Safe Food Fertilizer v. EPA , 350 F.3d 1263 ( 2004 )

Notice: This opinion is subject to formal revision before publication in the
Federal Reporter or U.S.App.D.C. Reports. Users are requested to notify
the Clerk of any formal errors in order that corrections may be made
before the bound volumes go to press.
United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Filed April 23, 2004
No. 02-1326
SAFE FOOD AND FERTILIZER, ET AL.,
PETITIONERS
v.
ENVIRONMENTAL PROTECTION AGENCY,
RESPONDENT
On Petitioner’s Petition for Panel Rehearing
–————
Before: EDWARDS and GARLAND, Circuit Judges, and
WILLIAMS, Senior Circuit Judge
WILLIAMS, Senior Circuit Judge: In our original opinion,
350 F.3d 1263 (D.C. Cir. 2003), we considered a challenge to
an EPA rule that exempted certain recycled zinc fertilizer
products from regulation under the Resource Conservation
and Recovery Act (‘‘RCRA’’), 42 U.S.C. § 6901. The new
rule, in relevant part, exempted such products from RCRA so
long as their contaminant levels fell below specified limits set
by EPA. EPA claimed that recycled products meeting these
regulations would have environmental impacts substantially
Bills of costs must be filed within 14 days after entry of judgment.
The court looks with disfavor upon motions to file bills of costs out
of time.
2
similar to those of analogous products made from virgin
materials, and that therefore EPA could lawfully classify
them as not being ‘‘solid waste’’ for RCRA purposes despite
their being hazardous materials within the meaning of the
statute. We upheld this so-called ‘‘identity principle’’—to-
gether with market valuation and EPA-required management
practices—as a valid standard for distinguishing waste from
non-waste, and we further upheld the principle’s application
to EPA’s chosen limits for lead, arsenic, cadmium, and mercu-
ry in exempted products.
Petitioners sought rehearing on several grounds, one of
which requires discussion, and, indeed, a limited remand.
That ground is the argument that our conclusions with regard
to the metals in question were based on a study submitted by
The Fertilizer Institute (‘‘TFI Study’’) that was not part of
the record. A related aspect of this claim is the argument
that even if the TFI Study or its relevant conclusions were
part of the record, EPA did not rely on the study in promul-
gating its rule, and therefore we could not properly do so in
upholding it. See SEC v. Chenery Corp., 318 U.S. 80, 87
(1943). We asked for and received a response from the EPA.
After considering the parties’ submissions, we reach the
following conclusions: Petitioners are correct that we relied
on the TFI Study—in the limited sense of relying on its
conclusions. Those conclusions, however, were in the record,
so that the precise claim raised by petitioners is incorrect.
Nonetheless, in our reliance on the TFI Study we may have
gone farther than any express EPA language justified in
equating it with an EPA study that was in the record and was
expressly relied on by EPA, but which we as lay judges found
ourselves unqualified to interpret. Thus our original opinion
made certain connections that ought to have been made—
assuming they can properly be made—by the agency. We
therefore remand to EPA for a more detailed explanation of
the relationship between its risk assessment study and the
conclusions of the TFI Study. In all other respects the
petition for rehearing is denied.
3
* * *
Petitioners appear to be correct that the TFI Study was
not in the rulemaking record, though the conclusions of that
study—i.e., the risk thresholds cited by EPA in its final rule
and by this court in our original opinion—clearly were. But
EPA’s position that virgin fertilizers and recycled fertilizers
meeting EPA’s proposed contaminant limits are ‘‘identical’’ in
their environmental impact did not rest directly on the TFI
Study. In its Notice of Proposed Rulemaking (‘‘NPRM’’), for
instance, EPA articulated its rough equation of the risk
threats (of fertilizers made of virgin materials and of ones
made with qualifying recycled materials) without supporting
citation, saying that while ‘‘contaminant levels in non-
hazardous feedstocks are slightly lower than those in hazard-
ous feedstocks TTT any potential risks posed by hazardous
and non-hazardous zinc feedstock materials would be substan-
tially similarTTTT’’ 65 Fed. Reg. 70,959 (emphasis added).
EPA also said that its proposed contaminant limits were
based ‘‘on contaminant levels that can be routinely and reli-
ably achieved in ZSM [zinc sulfate monohydrate] fertilizer
products,’’ a finding which was based on samples from repre-
sentative virgin products, and EPA further claimed that
lower limits would not ‘‘result in any significant gain in
environmental protection.’’ 65 Fed. Reg. 70,969 (emphasis
added). As EPA did not have the TFI Study before it at that
point, its conclusion about the environmental impacts of recy-
cled and virgin fertilizers was presumably based on EPA’s
own studies.
EPA’s non-reliance on the TFI Study—and its affirmative
reliance on its own studies—is made even more clear by the
explanation that accompanied the final rule. Responding to
commenters who called for more stringent technology-based
limits (based on the alleged capability of fertilizer producers
to achieve such limits), EPA pointed out that ‘‘[t]he Agency’s
fertilizer risk assessment indicates that the proposed limits
are considerably below levels that we estimate (albeit rough-
ly) to be safe for humans and ecosystems. Thus, the actual
environmental benefit to be gained from more stringent limits
would likely be negligible.’’ 65 Fed. Reg. 48,405/2. Similarly,
4
in responding to comments on the NPRM, EPA noted that
‘‘[w]hile there are uncertainties in EPA’s study of fertilizer
contaminant risks, we are confident in its basic conclusions,
particularly since the limits are well below EPA’s thresholds
for acceptable risks to human health.’’ EPA’s Proposed
Regulations for Zinc Fertilizers Made from Recycled Hazard-
ous Secondary Materials: Response to Comments, Docket
No. 8 (undated) at 23. Thus, EPA’s conclusion that its
identity principle was satisfied rested not on the TFI Study,
but on EPA’s own assessment, announced in the NPRM and
apparently unchallenged, that recycled materials meeting
EPA’s limits posed no meaningful extra risk beyond that of
fertilizers from virgin materials.
We note here that the validity of EPA’s own risk assess-
ment was potentially in play in the rulemaking—though not
on precisely the issue of EPA’s application of its identity
principle. The reason that its pertinence before the agency
was not on precisely that question is because that question
was never posed by petitioners or any other party. But EPA
invoked its risk assessment in responding to claims that it
could and should have adopted more stringent technology-
based limits, and it is precisely those claims to which petition-
ers have pointed before us in responding to EPA’s argument,
see EPA Br. at 44 & n.23, that the application of the identity
principle had never been attacked in the rulemaking, see
Petitioners’ Reply Br. at 7 n.4. In treating petitioners’
challenge to the identity principle as properly before us, we
(implicitly) extrapolated from general arguments during the
comment period that the limits should have been stricter.
We similarly extrapolated from EPA’s response to these
comments, 67 Fed. Reg. 48,405/2, an appropriate defense of
its application of the identity principle; since petitioners
didn’t frame their agency-level challenge in that way, EPA’s
discussion was of course not stated as a response to such a
challenge.
In our original opinion the TFI Study became relevant
primarily because the EPA risk assessment, and the other
studies in the record upon which EPA relied, are difficult for
non-expert judges to interpret. See Safe Food, 350 F.3d at
5
1271. Had the TFI Study never been submitted or discussed
in the explanation of the final rule, we would presumably
either have had to take EPA at its word that the differences
in contaminant levels between virgin and recycled fertilizers
are trivial when viewed in the perspective of real risks to
health and the environment, or have had to remand to EPA
with instructions to further explain how the results of the
studies in the record could be translated into risk thresholds
that we could use to verify EPA’s claims regarding identical
health and environmental impacts.
Our original opinion seized on a third option that made use
of the TFI Study, the conclusions of which had been submit-
ted by industry commenters who thought that EPA should
adopt as its contaminant limits the much higher, risk-based
levels that the TFI Study proposed as thresholds. EPA
declined to do so, noting that such a decision would allow
contaminant levels to increase dramatically and that this
would not be a desirable environmental result, especially
considering the uncertainty inherent in such risk estimates.
Despite this uncertainty, however, EPA observed that ‘‘the
general findings of EPA’s risk assessment did not differ
dramatically from those of the TFI-sponsored study.’’ 67
Fed. Reg. 48,405/1. Given this claim of rough equation
between the two studies—which petitioners to this day ap-
pear not seriously to have contested in their submissions to
this court—we used the TFI Study risk estimates as a
benchmark for determining whether EPA could reasonably
find that the differences between EPA’s contaminant limits
and the contaminant levels found in virgin products were
insignificant. We found that, for lead, mercury, arsenic, and
cadmium, the TFI Study risk thresholds ranged from 20 to
372 times higher than EPA’s proposed contaminant limit.
Safe Food, 350 F.3d at 1270. Having thus used the TFI
Study to ‘‘translate’’ EPA’s own risk estimates into terms
comparable with EPA’s proposed limits, we concluded that
EPA was justified in its initial finding—again, a finding never
challenged either in the rulemaking or before us—that the
risks from virgin and recycled fertilizers were, for all prac-
tical purposes, identical. But, although the EPA risk assess-
6
ment and the TFI Study considered chromium, the summary
of the TFI Study results for some reason did not include a
proposed chromium risk threshold, and the findings of the
EPA assessment were not comprehensible to us; accordingly
we remanded for further explanation.
We now recognize that our original opinion was insufficient-
ly clear about the use to which we put the TFI Study, in that
the opinion suggests that the conclusion rested solely or
primarily on the TFI Study itself. That is not the case.
Rather, the use of the TFI Study numbers hinged on EPA’s
uncontested claim that the TFI Study estimates were roughly
comparable to EPA’s own risk assessment. Given that assur-
ance of rough comparability, and notwithstanding our recog-
nition that such estimates were subject to considerable uncer-
tainty, we could see no error in EPA’s application of its
identity principle.
Nonetheless, we are mindful of the Chenery rule that we
can uphold an agency decision only on the basis of arguments
and evidence provided by the agency during the rulemaking
proceedings. And we recognize that, as petitioners point out,
we put the results of the TFI Study to a use that EPA
appears not to have considered in its explanation of the rule.
The record contains all the necessary pieces, but we put them
together in a way that the agency had not. In particular, we
accepted EPA’s assertion in one section of the record that the
TFI Study results ‘‘did not differ dramatically’’ from the
EPA’s own risk assessment, 67 Fed. Reg. at 48,405/1, to
verify EPA’s claim that the EPA risk assessment ‘‘indicates
that the proposed limits are considerably below levels that we
estimate (albeit roughly) to be safe for humans and ecosys-
tems.’’ Id. at 48,405/2. We conclude that we erred insofar as
we simply accepted EPA’s claim that its risk assessment, on
which the agency could properly rely, generated results suffi-
ciently comparable to the TFI Study, on which the agency did
not rely, for us to use the latter study to evaluate whether
EPA’s claim regarding identity was plausible.
7
We therefore remand with instructions that EPA explain
why the risk threshold estimates in the TFI Study are
consistent with the EPA’s own risk assessment, or, in the
alternative, to do its own ‘‘translation’’ of its study, and the
other studies properly in the record, into terms that a review-
ing court could use to assess whether the EPA reasonably
applied its identity principle. We stress the narrowness of
this remand. Petitioners already had an opportunity and
incentive to challenge the methodology of the EPA risk
assessment and the other studies in the record, and to submit
their own studies challenging EPA’s consistent assertion that
the differences in the contaminant levels found in virgin and
recycled products are too small to be of moment from an
environmental standpoint. Petitioners may not at this point
have another bite at the apple. Nor may they at this stage
challenge the methodology of the TFI Study if EPA chooses
to approach the remand by showing how the TFI methodolo-
gy and its own methodology are sufficiently comparable, as
this would amount to a back-door challenge to EPA’s method-
ology. Petitioners are limited at this stage to challenging the
EPA’s claim that its study and the TFI Study generate
similar results.
So ordered.