ELR Citation: ELR 21340
No(s). 92-4129 (2d Cir. Aug 12, 1993)

The court holds that a corporation challenging the U.S. Environmental Protection Agency's (EPA's or the Agency's) authority to administer federal permits for hazardous waste sites in a state that has its own federally approved hazardous waste program under the Resource Conservation and Recovery Act (RCRA), has failed to exhaust its administrative remedies as to two of its claims, and the court upholds EPA's construction of RCRA on federal permitting authority in view of state permitting authority. The corporation had challenged four EPA permitting decisions: an April 1992 EPA environmental appeals board (EAB) rejection of the corporation's petition for review of EPA's decision to issue the federal permit, a May 1992 decision to terminate a stay of the federal permit, the regional administrator's July 1992 refusal to terminate the federal permit, and portions of a May 1992 memorandum of agreement (MOA) between the state and EPA for its failure to provide for automatic termination of the federal permit once the state hazardous waste program became effective. The court first holds that it has jurisdiction to review only the original decision to issue the permit. The corporation had exhausted its administrative remedies as to the 1991 decision, but not the July 1992 decision or the May 1992 decision to terminate a stay of the permit. RCRA §7006(b)(1) authorizes review of actions by the Administrator, which includes EAB decisions, but not regional administrator's actions, such as the July 1992 decision. Moreover, EPA's regulations create express exhaustion requirements with which the corporation had not fully complied. The court holds that although EPA failed to mention exhaustion in its brief, EPA did not waive an exhaustion defense. EPA may raise the defense because the regulatory scheme is complex and no severable constitutional issue is presented. The court also holds that the challenges to the EAB's decision following its review of the original permitting decision and to the MOA are ripe for review. The issues are fit for review and withholding court consideration would impose hardship.

Addressing the merits of the corporation's claims, the court first rejects the corporation's judicial estoppel claim which was based on the contention that EPA took a position in two other cases that is inconsistent with its current position. The consequence of EPA's action in this litigation on the Agency's broad policy on poststate authorization administration is irrelevant to the issues before the court. The court also rejects arguments that EPA's position is inconsistent with existing regulations, finding that the corporation's arguments misread the regulations as including instructions about the content of permits. Finally, under Chevron U.S.A., Inc. v. Natural Resources Defense Council, 14 ELR 20507 (U.S. 1984), the court holds that EPA's position is permissible under RCRA. Although the statutory language does not speak directly to the questions before the court, EPA's resolution of the issues is reasonable. Continued administration by EPA of federal permits past the immediate moment of state authorization avoids the gap in regulation that might occur if the state failed to issue immediately a new permit containing all applicable requirements.

Counsel for Petitioner
Thomas S. West, Elise N. Zoli
LeBoeuf, Lamb, Leiby & MacRae
One Commerce Plaza
99 Washington Ave., Ste. 2020, Albany NY 12210
(518) 465-1500

Counsel for Respondent
Craig D. Galli, John A. Sheehan
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

Lawrence E. Starfield
U.S. Environmental Protection Agency
401 M St. SW, Washington DC 20460
(202) 260-2090

Counsel for Amicus Curiae
Joan Leary Matthews, Ass't Attorney General
Attorney General's Office
New York State Department of Law
The Capitol, Albany NY 12224
(518) 474-7124

Before Feinberg and Kelleher,^* JJ.: