Chemical Waste Management, Inc. v. U.S. E.P.A., 88-1490

Decision Date05 May 1989
Docket NumberNo. 88-1490,88-1490
Citation873 F.2d 1477
Parties, 277 U.S.App.D.C. 220, 57 USLW 2675, 19 Envtl. L. Rep. 20,868 CHEMICAL WASTE MANAGEMENT, INC. and Waste Management of North America, Inc., Petitioners, v. U.S. ENVIRONMENTAL PROTECTION AGENCY and Lee M. Thomas, Administrator, Respondents.
CourtU.S. Court of Appeals — District of Columbia Circuit

Daniel M. Darragh, of the bar of the State of New York, pro hac vice, by special leave of Court, for petitioners.

J. Brian Molloy and Joan Z. Bernstein, for petitioners.

William R. Weissman and Douglas H. Green, for intervenors Edison Elec. Institute, et al., were on the joint brief, for petitioners and intervenors.

Mark R. Haag, Attorney, Dept. of Justice, with whom Donald A. Carr, Acting Asst. Atty. Gen., Land and Natural Resources Div., Dept. of Justice, and Caroline H. Wehling, Attorney, U.S. E.P.A., were on the brief, for respondent.

Roger J. Marzulla, Attorney, Dept. of Justice, also entered an appearance, for respondent.

Before WALD, Chief Judge, and STARR and D.H. GINSBURG, Circuit Judges.

Opinion for the Court filed by Circuit Judge D.H. GINSBURG.

D.H. GINSBURG, Circuit Judge:

Petitioners Chemical Waste Management, Inc. and Waste Management of North America seek review of Environmental Protection Agency regulations, 40 C.F.R. Part 24 (1988), that establish informal procedures for administrative hearings concerning the issuance of corrective action orders under Sec. 3008(h) of the Resource Conservation and Recovery Act (RCRA), as modified by the Hazardous and Solid Waste Amendments of 1984. 42 U.S.C. Sec. 6928(h) (1982 & Supp.1985). We conclude that the regulations represent a reasonable interpretation of an ambiguous statutory provision and are not, on their face, inconsistent with the requirement of due process. Accordingly, we deny the petition for review.

I. BACKGROUND

Congress enacted RCRA in 1976 to establish a comprehensive program for regulation of hazardous waste management and disposal. The statute requires generally that the operator of any hazardous waste treatment, storage, or disposal facility obtain a permit, RCRA Sec. 3005, 42 U.S.C. Sec. 6925, but facilities in existence as of 1980 may continue to operate as "interim facilities" pending agency action on their permit applications, RCRA Sec. 3005(e), 42 U.S.C. Sec. 6925(e).

A. Formal Adjudication under Part 22.

Subsection (a) of RCRA Sec. 3008 authorizes EPA to enter orders assessing civil penalties, including suspension or revocation of permits, for violation of RCRA regulations. 42 U.S.C. Sec. 6928(a). Subsection (b) provides that, upon request made within thirty days of the issuance of a subsection (a) order, EPA "shall promptly conduct a public hearing." Accordingly, the agency is authorized to "issue subpoenas for the attendance and testimony of witnesses and the production of relevant papers, books and documents, and may promulgate rules for discovery procedures." RCRA Sec. 3008(b), 42 U.S.C. Sec. 6928(b).

In 1978, EPA promulgated procedural regulations to implement the "public hearing" provision of subsection (a). 40 C.F.R. Part 22. These procedures conform to the provisions of the Administrative Procedure Act for formal adjudication. 5 U.S.C. Secs. 556 & 557. For example, an Administrative Law Judge presides at the hearing, 40 C.F.R. Sec. 22.03(a), and each party has the right to call and to cross-examine witnesses, 40 C.F.R. Sec. 22.22(b).

In the preamble accompanying these regulations, EPA explained its selection of formal adjudicatory procedures. Although, in EPA's view, there are "many cases" in which the term "public hearing" should not be read to require formal adjudicatory procedures, EPA concluded that "the nature of the decision at issue in [subsection (a) ] cases indicates ... that such formal procedures were probably intended." 43 Fed.Reg. 34738 (1978). In such cases, the agency "will be accusing someone of violating established legal standards through their past conduct, and will be seeking to impose a sanction for it.... In addition, the facts at issue will be specific ones involving the past conduct of regulated persons." Id.

B. Informal Adjudication Under Part 24

In the Hazardous and Solid Waste Amendments of 1984, Congress added to Sec. 3008 a new subsection (h), authorizing the Administrator of EPA to issue "an order requiring corrective action" whenever he "determines that there is or has been a release of hazardous waste into the environment" from an interim facility. RCRA Sec. 3008(h)(1), 42 U.S.C. Sec. 6928(h)(1). Such orders must indicate "the nature of the required corrective action or other response measure, and ... specify a time for compliance," and may include suspension or revocation of the facility's authorization to operate as an interim facility. RCRA Sec. 3008(h)(2), 42 U.S.C. Sec. 6928(h)(2). The Administrator may assess a civil penalty of up to $25,000 per day for noncompliance with a corrective action order. Id. The 1984 Amendments also modified subsection (b) to make it clear that those subject to corrective action orders under the new subsection (h) have the right to a "public hearing."

To govern subsection (h) hearings, EPA promulgated the procedural regulations here under review, 40 C.F.R. Part 24. Those rules specifically provide that the formal adjudicatory procedures of Part 22 shall be applicable only to challenges to subsection (h) corrective action orders that include a suspension or revocation of interim status or an assessment of civil penalties for noncompliance. 40 C.F.R. Sec. 24.01. If the order calls upon the interim facility operator merely to undertake an investigation or to do so in combination with interim corrective measures, then, depending upon the burden entailed by such measures, the agency will use either the informal adjudicatory procedures provided in Subpart B of Part 24 (for interim corrective measures that are "neither costly nor technically complex," 40 C.F.R. Sec. 24.80) or those in Subpart C of Part 24.

The procedures in Subparts B and C are substantially similar insofar as is relevant to this case. The crucial point is that both subparts set forth informal rather than formal adjudicatory procedures. Under either subpart, the operator of a hazardous waste facility may submit written information and argument for inclusion in the record, 40 C.F.R. Secs. 24.10(b) & 24.14(a)(1); make an oral presentation at the hearing itself, 40 C.F.R. Secs. 24.11 & 24.15(a); and be assisted at hearing by legal and technical advisors, id. Direct examination and cross-examination of witnesses is not permitted, but the Presiding Officer may direct questions to either party. Id. The Presiding Officer is to be either "the Regional Judicial Officer ... or another attorney employed by the Agency, who has had no prior connection with the case, including performance of any investigative or prosecuting functions." 40 C.F.R. Secs. 24.09 & 24.13(a). With respect to both Subpart B and Subpart C proceedings, EPA, when issuing a corrective action order, shall deliver to the operator "all relevant documents and oral information (which has been reduced to writing), which the Agency considered in the process of developing and issuing the order, exclusive of privileged internal communications." 40 C.F.R. Sec. 24.03(b).

The Presiding Officer is to review the record and to file a recommended decision with the EPA Regional Administrator, 40 C.F.R. Secs. 24.12 & 24.17. The Regional Administrator, in turn, is to receive comments from the parties and to render a final decision, 40 C.F.R. Sec. 24.18, from which an aggrieved party may seek judicial review under the APA.

II. Chevron ANALYSIS

Petitioners argue initially that the informal procedures of Part 24 are inconsistent with the intent of Congress in enacting and amending Sec. 3008. To this end, petitioners make three specific contentions: first, that the language of subsection (b), as interpreted by EPA in its 1978 implementing regulations, requires formal procedures in all subsection (h) adjudications; second, that the legislative history of the 1984 Amendments demonstrates Congress's intention that EPA use the same formal procedures for the issuance of the new subsection (h) orders as the agency had theretofore established for the issuance of subsection (a) orders; and, third, that precedent in this circuit erects a presumption that when Congress refers to an adjudication as a "hearing," it intends that formal procedures be used.

We approach petitioners' arguments within the framework that the Supreme Court decreed in Chevron U.S.A. v. Natural Resources Defense Council, 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), for judicial review of an agency's interpretation of a statute under its administration. At the outset, we ask whether "Congress has directly spoken to the precise question at issue," id. at 842, 104 S.Ct. at 2781; if so, then we "must give effect to the unambiguously expressed intent of Congress" and may not defer to a contrary agency interpretation, id. at 842-43, 104 S.Ct. at 2781-82. If the statute is "silent or ambiguous with respect to the specific issue," however, we proceed to ask "whether the agency's answer is based on a permissible construction of the statute," id. at 843, 104 S.Ct. at 2782; if so, then we must defer to the agency's construction.

A. Chevron Step One.

Before turning to petitioners' principal arguments based on the requirement of a "public hearing," we may briefly dispose of a related argument based on the provision in subsection (b) that the EPA "may promulgate rules for discovery procedures." According to petitioners, this nominally permissive statement implies that Congress contemplated, and that the agency must therefore provide, formal procedures in which discovery plays a part. In response to a similar contention at the rulemaking stage, EPA read subsection (b) to "suggest[ ] that [a]...

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