23

Second, we do not conclude from the fact that one action can be final for one
party and yet nonfinal for another to mean that "finality" is an analytically
indefinite term in this context. On the contrary, we think that all it means is that
finality with respect to agency action is a party-based concept--a reading of
finality which, as discussed below, serves the interests of fairness by allowing
parties seeking judicial review to get it, rather than making them dependent on
the whims of other parties. See infra p. 587-88. This fact about agency finality
does not provide a reason for creating an analytic inconsistency between this
case and Locomotive Engineers.

24

Turning to the policy aspect of these distinctions, we also note that the rule that
filing a petition for reconsideration renders an agency action nonfinal with
respect to the filing party is good policy. Petitioners have the option of
proceeding directly to the court of appeals, or giving the agency another chance
to consider the matter and applying to the court of appeals afterward. We can
see no justification for allowing a petitioner to apply to both the court and the
agency at the same time. On the contrary, such a regime could lead only to
waste of resources on the part of the agency, the court, or both, without any
countervailing benefit. Cf. Griggs v. Provident Consumer Discount Co., 459
U.S. 56, 61, 103 S.Ct. 400, 403, 74 L.Ed.2d 225 (1982) (holding that a notice of
appeal is a "nullity" if filed while there is a pending motion before the district

court asking the district court to alter or amend its judgment). The fact that, as
discussed above, some waste of resources is tolerated when one party seeks
administrative reconsideration and another seeks judicial review is not a reason
for countenancing waste in the situation we face here.
25

A single agency action can affect a large number of parties. In getting rid of the
requirement that parties ask for agency reconsideration before going to court,
Congress evinced a desire to allow parties who so desire to get speedy judicial
relief. If any party could render an action nonfinal for all, simply by filing a
petition for reconsideration, this purpose would be thwarted; parties seeking
immediate judicial relief would be forced to wait until the agency disposed of
the reconsideration petitions filed by others. Thus as a matter of furthering
Congress' intent not to require such extensive exhaustion, while at the same
time allowing parties seeking agency reconsideration to do so, the Supreme
Court has concluded that an agency action can be final for one party and
nonfinal for another. See American Farm Lines, 397 U.S. at 541, 90 S.Ct. at
1293.

26

However, this reasoning does not apply to cases, like the case at bar, in which
the party in court is the party who petitioned for agency reconsideration. In
such cases no one has forced such party to remain at the agency level; the party
itself has opted to do so. The reasons for countenancing waste of judicial
resources when there are two parties seeking review, one with the agency and
one with the court, do not apply when only a single party is involved. See
Winter v. ICC, 851 F.2d 1056, 1062 (8th Cir.1988).

27

Under different circumstances it might have been appropriate to conclude that

Congress has made a policy judgment that efficiency is always secondary in the
context of judicial review of agency actions. However, the legislative history
reflects no such judgment, and Locomotive Engineers undermines the plain
meaning rationale.

IV.
28

It is always disturbing for a court to go against the "plain meaning" of a statute.

It is particularly troubling when, as is the case here, other courts have found a
way to enforce the language. We must thus come to grips with Judge Scalia's
opinion in American Trucking Associations, Inc. v. ICC, 697 F.2d 1146, 1148
n. * (D.C.Cir.1983), which was followed by the Seventh Circuit in Northside
Sanitary Landfill, Inc. v. Thomas, 804 F.2d 371, 378 (7th Cir.1986). As
mentioned above, these cases held that the pendency of a petition for agency
reconsideration has no effect on a court's jurisdiction. We do note that, in the

only opinion on the issue written after Locomotive Engineers, the Court of
Appeals for the Eighth Circuit, decided that such simultaneous jurisdiction is
impermissible. See Winter v. ICC, 851 F.2d 1056, 1062 (8th Cir.1988).
29

We have considered the opinions of our sister circuits, but we remain convinced
that we have no jurisdiction to consider this petition while there is an
outstanding petition for agency reconsideration. Neither of the Courts of
Appeals that decided the other way provides any basis for distinguishing this
case from Locomotive Engineers. Although Outland v. CAB--the case which
articulated the rule that Justice Scalia adopted for the Supreme Court in
Locomotive Engineers--was binding precedent in the D.C. Circuit at the time
Judge Scalia wrote American Trucking, he makes no attempt in American
Trucking to reconcile his interpretation of section 704 with the prior contrary
interpretation in his circuit. The Seventh Circuit had no prior binding precedent
interpreting section 704 against its plain meaning and thus did not need to
grapple with the problem of reconciling two conflicting meanings of "finality."
However, their uncritical reliance on plain meaning is no longer persuasive in
light of the Supreme Court's interpretation of section 704 in Locomotive
Engineers.

30

In sum we find that the courts of appeals cannot have jurisdiction over a
petition for review when a petition for reconsideration brought by the same
party is still pending before the agency. Finality for purposes of entitlement to
judicial review should mean the same thing that finality means for purposes of
triggering the time limit for appeal. Thus we find ourselves bound by
Locomotive Engineers, which interpreted section 704, notwithstanding its
literal meaning, as allowing petitions for reconsideration to render agency
actions nonfinal.

V.
31

We regret that this jurisdictional issue has arisen so late in the day. Not only do
we wish that the parties had brought the existence of the petition for
reconsideration clearly to our attention early on, but we also are at a loss to
understand why the petition for rehearing has remained undisposed of for some
eighteen months after issuance of the final rule, particularly in view of its
consequence for appellate review. We urge the agency to dispose of it
promptly. However, because we do not have jurisdiction to decide a case while
a petition for reconsideration on the same case is pending before the EPA, the
petition for review will be dismissed.

32

If West Penn's petition for reconsideration is withdrawn, or if the EPA denies

it, we will have jurisdiction to review the Administrator's refusal to declare

Armstrong County an attainment area. West Penn may then file a new petition
for review. If it does, the case will proceed on original briefs and letter
memoranda thus far received by the panel, supplemented by such additional
submissions as may be appropriate.

The Honorable Robert E. Cowen, United States District Judge for the District
of New Jersey, sitting by designation. Since the argument of this appeal, Judge
Cowen has become a member of this Court

The submissions of both West Penn and the EPA suggest that it is the
understanding of the environmental bar that petitions for reconsideration before
the agency have no effect upon appellate jurisdiction

The petition contends that to apply the more restrictive 1985 stack height
regulations to a stack which was constructed, at a cost of $13 million, in
reliance on EPA's 1981 SIP approval and solely to comply with the Clean Air
Act, violates principles of procedural fairness and administrative law. EPA's
SIP approval, which was a final agency action, is termed by West Penn an "ad
hoc rule," which, it submits, cannot be retroactively displaced

Section 704 provides in full:

Agency action made reviewable by statute and final agency action for which
there is no other adequate remedy in a court are subject to judicial review. A
preliminary, procedural, or intermediate agency action or ruling not directly
reviewable is subject to review on the review of the final agency action. Except
as otherwise expressly required by statute, agency action otherwise final is final
for the purposes of this section whether or not there has been presented or
determined an application for a declaratory order, for any form of
reconsideration, or, unless the agency otherwise requires by rule and provides
that the action meanwhile is inoperative, for an appeal to superior agency
authority.

In Outland the D.C. Circuit split with the Ninth Circuit, which had previously
adopted a contrary interpretation of section 704. The next year, however, the
Ninth Circuit reversed itself and adopted the Outland rule. See Samuel B.
Franklin & Co. v. SEC, 290 F.2d 719 (9th Cir.1961)

In Locomotive Engineers, the Court was actually construing the Interstate

Commerce Act, rather than the APA. However, the Court based its argument on
an analogy to section 704, the portion of the APA that we are now construing,

finding "no basis for distinguishing" the two statutes. 107 S.Ct. at 2369