17 F.3d 1453 (D.C. Cir. 1994), 92-1126, 3M Co. (Minnesota Min. and Mfg.) v. Browner

Docket Nº:92-1126.
Citation:17 F.3d 1453
Party Name:24 Envtl. 3M COMPANY (MINNESOTA MINING AND MANUFACTURING), Petitioner, v. Carol M. BROWNER, Administrator of Environmental Protection Agency and Environmental Protection Agency, Respondents.
Case Date:March 04, 1994
Court:United States Courts of Appeals, Court of Appeals for the District of Columbia Circuit
 
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Page 1453

17 F.3d 1453 (D.C. Cir. 1994)

24 Envtl.

3M COMPANY (MINNESOTA MINING AND MANUFACTURING), Petitioner,

v.

Carol M. BROWNER, Administrator of Environmental Protection

Agency and Environmental Protection Agency, Respondents.

No. 92-1126.

United States Court of Appeals, District of Columbia Circuit

March 4, 1994

Argued Sept. 7, 1993.

Rehearing and Suggestion for Rehearing In Banc Denied May 9, 1994.

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Petition for Review of an Order of the Environmental Protection Agency.

Douglas L. Wald, Washington, DC, argued the cause for petitioner. With him on the briefs were Blake A. Biles and Annette M. Lang, Washington, DC.

Eileen McDonough, Attorney, United States Department of Justice, Washington, DC, argued the cause for respondents. With her on the brief were Peter R. Steenland, Jr., Acting Assistant Attorney General, United States Department of Justice, Deborah Mack-Iacangelo, Attorney, James C. Nelson, Associate General Counsel, and Patricia A. Roberts, Assistant General Counsel, Environmental Protection Agency, Washington, DC. David A. Dana, Attorney, United States Department of Justice, Washington, DC, entered an appearance.

David E. Menotti, Robert L. Deitz, Lynn F. Kaufmann, John N. Hanson and Cynthia A. Lewis, Washington, DC, were on the brief for amici curiae Browning-Ferris Industries, Inc. and General Motors Corporation.

Before: BUCKLEY, GINSBURG, and RANDOLPH, Circuit Judges.

Opinion for the court filed by Circuit Judge RANDOLPH.

RANDOLPH, Circuit Judge:

This petition for review of the Environmental Protection Agency's assessment of civil penalties turns on the meaning of 28 U.S.C. Sec. 2462, the direct descendant of a statute of limitations enacted more than a century and a half ago. There are three questions. Does Sec. 2462 apply to administrative proceedings? If so, is a proceeding to assess a civil penalty an action for the enforcement of a penalty within Sec. 2462's meaning? If it is, does Sec. 2462's five-year period of limitations begin running only when EPA reasonably could have been expected to detect the violations giving rise to the civil penalties?

I

Between August 1980 and July 1986, 3M unwittingly committed several violations of the Toxic Substances Control Act (TSCA), 15 U.S.C. Secs. 2601-2629. On July 28, 1986, after the company became aware of its transgressions, it notified EPA's compliance office. The company had learned that one of its chemicals, Chemical A, 1 was not on an EPA inventory of existing chemicals. Although 3M had believed that Chemical A came from a manufacturer in this country, the company's investigation revealed that 3M received the chemical from the manufacturer's Canadian affiliate.

At least ninety days before a new chemical may be imported, TSCA requires the importer to provide EPA with a Premanufacture Notice. 15 U.S.C. Sec. 2604(a)(1). Because Chemical A was both new and imported, 3M's importation of Chemical A without the requisite notice violated this provision. In addition, 3M's brokers wrongly certified to Customs officials that TSCA's requirements had been met.

The mishap with Chemical A spurred 3M to review its other imported chemicals. Thus, it discovered a problem with Chemical B. This chemical has the same code and the same use as another chemical listed on the inventory of existing chemicals. When 3M imported Chemical B on various occasions between July 15, 1983, and August 4, 1986, it assumed Chemical B was not new and did not require a Premanufacture Notice. Closer inspection revealed that Chemical B was not identical to the chemical on the inventory. As with Chemical A, a Premanufacture

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Notice had been required but not submitted, and the Customs certifications regarding compliance with TSCA were incorrect. On September 16, 1986, 3M notified EPA of the violations concerning Chemical B.

Two years later, on September 2, 1988, EPA filed an administrative complaint against 3M seeking $1.3 million in civil penalties under Sec. 16(a)(2)(A) of TSCA for 3M's failure to file Premanufacture Notices and for 3M's submitting inaccurate Customs certifications with respect to Chemicals A and B. Section 16(a)(2)(A), 15 U.S.C. Sec. 2615(a)(2)(A), provides that the EPA Administrator shall assess civil penalties for violations of the Act "by an order made on the record after opportunity ... for a hearing...."

In its answer to the complaint, 3M interposed a statute of limitations--28 U.S.C. Sec. 2462--claiming that the statute barred proceedings to impose penalties for 3M's importation of the chemicals without the requisite notices five years prior to EPA's complaint, that is, before September 1983. An EPA Administrative Law Judge ruled that no statute of limitations applied to Sec. 16(a)(2)(A) proceedings. The ALJ found 28 U.S.C. Sec. 2462 inapplicable on the grounds that it applied only to judicial proceedings; and that, in any event, civil penalty cases under Sec. 16 of TSCA were not the sort of enforcement proceedings covered by Sec. 2462. After the ALJ assessed a civil penalty of $104,720, 3M filed an administrative appeal with the EPA Chief Judicial Officer, who acts as the Administrator's delegate in these cases. The Chief Judicial Officer, "adopt[ing] and incorporat[ing]" the "applicable portions" of the ALJ's opinion, also ruled that Sec. 2462 did not apply. 2 He then assessed a penalty against 3M of $130,650. This petition followed.

II

Any person who violates Sec. 15 of TSCA, 15 U.S.C. Sec. 2614, "shall be liable to the United States for a civil penalty in an amount not to exceed $25,000 for each such violation." 15 U.S.C. Sec. 2615(a)(1). Before the EPA Administrator assesses a penalty pursuant to Sec. 16(a)(2)(A), the alleged violator has the right to a hearing. 15 U.S.C. Sec. 2615(a)(2)(A). If the hearing results in the Administrator's issuing an order fixing liability and setting the amount of the penalty, any person "aggrieved" has thirty days to file a petition for review in a federal court of appeals. 15 U.S.C. Sec. 2615(a)(3).

While TSCA thus sets a deadline on the alleged violator's petition for judicial review, TSCA contains no provision limiting the time within which the EPA Administrator must initiate the administrative action. If there is such a time limit, it must be derived from the five-year statute of limitations, 28 U.S.C. Sec. 2462, generally applicable to civil fines and penalties, which reads:

Except as otherwise provided by Act of Congress, an action, suit or proceeding for the enforcement of any civil fine, penalty, or forfeiture, pecuniary or otherwise, shall not be entertained unless commenced within five years from the date when the claim first accrued if, within the same period, the offender or the property is found within the United States in order that proper service may be made thereon.

A

The most fundamental question raised by 3M's invocation of Sec. 2462 is whether the statute applies to civil penalty cases brought before agencies. The question has received little attention in judicial opinions. In one case, the government and the defendant agreed that Sec. 2462 "at least requires that any administrative action aimed at imposing a civil penalty must be brought within

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five years of the alleged violation." United States v. Meyer, 808 F.2d 912, 914 (1st Cir.1987). In three other cases, the courts have assumed, without discussion, that Sec. 2462 covers administrative penalty proceedings. See Williams v. United States Dep't of Transp., 781 F.2d 1573, 1578 n. 8 (11th Cir.1986); H.P. Lambert Co. v. Secretary of the Treasury, 354 F.2d 819, 822 (1st Cir.1965); The A/S Glittre v. Dill, 152 F.Supp. 934, 940 (S.D.N.Y.1957). 3 Reports of two congressional committees on unrelated legislation, cited in Meyer, also assumed that Sec. 2462 "is applicable to administrative as well as judicial proceedings." S.REP. NO. 363, 89th Cong., 1st Sess. 7 (1965); see H.R.REP. NO. 434, 89th Cong., 1st Sess. 5 (1965), U.S.Code Cong. & Admin.News 1965, pp. 1826, 1832.

It is easy to see why Sec. 2462's application to administrative cases would be taken for granted. What cannot be "entertained" after Sec. 2462's limitation period has expired is "an action, suit or proceeding." An agency's adjudication of a civil penalty case readily fits this description. In this case, EPA's regulations describe the agency's process for assessing civil penalties as a "proceeding." 4 The Administrative Procedure Act, 5 U.S.C. Sec. 554(b), which generally governs agency adjudications of civil penalties and which Sec. 16(b) of TSCA expressly incorporates, calls agency adjudications "proceedings." So does the Judicial Code, see, e.g., 28 U.S.C. Secs. 2344(1), 2347. See also 31 U.S.C. Sec. 3730(e)(3), referring to an "administrative civil money penalty proceeding."

The ALJ nevertheless ruled that Sec. 2462 related only to judicial "actions, suits or proceedings." He acknowledged that other administrative law judges had reached the opposite conclusion in TSCA penalty assessment cases. 5 Much of the ALJ's reasoning rested on the fact that Sec. 2462's predecessor spoke of "suit or prosecution," and that the 1948 revision of the Judicial Code (of which more hereafter) replacing these words with "action, suit or proceeding" intended no change in substance. The ALJ therefore believed that regardless whether EPA's assessment of a civil penalty was a "proceeding," it could not be considered a "suit or prosecution."

We wonder why not. According to the Administrative Procedure Act, agency attorneys who bring administrative complaints, including complaints for civil penalties, are performing "prosecuting functions." 5 U.S.C. Sec. 554(d). NLRB v. United Food & Commercial Workers, 484 U.S. 112, 125-26, 108...

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