Quivira Min. Co. v. U.S. Nuclear Regulatory Com'n

• Decision Date: 27 January 1989
• Docket Number: No. 85-2853,85-2853
• Citation: 866 F.2d 1246
• Parties: , 19 Envtl. L. Rep. 20,778 QUIVIRA MINING COMPANY, Kerr-McGee Chemical Corporation, Homestake Mining Company of California, and United Nuclear Corporation, Petitioners, v. UNITED STATES NUCLEAR REGULATORY COMMISSION and United States of America, Respondents, New Mexico Environmental Improvement Division, Intervenor.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1246

866 F.2d 1246

29 ERC 1055, 19 Envtl. L. Rep. 20,778

QUIVIRA MINING COMPANY, Kerr-McGee Chemical Corporation Homestake Mining Company of California, and United Nuclear Corporation, Petitioners, v. UNITED STATES NUCLEAR REGULATORY COMMISSION and United States of America, Respondents New Mexico Environmental Improvement Division, Intervenor.

No. 85-2853.

United States Court of Appeals Tenth Circuit.

Jan. 27, 1989.

Richard A. Meserve, Covington & Burling, Washington, D.C. (Peter J. Nickles and Sonya D. Winner, also of Covington & Burling, and G. Stanley Crout, Sunny J. Nixon and Michael S. Yesley of Stephenson, Carpenter, Crout & Olmsted, Santa Fe, N.M., with him, on the briefs), for petitioners Quivira Mining Co., Kerr-McGee Chemical Corp., United Nuclear Corp. and Homestake Mining Co. of California.

E. Neil Jensen, Atty., U.S. Nuclear Com'n, Washington, D.C. (William C. Parler, Gen. Counsel, William H. Briggs, Jr., Sol., and E. Leo Slaggie, Deputy Sol., U.S. Nuclear Regulatory Com'n, Washington, D.C., Peter R. Steenland, Jr., Chief, Appellate Section and J. Carol Williams, Atty., Land & Natural Resources Div., U.S. Dept. of Justice, Washington, D.C., with him, on the briefs), for respondents U.S. Nuclear Regulatory Com'n and U.S. of America.

Before LOGAN, McWILLIAMS, and TACHA, Circuit Judges.

LOGAN, Circuit Judge.

This case constitutes another chapter in the litigious saga of the Uranium Mill Tailings Radiation Control Act of 1978 (UMTRCA), Pub.L. No. 95-604, 92 Stat. 3021 (codified as amended in scattered sections of 42 U.S.C.). ¹ Here, industry petitioners Quivira Mining Company, Kerr-McGee Chemical Corporation, Homestake Mining Company of California and United Nuclear Corporation challenge regulations promulgated in 1985 by the United States Nuclear Regulatory Commission (NRC) pursuant to UMTRCA. These regulations, consisting of an introduction and twelve criteria (the 1985 Criteria), establish standards for the NRC to follow in licensing and relicensing uranium mills and uranium mill tailings sites. 50 Fed.Reg. 41,852 (1985) (codified at 10 C.F.R. pt. 40, app. A).

Petitioners contend that (1) the 1985 Criteria are not supported by the cost-benefit analysis which the amended UMTRCA requires; (2) the criteria do not allow sufficient site-specific flexibility; (3) application of the criteria to thorium tailings is arbitrary and capricious and violates due process; and (4) the financial criteria are arbitrary and capricious and violate UMTRCA.

I

Mill tailings are the principal byproduct of the process of milling ore to extract uranium. These tailings contain radioactive material, most significantly radium. Radium decays to produce radon, an inert gas. The radon gas that escapes from tailings piles degrades into a series of short half-life decay products which are hazardous if inhaled. If the radon does not escape the tailings piles, its decay products remain in the piles and produce gamma radiation that may be harmful to creatures living near them. Uranium mill tailings also contain potentially dangerous nonradioactive material such as arsenic and selenium. These toxic and radioactive materials may be ingested with food or water. See American Mining Congress v. Thomas, 772 F.2d 617, 621 (10th Cir.1985), cert. denied, 476 U.S. 1158, 106 S.Ct. 2275, 90 L.Ed.2d 718 (1986); 48 Fed.Reg. 45,927-28 (1983).

Congress enacted UMTRCA in 1978 to address hazards presented by uranium and thorium mill tailings. UMTRCA assigned regulatory responsibilities to the Department of Energy, the Environmental Protection Agency (EPA) and the NRC. The EPA was directed first to promulgate "standards of general application ... for the protection of the public health, safety and the environment from radiological and nonradiological hazards associated with [uranium mill tailings]." 42 U.S.C. Sec. 2022. The NRC, in accordance with its "management function," id. Sec. 2114, promulgated specific regulations, conforming with the EPA general standards, to control mill tailings at "active" sites (those currently under NRC license) and at new sites to be licensed in the future. ²

When the EPA did not promulgate its standards within the time originally set by Congress, the NRC published its own regulations (the 1980 Criteria) in advance of any EPA general standards. See Uranium Mill Licensing Requirements, 45 Fed.Reg. 65,521, 65,533-36 (1980) (codified at 10 C.F.R. pt. 40, app. A (1981)). Like the aforementioned 1985 Criteria, the 1980 Criteria took the form of an introduction and thirteen criteria covering various aspects of mill tailings control. ³ In 1983, Congress amended UMTRCA, Act of Jan. 4, 1983, Pub.L. No. 97-415, 96 Stat. 2067, and pursuant to those amendments the EPA promulgated final regulations dealing with active sites. 48 Fed.Reg. 45,946 (1983) (codified at 40 C.F.R. Sec. 192.30-.43). In American Mining Congress v. Thomas, 772 F.2d 640 (10th Cir.1985) (AMC II ), cert. denied, 476 U.S. 1158, 106 S.Ct. 2276, 90 L.Ed.2d 718 (1986), we upheld these regulations against numerous challenges from environmental and industry petitioners. See also American Mining Congress v. Thomas, 772 F.2d 617 (10th Cir.1985) (AMC I ) (reviewing EPA inactive site regulations), cert. denied, 476 U.S. 1158, 106 S.Ct. 2275, 90 L.Ed.2d 718 (1986).

The NRC then initiated rulemaking proceedings to bring its 1980 Criteria into conformity with EPA active site regulations. These proceedings resulted in the 1985 Criteria, the regulations now under review. Although many of these criteria are identical to their 1980 counterparts, others were changed significantly.

II

Before turning to the issues raised by petitioners, we enunciate our standard of review. As we noted in AMC I, 772 F.2d at 625, UMTRCA specifies that the standards set out in the Administrative Procedure Act (APA), 5 U.S.C. Secs. 701-706, govern review under it. 42 U.S.C. Sec. 2022(c)(2). For the type of informal notice-and-comment rulemaking at issue here, the APA specifies that agency action may be set aside if found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. Sec. 706(2)(A). Review under this standard is deferential; an agency rule is arbitrary and capricious only

"if the agency has relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise."

Motor Vehicle Mfrs. Ass'n v. State Farm Mutual Auto. Ins. Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 2867, 77 L.Ed.2d 443 (1983).

In determining whether an administrative regulation permissibly construes the statute that an agency is charged with enforcing, our inquiry is shaped by the specificity of the congressional enactment:

"First, always, is the question whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress. If, however, the court determines Congress has not directly addressed the precise question at issue, the court does not simply impose its own construction on the statute, as would be necessary in the absence of an administrative interpretation. Rather, if the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency's answer is based on a permissible construction of the statute."

Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-43, 104 S.Ct. 2778, 2781-82, 81 L.Ed.2d 694 (1984) (footnotes omitted); see also INS v. Cardoza-Fonseca, 480 U.S. 421, 445 n. 29, 447-48, 107 S.Ct. 1207, 1220 n. 29, 1221, 94 L.Ed.2d 434 (1987); United States v. Riverside Bayview Homes, Inc., 474 U.S. 121, 131, 106 S.Ct. 455, 461, 88 L.Ed.2d 419 (1985); Chemical Mfrs. Ass'n v. Natural Resources Defense Council, Inc., 470 U.S. 116, 125, 105 S.Ct. 1102, 1107, 84 L.Ed.2d 90 (1985).

III

Petitioners primarily argue that the 1985 Criteria are not supported by the cost-benefit analysis they assert UMTRCA requires. The NRC candidly admits that when it promulgated the 1985 Criteria it did not then analyze the costs and benefits of the requirements that the criteria imposed, and it advances alternative arguments why this is not error. First, the NRC contends that Congress did not require it to perform cost-benefit analysis before promulgating the criteria, but instead required only that "the NRC give 'due consideration' to the costs of its mill tailings program." Brief of Respondents at 22. Second, it argues that even if Congress required cost-benefit analysis, previous analysis by the NRC and/or the EPA satisfies this requirement.

A

Courts and Congress often use the phrase "cost-benefit analysis" imprecisely, with the result that it is difficult to discern just what type of analysis is intended. As we noted in AMC I,

"[t]he label 'cost-benefit analysis' encompasses everything from a strict mathematical balancing formula to a less strict standard that merely requires the agency to recognize both the costs and benefits of specific proposed alternatives and consider the differences in choosing an appropriate alternative. 'Labels are neither important nor determinative.' "

772 F.2d at 631 (quoting American Petroleum Inst. v. EPA, 540 F.2d 1023, 1037 (10th Cir.1976), cert. denied, 430 U.S. 922, 97 S.Ct. 1340, 51 L.Ed.2d 601 (1977)).

In AMC I, we distinguished between two strands of cost-benefit analysis, see 772 F.2d at 630-32, to which we will refer here as "cost-benefit optimization" and "cost-benefit rationalization." Cost-benefit optimization, the strictest type of cost-benefit analysis, requires quantification of costs and benefits and a mathematical...