United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued May 7, 2010 Decided August 6, 2010
No. 09-5360
HOWMET CORPORATION,
APPELLANT
v.
ENVIRONMENTAL PROTECTION AGENCY AND LISA PEREZ
JACKSON, ADMINISTRATOR, UNITED STATES ENVIRONMENTAL
PROTECTION AGENCY,
APPELLEES
Appeal from the United States District Court
for the District of Columbia
(No. 1:07-cv-01306-EGS)
Bryan J. Moore argued the cause and filed the briefs for
appellant.
Donald J. Patterson, Jr. and Bethany S. French were on
the brief for amicus curiae Alliance of Automobile
Manufacturers in support of appellant.
2
Justin R. Pidot, Attorney, U.S. Department of Justice,
argued the cause for appellees. With him on the brief was
Robert H. Oakley, Attorney.
Before: SENTELLE, Chief Judge, BROWN and
KAVANAUGH, Circuit Judges.
Opinion for the Court filed by Circuit Judge BROWN.
Dissenting opinion filed by Circuit Judge KAVANAUGH.
BROWN, Circuit Judge: The Environmental Protection
Agency (EPA or the Agency) says Howmet Corporation
(Howmet) violated the Resource Conservation and Recovery
Act and the Hazardous and Solid Waste Amendments of 1984,
42 U.S.C. §§ 6901 et seq. (collectively RCRA), and its
implementing regulations. Howmet says its actions were
permitted by the regulations. Whether viewed as a syntactical
ambiguity or a semantic squabble, the dispute focuses on one
question: when is a material no longer serving “the purpose
for which it was produced?” The EPA insists the initial use of
the material is determinative; Howmet contends the initial use
is irrelevant. The question matters because “spent material” is
subject to RCRA’s hazardous waste regulations, but material
that has not been spent is not. Howmet insisted that used
KOH (liquid potassium hydroxide) sent to a fertilizer
manufacturer for use as a fertilizer ingredient was not “spent
material” and thus not subject to RCRA regulations. After
Howmet lost this argument before an administrative law judge
(ALJ) and the Environmental Appeals Board (EAB), the
district court rejected Howmet’s Administrative Procedure
Act claim and granted the EPA’s cross-motion for summary
judgment, holding the EPA’s interpretation of its “spent
material” regulation was not arbitrary and capricious and that
Howmet had fair notice of the Agency’s interpretation. See
3
Howmet Corp. v. EPA, 656 F. Supp. 2d 167 (D.D.C. 2009).
We affirm.
I
Subtitle C of RCRA, 42 U.S.C. §§ 6921–34, establishes a
“stringent ‘cradle-to-grave’ regulatory structure for overseeing
the safe treatment, storage and disposal of hazardous waste.”
Sierra Club v. EPA, 292 F.3d 895, 896 (D.C. Cir. 2001). The
statute defines “hazardous waste” as a “solid waste [that] may
. . . pose a substantial present or potential hazard to human
health or the environment when improperly treated, stored,
transported, or disposed of, or otherwise managed.” 42
U.S.C. § 6903(5). The EPA has broad investigatory and
enforcement authority under RCRA. See Gen. Motors Corp.
v. EPA, 363 F.3d 442, 444 (D.C. Cir. 2004). Pursuant to this
authority, the EPA has imposed numerous requirements and
restrictions on the generators and transporters of hazardous
waste, including requiring EPA identification numbers, 40
C.F.R. § 262.12(c), the use of hazardous waste manifests
identifying contaminants, id. § 262.20(a), and written
notification of land disposal restrictions, id. § 268.7(a).
Hazardous wastes are a subset of solid wastes. See 42
U.S.C. § 6903(5); 40 C.F.R. § 261.3(a). Since a substance
cannot be a “hazardous waste” or subject to the EPA’s
hazardous waste regulations unless it satisfies the threshold
definition of “solid waste,” our analysis begins with the
definition of solid waste. “Solid waste” is “discarded
material, including solid, liquid, semisolid, or contained
gaseous material resulting from industrial, commercial,
mining, and agricultural operations.” 42 U.S.C. § 6903(27).
Discarded material includes recycled materials (materials that
have been “used, reused, or reclaimed,” 40 C.F.R.
§ 261.1(c)(7)) and spent materials (any material so
4
contaminated by use it can no longer serve “the purpose for
which it was produced without processing,” id. § 261.1(c)(1)).
Under the EPA’s regulations, when a spent material is
recycled, it must be managed as a solid waste. Moreover, if
the material also exhibits a hazardous characteristic, such as
corrosivity,1 see id. §§ 261.3(a), 261.20–.24, it must be
managed as a hazardous waste subject to the RCRA
requirements. Thus, as the EAB noted, when a hazardous
“spent material” is recycled, or “[u]sed to produce products
that are applied to or placed on the land or are otherwise
contained in products that are applied to or placed on the
land,” id. § 261.2(c)(1)(i)(B), it must be managed as
hazardous waste. The resolution of this appeal rests on
whether the materials in question were “spent” and should be
deemed solid waste. Since “spent material” is material that
has been used and as a result of contamination can no longer
serve “the purpose for which it was produced without
processing,” the central issue in this case is the interpretation
of the phrase “the purpose for which it was produced.”
The EAB’s syllabus succinctly summarizes the dueling
interpretations: “Howmet argues that ‘purpose’ implies a
fundamental purpose. Howmet’s interpretation would allow a
multi-use product, such as KOH, to be used first as a cleaning
agent and then as a fertilizer ingredient without being ‘spent,’
because both uses allegedly are consistent with KOH’s broad
fundamental purpose as a concentrated source of hydroxide
ions and of potassium. [The Agency argues] that a product’s
purpose for production (i.e., ‘the purpose for which it was
produced’) must be related to its original use, [so] a product
first used as a cleaning agent becomes a ‘spent material’ when
1
Corrosivity is deemed present if the waste is aqueous and has a pH
of less than or equal to 2 or greater than or equal to 12.5. See 40
C.F.R. § 261.22(a).
5
it becomes too contaminated for that use and then is sent to a
fertilizer manufacturer to be used in a fundamentally different
manner.”
II
The facts in this case are not in dispute. Howmet
manufactures precision investment castings for aerospace and
industrial gas turbine applications. To clean the ceramic core
from the metal castings, Howmet uses an aqueous KOH
solution. During the cleaning process the KOH is
contaminated. Howmet uses the KOH solution until it
becomes so contaminated it can no longer effectively clean
the castings. The used KOH is corrosive. Thus, under the
EPA’s regulations, the used KOH would be regulated as
hazardous waste. See 40 C.F.R. § 261.22.
Typically, Howmet accumulates the used KOH in storage
tanks at an authorized hazardous waste disposal facility.
However, between August 1999 and September 2000,
Howmet sent some of the used KOH to Royster, an
independent fertilizer manufacturing company that, without
processing or otherwise reclaiming it, added the KOH to its
fertilizer to control pH and provide a source of potassium.
Howmet did not prepare any hazardous waste manifest for the
shipments to Royster or otherwise treat the KOH as a
hazardous waste under RCRA, 42 U.S.C. §§ 6901–91.
In 2003, the EPA brought enforcement actions against
Howmet, alleging the used KOH sent to Royster was a solid
and characteristic hazardous waste, in that it was corrosive
and potentially contaminated with chromium, and therefore
subject to RCRA jurisdiction. The EPA alleged Howmet
violated RCRA and its implementing regulations by
(1) shipping hazardous waste to facilities that did not have an
6
EPA identification number; (2) sending hazardous waste
offsite using transporters without EPA identification numbers;
(3) failing to prepare hazardous waste manifests for the KOH
shipments to Royster; and (4) failing to send and maintain on
file appropriate land disposal restriction notifications for the
KOH shipments informing Royster whether the KOH was too
contaminated for land application without prior treatment.
Howmet contested the allegations and requested a
hearing. An ALJ found Howmet liable under RCRA,
concluding the used KOH sent to Royster was a hazardous
“spent material” and therefore a solid waste that must be
managed as a hazardous waste and that Howmet had failed to
manage the KOH in accordance with EPA regulations. The
ALJ also concluded Howmet had not proved it was denied due
process because it had not received fair notice of the EPA’s
interpretation of its spent material regulation. The ALJ
assessed a civil fine of $309,091 against Howmet. Howmet
appealed to the EAB, which upheld the ALJ’s finding in a
lengthy decision detailing RCRA’s statutory and regulatory
framework. Howmet filed a complaint in the district court
claiming the EAB’s decision was arbitrary and capricious, but
the district court awarded summary judgment in favor of the
EPA, holding the EPA reasonably interpreted its “spent
material” regulation and that Howmet had fair notice of the
EPA’s interpretation. Howmet Corp., 656 F. Supp. 2d 167.
This appeal followed.
III
We review the district court’s grant of summary judgment
de novo, see Steele v. Schafer, 535 F.3d 689, 692 (D.C. Cir.
2008), and must set aside the EPA’s final determination if
“arbitrary, capricious, an abuse of discretion, or otherwise not
in accordance with law,” 5 U.S.C. § 706(2)(A). We accord an
7
agency’s interpretation of its own regulations a “high level of
deference,” accepting it “unless it is plainly wrong.” Gen.
Elec. Co. v. EPA, 53 F.3d 1324, 1327 (D.C. Cir. 1995); see
also Exportal Ltda. v. United States, 902 F.2d 45, 50 (D.C.
Cir. 1990) (“It is well established that a reviewing court owes
deference to an agency’s construction of its own
regulations.”). Under this standard, we must defer to the
EPA’s interpretation as long as it is “logically consistent with
the language of the regulation[s] and . . . serves a permissible
regulatory function.” Gen. Elec., 53 F.3d at 1327. But see
Exportal, 902 F.2d at 50 (explaining deference is due “only
when the plain meaning of the rule itself is doubtful or
ambiguous” and thus deference to an agency’s interpretation
“is not in order if the rule’s meaning is clear on its face”).
Moreover, “[t]he policy favoring deference is particularly
important where . . . a technically complex statutory scheme is
backed by an even more complex and comprehensive set of
regulations.” Gen. Elec., 53 F.3d at 1327 (noting that “[i]n
such circumstances, ‘the arguments for deference to
administrative expertise are at their strongest’”).
A. The definition of “spent material” is ambiguous
Both parties seem to agree our analysis should begin with
determining whether the regulatory text of the EPA’s spent
material definition, as applied to Howmet’s KOH shipments
to Royster, is clear on its face. Howmet argues the EPA’s
definition is unambiguous. It claims both the dictionary
definition of “purpose” (“the object . . . for which something
exists”), as well as the context of the regulation, are relevant
and support its position. Howmet insists the plain language of
the definition—“the purpose for which it was produced”—
looks retrospectively to a material’s intended purpose at the
time it was produced, not prospectively to the first use made
of the material following its production and therefore does not
8
permit the interpretation adopted by the EPA. The EPA, on
the other hand, argues the word “purpose” is ambiguous, both
taken alone and in context, and that the phrase “the purpose
for which it was produced” could relate to a material’s use,
especially where, as here, the producer of the material does
not itself put the material to use, but rather creates the product
for sale. We agree with the EPA.
Neither the word “purpose” nor the phrase “the purpose
for which it was produced” are defined in the EPA’s
regulations, and the dictionary definition relied on by Howmet
provides little help in determining the meaning of either the
word or phrase, as they are used in 40 C.F.R. § 261.1. The
everyday meanings of the term and phrase also do not provide
any clarity as to whether the initial use of a material is
relevant to determining the purpose for which the material
was produced. In sum, the text of the EPA’s definition is
simply ambiguous with respect to whether we should adopt
Howmet’s “multiple, original purposes” approach to
determining when a material is “spent,” or whether we should,
instead, adopt the “original use”-based purpose test advanced
by the EPA.
B. The EPA’s interpretation of the “spent material”
regulation is reasonable
Having concluded the plain language of the EPA’s “spent
material” definition does not answer the question whether the
used KOH sent to Royster was a spent material, we examine
whether the EPA’s interpretation of the definition is
reasonable. See, e.g., Gorman v. NTSB, 558 F.3d 580, 589
(D.C. Cir. 2009) (explaining this court must uphold an
agency’s interpretation of an ambiguous regulation if
reasonable); Devon Energy Corp. v. Kempthorne, 551 F.3d
1030, 1037 (D.C. Cir. 2008). In so doing, we look to the
9
EPA’s overall regulatory framework under RCRA, as well as
the regulatory history of the Agency’s “spent material”
definition. Both establish the EPA’s interpretation is
reasonable and consistent with the Agency’s prior
interpretations.
1. Regulatory History of the EPA’s “Spent Material”
Definition
The EPA’s current hazardous waste regulations were
promulgated in 1985 primarily to clarify “which materials are
solid and hazardous wastes when they are recycled.”
Hazardous Waste Mgmt. Sys.; Definition of Solid Waste, 50
Fed. Reg. 614, 614 (Jan. 4, 1985) (to be codified at 40 C.F.R.
pts. 260, 261, 264, 265, 266). The EPA’s original 1980
regulations implementing Subtitle C of RCRA did not include
a reference to “spent material” or a material’s “purpose.”
Hazardous Waste Mgmt. Sys.: Identification and Listing of
Hazardous Waste, 45 Fed. Reg. 33,084 (May 19, 1980) (to be
codified at 40 C.F.R. pt. 261). Instead, a material was
considered “solid waste” when, among other things, it had
been “used” and “sometimes discarded.” See id. at 33,093,
33,119. Under the regulations, a material that “ha[d] served
its original intended use and sometimes [wa]s discarded” was
a “solid waste.” 40 C.F.R. § 261.2(b)(2) (1980) (emphasis
added); see also 45 Fed. Reg. at 33,119.2 Thus, once a
material had been used and could no longer serve its originally
intended use, it was considered waste. Notably, the preamble
to the final 1980 regulations used the phrase “original
intended purpose” rather than “original intended use” to
2
A material was “discarded” if, among other things, it was “placed
into or on any land” without being “re-used, reclaimed or recycled.”
40 C.F.R. § 261.2(c), (d) (1980); see also 45 Fed. Reg. at 33,119.
10
describe “solid waste.” 45 Fed. Reg. at 33,093, 33,099
(emphasis added). The preamble, while not binding, see
Kennecott Utah Copper Corp. v. U.S. Dep’t of the Interior, 88
F.3d 1191, 1223 (D.C. Cir. 1996) (explaining “whether [a]
preamble has independent legal effect . . . is a function of the
agency’s intention to bind either itself or regulated parties);
see also Nat’l Res. Def. Council v. EPA, 559 F.3d 561, 565
(D.C. Cir. 2009), is informative with respect to how the EPA
intended to determine a material’s “purpose.” The fact the
EPA substituted the term “use” for “purpose” in the final
regulation is consistent with the EPA’s current position that a
used material’s original “purpose” should be determined by
looking to how the material was initially deployed after being
purchased as a product—i.e., the material’s “original intended
use.”
In 1983, the EPA proposed the rule containing the current
hazardous waste regulations. See Hazardous Waste Mgmt.
Sys., 48 Fed. Reg. 14,472 (proposed Apr. 4, 1983) (to be
codified at 40 C.F.R. pts. 260, 261, 264, 265, 266). The
Agency proposed several important changes to the definition
of “solid waste.” Most importantly, the EPA’s proposed
definition would no longer base a material’s status as solid
waste on whether it was “sometimes discarded.” See id. at
14,475. Instead, a recycled material’s regulatory status would
depend “upon both what the material [was] and how it [was]
actually managed.” Id. The revised definition of “solid
waste” stated that five types of recycling activities, including
“[u]se constituting disposal . . . which involves the direct
placement of wastes onto the land,” would be within the
EPA’s jurisdiction. Id. at 14,476. The five categories were
further divided according to the type of waste involved. One
such type of waste was “spent material,” which the EPA
described in the preamble as “materials that have been used
and are no longer fit for use without being regenerated,
11
reclaimed, or otherwise re-processed.” Id. (emphasis added).
The EPA explained that “processes using spent materials may
be more logical candidates for regulation because spent
materials (having already fulfilled their original use) are more
inherently waste-like.” Id. at 14,488 (emphasis added). The
proposed regulation itself defined “spent material” as “any
material that has been used and has served its original
purpose.” Id. at 14,508 (proposed 40 C.F.R. § 261.2(b)(1))
(emphasis added). Again, the EPA’s synonymous use of the
singular term “original use” and the term “original purpose”
reveals the Agency viewed the two concepts as closely
connected and interrelated.
The EPA finalized the proposed regulations in 1985. See
Hazardous Waste Mgmt. Sys.; Definition of Solid Waste, 50
Fed. Reg. 614 (Jan. 4, 1985). Although the EPA stated it
“was continuing to define spent materials as those which have
been used and are no longer fit for use without being
regenerated, reclaimed, or otherwise reprocessed,” id. at 624,
the EPA acknowledged its “reference to original purpose [in
the 1983 proposed regulations] was ambiguous when applied
to situations where a material can be used further without
being reclaimed, but the further use is not identical to the
initial use.” Id. The Agency therefore stated it was
“clarifying what [it] mean[t] by spent materials,” id., and,
accordingly, revised the wording of the definition to read as it
does today: “A ‘spent material’ is any material that has been
used and as a result of contamination can no longer serve the
purpose for which it was produced without processing,” 40
C.F.R. § 261.1(c)(1) (1985). In the preamble, the EPA
provided an example of a product used for a subsequent
purpose not identical to its original use that would not be
considered a spent material:
12
[W]here solvents used to clean circuit boards are no[]
longer pure enough for that continued use, but are still
pure enough for use as metal degreasers. These
solvents are not spent materials when used for metal
degreasing. The practice is simply continued use of a
solvent (This is analogous to using/reusing a
secondary material as an effective substitute for
commercial products.). The reworded regulation
clarifies this by stating that spent materials are those
that have been used, and as a result of that use become
contaminated by physical or chemical impurities, and
can no longer serve the purpose for which they were
produced.
50 Fed. Reg. at 624.
As noted above, we recognize an agency’s preamble
guidance generally does not have the binding force of the
agency’s regulations. Nonetheless, it is at least informative.
The example the EPA provided is illustrative of the type of
subsequent use of a material it sought to regulate under
RCRA. The example suggested certain “continued use[s]” of
a material sufficiently similar to or consistent with the
material’s initial use would be considered “a purpose for
which [the material] was produced” and thus permitted under
the Agency’s “spent material” definition. Thus, the example
makes clear the EPA was, in both 1983 and 1985, associating
the concept of “purpose” with “initial use.” The EPA’s
accompanying explanation further indicates the Agency
intended to place limits on the types of reuse allowable under
its regulations. The Agency’s acknowledgement that its spent
material definition was ambiguous when applied to situations
where a material’s “further use is not identical to [its] initial
use” implies the Agency intended to create a distinction
13
between certain types of reuse.3 In fact, had the EPA
intended, as Howmet insists, to allow any reuse that is a
“normal use” of a material, its clarification of situations where
“the further use is not identical to the initial use” would have
been superfluous.
2. RCRA’s overall purpose
In addition to being inconsistent with the regulatory
history of the EPA’s “spent material” definition, we find
Howmet’s position to be incompatible with the overall thrust
of RCRA and its implementing regulations. Congress
described the national policy objective of RCRA as, wherever
feasible, reducing or eliminating “the generation of hazardous
waste.” 42 U.S.C. § 6902(b). “Waste that is nevertheless
generated should be treated, stored, or disposed of so as to
minimize the present and future threat to human health and the
environment.” Id. Congress recognized that “disposal of
solid waste and hazardous waste in or on the land without
careful planning and management can present a danger to
3
Amicus Curiae in support of Howmet, Alliance of Automobile
Manufacturers, argues that, under the EAB’s decision in In Re: Gen.
Motors Auto.-N. Am., No. RCRA 05-2004-0001, Appeal No. RCRA
(3008) 06-02 (EAB June 20, 2008), handed down a year after the
EAB’s decision in Howmet, a material is not “spent” if
subsequently used for a “legitimate purpose,” even if that use is
different “in some sense” from how it was used in its initial
deployment. Amicus Br. at 5–7. However, Amicus’ argument
ignores a key part of the EAB’s holding in General Motors. In
General Motors, the EAB clarified its “continued use” policy by
holding a subsequent use must satisfy two primary conditions in
order to be considered “a purpose for which [the material] was
produced.” In re: Gen. Motors, slip op. at 2. The first condition is
that the continued use “must be similar to or consistent with the
initial deployment or application of the material.” Id.
14
human health and the environment.” Id. § 6901(b)(2).
Moreover, Congress acknowledged that materials being
reused and recycled “can indeed be solid and hazardous
wastes and that these various recycling activities may
constitute hazardous waste treatment, storage, or disposal.”
H.R. REP. NO. 98-198(I), at 46 (1983), reprinted in 1984
U.S.C.C.A.N. 5576, 5605. Congress thus conceded that
certain recycled materials must be regulated in order to further
its overall goal of “protect[ing] human health and the
environment.” Id.
Consistent with Congress’s guidance, the EPA’s
regulations recognize that recyclable materials, if not managed
properly, may present significant risks to public health and the
environment. Congress and the EPA have also indicated their
concerns are heightened when materials and applications
applied to the land are involved. See 48 Fed. Reg. at 14,474
(explaining that “wastes destined for recycling can present the
same potential for harm as wastes destined for treatment and
disposal,” that “using or reusing wastes by placing them
directly on the land . . . may present the same sorts of hazards
as actually incinerating or disposing of them,” and noting
“[f]acilities that recycle hazardous wastes have caused serious
health and environmental problems by directly placing the
wastes on the land” and that “[i]mproper storage,
overaccumulation of inventory, and unsafe transport before
recycling have also been recurring problems”).
Under the EPA’s regulations, certain recycled materials
are not treated as solid wastes when “[u]sed or reused as
ingredients in an industrial process to make a product,
provided the materials are not being reclaimed” or “[u]sed or
reused as effective substitutes for commercial products.” 40
C.F.R. § 261.2(e)(1)(i), (ii). However, “[m]aterials used in a
manner constituting disposal, or used to produce products that
15
are applied to the land,” id. § 261.2(e)(2)(i), are treated as
solid wastes, regardless, “even if the recycling involves use,
reuse, or return to the original process,” id. § 261.2(e)(2).
Accordingly, when a material has become contaminated, and a
party seeks to use the contaminated material for a purpose
substantially different from its original use by applying it to
the land, the party seeking to reuse the material has an
obligation to examine the material, disclose its hazardous
characteristics, and treat it as a hazardous waste. Fertilizer is
indisputably a product “applied to the land.” Thus, the
shipment of a corrosive material such as used KOH to be used
to produce fertilizer appears to be the type of activity the EPA
sought to regulate under RCRA.
Having determined the Agency’s interpretation is
reasonable, we need not evaluate the reasonableness of
Howmet’s proposed interpretation. Once it is established that
an agency has adopted a reasonable interpretation of an
ambiguous regulation, the agency’s interpretation stands even
if a regulated entity has proposed an interpretation that might
comport with the statutory scheme equally well or even better.
IV
We turn briefly to Howmet’s alternative argument that,
even if we conclude the EPA’s interpretation of its “spent
material” regulation was reasonable, we should nonetheless
reverse the district court because Howmet was not given fair
notice of the EPA’s interpretation. Howmet’s second
argument fares no better than its first.
“Traditional concepts of due process incorporated into
administrative law preclude an agency from penalizing a
private party for violating a rule without first providing
adequate notice of the substance of the rule.” Satellite Broad.
16
Co., Inc. v. FCC, 824 F.2d 1, 3 (D.C. Cir. 1987). In
determining whether a party was provided fair notice, we ask
first “whether the regulated party received, or should have
received, notice of the agency’s interpretation in the most
obvious way of all: by reading the regulations.” Gen. Elec.,
53 F.3d at 1329. “If, by reviewing the regulations and other
public statements issued by the agency, a regulated party
acting in good faith would be able to identify, with
‘ascertainable certainty,’ the standards with which the agency
expects parties to conform, then the agency has fairly notified
a petitioner of the agency’s interpretation.” Id. This court has
held published agency guidance may provide fair notice of an
agency’s interpretation of its own regulations. See Star
Wireless, LLC v. FCC, 522 F.3d 469, 474 (D.C. Cir. 2008).
One year after the EPA promulgated its 1985 final rule
defining “spent material,” 40 C.F.R. § 261.1(c)(1), it
published a guidance manual describing the interpretation it
adopted with respect to Howmet’s KOH shipments. See
OFFICE OF SOLID WASTE, U.S. EPA, GUIDANCE MANUAL ON
THE RCRA REGULATION OF RECYCLED HAZARDOUS WASTES
(1986) (Guidance Manual). The 1986 Guidance Manual
states:
[A] spent material is any material that has been used
and as a result of contamination can no longer serve
the purpose for which it was produced without
processing. EPA interprets “the purpose for which a
material was produced” to include all uses of the
product that are similar to the original use of the
particular batch of material in question. For example,
EPA cites the case of materials used as solvents to
clean printed circuit boards . . . . If the solvents
become too contaminated for this use but are still pure
enough for similar applications (e.g., use as metal
17
degreasers), they are not spent materials. Use of
slightly contaminated solvents in this way is simply
continued use of the original material rather than
recycling of a spent material. However, the solvents
would be spent materials if they had to be reclaimed
before reuse or if the manner in which they were used
was not similar to their original application. . . . As
[an] example, used plating baths reused directly in
other plating processes would not be spent materials.
If used for a purpose other than plating, however, the
used plating baths would be a spent material.
Id. at 1–7. The EPA announced the availability of the
Guidance Manual in the Federal Register. See 51 Fed. Reg.
26,892, 26,892 (July 28, 1986) (noting the guidance document
is “designed to assist . . . the regulated community in applying
the definition of solid waste . . . to determine which materials
when recycled are solid and hazardous wastes”); see also
Perales v. Reno, 48 F.3d 1305, 1316 (2d Cir. 1995) (“Due
process cases have long recognized that publication in the
Federal Register constitutes an adequate means of informing
the public of agency action.”).
The EPA’s explanation of the definition of spent material
in the Guidance Manual should have put Howmet on notice of
the EPA’s interpretation of its “spent material” definition, and
Howmet should have been able to determine that, based on the
EPA’s interpretation, the used KOH it transferred to Royster
was a spent material. Use as a fertilizer ingredient is not a use
“similar to” use as an industrial cleaning agent. Thus, even
assuming the EPA’s 1985 Final Rule and its accompanying
regulations lacked enough clarity, on their own, to provide
Howmet fair notice of the EPA’s interpretation of its spent
material definition, the Guidance Manual, made available to
Howmet one year after the regulation was promulgated and
18
thirteen years before the conduct at issue here, was sufficient
to do so.
V
For the foregoing reasons, the judgment of the district
court is
Affirmed.
KAVANAUGH, Circuit Judge, dissenting:
The Resource Conservation and Recovery Act of 1976
grants EPA authority to regulate the generation, storage,
transport, treatment, and disposal of “hazardous waste.” As
relevant here, the statute provides that hazardous waste must
be “discarded material.” 42 U.S.C. § 6903(5), (27). In 1985,
EPA issued regulations that construe “discarded material” to
include certain “spent material.” See 40 C.F.R. § 261.2. A
material is “spent” if it is no longer suitable for “the purpose
for which it was produced.” Id. § 261.1(c)(1). A separate
regulation makes clear that “purpose,” though singular, can
include multiple purposes. See id. § 260.3(b).
The key issue in this EPA enforcement action concerns
the 1985 regulations’ phrase “purpose[s] for which [a
material] was produced.” The material at issue here – liquid
potassium hydroxide – is produced and marketed for, among
other things, use in fertilizer. Yet EPA seeks to impose fines
on Howmet for shipping liquid potassium hydroxide for use
in fertilizer simply because Howmet had already used the
potassium hydroxide as a metal cleaning agent. In justifying
its enforcement action, EPA claims that the “purpose for
which [a material] was produced” includes only the material’s
first use by the purchaser.
In my judgment, EPA’s argument mangles the language
of the 1985 regulations. As a matter of plain English, the
purposes for which a material is produced are not limited to
how the material is initially used by a purchaser. As Howmet
cogently argues, “the first use that is made of a material after
the material is produced simply cannot define or change the
purpose for which the material was previously produced.”
Howmet Reply Br. at 5. To be sure, EPA would prevail here
if the 1985 regulation said that “spent material” is material
that is re-used. But the regulation does not say anything like
that. EPA’s current interpretation of the 1985 regulations in
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effect deletes the word “produced” and substitutes the words
“first used.” EPA’s current interpretation is flatly inconsistent
with the text of its 1985 regulations. To me, this case begins
and ends with that rather simple point.
Courts must not “permit the agency, under the guise of
interpreting a regulation, to create de facto a new regulation.”
Christensen v. Harris County, 529 U.S. 576, 588 (2000).
That’s what EPA is attempting to do here. EPA is seeking to
expand the definition of spent material – and thereby enlarge
its regulatory authority. It may be that broader EPA
regulatory authority in this area would be wise as a policy
matter. But EPA may not obtain that authority by distorting
the terms of the 1985 regulations.
What’s more, EPA’s current interpretation contravenes
EPA’s explicit statement in the preamble to the 1985
regulations – namely, that it was not extending its regulatory
authority to “situations where a material can be used further
without being reclaimed, but the further use is not identical to
the initial use.” Hazardous Waste Management System;
Definition of Solid Waste, 50 Fed. Reg. 614, 624 (Jan. 4,
1985). EPA now wants to read the 1985 regulations to allow
it to regulate precisely what the preamble said it could not
regulate.
Of course, there is good reason the 1985 regulations did
not go as far as EPA now wants to. Doing so would violate
the text of RCRA, the governing statute, which as relevant
here confines EPA’s authority to regulation of “discarded
material.” We have held that Congress intended the term
“discarded material” to carry its “ordinary, plain-English
meaning” – namely, to cover only material that is “disposed
of, thrown away, or abandoned.” American Mining Cong. v.
EPA, 824 F.2d 1177, 1184-85, 1190 (D.C. Cir. 1987); see
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also Ass’n of Battery Recyclers, Inc. v. EPA, 208 F.3d 1047,
1051 (D.C. Cir. 2000). EPA’s current extension of its RCRA
jurisdiction to reach materials that, far from being disposed
of, abandoned, or thrown away, are being used as anticipated
disregards Congress’s decision to restrict EPA’s authority to
regulation of “discarded material.” In our Court, Howmet has
raised a challenge based only on the 1985 regulations, not on
RCRA, so there is no basis here for further exploring the
statutory boundaries. But in light of today’s decision, we may
have to consider in a future case whether EPA’s expansion of
its regulatory authority transgresses RCRA’s limits.
* * *
I would reject EPA’s interpretation of its 1985
regulations as contrary to the clear language of the
regulations. Even assuming the regulations are susceptible to
a range of reasonable readings, EPA’s interpretation is outside
that range. See Auer v. Robbins, 519 U.S. 452, 461 (1997). I
respectfully dissent.