D.C. Circuit Issues Ruling on RCRA Transfer-Based Exclusion

Wed, 07/03/2019 - 12:54

Yesterday the U.S. Court of Appeals for the D.C. Circuit on July 2, 2019, issued a decision upholding the transfer-based exemption for hazardous waste under RCRA’s definition of solid waste (DSW) regulations.  California Communities Against Toxics et al., v. EPA, D.C. Cir. Case No. 18-1163. The road to this decision is long and winding, stretching back to 2008.  Some background is necessary. Under the Bush administration, EPA on October 30, 2008, promulgated a final rule conditionally excluding from hazardous waste regulation hazardous secondary material transferred to a third party for recycling, i.e., the transfer-based exclusion.  EPA codified that conditional exclusion at 40 C.F.R. §§ 261.4(a)(24) and (25).  73 Fed. Reg. 64668. In January 2015 under the Obama administration, however, EPA replaced the transfer-based exclusion with the verified recycler exclusion.  80 Fed. Reg. 1694; Jan. 13, 2015.  EPA was sued on that decision.  On July 7, 2017, the D.C. Circuit found “unreasonable,” and thus threw out, the verified recycler exclusion. The court reinstated the transfer-based exclusion. American Petroleum Institute v. EPA (D.C. Cir. No. 09-1038).  The court then amended its ruling on March 6, 2018, tweaking its 2017 decision.Responding to the court’s July 2017 and March 2018 orders, EPA on May 30, 2018, issued a final rule revising the DSW regulations. 83 Fed. Reg. 24664.  That rule removed the verified recycler exclusion and reinstated the transfer-based exclusion. EPA was sued on that rule, which is the subject of the July 2, 2019, decision. In the decision the court found that EPA did not act contrary to RCRA in adopting the transfer-based decision.  The court concluded that hazardous secondary materials are not “discarded” (and thus not solid waste) each time they are transferred from a generator to a reclaimer along with payment.  The court further found that EPA provided a reasoned explanation for applying different standards to materials that are not yet part of the wasted disposal problem RCRA addresses, where they meet conditions EPA has concluded are adequate for safe transfer and legitimate recycling. Ultimately, the immediate impact of the court’s ruling may be minimal.  Implementation of the revised rules is a hodgepodge. The immediate effect of the ruling depends upon the authorization status of each state. For the two states that have no final RCRA authorization -- Alaska and Iowa -- the revised rules are effective immediately. States that have final authorization but that did not adopt the 2015 verified recycler exclusion are not required to adopt or become authorized for the reinstated transfer-based exclusion, as it is less stringent than full hazardous waste regulation. States that have RCRA authorization but have not adopted the 2015 definition of legitimate recycling are, however, required to adopt that definition. For states that have adopted rules similar to the verified recycler exclusion and the 2015 definition of legitimate recycling, but have not yet been authorized for them, the authorization status of the state programs remains unchanged. For states that have previously been authorized for rules similar to the verified recycler exclusion and the 2015 definition of legitimate recycling, and have been authorized for them, the effect is that those previously-authorized state provisions will be considered broader in scope than the federal program (and thus non-enforceable by EPA).bERGESON & cAMPBELL