ELR Citation: ELR 21206
No(s). s. 91-1538 et al (D.C. Cir. Jul 8, 1994)

The court holds that the U.S.Environmental Protection Agency (EPA) has authority under the Resource Conservation and Recovery Act (RCRA) to regulate the land disposal of K061 electronic arc furnace dust and to set a treatment standard for zinc. EPA's K061 treatment rule establishes numerical treatment standards for 13 metals contained in residual slag after K061 hazardous waste is processed in high-temperature metals recovery (HTMR) facilities. EPA had declined to set treatment standards for K061 slag based on its "indigenous principle." That principle provided that a secondary material burned in an industrial furnace exclusively for materials recovery is not a solid waste if it is indigenous to the process in which the industrial furnace is used, in the sense of being generated by the same type of industrial furnace as that in which burning occurs. In American Petroleum Institute (API) v. U.S. Environmental Protection Agency, 20 ELR 21091 (D.C. Cir. 1990), the court held that neither case law nor RCRA unambiguously foreclosed EPA's power to prescribe treatment standards for K061 slag and that by declining to regulate based on case law or RCRA, EPA had unlawfully exempted K061 slags from RCRA's land disposal provisions.

The court first holds that EPA acted reasonably in promulgating its K061 treatment regulations. EPA did not abandon the view expressed by the court in American Mining Congress v. U.S. Environmental Protection Agency, 17 ELR 21064 (D.C. Cir. 1987), that materials used in ongoing production processes are not subject to RCRA. Rather, the Agency jettisoned only the indigenous principle as the method of determining whether or not a material is a component of the production process. This result is a natural consequence of the court's decision in API. API held that the indigenous principle was not the product of reasoned decisionmaking and that EPA therefore could not rely on the principle in exempting K061 slag from RCRA land disposal restrictions. As the Agency chose on remand not to attempt another justification for its nonregulation, but rather to set K061 slag standards, its only burden was to explain why treatment standards are consistent with both the derived-from rule and the broad purposes of RCRA. The Agency met this burden. It stated that K061 waste destined for reclamation via HTMR is a solid waste under the derived-from rule because it is a listed waste being reclaimed and because at present there is no indigenous principle operating to cut off application of the derived-from rule. It also noted that K061 slag treatment standards are consistent with RCRA's cradle-to-grave mandate in that there will be strict supervision of toxic constituents from K061 throughout all phases of its management. The court holds that EPA did not deviate from long-standing Agency policy any more than was required by API. The court also holds that the Agency had sufficient reasons to issue treatment standards pending completion of new rules concerning recycled materials. The court's remand in API created the potential for an absolute ban on K061 slag land disposal by vacating existing K061 treatment standards and leaving in place only EPA's interim treatment standards for high-zinc K061 hazardous wastes. The interim standards were scheduled to lapse just one year after the API remand. Had they lapsed without the promulgation of new standards, operation of RCRA §3004(g)(6)(C) threatened to prevent theland disposal of approximately 415,000 tons of K061 generated annually in the United States. This would have halted the country's steel production. The court holds that EPA reasonably believed that the absolute land disposal ban was imminent. Section 3004(g)(6)(C) does not explicitly address the status of promulgated treatment standards that are later held invalid. An absolute land disposal ban in such situations is in keeping with Congress' clear intent to have continuing treatment standards in place for the life of the hazardous waste in question. Also, the court's guidance on this issue points in the direction of the Agency interpretation.

Turning to petitioners' challenge to EPA's zinc treatment standard, the court holds that the absence of zinc from EPA's regulatory list of hazardous constituents does not prohibit EPA from setting zinc treatment standards. RCRA §3004(m) directs the Agency to promulgate regulations specifying levels or methods of treatment that substantially reduce the likelihood of migration of hazardous constituents from waste to minimize threats to human health and the environment. Applying the U.S. Supreme Court's decision in Chevron U.S.A., Inc. v. Natural Resources Defense Council, 14 ELR 20507 (1984), the court upholds as reasonable EPA's interpretation of §3004(m). The court holds that §3004(m) does not unambiguously prevent EPA from setting a treatment standard for zinc that substantially reduces the migration of materials set forth on EPA's list of hazardous constituents. The court further holds that past Agency practice in regulating hazardous constituents does not prevent EPA from setting the zinc treatment standard, because past practice has been inconsistent. The court also holds that EPA did not act arbitrarily or capriciously in setting the zinc standard. The Agency established a zinc treatment standard to ensure proper operation of HTMR processes by maximizing zinc recovery. The Agency found that high zinc recovery lowers both the overall volume of slag and the mobility of toxic metals in the slag residue. The court holds that minimizing the overall volume of slag to be disposed of is, by itself, a sufficient justification for the zinc treatment standard. Finally, the court holds that EPA's failure to allow comments on its stated rationale that the zinc treatment standard was designed to abate the leaching of zinc was harmless error.

Counsel for Petitioner
John N. Moore
Squire, Sanders & Dempsey
1201 Pennsylvania Ave. NW, Washington DC 20044
(202) 626-6600

Counsel for Respondent
Robin L. Juni
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

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

Before: MIKVA, Chief Judge, SENTELLE and RANDOLPH, Circuit Judges.