IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

SECOND AMENDED COMPLAINT
SEEKING DECLARATORY AND INJUNCTIVE RELIEF

     Plaintiffs Jim J. Tozzi, the American Wood Preservers Institute, and Wood Protection Products, Inc. bring this action for declaratory and injunctive relief against Defendants U.S. Environmental Protection Agency ("EPA"); Christine Todd Whitman, Administrator of EPA; Margaret N. Schneider, Acting Assistant Administrator for EPA’s Office of Environmental Information; and the Office of Management and Budget ("OMB").

INTRODUCTION

     1. Plaintiffs bring this action pursuant to the Administrative Procedure Act ("APA"), 5 U.S.C. § 500, et seq., and the Declaratory Judgment Act, 28 U.S.C.§§ 2201-2202, seeking a judicial declaration that EPA and OMB have acted arbitrarily and capriciously and contrary to law in connection with the issuance of EPA’s final rule requiring reporting of certain allegedly persistent bioaccumulative toxics under the Toxic Release Inventory ("TRI") program. See 64 Fed. Reg. 58665 (Oct. 29, 1999) ("Final Rule"). In particular, Plaintiffs seek a declaration that: (a) OMB’s approval of EPA’s "information collection request" ("ICR") violated the Paperwork Reduction Act of 1995, 44 U.S.C. § 3501, et seq., (b) EPA acted arbitrarily and capriciously in establishing the reporting threshold for "dioxin and dioxin-like compounds" category under the TRI program, and (c) the new reporting requirement and reporting threshold for dioxin and dioxin-like compounds are not in accordance with law. Plaintiffs also seek immediate and temporary injunctive relief against the reporting of dioxin and dioxin-like compound releases under the Final Rule, which would otherwise be required by July 1, 2001.

THE PARTIES

     2. Plaintiff Tozzi is the founder and president of Multinational Business Services, Inc., a regulatory consulting firm that specializes in federal information policy issues. Mr. Tozzi also participated in the drafting of the Paperwork Reduction Act of 1980, and participates on an ongoing basis in issues involving compliance with the Paperwork Reduction Act. Mr. Tozzi has filed public comments with OMB under the Paperwork Reduction Act on numerous occasions, and intends to file comments on the EPA reporting requirements at such time as EPA prepares an accurate and complete ICR and notices it for public comment.

     3. Plaintiff American Wood Preservers Institute ("AWPI") is the national industry trade association representing the pressure-treated wood industry throughout the United States. See Affidavit of Scott S. Ramminger, AWPI President and CEO, filed in support hereof and attached as Exhibit 1. AWPI’s membership numbers approximately 110 companies, including wood pressure treaters (81 companies), preservative manufacturers and formulators (nine additional companies), and supporting members (19 companies).

     4. The objectives of AWPI are to improve public acceptance of preserved-wood products, represent the industry on regulatory and legislative matters, and address all questions about the manufacture, use, disposal, and integrity of treated-wood products. AWPI promotes environmental stewardship and compliance with state and federal regulations by all members of the wood preserving industry. AWPI also provides technical advice and information to its members and to distributors and users of pressure-treated wood.

     5. A significant number of AWPI member companies manufacture, process or otherwise use chemicals, including pentachlorophenol and creosote, that may contain dioxins or dioxin-like compounds. Such compounds may be created during the manufacturing of pentachlorophenol and may be present as contaminants. In addition, creosote may contain benzo(g,h,i)perylene and one or more polycyclic aromatic compounds (PACs). Many of the AWPI member companies therefore will likely fall within the scope of the Final Rule’s reporting requirements.

     6. Plaintiff Wood Protection Products, Inc. ("WPP") formulates pentachlorophenol concentrate and ready-to-use solutions for wood treatment. See Affidavit of WPP Vice President James R. Forshaw filed in support hereof and attached as Exhibit 2. WPP employs at least 10 individuals and is a member in good standing of Plaintiff AWPI.

     7. WPP processes or otherwise uses a chemical, pentachlorophenol, that contains dioxins. Because the dioxins listed in the Final Rule are reasonably likely to be present, in total amounts of 0.1 gram or greater over a one-year period, in chemicals that WPP processes or otherwise uses, WPP falls within the scope of the Final Rule’s TRI dioxins category reporting threshold.

     8. WPP has not previously been required to report dioxins category releases under the TRI program. WPP will therefore incur new and significant administrative expenses as a result of the new dioxins category reporting threshold in the Final Rule. WPP will also incur strong and adverse public reaction and damage to its business reputation, in addition to lost sales, as a result of being publicly stigmatized as a "dioxin polluter".

     9. Defendant EPA is an agency of the United States Government. As such, it is responsible for compliance with the Paperwork Reduction Act prior to imposing new or modified information collections on the public.

     10. Defendant Whitman is the Administrator of the EPA. As the "head" of that agency, she is "responsible for...complying with the requirements of this chapter [the Paperwork Reduction Act] and related policies established by the Director [of OMB]." 44 U.S.C. § 3506(a)(1). In this capacity, Defendant Whitman bears responsibility for the violations of law set forth in this Complaint.

     11. Defendant Schneider is the Acting Assistant Administrator for Environmental Information at EPA. As the "Chief Information Officer" designated by defendant Whitman to administer EPA’s responsibilities under the Paperwork Reduction Act, she is required to "report directly to such agency head to carry out the responsibilities of the agency under this chapter." 44 U.S.C. § 3506(a)(2)(A). In this capacity, Defendant Schneider is responsible for EPA’s compliance with the Paperwork Reduction Act.

     12. Defendant OMB is the federal agency responsible for reviewing ICRs submitted by agencies such as EPA. OMB is named as a defendant in this lawsuit because its actions in approving the incomplete ICR were contrary to law.

JURISDICTION AND VENUE

13. This Court possesses federal question jurisdiction under 28 U.S.C. § 1331. The disputed questions of federal law include, but are not limited to, the following:

1. Whether the present ICR approval is valid, and whether EPA and OMB have otherwise complied with the procedural requirements of the Paperwork Reduction Act in connection with the ICR as it pertains to the new TRI reporting requirements for the new category of dioxin and dioxin-like compounds?
   
   
2. Whether OMB’s approval of EPA’s request for a control number under the Paperwork Reduction Act was in accordance with law, in light of the fact that EPA did not submit a complete clearance package and had not in other respects complied with the procedural prerequisites to OMB review?
   
   
3. Whether EPA has considered the correct relevant factors established by law in setting a reporting threshold for dioxins and dioxin-like compounds?
   
   
4. Whether EPA acted arbitrarily and capriciously when it refused to employ the same methodology for expression of dioxin and dioxin-like compound releases (i.e., "TEQ") under the Final Rule as the agency uses in other contexts?

     14. Venue is proper in this judicial district under 28 U.S.C. § 1391, because a substantial part of the events and omissions giving rise to the claims in this lawsuit occurred or failed to occur at the headquarters of EPA, which are located in the District of Columbia.

     15. EPA’s failure to comply with its statutorily-mandated obligation to submit to OMB a complete ICR (and to provide notice and opportunity for public comment with respect to the same) constitutes final agency action, as does OMB’s approval of the ICR and EPA’s publication of the Final Rule.

     16. EPA has not satisfied the statutory standard under section 313 of the Emergency Planning and Community Right to Know Act ("EPCRA"), 42 U.S.C. § 11023, for setting a reporting threshold for dioxins and furans.

     17. Plaintiffs have exhausted any available administrative remedies.

     18. This Court is authorized to award declaratory and injunctive relief in this lawsuit under the APA and the Federal Declaratory Judgment Act, 28 U.S.C. § 2201, because (a) there is a substantial controversy between parties who have adverse legal interests of sufficient immediacy and reality to warrant a judicial declaration of rights and duties; (b) an actual controversy exists and will continue to exist until such time as defendants correct their violations of the Paperwork Reduction Act and section 313 of EPCRA; (c) defendants’ noncompliance is fixed and definite; (d) defendants have already failed to perform their ministerial, nondiscretionary legal duties under the Paperwork Reduction Act and intend to continue on their present course; and (e) plaintiffs have a personal stake in the outcome of the case.

FACTUAL BACKGROUND

     19. On October 29, 1999, EPA issued the Final Rule adding seven polychlorinated dibenzo-p-dioxins and 10 polychlorinated dibenzofurans to the reporting requirements of the TRI program. See 64 Fed. Reg. 58,665, 58,669 (Oct. 29, 1999). The Final Rule established a radically low reporting threshold for dioxins and dioxin-like compounds. Under the Final Rule, facilities with reason to believe they manufacture, process or otherwise use dioxins or dioxin-like compounds in an amount of 0.1 gram or more per year are subject to the reporting requirements.

     20. Although the Final Rule establishes a reporting threshold for the dioxins and furans (i.e., a numerical threshold of 0.1 gram for identifying who must report), the Final Rule does not specify the specific contents of the reporting requirement (e.g., what level of releases respondents are required to report, how releases will be determined, etc.). EPA stated that it would fill in these gaps by issuing "additional guidance" at some undetermined point in the future.

     21. In setting the 0.1 gram reporting threshold for dioxins and furans, EPA failed to express the threshold in terms of "TEQ" or "toxic equivalents". TEQ expresses a concentration of dioxin-like compounds in terms of equivalent concentrations of 2,3,7,8-TCDD (or "dioxin"). The TEQ approach is consistent with the international toxicity equivalents factors approach, consistent with EPA’s approach to regulating dioxins in various media and for conducting risk assessments, and consistent with EPA’s source characterization work to assess the national inventory of dioxin releases to environmental media. EPA has adopted TEQ methodology in nearly every other agency program in which dioxin levels, emissions or releases are expressed, and its failure to do so in the Final Rule, without a reasoned explanation, constituted arbitrary and capricious agency action.

     22. The Final Rule also requires reporting by companies that manufacture, process or otherwise use (a) benzo(g,h,i)perylene in amounts of 10 pounds or more and (b) certain listed PACs in amounts of 100 pounds or more during a one-year period. As with dioxins and furans, EPA has not previously required separate reporting of benzo(g,h,i)perylene and PACs under the TRI program.

     23. When creosote was added to the TRI reporting list in 1989, 40 C.F.R. § 372.65(a),(b), EPA specifically considered whether separate reporting of listed constituents of creosote would also be required. To avoid double-counting and for other reasons, EPA determined that it would not:

54 Fed. Reg. 49948, 49951 (Dec. 1, 1989). The Final Rule, however, is silent as to whether and to what extent its requirements for reporting the listed constituents of creosote (i.e., benzo(g,h,i)perylene and PACs) supersede EPA's previous regulations on the same subject. The Final Rule is thus inconsistent with respect to previous TRI reporting requirements and imposes regulatory uncertainty and additional legal and/or administrative expenses on the TRI respondent Plaintiffs.

     24. Despite the fact that EPA did not provide public notice of the reporting requirements for dioxins and furans imposed under the Final Rule – which according to EPA went into effect on January 1, 2000 – EPA proceeded to submit an ICR to OMB requesting that OMB issue a "control number" approving the reporting requirements in the Final Rule. It is a violation of the Paperwork Reduction Act for a federal agency such as EPA to seek an OMB control number, and for OMB to approve an ICR, when the requesting agency has not even made the reporting requirements available to the public for comment.

     25. On or about January 31, 2000, OMB transmitted to EPA an electronic mail notice purporting to indicate that OMB had approved EPA’s ICR for the Final Rule on that date.

     26. Plaintiffs had attempted to obtain a temporary restraining order prohibiting OMB from approving the ICR, but, due to a snow emergency resulting in the closure of the Court, Plaintiffs were unable to file this action until February 1, 2000. Plaintiffs subsequently withdrew their motion for a TRO against OMB’s approval of the ICR but continued to seek a judicial declaration that OMB’s ICR approval was invalid.

     27. On June 15, 2000, EPA issued a Federal Register notice making available for comment a draft agency document titled "Emergency Planning and Community Right-to-Know Act -- Section 313: Guidance for Reporting for the Dioxin and Dioxin-like Compounds Category" (hereinafter, the "Guidance"). EPA sought comments on the technical contents of the Guidance, "particularly on the methods of estimating releases and other waste management quantities for dioxin and dioxin-like compounds." 65 Fed. Reg. 37548, 37549 (June 15, 2000).

     28. On July 17, 2000, undersigned counsel for Plaintiffs filed comments with EPA on the Guidance document, and Plaintiffs filed a copy of these comments with the Court. Counsel stated in those comments that the Guidance (i) did not cure EPA’s failure to comply with the procedural requirements of the Paperwork Reduction Act, which demand that a complete information collection request be submitted to OMB for public comment and OMB review and approval, and (ii) failed as a factual matter to provide necessary clarification to Plaintiffs on how to calculate the releases of dioxin and dioxin-like compounds that the Final Rule requires must be reported.

     29. The methodology that TRI respondents, including Plaintiffs, would be required to use for calculating releases of dioxin and dioxin-like compounds under the Final Rule was not set forth in the information collection request submitted to OMB. Accordingly, Plaintiffs and the public had no opportunity to comment on that methodology prior to OMB’s approval of the ICR. Similarly, OMB had no opportunity to review the methodology, or to consider public comments on it, before issuing its approval of the ICR.

     30. The ICR was therefore submitted to, and approved by, OMB in clear violation of the Paperwork Reduction Act. EPA’s subsequently promulgated Guidance document did not cure this statutory violation. Public comment and OMB review can be effective only if one coherent ICR – containing all of the reporting requirements – is submitted.

     31. Because EPA failed to make the complete ICR and reporting requirement available to the public, Plaintiffs were deprived of their right to comment intelligently on, inter alia, the following statutory prerequisites to OMB approval of the ICR: "purpose," "need," "practical utility," feasibility, appropriateness of the reporting burden to be imposed on respondents, and the accuracy of the agency’s burden estimates. See 44 U.S.C. §§ 3506(c)(2)(A), 3506(c)(3), 3507; 5 C.F.R. §§ 1320.3(l), 1320.8; see also Exhibit A of Tozzi Affidavit in Support of Motion for Preliminary Injunction (Affid. filed January 31, 2000, subsequently withdrawn, and refiled herewith as Exhibit 3), OMB Implementing Guidance for the Paperwork Reduction Act (Prelim. Draft, Feb. 3, 1997) at 37-49.

FIRST CAUSE OF ACTION –
FAILURE TO COMPLY WITH THE PROCEDURAL
REQUIREMENTS OF THE PAPERWORK REDUCTION ACT

     32. Plaintiffs reallege and incorporate by reference herein all of the statements, allegations and claims set forth in all of the preceding paragraphs of this Complaint.

     33. Under the Paperwork Reduction Act, the collecting agency may not submit the ICR clearance package to OMB, and OMB may not approve it, unless and until the collecting agency has provided enough information about the proposed "collection of information" to enable public commenters (such as Plaintiffs) and OMB to assess whether the proposed collection of information complies with such statutory requirements as "purpose," "need," "practical utility," feasibility, accuracy of burden estimates, and appropriateness of the burden estimates in light of the information needed by the government. The clearance package that EPA submitted to OMB in connection with the Final Rule did not comply with these requirements. Plaintiffs thus have been denied an opportunity to participate meaningfully in the administrative process to the extent provided under the Paperwork Reduction Act.

SECOND CAUSE OF ACTION --
ARBITRARY AND CAPRICIOUS ADOPTION OF
RULE CONTRARY TO STATUTORY STANDARD

     34. In failing to employ TEQ methodology in establishing the reporting threshold for dioxin and dioxin-like compounds, EPA has engaged in arbitrary and capricious agency action under the APA, 5 U.S.C. § 706.

     35. EPA has failed to meet the statutory standard prescribed under section 313 of EPCRA for setting thresholds for TRI chemical reporting. This failure has caused Plaintiffs direct harm through imposition of burdensome and unjustified reporting requirements. Plaintiffs are thus aggrieved parties under the APA, entitled to judicial review of the Defendants’ wrongful actions.

PRAYER FOR RELIEF

For the foregoing reasons, Plaintiffs respectfully pray that this Court grant judgment in their favor and award plaintiffs the following relief:

1. An immediate Order preliminarily enjoining EPA from implementing that part of the Final Rule pertaining to releases of dioxin and dioxin-like compounds until final disposition of this action, and prohibiting EPA from imposing any penalties for failure to report such releases while such Order is in effect;
   
   
2. A permanent injunction against EPA’s enforcement of the Final Rule as it applies to reporting of releases of dioxin and dioxin-like compounds;
   
   
3. A judicial declaration that EPA’s ICR was unlawful due to violations of the Paperwork Reduction Act and that OMB’s approval of the ICR pertaining to dioxin and dioxin-like compounds was not in accordance with law;
   
   
4. A judicial declaration that EPA’s ICR was unlawful due to violations of the Paperwork Reduction Act and that OMB’s approval of the ICR pertaining to creosote constituent compounds (listed PACs and benzo(g,h,i)perylene) was not in accordance with law;
   
   
5. A judicial declaration that the reporting threshold set forth in the Final Rule for releases of dioxins and dioxin-like compounds was adopted arbitrarily and capriciously and is contrary to the standard set out in section 313 of EPCRA; and
   
   
6. Such additional relief as the Court may deem just and proper.
   

Dated: June 12, 2001 

OF COUNSEL:

W. Caffey Norman
DC Bar No. 269639
PATTON BOGGS LLP
2550 M Street, N.W., 5^th Fl.
Washington, D.C. 20037
ph: (202) 457-5270
fax: (202) 457-6315