One step forward, two steps back: EPA's proposed revision to the definition of solid waste

by Kate Davis
University of Wisconsin Law School
Wisconsin State Bar Environmental Essay Competition

May 17, 2005

Introduction

On October 28, 2003, the Environmental Protection Agency (EPA) proposed a rule to change the definition of solid waste under the Resource Conservation and Recovery Act (RCRA).[1] If the rule is adopted, an estimated 1.5 million tons of hazardous waste annually would be no longer subject to regulation as hazardous waste under Subtitle C of RCRA.[2] While EPA asserts that this deregulation will promote "safe, beneficial" recycling of hazardous wastes, it acknowledges the hazardous waste recycling operations have accounted for a number of notorious damage incidents.[3] Recycling operations make up twenty of the first National Priority Sites under Superfund.[4] Despite this fact, the Agency performed no analysis of the proposal's potential health and environmental consequences - weakening not only its policy assertions, but also the ability of the rulemaking to withstand a challenge of "arbitrary and capricious" decision-making.

In contrast to its lack of environmental analysis on the proposed rule, EPA compiled detailed information regarding cost-savings to businesses whose wastes would no longer be subject to hazardous waste regulations. According to the proposal, industries would save about $178 million annually by avoiding costs associated with transporting, managing and disposing of wastes, contingency planning costs and state hazardous waste taxes.[5] Recycling hazardous waste rather than disposing of it is a commendable goal. However, the proposed exclusion could very well encourage unregulated recycling of hazardous materials rather than regulated recycling.

This proposal is by no means EPA's first attempt to modify its hazardous waste recycling framework. Since its inception, RCRA has been criticized by industry for unduly regulating and therefore discouraging the recycling of hazardous wastes.[6] EPA has thus far responded to these concerns in a piecemeal fashion, attempting to encourage recycling by creating special regulatory exemptions and exclusions for particular processes and industries.[7] The resulting regulatory framework has been described as one where "[t]he definitions, exclusions and exemptions, counter exceptions and negations, and layers of management are scattered, overloaded, and difficult to understand."[8]

In the 1990's EPA participated in a variety of initiatives aimed at exploring and developing comprehensive new approaches to regulating hazardous material recycling.[9] These efforts have been largely unsuccessful - attributable in large part, EPA notes, "to the fundamental difficulty of trying to distinguish wastes from non-waste materials in a national regulatory framework that applies to an exceptionally broad array of industries, materials and recycling practices."[10]

EPA's conceptual difficulty with distinguishing waste from non-waste was pulled into focus by a series of D.C. Circuit Court opinions which held, in a variety of contexts, that the Agency was improperly regulating non-waste materials (which are outside the scope of their RCRA jurisdiction). The cases center around the meaning of "solid waste" for purposes of the RCRA Subtitle C (hazardous waste) program.

Association of Battery Recyclers v. EPA (ABR)[11], a recent D.C. Circuit case, was a driving force behind EPA's October, 2003 proposed "Revisions to the Definition of Solid Waste." [12] The mining industry challenged an EPA rule which "defin[ed] 'solid waste' in terms of how materials 'generated and reclaimed within the primary mineral processing industry' [were] stored."[13] The court found storage to be an inappropriate means to differentiate waste from non-waste - noting "Congress clearly and unambiguously expressed its intent that 'solid waste' be limited to materials that are 'discarded' by virtue of being disposed of, abandoned or thrown away."[14] Some of the material EPA sought to regulate as solid waste under this rule was, in fact, "destined for reuse as part of a continuous industrial process and thus [was] not abandoned or thrown away."[15] The court therefore vacated the provisions which improperly expanded jurisdiction to non-waste materials.[16] EPA then removed those provisions from the final version of the rule.[17]

Looking beyond the rule-specific changes required by the court, EPA perceived the ABR decision to be of broader significance - an "opportunity to re-examine its rules and interpretations and clarify whether they regulate certain materials that are not 'discarded.'"[18] EPA felt that it needed to address the court's statements regarding the waste classifications of certain recycled materials.[19] In developing the proposal to revise the definition of solid waste, one of EPA's objectives was to create a regulatory exclusion based on the court's view that "materials generated and reclaimed in a continuous process within the same industry" are not discarded, and hence, are outside the Agency's regulatory jurisdiction.[20] This key phrase was judged to be the clearest direction from the D.C. Circuit as expressed in ABR and previous decisions.[21]

The proposed revision to the definition of solid waste was crafted through a series of discretionary decisions - (1) deciding that a revision to the Subtitle C regulations was necessary (2) excising a phrase from a few circuit court opinions to articulate the boundaries of the exclusion (materials generated and reclaimed in a continuous process within the same industry) - and (3) defining the scope of the "exclusionary phrase" in broad terms to enhance its applicability. However, this exercise of discretion is not supported by adequate analysis of the potential human health and environmental consequences. The deficiency raises significant legal and policy concerns that must be better addressed by the Agency to have a legally defensible and environmentally sound regulatory framework for the recycling of hazardous materials.

This comment examines the proposal in light of recent D.C. Circuit decisions, and evaluates the policy implications and likelihood of a successful legal challenge should the proposal be finalized. Part I provides a snapshot of the current regulatory framework for hazardous waste recycling. Part II examines the series of D.C. Circuit Court opinions that EPA used as "guideposts" in crafting the language and scope of the proposed exclusion. Part III details the relevant portions of the proposed rule. Finally, Part IV evaluates the Agency's use of the D.C. Circuit Court opinions to support its exercised of discretion - and articulates legal and policy concerns with the proposed exclusion.

I. The Current Regulatory Framework for Hazardous Waste Recycling

RCRA is a comprehensive environmental statute under which EPA is granted authority to regulate solid and hazardous wastes.[22] Congress' "overriding concern" in enacting RCRA was to establish the framework for a national system to insure the safe management of hazardous waste.[23] In passing RCRA, Congress expressed concern over the "rising tide" in scrap, discarded, and waste materials.[24] Congress thus crafted RCRA "to promote the protection of human health and the environment and to conserve valuable material and energy resources."[25] RCRA includes two major parts: one dealing with non-hazardous solid waste management and the other with hazardous waste management. Under the latter, called the Subtitle C program, EPA is directed to promulgate regulations establishing a comprehensive management system for hazardous waste.[26]

"Hazardous waste," for purposes of RCRA's Subtitle C program, is a subset of "solid waste" that has the potential to pose a high-level threat to human health and the environment.[27]

Therefore, to qualify as a hazardous waste, a material must first satisfy the definition of a solid waste.[28] A solid waste is defined by RCRA as "any garbage, refuse, sludge from a waste treatment plant, water supply treatment plant, or air pollution control facility and other discarded material, including solid, liquid, semisolid or contained gaseous material, resulting from industrial, commercial, mining, and agricultural operations, and from community activities . . ."[29] Discarded materials include abandoned, recycled, inherently waste-like materials, as well as certain military munitions materials.[30]

In general, hazardous wastes are subject to RCRA regulation from the moment of their generation all the way through disposal.[31] However, hazardous secondary materials can often be recycled instead of disposed, which can effect how the materials are regulated.[32] Since 1980, EPA has interpreted "solid waste" to encompass both materials that are destined for final, permanent placement in disposal units, as well as some materials that are destined for recycling.[33] Those secondary materials that are used or reused directly as effective substitutes for commercial products, and those which can be used as ingredients in an industrial process (provided they are not being reclaimed) are not regulated as wastes.[34] These practices are likened to normal industrial productions as opposed to waste management.[35] In contrast, some recycling practices, such as certain kinds of reclamation[36], the Agency likens to waste management and therefore regulates under Subtitle C.[37] In sum, the Subtitle C regulations essentially divide recyclable hazardous materials into waste-like and product-like categories and then regulates accordingly.[38]

In the preamble to the proposed exclusion from the definition of solid waste, EPA offers three additional arguments for their selective regulation, under RCRA Subtitle C, of certain recycling practices:

[1]The statute and legislative history suggest that Congress expected EPA to regulate as wastes some materials that are destined for recycling. [2] Many materials stored or transported prior to recycling present the same types of threats to human health and the environment as materials stored or transported prior to disposal. . . [3] Excluding all material destined for recycling would allow materials to move in and out of the hazardous waste management system depending on what any person handling the material intended to do with it - which seems inconsistent with mandate to track hazardous wastes and control "cradle to grave."[39]

It is important to note that EPA has always asserted that materials are not excluded from its jurisdiction simply because someone claims that they will be recycled. EPA considers materials destined for "sham recycling"[40] to be discarded, and, therefore, subject to Subtitle C regulations.[41] The D.C. Circuit has agreed that materials undergoing sham recycling are discarded and therefore properly fall under Subtitle C jurisdiction.[42]

The proposed revision to the definition of solid waste deals with one category of hazardous waste recycling: reclamation.[43] In a reclamation operation, some components of a material are recovered and reused, while others are separated and in some cases discarded.[44] EPA currently has a wide variety of regulatory approaches to reclamation operations because some processes more closely resemble waste management while others more closely resemble normal manufacturing.[45]

Taken all together, EPA has devised a high complex regulatory program for hazardous waste recycling - the evaluation of which is complicated by the limited amount of data EPA collects on specific industries or recycling practices.[46] These regulations have been subject to challenges and criticism from industry, states, and environmental groups.[47] Key industry concerns include: "the difficulty of interpreting and applying the definitions consistently; the costly, time-consuming, and uncertain permitting process; [and] the high production costs for recyclable materials and their derivatives . . ." [48] These concerns translate into reluctance on the part of businesses to invest in recycling units, thereby, according to industry, increasing consumer costs, wasting natural resources, and holding back technological innovations.[49] States have also raised concerns about the complexity of the system - noting the difficulty distinguishing waste from non-waste and the impossibility of tracking materials and inspecting facilities interferes with their ability to implement and enforce the RCRA program.[50] Finally, environmental groups "have emphasized the high number of recycling sites for the Superfund National Priorities List; the information deficit associated with exempt recycling; and the lack of oversight, regulation or product specification for exempt waste-derived products. [51]

II. The Force Behind Regulatory Reform: A Series of D.C. Circuit Court Cases that Guided EPA's Exercise of Discretion in Proposing Revisions to the Definition of Solid Waste

The D.C. Circuit Court has had several opportunities to examine and critique EPA's regulatory definition of solid waste as it pertains the Agency's jurisdiction over recyclable hazardous materials. The landmark case is American Mining Congress v. EPA (AMC I),[52] in which organizations representing mining, iron and steel, and chemical manufacturing industries, as well as industry groups representing electric and gas utilities challenged EPA's 1985 regulatory definition of solid waste.[53] The petitioners maintained that EPA exceeded its authority by seeking to regulate materials that were not discarded or otherwise disposed of.[54] The key question identified by the court was "whether Congress was using the term "discarded" in its ordinary sense -- 'disposed of' or 'abandoned'--or whether Congress was using it in a much more open-ended way, so as to encompass materials no longer useful in their original capacity though destined for immediate reuse in another phase of the industry's ongoing production process."[55]

Because the issue was one of statutory interpretation, the court applied the principles enunciated in Chevron U.S.A., Inc. v. NRDC[56] to guide its inquiry.[57] Under Chevron, the reviewing court first considers whether Congress "has directly spoken to the precise question at issue."[58] This inquiry focuses initially on the language and structure of the statute itself.[59] If the answer is not found in the statute, then the court looks to secondary indicia of intent, such as the measure's legislative history.[60] If the intent of Congress is clear, the analysis ends and the court (as well as the agency) must give effect to the intent.[61] However, "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."[62]

The AMC I court never got beyond the first prong of the Chevron analysis, finding ample evidence of congressional intent both in the statute and the legislative history. The court noted that:

RCRA was enacted . . . in an effort to help States deal with the ever-increasing problem of solid waste disposal by encouraging the search for and use of alternatives to existing methods of disposal (including recycling) and protecting health and the environment by regulating hazardous wastes. To fulfill these purposes, it seems clear that EPA need not regulate "spent" materials that are recycled and reused in an ongoing manufacturing or industrial process. These materials have not yet become part of the waste disposal problem; rather, they are destined for beneficial reuse or recycling in a continuous process by the generating industry itself.[63]

The court concluded that "discarded materials" could not include materials "destined for beneficial reuse or recycling in a continuous process by the generating industry itself."[64] Because Congress had directly spoken to this issue, EPA's use of a conflicting definition was not entitled to Chevron deference.[65] Therefore, the petition for review was granted.[66]

It is important to note that the circuit court's analysis was performed against a specific factual backdrop: the mining and petroleum industry. The court went to great lengths to describe each industry's unique recycling concerns. In the mining industry, the production of primary metals from ores involves multiple extraction steps to obtain as much of the metal as possible - reclamation of slag, dross, dust, revert and similar materials is an integral part of the production process.[67] As the court in AMC I explained:

In the mining industry, primary metals production involves the extraction of fractions of a percent of a metal from a complex mineralogical matrix (i.e., the natural material in which minerals are embedded). Extractive metallurgy proceeds incrementally. Rome was not built in a day, and all metal cannot be extracted in one fell swoop. In consequence, materials are reprocessed in order to remove as much of the pure metal as possible from the natural ore. . . . The mining facility typically recaptures, recycles, and reuses these [materials].[68]

For the petroleum industry, the court first noted that "[p]etroleum refineries vary greatly both in respect of their products and their processes," and then found that "most of their products" are produced "through a number of interdependent and sometimes repetitious processing steps."[69] The court concluded:

Any hydrocarbons that are not usable in a particular form or state are returned to an appropriate stage in the refining process so they can eventually be used. Likewise, the hydrocarbons and materials which escape from a refinery's production vessels are gathered and, by a complex retrieval system, returned to appropriate parts of the refining process.[70]

Following the industry descriptions, the court stated "against this factual backdrop, we now examine the legal issues presented by the petitioners challenge."[71] Thus, the court's focus on reclamation of secondary materials as an essential aspect of the production process is important in considering the applicability of the holding to other materials and recycling practices.

While AMC I found clear Congressional intent as to the meaning of "discard" in so far as it applied to hazardous materials in an "ongoing process," subsequent D.C. Circuit decisions found ambiguities demanding resolution by the Agency's delegated lawmaking powers. In American Petroleum Institute v. EPA (API I), the court examined EPA's contention in a proposed rulemaking that K061 sludge discarded by producers of steel was no longer "discarded" when it arrived at a facility for metal reclamation.[72] The Agency explained that the furnaces used for metals reclamation "are normally ... essential components of the industrial process, and when they are actually burning secondary materials for material recovery[,] [they] can be involved in the very act of production . . . "[73] Using AMC I as guidance, EPA felt constrained to view K061 as no longer being "waste" within the meaning of the RCRA once it entered a reclamation furnace.[74]

The court responded by stating that AMC I was "by no means dispositive of EPA's authority to regulate K061 slag."[75] Unlike the materials in question in AMC I, the court noted, "K061 was indisputably 'discarded' before being subject to metals reclamation - consequently, it has 'become part of the waste disposal problem.'"[76] K061 is delivered to the reclamation facility not as part of an "ongoing manufacturing or industrial process" within "the generating industry," but as part of a mandatory waste treatment plan prescribed by EPA.[77] As such, the material appeared to remain "discarded" and therefore subject to EPA's jurisdiction.[78] Because EPA mistakenly concluded that case law left it no discretion to interpret the relevant statutory provisions, the court remanded the issue to EPA for reconsideration.[79]

The court noted, however, that the scope of the agency's interpretive discretion on remand was far from unbounded.[80] Although the court concluded that Congress had not spoken precisely on the question of EPA's authority to regulate the slag produced from the treatment of K061, any "permissible" construction of the relevant provisions must comport with the broader "statutory purpose" of RCRA.[81]

Shortly after API I, the D.C. Circuit addressed another challenge from the American Mining Congress involving EPA's interpretation of "discard."[82] The petitioners sought review of an EPA rule relisting as hazardous six wastes generated from metal smelting operations. AMC challenged both the Agency's interpretation of the term "discarded" in RCRA, and argued that EPA had inadequately explained the bases of its decision to relist the six wastes as hazardous.[83] Relying principally on the decision of the court in AMC I, the petitioners argued that three wastes, which were stored in surface impoundments, were not "discarded," were therefore not "solid wastes," and thus could not be "hazardous wastes" within the meaning of RCRA.[84]

The court felt the petitioners' reading of AMC I was too broad.[85] AMC 's holding concerned only materials "destined for immediate reuse in another phase of the industry's ongoing production process,"[86] which "have not yet become part of the waste disposal problem."[87] The court found that nothing in AMC I prevented the Agency from treating as "discarded" the wastes at issue. The wastes were "managed in land disposal units that are part of wastewater treatment systems, which have therefore become 'part of the waste disposal problem,' and which are not part of ongoing industrial processes."[88]

In reference to the court's API I decision earlier that year, it noted that the petitioners were unable to point to anything in the language, overall structure, or legislative history of the statute, that showed the term "discarded" to be any less ambiguous regarding sludge stored in surface impoundments than it was regarding the materials at issue in API.[89] Because Congress has not directly spoken to the precise question at issue, the court considered whether the Agency's interpretation of the term "discarded" was "reasonable and consistent with the statutory purpose."[90] In this case, the Agency had determined that material placed in wastewater treatment surface impoundments where it is "capable of posing a substantial present or potential hazard to human health or the environment when improperly treated, stored, transported or disposed of, or otherwise managed, by leaching into the ground, is 'discarded material,' and hence a 'solid waste.'"[91] The court concluded that the Agency's interpretation of "discard" was both reasonable and consistent with the statutory purposes of RCRA.[92]

The Agency did not fare as well on the petitioners' second claim of an inadequate agency record to justify EPA's decision to relist the wastes. The court concluded that regarding some of the six wastes, the Agency met its obligation to engage in reasoned decision making.[93] Regarding others, however, the Agency failed to articulate a rational connection between the data on which it purportedly relied and its decision to reject the petitioners challenges.[94] The court remanded to the Agency for a fuller explanations regarding the materials not sufficiently supported. [95]

The D.C. Circuit again stressed the importance of demonstrating reasoned decision-making in the context of interpreting 'discard' in American Petroleum Institute v. EPA (API II).[96] In this case, industry groups challenged EPA's determination that oil-bearing wastewaters are solid waste for purposes of RCRA regulation. [97] The point of contention between EPA and industry was whether primary treatment of the oil-bearing wastewater was part of the production process, or "discard."[98] Citing AMC II, the court noted that where an industrial by-product may be characterized as either "discarded" or "in process" material, EPA's choice of characterization is entitled to deference.[99]

However, the court also noted that "the record must reflect that EPA engaged in reasoned decision-making to decide which characterization is appropriate."[100] Finding the record to be deficient in that regard, the court held EPA's decision was arbitrary and capricious.[101] It vacated the portion of EPA's decision declining to exclude oil-bearing wastewaters from the statutory definition of solid waste, and remanded for further proceedings.[102] The court did not suggest any particular result on remand, but its earlier statements indicate that EPA potentially had jurisdiction over oil-bearing wastewaters recycled at petroleum refineries.

At least two other circuits have held that EPA has authority over some material destined for reuse or recycling. The Eleventh Circuit found that "it is unnecessary to read into the term 'discarded' a congressional intent that the waste in question must finally and forever be discarded."[103] The Fourth Circuit found that slag held on the ground untouched for six months prior to sale for use as roadbed could be a solid waste.[104]

Association of Battery Recyclers v. EPA, decided in 2000,is the final "guidepost" cited by EPA as it proposes to once again exercise its discretion to interpret the statutory term "discard" for purposes of their Subtitle C program.[105] In ABR, petitioners challenged a new EPA rule, promulgated in 1998, adjusting the Agency's Subtitle C jurisdiction over hazardous materials recycled by reclamation within the mineral processing industry --- the Land Disposal Restrictions Phase IV Rule ("LDR").[106] The rule contained a conditional exclusion for all types of mineral processing materials destined for reclamation.[107] As part of LDR, EPA prohibited land-based storage prior to reclamation because it considered secondary materials from the mineral processing industry that were stored on the land to be part of the waste disposal problem.[108] EPA noted that while RCRA did not authorize the Agency to regulate "materials that are destined for immediate reuse in another phase of the industry's on going production process" -materials removed from the production process for storage are not "immediately reused," and therefore are "discarded" and subject to EPA's jurisdiction. [109]

Petitioners challenged the portion of LDR defining a "solid waste" in terms of how materials "generated and reclaimed within the primary mineral processing industry" are stored.[110] Under the rule, if the mineral processor stored secondary material destined for recycling in tanks, containers, buildings, or on properly maintained pads, the materials are not considered solid waste.[111] However, if the same secondary materials were not stored in such a manner prior to being recycled, they could be regulated as hazardous waste.[112] Petitioners contended that the rule exceeded EPA's authority and asked how secondary material held for recycling in production could be a "waste" when the statute defines "waste" as "discarded materials."[113]

The court noted that these issues were fully vetted in AMC I.

The [AMC I] court began by referring to the "ordinary, plain-English meaning" of "discarded"-- " 'disposed of,' 'thrown away,' or 'abandoned.' " Id. at 1184. Secondary materials destined for recycling are obviously not of that sort. Rather than throwing these materials away, the producer saves them; rather than abandoning them, the producer reuses them. After examining the structure and history of RCRA, the AMC I court concluded: "Congress clearly and unambiguously expressed its intent that 'solid waste' (and therefore EPA's regulatory authority) be limited to materials that are 'discarded' by virtue of being disposed of, abandoned, or thrown away."[114]

The court concluded "at least some of the secondary material EPA seeks to regulate as solid waste is destined for reuse as part of a continuous industrial process and thus is not abandoned or thrown away."[115] As in AMC I, " by regulating in-process secondary materials, EPA has acted in contravention of Congress' intent, because it has based its regulation on an improper interpretation of 'discarded' and an incorrect reading of our AMC I decision."[116] The court also explained that the intervening API I and AMC II decisions had not narrowed the holding in AMC I.[117] In response to thisdecision, EPA promulgated a final rule removing the provisions of the LDR rule that the court vacated in ABR.[118]

Taken together, these court decisions provide valuable guidance as to EPA's jurisdictional boundaries when dealing with recyclable hazardous waste. The court appears to view the question of discard along a continuum of materials and recycling practices.[119] At one end of the continuum are materials directly reinserted by the generator into the production process from which they are produced, such as the mining and petroleum processing described in AMC I. At the other end of the continuum are materials and are "indisputably discarded" before being reclaimed, such as K061 slag that was shipped to a metals reclamation furnacein API I.[120]

Materials falling somewhere in between were addressed by the court in AMC II and API II. In AMC II, the court held that sludge from a surface impoundment that may later be reclaimed were part of the facility's wastewater treatment system and not part of an ongoing industrial process.[121] In API II, the court reviewed EPA's determination that oily wastewaters were discarded prior to treatment to recover oil, against industry's contention that they were in-process materials that were recycled and therefore not discarded.[122] In doing so, the court took a hard look at EPA's reasoning, noting that "the record must reflect that EPA engaged in reasoned decision-making to decide where characterization is appropriate."[123] Finding the record to be deficient in that regard, the court held EPA's decision to be arbitrary and capricious, it vacated the portion of the rule dealing with oil-bearing wastewaters.[124]

III. A Brief Look at EPA's Proposed Revision to the Definition of Solid Waste

As noted earlier, EPA perceived the ABR decision and its predecessors as providing an "opportunity to re-examine its rules and interpretations and clarify whether they regulate certain materials that are not 'discarded.'"[125] Looking to the decisions for guidance (and perhaps justification), the Agency now proposes to exercise its discretion to interpret the statutory term "discard" for Subtitle C purposes.[126]

The proposed revision is de-regulatory in nature, in that certain recyclable materials that have heretofore been subject to hazardous waste regulations would no longer be regulated under the hazardous waste regulatory system.[127] The rule also provides more explicit criteria for determining the legitimacy of recycling practices - although, this was not in response to the D.C. Circuit decisions and is therefore not analyzed is this paper. [128] Taken together, EPA expects that this proposed rule will encourage safe, beneficial recycling of hazardous secondary materials by industry - consistent with one of the primary goals of Congress in enacting the RCRA statute.[129] However, EPA performed no formal analysis of the exclusion's potential impacts to human health and the environment to back up this assertion.[130]

A. Overview of the Proposed Exclusion

The proposal would modify the current regulatory provision at 40 C.F.R. §261.2(c)(3), which specifies that some types of hazardous materials are wastes if their recycling involves reclamation.[131] A material is reclaimed "if it is processed to recover a usable product, or if it is regenerated."[132] The basic premise of the proposed exclusion is that hazardous secondary materials that are "generated and reclaimed in a continuous process within the same industry" would not be considered wastes for Subtitle C purposes, and thus would not be subject to the hazardous waste regulations. [133]

The Agency reasons that, generally, when a material is reclaimed within the same industry that generated it, and the material can remain useful to that industry, and the material is not discarded.[134] The industry has not "finished" with the material; rather, it is to the advantage of the industry to continue using it as a substitute for other types of materials.[135] The Agency also asserts that the potential for environmental harm from same-industry recycling of hazardous secondary materials is likely small compared to other recycling practices because: "processes and facilities within the same industry are likely to use similar raw materials and process them in a similar manner; they are also likely to have expertise as to types of secondary materials produced by their industry, their potential for recycling, and appropriate practices for managing such materials."[136] However, EPA did not perform any formal analysis to support this assertion.

In addition to selecting "generated and reclaimed in a continuous process within the same industry" to articulate the boundaries of the exclusion, the Agency had to define the key concepts in the phrase itself. The Agency chose to construe the phrase and its components quite broadly, extending the reach of the exclusion to a diverse set of materials and recycling practices.

B. Defining "Continuous Process Within the Same Industry"

EPA proposed two options for defining "continuous process within the same industry"[137] (the Agency definitions of components "industry" and "continuous process" are discussed next). Under Option 1, hazardous secondary materials would have to be generated and reclaimed within a single industry in order to qualify for the exclusion.[138] The reclamation of excluded material could take place in multiple processing steps, provided that each processing step takes place in the same industry that generated the material.[139] The proposal would also allow reclamation of excluded material to take place at one or more different locations or facilities, as long as each reclamation step occurs within the generating industry- there would not be any geographical limits on the movements of excluded materials.[140]

Option 2 is identical to the first option described above, with one exception - hazardous secondary materials that are generated and reclaimed in a continuous process within the same industry would not be eligible for the exclusion if the reclamation takes place at a facility that also recycles regulated hazardous wastes generated in a different industry.[141] This would essentially make all commercial recyclers, who typically handle wastes from many industries, ineligible for the exclusion.[142]

C. Defining "Industry"

In developing a definition of industry for the proposed exclusion, EPA considered: "(1) whether the definition could be easily identified and readily implemented; (2) whether it was simple (versus unnecessarily complicated); and (3) the degree to which the definition, when used as part of an "intra-industry" exclusion, resulted in outcomes consistent with the principle described above (i.e., that the materials were being continuously used rather than discarded)." [143] After consideration of these criteria, EPA proposed using the North American Industry Classification System (NAICS) developed by the Office of Management and Budget (OMB) as the foundation for industry definitions for purposes of the proposed rule.[144]

EPA considered creating its own list of specific industries or industry categories, however, such a list would have required a significant investment of time and resources and would not necessarily have reflected standardized, commonly accepted definitions of industry.[145] EPA believes that the developers of the NAICS have more expertise with respect to diverse industrial operations, and consequently, find it to be a reasonable starting point for defining "industry" with regard to identifying materials that are not "discarded" for purposes of RCRA Subtitle C.[146]

There are several additional facts provided by EPA in support of its decision to use NAICS to define "industry." First, NAICS was developed using a "production-oriented" concept, whereby producing units that use identical or similar production processes are grouped together.[147] This fact is relevant for the purpose of this exclusion because materials being generated from, and returned to, "identical or similar production processes" can be likewise viewed as being beneficially recycled "within the same industry." Second, the NAICS are immediately functional as an existing, recognized system for classifying industries. Finally, under the NAICS system, the owner/operator of a facility determines his/her own industry classification, largely using the NAICS Manual for help in determining how to categorize his/her own establishment. For purposes of the proposed rule, owners of facilities handling secondary hazardous materials will identify which NAICS code applies to them for RCRA recycling purposes.[148]

EPA is proposing to identify industry for purposes of this exclusion at the 4-digit NAICS level - therefore, two establishments will be considered within the "same industry" if they share the same 4-digit NAICS code.[149] The 4- digit level approach was selected because the Agency believed it struck the appropriate balance between being overly broad (i.e., undermining any meaningful distinctions of industry) and too narrow (i.e., inappropriately restricting beneficial resource recovery and recycling opportunities).[150]

EPA does note that there are a number of 4-digit NAICS industry codes that are designated as "Other" activities within an industry Sub-sector.[151] Generally, these categories seem to represent a more diverse set of process activities than occurs under other 4-digit NAICS codes and can therefore lead to some awkward "industry" groupings.[152] For example, "NAICS 3259 (Other Chemical Product and Preparation Manufacturing) includes Printing Ink Manufacturing; Explosives Manufacturing; Custom Compounding of Purchased Resins; Photographic Film, Paper, Plate, and Chemical Manufacturing; and All Other Miscellaneous Chemical Product and Preparation Manufacturing."[153] Finally, EPA proposed to retain definitions it has developed in previous rules for the petroleum and mineral processing industries in lieu of the 4-digit NAICS approach.[154]

D. Defining "Continuous Process"

Having taken a brief look at how EPA defines "industry" for purposes of this exclusion, we move to the second key component - continuous process. EPA proposes that generation and reclamation of materials would be understood to take place in a "continuous process" only if the materials are handled exclusively by facilities or entities (except for transporters) that are within the generating industry, and the materials are not "speculatively accumulated" as defined in 40 C.F.R. §261.1(c)(8).[155] This definition would not allow a generator to ship excluded materials to a broker or other middleman before they are received at a reclamation facility.[156] EPA acknowledges that middlemen such as brokers are often better able to find markets for recyclable secondary materials, and thus can facilitate their beneficial reuse.[157] However, they regard the use of brokers as a significant discontinuity in the use of a secondary material, and therefore inconsistent with the management identified by the courts as outside the Agency's jurisdiction.[158] Independent transporters can to ship excluded materials from one facility to another, as long as each facility is within the generating industry.[159]

In addition to requiring materials be shipped directly between the generator and reclaimer, EPA feels that time limitations on reclamation are an appropriate component of "continuous process." The Agency proposed to use RCRA's existing "speculative accumulation" provisions[160] to distinguish between processes that are "continuous" and those that are not.[161] Under this existing rule, a material is accumulated speculatively if the person accumulating it cannot show that the material is potentially recyclable and has a feasible means of being recycled.[162] More importantly for the purpose of this proposal, the person accumulating the material must show that during a calendar year (beginning January 1) the amount of material that is recycled, or transferred to a different site for recycling, must equal at least seventy-five percent by weight or volume of the amount of that material on hand at the beginning of the period.[163]

EPA believes that using the existing regulatory provisions for speculative accumulation as the time limit for defining "continuous process" in the proposed rule is consistent with the D.C. Circuit Court's direction, and fits well within the existing regulatory structure for hazardous waste recycling.[164] In the ABR decision, the Court suggested that temporary storage of secondary materials prior to reclamation may be a necessary phase in the overall reclamation process.[165] However, the ABR court did not suggest a particular time limit beyond which accumulation of materials could no longer be considered part of a "continuous process."[166]

E. Enforcement

Generators who wish to use the 40 C.F.R. § 261.2(g) exclusion must submit a one-time notice to EPA or a state that is authorized to administer RCRA.[167] If a material is not managed within the boundaries of the proposed exclusion, the material is not excluded and is a hazardous waste for Subtitle C purposes from the time the generator first generated it.[168] Therefore, each person who manages a hazardous secondary material that loses its exclusion would have to manage it consistently with hazardous waste management requirements from the point when the material was first generated, regardless of whether the person is the one who actually causes the loss of the exclusion.[169] EPA believes that this approach will provide everyone involved with hazardous secondary materials with an incentive to manage them in such a way as to prevent loss of the exclusion.[170] It also encourages each person to use all appropriate steps to see that others handle the material so it is legitimately reclaimed. [171]

In addition, the proposed exclusion would not affect the obligation to promptly respond to and remediate any releases of hazardous secondary material that may occur.[172] If, for example, a hazardous secondary material is spilled or released, then the material would be 'discarded' and subject to Subtitle C regulation.[173] Any management of the released material not in compliance with applicable Federal and State hazardous waste requirements could result in an enforcement action.[174]

F. Estimated Costs and Benefits

Entities potentially affected by this action are expected in include more than 1700 facilities that generate and/or recycle hazardous secondary materials. The proposed exclusion is expected to result in a net savings to industry of approximately $178 million per year.[175] These cost savings for both those who are modeled to switch to recycling and those who currently recycle either on-site or within the same industry are expected to come from reduced administrative costs, transportation costs, disposal/management costs, state hazardous waste taxes, contingency planning costs and increased salvage revenue (for entities that shift from disposal to recycling). [176]

Some of the environmental benefits predicted to result from the proposed rule include conservation of landfill capacity, increase in resource efficiency, growth of a recycling infrastructure, and development of innovative technologies for affected secondary materials.[177] EPA estimates that approximately 425 thousand tons of secondary hazardous materials would be redirected away from landfills towards recycling under the proposed exclusion.[178] EPA believes the rule will facilitate the growth and development of the innovative recycling technologies in the United States by reducing regulatory barriers to new technologies becoming established.[179] The Agency acknowledges that some 1.5 million tons of hazardous secondary materials would be no longer subject to regulation as hazardous waste under Subtitle C of RCRA under this proposal.[180] EPA has not, however, evaluated any potential for changes resulting in either higher or lower releases to the environment of hazardous constituents from different handling methods for affected secondary materials.[181]

IV. Legal and Policy Concerns with the Proposed Revision to the Definition of Solid Waste

"If AMC I and ABR are the guideposts, then EPA has lost its way."[182]

A. Legal Concerns

EPA was not required by ABR or its predecessors to revise the definition of 'discard' for purposes of Subtitle C regulations.[183] After ABR, EPA revoked the regulatory provisions that the court held were unlawful.[184] The existing RCRA regulations were duly promulgated and remain lawful. Therefore, any further Agency action should be characterized as an exercise of Agency discretion and as such must be supported by a record demonstrating "reasoned decision-making."[185] Perhaps in acknowledgment of its deficient rulemaking record, the Agency seeks to bolster it exercise of discretion by identifying ABR and other decisions as guideposts. However, a close analysis of these guideposts suggests and that EPA has gone astray by taking language from the court and applying it a broader universe of materials and practices than was contemplated.

The D.C. Circuit Court did clearly hold that secondary hazardous materials directly reused by the producer in an ongoing production process are not discarded, and therefore are not wastes.[186] However, "the court has never ruled that materials no longer useful to the original producer, that are stored in an uncontrolled manner for a lengthy period of time, then shipped long distances through many states to a different company within the same industry, to be reclaimed in a different recycling process, cannot be [considered] discarded."[187]

First, both AMC I and ABR cases dealt primarily with the mineral processing and petroleum refining industries. While the ABR court recognized the potential application of its holding to some other industries, the facts presented were in many respects unique to these industries. As discussed in the AMC I case, both the mineral processing and petroleum refining industries are essentially extractive - they inherently involve the processing (i.e., reclaiming) of secondary materials in a continuous series of steps to produce finished products (infra to industry descriptions).[188] Certainly, the same type of reclamation is not found in all industries.

In addition, the recoverable materials in mineral processing are typically put directly back into the production process by the generator at the mill or smelter located on site or in close proximity.[189] Likewise petroleum residues are reinserted directly back into the production process.[190] This fact is a critical one in the court's decisions. The ABR court held that secondary materials destined for recycling were not discarded because "[r]ather than throwing materials away, the producer saves them; rather than abandoning them, the producer reuses them."[191] This distinction appears to limit the holding to materials reused by the generator on-site or in a closely integrated production process.[192] The facts considered by the ABR court certainly did not involve the generator shipping materials to a different company for recycling. Therefore, if EPA intends to use ABR and its predecessors as guideposts for the reform of recycling regulations for hazardous secondary materials- a close reading suggests their application is limited to the petroleum and mineral refining industry - and, perhaps, similarly extractive industries.

Regardless of what exact industries the court was contemplating, there is evidence that the court expected EPA to analyze types of materials and recycling activities against reasonable indicia of discard.[193] In its opinions, the circuit court was careful to either designate the specific materials examined (such as the 'indisputably discarded' K061[194] ) or state a general conclusion, either unwilling or unable to comment of specific materials ("at least some of the secondary material EPA seeks to regulate as solid waste is destined for reuse as part of a continuous industrial process and thus is not abandoned or thrown away."[195]) In those instances where the court's holdings were general in scope because of an insufficient administrative record, the court vacated the provisions and remanded for a more complete inquiry.[196]

In its new proposed rule, EPA has not taken heed of this advice, instead seeking to exclude all hazardous secondary materials that are reclaimed in any process in hundreds of industries. EPA has not sufficiently examined the materials, reclamation processes, and industries that it proposes to exclude from the definition of solid waste on an adequate administrative record.[197] So, while the proposed exclusion does indeed borrow the phrase "continuous process/same industry" from these decisions, EPA is, in fact, applying it to a much broader, more diverse set of recycling processes than have been sufficiently examined.

Indeed, in both AMC I and ABR, the court warned EPA against parsing individual words in its opinions.[198] Yet EPA seems to be treating the words "continuous process" and "within the generating industry" from the court's opinions "as if they were statutory terms in need of regulatory definition."[199]

The Agency's inadequate rulemaking record will make the proposed exclusion vulnerable to a challenge of "arbitrary and capricious" rulemaking. A court's initial inquiry would show that EPA's interpretation of the scope of its authority under RCRA via "discard" has been unclear and unsteady. As noted in AMC I, "EPA has shifted from its vague 'sometimes discarded' approach of 1980 to a proposed exclusion from regulation of all materials used or reused as effective substitutes for raw materials in 1983, and finally, to a very narrow exclusion of essentially only materials processed within the meaning of the 'closed-loop' exception under the final rule."[200] Therefore, in analyzing the proposed exclusion, a court would be confronted with neither a consistent nor a longstanding agency interpretation.

Because the key issue is one of statutory interpretation (EPA's interpretation of "discard") the principles enunciated in Chevron[201] guide the court's inquiry. "[I]f 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."[202] While AMC I found clear Congressional intent for material reused directly to not be considered 'discard' for Subtitle C purposes - later decisions highlight the ambiguities that exist for materials & recycling practices not clearly at either end of the continuum. The proposed exclusion, as noted above, is quite broad and involves very diverse recycling processes - and therefore necessarily spans a portion of the continuum and cannot be attributed to Congressional intent identified and articulated in AMC I.

When Congress' intent is not clear, "the question for the court is whether the agency's answer is based on a permissible construction of the statute . . ."[203] While a court may not "substitute its own construction of a statutory provision for a reasonable interpretation made by the administrator of an agency,"[204] it has a duty to carefully "review the record to ascertain that the agency has made a reasoned decision based on 'reasonable extrapolations from some reliable evidence.' "[205] The court will ensure that the Agency has examined "the relevant data and articulate[d] a satisfactory explanation for its action including a 'rational connection between the facts found and the choice made,' " [206]

A court reviewing this proposal would find the rulemaking record sorely lacking. EPA failed to perform any sort of analysis to understand the potential consequences of the proposed exclusion on human health and the environment. Executive Order 12866 entitled Regulatory Planning and Review[207] requires EPA to assess the costs of significant regulatory actions both to health, safety, and the environment and to government programs responsible for administering the regulatory program. However,"[t]here is no EPA analysis of the potential environmental harm from the proposed rule, no reasoned analysis of the indicia of discard or the environmental basis for EPA's approach, and scant attention to significant concerns such as how the rule will likely cut of off superfund liability for generators of these excluded materials"[208] Therefore, as the proposal currently stands, it is very vulnerable to a claim of arbitrary and capricious Agency decision-making.

B. Policy Concerns

Congress crafted RCRA "to promote the protection of human health and the environment."[209] Looking beyond the potential legal problems associated with the administrative record, the Agency's failure to investigate the human health and environmental consequences of the proposed exclusion warrants serious criticism.

As EPA has recognized, hazardous secondary materials that are stored and transported prior to recycling can present the same types of threats to human health and the environment as materials sent for permanent disposal.[210] In fact, EPA has found that recycling operations have accounted for many damage incidents and contaminated sites, including 20 of the first filing under RCRA's imminent and substantial endangerment authority and 20 of the first National Priority Sites under Superfund.[211] EPA now proposes to exclude from RCRA regulation an estimated 1.5 million tons of hazardous waste.[212]

States and environmental groups have expressed significant concerns about enforcement which suggest that additional hazardous wastes (beyond the 1.5 million tons contemplated by the Agency) may be managed outside Subtitle C regulations due to improper use of the exclusion.[213] Often "the best and most cost-effective way for government to ensure compliance with environmental laws and regulations, and thus protect human health and the environment from harm, is to have an aggressive inspection program to identify violations and return the violator to compliance before the opportunity for significant adverse effects or significant non-compliance occurs."[214] Early identification of violations means that return to compliance is quicker, penalties are lower or not even necessary, and inspection and enforcement resource expenditures are kept to a minimum.[215]

The enforcement strategy implicit in this proposed rule is one that would largely cause violations to be identified after the major deviation and potential environmental harm has occurred.[216] For example, if a shipment of hazardous secondary material is sent to a reclaimer outside of its industry and is mismanaged by storage on the ground at a series of "reclaimers", there is no required paper trail that will give an inspector early warning or documentation of the non-compliance.[217] Neither the generator, transporter, nor receiving company is required to maintain records on the shipment. Rather, an inspector would have to become suspicious of long-term storage of material at a facility and expend significant time and resources re-constructing its movements by reviewing non-standardized business paperwork in order to determine that noncompliance (and associated potential environmental harm) has occurred.[218] While this research is going on, the material remains stored on the ground, a potential hazard to human health and the environment, and several business entities remain in non-compliance.[219]

The Agency states that because the material would be out of compliance from the point of generation, all involved parties would be subject to enforcement action and thus there would be a strong incentive for the parties to ensure compliance by each other.[220] However, the absence of reporting and recordkeeping requirements and the freedom with which the excluded materials would be able to be managed would make the movements and transactions associated with the material so difficult to trace that enforcement would be perceived as unlikely.[221] In addition, the various parties involved in managing the material will have no control over the financial viability of the other parties.[222] It will be difficult for regulatory agencies to establish accountability for abandoned materials if there are inadequate records.[223]

Additionally, the NAICS coding system would be open to abuse by those wishing to claim the exclusion. Companies self-select their NAICS code(s) and it is unclear whether EPA and the states have the authority to second-guess or over-ride their self-designations.[224] It is also unclear how states will be able to evaluate, much less enforce against, a wrongly classified facility in another state.

In addition to protecting human health and the environment, a stated goal of RCRA generally and this proposed revision is encouraging recycling.[225] EPA admits that middlemen such as brokers are often better able to find markets for recyclable secondary materials, and thus can facilitate their beneficial reuse - but does not extend the exclusion to them.[226]

[This leaves EPA] with an illogical dichotomy: if an automobile repair shop sends its secondary materials to a company that is permitted by EPA to properly recycle hazardous solvents, it has "discarded" its waste. However, if the auto shop sends its solvents to another automobile repair shop that decides to enter the solvent recovery business, then the spent solvent is not "discarded." How can one situation be an example of "discarding" and the other not? Clearly, the solvents are discarded in both cases. EPA's proposed rule would encourage waste properly treated and recycled today in permitted facilities to be sent instead to unpermitted, unqualified and uncontrolled sites.[227]

The reality is that most recycling occurs between industries, and of the most successful, responsible recyclers are specialized, third-party commercial entities who have made large investments in equipment and personnel, can meet rigorous specifications for reclaimed materials, and have well-developed markets for their products.[228] This proposal would only hurt these successful recyclers, by creating strong incentives for developing intra-industry recycling capacity, while discouraging the use of these commercial recyclers.[229] It is difficult to understand, then, how this exclusion intends to promote "safe, beneficial recycling."[230]

C. Conclusion

EPA asserts that its proposed revision to the definition of solid waste will promote "safe, beneficial" recycling of hazardous wastes. Despite the known environmental dangers of hazardous waste recycling, the Agency proposes to allow certain hazardous wastes to now be recycled at unregulated facilities, without having performed any analysis of the potential health or environmental consequences. This deficiency will make it very difficult for the Agency to show its interpretation of "discard" was both reasonable and consistent with the statutory purposes of RCRA. In the face of this deficient record, EPA points to ABR and other D.C. Circuit decisions as "guideposts" in crafting the language and scope of the exclusion. However, it is not altogether convincing that those "guideposts" intended to lead us here, on the verge of excluding 1.5 million tons of hazardous waste from regulation and directing it away from regulated, commercial recyclers.

---

[1] Revisions to the Definition of Solid Waste, 68 Fed.Reg. 61558, 61560 (proposed Oct. 28, 2003).

[2] Id. at 61560, 61592.

[3] Id. at 61560.

[4] Id. at 61562 (citing 48 Fed. Reg. 14474 (Apr. 4, 1983)). Superfund National Priorities List sites are the most serious uncontrolled or abandoned hazardous waste sites that have been identified for possible long-term remedial action under Superfund. The list is based primarily on the score a site receives from the Hazard Ranking System. EPA Superfund page, http://www.epa.gov/superfund.

[5] Id. at 61592.

[6] Interview with Dave Fagan, Environmental Protection Specialist, United States Environmental Protection Agency (Nov. 2, 2004).

[7] Id. See, e.g.40 C.F.R. § 261.4(a)(6)(pulping liquor exclusion); 40 C.F.R. § 261.4(a)(9)(spent wood preserving solutions conditional exclusion).

[8] Markus G. Puder, Sounds of Silence: What Happened to the U.S. Environmental Protection Agency's Hazardous Waste Recycling Program Reform?, 10 Cornell J.L & Pub. Pol'y 95, 105 (2001).

[9] Id. at 112-121.

[10] 68 Fed. Reg. at 61560.

[11] 208 F.3d 1047 (D.C. Cir. 2000).

[12] 68 Fed. Reg. at 61558.

[13] 208 F.3d at 1050. See LDR Phase IV Rule, 63 Fed. Reg 28556 (May 26, 1998).

[14] Id. at 1051 (citingAmerican Mining Congress v. EPA, 824 F.2d 1177, 1190 (D.C. Cir. 1987)).

[15] Id. at 1056.

[16] 68 Fed. Reg. at 61563.

[17] LDR Phase IV rule, 67 Fed. Reg. 11251 (Mar. 13, 2002).

[18] 68 Fed. Reg. at 61563.

[19] Fagan Interview, supra note 1.

[20] 68 Fed. Reg. at 61563.

[21] Fagan Interview; 68 Fed. Reg at 61563.

[22] RCRA was enacted in 1976, and amended in 1978, 1980, and 1984. See The Quiet

Communities Act of 1978, Pub.L. No. 95-609, 92 Stat. 3081; The Solid Waste Disposal Act Amendment of 1980, Pub.L. No. 96-482, 94 Stat. 2334; Hazardous and Solid Waste Amendments of 1984, Pub.L. No. 98-616, 98 Stat. 3221.

[23] H.R.Rep. No. 1491, 94th Cong., 2d Sess. 3 (1976), U.S.Code Cong. & Admin.News 1976, pp. 6238, 6240, 6241.

[24] 42 U.S.C. § 6901 (a)(2).

[25] Id. § 6902.

[26] Id. § 6921.

[27] Id. § 6903(5). RCRA does not prescribe a method for determining whether a solid waste is hazardous but delegates this authority to EPA. Id. §6921(a)-(b). The regulatory definition of hazardous waste, barring certain exclusions and exemptions, covers listed and characteristic wastes, as well as certain waste mixtures and residues. 40 C.F.R. §261.3.

[28] American Mining Congress v. EPA, 824 F.2d 1177, 1179 (D.C. Cir. 1987).

[29] 42 U.S.C. § 6903(27) (emphasis added).

[30] See 40 C.F.R §261.2(a)(2).

[31] For this reason, the RCRA regulations are often described as "cradle-to grave." See 40 C.F.R §261.6(b)-(d).

[32] 68 Fed. Reg at 61561.

[33] Id. (citing 40 Fed. Reg. 33090, 33090-95 (May 19, 1980); 50 Fed. Reg. 604, 616-618 (Jan. 4, 1985)) (emphasis in original).

[34] Id.

[35] Id.

[36] A material is reclaimed if it is processed to recover a usable product, or if it is regenerated. 40 C.F.R. §261.2(c)(3).

[37] Id.

[38] 68 Fed. Reg. at 61561.

[39] Id. at 61561-62 (citation omitted).

[40] For all recycling activities, the premise is that legitimate reclamation or reuse is

taking place. Some facilities, however, may claim that they are "recycling" a material

in order to avoid being subject to RCRA regulation, when in fact the activity is not

legitimate recycling. In distinguishing "legitimate" from "sham" recycling, EPA considers whether the secondary material is effective for the claimed use, whether the secondary material is used in excess of the amount necessary, and whether or not the facility has maintained records of the recycling transactions. RCRA, Superfund & EPCRA Call Center Training Module. Introduction to: Definition of Solid Waste and Hazardous Waste Recycling (updated Oct. 2001) available at http://www.epa.gov/epaoswer/hotline/training/defsw.pdf

[41] 68 Fed. Reg. at 61562 (citing 45 Fed. Reg. 33093 (May 19^th, 1980), 50 Fed. Reg. 638-39 (Jan. 4, 1985)).

[42] See American Petroleum Institute v. EPA, 216 F.3d 50, 58-59 (D.C. Cir. 2000).

[43] 68 Fed. Reg. at 61563.

[44] Id. at 61562.

[45] Id. See 40 C.F.R §261.2(c) tbl.1.

[46] Markus G. Puder, Sounds of Silence: What Happened to the U.S. Environmental Protection Agency's Hazardous Waste Recycling Program Reform?, 10 Cornell J.L & Pub. Pol'y 95, 105 (2001).

[47] Id. at 106; Fagan Interview, supra note 1.

[48] Id. at 107.

[49] Id. at 107-08.

[50] Id. at 108.

[51] Id.

[52] 824 F.2d 1177 (D.C. Cir. 1987).

[53] Id. at 1178.

[54] Id. (emphasis added).

[55] Id. at 1185.

[56] 467 U.S. 837 (1984).

[57] 824 F.2d at 1182.

[58] 476 U.S. at 842.

[59] Id.

[60] Id.

[61] Id. at 842-843.

[62] Id.

[63] 824 F.2d at 1185 (emphasis in original).

[64] Id. at 1186.

[65] Id. at 1182.

[66] Id. at 1193.

[67] Comment from Environmental Technology Council, to OSWER Docket, 5 (Feb. 25, 2004)(at http://docket.epa.gov/edkpub/index.jsp, Docket ID No. RCRA-2002-0031).

[68] 824 F.2d at 1181.

[69] Id.

[70] Id.

[71] Id.

[72] 906 F.2d 729, 740 (D.C. Cir. 1990). K061 is a zinc-bearing listed hazardous waste that emanates from the primary production of steel in electric furnaces. 40 C.F.R. § 261.32

[73] Id. at 734 (quoting 53 Fed.Reg. 11742, 11753 (Apr. 8, 1988)).

[74] Id. (citing 53 Fed. Reg. 11753).

[75] Id. at 741.

[76] Id.(emphasis in original).

[77] Id.(emphasis in original).

[78] Id.(citing Ohio v. Department of Interior, 880 F.2d 432, 441 (D.C. Cir. 1989)).

[79] Id.

[80] Id.

[81] Id.

[82] American Mining Congress v. EPA, 907 F.2d 1179 (D.C. Cir. 1990).

[83] Id. at 1184.

[84] Id.

[85] Id. at 1186.

[86] Id.(quoting AMC I at 1185) (emphasis added).

[87] Id. (citing AMC I at 1186).

[88] Id. (emphasis in original).

[89] Id. at 1186.

[90] Id. at 1186-87 (citingChevron v. NRDC, 467 U.S. 837, 843 (1984); Ohio v. Department of the Interior, 880 F.2d 432, 441 (D.C. Cir. 1989)).

[91] Id. at 1187 (citing 40 C.F.R. § 261.11(a)(3)).

[92] Id.

[93] Id. at 1188.

[94] Id.

[95] Id. at 1190.

[96] 216 F.3d 50 (D.C. Cir. 2000).

[97] Id. at 58 (citing CERCLA Hazardous Waste Substance Designation and Reportable Quantities (proposed), 60 Fed.Reg. 57747, 57755-56; CERCLA Hazardous Waste Substance Designation and Reportable Quantities (Final), 63 Fed.Reg. 42, 110, 42,128-30).

[98] Id. at 57.

[99] Id.

[100] Id.

[101] Id. at 58.

[102] Id.

[103] United States v. ILCO, 996 F.2d 1126, 1132 (11^th Cir. 1993) (finding that used lead batteries sent a reclaimer have been "discarded once" by the entity that sent the battery to the reclaimer).

[104] Owen Electric Steel Co. v EPA, 37 F.3d 146, 150 (4^th Cir. 1994).

[105] 208 F.3d 1047 (D.C. Cir. 2000).

[106] 63 FR 28556 (May 26, 1998).

[107] Id. at 28581.

[108] Id.

[109] Id. at 28580.

[110] 208 F.3d at 1050.

[111] Id. at 1051.

[112] Id.

[113] Id. (citing 42 U.S.C. § 6903(27)).

[114] Id. at 1051 (internal citations omitted).

[115] Id. at 1056.

[116] Id. (quoting AMC I, 824 F.2d 1177, 1193 (D.C. Cir. 1987)).

[117] Id. at 1054-56.

[118] Revisions to the Definition of Solid Waste, 68 Fed.Reg. 61558, 61563 (proposed Oct. 28, 2003).

[119] Comment from ETC, supra note 67, at 9.

[120] 906 F.2d 729, 741 (D.C. Cir. 1990).

[121]907 F.2d 1179, 1186 (D.C. Cir. 1990).

[122] 216 F.3d 50, 57 (D.C. Cir. 2000).

[123] Id.

[124] Id. at 58.

[125] 68 Fed. Reg. at 61563.

[126] Id.

[127] Id. at 61560.

[128] Id.

[129] Id.

[130] Id.

[131] Id. at 61564.

[132] Id. (quoting 40 C.F.R. § 261.2(c)(3)).

[133] Id. at 61565.

[134] Id.

[135] Id.

[136] Id.

[137] Id.

[138] Id.

[139] Id.

[140] Id. at 61565-66.

[141] Id.

[142] Id.

[143] Id.

[144] Id. NAICS is a new industry classification system that has replaced the Standard Industrial Classification (SIC) system (most recently updated in 1987) that has traditionally been used by government agencies for collecting statistical data and for other administrative and regulatory purposes. On April 9, 1997, OMB published a Federal Register Notice of final decision (62 Fed. Reg.17288) to adopt the NAICS for the United States. NAICS are the most widely-recognized existing industry classification system in the United States.

[145] Id.

[146] Id. In the past, EPA has used the Standard Industrial Classification (SIC) system (predecessor to the NAICS) to implement parts of RCRA Subtitle C. Id.

[147] Id. at 61568(citing 62 Fed. Reg. 17289).

[148] This aspect of NAICS (and its predecessor SIC) is not new. There are already EPA regulations where certain facility owner/operators need to identify their SIC category (e.g., for determining the applicability of the Toxic Chemical Release Reporting/Community Right-To-Know requirements; see 40 CFR 372.22); or that refer to the SIC categories (e.g., RCRA regulations that rely in part on SIC codes to delineate the scope of certain existing industry-specific hazardous waste listings and exclusions); or that require SIC classification information as part of required reporting for large quantity hazardous waste generators and RCRA permit applicants). EPA notes that is it not practical to review and make determinations for all of the individual facilities potentially affected by the proposal.68 Fed. Reg. at 61568.

[149] Id. at 61569. Under the NAICS classification hierarchy, the first two digits (of the 6-digit code) designate the Sector, the third digit designates the Sub-sector, the fourth digit designates the Industry Group, the fifth digit represents the NAICS Industry (the most detailed level for making data comparisons across the U.S., Mexico, and Canada), and the sixth digit designates individual country-level national industries. Id.at 61568.

[150] Id.

[151] Id. at 61569-70.

[152] Id. at 61570.

[153] Id.

[154] Id.

[155] Id. at 61575.

[156] Id.

[157] Id.

[158] Id.

[159] Id.

[160] 40 C.F.R. § 261.1(c)(8).

[161] Id. at 61575-76. EPA notes that this provision already applies to secondary materials not otherwise considered to be wastes when recycled, such as materials used as ingredients or commercial product substitutes, materials that are recycled in a closed-loop production process, or unlisted sludges and byproducts being reclaimed. Id.

[162] Id.

[163] Id.

[164]Id. at 61575. For most types of recycling that are excluded from regulation under RCRA, the existing speculative accumulation provisions serve to define the point at which potentially recyclable secondary materials nevertheless become solid and hazardous wastes. Id.

[165] Id.

[166] Id.

[167] Id. at 61577. The intent of the proposed notification requirement is to provide basic information to regulatory agencies as to who would be managing hazardous secondary materials under the terms of today's exclusion, and the types of materials being recycled. This notice requirement would only apply to generators of secondary materials that have previously been regulated. EPA notes that, with few exceptions, the current regulations do not require generators of excluded materials to notify EPA or authorized state agencies. Requiring these generators to submit one-time notices once they become subject to the new 40 CFR 261.2(g) exclusion would in effect be a more stringent requirement. Id. at 61577-78.

[168] Id. at 61581.

[169] Id.

[170] Id.

[171] Id.

[172] Id.

[173] Id. However, there are concerns that arranger liability under Superfund will be vigorously contested and litigated under the proposed rule. Comment from ETC, supra note 67, at 42.

[174] Id.

[175] Id. at61558.

[176] Id. at 61592.

[177] Id.

[178] Id.

[179] Id.

[180] Id.

[181] Id.

[182] Comment from ETC, supra note 67, at 5.

[183] Id. at 10. Comment from Sierra Club, to OSWER Docket (Feb. 25, 2004)(at http://docket.epa.gov/edkpub/index.jsp, Docket ID No. RCRA-2002-0031).

[184] 67 Feg. Reg. 11251 (Mar. 13, 2002).

[185] API II, 216 F.3d 50, 57 (D.C. Cir. 2000).

[186] AMC I, 824 F.2d 1177 (D.C. Cir. 1987).

[187] Comment from ETC, supra note 67, at 5.

[188] 824 F.2d at 1181.

[189] Comment from ETC, supra note 67, at 5 (emphasis added).

[190] Id. (emphasis added).

[191] 208 F.3d at 1051 (emphasis added).

[192] Comment from ETC, supra note 67, at 5 (emphasis added).

[193] Id. at 10.

[194] 906 F.2d 729, 741 (D.C. Cir. 1990).

[195] 208 F.3d at 1056.

[196] See 208 F.3d at 1051.

[197] Comment from ETC, supra note 67, at 10.

[198] 824 F.2d at 1183 n.6; 208 F.3d at 1049.

[199] 208 F.3d at 1049.

[200] 824 F.2d at 1183.

[201] 467 U.S. 837 (1984).

[202] Id. at 842-43.

[203] Id. at 843-44.

[204] Id.

[205] Natural Resources Defense Council v. EPA, 902 F.2d 962, 968, (D.C.Cir.1990) (quoting Natural Resources Defense Council v. Thomas, 805 F.2d 410, 432 (D.C.Cir.1986)).

[206] Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43, (1983).

[207] 58 Fed. Reg. 51735 (Oct. 4, 1993).

[208] Comment from ETC, supra note 67, at 5.

[209] 42 U.S.C. § 6902.

[210] 68 Fed. Reg. 61561-62.

[211] 68 Fed. Reg. 61562 (citing 48 Fed. Reg. 14474).

[212] 68 Fed. Reg. 61558.

[213] See Comment from ETC, supra note 67, at 5; Comment from Sierra Club, supra note 183; Comment from North Carolina, to OSWER Docket (Feb. 25, 2004)(at http://docket.epa.gov/edkpub/index.jsp, Docket ID No. RCRA-2002-0031); Comment from Kentucky, to OSWER Docket 4 (Feb. 25, 2004)(at http://docket.epa.gov/edkpub/index.jsp, Docket ID No. RCRA-2002-0031).

[214] Comment from North Carolina, supra note 213, at 2.

[215] Id.

[216] Id.

[217] Id.

[218] Id.

[219] Id.

[220] 68 Fed. Reg. at 61581.

[221] Comment from ETC, supra note 67, at 30-32.

[222] Id.

[223] Id.

[224] 68 Fed. Reg. at 61568.

[225] 42 U.S.C. § 6902; 68 Fed. Reg. 61560.

[226] 68 Fed. Reg. at 61575.

[227] Comment from ETC, supra note 67, at 25.

[228] Fagan Interview supra note 1.

[229] Id.

[230] 68 Fed. Reg. at 61560.

Environmental Law Section