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California Communities Against Toxics v. Environmental Protection Agency and Andrew Wheeler

United States Court of Appeals, District of Columbia Circuit

July 2, 2019

California Communities Against Toxics, et al., Petitioners
Environmental Protection Agency and Andrew Wheeler, Administrator, U.S. Environmental Protection Agency, Respondents American Chemistry Council, et al., Intervenors

          Argued April 9, 2019

          On Petition for Review of Administrative Action of the United States Environmental Protection Agency

          Khushi Desai argued the cause for petitioners. With her on the briefs was James S. Pew.

          Perry M. Rosen, Attorney, U.S. Department of Justice, argued the cause for respondents. With him on the brief were Jeffrey Bossert Clark, Assistant Attorney General, and Jonathan Brightbill, Deputy Assistant Attorney General.

          Thomas Sayre Llewellyn argued the cause for intervenor-respondents. With him on the brief were Stacy R. Linden, Matthew A. Haynie, Richard S. Moskowitz, Wayne J. D'Angelo, Peter C. Tolsdorf, Timothy K. Webster, Leslie A. Hulse, Aaron J. Wallisch, Kevin A. Gaynor, John P. Elwood, and Jeremy C. Marwell. Joshua S. Johnson entered an appearance.

          Before: Henderson and Rogers, Circuit Judges, and Sentelle, Senior Circuit Judge.


          Rogers, Circuit Judge.

         In 1976, Congress enacted the Resource Conservation and Recovery Act of 1976 ("RCRA"), as amended, 42 U.S.C. §§ 6901-6992k, to address the environmental and health risks associated with hazardous solid waste. Subtitle C of RCRA required the Environmental Protection Agency to issue regulations governing the storage, treatment, and disposal of "solid waste," which was defined as "discarded" material, 42 U.S.C. § 6903(27). Among RCRA's stated objectives was "minimizing the generation of hazardous waste . . . by encouraging process substitution, materials recovery, properly conducted recycling and reuse, and treatment." Id. § 6902(a)(6) (emphasis added). In 2008, EPA promulgated a final rule that treated material transferred from a waste generator to a third-party reclaimer as legitimately recycled, rather than "discarded" and subject to Subtitle C regulation, if several conditions were met. This Transfer-Based Exclusion was replaced by another exclusion in 2015, reinstated by the court in 2017, and reissued by EPA as modified in 2018.

         Environmental petitioners consider the Transfer-Based Exclusion to be insufficiently protective of human health and the environment and bring two challenges: First, they contend the Transfer-Based Exclusion exceeds EPA's statutory authority under RCRA. In their view, a generator "discards" hazardous material whenever it pays a reclaimer to accept the material. Second, they contend the Transfer-Based Exclusion fails arbitrary and capricious review because EPA has not provided a reasoned explanation for treating hazardous material differently based on whether it is sent to a reclaimer instead of a storage, treatment, or disposal facility, and because EPA has already identified deficiencies in the Transfer-Based Exclusion.

         EPA initially raises a host of threshold objections to petitioners' contentions, some of which industry intervenors join. Upon examination, we conclude none is persuasive. On the merits, EPA responds that neither the statutory text, case law, nor empirical data supports petitioners' contentions. We conclude, in view of this court's precedent, that EPA did not act contrary to RCRA in adopting the Transfer-Based Exclusion because hazardous secondary materials are not necessarily "discarded" each time they are transferred from a generator to a reclaimer along with payment. Further we conclude that EPA has provided a reasoned explanation for applying different standards to materials that are not yet part of the waste disposal problem RCRA addresses where they meet conditions EPA concluded were adequate for safe transfer and legitimate recycling. The Transfer-Based Exclusion therefore survives arbitrary and capricious review. Accordingly, we deny the petition for review.


         Some background is necessary before addressing the threshold objections to petitioners' challenge.


         In 2008, EPA promulgated a final rule intended to "encourage and expand the safe, beneficial recycling of additional hazardous secondary materials," adopting the Generator-Controlled Exclusion and the Transfer-Based Exclusion. The Exclusions deal with "reclamation," a type of recycling that occurs when secondary material is processed to recover a usable product or is regenerated. 40 C.F.R. § 261.1(c)(4), (7). Secondary materials can include byproducts, spent materials, and sludges. Id. § 261.1(c)(1)- (3). The final rule allowed generators of hazardous secondary materials to avoid Subtitle C regulation of those materials where the generator controls the recycling or where the generator transfers the materials to an off-site reclaimer. Revisions to the Definition of Solid Waste, 73 Fed. Reg. 64, 668, 64, 669 (Oct. 30, 2008) ("2008 Rule"). Under the Transfer-Based Exclusion, generators, transporters, and reclaimers must meet "Transfer Conditions" to ensure hazardous materials are transferred securely and are actually recycled. Id. at 64, 669- 70. For example, a generator must audit the reclaimer for compliance with proper recycling practices. Id. at 64, 683. "Legitimacy Factors" must also be satisfied so recycling is legitimate and not a "sham." Id. at 64, 670. The history of the Rule is described in American Petroleum Institute v. EPA ("API III"), 862 F.3d 50 (D.C. Cir. 2017).

         Suffice it to say, environmental groups challenged the 2008 Rule as too lenient, and industry groups challenged the Rule as too strict. EPA eventually replaced the Transfer-Based Exclusion in 2015 with a similar but more restrictive Verified Recycler Exclusion, allowing generators to avoid Subtitle C requirements only when they transfer materials to verified recyclers that had obtained either permits or variances. Definition of Solid Waste, 80 Fed. Reg. 1694, 1695 (Jan. 13, 2015) ("2015 Rule"). Environmental and industry groups challenged this Exclusion, and in API III, the court vacated the permit and variance provisions, reinstated the 2008 Transfer-Based Exclusion, and upheld other requirements regarding emergency preparedness and containment added in 2015. On rehearing, the court expanded the Transfer-Based Exclusion to cover spent refinery catalysts. American Petroleum Institute v. EPA ("API IV"), 883 F.3d 918 (D.C. Cir. 2018). Without further notice and comment, EPA then published in 2018 the Transfer-Based Exclusion as modified by this court, which petitioners now challenge. Response to Vacatur of Certain Provisions of the Definition of Solid Waste Rule, 83 Fed. Reg. 24, 664 (May 30, 2018) ("2018 Rule"). The court is presented with an unusual time warp in considering petitioners' challenges to the Transfer-Based Exclusion given the passage of 10 years during which EPA considered policy concerns and the court addressed legal challenges.


         The court first must address the threshold objections raised by EPA and joined in part by industry intervenors.

         1. Standing. To satisfy "the irreducible constitutional minimum of standing," a party must establish (1) that it has "suffered an injury in fact" that is both "concrete and particularized" and "actual or imminent," (2) that the injury is "fairly trace[able] to the challenged action of the defendant," and (3) that the injury is "likely . . . [to] be redressed by a favorable decision." Lujan v. Defs. of Wildlife, 504 U.S. 555, 560-61 (1992) (first alteration in original). Contrary to EPA's objection, petitioners have established standing.

         For an organization to bring suit on behalf of its members, it must show (1) at least one of "its members would otherwise have standing to sue in [his or her] 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." Defs. of Wildlife v. Perciasepe, 714 F.3d 1317, 1323 (D.C. Cir. 2013). Petitioners' members live, commute, work, and recreate near generators of hazardous materials that used the Transfer-Based Exclusion before 2015 or that are likely to use it now. See Feldman Decl. ¶¶ 3-4; Ford Decl. ¶ 3; Kilgour Decl. ¶¶ 5-7; Rhodes Decl. ¶¶ 2-3. By parity of reasoning, just as the court has recognized industry groups' standing based on injury caused by elimination of parts of the Exclusion, e.g., API III, 862 F.3d at 66, the Transfer-Based Exclusion deprives petitioners' members of Subtitle C protections that Congress deemed necessary to address health or environmental risks. Congress acknowledged the potential threat to human health and the environment associated with hazardous wastes when it required EPA to promulgate regulations governing their storage, treatment, and disposal. 42 U.S.C. § 6903(5)(B). By definition, the existing Subtitle C regulations are those EPA has determined to be "necessary to protect human health and the environment." Id. §§ 6922(a), 6923(a), 6924(a). In their declarations, petitioners' members describe how their reasonable fear of those same health or environmental risks impairs their ability to feel safe and to enjoy the outdoors. Several declarants state that they spend less time outdoors exercising, gardening, walking their dogs, or fishing, or do not enjoy these outdoor activities as much, due to their worries about health and environmental harms. Cheung Decl. ¶¶ 10- 11; Feldman Decl. ¶¶ 6-9; Ford Decl. ¶¶ 6-8; Kilgour Decl. ¶ 10.

         This court has concluded in similar circumstances that environmental petitioners have standing to challenge regulatory actions under RCRA. In Sierra Club v. EPA, 755 F.3d 968 (D.C. Cir. 2014), the court held that similar declarations explaining "individuals' particularized fears of serious health and environmental consequences" and "their individual behavioral changes" resulting from the regulatory change established injury in fact for Article III standing. Id. at 974-75. Similarly, in NRDC v. EPA, 755 F.3d 1010 (D.C. Cir. 2014), the court deemed sufficient "declarations of long-time members who spend time near facilities which, as a result of the [challenged] Exclusion, now burn comparable fuels" and who "spend less time outdoors" due to their "concern[] about the emissions' effects on their health." Id. at 1016-17. If a challenged regulation causes individuals to reasonably fear health or environmental harms and thus prevents them from using or enjoying the aesthetic or recreational value of their area, ...

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