United States v. Marine Shale Processors

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 94-30664

UNITED STATES OF AMERICA, ET AL.,
Plaintiffs,

UNITED STATES OF AMERICA,
Plaintiff-Appellee,
Cross-Appellant,

STATE OF LOUISIANA,
Intervenor-Appellee,
Cross-Appellant,

versus

MARINE SHALE PROCESSORS,
Defendant-Appellant,
Cross-Appellee.

Appeals from the United States District Court
for the Western District of Louisiana

April 18, 1996

Before REYNALDO G. GARZA, KING, and HIGGINBOTHAM, Circuit Judges.

HIGGINBOTHAM, Circuit Judge:

This case, along with Nos. 94-30419 and 95-60228, concerns the

past actions and future fate of Marine Shale Processors, Inc., a

hazardous waste treatment facility. The cases involve multiple

aspects of each of the federal environmental laws as affecting

disputes between the Environmental Protection Agency and MSP. We

provide a brief explanation of the three cases in this opinion

before discussing the specific issues raised by this appeal.
 I

In 1985, Marine Shale Processors, Inc. opened a facility in

Amelia, Louisiana purporting to recycle hazardous waste through its

newly acquired rotary kiln, a mechanism 275 feet long and 11 feet

in diameter with the capacity to heat materials to temperatures in

excess of 2000 degrees Fahrenheit. MSP's treatment process began

with placement of materials in its kiln. From there, most material

traveled through oxidizers and slag boxes. The process generated

significant quantities of smoke, flue gases, and air particles.

Carcinogenic heavy metals tended to concentrate in these air

particles. The air pollutants passed through baghouses, which

collected some of the material in the form of caked dust. The dust

dropped off the bags to the bottom of the baghouse, where it was

collected, run through the oxidizers and slag boxes, then combined

with the rest of the material produced from the primary process.

The nature of MSP's operation made it subject to federal and state

laws limiting pollution of water, air, and land. See The Resource

Conservation and Recovery Act, 42 U.S.C. §§ 6901-92k; The Clean Air

Act, 42 U.S.C. §§ 7401-7671q; The Clean Water Act, 33 U.S.C. §§

1251-1376. These laws required MSP to obtain permits specifying

the type and amount of pollutants that it could discharge into the

environment.

RCRA regulations divide facilities using heat to process

hazardous waste into three basic types, incinerators, boilers, and

industrial furnaces. See 40 C.F.R. § 260.10 (defining all three

terms). From 1980 to 1991, the regulations required only

2
facilities engaged in incineration to obtain permits before

operating. See Final Rule, Burning of Hazardous Wastes in Boilers

and Industrial Furnaces, 56 Fed. Reg. 7134, 7138 (1991); 40 C.F.R.

pt. 264 subpt. O. In 1991, EPA amended the regulations to require

all facilities using thermal processes to treat hazardous waste to

obtain one of two types of permits. 56 Fed. Reg. at 7134.

Incinerators needed Subpart O permits, and boilers and industrial

furnaces were required to obtain BIF permits. See 40 C.F.R. pt.

266 subpt H. Since opening operations in 1985, Marine Shale has

claimed that its kiln system constitutes an industrial furnace

under the RCRA regulations. When EPA amended the regulations to

require all thermal treatment facilities to acquire permits, MSP

filed a six volume permit application with EPA Region VI. Four

years later, EPA denied this permit application. Invoking our

authority to set aside final agency action under the Administrative

Procedures Act, 5 U.S.C. § 706(2), MSP appealed the permit denial.

In number 95-60228, we address this denial.

In 1990, the United States sued MSP under RCRA, alleging that

MSP was an incinerator of hazardous waste operating without the

required Subpart O permit and was illegally disposing incinerator

ash on the ground. The United States later amended its complaint

to allege violations of the CWA, the CAA, and other provisions of

RCRA. Southern Wood Piedmont Company, the entity sending the

largest volume of hazardous waste to Marine Shale, intervened and

sought a declaration that all material resulting from the

processing of its waste was exempt from RCRA regulation. The

3
Louisiana Department of Environmental Quality sought to intervene

as a plaintiff; the district court allowed LDEQ to intervene but

prohibited it from asserting claims other than those brought by the

United States.

Early in the litigation, District Court Judge Haik granted the

United States’ motion for a preliminary injunction prohibiting MSP

from transporting the material resulting from its process away from

grounds owned by MSP or its sister corporation, Recycling Park,

Inc. After former representatives of MSP attempted to bribe Judge

Haik, Fifth Circuit Chief Judge Politz ordered the case transferred

to Judge Adrian Duplantier, who has presided since.

Judge Duplantier divided the litigation into phases. In the

first phase, the United States and SWP tried their RCRA claims to

a jury. After a five-week trial, the jury was unable to agree to

answers to four of thirteen interrogatories. Judge Duplantier

declared a mistrial on the claims prosecuted by the United States

and granted SWP’s motion for partial judgment under Fed. R. Civ. P.

54(b). Dissatisfied with the scope of this judgment, SWP appealed

to this court. Contending that the district court erred in

entering the Rule 54(b) judgment, the United States cross-appealed.

In number 94-30419, we address the appeals from this judgment.

After this first attempt to resolve RCRA issues, Judge

Duplantier proceeded to the later phases of the case. The court

conducted a bench trial on the CWA and CAA issues. It also

resolved certain outstanding RCRA claims by summary judgment. The

sum of the district court’s rulings was that MSP had violated

4
several provisions of all three environmental statutes. The

district court fined MSP for each violation and granted the United

States’ request for injunctive relief. Judge Duplantier then

stayed all injunctions pending appeal, and as a condition for this

stay, enjoined MSP from distributing dividends to its shareholders.

Judge Duplantier entered a second Rule 54(b) judgment incorporating

all matters decided at the later phase of the litigation. In this

case, number 94-30664, we address issues arising from this second

Rule 54(b) judgment.

Because of the complexity of the issues involved, we detail

the facts corresponding to each district court ruling with the

relevant legal discussion. We begin with CWA issues, continue with

RCRA questions, and then consider CAA disputes. We conclude with

a discussion of the district court’s injunctions.

II

The district court fined MSP for two types of CWA violations,

thermal pollution and stormwater discharges. MSP appeals both

fines. MSP concedes that it violated the CWA; it argues only that

the fine was too high.

A

MSP used water to cool the material produced from its kiln.

MSP pumped the water from Bayou Boeuf through a series of pipes,

and the water absorbed the heat through the pipes without coming

into direct physical contact with MSP's materials. Water used in

this manner is called “non-contact cooling water.” Since opening

5
operations in 1985, MSP has discharged non-contact cooling water

heated to temperatures at times exceeding 100 degrees Fahrenheit

back into the Bayou Boeuf. The alternative to this type of heat

discharge system is the construction of an expensive form of heat

removal, such as a system of cooling towers.

Shortly after opening, MSP first applied to EPA Region VI for

a National Pollutant Discharge Elimination System permit. 33

U.S.C. § 1342(a). This application did not mention MSP's need for

non-contact cooling water. In July of 1986, MSP received an NPDES

permit that did not include allowances for non-contact cooling

water. MSP continued its discharge of heat into the Bayou Boeuf.

On February 25, 1987, MSP applied for a revision in its NPDES

permit to allow it to discharge hot water into the Bayou. In

response to MSP’s application, Region VI issued a series of three

draft permits, each allowing MSP to discharge non-contact cooling

water at temperatures below 100 degrees Fahrenheit. In July of

1991, Region VI denied MSP's request for a revision to its NPDES

permit and announced that it would terminate the original 1986

permit on the ground that MSP had intentionally included

misinformation in its permit application. Two months later, the

Environmental Appeals Board reversed, holding that Region VI could

not terminate MSP's original permit or deny its request for

revisions on misinformation grounds without granting MPS a hearing.

Marine Shale Processors, Inc., NPDES Appeal No. 91-22 (EPA Sep. 12,

1994). Region VI has not yet scheduled a hearing regarding MSP's

NPDES permit.

6
 After the bench trial on the Clean Water Act issues, the

district court found the following facts:

MSP has discharged large quantities of non-contact
cooling water containing heat (by law a pollutant) into
Bayou Boeuf almost daily since it began operating, all
without a permit. . . . Despite the frequency and
duration of MSP's unpermitted discharges, there is
little, if any, evidence of actual damage to Bayou Boeuf.
This is especially so with respect to the discharge of
the non-contact cooling water.

Although the unpermitted discharges did not have a
significant impact on the environment, these water
violations are serious. MSP's actions in discharging
pollutants into Bayou Boeuf have been willful and
flagrant. . . . [T]here is not doubt that MSP knew it
needed an NPDES permit . . . and simply decided to
operate without [one]. MSP not only discharged non-
contact cooling water knowing it did not have a permit to
do so, but in order to increase capacity and thus
maximize profit, substantially increased the amount of
such water that it was discharging.

Such discharges demonstrate a callous disregard for
the regulatory scheme and the purposes of the Clean Water
Act. The court cannot countenance such activity. No one
is above the law. MSP's water violations were profit
driven, and for the most part were purposeful, not
accidental.

I consider as a mitigating circumstance the fact
that since February 1987, MSP has attempted to obtain a
modified NPDES permit, but note that the request for
modification did not come until more than a year after
MSP began operations without the necessary permit.

MSP’s operation also resulted in a number of stormwater

discharges which exceeded the limits specified in its NPDES permit

for oil, grease, and chemical oxygen demand. On appeal, MSP

concedes that four of 430 of its oil and grease readings and

thirty-three of its 431 chemical oxygen demand measurements, during

the period from 1988 to 1992, were higher than its permit limits.

The district court considered MSP's thermal pollution together with

7
its unlawful stormwater discharges in levying a $3,000,000 fine for

all Clean Water Act violations.

B

MSP attacks the portion of the stormwater discharge fine on

several grounds. First, MSP argues that the district court

insufficiently reduced the penalty in light of EPA’s seven-year

delay in ruling on MSP’s NPDES permit amendment application.

Second, MSP urges that the district court erroneously excluded

evidence of measurement error in the process used to assess

stormwater discharges; MSP contends that two-thirds or more of its

stormwater exceedences were within measurement error range of its

NPDES permit limits. Third, MSP draws our attention to the fact

that all of the exceedences were "first flush" readings, readings

taken at the beginning of a storm event where pollutant levels are

highest, and suggests that in 1992 EPA amended its stormwater

regulations so that compliance is now measured according to

readings taken over the entire storm event. Fourth, MSP points out

that the Office of Water, United States Environmental Protection

Agency Training Manual for NPDES Permit Writer EPA 833-B-93-003,

§ 3.3.1 (1993), states that "[I]n any single monitoring

observation, a discharger running a properly operated and

maintained treatment facility has a 95 to 99 percent chance of

complying with its permit limits,” and that its compliance for oil

and grease was within this range. Fifth, MSP contests the fine on

the ground that the district court did not differentiate and define

the number or severity of the various violations.

8
 Regarding thermal pollution, MSP contends that the $3,000,000

penalty was too high because the district court based its fine in

part on a clearly erroneous finding of fact, namely, that the

increase in MSP’s discharges of non-contact cooling water were

profit-driven. MSP points to evidence in the record supporting a

different motivation for its increase in hot water discharges.

C

When considering MSP’s argument that the district court fine

was too harsh, we begin by noting that the court had statutory

authority to impose a fine of around $45,000,000 for CWA

violations. The $3,000,000 fine represents less than eight percent

of what the court might have imposed. We note that the evidence

amply supports the district court’s finding that MSP knew it needed

a permit for its thermal discharges and simply decided to operate

without one for several years. The record also discloses that the

district court, at least initially, found that MSP violated the CWA

in a third way by allowing rainwater and waves to wash into and out

of barges on the Bayou that MSP used to hold hazardous waste, but

that the district court apparently later decided not to fine MSP

for these discharges. Finally, we note that when imposing

penalties under the environmental laws, courts often begin by

calculating the maximum possible penalty, then reducing that

penalty only if mitigating circumstances are found to exist. See,

e.g., Atlantic States Legal Foundation, Inc. v. Tyson Foods, Inc.,

897 F.2d 1128, 1142 (11th Cir. 1990). Under such circumstances, we

suggest that MSP may act at its own peril in seeking to upset this

9
fine. See United States v. B & W Investment Properties, 38 F.3d

362, 368 (7th Cir. 1994) (“In considering fines under the [Clean

Air] Act, courts generally presume that the maximum penalty should

be imposed.”), cert. denied, 115 S. Ct. 1998 (1995).1

We find unconvincing MSP’s contention that the district court

insufficiently weighed EPA’s delay in ruling on the NPDES permit

amendment application when imposing the fine. MSP concedes that

the district court considered this mitigating factor in its

analysis. We note also that MSP never sought the aid of the

federal judiciary in compelling EPA to act more expeditiously

“despite the clear availability of this remedy.” United States v.

General Motors Corp., 876 F.2d 1060, 1068 (1st Cir. 1989), aff’d,

496 U.S. 530 (1990); see, e.g., Ingalls Shipbuilding v. Asbestos

Health Claimants, 17 F.3d 130, 132-34 & n.9 (5th Cir. 1994)

(considering remedies for undue agency delay); Atlantic & Gulf

Stevedores, Inc. v. Donovan, 274 F.2d 794, 802 (5th Cir. 1960);

Telecommunications Research & Action Center v. FCC, 750 F.2d 70,

79-81 (D.C. Cir. 1984).2 “There was a simple and straightforward

1
This statement applies with equal force to the district
court’s Clean Air Act fines.
2
Although we note some tension in the cases as to which
court’s aid MSP might have enlisted, compare Telecommunications
Research, 750 F.2d at 74-79 (holding that 5 U.S.C. § 706(1) and 28
U.S.C. § 1651(a) grant exclusive jurisdiction to the courts of
appeals to remedy agency delay under certain circumstances) with
Ingalls Shipbuilding, 17 F.3d at 132-34 (holding that some
challenges to agency delay may proceed in the district court under
28 U.S.C. § 1361), we find no dispute in the case law that MSP had
some judicial remedy available to it. In fact, MSP itself
recognized that such a remedy was available, and at one point
sought an order from the district court directing LDEQ to expedite
consideration of its permit applications.

10
way for [MSP] to avoid paying civil penalties for violations of the

Clean Water Act: After purchasing the plant, [MSP] could have

ceased operations until it was able to discharge pollutants without

violating the requirements of its NPDES permit.” Atlantic States,

897 F.2d at 1141-42.

With these concepts in mind, we reject MSP’s argument that the

district court insufficiently mitigated its fine in consideration

of EPA’s delay in ruling on MSP’s NPDES permit amendment

application. In General Motors Corp. v. United States, 496 U.S.

530, 541 & n.4 (1990), the Supreme Court held that in the CAA

context courts should respond to EPA’s undue agency delay by

reducing penalties in an enforcement action in order to counteract

any incentive the agency might have to place itself in a superior

litigating position.3 The district court considered EPA’s delay in

its calculations and reduced the fine accordingly. We find no

abuse of discretion.

Next, we reject MSP’s argument that the district court abused

its discretion by relying too heavily on MSP’s stormwater discharge

exceedences in calculating its fine. Initially, we note that MSP’s

statement that the district court excluded evidence of measurement

error contradicts the record, which shows that the district court

heard evidence from MSP expert John Wagner on this matter. While

MSP correctly pointed out that many of its stormwater exceedence

3
We note that one of the cases upon which MSP relies for its
argument, American Cyanamid Co. v. EPA, 810 F.2d 493 (5th Cir.
1987), may no longer be good law after General Motors. See 496 U.S.
at 536 n.1.

11
levels were within the range of measurement error of its NPDES

permit, the district court correctly responded that measurement

error is “plus or minus,” and thus that many of MSP’s discharge

samples reading below permit limits could have been exceedences.

In addition, we find unpersuasive MSP’s reliance on the fact that

all of its exceedences were first flush samples, i.e. samples taken

at the beginning of a storm when pollutant readings are highest,

when EPA’s current regulations may rely on readings from the entire

storm event to determine if an exceedence has occurred. MSP admits

that the regulations in force at the time of its discharges

rendered illegal any stormwater discharge in excess of permit

limits, even first flush samples. It does not argue that these

regulations were invalid. Under these circumstances, the district

court did not abuse its discretion by relying on MSP’s stormwater

exceedences.

For similar reasons, we reject MSP’s reliance on EPA

publications stating that a properly operated facility should

achieve a 95-99% rate of compliance with its NPDES permit limits.

MSP does not suggest that EPA’s enforcement authority in some way

turns upon this figure. Moreover, MSP did not achieve this

compliance figure.

We disagree with MSP that the district court’s findings of

fact and conclusions of law were insufficiently specific to support

the fine. The district court’s findings were not as detailed as

some. See, e.g., Hawaii’s Thousand Friends v. City & County of

Honolulu, 821 F. Supp. 1368, 1394-97 (D. Haw. 1993). Nevertheless,

12
calculation of discretionary penalties is not an exact science, and

few courts could comply with MSP’s request that the importance of

each factor be precisely delineated. See Tull v. United States,

481 U.S. 412, 427 (1987) (observing that “highly discretionary

calculations that take into account multiple factors are necessary

in order to set civil penalties under the Clean Water Act”); see

also B & W Investment Properties, 38 F.3d at 368.

Finally, we find some merit in MSP’s attack upon the district

court’s findings of fact, and as a result, we reverse the damage

award and remand for recalculation. MSP argues that the district

court’s penalty calculations were based on clearly erroneous

findings of fact. In particular, MSP attacks the district court’s

conclusions that “MSP’s water violations were profit driven, and

for the most part were purposeful, not accidental,” and that MSP,

“in order to increase capacity and thus maximize profit,

substantially increased the amount of such water that it was

discharging.”

Regarding the first finding, we find no clear error. The

district court could infer that MSP’s water emissions were

purposeful and profit-driven from the substantial evidence before

it that MSP knew it needed an NPDES permit for its thermal

discharges but decided to operate without one. We note that the

district court made an explicit finding, a finding the evidence

supports, that MSP decided to begin operations knowing that it

needed an NPDES permit for hot water discharges that it did not

possess.

13
 Regarding the second finding, we agree with MSP. MSP cites to

evidence in the record supporting its contention that the increase

in hot water discharges resulted from technological improvements in

its overall system, and not from a desire to maximize profit by

increasing the amount of waste processed. On August 23, 1989, MSP

informed LDEQ’s Office of Water Resources by letter that it was

replacing two of its oxidizers with more efficient machinery and

that as a result the volume, although not the temperature, of the

hot water discharged would increase. The August 23 letter reminded

LDEQ that MSP had previously provided notice of this change in a

letter to the Air Quality Division of LDEQ dated April 24, 1989.

MSP argues that this evidence shows that MSP’s motive for

increasing its discharge of heat was a desire to make its operation

more efficient. Such self-serving statements are not overwhelming

evidence. Nevertheless, the United States cites to no evidence in

the record to the contrary, and indeed, does not address this point

at all in its brief. Our independent review of the record, which

is admittedly large and difficult to decipher, indicates nothing to

support the district court’s ruling. We note that in the pretrial

order at the RCRA stage, the United States announced its intention

to prove that MSP had added oxidizers and slag boxes to its

facility, and there is some indication in the record that this

addition may have increased MSP’s capacity to process hazardous

waste. Nevertheless, especially with no help whatsoever from

appellees, we are unable to connect these additions to MSP’s

increased discharge of hot water. Under such circumstances, we

14
conclude that the district court’s characterization of MSP’s motive

for increase the volume of its thermal pollution is clearly

erroneous.

We hesitate to vacate such a large fine on the basis of such

insignificant error. The district court did not, however,

differentiate what portion of the fine resulted from each type and

quantity of violation. While this failure to differentiate is not

in itself reversible error, it does render us unable to determine

whether the error was harmless or to dispose of this case by

reducing the amount of the fine on our own. Accordingly, we vacate

the entirety of the fine and remand to the district court for

recalculation.

III

The district court decided all RCRA issues relevant to this

appeal by summary judgment. In particular, the district court held

that MSP had violated land ban regulations on numerous occasions.

In addition, the district court held that MSP had stored K-listed

wastes without a permit or interim status, but ruled that MSP had

interim status to store F-listed wastes. Both the United States

and MSP appeal the district court’s RCRA rulings. We consider the

land ban violations before discussing listed wastes.

A

1

15
 RCRA land ban regulations prohibit placement on the land of

material leaching toxic metals in excess of regulatory limits. 40

C.F.R. pt. 268. The district court granted in part the United

States’ motion for summary judgment, finding that MSP had violated

land ban regulations by placing on the ground materials that would

leach lead and other metals in excess of regulatory limits. MSP

appeals this finding, disputing the district court’s holding as to

method by which samples are to be collected and analyzed for

testing purposes.

EPA requires facilities like MSP to test a substance’s

leaching capacity according to the Toxicity Characteristic Leaching

Procedure. See, e.g., 40 C.F.R. § 268.7(a). The parties dispute

the method by which material samples are to be collected for TCLP

testing and the resulting data analyzed. As we understand them,

there are at least three possible methods. In the first, the

analyst collects single samples from random sections of a pile of

material, a form of collection called "grab sampling;" the analyst

then subjects these samples to TCLP testing and compares the raw

numbers generated without a statistical analysis to the regulatory

limits on leaching. In the second, the analyst collects grab

samples, conducts TCLP testing upon them, but then subjects the

numerical results to a statistical analysis before comparing the

results to the regulatory limits on leaching. In the third method,

the analyst combines samples from random sections of a particular

pile of material into a single larger sample, a form of collection

16
called "composite sampling," then subjects the composite sample to

TCLP testing.

MSP processed hazardous waste through its kiln system. As the

material exited the system, MSP took samples every 15 minutes. 24

to 32 samples were combined and thus, in the terminology just

defined, became a single composite sample. MSP placed the exiting

material on the ground in a pile called a “day pile” and sent the

combined samples to an in house laboratory to subject them to TCLP

testing. The TCLP testing of these composite samples took

approximately 24 hours, during which time the day pile remained on

the ground. MSP recorded the results of the TCLP testing on “daily

aggregate control sheets.” It conducted no statistical analysis of

the data on the daily aggregate control sheets. In some cases, the

daily aggregate control sheets showed readings exceeding land ban

regulatory limits. In those instances, MSP reprocessed the

entirety of the day pile from which the offending composite sample

was taken through the kiln system and retested the resulting

material, generating new daily aggregate control sheets.

Once the daily aggregate control sheets showed that no TCLP

readings generated from the composite samples of the day piles

exceeded land ban limits, MSP combined several day piles into

larger “sale piles.” MSP also placed these sale piles on the

ground. An independent laboratory then took numerous samples of

the sale piles and subjected each individually to TCLP testing. In

the terminology defined above, these samples were grab samples.

The independent lab subjected the TCLP results of the grab samples

17
from the sale piles to a statistical analysis of the nature

outlined in Office of Solid Waste and Emergency Response,

Environmental Protection Agency, SW-846, Test Methods for

Evaluating Solid Waste, at nine-14 to nine-17 (3d ed. 1986)

[hereinafter SW-846].

Thus, MSP placed the material coming out of its kiln system on

the ground on two separate occasions, once in the form of day

piles, and again in the form of sale piles. MSP used composite

samples to test the day piles and grab samples with a statistical

analysis to test final sale piles. The parties assume that because

RCRA regulates the placement of hazardous waste on the land

regardless of the point of a treatment process at which such

placement occurs, violations of RCRA could have occurred at either

the interim day pile stage or the more final sale pile stage.

The district court granted summary judgment to the United

States based on violations of RCRA at the day pile stage. It

relied on MSP’s daily aggregate control sheets to find that MSP

placed material violating land ban regulations on the ground on 27

occasions. It fined MSP $500,000 for these violations of RCRA.

2

MSP argues that the district court’s reliance on what it calls

“single sample exceedences” constituted reversible error. It

argues that because EPA documents, especially SW-846, require that

compliance be determined by a statistical analysis of the result of

TCLP testing of grab samples, it lacked fair notice that a

18
violation might be proved by TCLP testing of composite samples

without a statistical analysis.

3

We assume for the sake of argument that MSP is correct that

EPA regulations require a statistical analysis of samples in order

to demonstrate compliance with RCRA. The difficulty is that, as

MSP itself recognizes in its briefs, any proposed statistical

analysis was to be conducted upon the results of TCLP testing of

materials collected by grab, not composite, sampling. See 40

C.F.R. § 268.41(a) (1994), superseded, Final Rule, Land Disposal

Restrictions Phase II, 59 Fed. Reg. 47,982, 48,103 (1994). MSP

contends that it based its compliance program on grab samples, but

concedes that it took grab samples only of sale pile materials,

while the district court’s findings were based entirely on day pile

violations, from which MSP tested only composite samples.4 Because

MSP did not conduct TCLP testing of grab samples from its day piles

before combining the grab samples into composite samples, it its

now impossible to conduct any relevant statistical analysis. Thus,

MSP did not comply with the regulations upon which it now claims it

relied. MSP’s argument boils down to the contention that its

failure to follow EPA’s specified procedures, which prevented the

generation of the evidence normally relied on to test compliance

4
We note that MSP does not divulge what the results of its
proposed statistical analysis might have been, or how one could
conduct a statistical analysis on test results generated by a
single composite sample.

19
with RCRA land ban restrictions, should immunize it from a finding

of liability.

We disagree. 40 C.F.R. § 268.40 (1994), superseded, 59 Fed.

Reg. at 48,046, stated that wastes like those at issue here “may be

land disposed only if an extract of the waste . . . developed using

. . . the [TCLP] does not exceed” the values specified in the

regulations. At the times relevant to this litigation, 40 C.F.R.

§ 268.41(a) stated that “[c]ompliance with these concentrations is

required based on grab samples.” MSP placed hazardous waste on the

land without following these specified testing procedures,

procedures the D.C. Circuit labeled “graphically self-defining.”

Chemical Waste Management, Inc. v. EPA, 976 F.2d 2, 34 (D.C. Cir.

1992), cert. denied, 507 U.S. 1057 (1993).

Moreover, the district court did not presume a violation of

land ban regulations because of MSP’s failure to comply with

applicable testing procedures. Rather, the court below reasoned as

follows. The mixing inherent in composite sampling necessarily has

an averaging effect and will almost always result in a reading

lower than that generated by the most toxic grab sample.

Therefore, TCLP tests of composite samples cannot demonstrate

compliance with land ban limits in most cases, but they might well

demonstrate a violation, if the composite sample’s TCLP reading

were high enough. MSP’s own daily aggregate control sheets showed

TCLP results from testing of day piles showed leaching of greater

than the land ban standard for certain metals. Accordingly, the

district court granted summary judgment to the United States.

20
 Under such circumstances, we are unpersuaded by MSP’s argument

that it lacked fair notice that a court, because of MSP’s own

failure to follow graphically self-defining procedures, might focus

on reliable, alternative evidence that MSP placed materials on the

ground capable of leaching toxins in excess of regulatory limits.

Had MSP followed the authority cited in its brief, perhaps it might

not have been subject to penalties. Cf. Gates & Fox Co. v. OSHRC,

790 F.2d 154, 156-57 (D.C. Cir. 1986) (overturning a penalty on

fair notice grounds when an employer followed the most reasonable

interpretation of a regulation and received no contrary

interpretation from any authoritative source). We express no view

on this question. This is not a case of a court construing a

regulation “to mean what an agency intended but did not adequately

express.” Diamond Roofing Co. v. OSHRC, 528 F.2d 645, 649 (5th

Cir. 1976). The regulations were clear, MSP did not follow them,

and it cannot now be heard to complain on the ground of lack of

fair notice that a court would rely on other means of proof. We

find no error in the district court’s fine.

B

1

Congress passed the current version of RCRA in 1976. 42

U.S.C. § 6925(a) directed EPA to promulgate regulations governing

the issuance of permits to store hazardous wastes on the ground.

Realizing that EPA could not issue permits to all existing

facilities simultaneously with the promulgation of these

regulations, Congress created a grandfathering scheme granting

21
interim status to certain facilities. 42 U.S.C. § 6925(e). In

order to achieve interim status, a facility must have (1) existed

at the time it was rendered subject to a storage regulation, (2)

filed a hazardous waste notification form and, (3) filed a permit

application with either EPA or the relevant state regulatory body.

42 U.S.C. §§ 6925(e)(1), 6930(a). RCRA treated facilities that had

taken these three steps as though they had been issued permits

until EPA had finally resolved the pending permit application.

In 1980, EPA promulgated regulations requiring facilities to

obtain permits covering storage before storing F- or K-listed

wastes, but not for certain other types of waste. Final Rule,

Interim Final Rule, and Request for Comments, Hazardous Waste

Management System: Identification and Listing of Hazardous Waste,

49 Fed. Reg. 33,082, 33,123 (1980).5 At this same time, EPA

promulgated the “Mixture Rule,” which defined a hazardous waste

subject to regulation under RCRA to include “a mixture of solid

waste and one or more hazardous wastes listed in Subpart D . . .

not excluded from this paragraph . . . .” 45 Fed. Reg. at 33,119.

The D.C. Circuit declared the Mixture Rule void ab initio in Shell

Oil v. EPA, 950 F.2d 741 (D.C. Cir. 1991), on grounds of inadequate

notice. EPA repromulgated the Mixture Rule regulations in 1992.

Final Rule, Hazardous Waste Management System; Definition of

5
We assume, with the parties, that the permit requirement in
Louisiana did not extend to D- and U-listed wastes until 1986
because of MSP’s claimed status as a recycler, although we note
that EPA promulgated the U-listing on the same date that it
promulgated the K- and F-listings. See 45 Fed. Reg. at 33,123-24,
33,126-27.

22
Hazardous Waste; “Mixture” and “Derived-From” Rules, 57 Fed. Reg.

49,278 (1992).

In 1984, EPA certified LDEQ's state hazardous waste program,

allowing LDEQ to regulate the storage of hazardous waste on its own

and placing primary responsibility for RCRA enforcement with LDEQ.

See Approval of State Hazardous Waste Program, Hazardous Waste

Program, Louisiana, 49 Fed. Reg. 2893 (1984); see 42 U.S.C. §

6926(b). MSP asserts, and EPA does not dispute, that Louisiana’s

regulations initially allowed recycling facilities to store wastes

other than those included in the K- and F-listings without permits.

MSP began operations in 1985 without a RCRA storage permit.

Shortly after opening, MSP began accepting D- and U-listed

wastes. It also began receiving material manifested as "K001"

from two customers, Colfax Creosoteing Co. and Durawood Treating

Co. The manifest “K001" refers to the first of the wastes

specified as K-listed wastes in 40 C.F.R. § 260.10. Colfax and

Durawood had hired MSP to clean up large wastewater treatment

ponds. These ponds contained primarily water, creosote, and

pentachlorophenol. Also present were trace amounts of chrome,

copper, arsenic, along with unspecified quantities of debris. MSP

pumped the water from these ponds and removed it to MSP’s rotary

kiln site. MSP then added absorbent materials, composed in part of

material previously generated from MSP’s rotary kiln, to solidify

what remained and removed the entirety of the pond site material by

bulldozer. Materials arriving at MSP’s rotary kiln site from

Colfax and Durawood remained there partially on a cement pad.

23
 MSP's treatment of the Colfax and Durawood materials led the

United States four years later to file an information alleging that

MSP “did knowingly store and cause to be stored hazardous wastes

identified or listed pursuant to Title 42, United States Code,

Section 6921, namely, bottom sediment sludge from the treatment of

wastewaters from wood preserving facilities using creosote and/or

pentachlorophenol.” The United State’s indictment covered MSP’s

activities only in 1985. MSP pled guilty to this charge.

Sometime in 1985, LDEQ and MSP entered into discussions

concerning whether MSP's activity constituted "storage" under the

relevant regulations. In these discussion, LDEQ suggested that MSP

apply for a storage permit under forthcoming regulations requiring

facilities to obtain a permit to store all listed wastes, as

opposed to just K- and F-listed wastes. MSP and EPA agree that on

January 1, 1986, LDEQ promulgated these storage regulations, which

required all facilities to obtain RCRA permits before storing any

type of listed waste. In response, MSP submitted to LDEQ a

notification form and Part I of a permit application to store U-

and D-listed wastes in early January, 1986. On January 31, 1986,

MSP amended its application to include a request for permission to

store F- and K-listed wastes.6 Two months later, MSP began

accepting F-listed wastes. On June 9, 1986, LDEQ wrote MSP a

6
MSP completed its permit application by submitting Part II
in 1988. LDEQ never ruled on this application. At oral argument
in this case, counsel for MSP and the State of Louisiana informed
this court that LDEQ requested that MSP reapply for a RCRA storage
permit. MSP’s first attempt to reapply resulted in a notice by
LDEQ of 137 deficiencies in the application.

24
letter stating its view that MSP had obtained interim status and

could store any hazardous waste listed in its application form

until LDEQ ruled on the application. LDEQ's letter included the

following language:

This letter confirms that the rotary kiln operated by
Marine Shale Processors, Inc. . . . has interim status as
a storage facility and may receive any hazardous waste
for storage prior to reuse and/or recycling if such waste
has been listed in the facility's Part I Permit
Application or in any subsequent approved revisions to
that application.

In this action, the United States alleged that MSP stored K-

and F-listed wastes without a permit or interim status. Initially,

the district court granted summary judgment to the United States,

holding that MSP’s actives did constitute storage of hazardous

waste. It further held that because MSP was not in existence in

1980 or in 1984, when EPA initially required recycling facilities

for storage permits and when EPA certified LDEQ’s identical

regulations, MSP did not have interim status to store K- and F-

listed wastes in 1985, when MSP began to receiving the materials

manifested K001. The court rejected MSP's arguments that the

materials manifested K001 received from the Colfax and Durawood

operations were not pure K-listed wastes but were rather mixtures

of K-listed and other wastes covered only by the Mixture Rule,

commenting that "the interpretations urged by MSP would produce the

ridiculous result that one could receive a listed hazardous waste,

add a drop of water to it, and store that waste without having

either a storage permit or interim status." The court further

stated, "If these wastes fail to qualify as K001 wastes, I cannot

25
envision what wastes would." The district court also rejected

MSP's collateral estoppel defense, reasoning that interim status

could be granted only by statute, not by regulatory agencies, and

that estoppel does not lie against the government. In imposing a

penalty, the court counted as one violation each day upon which MSP

received either a K- or F-listed waste and counted as two

violations those days upon which MSP received both types of waste.

See 42 U.S.C. § 6928(g). In passing, the district court found that

even after EPA repromulgated the Mixture Rule in 1992, MSP stored

F-listed wastes on 185 occasions and K-listed wastes on 49

occasions. The court’s minute entry also found that MSP had stored

K-listed wastes on 107 occasions before receiving LDEQ’s June 9

letter.

Shortly thereafter, the district court sua sponte reversed its

decision regarding F-listed wastes and granted summary judgment to

MSP on that issue. In this second ruling, the court stated that

MSP's January, 1986 notice form and application gave it interim

status to store D- and U-listed wastes. The court further reasoned

that the RCRA regulations allowed MSP to piggyback interim status

to store F-listed wastes upon this previously achieved D- and U-

listed interim status by amending its permit application to include

F-listed wastes. The court, however, refused to modify its ruling

that MSP had no interim status to store K-listed wastes, reasoning

that the piggybacking theory did “not apply where, as here, a

facility stores a regulated waste at a time when it lacks interim

status to store any waste.” The court then calculated the number

26
of violations for K-listed wastes alone. Apparently on double

jeopardy grounds, the court excluded violations occurring in 1985,

the period covered by MSP’s prior guilty plea. It then found that

MSP had stored K-listed wastes on 354 occasions.

The court concluded by readdressing the issue of whether MSP’s

activities constituted “storage.” It found no evidence that MSP

either fed the K-listed wastes directly into its kiln or kept the

wastes in a holding container for brief period of time before

placement into the kiln. In spite of this finding, the district

court went on to comment that "if there were such evidence, those

days would not be counted as violations" because "storage" under

RCRA excluded "a reasonable period of time between the unloading of

the wastes and their placement in the kiln."

In a later order, the district court fined MSP $1,000,000 for

storing K-listed wastes without a permit. In assessing this fine,

the court considered as a mitigating factor LDEQ's communications

to MSP in 1986 and thereafter, finding,

On June 9, 1986, LDEQ represented to MSP in writing that
the facility was an interim status storage facility.
MSP's reliance on that representation was reasonable.
Moreover, because LDEQ never disavowed its previous
confirmation, MSP's reliance on LDEQ's representation
continued to be reasonable even after LDEQ expresses
concern about whether MSP had interim status as a storage
facility.

2

MSP urges that the district court erred in reading the ban on

the storage of K-listed wastes to cover the Colfax and Durawood

materials, and that in fact these materials were waste mixtures

covered only by the Mixture Rule regulations declared invalid in

27
Shell Oil. MSP also argues that the court should have accepted its

estoppel defense.7

The United States, in its cross appeal, claims that the

district court erroneously granted MSP summary judgment on the

question of illegal storage of F-listed waste. The United States

argues that RCRA prevents a facility from obtaining interim status

once it has illegally stored hazardous waste. Accordingly, the

district court should have granted summary judgment to the United

States on its claim that MSP stored F-listed waste without interim

status or a permit. MSP admits, the argument runs, that it had no

permit when it began to receive the K001 manifested materials; its

guilty plea establishes the status of these materials as K-listed

wastes, and in any event these materials were K-listed wastes as a

matter of law. Accordingly, MSP could not, by amending its permit

application, piggyback interim status to store F-listed wastes onto

its interim status for D- and U-listed wastes because it lacked

such status in the first place. Finally, the United States, with

support from the State of Louisiana, claims on cross-appeal that

the district court erroneously interpreted the word "storage" to

include a reasonable amount of time between the unloading of the

waste and its placement in processing machinery.

7
MSP does not contest the district court’s finding,
referring to MSP’s storage of K-listed wastes alone, that “dozens
of the violations occurred prior to receipt of LDEQ’s letter.”
Indeed, the district court found that MSP stored K-listed waste on
96 occasions between December 31, 1985, the last day covered by the
United States’ previous criminal indictment, and June 9, 1986, the
date of LDEQ’s letter. These violations alone would support a fine
of $2,400,000. MSP’s estoppel defense would not affect these
violations.

28
 3

We organize our discussion of RCRA issues in four steps. We

begin with MSP’s Mixture Rule defense before considering the

interim status dispute. We then discuss MSP’s estoppel defense,

and conclude with the storage issue. On the merits, we hold that

both of MSP’s arguments lack merit, that the district court

erroneously interpreted RCRA in holding that MSP had interim status

to store F-listed wastes, and that the current appeal provides us

with no reason to reach the storage issue.

a

We reject MSP’s contention that the materials manifested K001

were waste mixtures subject to regulation only under the Mixture

Rule invalidated in Shell Oil. MSP contends that the material

ultimately stored at MSP as a result of the Colfax and Durawood

cleanups included soil, debris, creosote, copper, chrome, arsenic,

wastewater, and the absorbent material it added to the bottom of

the pond before bulldozing. Accordingly, MSP argues, these

materials contained matter not included in K001 definition, and

thus constituted matter subject to regulation only pursuant to the

Mixture Rule.

Excepting the absorbent material, all other results of the

Colfax and Durawood cleanup operations easily meet the definition

of a K-listed waste. A K001 waste is a “[b]ottom sediment sludge

from the treatment of wastewaters from wood preserving processes

that use creosote and/or pentachlorophenol.” 40 C.F.R. § 261.32.

The evidence established that the materials in the pond came from

29
the treatment of wastewaters from wood preserving processes that

used creosote. For instance, Clyde M. Norton, the Vice-President

of the corporation that owned Colfax and Durawood, stated in an

affidavit that the materials originally in the pond before MSP

began its cleanup had been generated from the two companies’ wood

treating operations.

MSP’s primary argument is that extraneous matter in the

materials it received prevented those materials from falling within

the regulatory definition of a “sludge.” We do not agree. The

regulations define a “sludge” as “any solid, semi-solid, or liquid

waste generated from a[n] . . . industrial wastewater treatment

plant.” 40 C.F.R. § 260.10. Thus, the definition of a sludge,

like the definition of a K001 waste, focuses primarily on the

origin of the material at issue, not, as MSP contends, on its

composition. Moreover, a sludge is a waste generated from a

wastewater plant, not as MSP contends, from a wastewater operation.

“The word `plant’ denotes an entire facility, a collection of

units, machines, land, buildings, and fixtures used in a trade or

business, not a single intermediate unit in the treatment process.”

In re Brown Wood Preserving Co., No. RCRA-84-16-R, 1989 WL 253215,

at * 6 (EPA May 3, 1989). MSP’s own evidence established that the

entirety of the material, except for the absorbent material MSP

added to the bottom of the ponds after removing the wastewater

itself, came from the industrial wastewater treatment plants

located on the Colfax and Durawood sites.

30
 We have more difficulty characterizing the results of MSP’s

bulldozing, after it had added absorbent materials to the Colfax

and Durawood wastewater ponds, but we ultimately agree with the

district court that the addition of these absorbent material did

not cause the Colfax and Durawood wastes to lose their K-listed

character. As the district court noted, MSP’s interpretation of

the definition of K001 waste leads to absurd results. Under its

interpretation, MSP could have transformed the Colfax and Durawood

materials into mixtures, regulable only by the Mixture Rule

invalidated in Shell Oil, by adding a drop of water or a speck of

dust to every barrel of waste it received, so long as the drop or

speck did not come from a wastewater treatment facility. Indeed,

although MSP repeatedly contends that the K001 listing applies only

to “pure” substances of the nature described in that regulation,

such purity exists only in theory. Rudimentary chemical principles

establish that a liquid absorbs gases from the surrounding air and

trace amounts of impurities from the container in which the liquid

resides. Thus, had MSP added nothing at all to the soils it

bulldozed from the Colfax and Durawood sites, the resulting

material would still not have been pure K001 waste within MSP’s use

of the phrase. Instead, the arriving material would have consisted

of a mixture of K001 waste, dissolved gas molecules from the air,

trace amounts of whatever metal or ceramic or synthetic housed the

waste in transit, and impurities stuck to the inside of the

container. MSP’s brand of purity exists only in the hypotheticals

31
of chemistry classrooms, and its interpretation of the regulations

would render them meaningless.

We hold that a substance does not lose its character as a K-

listed waste, and thus does not become regulable only by the

previously invalid Mixture Rule, unless the materials added to it

change its basic composition in some significant way. We draw

support from the D.C. Circuit’s decision in Chemical Waste

Management, Inc. v. Environmental Protection Agency, 869 F.2d 1526,

1539 (D.C. Cir. 1989). In upholding EPA’s “contained-in” policy,

the D.C. Circuit rejected the argument that “an agglomeration of

soil and hazardous waste is to be regarded as a new and distinct

substance” and instead accepted EPA’s position that “hazardous

waste cannot be presumed to change character when it is combined

with an environmental medium.” 869 F.2d at 1539. Under the

circumstances of this case, we decline MSP’s invitation to hold

that the addition of an absorbing agent or other inert debris to a

K001 waste transforms the waste into a new and distinct substance

regulable only through the Mixture Rule. We hold that a K001 waste

remains a K001 waste after the addition of a substance that results

in no significant change in composition.

We need not specify exactly where the line between a

significant and insignificant alteration lies.8 The addition of

the absorbent agent did not cause a significant alternation of the

Colfax and Durawood materials for several reasons. First, from the

8
EPA’s 1992 repromulgation of the Mixture Rule suggests that
few future courts will confront this question.

32
standpoint of their toxic composition, these materials were in the

heart of the definition of the K001 listing. As the district court

observed, “[i]f these wastes fail to qualify as K001 wastes, I

cannot envision what wastes would.” Second, evidence in the record

strongly suggested that at the time these wastes were being

shipped, those in the industry considered them K001 sludges. Huey

Stockstill, the MSP officer in charge of the Colfax and Durawood

cleanup, repeatedly characterized the material brought to MSP’s

kiln site as a sludge. The materials were manifested as K001

wastes. The contract between Colfax and Marine Shale described the

wastes as “creosote waste that has been generated during wood

treating operations at the Colfax wood preserving facility.”

Third, MSP pled guilty to storing K-listed waste upon its premises

without a permit as a result of charges focusing on its storage of

the Colfax and Durawood materials, suggesting that it too thought

these materials constituted K001 waste, although in the face of

litigation it has changed its position. MSP argues that its guilty

plea was also based on the Mixture Rule, but the charges to which

MSP pled recite the definition of a K001 waste without mentioning

this rule. Fourth, the addition of the absorbent was entirely

incidental to a cleanup operation, and thus resembles the

impurities a waste might absorb from its container during transport

and storage.

We reject MSP’s contention that our decision places us in

conflict with the Seventh Circuit’s holding in United States v.

Bethlehem Steel Corp., 38 F.3d 862, 865, 868-71 (7th Cir. 1994).

33
In Bethlehem Steel, the defendant had mixed an F006 waste with

“other kinds of wastewater,” 38 F.3d at 865, before the addition of

a thickener allowed a sludge to precipitate to the bottom. The

addition of these other wastewaters so changed the basic

composition of the substance at issue that EPA resorted to

arguments found unpersuasive in Shell Oil in an attempt to place

the wastewaters within the F006 listing. We find no conflict

between our holding and that of Bethlehem Steel.9

b

We hold that a facility may not achieve interim status under

RCRA if it has illegally stored listed waste without a permit prior

to the time it seeks to achieve interim status. Such a facility

was not in existence at the time it was required to have a permit,

and the facility has rendered itself subject to the permit

requirement. Accordingly, we affirm the district court’s K-listed

waste ruling and reverse its decision that MSP possessed interim

status to store F-listed waste.

The interim status dispute in this case centers on the

following statutory language:

Any person who owns or operates a facility required to
have a permit under this section which facility . . . is
in existence on the effective date of statutory or
regulatory changes under this chapter that render the
facility subject to the requirement to have a permit . .
. shall be treated as having been issued a permit until

9
Because we find no error in the district court’s conclusion
that the Colfax and Durawood materials were K-listed waste, we do
not address the United States’ argument that MSP’s prior guilty
plea estopped it from denying that the wastes it stored were K-
listed wastes.

34
 such time as final administrative disposition of [the
permit] application has been made.

42 U.S.C. § 6925(e).

Three concepts from this portion of the statute resolve the

case before us. First, section 6925(e) refers to “a permit.”

Under RCRA, EPA issues a particular facility one permit only. If

a facility treats, stores, and disposes of hazardous waste, a

single permit covers all of these activities. If it engages in any

of these activities with respect to more than one type of waste, a

single permit covers all wastes specified in that permit.

Second, section 6925(e) grants interim status to persons

operating a “facility.” As we will explain, the district court’s

holding implies that the statute grants interim status on a

wastestream by wastestream basis, but the statute’s plain language

contemplates a grant or denial of interim status on a facility by

facility basis.

Third, section 6925(e) focuses on whether a facility was in

existence at the time it was “render[ed] . . . subject” to the

statutory requirement that it obtain a permit. The crucial point

in time under RCRA is the moment at which the law required the

facility to have a permit. Section 6925(e) grants interim status

only to facilities that were “in existence” at this moment.

With these three concepts firmly in mind, we conclude that

MSP’s storage of K-listed wastes rendered it unable to achieve

interim status to store any type of waste. In 1980, EPA required

that all facilities, including recycling facilities, have RCRA

permits before storing K-listed waste. When Louisiana took over

35
the administration of its own RCRA program in 1984, it also

required facilities storing K-listed waste to obtain a RCRA permit.

In 1985, MSP stored the K-listed wastes from the Colfax and

Durawood cleanup operations. MSP had no RCRA permit at this time.

It could not obtain interim status because it was not in existence

in either 1980 or 1984, the promulgation dates for the regulations

requiring a permit for the storage of K-listed wastes, and because

it had no pending permit application. In 1985, therefore, MSP

lacked interim status.

An alternative application of the statute to these facts

yields an identical result. The section 6925(e) exception to the

permit requirement applies only when “statutory or regulatory

changes . . . render the facility subject” to the necessity that

the facility obtain a permit. In this case, statutory and

regulatory changes did not render MSP subject to the permit

requirement; rather, MSP rendered itself subject to this

requirement by storing a listed waste. Either way, because the

section 6925(e) exception does not apply, MSP needed a permit to

store waste, and its failure to procure one prior to its storage

activity resulted in a RCRA violation.

Our difficulty with the district court’s holding lies in its

assumption that MSP could achieve interim status by applying for a

permit to store F-listed waste when it became subject to

regulations corresponding to that type of waste. This holding

presumes that MSP was rendered subject to the requirement that it

obtain a permit in 1986. In essence, the district court held that

36
RCRA operates on a wastestream by wastestream basis. But MSP

needed a permit to cover its storage of K-listed waste several

months before. MSP did not need one permit to store K-listed

wastes and a second to store F-listed wastes. RCRA contemplates

that a facility will receive a single permit to cover storage of

all types of waste, and that this permit will govern the storage at

the entire facility. RCRA permitting does not operate on a

wastestream by wastestream basis.

The district court rejected the position we adopt here on the

grounds that “[i]t is unreasonable to suggest that an operator who

has once violated a regulation is thereafter precluded from ever

lawfully operating. One could argue with equal force that any

permittee who violates an environmental regulation would as a

result lose his permit . . . .” We do not believe that our holding

implies that any operator once violating a RCRA regulation may

never lawfully operate. Such a violator may operate after it has

applied for and obtained a RCRA permit.

We note that our holding does not conflict with the district

court’s construction of La. Haz. W. Reg. § 23.2, superseded,

counterpart codified at L.A.C. § 33:V:4303.A.1, which allows a

facility to piggyback interim status to store a second type of

waste onto its interim status to store a first by amending its

pending permit application to cover the second waste. See 40

C.F.R. § 270.72(a)(1) (suggesting that EPA allows use of the

piggybacking theory as well). MSP argues that it could piggyback

interim status to store K- and F-listed wastes onto its status to

37
store D- and U-listed wastes. The piggybacking theory can apply,

however, only if a facility has achieved interim status in the

first place. See 40 C.F.R. § 270.72(a) (“[T]he owner or operator

of an interim status facility may make the following changes . . .

.”). MSP did not have interim status to store any type of

hazardous waste when in 1985 it rendered itself subject to the

requirement that it obtain a permit, and thus it could not take

advantage of the piggybacking theory. We reject MSP’s attempt to

confuse the issues of when a facility needed and attained interim

status with what wastes it was entitled to store.

c

MSP’s estoppel defense is no more availing. We agree with the

district court that equitable estoppel will not lie against the

United States under the facts of this case. We hold that MSP’s

reliance on LDEQ’s June, 1986 letter was not reasonable and

therefore that it has failed to prove a traditional element of the

estoppel defense. We also agree with the United States that MSP

has not shown that LDEQ’s letter constituted affirmative

misconduct.

The district court denied MSP’s estoppel defense on the

grounds that Congress, not EPA or LDEQ, grants interim status. See

State of New Mexico v. Watkins, 969 F.2d 1122, 1130 (D.C. Cir.

1992). Although the district court’s reasoning contains a valuable

insight, its conclusion is not technically correct. Equitable

estoppel does not rest on the grounds that the claimant is in

reality entitled to the benefit or status in question. Rather,

38
equitable estoppel responds to the unfairness inherent in denying

the claimant some benefit after it has reasonably relied on the

misrepresentations of the adverse party. Thus, at least in its

estoppel defense, MSP does not contend that it in reality was

entitled to interim status, and LDEQ’s June 9 letter may have been

no defense had the issue of interim status arisen in a citizen suit

under 42 U.S.C. § 6972. Rather, MSP claims that the United States

should not be allowed to deny that MSP has interim status because

MSP reasonably relied on the representations of government agents.

Nevertheless, we agree with the district court’s refusal to

estop the government in this situation. Recently, the Supreme

Court cast further doubt on the proposition that equitable estoppel

runs against the United States. In Office of Personnel Management

v. Richmond, 496 U.S. 414 (1990), the Supreme Court emphasized the

separation of powers difficulties inherent in an estoppel of the

United States. It noted, for instance, that while Congress may

create a remedy for a federal employees’ issuance of erroneous

legal advice, “[j]udicial adoption of estoppel based on agency

misinformation would, on the other hand, vest authority in these

agents that Congress would be powerless to constrain.” 496 U.S. at

429. Were courts to estop the United States readily, the executive

branch could use this doctrine strategically to achieve results

Congress intended to prevent, thus delivering lawmaking power to

the executive in a manner that the first sentence of Article I does

not contemplate. Although the Court made its observations in the

context of the Appropriations Clause, the principles it articulated

39
are more generally applicable and have particular force when a

private party seeks to avoid the force of an otherwise applicable

law because of a government agent’s representation that the law

does not apply. Since Richmond, the circuits have repeatedly

acknowledged the importance of separation of powers principles to

claims of estoppel against the government. See, e.g., FDIC v.

Hulsey, 22 F.3d 1472, 1489 (10th Cir. 1994) (stating that courts

should allow an estoppel, if at all, only when such a ruling “would

not frustrate the purpose of the statutes expressing the will of

Congress”); United States v. Guy, 978 F.2d 934, 938 (6th Cir.

1992); Kennedy v. United States, 965 F.2d 413, 419-21 (7th Cir.

1992); Transohio Savings Bank v. Director, 967 F.2d 598, 622-23

(D.C. Cir. 1992).

In addition, estoppel of the United States implicates the

President’s power and duty under the Take Care Clause. When a

court refuses to enforce the law on the basis of a previous

representation from a government official, it renders the current

executive unable to enforce the law and thus discharge its

responsibilities under the Take Care Clause. Although courts

rarely trace this responsibility to its constitutional roots,

several cases have articulated this interest and given it

substantial weight. See, e.g., Heckler v. Community Health

Services, 467 U.S. 60 (1984) (“When the Government is unable to

enforce the law because the conduct of its agents has given rise to

an estoppel, the interest of the citizenry as a whole in obedience

to the rule of law is undermined.”); Hulsey, 22 F.3d at 1489

40
(stating that courts should refuse to apply the estoppel doctrine

when to do so would “unduly undermine the enforcement of the public

laws”).

The threat to both sets of constitutional principles in this

case is obvious. We recall the district court’s observation that

Congress, not EPA or LDEQ, grants interim status. Outside of the

context of a citizen suit, an estoppel here would effectively allow

LDEQ to grant MSP interim status in sharp tension with the

principles of Articles I and II. Finally, we note the threat to

the RCRA dual enforcement scheme posed by a decision allowing an

estoppel in this case. Allowing state representations to estop the

federal government in this case would provide the states with a

mechanism for going below the federal floor of regulation required

by RCRA. See, United States v. Marine Shale Processors, Inc., No.

94-30419, at 12-13.

Courts have reacted to the danger that estoppel of the United

States poses to these values in several ways. First, courts have

applied the elements of traditional equitable estoppel against the

government rather narrowly. See, e.g., Heckler, 467 U.S. at 61-62

(holding that the estoppel claimant had shown no possibility of

detriment in spite of the fact that denying its claim might force

it into bankruptcy). Second, courts have insisted that any

estoppel against the government result from a representation of an

official acting within the scope of her official authority, thus

implying that the concept of apparent authority does not apply in

the case of a government estoppel. See, e.g., United States v.

41
Walcott, 972 F.2d 323, 325 (11th Cir. 1992).10 Third, courts have

required that a party seeking to estop the United States show some

sort of “affirmative misconduct,” an element normally not required

to estop private parties. See, e.g., Fano v. O’Neill, 806 F.2d

1262, 1265-66 (5th Cir. 1987); Cadwalder v. United States, 45 F.3d

297, 299 (9th Cir. 1995). We rely on the first and third of these

principles to reject MSP’s estoppel defense. MSP’s reliance on

LDEQ’s June 9 letter was unreasonable as that term is used in the

estoppel doctrine,11 and in addition, MSP has not met its burden to

show affirmative misconduct.

Courts considering estoppel claims against the government

involving an official’s misstatement that a particular statute or

regulation does not apply to the claimant have read the element of

reasonable reliance in light of the principle that all citizens,

especially citizens dealing with the government, are presumed to

10
Because of our disposition of this case on other grounds,
we do not reach Louisiana’s argument that the officer issuing the
letter upon which MSP relied lacked actual authority under
Louisiana law to bind LDEQ.
11
We do not imply a reversal of the district court’s finding
that “MSP’s reliance on [LDEQ’s] representation was reasonable.”
The district court made this statement in the context of its
penalty calculation, not its estoppel holding. We believe the
district court intended this sentence as a restatement of its
finding that MSP did not “store K wastes after June 9, 1986 with
disdain for the requirements of a storage permit.” As we have
explained, the elements of estoppel are narrowly construed when a
claimant seeks to estop the government. The district court
followed the proper course of action by refusing to estop the
government and by considering the LDEQ letter as a mitigating
factor in its penalty calculations. See Rollins Environmental
Services (NJ), Inc. v. EPA, 937 F.2d 649, 652-54 (D.C. Cir. 1991);
United States v. Production Plated Plastics, Inc., 742 F. Supp.
956, 961 (W.D. Mich. 1990), aff’d, 955 F.2d 45 (6th Cir.), cert.
denied, 506 U.S. 820 (1992).

42
know the law. See, e.g., Breath v. Cronvich, 729 F.2d 1006, 1011

(5th Cir.), modified by, 734 F.2d 225, cert. denied, 469 U.S. 934

(1984); United States Fidelity & Guaranty Co. v. Bass, 619 F.2d

1057, 1077 (5th Cir. 1980). Courts have translated this

reasonableness requirement into the rule that a party’s reliance on

a government employee’s misstatement concerning the coverage or

application of a law will rarely be reasonable if a clear statute

or regulation provided otherwise. See, e.g., Federal Crop

Insurance Corp. v. Merrill, 332 U.S. 380, 381-82, 384 (1947)

(refusing to invoke estoppel to require the government to insure

crops when the relevant statue “by explicit language” did not

provide for insurance under the circumstances); United States v.

Perrez-Torres, 15 F.3d 403, 407 (5th Cir. 1994) (rejecting an

estoppel argument when the terms of a statute provide in “clear and

unambiguous” terms that the alleged official misrepresentation was

incorrect), cert. denied, 115 S. Ct. 125 (1994); see also Guy, 978

F.2d at 937-38; Kennedy, 965 F.2d at 419-21.

42 U.S.C. § 6925(e) provides clear guidance regarding interim

status. In the previous section, we went no further than the plain

language of the statute to decide that MSP lacked interim status

once it illegally stored K-listed wastes. MSP makes no compelling

argument excusing its failure to read section 6925(e) in accordance

with its straightforward terminology. MSP’s reliance on the June

9 LDEQ letter was unreasonable.

Even if MSP’s reliance on the LDEQ letter had been reasonable,

MSP has failed to show that LDEQ’s June 9 letter constituted the

43
kind of affirmative misconduct necessary to estop the United

States. Although courts have been less than forthcoming in

defining what a government official must do to satisfy the

affirmative misconduct element of an estoppel defense, the cases

support the conclusion that at minimum the official must

intentionally or recklessly mislead the estoppel claimant.12 In

REW, Enterprises, Inc. v. Premier Bank, N.A., 49 F.3d 163, 170 (5th

Cir. 1995), for instance, we considered the absence of any evidence

that an agent “deliberately” misled a company as a reason not to

estop the government. And in Ingalls, we refused to estop the

government in part because there was no allegation that an

official’s misstatement was made with knowledge of its falsity or

with intent to mislead. 976 F.2d at 938; see also Fano, 806 F.2d

at 1265 (remanding for a hearing on the issue of estoppel in part

on the basis of allegations that an agency “willfully, wantonly,

recklessly, and negligently” misled a citizen) (internal quotation

marks omitted); Kennedy, 965 F.2d at 421 (Affirmative misconduct

“is something more than mere negligence.”) (internal quotation

marks omitted); SIU de Puerto Rico, Caribe y Latinoamerica v.

Virgin Islands Port Authority, 42 F.3d 801, 803-04 (3d Cir. 1994);

12
We reserve two issues for another day. First, we do not
decide whether a showing of intent to mislead is sufficient in
itself to discharge an estoppel claimant’s burden to prove
affirmative misconduct. Second, we do not decide whether
representations made with reckless disregard for their truth are
sufficient to support a finding of affirmative misconduct. We hold
only that affirmative misconduct is something more than merely
negligent conduct.

44
Hulsey, 22 F.3d at 1490 (“[T]he erroneous advice of a government

agent does not reach the level of affirmative misconduct.”).

Requiring an estoppel claimant to prove that the government

agent intended to mislead has a sound basis in policy and

constitutional values. As we have explained, a citizen’s first

defense to misstatements from a government official regarding the

scope and applicability of a particular law is self-help, that is,

her own research to discover the applicable legal principles. An

official bent upon misleading a citizen is more likely to

anticipate and seek to neutralize any factors that might put the

citizen on notice of the deception, thus undermining the citizen’s

self-help defense to official error. In addition, intentionally

deception is more reprehensible than negligent error and implicates

the Due Process Clause value of fair dealing between the sovereign

and the citizen. See Richmond, 496 U.S. at 435-36 (Stevens, J.,

concurring) (discussing a hypothetical highlighting the special

harshness inherent in intentionally duplicitous conduct by

government officials); see also Oliver W. Holmes, The Common Law 3

(1881) ”[E]ven a dog distinguishes between being stumbled over and

being kicked.”).

MSP cannot prove on these facts that LDEQ’s June 9

representations regarding its interim status was the result of

anything other than a negligent interpretation of section 6925(e).

The circumstances in this case suggest simply that LDEQ made an

honest mistake, a mistake that the district court considered as a

mitigating factor when fining MSP. We hold that the district court

45
correctly refused to estop the United States from disputing MSP’s

interim status.

MSP’s citation to United States v. Pennsylvania Industrial

Chemical Corp., 411 U.S. 655 (1973), is unavailing, even if this

case remains good law after Richmond and Heckler. See Richmond,

496 U.S. at 426-27 (noting some dispute over whether Pennsylvania

Chemical was an estoppel case). In Pennsylvania Industrial, an

agency repeatedly reaffirmed in published regulations that a

statute did not apply to a certain type of conduct. The defendant

engaged in this conduct during the period in which these

regulations remained in force. The agency then reversed its

position, published new regulations providing that the statute did

apply to conduct of the nature engaged in by the defendant, and

sought to hold the defendant criminally liable for actions taken

while the old regulations remained in force. The Supreme Court

held that the defendant was entitled to an opportunity to prove

that it “was affirmatively misled by the responsible administrative

agency into believing that law did not apply to this situation” on

the grounds that “traditional notions of fairness inherent in our

system of criminal justice prevent the Government from proceeding

with the prosecution.” 411 U.S. at 674.

Pennsylvania Industrial does not contradict our holding in

this case. The Pennsylvania Industrial defendant availed itself of

its self-help remedy and discovered regulations providing that the

conduct was legal, regulations to which courts would in appropriate

circumstances defer. See Chevron, U.S.A., Inc. v. Natural

46
Resources Defense Council, Inc., 467 U.S. 837, 842-43 (1984).

While a citizen might reasonably rely on the regulations of the

agency charged with the administration of the statutory scheme.

MSP has cited no case holding that a official’s non-adjudicative

statements regarding the applicability of a statute to a particular

set of facts are entitled to similar deference.

We acknowledge that this case presents several factors

favoring estoppel. LDEQ’s representation to MSP was written, not

oral. Cf. Heckler, 467 U.S. at 65 (stating that courts should be

especially reluctant to estop the government of the basis of oral

statements). Although the district court made no findings as to

intent, the fact that LDEQ issued its letter in the context of

negotiations allegedly designed to bring MSP into compliance with

RCRA’s storage regulations suggest that LDEQ intended for MSP to

rely on the letter. Although MSP’s extensive storage of K-listed

wastes prior to receiving the June 9 letter suggests that it might

have continued to behave in the same manner regardless of what LDEQ

said, at least one of MSP’s customers, Southern Wood Piedmont

Company, did in fact rely on LDEQ representations regarding the

status of MSP’s facilities. Nevertheless, the burden on a party

seeking to estop the United States is heavy indeed, and MSP has not

met its burden in this case.13

13
To the extent that MSP has properly appealed the district
court’s $1,000,000 fine as too high, we affirm. The district court
considered the LDEQ’s letter as a mitigating factor and reduced its
fine accordingly. As the district court noted, however, numerous
violations occurred before June 9, 1986. We believe on these facts
that MSP has little cause for complaint.

47
 4

The United States appeals the district court’s definition of

the word “storage” as “excluding a reasonable period of time

between unloading of the wastes and their placement in the kiln.”

The district court defined storage in an order granting summary

judgment to the United States on the issue MSP’s storage of K-

listed wastes. Immediately preceding this definition, the district

court found that “there was no evidence that the wastes were ever

fed into the kiln either directly from the transport vehicle or

after only a brief period of containment in an MSP tank for the

purposes of conveyance to the kiln. If there had been, those days

would not be counted as violations.” Indeed, a September 15, 1989

Marine Shale response to an EPA demand for information suggests

that hazardous wastes often spend at least ten to 15 days in MSP’s

blending tanks before being placed into the kiln.

In light of the district court’s finding that MSP never kept

K-listed waste on site for only a brief period of time, a finding

that neither party disputes, we do not see how the district court’s

definition of storage affects any issue properly before this court.

The storage issue did not affect the fine, and the parties may

litigate the meaning of storage as the term appears in the

injunction in a contempt proceeding. We decline to issue an

advisory opinion on this matter.

IV

48
 The United States charged MSP with operating several minor

emission sources without a permit in violation of the Clean Air Act

and accompanying regulations. It also alleged that MSP had

exceeded the limits specified in the permit for its kiln stack on

numerous occasions. The district court held for the United States

regarding minor emission sources but agreed with MSP that the

United States could not enforce the kiln stack permit. Both

parties appeal.

A

The Clean Air Act's Prevention of Significant Deterioration

Program governs the emission of air pollutants in states that have

attained CAA National Ambient Air Quality Standards. The PSD

portion of the CAA divides emission sources into major and minor

emitting facilities. 42 U.S.C. § 7479(1). The CAA and its

regulations classify a source as minor if either of two different

forces limit its rate of emission of air pollutants to below a

specified amount: first, physical or mechanical limits

constraining its rate of emission; and second, legal limits, in the

form of legal restrictions on its rate of emission or hours of

operation. 40 C.F.R. § 51.166(b)(4). The industry uses the term

“synthetic minor source” to refer to a facility subject to this

second type of limit but nevertheless possessing the physical and

mechanical potential to emit above the statutorily specified rate.

The CAA requires facilities constructing or modifying major sources

to obtain a preconstruction permit from agencies administering EPA-

49
approved state implementation programs. 42 U.S.C. §§ 7475(a)(1),

7479(2)(C).

Since opening for business in 1985, MSP has operated at least

one source with the mechanical potential to emit sufficient

pollutants to qualify as a major source: its kiln stack. It has

also operated several emission sources without such potential.

When MSP originally bought the rotary kiln in 1984, LDEQ

transferred to MSP the air permit previously governing the

facility, Permit 722 M-1, with the stipulation that MSP add a

baghouse to its kiln stack. Disputes as to the status of MSP's air

emissions led LDEQ to issue a compliance order in December, 1985.

MSP and LDEQ sought to resolve their differences and in early 1986

settled. As part of this settlement agreement, LDEQ issued a

second air permit, Permit 1036 M-1. Permit 1036 M-1 did not

include provisions addressing 29 minor sources that MSP operated at

the time. In issuing Permit 1036 M-1, LDEQ did not follow the

procedural requirements in its regulations governing the issuance

of air permits; in particular, LDEQ did not provide public notice

and an opportunity for comment regarding MSP's second permit.

In 1986, LDEQ issued a second compliance order addressing

MSP's admitted operation of minor emission sources without a

permit. LDEQ and MSP apparently continued discussions until April,

1988, when LDEQ ordered MSP to fill out a questionnaire requiring

identification of all emission sources in its facility. MSP’s

response to the questionnaire identified the 29 unpermitted minor

sources, from which MSP was still discharging air pollutants.

50
Shortly thereafter, MSP filed two applications with LDEQ. The

first sought to modify Permit 1036 M-1 to legalize MSP’s discharges

from its currently operating 29 minor sources. The second

requested a variance to continue operations until LDEQ ruled on the

permit amendment application. Throughout this time, MSP was still

emitting from its minor sources.

LDEQ acted on MSP’s variance application while requesting

further information from MSP on the permit amendment application.

After a public hearing, LDEQ denied the variance application on

February 1, 1989. The next day, MSP requested an additional

hearing on the variance denial, a request LDEQ denied.

MSP appealed the variance denial to the Court of Appeal of

Louisiana. After holding that it had jurisdiction over an appeal

of a variance denial, In re Marine Shale Processors, Inc., 563 So.

2d 278 (La. Ct. App. 1990), the court affirmed LDEQ’s denial of

MSP’s variance application on June 26, 1990. In re Marine Shale

Processors, Inc., 566 So. 2d 994 (La. Ct. App. 1990). Before the

Court of Appeal of Louisiana, MSP argued that the variance denial

would “result in a practical closing and/or elimination of a

significant portion of its lawful business without corresponding

benefit to the people of Louisiana.” 566 So. 2d at 996. The court

rejected this argument, holding that MSP could continue operations

in conformity with Permit 1036 M-1 and that the people of Louisiana

would benefit from avoiding what LDEQ called “an unacceptable risk

to those working and residing in the vicinity of MSP[’s] facility.”

566 So. 2d at 998 (internal quotation marks and emphasis omitted).

51
 MSP’s arguments regarding the effect of the variance denial on

its operations did not prove prophetic. It continued to operate

after the ruling of the Louisiana Court of Appeals, and it

continued to discharge from its 29 unpermitted minor sources.

Regarding the application to amend Permit 1036 M-1, MSP

responded to LDEQ’s request for additional information on several

occasions and completed its application on December 7, 1989.

Thirteen months later, LDEQ denied MSP's application to amend

Permit 1036 M-1. MSP invoked LDEQ's appeals process, and the

appellate authority remanded on the grounds that LDEQ had failed to

adhere to required procedures in denying MSP's application to

amend. On remand, LDEQ denied the application anew. MSP requested

reconsideration of this denial. On February 11, 1992, LDEQ noted

that the pending motion for reconsideration prevented the denial

order from becoming final. Since that time, LDEQ has taken no

action on the permit amendment application. MSP continues to

operate its 29 unpermitted minor sources.

The district court held that Permit 1036 M-1 was not federally

enforceable because LDEQ did not issue it in accordance with its

own procedural requirements. As a corollary, it held that MSP

could not rely on the pollution control devices specified in the

permit to transform its kiln stack into a synthetic minor source,

and thus that MSP had operated a major source without a permit.

The court found that MSP had operated one major and twenty-nine

minor emission sources without a permit.

52
 The district court then articulated several factors relevant

to the imposition of a civil fine:

MSP's motion for reconsideration of the denial of the air
permit, which the state has notified MSP has the effect
of suspending the denial of the permit, has been pending
since January 15, 1992, despite my repeated statements to
the Assistant Attorney General that the state should take
final action on the permit application. While the state
has been unreasonably dilatory in acting on MSP's motion
for reconsideration, it is significant that MSP has
failed to install on [its facilities] the very pollution
control devices which, in its amended permit application,
it proposed to install.

The court fined MSP $1,000,000 for the major source violation and

$2,500,000 for the twenty-nine minor source violations.

B

MSP challenges the fine of $1,000,000 for a major source

violation, arguing that while the court below correctly ruled that

Permit 1036 M-1 was not federally enforceable, it erred in not

allowing MSP to rely on the legal limits imposed by Permit 1036 M-1

in order to classify the kiln stack as a synthetic minor source.

MSP further contends that the statute of limitations bars any

penalty for the minor source violations because MSP began emitting

from these sources more than five years ago. Finally, MSP argues

that the district court's fine was too heavy. MSP contends that

the district court's reliance on MSP's failure to install certain

pollution control devices constituted reversible error because

Louisiana law prohibited the installation of these devices without

a permit. MSP also claims that the district court failed to place

sufficient emphasis on LDEQ's delay in ruling on MSP's application

to amend its permit.

53
 In its cross appeal, the United States contends that the

district court erred in holding that LDEQ's failure to follow its

permit issuance guidelines rendered the federal government unable

to enforce Permit 1036 M-1. In the alternative, the United States

argues that if it cannot enforce Permit 1036 M-1, it can enforce

the predecessor and more restrictive Permit 722 M-1.

C

We resolve the issues in the following order. First, we

discuss whether the district court erred in ruling that procedural

defects in the issuance of Permit 1036 M-1 rendered the United

States unable to enforce the permit. Second, we consider whether

the district court properly rejected MSP’s statute of limitations

defense to the minor source violations. Third, we address MSP’s

challenge to the amount of the minor source fine.

1

We reverse that portion of the district court’s fine dealing

with MSP’s kiln stack. We hold that the United States may enforce

Permit 1036 M-1. We remand for further proceedings consistent with

this opinion.

The Permit 1036 M-1 portion of the dispute centers on the

definition of “federally enforceable” in the CAA regulations

dealing with regions that have attained CAA air quality standards.

These regulations state that the United States may enforce “any

permit requirements established . . . under regulations approved

pursuant to 40 C.F.R. part 51, subpart I.” 40 C.F.R. §§

51.166(b)(17); see also 40 C.F.R. § 51.165(a)(1)(xiv) (providing an

54
identical definition). The regulations in 40 C.F.R. pt. 51, subpt.

I, require CAA State Implementation Plans to include a program of

review of proposed construction or modification of stationary

sources, a process called “preconstruction review.” 40 C.F.R. §§

51.160-.166. Louisiana’s version of this process led LDEQ to issue

Permit 1036 M-1, a “preconstruction permit.” MSP argues that LDEQ

issued Permit 1036 M-1 without following the procedure contained in

the Louisiana SIP for the issuance of preconstruction permits and,

thus, that Permit 1036 M-1's requirements were not established

under the SIP. The United States responds that the regulations

refer not to procedure but to the authority under which the state

issued the permit.

Although the parties focus their attention on the phrase

“pursuant to” in the regulation, their dispute may require us to

interpret the phrase “established under” in section 51.166(b)(17).

The parties have not disputed that EPA approved Louisiana’s SIP

pursuant to the relevant regulations. See 40 C.F.R. § 52.972. The

phrase “pursuant to” does appear in 40 C.F.R. § 52.23, providing

that “[f]ailure to comply . . . with any permit condition or permit

denial issued pursuant to approved or promulgated regulations for

the review of new or modified stationary or indirect sources . . .

shall render the person or governmental entity so failing to comply

. . . subject to enforcement action under section 113 of the Clean

Air Act.” The arguments upon which we rely do not depend on

whether the relevant regulatory phrase is “established under” or

55
“pursuant to,” and we thus decline to consider whether the relevant

provision is 40 C.F.R. § 51.166(b)(17) or 40 C.F.R. § 52.23.

We agree with the United States for three reasons. First, the

common meaning of the phrases “established under” and “pursuant to”

provide little guidance regarding federal enforceability; plain

language supports neither party. Second, the CAA provides EPA with

broad authority to enforce state air permits. Section 113 of the

CAA provides, “The Administrator . . . may commence a civil action

. . . [w]henever [a person] . . . has violated, or is in violation

of, any requirement or prohibition of an applicable implementation

plan or permit.” 42 U.S.C. § 7413(b)(1) (emphasis added).

Although MSP’s argument is based on CAA regulations, not the

statute, and although EPA may by rule limit its own ability to

enforce state air permits, the broad enforcement powers Congress

intended to confer upon EPA aids our interpretation of the

ambiguous regulatory language. We are reluctant to construe such

language as preventing the agency from exercising the enforcement

power that Congress intended it to have.

Third, MSP’s argument leads to the conclusion that it has no

federally enforceable preconstruction permit, a conclusion

inconsistent with the nature of the dual enforcement scheme

contemplated in the CAA. Congress gave the United States the power

to enforce state air permits in part in order to prevent a

destructive race among states to attract industry by adopting the

least stringent emissions limits. As the Sixth Circuit has

explained,

56
 [S]tandards for purification of the ambient air simply
cannot be set along the boundaries of our 50 states. The
winds, of course, recognize no such boundaries. The 50
states of this union compete intensely with one another
for industry. As Congress has recognized, if state
control of ambient air emissions were final, in short
order, major shifts of smoke stack industries to states
with the most lenient pure air standards would inevitably
take place. Absent final authority in the United States
EPA, the attainment goal of the Clean Air Act would prove
ephemeral.

United States v. Ford Motor Co., 814 F.2d 1099, 1102 (6th Cir.),

cert. denied, 484 U.S. 822 (1987); see also Sierra Club v. Indiana-

Kentucky Electric Corp., 716 F.2d 1145, 1154 (7th Cir. 1983)

(Congress “rather clearly embraced the general proposition that

federal action was intended to remedy any problem with a state

implementation plan.”) (emphasis removed).14

In contrast, MSP’s construction of the relevant regulations

would allow states to undermine the United States’ section 113

power to enforce preconstruction permits by issuing such permits in

violation of the relevant procedural requirements. Worse yet,

sources themselves would have an incentive to insert procedural

irregularities into permit processes, since doing so would allow

them to avoid a federal enforcement action under section 113. Our

concern for the integrity of the dual enforcement scheme that the

CAA contemplates leads us to reject MSP’s argument.

14
Some commentators have questioned the “race to the bottom”
rationale for federal enforcement. See, e.g., David Shapiro,
Federalism: A Dialogue (1995) (collecting and discussing sources).
While these arguments may have considerable force in some areas,
their persuasive value is less in an area fraught with the
externalities commonly associated with air pollution.

57
 MSP responds to this third argument by contending that no hole

in the regulatory scheme exists because Louisiana can enforce

Permit 1036 M-1 in a state court action. Even if MSP’s contention

were correct, section 113 embodies Congress’s decision that state

enforcement would not always be sufficient to ensure attainment of

CAA ambient air standards. In addition, we are uncertain whether

Louisiana law would allow the state to enforce the permit. MSP

provides no citations to Louisiana law to support its contention.

MSP’s arguments to this court, if accepted, might prevent it from

defending against an action by Louisiana in state court to collect

penalties for violations of Permit 1036 M-1 on the basis of

procedural irregularities. But other entities could use this

defense in other cases, and some states might construe state law to

bar state enforcement of permits issued in violation of the

relevant procedural requirements. Such a ruling could cause a

situation in which a source operates under and violates a permit

that no authority, state or federal, can enforce. We refuse to so

endanger the statutory enforcement scheme.

MSP also relies upon a series of quotations to the Federal

Register, specifically to Final Rule, Requirements for the

Preparation, Adoption, and Submittal of Implementation Plans, 54

Fed. Reg. 27,274 (1989), purportedly illustrating that EPA

explicitly recognized that states might choose to issue air permits

which are not federally enforceable. These quotations include

language like the following: “[P]ermits which do not conform to

operating permit program requirements and the requirements of EPA’s

58
underlying regulations may not be deemed `federally enforceable.’”

54 Fed. Reg. at 27,282. Later, EPA added, “States are free to

continue issuing operating permits that do not meet the above

requirements. However, such permits would not be `federally

enforceable’ . . . .” Id.

MSP lifts quotations out of context. The CAA statutory scheme

contemplates at least two different types of air permits unhappily

named “preconstruction permits” and “operating permits,” with

confusion easily resulting from the fact that preconstruction

permits often include limits upon a source’s operations.

Preconstruction permits result from a review process that occurs

before construction of or major modification to a stationary

source. At this stage, the permitting authority must determine

whether the proposed construction or modification would violate a

state’s emissions control strategy or interfere with the attainment

or maintenance of CAA air quality standards. 40 C.F.R. §

51.160(a)(1-2). In contrast, operating permits focus on a source’s

current emissions, even if the source has not recently undergone

construction or major modification. See 40 C.F.R. § 70.1(b) (“All

sources subject to these regulations shall have a permit to operate

. . . .”).15 The distinction between preconstruction and operating

permits is critical. Before 1990, no federal law required states

to maintain operating permit programs, but the CAA has always

15
40 C.F.R. pt. 70 provides a model of the nature of state
operating programs pre-1990 programs.

59
compelled states to administer a program of preconstruction review.

See 42 U.S.C. §§ 7410(a)(2)(C), 7475(a).

In 1986, when LDEQ issued Permit 1036 M-1, the CAA and its

regulations conditioned approval of SIPs upon a state’s maintenance

of an effective program of preconstruction review. 40 C.F.R. §

51.160(a). At that time, however, the CAA did not require states

to maintain an operating permit system. Some states chose to do

so; EPA informs us, and MSP does not dispute, that Louisiana was

not among those states. Our brief search of the Louisiana

Administrative Code has unearthed no operating permit program in

force at this time.

All of the quotations upon which MSP relies occurred in the

context of a discussion of state operating permits, not

preconstruction permits. In the pre-trial order in this case,

Marine Shale affirmatively argued that any failure on its part to

obtain air permits constituted noncompliance with “a

‘preconstruction’ permit application requirement,” thus in effect

conceding that Permit 1036 M-1 was a preconstruction permit. MSP

does not argue otherwise on this appeal. MSP cites to no authority

supporting the proposition that EPA has limited its ability to

enforce state preconstruction permits. Although EPA argues that

states cannot render the United States unable to enforce

preconstruction permits, we need not address this broad contention

to decide this case. We hold only that, in light of the statutory

scheme, the phrase “established under” contained in the 40 C.F.R.

§§ 51.166(b)(17)’s definition of “federally enforceable” refers

60
more naturally to the source of the authority upon which the state

relied to issue the permit than it does to conformity with

appropriate procedures.

MSP’s final argument is that even if the phrases “established

under” or “pursuant to” refer to the authority upon which a state

relied to issue a permit, Permit 1036 M-1 is still not federally

enforceable because the LDEQ did not issue this permit under the

authority of the Louisiana SIP. According to MSP, EPA recognized

in the federal register portion quoted above that states might

employ some portion of their police power other than that embodied

in the SIP to issue air permits and that LDEQ’s failure to follow

the procedural steps for issuing a preconstruction permit

illustrates that the Permit 1036 M-1 was an “off-the-SIP” permit.

The source of a state agency’s authority to take particular

action is a matter of state law. The State of Louisiana refers us

to La. Rev. Stat. Ann. § 30:2011(D)(2), which provided the LDEQ

power to issue air permits. The United States and LDEQ assert that

LDEQ responded by promulgating L.A.Q.R. § 6.0, superseded,

counterpart codified at L.A.C. § 33:III:501.C.2., at that time the

portion of the Louisiana SIP dealing with the issuance of

preconstruction permits, and MSP does not dispute these assertions.

While nothing in these sections compels the conclusion that LDEQ

lacked power from some other source to issue such permits, MSP has

not identified what this other source might be. Most importantly,

however, we agree with the United States that Permit 1036 M-1

itself provides the best evidence that LDEQ did not attempt to

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issue an off-the-SIP permit. Permit 1036 M-1 incorporates by

reference a series of Standard Air Emission Permit Conditions, the

first of which provides that “[f]ailure to install, properly

operate and/or maintain all proposed control measures and/or

equipment as specified in the application shall be considered a

violation of the permit and regulation 6.0.” In other words,

Permit 1036 M-1 provided that a violation of the permit constituted

a violation of the SIP. This reference provides strong evidence

that LDEQ used its powers under the SIP to issue Permit 1036 M-1,

and in the absence of state authority to the contrary, we hold that

Permit 1036 M-1 was established under LDEQ’s regulations approved

pursuant to 40 C.F.R. pt. 51, subpt. I.

Our decision here does not conflict with National Mining Ass’n

v. United States Environmental Protection Agency, 59 F.3d 1351

(D.C. Cir. 1995), decided shortly before oral argument in this

case. In National Mining Ass’n, the D.C. Circuit held that EPA had

to consider limits in permits unenforceable by the United States

and issued pursuant to effective state permitting programs when

deciding whether a source with the physical and mechanical

potential to emit pollutants above the floor rate for major

stationary sources could avoid preconstruction review as a

synthetic minor source. 59 F.3d at 1361-65. In other words,

National Mining Ass’n addressed the consequences attaching to

federal enforceability. This case concerns the analytically prior

question of whether a particular permit is federally enforceable.

To the extent that the D.C. Circuit discussed procedural

62
requirements necessary to make a permit federally enforceable, see

59 F.3d at 1362, it spoke of operating permits, not preconstruction

permits.

2

We affirm the district court’s rejection of MSP’s statute of

limitations defense to the allegations of minor source violations.

The United States concedes that the five-year limitations period in

28 U.S.C. § 2462 bars all fines for minor source emissions

occurring more that five years before the filing of this lawsuit.

MSP contends, however, that because emissions from each minor

source began more than five years before the United States filed

suit, section 2462 bars all minor source fines, even those

occurring within five years of the filing of the complaint. MSP’s

argument is frivolous. 42 U.S.C. § 7413(b) states that the United

States may sue to collect penalties of $25,000 “per day for each

violation.” Section 7413(b) contemplates a fine for each day a

minor source operates in violation of law, and section 2462 limits

the number of days to five years before the filing of the

complaint. The district court properly rejected MSP’s statute of

limitations defense.

3

MSP argument that the district court’s $2,500,000 minor source

fine was too harsh rests on two grounds. First, MSP contends that

the district court did not sufficiently mitigate the penalty in

light of LDEQ’s delay in ruling on MSP’s application to amend its

permit to include these emissions sources. Second, MSP argues that

63
the district court erroneously relied on MSP’s failure to install

the pollution control devices mentioned in its permit amendment

application.

MSP’s first argument is, to say the least, unconvincing. MSP

began to operate unpermitted minor sources in violation of the CAA

when it first opened for business. It continued for years to

operate these sources and did not apply for a permit for them until

after LDEQ ordered it to complete a questionnaire identifying all

emission source on the site. It continued to operate these sources

while LDEQ considered its request for a variance to render these

emissions legal. Emissions did not cease after LDEQ denied the

variance, during the pendency of judicial review of the variance

denial, or even after the Louisiana courts affirmed the denial,

despite MSP’s arguments to the Louisiana judiciary that the

variance denial would require MSP to shut down. In light of MSP’s

disregard for the requirement that it obtain the very permit that

has been the subject of unreasonable delay, we do not find

persuasive the argument that the district court’s refusal to

further mitigate the fine constituted an abuse of discretion. We

note further that the statutory maximum fine for MSP’s minor source

violations is $1,560,000,000, and that the maximum fine for the

operation of these sources after the variance denial became final

is $1,175,000,000. Thus, the district court’s fine represents

around one tenth of one percent of what it might have imposed, and

around two tenths of one percent of what it might have imposed for

64
the time period during which MSP operated in flagrant and willful

violation of the permit requirement.

We reject MSP’s second contention as well. MSP argues that

L.A.C. 33:III:505.A.1, superseded, 21 La. Reg. 878 (July 20, 1995),

counterpart codified at L.A.C. § 33:III:501.C.2, prevented it from

installing pollution control devices without permission from LDEQ.

Section 505.A.1 applied, however, only to “[a]ny person planning to

initiate[] or increase the emission of air contaminants.” The

regulation’s current incarnation, section 501.C.2, applies only to

construction, modification, or operation “which may ultimately

result in an initiation or increase in emission of air

contaminants.” This plain language suggests that MSP could have

installed devices resulting in the reduction of air pollutants at

any time without permission from LDEQ. We find no error in the

district court’s reliance on the fact that MSP did not follow its

proposed course of action.

V

We consider together MSP's appeal from the district court's

permanent injunctions prohibiting MSP from discharging non-contact

cooling water into Bayou Boeuf, storing K-listed wastes, and

operating major or minor air emission sources, all unless MSP

obtained permits for these activities. MSP asserts that all three

injunctions suffer a common defect, namely, that the district court

abused its discretion by failing to support its decision to issue

an injunction with a discussion of traditional equitable factors,

65
such as the balance of the harms and benefits to each party, the

adequacy of legal remedies, and the presence of irreparable harm.

MSP also argues that the district court failed to articulate

findings and reasons with sufficient specificity to support the

injunctions. See Fed. R. Civ. P. 65(d). MSP supports its

arguments primarily with cites to two Supreme Court decisions,

Amoco Productions Co. v. Village of Gambell, 480 U.S. 531 (1987),

and Weinberger v. Carlos Romero-Barcelo, 456 U.S. 305 (1982).

We do not agree that Amoco and Weinberger require a court to

balance the equities and make findings regarding irreparable harm

and adequacy of legal remedies in all cases arising under the

environmental statutes. Amoco and Weinberger both hold that a

federal statute's authorization of injunctive relief does not

remove an equity court's traditional discretion over the decision

to issue an injunction. In both cases, the Court was "explicitly

reject[ing] the notion that an injunction follows as a matter of

course upon a finding of statutory violation." Town of Huntington

v. Marsh, 884 F.2d 648, 651 (2d Cir. 1989), cert. denied, 494 U.S.

1004 (1990); see also Natural Resources Defense Council, Inc. v.

Texaco Refining and Marketing, Inc., 906 F.2d 934, 939-40 (3d Cir.

1990) (collecting cases). Neither decision directs courts to

abandon traditional principles of equity jurisprudence in

environmental cases. To the contrary, the Court identified the

error in both cases as the lower courts’ departure from these

traditional principles; while recognizing that Congress could

circumscribe a court's reliance upon the traditions of equity in a

66
particular context, the Court held that Congress had not intended

to do so in the environmental statutes at issue. Weinberger and

Amoco allow a court to issue an injunction without making findings

of irreparable harm, inadequacy of legal remedy, or the balance of

convenience, provided that traditional equitable principles permit

such a course of action.

At least two traditional principles of equity are relevant to

this case. First, a court need not balance the hardship when a

defendant's conduct has been willful. United States v. Pozsgai,

999 F.2d 719, 736 (3d Cir. 1993), cert. denied, 114 S. Ct. 1052

(1994); EPA v. Environmental Waste Control, Inc., 917 F.2d 327, 332

(7th Cir. 1990), cert. denied, 499 U.S. 975 (1991). This doctrine

evolved in part from cases involving willful encroachments onto

neighboring real estate, see, e.g., 5 John N. Pomeroy & John N.

Pomeroy, Jr., Pomeroy's Equity Jurisprudence § 1922, at 4362-64 (2d

ed. 1919), and it remains good law today in a variety of contexts.16

MSP offers no reason why this traditional principle of equity

should not relieve a court of its normal obligation to balance the

16
Louis W. Epstein Family Partnership v. K-mart Corp., 13
F.3d 762, 769-70 (1994) (Pennsylvania law, encroachment on land);
Kratze v. Independent Order of Oddfellows, 500 N.W.2d 115, 121 &
n.10 (Mich. 1993) (land encroachment); Amabile v. Winkles, 347 A.2d
212, 216-17 (Md. 1975) (land); Normandy B. Condominium Ass'n, Inc.
v. Normandy C. Ass'n, Inc., 541 So. 2d 1263 (Ct. App. Fla. 1989)
(interference with an easement); Barrett v. Lawrence, 442 N.E.2d
599, 603 (Ill. App. 1982) (failure to deposit money in an escrow);
Christensen v. Tucker, 250 P.2d 660, 665-66 (Cal. App. 1952) (land
encroachment). Federal courts have applied this doctrine in the
intellectual property context as well. See, e.g., Helene Curtis
Industries, Inc. v. Church & Dwight Co., 560 F.2d 1325, 1333-34
(7th Cir. 1977) (trademark infringement), cert. denied, 434 U.S.
1070 (1978); E.F. Johnson Co. v. Uniden Corp. of America, 623 F.
Supp. 1485, 1504 (D. Minn. 1985) (patent infringement).

67
equities when dealing with a defendant who has willfully and

repeatedly violated the environmental laws.

Second, when the United States or a sovereign state sues in

its capacity as protector of the public interest, a court may rest

an injunction entirely upon a determination that the activity at

issue constitutes a risk of danger to the public. United States

Steelworkers of America v. United States, 361 U.S. 39, 60-61 (1959

(Frankfurter, J., concurring) (discussing the judiciary's historic

use of equity powers, at the request of the sovereign, to enjoin

activity found to be a public nuisance); Environmental Waste

Control, 917 F.2d at 332; Environmental Defense Fund, Inc. v.

Lamphier, 714 F.2d 331, 337-38 (4th Cir. 1983); see also Alabama v.

United States, 304 F.2d 583, 591 & n.24 (5th Cir.), aff'd, 371 U.S.

37 (1962). But see United States v. Lambert, 695 F.2d 536, 540

(11th Cir. 1983) (upholding a district court's denial of the United

State's request for a preliminary injunction without discussing

this doctrine). In Georgia v. Tennessee Copper Co., 206 U.S. 230,

237-38 (1907), for instance, Justice Holmes's stated that when a

sovereign state is the plaintiff, "[t]his court has not quite the

same freedom to balance the harm that will be done by an injunction

against that of which it would have in deciding between two

subjects of a single political power." 206 U.S. at 238. This

doctrine draws support from the extraordinary weight courts of

equity place upon the public interests in a suit involving more

than a mere private dispute, see, e.g., Virginian Railway v. System

Federation No. 40, AFL, 300 U.S. 515, 552 (1937), and from the

68
deference courts afford the political branches in identifying and

protecting the public interest.

In the final analysis, however, unless Congress has narrowed

an equity court's flexibility in the context of a particular

statutory scheme, the issuance of an injunction remains an exercise

of the district court's discretion. See Tennessee Copper, 206 U.S.

at 238 (refusing to abandon "the considerations that equity always

takes into account" even in the context of a suit by a state to

protect the public interest). Weinberger and Amoco remind us that

the hallmark of equity is flexibility and that courts should not

lightly presume that Congress intended to narrow an equity court's

traditional exercise of discretion.

Relying on United States v. Bethlehem Steel Corp., 38 F.3d

862, 868 (7th Cir. 1994), the United States argues that Congress

has in fact narrowed judicial discretion in the context of RCRA, if

not in the CAA or CWA. In Bethlehem Steel, the Seventh Circuit

applied the second of these two doctrines to a suit involving

unpermitted disposal of hazardous waste on the land. The court

held that because the case involved a suit by the United States to

protect the public interest, and because Congress when passing RCRA

found that "disposal of solid waste and hazardous waste in or on

the land without careful planning and management can present a

danger to human health and the environment," 42 U.S.C.

§ 6901(b)(2), an injunction could issue "without undertaking a

weighing of the equities or making a finding of irreparable harm."

38 F.3d at 867. The United States seeks to bolster its reliance on

69
Bethlehem Steel by pointing out that RCRA's interim status

requirements are fairly specific, and that 40 C.F.R.

§ 265.112(d)(3)(I) requires facilities lacking permits or interim

status to close.

Although the United States’ argument has some force, we do not

read Bethlehem Steel to hold that the United States is entitled to

an injunction whenever it proves a violation of RCRA. We find

nothing in RCRA which, “‘in so many words, or by necessary and

inescapable inference, restricts the court's jurisdiction in

equity.'" Weinberger, 456 U.S. at 313 (quoting Porter v. Warner

Holding Co., 328 U.S. 395, 398 (1946)). To be sure, a court of

equity must exercise its discretion with an eye to the

congressional policy as expressed in the relevant statute, but some

of Bethlehem Steel's language may tread too closely to the view,

rejected in Weinberger, that a court is "mechanically obligated to

grant an injunction for every violation of law" when the United

States is the plaintiff. 456 U.S. at 313.

Applying these traditional equitable principles here is not

without difficulty. The district court's Order and Reasons

included findings of fact and conclusions of law concerning

remedies for MSP's violations of the environmental laws, but in its

findings and conclusions the district court discussed only the

fines levied against MSP. The district court then attached a

Judgment on Main Demand ordering MSP to pay fines and enjoining

future statutory violations. We find few indications in either the

Order and Reasons or the Judgment on Main Demand that the district

70
court considered the equitable theory supporting its injunctions.

The district court did not explicitly make findings as to

willfulness, risk of danger to the public interest, balance of the

equities, irreparable harm, or adequacy of legal remedies, although

it did address facts tantalizingly similar to these factors.

Regarding willfulness, for instance, the court found that MSP's

violations of the CAA were "serious because they have continued for

long periods of time and result[ed] to some extent from MSP's

deliberate indifference to the necessity of having a permit before

commencing or continuing operations." But it also found that "MSP

and LDEQ were of the opinion that no PSD permit was required

because of the pollution control devices installed by MSP." In

addition, the district court found that, overall, MSP's violations

of the environmental laws had as yet caused little perceivable harm

to the environment. That finding does not, however, compel the

conclusion that MSP's illegal activity could continue indefinitely

without causing a risk to the public health. See Amoco, 480 U.S.

at 545 ("Environmental injury, by its nature, can seldom be

adequately remedied by money damages and is often permanent or at

least of long duration, i.e, irreparable. If such injury is

sufficiently likely, therefore, the balance of harms will usually

favor the issuance of an injunction to protect the environment.")

In short, we are uncertain as to whether and in what manner

the district court exercised its equitable discretion in this case.

On the basis of the findings and record before us, we lack a

sufficient basis for appellate review. We have discretionary power

71
to leave the injunction in place, without or without the stay,

while requesting the district court to issue a supplemental

opinion, Allied Marketing Group, Inc. v. CDL Marketing, Inc., 878

F.2d 806, 814 (5th Cir. 1989), and we believe it appropriate to do

so and remand for further proceedings consistent with this opinion.

See Sierra Club Lone Star Chapter v. FDIC, 992 F.2d 545, 552 (5th

Cir. 1993). On remand, the district court should exercise

discretion as to whether to enjoin MSP from its continuing

violation of the environmental laws, and accompany any order issued

with an explanation of the relevant facts and legal theories.

VI

We AFFIRM the district court’s land ban, K-listed waste, and

CAA minor source fines. We VACATE the district court’s decision

regarding F-listed waste, CWA violations, and Permit 1036 M-1 and

REMAND for further proceedings consistent with this opinion. We

hold in place the injunctions and the conditions issued below and

REMAND to allow the district court to exercise its discretion

regarding their maintenance and for entry of explicit findings and

conclusions.

72