. 33 ELR 10456 ELR 6-2003 NEWS& ANALYSIS A Look at EPA Overfiling: Can Harmon and Power Engineering Exist in Harmony? Federal law divides the responsibility of enforcing federal environmental regulations between federal agencies, typically the U.S. Environmental Protection Agency (EPA), and state agencies. 1 Generally, state programs receive formal approval or authorization from EPA to administer the federal environmental program. 2 EPA usually combines the delegation of authority to the states with retained enforcement authority for themselves. 3 It is this federally retained enforcement authority that causes conflict between the states and EPA, presenting many legal questions when EPA chooses to initiate its own enforcement action. 4 This practice of EPA taking enforcement action in a state that is authorized to administer a federal program is known as overfiling. 5 Overfiling by EPA is intended to promote consistent enforcement of federal regulations and protect against inadequate state enforcement actions. 6 This Article compares two conflicting cases of EPA overfiling, United States v. Power Engineering Co. 7 and Harmon Industries, Inc. v. Browner 8 to determine whether (1) the statutory language of the Resource Conservation and Recovery Act (RCRA) and (2) the doctrine of res judicata bar overfiling by EPA. The Article will first give general background on RCRA. 9 Second, the Article discusses overfiling in the context of RCRA. 10 It should be noted that this Article is limited to overfiling that occurs in the enforcement of RCRA. 11 Third, The author is a J.D. candidate, William Mitchell College of Law, 2004. Ms. Clysdale received a B.A., Biology, College of St. Benedict, 1995. She was a Policy Analyst at the Minnesota Pollution Control Agency, 1996-2001. The author would like to thank Tammera Ericson and Michael Welch for their helpful comments, and her parents, sister, Gary Bruns, and extended family for their continued encouragement and support. 1. See Hubert H. Humphrey & LeRoy C. Paddock, The Federal and State Roles in Environmental Enforcement: A Proposal for a More Effective and More Efficient Relationship, 14Harv. Envtl. L. Rev. 7, 13 (1990) (giving general background on the history of federal environmental regulations). 2. See id. 3. See id. 4. See id. 5. See infra section entitled Overfiling. 6. See infra sections entitled Overfiling; Statutory Analysis. 7. 303 F.3d 1232, 33 ELR 20027 (10th Cir. 2002) [hereinafter Power II]. 8. 191 F.3d 894, 29 ELR 21412 (8th Cir. 1999) [hereinafter Harmon II]. 9. See infra section entitled RCRA. 10. See infra section entitled Overfiling. 11. Overfiling also occurs in the enforcement of the Clean Water Act (CWA) and the Clean Air Act (CAA). See Jerry Organ, Environmental Federalism Part I: The History of Overfiling Under RCRA, the by Elizabeth A. Clysdale the Article compares the Harmon and Power Engineering statutory analysis of RCRA. 12 The Article then compares the Harmon and Power Engineering analysis of res judicata. 13 Lastly, the Article concludes that the language of RCRA and the doctrine of res judicata prevent overfiling only if the state has taken action and federal issues enforced are the same or substantially similar to EPA s interests. 14 RCRA In 1976, the U.S. Congress enacted RCRA as a comprehensive set of regulations for the management of hazardous waste. 15 RCRA defines hazardous waste and imposes requirements for storage, transportation, treatment, and disposal of hazardous waste. 16 The primary goals of RCRA are: (1) to protect human health and the environment from the potential hazards of waste disposal; (2) to conserve energy and natural resources by recycling and recovery; (3) to reduce the amount of waste generated; and (4) to ensure that wastes are managed in an environmentally sound manner. 17 Hazardous waste can be byproducts of manufacturing or commercially available products, such as cleaning products or pesticides. 18 A waste is considered hazardous if it exhibits one or more of the following characteristics: (1) if the waste is easily ignitable or is spontaneously combustible; (2) if the waste is an acid or base that is capable of corroding metal; (3) if the waste is reactive and when mixed with water or another substance can cause explosions, toxic fumes, gases, or CWA, and the CAA Prior to Harmon, Smithfield, and CLEAN, 30 ELR 10615, 10619 (Aug. 2000) [hereinafter Federalism Part I]. 12. See infra section entitled Statutory Analysis. 13. See infra section entitled Res Judicata. 14. See infra section entitled Conclusion. 15. See John Coop, Harmon Industries, Inc. v. Browner, 28 Ecology L.Q. 253, 255 (2001). Prior to 1970, the states and local governments had been primarily responsible for environmental enforcement. See Humphrey & Paddock, supra note 1, at 7. By the mid- 1980s, the federal government controlled environmental enforcement, in what appeared to be a reaction to inadequate response of state governments to environmental problems. Id. Historically states have used the doctrines of trespass, negligence, strict liability for abnormally dangerous activities, water law, public trust, and public nuisance to control a wide variety of environmental problems. Id. at 10-11. In the 1940s, states began to adopt statutes to address environmental concerns. Id. at 11. It was not until the 1970s, that the federal government took the lead and drafted three major environmental acts, RCRA, the CAA, and the CWA. Id. 16. See Ellen R. Zahren, Overfiling Under Federalism: Federal Nipping at State Heels to Protect the Environment, 49Emory L.J. 373, 380 (2000). 17. See U.S. EPA & RCRA: Reducing Risk From Waste, at 2 (EPA 530-K-97-004) (1997), available at http://www.epa.gov/epaoswer/ general/risk/risk.htm. 18. See id. at 5.
6-2003 NEWS & ANALYSIS 33 ELR 10457 vapors; and (4) if the waste is toxic, meaning it is harmful or fatal when ingested or absorbed. 19 EPA encourages states to assume primary responsibility for implementing the RCRA program. 20 To manage and enforce federal law under RCRA, a state must apply for and receive formal authorization from EPA. 21 EPA authorization allows states to issue and enforce permits for the storage, treatment or disposal of hazardous wastes, in lieu of the federal government. 22 To receive authorization from EPA (1) the proposed state program must be equivalent to the federal program, 23 (2) be consistent with the federal and similar state programs, 24 and (3) provide adequate enforcement of RCRA. 25 The effect of receiving authorization from EPA is that any action taken by the state has the same force and effect as action taken by EPA. 26 If EPA deems that a state has not taken appropriate enforcement action, it has two options; it may (1) withdraw approval of the state program, 27 or (2) EPA may overfile and pursue its own enforcement action. 28 Congress recognizes that for the success of its environmental programs, including RCRA, the Clean Water Act (CWA), and the Clean Air Act (CAA), state involvement is essential. 29 However, delegation of the federal programs to the states has not been without conflict. Overfiling is often viewed as an infringement on states rights to implement environmental objectives in line with an individual state s priorities. 30 Overfiling Overfiling occurs when EPA initiates its own enforcement action, even though the state is authorized to implement the 19. See id. at 6. 20. Id. at 3. 21. See 42 U.S.C. 6926(b), ELR Stat. RCRA 3006(b). See also Harmon II, 191 F.3d 894, 897 29 ELR 21412, 21412 (8th Cir. 1999) (describing state authorization process under RCRA). 22. 42 U.S.C. 6926(b), ELR Stat. RCRA 3006(b); see also Harmon II, 191 F.3d at 897, 29 ELR at 21412. 23. Equivalent to the federal program has sometimes been interpreted to mean virtually identical. 1 RCRA and Superfund: A Practical Guide With Forms 4.15 (2d ed. 2002). States are allowed to implement a program that is more stringent, as long as it is consistent with the federal program. See id.; see also Zahren, supra note 16, at 380. 24. States are authorized to implement and enforce the program in a manner that is consistent with EPA s interpretation of the law, science, and sometimes the facts of a particular case. Angela Dempsey, Overfiling: Can EPA Pursue a Case Where the State Had Not Taken Enforcement Action? What Courts Have Done Since Harmon, 76 Fla. B.J. 36 (2002). 25. See 42 U.S.C. 6926(b), ELR Stat. RCRA 3006(b); see also Harmon II, 191 F.3d at 898, 29 ELR at 21413; Wyckoff v. EPA, 796 F.2d 1197, 1199, 16 ELR 20866, 20867 (9th Cir. 1986). 26. See 42 U.S.C. 6926(d), ELR Stat. RCRA 3006(d). 27. The threshold for withdrawal is high and usually requires giving notice to the state and then public notice before EPA may withdraw the Program. Zahren, supra note 16, at 382. EPA withdrawal of a state s authorization is rare, in fact many states have come to view withdrawal as an empty threat since EPA has not exercised this option. Id.; see also Federalism Part I, supra note 11, at 10616. Instead, EPA usually resorts to sanctions, negotiations of new deadlines, or overfilings rather than revocation of a state program. Zahren, supra note 16, at 382. 28. See Federalism Part I, supra note 11, at 10616. 29. See Zahren, supra note 16, at 375. 30. See id. at 387. RCRA program and has commenced its own enforcement action against the alleged polluter. 31 The effect of EPA overfiling is that an alleged polluter may end up facing two lawsuits and paying two penalties for the same violation. 32 While RCRA does not specifically authorize EPA to overfile, the language of the CWA and CAA specifically preserve EPA s right to overfile. 33 Overfiling under all three acts is done at EPA s discretion. 34 Overfiling rarely occurs and EPA only takes the lead when there is an imminent hazard, 35 a state fails to take timely and appropriate action, or because a state has requested that EPA take the lead in the enforcement action. 36 States would have little incentive to administer their own RCRA program if EPA were to overfile for every minor violation of RCRA. 37 However, under the CAA and the CWA, EPA does retain the authority to overfile if the state does not take timely or appropriate enforcement action. 38 Determining whether the state has taken appropriate enforcement action is left to EPA. 39 Until the U.S. Court of Appeals for the Eighth Circuit decision in Harmon Industries, 40 and subsequently the U.S. Court of Appeals for the Tenth Circuit decision in Power Engineering, 41 no other federal court had directly addressed whether EPA may overfile under RCRA. 42 31. Overfiling can be broadly defined as when EPA either steps in to fix, change, undo, or add to what a state has already done or takes action after a state has failed to act. Id. at 373. 32. See Bryan S. Miller, Harmonizing RCRA s Enforcement Provisions: RCRA Overfiling in Light of Harmon Industries v. Browner, 5 Envtl. Law. 585 (1999). 33. See Dempsey, supra note 24, at 36. Until recently, none of the overfiling cases involving the CAA or the CWA questioned EPA s statutory authority to take its own enforcement action in a state that administered a program under these Acts. See Federalism Part I, supra note 11, at 10619. 34. See Zahren, supra note 16, at 383. EPA policy provides that EPA may take enforcement action in authorized states only when: (1)[A] state requests overfiling; (2) a state is not authorized to take action; (3) a state fails to take timely and appropriate action ; (4) the case involves precedent-setting issues or issues in which federal involvement is needed to ensure national consistency; (5) the case involves national violators in multistate issues; (6) the case involves interstate pollution; or (7) the case is brought to prevent non-complying companies from obtaining an economic benefit from their violations. Id. 35. See Humphrey & Paddock, supra note 1, at 21. 36. See Dempsey, supra note 24, at 36; see also Zahren, supra note 16, at 375. 37. See Zahren, supra note 16, at 375. 38. Id. 39. See Jerry Organ, Environmental Federalism Part II: The Impact of Harmon, Smithfield, and CLEAN on Overfiling Under RCRA, the CWA, and the CAA, 30 ELR 10732, 10745 (Sept. 2000) (stating that a strong argument can be made that any state enforcement action that results in compliance or acts as a deterrence to noncompliance is an adequate enforcement action) [hereinafter Federalism Part II]. 40. 191 F.3d at 894, 29 ELR at 21412. 41. 303 F.3d at 1238, 33 ELR at 20027. 42. Id.; see also Miller, supra note 32, at 586.; Federalism Part II, supra note 39, at 10732; Ridgway M. Hall Jr., Harmon Limits RCRA Enforcers to One Bite, 29 ELR 10781 (Dec. 1999) (stating that the Harmon case is enormously significant because before the Eighth Circuit s decision, EPA had asserted the right to overfile whenever it thought that a state s enforcement action sought inadequate relief). For a review of cases that have explored the issue of EPA overfiling in dicta or under the CAA and the CWA, see Federalism Part I, supra note 11, at 10617. It should be noted that Wyckoff Co. v. EPA, 796 F.2d 1197, 16 ELR 20866 (9th Cir. 1986) addresses EPA s au-
33 ELR 10458 ENVIRONMENTAL LAW REPORTER 6-2003 Statutory Analysis Harmon Industries Harmon Industries operates a plant in Grain Valley, Missouri, which uses hazardous materials in the production of circuit boards for railroad control and safety equipment. 43 In November 1987, Harmon Industries management discovered that from 1973 through 1987, employees had routinely discarded volatile solvent residue, which is a hazardous waste, in the ground located behind the plant. 44 Harmon Industries stopped this disposal practice and notified the Missouri Department of Natural Resources (MDNR). 45 The MDNR investigated and determined that the contamination was not a threat to either human health or the environment. 46 The MDNR and Harmon Industries agreed to a cleanup plan, which was implemented by Harmon Industries. 47 A Missouri state court approved the consent decree between Harmon Industries and the MDNR, acknowledging full accord and satisfaction and releasing Harmon Industries from any civil penalties. 48 While the state action was pending, EPA initiated its own enforcement action against Harmon Industries, seeking $2,343,706 in penalties. 49 An administrative law judge found that EPA s action against Harmon Industries was appropriate, but lowered the fine to $586,716. 50 Harmon Industries appealed. 51 The federal district court found that thority to overfile under RCRA, but involves a state that only had interim authorization to manage a RCRA program rather than final authorization. In addition, the defendant used different arguments than Harmon or Power Engineering. 43. See Harmon II, 191 F.3d at 896, 29 ELR at 21412. 44. See id. at 896-97, 29 ELR at 21412. 45. See id. at 897, 29 ELR at 21412. 46. See id. 47. See id. 48. The release from civil penalties is based on Harmon Industries voluntary report of the contamination to the MDNR and its full cooperation with MDNR during the investigation. See id. 49. See id. RCRA requires that civil penalties be imposed for violations of the Act, in addition, EPA is obligated to impose penalties to recover for the economic benefit gained by companies not following the Act and to reflect the gravity of the offense. See Zahren, supra note 16, at 408. Penalties for economic gain create a level playing field by removing all profit from environmental violations, since compliance with RCRA usually calls for heavy investment in technology and equipment. See id. at 409. To see generally how a penalty is calculated see infra note 50. 50. A three-person Environmental Appeals Board panel subsequently upheld this fine. See Harmon II, 191 F.3d at 897, 29 ELR at 21412. The administrative law judge (ALJ) under EPA s RCRA Civil Penalty and Civil Enforcement Policy reduced the fine. Id. Harmon Indus., Inc. v. Browner, 19 F. Supp. 2d 988, 991, 29 ELR 20035, 20035 (W.D. Mo. 1998) [Harmon I]. The ALJ imposed gravity-based penalties for each of the four counts in EPA s complaint: Count 1 operation of a hazardous waste landfill without a permit or interim status $141,050; Count 2 failure to have a groundwater monitoring program for a hazardous waste landfill $135,005; Count 3 failure to establish and maintain financial assurance for closure and post-closure of its landfill $251,875; and Count 4 failure to timely notify EPA and/or register as a hazardous waste generator $52,714. In addition, the ALJ imposed an economic benefit penalty of $6,072, designed to recapture any economic gain Harmon experienced by failing to comply with RCRA regulations. Federalism Part II, supra note 39, at 10733 n.15. 51. See Harmon II, 191 F.3d at 897, 29 ELR at 21412. EPA s overfiling action violated RCRA and the doctrine of res judicata. 52 The Eighth Circuit affirmed. 53 The Eighth Circuit, using Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 54 stated that when reviewing a federal agency s interpretation of a federal statute, a federal court must refer to the agency s interpretation only if it is consistent with the plain language of the statute or, if the statute is ambiguous, the agency s reasonable interpretation of the statute. 55 Both parties, Harmon Industries and EPA, contend that the plain language of RCRA supported their interpretation. 56 EPA argued three reasons why the district court s interpretation ran contrary to RCRA. 57 First, the phrase in lieu of refers to the regulations as a whole that are to be enforced and not which agency, federal or state, will enforce them. 58 Second, the plain language in [ ]6928 allows the federal agency to initiate enforcement action against an environmental violator even in states that have received authorization pursuant to RCRA. 59 Third, the phrase same force and effect refers only to permits issued by the state, meaning that the state-issued permits will have the same force and effect as permits issued by the federal government. 60 Therefore, EPA concluded that by reading RCRA as a whole the statute authorizes either the state or EPA to enforce the state s program. 61 EPA contended that its position was consistent with the language of RCRA as a whole, and that if Congress had intended to limit EPA s right to take enforcement it would have expressly stated such intentions, as it did in the citizen s suit section. 62 EPA further argued that the 52. See id. The federal district court examined the issue as a case of first impression and concluded that the plain language of [ ]6926(b) dictates that the state program operate in lieu of the federal program and with the same force and effect as EPA action. Id. at 898, 29 ELR at 21413. 53. See id. at 904, 29 ELR 21414; see also Coop, supra note 15, at 260. 54. 467 U.S. 837, 14 ELR 20507 (1984). 55. See Harmon II, 191 F.3d at 897, 29 ELR at 21412 (citing Chevron, 467 U.S. at 842-45, 14 ELR at 20509). 56. See id. at 899, 29 ELR at 21413. 57. See id. at 898, 29 ELR at 21413. 58. See id.; see also 42 U.S.C. 6926(b), ELR Stat. RCRA 3006(b). 59. Harmon II, 191 F.3d at 898, 29 ELR at 21413. EPA cited 42 U.S.C. 6928(a)(1) and (2), ELR Stat. RCRA 3008(a)(1) and (2) stating: (1) Except as provided in paragraph (2), whenever on the basis of any information the [EPA] determines that any person has violated or is in violation of any requirement of this subchapter, the [EPA] may issue an order assessing a civil penalty for any past or current violation, requiring compliance immediately or within a specified time period, or both, or the [EPA] may commence a civil action in the United States district court in the district in which the violation occurred for appropriate relief, including a temporary or permanent injunction. (2) In the case of a violation of any requirement of [RCRA] where such violation occurs in a State which is authorized to carry out a hazardous waste program under [ ]6926 of this title, the [EPA] shall give notice to the State in which such violation has occurred prior to issuing an order or commencing a civil action under this section. Harmon II, 191 F.3d at 898, 29 ELR at 21413. 60. Harmon II, 191 F.3d at 900, 29 ELR at 21413. See also 42 U.S.C. 6926(d), ELR Stat. RCRA 3006(d). 61. See Harmon II, 191 F.3d at 898, 29 ELR at 21413. 62. See id. at 900, 29 ELR at 21413-14. RCRA 6972(b)(1)(B) provides the guidelines for private litigation against the government or any person who is in violation of RCRA. See 42 U.S.C. 6972(b)(1)(B), ELR Stat. RCRA 7002(b)(1)(B). An action may be brought under
6-2003 NEWS & ANALYSIS 33 ELR 10459 only requirement for it to take its own enforcement action is that it notify the state in writing if it intends to take action against an alleged violator. 63 The Eighth Circuit rejected EPA s arguments that the district court s interpretation ran contrary to RCRA. 64 First, while the Eighth Circuit agreed that the in lieu of language includes the regulatory program, it also includes the administration and enforcement since they are inexorably intertwined within the administration of the RCRA program. 65 In addition, the Eighth Circuit stated that 6926(b) is evidence that Congress intended to grant states a primary role in enforcing their own hazardous waste program. 66 Second, the Eighth Circuit found that the language of 6928 did not undermine this intent. Rather, when taken with RCRA as a whole 6928 gives EPA a secondary enforcement right that is triggered when state authorization is rescinded by EPA or if the state fails to initiate an enforcement action. 67 Therefore, the notice requirement in 6928(a)(2) allows the state the first opportunity to take enforcement action; if the state fails to take action EPA may then initiate its own action. 68 Third, the Eighth Circuit found that regardless of the statute s section headings, the phrase any action, includes both permitting and enforcement actions taken by the state under 6926(d). The Eighth Circuit stated that if Congress had intended enforcement and permitting to be separated, it would have stated its preference in a clear and unambiguous manner. 69 Fourth, the Eighth Circuit rejected EPA s argument that if Congress had intended to limit EPA s right to overfile it would have included specific language as it did in the citizen suit section. 70 The Eighth Circuit reasoned that even though Congress did not choose to include language similar to that used in another section of the statute, the absence of such language does not change the plain language interpretation of the state authorization section. 71 Rather, the Eighth Circuit claimed that the use of the word or in the citizen suit section demonstrates that Congress did not intend competing enforcement actions between EPA and the states. 72 Therefore, the plain language of the state authorization section indicates that primary enforcement authority is with the states. 73 this section unless EPA or an authorized state has commenced and is diligently prosecuting a civil or criminal action in a court. Id. 63. See Harmon II, 191 F.3d at 899, 29 ELR at 21413. 64. See id. at 902, 29 ELR at 21413. 65. See id. at 899, 29 ELR at 21413. See also 42 U.S.C. 6926(b), ELR Stat. RCRA 3006(b). 66. Harmon II, 191 F.3d at 902, 29 ELR at 21414. 67. See id. See also 42 U.S.C. 6928(a), ELR Stat. RCRA 3008(a). 68. See Harmon II, 191 F.3d at 899, 29 ELR at 21413. See also 42 U.S.C. 6928(a), ELR Stat. RCRA 3008(a). Thus, the notice requirement serves as another indication that Congress intended authorized states to have a primary enforcement role under RCRA. See Harmon II, 191 F.3d at 899, 29 ELR at 21413. 69. Id. 70. See id., 29 ELR at 21413-14. 71. See id. The state authorization section is 6926(b). See also 42 U.S.C. 6926(b), ELR Stat. RCRA 3006(b). 72. Harmon II, 191 F.3d at 901, 29 ELR at 21414. See also 42 U.S.C. 6928(b)(1)(B), ELR Stat. RCRA 3008(b)(1)(B) ( [a citizen action is prohibited] if the Administer or State has commenced...[an] action ) (emphasis added). 73. See Harmon II, 191 F.3d at 901, 29 ELR at 21414. Lastly, to provide additional support for its conclusion, the Eighth Circuit found that assuming there is some ambiguity within RCRA, an examination of the legislative history would allow the court to reach the same result, prohibiting EPA from overfiling. 74 Power Engineering Company Power Engineering Company operated a metal refinishing and chrome electroplating plant in Denver, Colorado. 75 In 1992, a discharge of hexavalent chromium into the Platte River led the Colorado Department of Public Health and the Environment (CDPHE) to discover that Power Engineering had been treating, storing, and disposing hazardous wastes without the proper state or federal RCRA permits. 76 In addition, the CDPHE discovered that the hexavalent chromium coming from the Power Engineering plant had contaminated the groundwater. 77 In 1993, the CDPHE issued a notice of violation to Power Engineering that it had improperly treated, stored, and disposed of hazardous wastes. 78 In 1996, the CDPHE ordered Power Engineering to comply with the applicable hazardous waste laws, properly manage its waste, and investigate and cleanup any contamination. 79 Power Engineering did not comply with this order. 80 As a result of noncompliance, the CDPHE fined Power Engineering $1.180 million. 81 When Power Engineering failed to begin its investigation and pay the fine, the CDPHE filed suit in state court to force compliance. 82 In 1999, the Colorado state court ruled that the compliance order and the fine were enforceable and ordered Power Engineering to clean up the site and pay the fine. 83 In 1996, EPA requested that the CDPHE enforce the financial assurance requirements of RCRA and state regulations against Power Engineering, which the CDPHE had authorization to require, but did not include as a part of the state s enforcement action. 84 EPA informed the CDPHE in writing that if it did not enforce the financial assurance requirements that EPA would commence its own enforcement 74. See id. 75. Power II, 303 F.3d 1232, 1235, 33 ELR 20027 (10th Cir. 2002). The plant generates approximately 13 different waste streams, resulting in more than 1,000 kilograms of hazardous waste per month. United States v. Power Eng g Co., 125 F. Supp. 2d 1050, 1052, 31 ELR 20335, 20335 (W.D. Colo. 2000) [hereinafter Power I]. 76. See Power II, 303 F.3d at 1235, 33 ELR at 20027. In 1989, Power Engineering notified the CDPHE that it was generating only four hazardous waste streams, but did not indicate that any of the waste contained hexavalent chromium or that it was treating, storing, or disposing of hazardous waste at its facility. See Power I, 125 F. Supp. 2d at 1052, 31 ELR at 20335. In 1993, Power Engineering notified the CDPHE that, in addition to the waste streams mentioned in its 1989 notification, it generated an additional five waste streams. See id. at 1052, 31 ELR at 20335. 77. See Power II, 303 F.3d at 1235, 33 ELR at 20027. 78. See id. 79. See id. 80. See id. 81. See id. 82. See id. 83. See id. 84. See Power I, 125 F. Supp. 2d at 1053, 31 ELR at 20336. Financial assurance regulations are designed to ensure that the party that is responsible for site cleanup is capable of paying the projected costs of completing the project and any long-term monitoring of the site as provided in RCRA. C.C. Lee, Dictionary of Environmental Legal Terms 258 (1997).
33 ELR 10460 ENVIRONMENTAL LAW REPORTER 6-2003 action. 85 In 1997, EPA filed suit in federal district court against Power Engineering for the disposal and storage of wastes without a permit and illegal operations. 86 After several hearings and motions, 87 EPA filed for summary judgment on Power Engineering s liability and Power Engineering moved for summary judgment on EPA s lack of authority to overfile a state s enforcement action. 88 In reviewing the cross-motions for summary judgment 89 the federal district court granted summary judgment for EPA, requiring Power Engineering to provide $2,119,044 in financial assurance. 90 The district court found EPA overfiling was permitted since it did not duplicate the state s enforcement action where the CDPHE did not address financial assurance in its enforcement action. 91 On appeal, the Tenth Circuit affirmed the ruling of the district court. 92 Like the Eighth Circuit, the Tenth Circuit used Chevron, 93 as a guide for its review of RCRA. 94 The Tenth Circuit concluded that RCRA was ambiguous on the matter of overfiling and deferred to EPA s interpretation that RCRA allows overfiling. 95 85. See Power I, 125 F. Supp. 2d at 1053, 31 ELR at 20336. In the letter dated August 26, 1996, EPA informed the CDPHE that its action with regard to Power Engineering had not been timely and/or appropriate. Id. As a result of the CDPHE inaction, EPA believed that the owner of Power Engineering was seeking to insulate or liquidate his assets, declare bankruptcy, or leave the country. See id. 86. See id. Charges brought by EPA against Power Engineering included failure to have a groundwater monitoring program, a site closure plan, and obtain and provide financial assurances for closure and post-closure care. See id. 87. See United States v. Power Eng g Co., 10 F. Supp. 2d 1145, 28 ELR 21325 (D. Colo. 1998) (ordering Power Engineering to provide $3.5 million in financial assurance pursuant to Colorado regulations); United States v. Power Eng g Co., 10 F. Supp. 2d 1165, 1172, 29 ELR 20058, 20061 (D. Colo. 1998) (ordering Power Engineering to post a surety bond guaranteeing payment into a trust fund after disputing the form the financial assurance was to take). Subsequently, Power Engineering claimed that no third party was willing to extend a line of credit that would allow it to obtain the necessary financial assurance. See Power I, 125 F. Supp. 2d at 1054, 31 ELR at 20336. Based on new information regarding cleanup costs, EPA lowered the amount of financial assurance to $575,500. See id. 88. See Power I, 125 F. Supp. 2d at 1054, 31 ELR at 20336. On appeal, the Tenth Circuit did not address the issue of overfiling since it was not raised by either party. See United States v. Power Eng g Co., 191 F.3d 1224, 1229, 30 ELR 20067, 20068 (10th Cir. 1999) (assuming (1) that EPA may enforce the state s hazardous waste program,... and (2) that EPA may do so even after the state has taken its own enforcement actions ) (citations omitted). 89. When the case was remanded to the Colorado District Court, the parties agreed that (1) EPA could amend its complaint to eliminate all claims except for financial assurance, and (2) both parties would file new motions for summary judgment. See Power I, 125 F. Supp. 2d at 1054, 31 ELR at 20336. 90. See Power II, 303 F.3d 1232, 1236, 33 ELR 20027 (10th Cir. 2002). 91. See Power I, 125 F. Supp. 2d at 1057, 31 ELR at 20337. 92. See Power II, 303 F.3d at 1241, 33 ELR at 20027. 93. Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-45, 14 ELR 20507, 20509 (1984). 94. See Power II, 303 F.3d at 1236, 33 ELR at 20027. 95. See id. at 1237, 33 ELR at 20027. The Tenth Circuit refered to RCRA s citizen suit provision, which prevents a citizen from commencing a suit if EPA or a state has commenced its own enforcement action. See id. (citing 42 U.S.C. 6972(b)(1), ELR Stat. RCRA 7002(b)(1)). Since Congress explicitly prohibits citizens from duplicating a federal or state RCRA action in [ ]6972(b)(1), but omits such language from [ ]6928, the statute suggests that Congress intended to prohibit duplicative citizen suits but not duplicative federal suits. Id. (using the rule in Brown v. Gardner, 513 U.S. 115, 120 (1994)[:] [W]here Congress explicitly includes particular language in one section of statute but omits it in another section of the same The Tenth Circuit agreed with EPA, finding support for its position in RCRA s citizen suit provision, 6972(b)(1). 96 This provision does not allow a citizen to commence an action if EPA or the state has commenced its own enforcement action. 97 The Tenth Circuit observed that similar language is not included in 6928, which only requires EPA to give notice to the state when it is going to initiate its own enforcement action. 98 Therefore, the Tenth Circuit concluded that since Congress explicitly prohibits citizens from duplicating a federal or state RCRA action in [ ]6972(b)(1), but omits such language from [ ]6928, the statute suggests that Congress intended to prohibit duplicative citizen suits but not duplicative federal suits. 99 The Tenth Circuit rejected Power Engineering s arguments, which were based on the Eighth Circuit s analysis in Harmon. 100 First, the Tenth Circuit disagreed with the Eighth Circuit s finding that administration and enforcement are inexorably intertwined. 101 The Tenth Circuit observed that administration and enforcement are not inexorably intertwined since they are mentioned in separate clauses within the same sentence. 102 Therefore, to avoid construing the statute in a manner that would render words or phrases meaningless, redundant or superfluous, the Tenth Circuit found that the first clause of the sentence that contains the in lieu of is interpreted to mean that the state is authorized to administer its program in lieu of the federal program and to issue and enforce permits. 103 The Tenth Circuit concluded that the Eighth Circuit s interpretation fails to account for the placement of enforcement and in lieu of in separate clauses of [ ]6926(b), and that the authorization of the state program does not deprive EPA its enforcement powers. 104 Second, the Tenth Circuit disagreed with the Eighth Circuit s conclusion that any action under 6926(d) refers to both enforcement and permitting, which both have the same force and effect as the federal program. 105 Rather, the Tenth Circuit stated that the statutory heading to 6926(d), effect of State permit, suggests that this subsection only intends for state permits to have the force and effect as federal permits. 106 The Tenth Circuit suggested that Act, it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion. ). 96. See Power II, 303 F.3d at 1237, 33 ELR at 20027. 97. See id. See also 42 U.S.C. 6972(b)(1)(B), ELR Stat. RCRA 7002(b)(1)(B). 98. See Power II, 303 F.3d at 1237, 33 ELR at 20027. See also 42 U.S.C. 6928(a)(2), ELR Stat. RCRA 3008(a)(2). 99. See supra note 95. 100. Power II, 303 F.3d at 1237, 33 ELR at 20027. 101. See id. at 1238, 33 ELR at 20027. 102. See id. See also 42 U.S.C. 6926(a), ELR Stat. RCRA 3006(a). Furthermore, the Tenth Circuit observed that another indication the administration and enforcement of RCRA are not inexorably intertwined is that the sections addressing administration and enforcement are in separate sections of RCRA. Power II, 303 F.3d at 1238, 33 ELR at 20027. See also 42 U.S.C. 6926, ELR Stat. RCRA 3006 (addressing the administration of RCRA); 42 U.S.C. 6928, ELR Stat. RCRA 3008 (addressing the enforcement of RCRA). 103. See Power II, 303 F.3d at 1238, 33 ELR at 20027 (citation omitted). See also 42 U.S.C. 6926(b), ELR Stat. RCRA 3006(b). 104. Power II, 303 F.3d at 1239, 33 ELR at 20027. 105. See id. 106. Id. See also Immigration & Naturalization Serv. v. National Ctr. for Immigrants Rights, 502 U.S. 183, 189 (1991) ( the title of a
6-2003 NEWS & ANALYSIS 33 ELR 10461 it is reasonable to conclude that Congress simply intended for [ ]6926(d) to clarify that recipients of state-issued permits need not obtain a permit from EPA. 107 The Tenth Circuit found this to be a more reasonable result than using the Eighth Circuit s approach, thereby taking RCRA as a whole and harmonizing 6928 by adding restrictions on EPA s enforcement power that are not found in the plain language of that section. 108 Therefore, since it is reasonable to conclude that while subsection 6926(d) prevents EPA from denying the effect of a state permit, it does not prevent EPA from taking action when a violation occurs. 109 Third, both the Tenth Circuit and the Eighth Circuit found ambiguity within RCRA. 110 However, the Tenth Circuit found fault with the Eighth Circuit s use of the legislative history to reach the outcome that Congress did not intend for EPA to overfile. 111 Since RCRA is ambiguous and does not clearly state whether EPA may overfile, the Tenth Circuit stated it must defer to EPA s reasonable interpretation even if we would have reached a different result had we construed the statute initially. 112 Therefore, the Tenth Circuit concluded that EPA s interpretation has substantial support in the text of RCRA and is therefore a reasonable interpretation of the statute. Given this, EPA has authority under RCRA to overfile. 113 Statutory Analysis Both the Tenth Circuit and the Eighth Circuit used Chevron as the framework for their statutory analysis to determine whether RCRA gives EPA the authority to overfile. 114 In Chevron, the U.S. Supreme Court noted: When a court reviews an agency s construction of the statute which it administers, it is confronted with two questions. First, always, is the question whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress. statute or section can aid in resolving an ambiguity in the legislation s text ). 107. Power II, 303 F.3d at 1239, 33 ELR at 20027. 108. See id. at 1238, 33 ELR at 20027. The Tenth Circuit agrees that 6928(a)(2) limits EPA s right to bring enforcement action under certain circumstances. See id. The only specific limitation to overfiling, is that EPA provides prior written notice to the state before commencing its own enforcement action. See id. The Tenth Circuit stated that the other option, withdrawal of a state s authorization, is an extreme and drastic step and nothing in the statute suggests that this would be a prerequisite to EPA enforcement or that it is the only remedy for inadequate state enforcement. See id. at 1239, 33 ELR at 20027. 109. Id. 110. See id. at 1240, 33 ELR at 20027. Specifically, the Tenth Circuit found that it was ambiguous whether program includes enforcement and it is not defined by RCRA. See id. at 1237, 33 ELR at 20027 (citing Wyckoff Co. v. EPA, 796 F.2d 1197, 1200, 16 ELR 20866, 20868 (9th Cir. 1986)). 111. See id. at 1237, 33 ELR at 20027. 112. Id. at 1240, 33 ELR at 20027 (quoting Washington Dep t of Ecology v. EPA, 752 F.2d 1465, 1469 (9th Cir. 1985). The Tenth Circuit stated that given the ambiguities and contradictions, we find that Congress has not directly spoken to the precise question at issue. Id. (quoting Chevron, U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837, 842, 14 ELR 20507, 20508 (1984)). 113. See id. 114. See id. at 1236, 33 ELR at 20027; Harmon II, 191 F.3d 894, 897, 29 ELR 21412, 21412 (8th Cir. 1999). If, however, the court determines Congress has not directly addressed the precise question at issue, the court does not simply impose its own construction on the statute, as would be necessary in the absence of an administrative interpretation. Rather, if the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency s answer is based on a permissible construction of the statute. 115 The Tenth Circuit and the Eighth Circuit began their analysis by determining whether the congressional authority for EPA to overfile is clearly stated within the language of RCRA. 116 The Tenth Circuit found that given the ambiguities and contradictions within RCRA, Congress has not directly spoken on whether EPA can overfile and, therefore, deference must be given to EPA s interpretation of RCRA. 117 In contrast, the Eighth Circuit found that the plain language of RCRA did not give EPA the authority to overfile and Congress intended for the states to have primary enforcement authority. 118 The Eighth Circuit reached its conclusion by combining two sections of RCRA that seem to conflict, and then looked to the statute as a whole to determine that EPA does not have authority to overfile. 119 The Tenth Circuit criticized this analysis, stating [t]his interpretation goes well beyond the plain language of the statute. 120 The Tenth Circuit suggested that instead of harmonizing the enforcement and permitting sections of RCRA, Congress intended for the authorization section to merely clarify that recipients of state-issued permits need not obtain a permit from EPA. 121 Contrary to the Eighth Circuit s interpretation, a careful 115. Chevron, 467 U.S. at 842-43, 14 ELR at 20508-09 (footnotes omitted). The Chevron court observed that in these types of cases, when the federal agency s interpretation represents a reasonable interpretation of the statute, the agency is entitled to deference by the court. See id. at 865, 14 ELR at 20514. The Chevron court stated that when a challenge to an agency s interpretation of a statutory provision centers on the agency s policy rather than a gap in the statute left open by Congress, the challenge must fail. See id. at 866, 14 ELR at 20514. 116. See Power II, 303 F.3d at 1236, 33 ELR at 20027; Harmon II, 191 F.3d at 897, 29 ELR at 21412. 117. See Power II, 303 F.3d at 1240, 33 ELR at 20027; see also United States v. Murphy Oil USA, Inc., 143 F. Supp. 2d 1054, 1117 (W.D. Wis. 2001) (deferring to EPA s interpretation of RCRA). 118. See Harmon II, 191 F.3d at 899-900, 29 ELR at 21413. 119. See id. at 899, 29 ELR at 21413. The Eighth Circuit harmonizes the section that allows EPA to bring enforcement actions in certain circumstances ( 6928(a)) with the section that gives EPA the right to withdraw the state s authorization ( 6926(b)), to conclude that there is a congressional intent to give EPA a secondary enforcement right available only after the state has failed to initiate an enforcement action or EPA has withdrawn the state s authorization. See id. Then by reading RCRA as a whole, the notice requirement allows a state the first chance opportunity to initiate the statutorily permitted enforcement action. Id. 120. Power II, 303 F.3d at 1238, 33 ELR at 20027. The Tenth Circuit stated when the Eighth Circuit looked at RCRA as a whole to support its conclusion giving the states primary enforcement authority, it failed to consider the subsection headings, which can be used to clarify an ambiguous statute. See id. at 1239, 33 ELR at 20027. The Tenth Circuit argued that if the Eighth Circuit used the heading to 6926(d), it would suggest that same force and effect applies only to permitting under RCRA and does not included the state enforcement actions, which is addressed in another section of the statute. See id. See also Murphy Oil USA, Inc., 143 F. Supp. 2d at 1117 (stating that the Harmon court read too much into the phrases in lieu of and same force and effect and at the same time gave inadequate effect to the provisions of the statute that demonstrate Congress s intent to give EPA its own independent enforcement authority even in states that have authorized hazardous waste programs ). 121. Power II, 303 F.3d at 1239, 33 ELR at 20027.
33 ELR 10462 ENVIRONMENTAL LAW REPORTER 6-2003 reading of 6926(b) reveals that a state may issue permits in lieu of EPA, but says nothing about who may enforce the permits. 122 It would have been more logical for the Eighth Circuit to find that RCRA does not directly speak to, or is at least ambiguous with respect to, overfiling. 123 The Eighth Circuit could have just as easily reached this conclusion by finding that some ambiguity exists in the [RCRA]. 124 The Tenth Circuit contended that RCRA arguably supports the Eighth Circuit s reasoning. 125 In addition, several cases that have indirectly dealt with overfiling under RCRA have admitted that RCRA is ambiguous regarding whether EPA can overfile. 126 Since the Eighth Circuit could have reasonably found RCRA ambiguous, the next step under the Chevron analysis would have been for the Eighth Circuit to determine whether EPA s position was based on a reasonable interpretation of RCRA. 127 Instead, the Eighth Circuit determined that the ambiguities within the statute allowed it to look at the legislative history to determine that the congressional intent was for the states to have primary enforcement authority. 128 Given the Tenth Circuit s holding, it is unlikely that the Eighth Circuit, had it given the proper deference to EPA s interpretation, would have concluded that RCRA provided a complete bar to EPA overfiling. 129 While the Eighth Circuit has been criticized for misapplying the Chevron analysis, 130 others have found the language of the Eighth Circuits interpretation to be well grounded in the plain language of RCRA. 131 Even though RCRA can be read as allowing EPA to overfile, there are several policy arguments for not allowing EPA to overfile. 132 For example, the practice of overfiling interferes with a state s ability to set environmental priorities in accordance with a state s own priorities. 133 Overfiling creates uncertainty as to the resolution of a state enforcement action and wastes state resources when they are spent on an enforcement action that is later overfiled. 134 States that work closely with industries to promote compliance may suffer politically from overfiling since it subjects industries to a second suit and the possibility of large fines. 135 While overfiling creates state-federal tension, 136 little conflict is created when a state requests EPA take enforcement that is politically unpopular against a company located within the state, 137 or when EPA overfiles to address significant interstate pollution. 138 In addition, overfiling is a tool used by EPA to prevent inconsistent application of federal regulations and to prevent a race to the bottom 139 among states to attract industry. 140 The Eighth Circuit s holding can be interpreted to limit EPA overfiling to situations where the state did not take adequate enforcement or has failed to take any action. A court facing a different factual situation could easily distinguish itself from Harmon and find that EPA is allowed to overfile if the state failed to take enforcement entirely or the action was inadequate. 141 The facts of the Harmon case can be easily distinguished from those in the Power Engineering case. Given the circumstances in the Harmon case, it appears that the Eighth Circuit viewed the MDNR s enforcement action as reasonably appropriate. 142 In contrast, the reason EPA pursued its own enforcement action in Power Engineering was that the CDPHE failed to include financial assurance in its enforcement action, even after EPA notified the CDPHE of this de- 122. Such State is authorized to carry out such program in lieu of the Federal program under this subchapter in such State and to issue and enforce permits for the storage, treatment, or disposal of hazardous waste (and to enforce permits deemed to have been issued under [this Act]). 42 U.S.C. 6926(b), ELR Stat. RCRA 3006(b). 123. See Coop, supra note 15, at 266 (observing that the Eighth Circuit could have just as easily found the statute ambiguous and given deference to EPA s interpretation). 124. Harmon II, 191 F.3d at 901, 29 ELR at 21414. 125. See Power II, 303 F.3d at 1240, 33 ELR at 20027. 126. See United States v. Elias, 269 F.3d 1003, 1010, 32 ELR 20218, 20220 (9th Cir. 2001) (finding no clear congressional intent within RCRA, the court deferred to EPA s interpretation allowing it to bring criminal charges against the defendant); Wyckoff Co. v. EPA, 796 F.2d 1197, 1200, 16 ELR 20866, 20868 (9th Cir. 1986) (finding no clear congressional intent that RCRA be read to prevent EPA from overfiling). But see Murphy Oil USA, Inc., 143 F. Supp. 2d at 1117 (agreeing with the Eighth Circuit s finding that RCRA is not ambiguous on the subject of state and federal prosecutions ). 127. See Wyckoff, 796 F.2d at 1200, 16 ELR at 20868 (applying Chevron, the Ninth Circuit deferred to EPA s interpretation, which it found was reasonable, after finding RCRA is ambiguous as to whether EPA may overfile). 128. See Harmon II, 191 F.3d at 901, 29 ELR at 21414. 129. See Murphy Oil USA, Inc., 143 F. Supp. 2d at 1117 (concluding that EPA s interpretation of RCRA is reasonable and RCRA allowed EPA to overfile). 130. See Elias, 269 F.3d at 1012 n.25, 32 ELR at 20219 n.25 ( [Harmon] is also suspect for it marked lack of Chevron deference. ); Gary A. Jonesi, Environmental Enforcement Becomes Federalism s Hazardous Battleground, 15 Nat l Envtl. Enforcement J. 3 (2000). 131. See Murphy Oil USA, Inc., 143 F. Supp. 2d at 1117 (agreeing with the Eighth Circuit s finding that RCRA is not ambiguous on the subject of state and federal prosecutions ); Federalism Part II, supra note 39, at 10734. 132. See Zahren, supra note 16, at 411. In October 1998, the Environmental Council of States adopted a resolution calling for EPA to consistently implement its policies and agreements with the authorized states. See id. 133. See id. at 387. 134. See Humphrey & Paddock, supra note 1, at 14; Hall, supra note 42, at 10781; Zahren, supra note 16, at 429. 135. See Zahren, supra note 16, at 409. 136. See Humphrey & Paddock, supra note 1, at 8; Zahren, supra note 16, at 374. 137. A state may request that EPA take enforcement when a complex technical issue is involved that EPA may be better equipped to handle. See Humphrey & Paddock, supra note 1, at 41. 138. See Zahren, supra note 1, at 413. 139. Race to the bottom occurs when a state lowers its environmental standards to attract industry to invest in the state. See Zahren, supra note 16, at 420. 140. See Dempsey, supra note 24, at 39. 141. See United States v. Elias, 269 F.3d 1003, 1011, 32 ELR 20218, 20219 (9th Cir. 2001) (finding that the Eighth Circuit in Harmon concluded only that the federal government losses [sic] its primary role in enforcing hazardous waste regulations ) (emphasis added); United States v. Flanagan, 126 F. Supp. 2d 1284, 1289 (C.D. Cal. 2000) ( Put simply, [Harmon] is not about if, but when the United States can bring a civil enforcement action in federal court after it has authorized a state program. Had the State of California previously prosecuted Defendants criminally for the same conduct alleged in the Indictment, [Harmon] might have been applicable by analogy. ); Federalism Part II, supra note 39, at 10743. 142. See Federalism Part II, supra note 39, at 10734. The state claims against Harmon included: (1) failure to register as a hazardous waste generator; (2) operation of a hazardous waste treatment, storage, and disposal facility without a permit; and (3) failure to use a permitted hazardous waste disposal facility. See Harmon I, 19 F. Supp. 2d 988, 992, 29 ELR 20035, 20036 (W.D. Mo. 1998). EPA claims against Harmon were similar and included a fine, which was not included in the state action. See id.