In April, a major decision came out of the United States Court of Appeals for the District of Columbia in the Waterkeeper Alliance v. Environmental Protection Agency case.  [Read the opinion here.]  Frankly, I’ve had to brush up on my federal environmental law in order to write this blog post, so forgive my delay in getting this up.

Background

Under the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) and the Emergency Planning and Community Right-to-Know Act (“EPCRA”), both federal environmental laws passed in the 1980’s, parties must notify the National Response Center (for CERCLA) or state and local government agencies (for EPCRA) when amounts of certain hazardous materials over a set quantity are released into the environment.  After this notification is made, the NRC notifies all necessary governmental authorities.  The statutes give the EPA power to further investigate, monitor, and take remedial action if necessary.

An issue arose related to the application of these statutes to animal waste.  At least two substances–ammonia and hydrogen sulfide–are emitted by animal waste during decomposition.  Both ammonia and hydrogen sulfide fall under the CERCLA definition of “hazardous substances” and EPCRA’s definition of “extremely hazardous substances” to which the statutory reporting requirements apply.  Under both statutes, the reportable quantity for ammonia and hydrogen sulfide is set at 100 pounds/day.

During rulemaking, the EPA proposed exempting farms from CERCLA and EPCRA reporting air releases from animal waste.  The EPA reasoned that requiring reports for animal waste air releases was “unnecessary” because a federal response would usually be “impractical and unlikely.”  They noted that, as of 2007, they had never taken a response action based on animal waste.  During public comment, the EPA expressly requested comments on whether there could be a situation where a response would be triggered due to air release from animal waste on a farm.

In 2008, the EPA finalized the rule.  With regard to CERCLA, the rule exempts all farms from reporting air releases from animal waste.  Under EPCRA, while most farms are exempt from reporting, the exemption does not include confined animal feeding operations (“CAFOs”).  A CAFO is defined as a farm that “stables or confines” more than a certain number of animals.  For example, a CAFO contains more than 1,000 head of cattle, 10,000 head of sheep, or 55,000 turkeys.

Lawsuit

Soon after the rule was published, the lawsuits started rolling in.  Environmental groups, led by Waterkeeper Alliance, argued that CERCLA and EPCRA do not allow the EPA to exempt anyone from reporting requirements if there are releases over the statutory reportable quantity.  Further, the environmental groups claim that the rule is arbitrary in treating waste on farms differently than similar waste in other places, such as at a zoo or a slaughterhouse, which would not be exempted from reporting.  On the other side, the National Pork Producers Council also filed suit, albeit for a very different reason.  The Council claimed that the CAFO exception is not allowed because it was based upon the public’s desire for information, rather than based upon the purpose for which the statute was enacted–facilitating emergency response.

Appellate Court Opinion

The appellate court addressed a number of issues.

1. Jurisdiction to hear the case.  Generally, a case involving a challenge to an agency action is filed in the district (trial level) court.  However, if Congress grants exclusive jurisdiction to a certain court other than the usual district court, the designated court has jurisdiction.  Here, CERCLA expressly grants exclusive jurisdiction to the Circuit Court of Appeals.  EPCRA, however, does not.  Although usually EPCRA cases would be filed in district court, the appellate court in this case held that where a single agency action relies on various different statutes, “it would be a wasteful exaltation of form over substance to require piecemeal challenges in various courts.”  Because CERCLA allows for jurisdiction, the court can hear the case.
2. Standing of Waterkeeper to sue.  The EPA argues that Waterkeeper lacks standing to sue based on CERCLA.  The government agrees that EPCRA has a public disclosure requirement, CERCLA does not, it merely requires reporting to the government.  Thus, argues EPA, Waterkeeper may have suffered injury were a party exempt from reporting under EPCRA because they would not have gotten disclosure, but it suffered no injury under CERCLA because it would not have gotten the information even had it been reported.  Essentially, the court held that because of the interplay between CERCLA and EPCRA, whereby information exempted under CERCLA may impact the information disclosed to the public under EPCRA, standing existed for Waterkeeper.
3. Ability of EPA to create additional exemptions.  The EPA argues that it has the authority based on the CERCLA and EPCRA statutes to enact additional new exceptions.  It pointed to numerous statutory provisions where Congress enacted exceptions from the reporting requirements, such as engine exhaust, normal application of fertilizer, etc., and argued these should allow the court to presume that Congress intended for the agency to be able to create other similar exceptions.  The court disagreed.  In particular, the court pointed to the broad language in the reporting mandate, requiring reporting of “any release” of a hazardous substance under CERCLA.  There was no indication that the court intended to allow the EPA to allow additional exceptions where reporting might be uneconomical or ineffective.  The court held that general provisions allowing the EPA to “promulgate any rules and regulations necessary to carry out the provisions” and to set reportable quantities and designate additional hazardous substances was not relevant to their ability to pass the rule at issue.
4. The “de minimus” doctrine.  The “de minimus” exception allows an agency to create an exception where the application of a statute’s literal terms would create truly pointless results.  Here, the EPA found a lack of benefit from farm reporting, as it said that, in most cases, a federal response would be impractical and unlikely.  The court held that while this might be true, “in most cases,” that meant that a federal response might be needed in other cases.  Further, the court relied upon comments made during the rulemaking period giving hypothetical examples of situations where action might be necessary, such as when manure pits are agitated for pumping.  They also relied on Congressional testimony from an Iowa regulator who said that the exception prevented local emergency responders from having needed information about dangerous releases.  Based on this, the court found it not at all “impractical or unlikely” that the EPA could respond to a farm release.  The mere fact that the benefits of this might be outweighed by substantial costs to farmers, were not enough to support the application of the de minimus exception.

Thus, the court granted the Waterkeepers petition, thereby invalidating the rule granting the farm exception.  It, therefore, dismissed the National Pork Producer’s motion as moot, since the rule is no longer in place.

Of course, the EPA could file a petition for cert with the United States Supreme Court.  For now, however, the exemption is no longer in place.

Take Away Points

1. Federal environmental regulation is a complicated area of law.
2. Now that the rule containing the farm exemption is no longer in place, under federal law, farms that may emit hazardous substances from animal waste above the threshold amount are legally required to report such emissions.   One major problem, which was noted by the court, is that there has been no determination of how these emissions should be measured.  It is unclear how farmers are expected to know whether their emissions are above reportable quantity, or how they are to measure them for reporting.  It may be that some operations can simply file an annual notice of continuous release if the releases are “continuous and stable in amount and rate.”  Hopefully, the EPA will offer some additional guidance documents in light of this ruling.  Operations for which this may be an issue should consult with their attorney to determine what steps to take.
3. Comments made during agency rulemaking matter.  In this case, the court relied on comments made by citizens during the notice and comment period of rulemaking.  This is a reminder that comments submitted during the pendency of the comment period can have profound impacts.