ELR Citation: ELR 21353
No(s). 90-1508 (D.C. Cir. Jul 5, 1991)

The court holds that although the Environmental Protection Agency's (EPA's) interpretation of its Toxic Substances Control Act (TSCA) regulation governing the disposal of solvent used to decontaminate polychlorinated biphenyl (PCB) containers must be sustained, the lack of adequate notice resulting from the regulation's inherent uncertainty is a mitigating factor that requires plaintiff's civil penalty to be set aside. Plaintiff, the owner and operator of a hazardous waste facility, closed a concrete basin at the facility that held liquids and sludges containing PCBs in a concentration of 1874.8 parts per million (ppm). After properly disposing of the liquids and sludges, plaintiff triple rinsed the basin with a solvent, as required by EPA's TSCA decontamination regulation, 40 C.F.R. §761.75. The regulation requires decontamination of any PCB container by rinsing the container three times with a solvent containing less than 50 ppm PCB. The ambiguous regulatory language at issue provides that "the solvent may be reused for decontamination until it contains 50 ppm PCB. The solvent shall then be disposed of as a PCB in accordance with §761.60(a)." Interpreting this language to mean that a company is not required to dispose of a solvent as a PCB if it never exceeds 50 ppm PCB, plaintiff incinerated the solvent at a facility meeting the requirements of the Resource Conservation and Recovery Act, but not those contained in EPA's TSCA regulations. Later, EPA issued an administrative complaint against plaintiff based on its interpretation that the word "then" in the TSCA regulation refers to the time when the rinsing is over and the solvent is no longer being reused. Thus according to EPA, for the purpose of reusing solvents, PCB concentration should be measured on the basis of what the solvent actually contains, while for purposes of disposal, the solvent shall be assumed to contain a concentration of PCB equal to the PCB level of the container before it was flushed.

The court first holds that it must defer to EPA's interpretation of the regulation. Although the decontamination regulation is confusing and plaintiff's interpretation is less strained, EPA's interpretation is logically consistent with the language of the regulation and serves a permissible regulatory function. The court rejects plaintiff's argument that EPA misconstrued its regulation in such a way to deny plaintiff fair warning of the conduct the regulation prohibited, because plaintiff did not raise due process as a ground for avoiding liability.

The court holds that the chief judicial officer's (CJO's) assessment of a $25,000 civil penalty against plaintiff was improper given the lack of adequate notice resulting from the regulation's uncertain meaning. The CJO's ruling that the regulation was "clear" was arbitrary, since the evidence reveals that EPA was uncertain of the meaning of its regulation, EPA personnel gave conflicting advice to private parties about how to comply with the regulation, and EPA's chief legal officer found the regulatory language equally supportive of both interpretations. TSCA §16 requires EPA to consider mitigating factors in assessing a civil penalty and the CJO's failure to account for the lack of notice resulting from the regulation's uncertainty was contrary to law.

A dissenting judge would hold that if plaintiff could not reasonably have known what EPA had in mind, it cannot now be held to have violated the regulation since notice is not merely a mitigating circumstance, but an element of proving a violation.

Counsel for Petitioner
Michael W. Steinberg
Morgan, Lewis & Bockius
1800 M St. NW, Washington DC 20036
(202) 467-7000

Counsel for Respondent
Mary Ellen M. Levine, James C. Nelson, Patricia A. Roberts
U.S. Environmental Protection Agency
401 M St. SW, Washington DC 20460
(202) 260-2090

Michael A. McCord, Kaye Allison
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

Before: EDWARDS, BUCKLEY, and RANDOLPH, Circuit Judges. Opinion for the Court filed by Circuit Judge RANDOLPH. Opinion dissenting in part and concurring in part filed by Circuit Judge EDWARDS.