Com. of Mass. v. U.S. Dept. of Transp.

• Decision Date: 27 August 1996
• Docket Number: No. 95-5175,95-5175
• Citation: 93 F.3d 890
• Parties: , 320 U.S.App.D.C. 227, 26 Envtl. L. Rep. 21,652 COMMONWEALTH OF MASSACHUSETTS, Appellant, v. UNITED STATES DEPARTMENT OF TRANSPORTATION, Appellee.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 890

93 F.3d 890

43 ERC 1231, 320 U.S.App.D.C. 227, 26

Envtl. L. Rep. 21,652

COMMONWEALTH OF MASSACHUSETTS, Appellant, v. UNITED STATES DEPARTMENT OF TRANSPORTATION, Appellee.

No. 95-5175.

United States Court of Appeals District of Columbia Circuit.

Argued Feb. 9, 1996.

Decided Aug. 27, 1996.

Appeal from the United States District Court for the District of Columbia (No. 93cv01581).

Douglas H. Wilkins, Boston, MA, argued the cause and filed the briefs for appellant. William L. Pardee, Boston, MA, entered an appearance.

Sushma Soni, Attorney, United States Department of Justice, Washington, DC, argued the cause for appellee, with whom Frank W. Hunger, Assistant Attorney General, Mark B. Stern, Attorney, Eric H. Holder, Jr., United States Attorney, Paul M. Geier, Assistant General Counsel, United States Department of Transportation, and Peter J. Plocki, Attorney, were on the brief.

Daniel R. Barney, Robert Digges, Jr., Alexandria, VA, and Roy T. Englert, Jr., Washington, DC, were on the brief, for amicus curiae.

Before: SENTELLE, RANDOLPH, and ROGERS, Circuit Judges.

Opinion for the Court filed by Circuit Judge SENTELLE.

Concurring opinion filed by Circuit Judge ROGERS.

SENTELLE, Circuit Judge:

The Commonwealth of Massachusetts ("Commonwealth" or "Massachusetts") appeals a District Court's dismissal of its action seeking judicial review of a declaration by the Department of Transportation ("DOT") that a Massachusetts licensing requirement was preempted by the Hazardous Materials Transportation Act ("HMTA"). DOT had found the state licensing rule, which required hazardous-waste carriers to post at least a $10,000 bond before they might pick up or drop off hazardous waste in the Commonwealth, preempted according to its reading of HMTA's general preemption provision codified at 49 U.S.C. § 5125(a)(2). The District Court accepted DOT's reasoning that the requirement was preempted because it ran contrary to HMTA's goal of more uniform hazardous-waste regulation.

We disagree. Even if we accord DOT's interpretation of HMTA's preemption provision Chevron deference, we cannot conclude that any permissible reading of HMTA authorizes preemption of the Commonwealth's requirement. We thus reverse the District Court.

BACKGROUND

In 1975, Congress enacted the Hazardous Materials Transportation Act in an effort to develop a national regulatory scheme for the transportation of hazardous substances. See New Hampshire Motor Transp. Ass'n v. Flynn, 751 F.2d 43, 46 (1st Cir.1984). Although HMTA, as further amended in 1990 and as restructured in 1994, established some uniform standards in the interstate transportation of hazardous materials, the Act does not, by its terms, exclude all state participation in the regulation of hazardous waste being carried within that state's borders. 49 U.S.C. §§ 5101-5127; see also New Hampshire Motor Transp. Ass'n, 751 F.2d at 46 (noting that HMTA's original preemption provision did not uniformly "forbid states to regulate"). Instead, HMTA, as now written, has two separate provisions that suggest the role the states may play in promulgating and enforcing their own hazardous-waste regulations.

In one, 49 U.S.C. § 5119, the statute prescribes a "working group of State and local government officials" to help the Secretary of Transportation ("Secretary") devise "uniform forms and procedures" by which all states will "register persons that transport ... hazardous material by motor vehicle in the State" and "allow the transportation of hazardous material in the State." Id. § 5119(a). That section then orders the Secretary to "prescribe regulations to carry out the recommendations contained in the report submitted" by the working group. Id. § 5119(c)(1). None of these § 5119 regulations, however, may take effect until "at least 26 States adopt all of the recommendations of the report." Id. Once such a state-endorsed, but federally promulgated, regulation takes effect, HMTA allows an individual state to "establish, maintain, or enforce [its own] requirement related to the same subject matter only if the requirement is the same as the [Secretary's] regulation." Id. § 5119(c)(2) (emphasis added).

The second provision of HMTA that explicitly addresses preemption has a less clear scope. That section, 49 U.S.C. § 5125, generally preempts any state or local requirement that makes simultaneous compliance In the absence of federal action in this area of bonding requirements, a number of states, including Massachusetts, promulgated their own rules. Massachusetts established a bonding requirement that applies only to transporters of hazardous wastes who wish to pick up waste from or drop off waste at a location in Massachusetts. See 310 CMR 30.401(4). The regulation requires that a waste transporter, before it may obtain a license allowing such collection or disposal, must submit a bond of at least $10,000 in order to "assure that [it] shall faithfully perform all of the requirements" of its license and of the laws and regulations of Massachusetts. 310 CMR 30.411(3). If, at some later time, the transporter does not promptly remedy some established violation of Massachusetts's rules, the Commonwealth may seize part or all of the bond as payment of an appropriate civil penalty. See id. 30.411(8). Because this bond provides a surety only for the Commonwealth, and is not a general fund against which other parties may seek indemnity for their claims against the transporter, the bonding requirement is distinct from other forms of liability insurance requirements, which Massachusetts governs through a separate regulation. See 310 CMR 30.410.

                with HMTA and the state's regulation "not possible;" id. § 5125(a)(1);  or "as applied or enforced, is an obstacle to accomplishing and carrying out this chapter or a regulation prescribed under this chapter."  Id. § 5125(a)(2).  The section also addresses a number of other preemption issues, including specific types of state regulation that are automatically preempted if they are not "substantively the same" as the corresponding federal requirements, id. § 5125(b), preemption waivers, id.   § 5125(e), and judicial review of preemption decisions by the Secretary, id. § 5125(f).  Neither this nor any other section of HMTA, however, explicitly addresses whether and how a state may require a waste transporter to post a bond against which the state may withdraw the amount of any fines incurred by the transporter for proven violations of the state's waste-transport rules.  Likewise, DOT has not promulgated regulations as to the extent or manner of such state bonding requirements
                

On July 17, 1991, the National Solid Wastes Management Association challenged Massachusetts's bonding requirement, as well as those promulgated by Maryland and Pennsylvania, as preempted. Although neither HMTA nor DOT had spoken to such bonding requirements, the Research and Special Programs Administration, which is the body responsible for DOT's initial determination as to whether HMTA preempts a state regulation, nonetheless determined that HMTA preempted all three rules because the rules "create[d] an obstacle to the accomplishment and execution of ... HMTA" under what was then 49 App. U.S.C. § 1811(a)(2) (now codified at 49 U.S.C. § 5125(a)(2)). Application by National Solid Wastes Management Association for a Preemption Determination Concerning Maryland, Massachusetts, and Pennsylvania Bonding Requirements for Vehicles Carrying Hazardous Wastes, 57 Fed.Reg. 58848, 58855 (1992). Massachusetts and Pennsylvania moved for reconsideration and, after DOT denied their requests, sought review by the District Court. Although the District Court agreed with the plaintiffs that it should not defer to an agency's decision on preemption matters, it nonetheless dismissed their claim because the state rules frustrated HMTA's general goal of uniform waste regulation and therefore were preempted. Massachusetts appealed this decision on June 1, 1995. With our approval, the Association of Waste Hazardous Material Transporters ("AWHMT") also entered the litigation as an amicus in support of DOT.

DISCUSSION

We need not determine whether an agency's interpretation of a statute on the preemption question is subject to Chevron analysis in order to decide this case, as the agency's determination here cannot be upheld with or without deference. See Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-45, 104 S.Ct. 2778, 2781-83, 81 L.Ed.2d 694 (1984). Under Chevron, "judicial review of an agency's interpretation of a statute under its administration is limited to a two-step inquiry." Nuclear Info. Resource Serv. v. NRC, 969 F.2d In this second step, a court must determine whether the agency's interpretation is a reasonable resolution of whatever ambiguity precluded a clear declaration of congressional intent in the first step. See Hazardous Waste Treatment Council v. EPA, 886 F.2d 355, 362 (D.C.Cir.1989) (per curiam), cert. denied, 498 U.S. 849, 111 S.Ct. 139, 112 L.Ed.2d 106 (1990). This second inquiry is thus not independent of the first: what a court may consider a reasonable interpretation largely depends on the nature and extent of the ambiguity already identified in Chevron's first step. See, e.g., Abbott Labs. v. Young, 920 F.2d 984, 988 (D.C.Cir.1990), cert. denied, 502 U.S. 819, 112 S.Ct. 76, 116 L.Ed.2d 49 (1991); State of Ohio v. Department of the Interior, 880 F.2d 432, 446 (D.C.Cir.1989) (deciding whether parties have advanced ambiguities "sufficient to permit" their readings); Continental Air Lines, Inc. v. Department of Transp., 843 F.2d 1444, 1450 (D.C.Cir.1988) (finding agency reading to be the "more natural of the competing interpretations" advanced in the first step of the Chevron inquiry and thus holding it reasonable). Because the range of permissible interpretations of a statute is limited by the extent of its ambiguity, an agency cannot exploit some minor...