Beazer East, Inc. v. United States Environmental Protection Agency, Region IIIBeazer East, Inc. v. United States Environmental Protection Agency, Region III
OPINION OF THE COURT
Beazer East, Inc. appeals the district court’s order granting summary judgment in favor of the Environmental Protection Agency. The EPA cited Beazer for four violations of Subtitle C of the Resource Conservation and Recovery Act,
This issue has two components: first, whether the EPA’s interpretation of the “provide structural support” language in
We conclude that the basins are surface impoundments and that the EPA’s interpretation of the “provide structural support” language of
I.
Beazer, a Delaware corporation, operates a coal tar plant in Follansbee, West Virginia, where it produces creosote, coal tar products and industrial chemicals. Waste-water from the plant undergoes microbial treatment and is released into the Ohio river. This treatment system consists of two aeration basins. 1 Each basin has a capacity of 500,000 gallons. They are built into the ground, are 15 feet deep, approximately 80 feet across, and are constructed of six-inch thick reinforced concrete. The concrete overlies a two-inch thick layer of bank sand, which in turn overlies a three-inch thick layer of compacted crushed slag.
In 1987, EPA Region III filed an Administrative Complaint, Compliance Order, and Notice of Opportunity for Hearing against Beazer, charging it with four violations of RCRA groundwater monitoring requirements. First, the EPA charged that Beazer violated
Beazer requested a hearing before an administrative law judge to contest the citations. At the outset, Beazer and the EPA stipulated that the only issue to be decided by the AU was whether the two basins were “tanks” or “surface impound-ments” within the definition of
Tank means a stationary device, designed to contain an accumulation of hazardous waste which is constructed primarily of non-earthen materials (e.g., wood, concrete, steel, plastic) which provide structural support.
Surface impoundment or impoundment means a facility or part of a facility which is a natural topographic depression, man-made excavation, or diked area formed primarily of earthen materials (although it may be lined with man-made materials), which is designed to hold an accumulation of liquid wastes or wastes containing free liquids, and which is not an injection well. Examples of surface impoundments are holding, storage, settling, and aeration pits, ponds and lagoons.
The EPA and Beazer stipulated that if the basins are found to be surface impound-ments, Beazer would pay a civil penalty of $30,000 and either comply with RCRA or close the basins.
After the EPA filed its Administrative Complaint, the parties moved for an accelerated decision by the AU. The AU denied this motion.. In his Opinion and Order, the AU opined that the foundation test applied by the EPA to the definition of tanks was neither expressed nor implied in the
After hearing extensive testimony from both parties’ experts, the AU reversed his position. In his Initial Decision, the AU concluded that the EPA’s reliance on the Weddle memorandum for its foundation test and the EPA’s watertightness test were both reasonable interpretations. He held that Beazer’s basins did not meet the definition of tanks and were instead surface impoundments subject to RCRA groundwater monitoring requirements. The AU assessed a civil penalty of $30,000 against Beazer and entered an order to comply with RCRA monitoring requirements under
On appeal, the EPA Administrator affirmed the AU. The Administrator did not discuss the agency’s use of the Weddle
III.
We review the district court’s summary judgment by applying the same standard used by the district court.
Childers v. Joseph,
As a preliminary matter, Beazer disputes the standard by which we review this agency action. Citing our decision in
Bethlehem Steel v. OSHA,
We disagree. Beazer’s standard of review argument confuses the distinction between “legislative” rules and “interpretive” rules promulgated by an administrative agency. To be sure, “legislative” rules that impose new duties upon the regulated party have the force and effect of law and must be promulgated in accordance with the proper procedures under the APA. See
United Technologies Corp. v. EPA,
Here, the EPA is interpreting language already found in
When we review an administrative agency’s interpretation of its own regulations, we defer to the agency’s construction of the language of its own regulation, “unless it is plainly erroneous or inconsistent with the regulation.”
Ford Motor Credit Co. v. Milhollin,
IV.
The Resource Conservation and Recovery Act of 1976, as amended, was enacted to protect groundwater from contamination by solid and hazardous waste. Subtitle C of RCRA,
The EPA has established minimum national standards for handling hazardous waste, by facilities operating on an “interim status.” See
(1) Is part of a wastewater treatment facility that is subject to a regulation under either section 402 or 307(b) of the Clean Water Act; and
(2) Receives and treats or stores an in-fluent wastewater that is a hazardous waste as defined in § 261.3 of this chapter or that generates and accumulates a wastewater treatment sludge that is a hazardous waste as defined in § 261.3 or this chapter, or treats or stores a waste-water treatment sludge which is a hazardous waste as defined in § 261.3 of this chapter; and
(3) Meets the definition of tank or tank system in§ 260.10 of this chapter.
V.
It is undisputed that Beazer did not have an adequate groundwater monitoring program to detect leaks from its aeration basins. Beazer argues that it is not subject
A.
Unlike a surface impoundment, by definition a tank must be constructed primarily of non-earthen materials (for example, wood, concrete, steel, or plastic) and those materials must provide structural support. 40 CFR 260.10. But how much structural support is necessary? The EPA has interpreted this regulation to require that a tank be able to support itself when removed from the ground and filled to capacity with the material it was intended to contain, and that non-earthen materials provide the primary structural support. There is no parallel structural support requirement for surface impoundments. Indeed, surface impoundments may consist of topographic depressions dug in the ground and lined with a man-made material.
Beazer concedes that if its basins were removed from the ground and filled to capacity with its wastewater, they would not be self-supporting. Nevertheless, Beazer argues that its concrete and welded wire fabric construction provides adequate support to satisfy the “provide structural support” language of
The EPA counters that its interpretation of the “structural support” language of
In its Final Decision, the EPA Administrator reasoned as follow:
An interpretation of the “structural support” language [of§ 260.10 ], therefore must exclude basins that rely on the surrounding soil for structural support. The “self-supporting” interpretation urged by the Region is the only reading of the “tank” definition that addresses this concern. The “self-supporting” interpretation ensures that a device will be able to maintain its integrity even if the support provided by the surrounding soil is dissipated through settlement or some other change. Accordingly, the foundation test, which determines whether a basin is self-supporting, is not just a theoretical exercise, requiring tanks to perform under conditions that will never exist, as [Beazer] argues. Instead, the foundation test requires tanks to perform under conditions that very well might exist if the supporting soil settles or otherwise shifts.
Final Decision of the EPA Administrator
at 12. While we disagree that the foundation test is the “only reading” of the regulation, we find this view to be a reasonable interpretation of the regulation.
3
See
Chemical Mfrs. Ass’n v. Natural Resources Defense Council,
Moreover, a tank designed to be self-supporting will have stronger walls and tighter joints than a surface impoundment and will not have to rely on the surrounding soil for structural support. Hence, in the event the surrounding soil shifts, a tank will prevent hazardous waste from contaminating the groundwater. See 40 CFR 265.193(b)(1) (secondary containment systems must be “[p]laced on a foundation or base capable of providing support to the secondary containment system and resistance to pressure gradients above and below the system and capable of preventing failure due to settlement, compression, or uplift.”)
Beazer argues that the regulation does not specify that anything more than “some” structural support is needed to come within the RCRA definition of tank. We note, however, that in the complex area of environmental regulation, the EPA must create bright lines to separate prohibited and permissible activity. We defer to this line-drawing provided the interpretation is both reasonable and consonant with Congress’ intent. For example, in
Vineland Chemical Co. v. EPA,
Beazer also contends that, even assuming the reasonableness of the EPA’s interpretation, regulated parties were not provided adequate notice that tanks must be self-supporting when removed from the ground and filled to capacity. But it is a basic tenet of administrative law that agencies have some discretion to chose between adjudication and rulemaking when interpreting statutes and regulations committed to their authority,
Bowen v. Georgetown University Hospital,
Beazer contends the EPA never gave it adequate notice because the EPA never gave meaning to the clause “provide structural support” in
In conclusion, we will not question the EPA’s choice to give meaning to the “structural support” language of
Last, the AU found that Beazer presented sufficient evidence to establish that its aeration basins are of rigid construction, but agreed with the EPA that if removed from the ground the basins would collapse. The AU also found that Beazer's basins rely in large part upon the surrounding soil (earthen, rather than non-earthen material) for structural support, and therefore were properly characterized as surface impound-ments rather than tanks. These findings were supported by substantial evidence and cannot be disturbed. Consequently, the EPA’s interpretation of the “structural support” language in
B.
Beazer next argues that the EPA erroneously interprets the term “to contain” in
VI.
We conclude that the EPA’s interpretation of
Notes
. The term "basin" is a generic term which may be applied to either a “tank” or a "surface im-poundment."
. The "Weddle memorandum” was an internal EPA memo from the acting director of the agency’s Washington, D.C., Office of Solid Waste to the Director of EPA Region IV. The memorandum distinguished a tank from a surface im-poundment by "structural support.” That is to say, if it were free standing, and filled to its design capacity with the material it was intended to hold, would the walls or shell of the unit alone provide sufficient support to maintain the structural integrity. If so, it can be considered a tank. If not, it is a surface impoundment.
. We accept that the official agency interpretation of
. However, courts will not allow retroactive application of an agency adjudication where doing so would result in "manifest injustice."
See District Lodge 64, Int'l Ass’n of Machinists & Aerospace Workers,
. The EPA has previously considered its interpretation of the "provide structural support” language found in
. This is not to say that an agency's interpretation of one of its regulations, developed in an adjudication, is always entitled to deference. For example, if the agency’s interpretation is "wholly unsupported by regulations, rulings, or administrative practice,"
Bowen,
. We note that there is little guidance in the regulations or in the Federal Register that points to a clear distinction between "to hold” and "to contain” as used in RCRA. While it may be true that the EPA’s interpretation of these terms accords with the overall regulatory goals of RCRA, if such a distinction effectively imposes additional substantive requirements on the regulated community, it should be placed directly in the regulations. The regulations would then be subject to notice and comment, with appropriate participation by the regulated community.
We caution that we will not defer to an interpretation that implies language that simply cannot be found in the regulation.
Director, OWCP v. Mangifest,