Natl Multi Hsing v. EPA

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued March 19, 2002 Decided June 7, 2002

No. 01-1159

National Multi Housing Council;
National Apartment Association;
National Leased Housing Association,
Petitioners

v.

United States Environmental Protection Agency,
Respondent

Battery Council International,
Intervenor

On Petition for Review of an Order of the
Environmental Protection Agency

J. Marks Moore III argued the cause for the petitioners.
Samuel M. Riley was on brief.

 Jon M. Lipshultz, Attorney, United States Department of
Justice, argued the cause for the respondent. John C. Cru-
den, Assistant Attorney General, United States Department
of Justice, and Alan Carpien, Attorney, United States Envi-
ronmental Protection Agency, were on brief.

David B. Weinberg and Edward Loring Ferguson, Jr.
entered appearances for the intervenor.

Before: Henderson, Tatel and Garland, Circuit Judges.

Opinion for the court filed by Circuit Judge Henderson.

Karen LeCraft Henderson, Circuit Judge: In 1992 the
Congress passed the Residential Lead-Based Paint Hazard
Reduction Act of 1992 (Title X1 or Act), which, inter alia,
amended the Toxic Substances Control Act (TSCA), 15 U.S.C.
ss 2601 et seq., by adding Title IV entitled "Lead Exposure
Reduction." In 2001 the Environmental Protection Agency
(EPA) issued its final "Lead Rule" pursuant to section 403 of
TSCA, 15 U.S.C. s 2683. See Lead; Identification of Dan-
gerous Levels of Lead, 66 Fed. Reg. 1206 (2001). The
petitioners, three trade associations representing the multi-
family rental housing industry, challenge the Lead Rule's
"regardless of source interpretation," which construes the
statutory term "lead-based paint hazard" to include "lead-
based paint and all residential lead-containing dusts and soils
regardless of the source of the lead, which, due to their
condition and location, would result in adverse human health
effects." Id. at 1207 (emphasis added). The petitioners
assert EPA's decision to include all hazardous lead-containing
dust and soil, whether or not the source of the lead is lead-
based paint, is contrary to the Congress's intent in enacting
Title X and is arbitrary and capricious.2 We reject the
petitioners' challenge for the reasons set forth below.

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1 The legislation was enacted as Title X of the Housing and
Community Development Act of 1992, Pub. L. No. 102-550, 106
Stat. 3672 (1992).

2 The petitioners also assert the regardless of source interpreta-
tion violates the equal protection clause of the Fourteenth Amend-
ment to the United States Constitution but this argument is waived

I.

Title X directs EPA and the Department of Housing and
Urban Development (HUD) to take various actions to protect
the public from any lead-based paint hazard by reducing such
hazard3 or, of particular relevance here, by requiring disclo-
sure of it. Section 1018(a)(1) of Title X directs HUD and
EPA to promulgate regulations for the disclosure of lead-
based paint hazards in "target housing," that is, "housing
constructed prior to 1978," 42 U.S.C. s 4851b(27), which is
offered for sale or lease. See 42 U.S.C. s 4852d(a). Accord-
ingly, in 1996, EPA and HUD jointly promulgated a final
"Disclosure Rule" which requires an owner of target housing
to disclose "the presence of any known lead-based paint
and/or lead-based paint hazards" before a purchaser or lessee
"is obligated under a contract to purchase or lease target
housing." See 61 Fed. Reg. 9064, 9082 (1996) (codified at 24

__________
because it was not raised before EPA. See National Wildlife Fed'n
v. EPA, 286 F3d 554, 562 (D.C. Cir. 2002) ("It is well established
that issues not raised in comments before the agency are waived
and this Court will not consider them.") (citing Nat'l Elec. Mfrs.
Ass'n v. EPA, 99 F.3d 1170, 1171 n.1 (D.C. Cir. 1997); Washington
Ass'n for Television & Children v. FCC, 712 F.2d 677, 681 (D.C.
Cir. 1983)).

3 See, e.g., 42 U.S.C. s 4822 (HUD "shall establish procedures to
eliminate as far as practicable the hazards of lead based paint
poisoning" and "shall provide for appropriate measures to conduct
risk assessments, inspections, interim controls, and abatement of
lead-based paint hazards" with respect to target housing covered by
HUD mortgage insurance or assistance payments); id. s 4852
(HUD "is authorized to provide grants to eligible applicants to
evaluate and reduce lead-based paint hazards in nonpublic hous-
ing"); id. s 4852a (HUD and EPA "shall establish a task force to
make recommendations on expanding resources and efforts to eval-
uate and reduce lead-based paint hazards in private housing"); id.
s 4852c (HUD, "in consultation with the [EPA, DOL and HHS],
shall issue guidelines for the conduct of federally supported work
involving risk assessments, inspections, interim controls, and abate-
ment of lead-based paint hazards").

C.F.R. s 35.88 (HUD codification); 40 C.F.R. s 745.107
(EPA codification)).

Section 403 of TSCA further requires that EPA "promul-
gate regulations which shall identify ... lead-based paint
hazards, lead-contaminated dust, and lead-contaminated soil."
15 U.S.C. s 2683. Pursuant to this directive, on January 5,
2001 EPA issued its final Lead Rule, which, as noted above,
included EPA's regardless of source interpretation that the
term "lead-based paint hazard" is "intended to identify lead-
based paint and all residential lead-containing dusts and soils
regardless of the source of the lead, which, due to their
condition and location, would result in adverse human health
effects." 66 Fed. Reg. at 1207. The petitioners seek review
of this portion of the Lead Rule insofar as it requires them to
disclose lead contamination in dust and soil from sources
other than lead-based paint.

II.

The petitioners first assert the language of Title X must be
construed to refer only to lead hazards from lead-based paint.
In construing statutory language we use the familiar Chevron
analysis:

If ... " 'Congress has directly spoken to the precise
question at issue,' " we "must give effect to Congress's
'unambiguously expressed intent.' " Secretary of Labor
v. F[ed. Mine Safety & Health Review Comm'n], 111
F.3d 913, 917 (D.C. Cir. 1997) (quoting Chevron USA,
Inc. v. Natural Resources Defense Council, Inc., 467
U.S. 837, 842, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984)). "If
'the statute is silent or ambiguous with respect to the
specific issue,' we ask whether the agency's position rests
on a 'permissible construction of the statute.' " Id. (quot-
ing Chevron, 467 U.S. at 843, 104 S.Ct. 2778).

Cyprus Emerald Resources Corp. v. Fed. Mine Safety &
Health Review Comm'n, 195 F.3d 42, 45 (D.C. Cir. 1999).

The petitioners maintain that EPA's regardless of source
interpretation contravenes the Congress's unambiguously ex-

pressed intent to target contamination from lead-based paint
only. In support, they point to the repeated references to
lead-based paint and to "lead-based paint hazards" through-
out Title X, including, notably, both in section 1018(a)(1),
which authorized EPA and HUD to promulgate their joint
disclosure rule, and in the legislation's title; the definition of
"target housing" to include only "housing constructed prior to
1978," the year the Consumer Product Safety Commission
banned residential use of lead-based paint, see 61 Fed. Reg.
s 9066; and the focus of the pre-enactment congressional
hearings on the dangers posed by lead-based paint.

By contrast, EPA maintains that the regardless of source
interpretation is consistent with the statutory language and,
in particular, with the statutory definition of "lead-based paint
hazard" as "any condition that causes exposure to lead from
lead-contaminated dust, lead-contaminated soil, lead-
contaminated paint that is deteriorated or present in accessi-
ble surfaces, friction surfaces, or impact surfaces that would
result in adverse human health effects as established by the
appropriate Federal agency." 42 U.S.C. s 4851b(15); 15
U.S.C. s 2681(1). EPA contends that because the three lead
sources--dust, soil and deteriorated paint--are enumerated
separately, and neither "lead-contaminated dust" nor "lead-
contaminated soil" is anywhere defined to require that the
lead contamination derive from paint, the Act permits regula-
tion of lead contaminated dust and soils regardless of the
source of the lead.

We agree with EPA that the Act's definition does not
represent the Congress's " 'unambiguously expressed' " intent
in view of the statutory definition which broadens the term
beyond its literal meaning by including lead-contaminated
dust and soil without expressly limiting the source of the
contamination to lead-based paint. This being so, we apply
the second step of Chevron and conclude that EPA's interpre-
tation reflects "a permissible construction of the statute."
Cyprus Emerald, 195 F.3d at 45.

The arbitrary and capricious standard requires only that an
agency "examine the relevant data and articulate a satisfacto-

ry explanation for its action including a 'rational connection
between the facts found and the choice made.' " Motor
Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463
U.S. 29, 43 (1983) (quoting Burlington Truck Lines, Inc. v.
United States, 371 U.S. 156, 168 (1962)). EPA satisfied this
standard here. In its response to comments, EPA explained
that "while [its] decision to cover lead in dust or soil regard-
less of the source of the lead is based on the directives of the
statute," it is also justified for the additional reason that there
is no "good technical basis to exclude from coverage based on
the lead source, dust or soil--particularly dust and soil with
high levels of lead." EPA Response to Comments at 32-33
(Dec. 22, 2000). Among the technical problems EPA cited is
that, "as a practical matter, with current scientific technology,
it is not possible to determine with good precision how much
of the lead in dust or soil in a specific room or area originated
from lead paint in a specific dwelling unit on a specific
building component" so that "there is a distinct absence of a
scientific method to determine conclusively that the source of
lead in dust or soil is not paint on a routine basis." Id at 31-
32. At oral argument the petitioners' counsel agreed that it
is impossible "under current technology" to ascertain whether
lead contamination in soil and dust derives from lead-based
paint or from some other source. In light of the technological
limitation, EPA reasonably required disclosure of all lead
contaminated soil and dust regardless of source in order to
carry out the Congress's undisputed intent to require disclo-
sure and abatement of all hazardous contamination from lead-
based paint. A contrary rule requiring disclosure only of
contamination known to be from paint, which appears to be
what the petitioners seek, would inevitably prevent disclosure
of some paint-based contamination because its source cannot
be determined.4

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4 It is not clear that EPA's regardless of source interpretation
even imposes any additional disclosure obligation on the petitioners.
At oral argument their counsel all but acknowledged that in the
absence of EPA's interpretation a seller would nevertheless be
obligated to disclose lead contamination.

 For the foregoing reasons, the petition for review is

Denied.