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Federal Appeals Court Vacates USEPA Rule That Would Have Exempted Farms from CERCLA and EPCRA Reporting Requirements

On April 11, 2017, the United States Court of Appeals for the District of Columbia Circuit decided Waterkeeper Alliance, et al. v. Environmental Protection Agency, et al., Case No. 09-1017, 2017 U.S. App. LEXIS 6174 (D.C. Cir. April 11, 2017) (Waterkeeper Alliance).  The decision vacates a final rule promulgated by the United States Environmental Protection Agency (USEPA) that exempted farming operations from reporting the release of air emissions under the requirements of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) and the Emergency Planning and Community Right-to-Know Act (EPCRA).  The court held that USEPA’s interpretation of CERCLA and EPCRA was inconsistent with the plain language of the statutes and not entitled to deference.

Both CERCLA and EPCRA require parties to notify authorities when large quantities of hazardous materials are released into the environment, and they authorize USEPA and state and local agencies to investigate and respond to such releases.  In December 2007, USEPA proposed a rule exempting from the reporting requirements the release of air emissions from farms.  The agency explained that it had never taken a response action based on notification of an air release from a farm, and could not foresee taking such an action because “the source (animal waste) and nature (to the air over a broad area) are such that on-going releases makes an emergency response unnecessary, impractical and unlikely.”  Waterkeeper Alliance at *7.  During the rulemaking proceeding, USEPA requested comments on hypothetical situations where a response might be triggered by such a notification, and if so, what an appropriate response action might be.  Several groups and state regulators submitted comments providing hypothetical examples that might trigger a response, including the release of air emissions from confined animal feeding operations (CAFOs), and explaining the utility of reporting in general.  Notwithstanding these comments, USEPA adopted a final rule identical to its original proposal that exempted farms from reporting their air releases. The final rule did, however, except CAFOs from the exemption thus continuing their obligation to report air releases under EPCRA.

Several parties challenged USEPA’s final rule.  Environmental and public health groups argued that the plain language of CERCLA and EPCRA require reporting of any and all releases, and does not grant USEPA the authority to grant exemptions.  The challenging parties also argued the final rule arbitrarily treated air releases from farms “more favorably” than those from other sources or other locations.  The National Pork Producers Council also intervened to challenge the final rule, asserting that the CAFO exception was invalid because it was based on a factor – the public’s desire for information – that was irrelevant to CERCLA and EPCRA’s purpose of facilitating emergency responses.

The court of appeals vacated the final rule on two grounds.  First, under Chevron, USA, Inc. v. NRDC, Inc., 467 U.S. 837 (1984), it held that the final rule was an unreasonable interpretation of CERCLA and EPCRA.  Waterkeeper Alliance at *13-15.  USEPA had asserted that the statutes’ enumerated exemptions and the authority provided to the agency to set reportable quantities for releases created ambiguity as to whether it could create new exemptions.  The court acknowledged that nothing in CERCLA or EPRCA precluded USEPA from creating new exemptions if they were consistent with the statutes’ purpose and language.  When read together, however, the court found CERCLA and EPCRA include a “sweeping reporting mandate” making “clear that the statutes require notification of ‘any release…of a hazardous substance…in quantities equal to or greater than’ the reportable quantities authorized.”  Moreover, although both statutes grant USEPA general rulemaking authority, the court found those authorities do not support the adoption of the specific exemptions in its final rule.  Id. at *16.

Second, the court dismissed USEPA’s argument that the final rule’s exemption was consistent with CERCLA and EPCRA because, like the statutes’ enumerated exemptions, it furthered Congress’ intent that the reporting requirements avoid duplication and minimize the burden on regulated entities and government response agencies.  The court acknowledged that the enumerated exemptions demonstrated a desire for administrative efficiency, but found that neither the exemptions nor Congress’ intent gave USEPA “carte blanche to ignore the statute[s] whenever it decides the reporting requirements aren’t worth the trouble.”  Waterkeeper Alliance at *17.  Similarly, the court refused to find the final rule acceptable under the de minimis doctrine, which excuses compliance with the literal terms of a statute where doing so leads to unnecessary cost and effort.  Id. at *17 (citing Alabama Power v. Costle, 636 F.2d 323, 360-363 & n89 (D.C. Cir. 1979).  The court explained that the doctrine does not apply where an agency concludes that the benefits of avoiding a statute’s literal terms are exceeded by the cost of the same.  Id.  Although USEPA claimed to find an absence of a regulatory benefit because a federal response was likely to be impractical and unlikely, the court found those assertions were contradicted by comments submitted during the rulemaking proceeding.  For example, environmental and public health groups noted that animal waste pits release hydrogen, methane, and ammonia when agitated, and that reporting could lead to improved pit operations and reduce the risk of illnesses related to such releases.  State regulators also commented that reporting would provide them notice of potentially dangerous releases and facilitate their ability to take investigative and abatement actions.  Finding the record “suggests the potentiality of some real benefits” and that “the comments undermine the USEPA’s primary justification for the Final Rule,” the court held that the USEPA’s final rule could not be justified under the de minimis doctrine.  Id. at *22.  Accordingly, the court vacated the final rule and, in turn, found moot and dismissed the National Pork Producers Council challenge to the CAFO carve-out.  Id. at *23.

For more information on this case, please contact Jason Canger at jcanger@somachlaw.com.

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