Natural Resources Defense Council v. Environmental Protection Agency , 755 F.3d 1010 ( 2014 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued May 12, 2014 Decided June 27, 2014.
No. 98-1379
NATURAL RESOURCES DEFENSE COUNCIL AND SIERRA CLUB,
PETITIONERS
v.
ENVIRONMENTAL PROTECTION AGENCY AND GINA
MCCARTHY,
RESPONDENTS
AMERICAN CHEMISTRY COUNCIL,
INTERVENOR
Consolidated with 98-1429, 98-1431
On Petitions for Review of Final Action of the
United States Environmental Protection Agency
James S. Pew argued the cause for the petitioners.
Khushi K. Desai and David R. Case were on brief.
Norman L. Rave, Jr., Attorney, United States Department
of Justice, argued the cause for the respondents. Robert G.
Dreher, Acting Assistant Attorney General, and Steven
Silverman and Alan H. Carpien, Attorneys, United States
Environmental Protection Agency, were on brief. Cynthia J.
2
Morris, and Christopher S. Vaden, Attorneys, United States
Department of Justice, and Lois J. Schiffer, Attorney, National
Capital Planning Commission, entered appearances.
Michael W. Steinberg argued the cause for the intervenor.
David M. Kerr and Leslie A. Hulse were on brief.
Thomas Sayre Llewellyn, Harry M. Ng and Deanne M.
Ottaviano were on brief for amici curiae American Petroleum
Institute et al. in support of the respondents.
Before: HENDERSON and MILLETT, Circuit Judges, and
SENTELLE, Senior Circuit Judge.
Opinion for the Court filed by Circuit Judge HENDERSON.
KAREN LECRAFT HENDERSON, Circuit Judge: Petitioners
Natural Resources Defense Council, Sierra Club and
Environmental Technology Council (collectively, Petitioners)
seek review of a portion of a 1998 rule of the Environmental
Protection Agency (EPA) creating a “Comparable Fuels
Exclusion” from regulation under section 3004(q) of the
Resource Conservation and Recovery Act of 1976 (RCRA), 42
U.S.C. § 6924(q). See Hazardous Waste Combustors;
Revised Standards, 63 Fed. Reg. 33,782, 33,783-801,
33,823-35 (June 19, 1998) (1998 Rule) (codified at 40 C.F.R.
§§ 261.4(a)(16) and 261.38). Section 6924(q) directs EPA to
establish standards applicable to all facilities that produce,
burn for energy recovery or distribute/market fuels derived
from specific listed hazardous wastes. The Comparable Fuels
Exclusion exempts from section 6924(q)’s mandate all fuels
deemed comparable to non-hazardous-waste-derived fossil
fuels because they satisfy EPA’s specifications. See 40
C.F.R. §§ 261.4(a)(16), 261.38. We conclude the
Comparable Fuels Exclusion is inconsistent with the plain
language of section 6924(q), which requires that EPA establish
standards applicable to all fuel derived from hazardous waste.
3
Accordingly, we grant the petitions for review filed by the
Natural Resources Defense Council (NRDC) and the Sierra
Club (collectively, Environmental Petitioners) and vacate the
Comparable Fuels Exclusion.
I.
RCRA, codified at 42 U.S.C. §§ 6901 et seq., is “a
comprehensive environmental statute under which EPA is
granted authority to regulate solid and hazardous wastes.”
Am. Mining Cong. v. EPA (AMC I), 824 F.2d 1177, 1179 (D.C.
Cir. 1987). Subtitle C of RCRA, 42 U.S.C. §§ 6921-39g,
governs “Hazardous Waste Management” and “establishes a
‘cradle to grave’ federal regulatory system for the treatment,
storage, and disposal of hazardous wastes.” Cement Kiln
Recycling Coal. v. EPA, 493 F.3d 207, 211 (D.C. Cir. 2007)
(quotation marks and citation omitted). RCRA defines
“hazardous waste” as “a solid waste, or combination of solid
wastes” which, because of its characteristics, may “cause, or
significantly contribute to an increase in mortality or . . .
serious . . . illness [or] pose a substantial present or potential
hazard to human health or the environment when improperly
. . . managed.” 42 U.S.C. § 6903(5). A “solid waste,” in
turn, is defined as “any garbage, refuse, sludge from a waste
treatment plant, water supply treatment plant, or air pollution
control facility and other discarded material.” Id. § 6903(27)
(emphasis added). Section 6924 provides generally that EPA
“shall promulgate regulations establishing such performance
standards, applicable to owners and operators of facilities for
the treatment, storage, or disposal of hazardous waste
identified or listed under this subchapter, as may be necessary
to protect human health and the environment.” Id. § 6924(a).
Until 1985, EPA regulations expressly exempted from
section 6924’s hazardous waste standards “material . . . being
burned as a fuel for the purpose of recovering usable energy,”
4
under the theory that such material was not “discarded,” 40
C.F.R. § 261.2(c)(2) (1984), and therefore not “solid waste,” as
defined in 42 U.S.C. § 6903(27), or, consequently, “hazardous
waste,” which is defined in section 6903(5) “as a subset of
‘solid waste,’ ” Horsehead Res. Dev. Co. v. Browner, 16 F.3d
1246, 1263 (D.C. Cir. 1994); see AMC I, 824 F.2d at 1189
(noting regulations existing in November 1984 had “provided
that unused commercial chemical products were solid wastes
only when ‘discarded’ [and] ‘[d]iscarded’ was at that time
defined as abandoned (and not recycled) by being disposed,
burned, or incinerated (but not burned for energy recovery)”
(citing 40 C.F.R. §§ 261.33, 261.2(c) (1983))). In 1984, the
Congress attempted to eliminate EPA’s regulatory energy
recovery exemption when it enacted section 6924(q) as part of
“The Hazardous and Solid Waste Amendments of 1984,” Pub.
L. No., 98-616, § 204(b)(1), 98 Stat. 3221, 3236-37 (Nov. 8,
1984). See AMC I, 824 F.2d at 1189 (noting Congress
“apparently added [section 6924(q)(1)] to override” 40 C.F.R.
§ 261.33 (1983)); Horsehead Res. Dev. Co., 16 F.3d at 1253
(“Exempting facilities that burned hazardous waste for energy
recovery from Subtitle C’s requirements created a regulatory
‘loophole’ by means of which over half of the hazardous waste
generated in the United States came to be burned in [boilers
and industrial furnaces] not subject to RCRA. Congress
closed this loophole by enacting RCRA section 3004(q)[,
which] set a deadline of November 8, 1986 for the EPA to
promulgate regulations governing the burning of hazardous
waste for energy recovery.” (citation omitted)).
Section 6924(q) governs “[h]azardous waste used as fuel”
and mandates that EPA regulate entities that produce, burn for
energy recovery or distribute/market hazardous-waste-derived
fuel. In particular, it provides that EPA “shall promulgate
regulations establishing . . . as may be necessary to protect
human health and the environment”: “(A) standards applicable
to the owners and operators of facilities which produce a fuel
5
. . . from any hazardous waste identified or listed under [42
U.S.C. § 6921], . . . (B) standards applicable to the owners and
operators of facilities which burn, for purposes of energy
recovery, any [such] fuel . . . or any fuel which otherwise
contains any hazardous waste . . . and (C) standards applicable
to any person who distributes or markets any [such] fuel . . . or
any fuel which otherwise contains any hazardous waste.” 42
U.S.C. § 6924(q)(1)(A)-(C). 1 In January 1985, pursuant to
1
Section 6924(q)(1) provides in full:
(q) Hazardous waste used as fuel
(1) Not later than two years after November 8, 1984,
and after notice and opportunity for public hearing,
the Administrator shall promulgate regulations
establishing such—
(A) standards applicable to the owners and
operators of facilities which produce a fuel—
(i) from any hazardous waste identified or
listed under section 6921 of this title, or
(ii) from any hazardous waste identified or
listed under section 6921 of this title and
any other material;
(B) standards applicable to the owners and
operators of facilities which burn, for purposes
of energy recovery, any fuel produced as
provided in subparagraph (A) or any fuel which
otherwise contains any hazardous waste
identified or listed under section 6921 of this
title; and
(C) standards applicable to any person who
distributes or markets any fuel which is produced
as provided in subparagraph (A) or any fuel
which otherwise contains any hazardous waste
identified or listed under section 6921 of this
title;
as may be necessary to protect human health and the
environment. Such standards may include any of the
6
section 6924(q), EPA eliminated the energy recovery
exclusion. See Hazardous Waste Management System;
Definition of Solid Waste, 50 Fed. Reg. 614, 664 (Jan. 4, 1985)
(amending definition of “solid waste” to provide that
“[m]aterials are solid wastes if they are recycled” by, inter alia,
“[b]urning for energy recovery”).
EPA proposed the Comparable Fuels Exclusion in 1996.
See Revised Standards for Hazardous Waste Combustors, 61
Fed. Reg. 17,358, 17,529-30 (Apr. 19, 1996). Following
notice and comment, the final version was published in the
1998 Rule. See 63 Fed. Reg. at 33,823-29. The Comparable
Fuels Exclusion exempts from the section 6924(q) hazardous
waste fuel standard requirement all “comparable fuels,” which
are “fuels which are produced from a hazardous waste, but
which are comparable to some currently used fossil fuels.”2
Id. at 33,782; see id. at 33,783-801. To be comparable, the
fuel must “meet specification levels comparable to fossil fuels
for concentrations of hazardous constituents and for physical
properties that affect burning,” such as heating value and
requirements set forth in paragraphs (1) through (7) of
subsection (a) of this section as may be appropriate.
Nothing in this subsection shall be construed to affect
or impair the provisions of section 6921(b)(3) of this
title. For purposes of this subsection, the term
“hazardous waste listed under section 6921 of this
title” includes any commercial chemical product
which is listed under section 6921 of this title and
which, in lieu of its original intended use, is (i)
produced for use as (or as a component of) a fuel, (ii)
distributed for use as a fuel, or (iii) burned as a fuel.
2
The Comparable Fuels Exclusion includes “an exclusion for a
particular type of hazardous waste-derived fuel, namely a type of
synthesis gas (‘syngas’) meeting particular specifications.” 63 Fed.
Reg. at 33,785.
7
viscosity. 63 Fed. Reg. at 33,783; see 40 C.F.R.
§§ 261.4(a)(16) (“The following materials are not solid wastes
for the purpose of this part: . . . [c]omparable fuels or
comparable syngas fuels that meet the requirements of
§ 261.38.”), 261.38 (setting out “[s]pecifications for excluded
fuels” as well as other conditions and limitations). The
Comparable Fuels Exclusion also imposes notification
requirements, including (1) that the generator of a comparable
fuel provide to the appropriate State or to EPA notice of, inter
alia, the hazardous waste content and the location where it will
be burned and (2) that the burner of such fuel publish in a local
newspaper notice of the fact, location and estimated extent of
the burning. 63 Fed. Reg. at 33,784, 33,797-98 (codified at 40
C.F.R. § 261.38(b)(2)).3
EPA’s stated rationale for the Comparable Fuels
Exclusion was that EPA “has discretion to classify . . . as a fuel
product, not as a waste” a “hazardous waste-derived fuel [that]
is comparable to a fossil fuel in terms of hazardous and other
key constituents and has a heating value indicative of a fuel.”
Id. at 33,783. Under this rationale, EPA explained, it “can
reasonably determine that a material which is a legitimate fuel
and which contains hazardous constituents at levels
comparable to fossil fuels is not being ‘discarded’ within the
meaning of RCRA section 1004(27) [42 U.S.C. § 6903(27)
(defining “solid waste)”], and therefore is not “waste.” 63
Fed. Reg. at 33,783. Such a determination, EPA continued,
“promotes RCRA’s resource recovery goals without creating
3
The Comparable Fuels Exclusion imposes additional
conditions “to assure that burning of comparable fuels will not
become part of the waste management problem”—notably, it limits
comparable fuels combustion to industrial furnaces, industrial and
utility boilers and hazardous waste incinerators and it prohibits
meeting specification limits through dilution. 63 Fed. Reg. at
33,784.
8
any risk greater than those posed by the commonly used
commercial fuels.” Id. In setting its comparable fuel
specifications, EPA used a “benchmark” approach “based on
the level of hazardous and other constituents normally found in
fossil fuels” so that “concentrations of hazardous constituents
in the comparable fuel could be no greater than the
concentration of hazardous constituents normally occurring in
commercial fossil fuels.” Id. at 33,784. Under the
benchmark specifications, EPA stated, it “reasonably
expect[ed]—based on the methodology used to establish the
specification—that the comparable fuel will pose no greater
risk when burned than a fossil fuel and concomitant energy
recovery benefits will be realized from reusing the waste to
displace fossil fuels.” Id. EPA further explained that it
“conclude[d] it has discretion in exercising jurisdiction over
hazardous waste-derived fuels that are essentially the same as
fossil fuel, since there would likely not be environmental
benefits from regulating those hazardous waste-derived fuels
(i.e., burners would likely just choose to burn fossil fuels).”
Id. In fact, EPA asserted, many of the commercial fossil fuels
already being burned “could be less ‘clean’ than the
comparable fuels, so that substitution of some commercial
fuels could be a net deterrent.” Id. In sum, EPA “expect[ed]
that the comparable fuel would pose no greater risk when
burned than a fossil fuel and would at the same time be
physically comparable to a fossil fuel, leading to the
conclusion that EPA may classify these materials as products,
not wastes.” Id.
Multiple petitioners—representing both environmental
and industry groups—filed timely petitions for review of the
Comparable Fuels Exclusion, which petitions were held in
abeyance pending, initially, settlement negotiations and,
subsequently, an administrative appeal of the related challenge
to EPA’s “Gasification Exclusion Rule” in Sierra Club v. EPA,
No. 08-1144 (D.C. Cir. June 27, 2014). The Comparable
9
Fuels Exclusion case was removed from abeyance in March
2013.
II.
We have subject matter jurisdiction to review the petitions
under 42 U.S.C. § 6976(a)(1), “which gives this court
exclusive jurisdiction over ‘petitions for review of action of the
EPA in promulgating any regulation, or requirement under
RCRA.’ ” Cement Kiln Recycling Coal. v. EPA, 493 F.3d
207, 214 (D.C. Cir. 2007) (brackets omitted). Before
reaching the merits, we consider the Petitioners’ standing vel
non under Article III of the United States Constitution. See
Bancoult v. McNamara, 445 F.3d 427, 432 (D.C. Cir. 2006)
(“The ‘first and fundamental question’ that we are ‘bound to
ask and answer’ is whether the court has jurisdiction to decide
the case.” (quoting Steel Co. v. Citizens for a Better Env’t, 523
U.S. 83, 94 (1998))).
A. Standing
“Because Article III limits the constitutional role of the
federal judiciary to resolving cases and controversies, a
showing of standing ‘is an essential and unchanging’ predicate
to any exercise of our jurisdiction.” Fla. Audubon Soc’y v.
Bentsen, 94 F.3d 658, 663 (D.C. Cir. 1996) (en banc) (quoting
Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992)
(citation omitted)). Moreover, “the party invoking the court’s
jurisdiction . . . bears the burden of demonstrating that it
satisfies the ‘irreducible constitutional minimum’ of standing:
(1) an ‘injury in fact’ that is ‘concrete and particularized’ as
well as ‘actual or imminent’; (2) a ‘causal connection’ between
the injury and the challenged conduct; and (3) a likelihood, as
opposed to mere speculation, ‘that the injury will be redressed
by a favorable decision.’ ” Ark Initiative v. Tidwell, 749 F.3d
1071, 1075 (D.C. Cir. 2014) (quoting Lujan, 504 U.S. at 560–
61 (1992) (quotation marks and brackets omitted)). The
10
Environmental Petitioners claim representational standing on
behalf of their members. Accordingly, each must demonstrate
that “[1] its members would otherwise have standing to sue in
their own right, [2] the interests it seeks to protect are germane
to the organization’s purpose, and [3] neither the claim asserted
nor the relief requested requires the participation of individual
members.” Defenders of Wildlife v. Perciasepe, 714 F.3d
1317, 1323 (D.C. Cir. 2013).
The Environmental Petitioners have met their burden of
demonstrating standing on behalf of their members. They
have submitted declarations of long-time members who spend
time near facilities which, as a result of the Comparable Fuels
Exclusion, now burn comparable fuels, and who are concerned
about the emissions’ effects on their health and, in some cases,
spend less time outdoors on that account. See, e.g., Br. for
Pet’rs, Decls. Add. 6 (declaration of NRDC member Doris
Falkenheiner), 12-14 (Sierra Club member Glen Besa), 22-23
(Sierra Club member William Fontenot), 34-35 (Sierra Club
member Kristina Moazed). The declarations’ averments
satisfy the Environmental Petitioners’ evidentiary burdens to
demonstrate injury, causation and redressability. See Ass’n of
Battery Recyclers v. EPA, 716 F.3d 667, 672 (D.C. Cir. 2013)
(finding association had Article III standing based on
members’ averments that “they live or work in close proximity
to [challenged] smelters and have reduced their time outdoors
in response to concerns about pollution—precisely the kinds of
harms the Supreme Court has deemed sufficient to show injury
in fact”).
Intervenor American Chemistry Council challenges the
Environmental Petitioners’ standing, asserting they did not
demonstrate that as of the time the petitions were filed, there
was a “substantial probability” that a facility located near one
of their members would burn comparable fuels, thereby
causing the alleged injury—largely because they do not aver
11
any facility had then provided notice of such burning—either
to the applicable RCRA director or through newspaper
publication—prerequisites under the 1998 Rule to burning
comparable fuels.4 See Br. for Intervenor 14-15; 40 C.F.R.
§ 261.38(b)(2); see also Chamber of Commerce v. EPA, 642
F.3d 192, 199-200 (D.C. Cir. 2011) (petitioner bears burden to
“show a ‘substantial probability’ that it has been or will be
injured, that the defendant caused its injury, and that the court
could redress that injury”; “standing is assessed as of the time a
suit commences” (brackets, capitalization and quotation marks
omitted)). We disagree.
It is “well-established . . . that standing will lie where ‘a
plaintiff demonstrates that the challenged agency action
authorizes the conduct that allegedly caused the plaintiff’s
injuries, if that conduct would allegedly be illegal otherwise.’ ”
Am. Trucking Ass’n v. Fed. Motor Carrier Safety Admin., 724
F.3d 243, 248 (D.C. Cir. 2013) (quoting Animal Legal Def.
Fund, Inc. v. Glickman, 154 F.3d 426, 440 (D.C. Cir. 1998) (en
banc)). This is precisely the case here. Once EPA
promulgated the Comparable Fuels Exclusion, it was “ ‘a
hardly-speculative exercise in naked capitalism’ ” to predict
that facilities would take advantage of it to burn
hazardous-waste-derived fuels rather than more expensive
fossil fuels. Id. (inferring that “motor carriers would respond
to the hours-increasing provisions by requiring their drivers to
use them and work longer days” (quoting Abigail Alliance for
Better Access to Developmental Drugs v. Eschenbach, 469
F.3d 129, 135 (D.C. Cir. 2006))). And the Intervenor does not
dispute that, as it turned out, many facilities did just that. In
fact, one facility in proximity to the Environmental Petitioners’
members—the Chemical Co. Baton Rouge Plastics Plant—had
4
The Intervenor does not question that the Environmental
Petitioners meet the second and third representational standing
requirements. Nor do we.
12
pending RCRA applications to combust hazardous waste in its
boilers (subject to RCRA regulation) before the 1998 Rule
issued—which applications it promptly withdrew in May 1999
when it achieved compliance with the Comparable Fuels
Exclusion and could therefore burn such fuels free from RCRA
regulatory constraints. See Br. for Pet’rs, Decls. Add. 37
(May 17, 1999 Letter from Exxon Chemical Co. Baton Rouge
Plastics Plant manager to Louisiana Department of
Environmental Quality Office of Waste Services).
The Intervenor also asserts that the Environmental
Petitioners have not shown that burning comparable fuels is
any more dangerous than burning fossil fuels and therefore
they have not demonstrated the possibility of any injury from
the Comparable Fuels Exclusion. “In EPA’s expert
judgment,” they note, “burning these comparable fuels will
have roughly the same risks, and the same affect [sic] on air
quality, as burning commercially available virgin fuels.” Br.
for Intervenor 21. The Environmental Petitioners, however,
are challenging EPA’s assessment of the Comparable Fuels
Exclusion’s risks—and we “assume for standing purposes”
that the Environmental Petitioners are “correct on the merits.”
See Sierra Club v EPA, 699 F.3d 530, 533 (D.C. Cir. 2012).5
In addition, both EPA and the Intervenor challenge the
standing of petitioner Environmental Technology Council, “a
national non-profit trade association of commercial firms that
provide technologies and services for recycling, treatment, and
secure disposal of industrial and hazardous wastes.”
Petitioners’ Rule 26.1 Disclosure Statement at 2 (Feb. 7, 2014).
5
Given our conclusion that NRDC and Sierra Club have
demonstrated standing based on their members’ asserted injuries
from facilities burning hazardous-waste-derived fuels, we need not
consider the Environmental Petitioners’ alternative claims of
informational and procedural injury.
13
We agree with EPA that under our precedent, the
Environmental Technology Council’s interest in the
litigation—“to protect its members’ competitive position in
selling greater quantities of waste treatment and disposal
services,”—“does not fall within the zone of interests” that
RCRA is intended to protect. Br. for Resp. 18 (citing
Hazardous Waste Treatment Council v. Thomas, 885 F.2d 918,
922-23 (D.C. Cir. 1989)); see also Sierra Club v. EPA, 292
F.3d 895, 902-903 (D.C. Cir. 2002); Cement Kiln Recycling
Coal. v. EPA, 255 F.3d 855, 871 (D.C. Cir. 2001).
Environmental Technology Council therefore lacks a cause of
action and we deny its petition for review. See Lexmark, Int’l,
Inc. v. Static Control Components, Inc., 134 S. Ct. 1377, 1388
(2014).
B. Statutory Construction
On the merits, the Petitioners first contend the Comparable
Fuels Exclusion is inconsistent with the language of section
6924(q). We review EPA’s interpretation of RCRA—a
statute it is charged with administering—under the familiar
two-step analysis of Chevron U.S.A. Inc. v. Natural Resources
Defense Council, Inc., 467 U.S. 837 (1984). See Am. Chem.
Council v. EPA, 337 F.3d 1060, 1063 (D.C. Cir. 2003).
Under Chevron:
We first ask “whether Congress has directly spoken to
the precise question at issue,” in which case we “must
give effect to the unambiguously expressed intent of
Congress.” If the “statute is silent or ambiguous with
respect to the specific issue,” however, we move to
the second step and defer to the agency’s
interpretation as long as it is “based on a permissible
construction of the statute.”
Natural Res. Def. Council v. EPA, 706 F.3d 428, 431 (D.C. Cir.
2013) (quoting Chevron, 467 U.S. at 842–43 (quotation marks
14
omitted)). We stop on Chevron step 1 because we agree with
the Petitioners that the Congress spoke directly to the question
whether EPA may exclude what it calls “comparable
fuels”—and foreclosed their exclusion.
Section 6924(q) unequivocally provides that EPA “shall
promulgate regulations establishing . . . standards” such “as
may be necessary to protect human health and the
environment”—applicable to three categories of entities: (1)
“owners and operators of facilities which produce a fuel . . .
from any hazardous waste identified or listed under [42 U.S.C.
§] 6921,” (2) “owners and operators of facilities which burn,
for purposes of energy recovery, any [such] fuel” and (3) “any
person who distributes or markets any [such] fuel.” 42 U.S.C.
§ 6924(q)(1)(A)-(C) (emphases added). The word “shall”
makes the directive to regulate hazardous-waste-derived fuels
mandatory. See Miller v. French, 530 U.S. 327, 337 (2000)
(referring to “mandatory term ‘shall’ ”); Ass’n of Civilian
Technicians, Mont. Air Ch. No. 29 v. FLRA, 22 F.3d 1150,
1153 (D.C. Cir. 1994) (“The word ‘shall’ generally indicates a
command that admits of no discretion on the part of the person
instructed to carry out the directive.”). And the repeated use
of “any” makes the mandate broadly inclusive—reaching all
fuels produced from all listed hazardous wastes. See Nat’l
Ass’n of Clean Water Agencies v. EPA, 734 F.3d 1115, 1128
(D.C. Cir. 2013) (“The word ‘any’ is usually understood to be
all inclusive, and EPA presented no compelling reason why
‘any’ should not mean ‘any.’ ” (quotation marks and citation
omitted)); United States v. Gonzales, 520 U.S. 1, 5 (1997)
(“Read naturally, the word ‘any’ has an expansive meaning,
that is, one or some indiscriminately of whatever kind.”
(quotation marks omitted)); cf. Massachusetts v. EPA, 549
U.S. 497, 528-29 (2007) (Clean Air Act definition of “air
pollutant” as “ ‘any air pollution agent or combination of such
agents, including any physical, chemical . . . substance or
matter which is emitted into or otherwise enters the ambient
15
air’ . . . embraces all airborne compounds of whatever stripe,
and underscores that intent through the repeated use of the
word ‘any’ ”) (emphases in original).6
From the statute’s mandatory and inclusive language we
can only conclude the Congress intended to require that EPA
regulate the production, burning for energy recovery and
distributing/marketing of all such fuels derived from all listed
hazardous wastes—with the sole express exclusions of (1)
certain oil-containing petroleum refinery wastes that are
converted into petroleum coke and (2) facilities that burn only
de minimis quantities of hazardous waste, see 42 U.S.C.
§ 6924(q)(2)(A)-(B). Given the plain intent of the Congress,
EPA had no discretion, as it claimed, to create its own
Comparable Fuels Exclusion to exempt from regulation fuels
that are derived from a listed hazardous waste and therefore
subject to mandatory regulation under section 6924(q). Cf.
Nat’l Ass’n of Clean Water Agencies, 734 F.3d at 1128
(“Congress’s use of the word ‘any’ in the definitional phrase
‘any facility which combusts any solid waste from commercial
or industrial establishments’ rendered the phrase clear and
unambiguous, and EPA had no authority to create exceptions
not explicitly listed in the statute through its definition of
‘commercial or industrial waste.’ ” (citing Natural Res.
Defense Council v. EPA, 489 F.3d 1250 (D.C. Cir. 2007))
(emphases in original)).
6
The intended breadth of coverage is further illustrated by the
express inclusion of “any commercial chemical product which is
listed under section 6921 of this title and which, in lieu of its original
intended use, is (i) produced for use as (or as a component of) a fuel,
(ii) distributed for use as a fuel, or (iii) burned as a fuel.” 42 U.S.C.
§ 6924(q)(1) (emphasis added). During oral argument, EPA
conceded that this language makes all commercial chemical products
subject to section 6924(q). See Recording of Oral Argument at
16:44 (May 12, 2014).
16
In particular, contrary to its stated rationale, EPA had no
discretion to “reasonably determine that a material which is a
legitimate fuel and which contains hazardous constituents at
levels comparable to fossil fuels is not being ‘discarded’ within
the meaning of [42 U.S.C. § 6903(27)].” 63 Fed. Reg. at
33,783. This is the very reasoning that the Congress rejected
when it enacted section 6924(q) to close EPA’s “regulatory
loophole” for energy recovery. Horsehead Res. Dev. Co., 16
F.3d at 1253. As we explained in AMC I, the Congress added
section 6924(q) in response to EPA’s regulations that excluded
from the definition of “solid waste” (and thereby of “hazardous
waste”) hazardous materials that are—or will be—burned for
energy recovery as not “discarded”; and the Congress
“addressed this problem by deeming the offending materials to
be ‘discarded’ and therefore within the statutory definition of
‘solid waste.’ ” AMC I, 824 F.2d at 1189 (emphasis added).7
Thus, for the purpose of interpreting section 6924(q),
“discarded” is not, as EPA claims in the 1998 Rule, “an
ambiguous term.” 63 Fed. Reg. at 33,783. And EPA
therefore has no discretion to “reasonably” construe the term to
exclude hazardous-waste-derived fuels from regulation.
EPA argues in its brief that the Comparable Fuels
Exclusion is itself a “standard” within the meaning of section
7
A.M.C. I focused on “the burning of commercial chemicals as
fuels, contrary to their original intended use”—a specific instance of
energy recovery burning that section 6924(q) identifies. See supra
note 8. Section 6924(q)’s compass is, as we explained supra, far
broader than that. See AMC I, 824 F.2d at 1189 (“ ‘Hazardous
waste, as used in this provision [6924(q)], includes not only wastes
identified or listed as hazardous under EPA’s regulations, but also
includes any commercial chemical product (and related materials)
listed pursuant to 40 C.F.R. § 261.33, which is not used for its
original intended purpose but instead is burned or processed as
fuel.’ ” (quoting H.R. Rep. No. 98-198, at 40 (1983) (emphasis
added))).
17
6924(q), which requires only that EPA establish “standards . . .
as may be necessary to protect human health and the
environment,” 42 U.S.C. § 6924(q)(1). Br. for Resp’t 28-29,
33. EPA asserts that the Comparable Fuel Exclusion’s
specifications and restrictions—in conjunction with existing
Clean Air Act, Occupational Safety and Health Administration
and Department of Transportation regulations—constitute
EPA’s determination of “the level of regulation ‘necessary’ for
the management, i.e., the storage, transportation, and burning,
of comparable fuels that is protective of human health and the
environment, as required by section 6924(q).” Id. at 29. But
this theory was not part of EPA’s rationale as expressed in the
1998 Rule. There, EPA concluded it need not establish any
standards applicable to qualifying comparable fuels because a
comparable fuel is not a “waste” but rather a “fuel product” and
therefore excluded from the statute’s reach. See 63 Fed. Reg.
at 33,783 (“The rationale for the Agency’s approach is that if a
hazardous waste derived fuel is comparable to a fossil fuel in
terms of hazardous and other key constituents and has a heating
value indicative of a fuel, EPA has discretion to classify such
material as a fuel product, not as a waste.”); id (“Under this
final rule, EPA is excluding from the regulatory definition of
solid waste hazardous waste-derived fuels that meet
specification levels comparable to fossil fuels for
concentrations of hazardous constituents and for physical
properties that affect burning.”).
The rationale EPA now offers—that by setting criteria for
exclusion from section 6924 regulation, it was in fact
“establishing standards” under section 6924 specifications—is
entirely post hoc. Accordingly, we may not sustain the 1998
rule thereunder. See Nat’l Ass’n of Clean Water Agencies,
734 F.3d at 1138 (“EPA did not state this rationale in the
rulemaking, and we cannot ‘accept appellate counsel’s post
hoc rationalizations for agency action.’ ” (quoting Motor
Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S.
18
29, 50 (1983))); see also SEC v. Chenery Corp., 318 U.S. 80,
95 (1943) (“[A]n administrative order cannot be upheld unless
the grounds upon which the agency acted in exercising its
powers were those upon which its action can be sustained.”).
EPA’s new rationale is also flatly inconsistent with the 1998
Rule, which expressly and repeatedly characterized its action
as an “exclusion.” See, e.g., 63 Fed. Reg. at 33,782-84.
Finally, the 1998 Rule did not even purport to apply the RCRA
protection standard EPA now cites—that the regulatory
standards be sufficient “to protect human health and the
environment.” 42 U.S.C. § 6924(a), (q)(1). Instead, EPA
considered only whether a fuel complying with the
Comparable Fuels Exclusion’s specifications presents a
“greater risk than burning fossil fuel”—which is quite a
different level of protection—and EPA’s answer was merely
that it “expects” not. See 63 Fed. Reg. at 33,783-84.
In support of its rationale as expressed in the 1998
Rule—that hazardous wastes recycled for energy recovery are
excluded from section 6924(q)’s “standard” mandate—EPA
relies on Circuit precedent that has upheld EPA’s
characterization of recycled materials as not “discarded” and
therefore not “waste” subject to RCRA hazardous waste
regulation. In AMC I, for example, we concluded at Chevron
step 1 that RCRA’s “solid waste” definition precludes EPA
from regulating materials produced in the oil refining
process—to be recycled through reintroduction at the
appropriate stage of the refining process—because the
Congress “clearly and unambiguously expressed its intent that
‘solid waste’ (and therefore EPA’s regulatory authority) be
limited to materials that are ‘discarded’ by virtue of being
disposed of, abandoned, or thrown away.” 824 F.2d at 1193.
Accordingly, the term’s plain meaning excludes materials that
“are destined for beneficial reuse or recycling in a continuous
process by the generating industry itself,” such as the recycled
materials there. Id. at 1186 (emphasis omitted); accord Ass’n
19
of Battery Recyclers, Inc. v. EPA, 208 F.3d 1047, 1056 (D.C.
Cir. 2000) (“[A]t least some of the secondary material EPA
seeks to regulate as solid waste is destined for reuse as part of a
continuous industrial process and thus is not abandoned or
thrown away. Once again, ‘by regulating in-process
secondary materials, EPA has acted in contravention of
Congress’ intent’ because it has based its regulation on an
improper interpretation of ‘discarded’ and an incorrect reading
of our AMC I decision.” (quoting AMC I, 824 F.2d at 1193)).
On the flip side, in Safe Food & Fertilizer v. EPA, 350
F.3d 1263 (D.C. Cir. 2003), we upheld as permissible under
Chevron step 2 EPA’s interpretation of the “solid waste”
definition to exclude as not “discarded” industrial process
byproducts recycled to produce zinc fertilizers as well as the
fertilizers themselves. Id. at 1269-71; see also Am. Mining
Cong. v. EPA, 907 F.2d 1179, 1186 (D.C. Cir. 1990) (“Nothing
in AMC [I] prevents the agency from treating as ‘discarded’ the
wastes at issue in this case, which are managed in land disposal
units that are part of wastewater treatment systems.”)
(emphases omitted). None of the cited cases, however,
involved fuels burned for energy recovery so as to come under
section 6924(q), which, as we explained in AMC I, “deem[s]”
the materials burned for energy recovery to be “ ‘discarded’
and therefore within the statutory definition of ‘solid waste.’ ”
AMC I, 824 F.2d at 1189; see Horsehead Res. Dev. Co., 16
F.3d at 1263 (“AMC I involved an altogether different facet of
waste disposal governed by a different statutory section, i.e.,
the scope of the RCRA term ‘solid waste’ . . . .”). Outside the
section 6924(q) energy recovery context—as the cited cases
demonstrate—materials to be reused may be reasonably—or
even necessarily—characterized as not “waste” because they
are not “discarded.” See AMC I, 824 F.2d at 1189 (“This
specific measure did not, however, revamp the basic
definitional section of the statute.”). But not under section
6924(q), which provides that EPA “shall promulgate
20
regulations establishing . . . standards” applicable to producers,
burners and distributors/marketers of a fuel produced from
“any hazardous waste identified or listed under [42 U.S.C.
§ 6921]” and deems the listed component hazardous materials
to be “discarded” waste. 42 U.S.C. § 6924(q)(1)(A)-(C)
(emphasis added).
Finally, EPA contends that the “Petitioners’ claim that the
Comparable Fuels Rule is inconsistent with section 6924(q)
has been waived because it was not raised in comments during
the rulemaking.” Br. for Resp’t 21; see Natural Res. Def.
Council v. EPA, 25 F.3d 1063, 1073–74 (D.C. Cir. 1994) (“We
do not reach the merits of this challenge because petitioners
failed to raise this question . . . before the agency during the
notice and comment period. They have therefore waived their
opportunity to press this argument in court.”); see also Military
Toxics Project v. EPA, 146 F.3d 948, 956-57 (D.C. Cir. 1998).
In response, the Petitioners point to two comments they claim
raised their statutory argument. See Reply Br. 9-10. First,
petitioner Environmental Technology Council submitted a
comment criticizing EPA’s “implementing approach” as
an attempt to defer RCRA § 3004(q)-(s) regulation of
. . . hazardous wastes to the CAA in accordance with
RCRA § 1006(a) to avoid duplication, but without
making the essential finding that such a deferral
satisfies the objectives of RCRA. For example, EPA
has not conducted any kind of technical or risk
analysis showing how a blanket exemption from all
RCRA Subtitle C controls for hazardous wastes that
meet the comparable fuel spec somehow adequately
protects human health and the environment. Thus, the
proposal is legally deficient.
Joint Appendix (JA) 387. Second, citing an EPA background
document’s explanation for rejecting a “risk” approach in
21
setting the comparable fuel specifications in favor of a
benchmark approach, commenter Molten Metal Technology
Inc. (Molten Metal) asserted:
Therefore, the Agency’s comparable fuels proposal
will likely result in higher exemption concentrations
than levels that would normally be derived using a
risk-based approach. Such an approach would
violate the clear Congressional mandate in Section
3004(q) of RCRA to regulate the burning of
hazardous waste for energy recovery “as may be
necessary to protect human health and the
environment.”
JA 374.
We agree with EPA that both comments seem to focus
more on the way EPA implemented the Comparable Fuels
Exclusion than on its statutory authority vel non to create any
such exclusion. Nonetheless, EPA’s response to Molten
Metal’s comment suggests that EPA understood Molten Metal
to challenge EPA’s statutory authority to exclude comparable
fuels in the first place and affirms its authority to do so:
“Section 3004(q) applies to hazardous wastes which are burned
for energy recovery. The provision does not speak to EPA’s
authority to determine whether particular fuels produced from
secondary materials are or are not, products rather than
wastes.” JA 547. Thus, the issue was expressly addressed by
EPA and is properly before the court. See Appalachian Power
Co. v. EPA, 135 F.3d 791, 818 (D.C. Cir. 1998) (“The purpose
of the exhaustion requirement is to ensure that the agency is
given the first opportunity to bring its expertise to bear on the
resolution of a challenge to a rule.”). Moreover, even if a
party may be deemed not to have raised a particular argument
before the agency, “EPA ‘retains a duty to examine key
assumptions as part of its affirmative burden of promulgating
22
and explaining a nonarbitrary, non-capricious rule”’ and
therefore . . . ‘EPA must justify that assumption even if no one
objects to it during the comment period.’ ” Id. (quoting Small
Refiner Lead Phase-Down Task Force v. EPA, 705 F.2d 506,
534-35 (D.C. Cir. 1983); see also Okla. Dep’t of Envtl. Control
v. EPA, 740 F.3d 185, 192 (D.C. Cir. 2014); Ne. Md. Waste
Disposal Auth. v. EPA, 358 F.3d 936, 948 (D.C. Cir. 2004) (per
curiam). As EPA’s response to Molten Metal’s comment
demonstrates, that EPA had statutory authority under section
6924(q) to exempt some hazardous-waste-derived fuels from
regulation was a “key assumption” underlying EPA’s exercise
of its “discretion to classify such material as a fuel product, not
as a waste,” 63 Fed. Reg. at 33,783, and thereby “exclude” it
from section 6924(q)’s ambit. Accordingly, we reject EPA’s
“waiver” argument.
For the foregoing reasons, we grant the Environmental
Petitioners’ petitions for review and vacate the Comparable
Fuels Exclusion codified at 40 C.F.R. §§ 261.4(a)(16) and
261.38. We deny Environmental Technology Council’s
petition for review.
So ordered.