Ciba-Geigy Corp. v. Sidamon-Eristoff

• Decision Date: 12 August 1993
• Docket Number: SIDAMON-ERISTOFF,D,CIBA-GEIGY,No. 1413,1413
• Citation: 3 F.3d 40
• Parties: 23 Envtl. L. Rep. 21,340 CORPORATION and Hercules Incorporated, Petitioner, v. Constantine, in his official capacity as Regional Administrator of Region II of the United States Environmental Protection Agency, Respondent. ocket 92-4129.
• Court: U.S. Court of Appeals — Second Circuit

Page 40

3 F.3d 40

23 Envtl. L. Rep. 21,340

CIBA-GEIGY CORPORATION and Hercules Incorporated, Petitioner, v. Constantine SIDAMON-ERISTOFF, in his official capacity as Regional Administrator of Region II of the United States Environmental Protection Agency Respondent.

No. 1413, Docket 92-4129.

United States Court of Appeals Second Circuit.

Argued May 27, 1993.

Decided Aug. 12, 1993.

Thomas S. West, Albany, NY (Elise N. Zoli, LeBoeuf, Lamb, Leiby & MacRae, on the brief), for petitioner.

John A. Sheehan, U.S. Dept. of Justice, Washington, DC (Myles E. Flint, Acting Asst. Atty. Gen., Craig D. Galli, U.S. Dept. of Justice, Lawrence E. Starfield, U.S. Environmental Protection Agency, Washington, DC, Stuart N. Keith, U.S. Environmental Protection Agency, New York City, on the brief), for respondent.

Robert Abrams, Atty. Gen., Joan Leary Matthews, Peter Crary & Val Washington, Asst. Attys. Gen., Albany, NY, filed a letter brief for amicus curiae New York State Dept. of Environmental Conservation.

Before: NEWMAN, Chief Judge, FEINBERG, Circuit Judge, and KELLEHER, ^* District Judge.

JON O. NEWMAN, Chief Judge:

This case is before the Court upon the petition of Ciba-Geigy Corporation and Hercules Incorporated (collectively "Ciba"), the current and past operators of a hazardous waste site in Glen Falls, New York, for review of a Memorandum of Agreement between the Environmental Protection Agency and New York State, a decision of the Environmental Appeals Board, and two decisions of the EPA Regional Administrator. In each challenge, Ciba seeks to vindicate a narrow legal point: its contention that EPA cannot administer federal permits for hazardous waste sites in states that have their own federally approved hazardous waste programs under the Hazardous and Solid Waste Amendments ("HSWA") to the Resource Conservation and Recovery Act ("RCRA"). Because we conclude that Ciba has partially failed to exhaust administrative remedies, we dismiss the petition in part. As to the remaining aspects of the petition, we conclude that EPA's construction of RCRA is permissible, and deny the petition.

Background

A brief review of the underlying statutory scheme will be helpful in understanding our disposition of this petition.

A. RCRA permits

RCRA established "a comprehensive 'cradle-to-grave' system for regulating the management of hazardous wastes." 1 Susan M. Cooke, et al., The Law of Hazardous Waste Sec. 1.01 at 1-4 (1993). The statute regulates generators of waste, transporters of waste, and operators of waste treatment, storage, and disposal facilities. See 42 U.S.C.A. Secs. 6922-24 (West 1983 & Supp.1993). Facility operators are required to obtain an operating permit. See 42 U.S.C. Sec. 6925(a) (1988).

The statutory scheme contemplates an eventual delegation of permit-issuing authority from EPA to the states. States may submit to the EPA Administrator details of a proposed state hazardous waste program. 42 U.S.C. Sec. 6926(b) (1988). The program must be "equivalent" to the federal RCRA program. Id. Sec. 6926(b)(1). If the Administrator approves the program, the state carries out its program "in lieu" of the federal program. Id. Sec. 6926(b). In particular, the state is responsible for the issuance and administration of permits. Id. However, even after approval of a state program, EPA retains significant involvement. EPA may bring enforcement actions, see 42 U.S.C. Secs. 6928, 6973 (1988), and may inspect and monitor sites, see 42 U.S.C.A. Secs. 6927, 6934 (West 1983 & Supp.1993). See generally Wyckoff Co. v. E.P.A., 796 F.2d 1197, 1200-01 (9th Cir.1986) (EPA may issue order under 42 U.S.C. Sec. 6934 requiring operator to perform monitoring and report results to EPA even after state authorization).

The original version of RCRA primarily concentrated on ongoing management of hazardous wastes, and did not provide authority for mandating corrective action to cure past mismanagement of waste. Congress acted to close this gap in 1984 with enactment of HSWA. Among other requirements, HSWA requires that permits for facilities with an existing hazardous waste problem include a schedule for cleaning up the wastes. See 42 U.S.C. Sec. 6924(u)-(v). HSWA also significantly complicated the division of authority between the federal government and the states. Concerned that regulations promulgated under HSWA be implemented as quickly as possible, Congress provided that new federal HSWA regulations would take effect in all states simultaneously, whether or not the state had an approved program under section 6926(b). See 42 U.S.C. Sec. 6926(g)(1) (1988); Cooke Sec. 1.03, at 1-20 to 1-21. If states wish to take over administration of these new regulations, they must amend their hazardous waste programs so as to be "substantially equivalent" to the federal HSWA regulations. Once this amendment is accomplished, the state may apply to the Administrator for "interim authorization ... to carry out [the state] requirement in lieu of direct administration in the State by the Administrator of [the federal] requirement." Id. Sec. 6926(g)(2). Eventually, states wishing to administer these regulations must adopt regulations fully equivalent to federal HSWA regulations, and obtain final authorization for the state HSWA program under section 6926(b).

In states that have obtained RCRA authorization under section 6926(b) but have not obtained authorization for HSWA regulations, whether under section 6926(g)(2) or section 6926(b), operators of most hazardous waste sites are required to obtain permits from both the state and EPA. See American Iron and Steel Institute v. U.S. E.P.A., 886 F.2d 390, 403 (D.C.Cir.1989), cert. denied, 497 U.S. 1003, 110 S.Ct. 3237, 111 L.Ed.2d 748 (1990); Cooke Sec. 5.03, at 5-53 to 5-54. In practice, these dual permits apparently tend to overlap considerably and may even impose conflicting requirements since "[i]t is not uncommon for the state and EPA to have different views on the same substantive issue. When this occurs, the applicant may get whipsawed between the two agencies." See John C. Chambers, Jr. & Peter L. Gray, Intergovernmental Relations: EPA and State Roles in RCRA and CERCLA, Nat. Resources & Env't, July 1989, at 7.

The statute does not contain specific provisions concerning the status of existing federal permits after a state obtains HSWA authorization under section 6926(g)(2) or section 6926(b). Under regulations adopted by EPA, the state is required to reissue permits to existing permittees. 40 C.F.R. Sec. 271.13(d). ¹ These state RCRA permits contain the requirements of both the previously issued state and federal permits. Id. At some point after issuance of the state RCRA permit, EPA will terminate the previous federal permit. See 40 C.F.R. Sec. 271.8(b)(6).

B. The New York program

By 1986, the New York Department of Environmental Conservation ("DEC") had obtained authorization under section 6926(b), and thus ran the RCRA permitting process in New York. Following enactment of HSWA and the issuance of federal HSWA regulations, DEC adopted new regulations, and applied in September 1991 for authorization to administer these regulations. After a public comment period, the Administrator granted DEC "final authorization" on May 22, 1992. ²

This authorization is reflected in a Memorandum of Agreement ("MOA") between EPA and DEC. The MOA includes provisions that concern the transfer and administration of existing federal permits. It appears to provide that while all pending permit applications will be transferred to DEC, existing federal permits will continue to be administered by EPA. Once DEC issues new permits containing all applicable requirements, EPA will consider termination of the federal permits on a case-by-case basis.

C. The pending dispute

Ciba owns a paint pigment production facility in Glen Falls, New York. Various waste products were impounded at the site, largely in an open lagoon. In 1989, Ciba decided to close the site, and applied to DEC for an appropriate permit. Because the site contained hazardous wastes and DEC was not yet authorized to administer HSWA regulations, both DEC and EPA issued draft permits. The permits are in large measure identical, because DEC included clean-up requirements, as it had the right to do. Ciba submitted comments requesting that EPA not issue a permit. EPA responded that it could not accede to the request since the DEC permit might not cover all necessary requirements; EPA issued a federal permit in October 1991. Ciba sought review of the federal permit from the EPA Administrator. ³ During the pendency of the review process, the federal permit was automatically stayed. Ciba made two arguments in its review petition. It contended that the federal permit was improper because it substantially duplicated the state permit. It also contended that even if the federal permit could be issued prior to authorization of the New York HSWA program, the federal permit was required to contain an automatic termination provision triggered by state authorization. The Environmental Appeals Board ("EAB") denied the petition in a written opinion. Matter of CIBA-GEIGY Corp., RCRA Appeal No. 91-28 (Apr. 7, 1992). The EAB found (a) that EPA was required to administer the HSWA program prior to state authorization, even if the state had adopted substantially similar requirements and had included those requirements in its permit, and (b) that there was no requirement that the federal permit have an automatic termination provision. The EAB suggested that the termination of the federal permit would be resolved by the MOA between the state and EPA, or otherwise would be resolved by EPA after state authorization. The federal permit accordingly became effective (after some minor delays) on May 8, 1992--some two weeks before New York received authorization to administer its HSWA program. On July 2, 1992, Ciba requested that the Regional Administrator terminate the federal permit in...