Newell Recycling v. U.S. EPA, 99-60694

Decision Date08 November 2000
Docket NumberNo. 99-60694,99-60694
Citation231 F.3d 204
Parties(5th Cir. 2000) NEWELL RECYCLING COMPANY, INC., Petitioner, v. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, Respondent
CourtU.S. Court of Appeals — Fifth Circuit

Before DUHE, EMILIO M. GARZA and DeMOSS, Circuit Judges.

DUHE, Circuit Judge.

Newell Recycling Company, Inc. ("Newell") appeals a final decision of the Environmental Protection Agency's Environmental Appeals Board ("EAB") holding Newell liable for violating the disposal requirements for polychlorinated biphenyls ("PCBs") established in Section 6(e) of the Toxic Substances Control Act ("TSCA"). The EAB's decision penalized Newell $1.345 million, less an amount paid in settlement by a co-defendant, for violating the TSCA. For the following reasons, we affirm.

BACKGROUND

Newell owned and operated a recycling facility in Houston, Texas, during the 1970's and early 1980's. In 1982, Newell sold the facility to Oklahoma Metal Processing, Inc. d/b/a Houston Metal Processing Company ("HMPC"). In the sale, Newell agreed to "specifically assume any liability resulting from an occurrence prior to the closing date of this sale."

Within two years of the sale, the Texas Department of Health sought soil samples to verify its suspicions of lead contamination at the recycling facility site. Shortly thereafter, Newell Enterprises asked HMPC to authorize Newell Recycling Company, Inc. (i.e., "Newell," the Petitioner in this case), Newell Products of Houston, Inc., and Newell Industries, Inc., to commence testing for lead contamination and cleanup on the site. After the soil samples showed lead contamination, a consultant recommended to Newell that the contaminated soil be removed to a hazardous waste facility for disposal. The consultant noted that HMPC had authorized Newell to perform testing, cleanup, and soil transportation functions at the site.

While superintending lead cleanup operations there in 1985, Newell discovered the PCB contamination that this case concerns. Electric capacitors seeping PCB-contaminated fluids lay buried in the soil unearthed during the lead contamination cleanup. Newell - although advised repeatedly by another consultant it had hired that the PCB-contaminated soil piled at the site had to be treated or disposed of by methods acceptable to the EPA under the TSCA - waited until after the EPA filed an administrative complaint against it in 1995 for violating the TSCA to remove the soil to a disposal facility. Approximately ten years elapsed, then, from Newell's discovery of the buried capacitors in 1985 to its proper disposal of the PCB-contaminated soil pile in 1995. The record does not explain this delay.

The Presiding Officer granted the EPA an accelerated decision (the equivalent of summary judgment) on its administrative complaint, holding that Newell committed an act of improper disposal by knowingly causing PCB-contaminated soil to be excavated and stockpiled at the site and then "leaving [the soil] there and taking no further clean-up action." In re Oklahoma Metal Processing Co., Inc., No. VI-659C (EPA April 29, 1997) (order granting partial accelerated decision on issue of liability). The Presiding Officer assessed Newell a $1.345 million fine for the disposal violation, less the amount HMPC paid the EPA to settle an action regarding its role in the improper disposal at the site. Newell appealed the Presiding Officer's liability rulings and his penalty assessment decision to the EAB. It affirmed the Presiding Officer's decision. Newell appeals the EAB's decision.

Newell argues that a five-year statute of limitations barred the EPA's TSCA complaint, that on the merits Newell is not liable for an "improper disposal" under the TSCA, and that the Presiding Officer's application of the EPA's 1990 Polychlorinated Biphenyls Penalty Policy (the "Penalty Policy") generated an excessive penalty that violated Newell's constitutional rights.

DISCUSSION

We must affirm the EAB's decision unless it is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A). See also Amoco Production Co. v. Lujan, 877 F.2d 1243, 1248 (5th Cir. 1989) ("On review of an agency adjudication, . . . the reviewing court must in general affirm the decision unless the agency's action was arbitrary, capricious, or otherwise not in accordance with law").

I. Limitations

28 U.S.C. § 2462 supplies the statute of limitations applicable here:

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 of the date when the claim first accrued. . . .

Newell argues that the EPA's improper disposal claim "accrued" when the PCBs polluting the soil pile were "taken out of service." See 40 C.F.R. § 761.3 ("Disposal means intentionally or accidentally to discard, throw away, or otherwise complete or terminate the useful life of PCBs and PCB Items. Disposal includes spills, leaks, and other uncontrolled discharges of PCBs as well as actions related to containing, transporting, destroying, degrading, decontaminating, or confining PCBs and PCB Items"). Since, Newell asserts, the PCBs were "taken out of service" sometime before 1990, the EPA's claim accrued more than five years before the filing of its TSCA complaint against Newell in 1995 and is thus time-barred. The EPA argues that Newell's TSCA violation -- excavating and stockpiling the soil and then leaving it on the site for ten years before disposing of it in accordance with 40 C.F.R. § 761.60(a), which requires that soil contaminated with PCBs above a certain ppm threshold be disposed of in an EPA-approved incinerator or landfill -- was "continuing" in nature. See InterAmericas Investments, Ltd. v. Board of Governors of the Federal Reserve System, 111 F.3d 376, 382 (5th Cir. 1997) ("A continuing violation applies when the conduct is ongoing, rather than a single event"). The EAB agreed with the EPA. The EAB held that the EPA's TSCA cause of action against Newell did not accrue until the course of conduct complained of no longer continued. See Fiswick v. United States, 329 U.S. 211, 216 (1946) (statute of limitations for continuing offenses runs from the last day of the continuing offense); In re Standard Scrap, TSCA Appeal No. 87-4, 3 E.A.D. 267, 1997 WL 603524, at *2 (EAB Aug. 2, 1990) (Final Decision) ("Failure to [properly dispose of PCBs] constitutes a violation of the regulation, and the violation continues as long as the PCBs remain out of service and in a state of improper disposal"). That is, it did not accrue until 1995, when Newell properly disposed of the soil. If stockpiling the soilwas a disposal, we cannot say the EAB's conclusion was arbitrary capricious, an abuse of discretion or otherwise not in accordance with law.1 Because we hold that the EPA's TSCA cause of action against Newell did not accrue for limitations purposes until 1995, we also affirm the EAB's denial of Newell's request for additional discovery. This discovery, Newell claims, would establish that the EPA had actual notice of conditions at the site earlier than five years before the EPA filed its complaint. Information about when the EPA actually knew of the site's conditions is not "significant[ly] probative" of any fact relevant to our statute of limitations determination. See 40 C.F.R. § 22.19(f).

II. Liability

Newell challenges its TSCA liability on two grounds. First, Newell argues that the EAB erroneously held that Newell contributed to the creation of the PCB-contaminated soil pile. Second, Newell contends that if, arguendo, it did cause the creation of the soil pile, that act of creation and Newell's subsequent involvement with the pile did not constitute an improper disposal of PCBs within the meaning of the TSCA.

The EAB properly determined that Newell contributed to the creation of the soil pile. The PCB Rule of the TSCA extends civil penalty liability to any "person who violates these regulations." 40 C.F.R. § 761.1(d). "Violators" in this context are those who have "caused (or contributed to the cause of) the [improper] disposal." In re City of Detroit, 3 E.A.D. 514, 526 (CJO 1991).

Ample evidence indicates that Newell at least contributed to the creation of the soil pile. Newell contends that a Newell affiliate, not Newell itself, created the pile. The record suggests otherwise. The EAB aptly characterized its contents: Newell "may not have acted alone, but it was certainly an active party in the events constituting the TSCA violation." Newell Recycling Co., Inc. v. United States Environmental Protection Agency, TSCA Appeal No. 97-7, slip op. at 33 (EAB Sept. 13, 1999). Newell, and not one of its affiliates, owned the Fidelity Road site immediately before conveying it to HMPC. In the sale of the site Newell assumed liability for "occurrence[s] prior to the closing date of th[e] sale." This covenant produced Newell's extensive involvement in remedying the lead and PCB contamination at the site. Newell's involvement included, the EAB correctly found: a visit by Newell's owner, Alton Newell, to the site in response to HMPC's demand for remedial action; Newell's two-time (1987 and 1989-90) retention of an environmental consulting firm to recommend remedies for PCB contamination at the site; execution in 1987 of an agreement with HMPC and another party interested in the site tolling the statute of limitations on claims against Newell arising from the site's contamination; and Newell's removal in 1995 of the contaminated soil to a disposal facility at its own expense. Moreover, until this enforcement action, Newell never suggested to the Texas or federal authorities involved in decontamination of the site that some other Newell entity was responsible for the...

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