McKenna & Cuneo's Environmental Practice Group brings to your attention two recent decisions in which the firm successfully represented its clients in challenging EPA regulatory determinations. First, in The Fertilizer Institute v. Browner, before the United States District Court for the District of Columbia, we prevailed on behalf of The Fertilizer Institute ("TFI") in overturning EPA's denial of TFI's petition to remove a chemical from the list of "toxic chemicals" subject to § 313 of the Emergency Planning and Community Right-To-Know Act ("EPCRA"). Second, in National Propane Gas Ass'n v. EPA, before the United States Court of Appeals for the D.C. Circuit, we obtained a stay for the National Propane Gas Association ("NPGA") of the effective date of EPA's Risk Management Program ("RMP") Rule, as applied to most propane sources.
Because in such administrative law cases the regulated community does not often succeed in overcoming the judiciary's usual deference to EPA's judgment, we thought you might be interested in a brief summary of these matters.
The EPCRA § 313 Decision
We are pleased to report a significant victory on behalf of our client TFI in a case filed in the District of Columbia. In an April 15, 1999 decision, the U.S. District Court for the District of Columbia granted TFI's motion for summary judgment and reversed EPA's decision to classify phosphoric acid as a "toxic chemical" under EPCRA § 313. The Fertilizer Institute v. Browner, No. 98-1067 (D.D.C. April 15, 1999).
The case began almost nine years ago when TFI petitioned EPA to remove phosphoric acid from the list of "toxic chemicals" that Congress had established under EPCRA § 313. In its petition, TFI maintained that phosphoric acid does not meet any one of the three statutory criteria on which a toxic chemical listing may be based, namely, the acute effects, chronic effects, and environmental effects listing criteria. In 1998, EPA denied TFI's petition. EPA concluded that although phosphoric acid does not meet either the acute effects or chronic effects listing criteria, it meets the environmental effects criterion. Under the environmental effects criterion, a chemical listing may be based on evidence that the chemical is "known to cause or can reasonably be anticipated to cause, because of its toxicity, toxicity and persistence in the environment, or toxicity and tendency to bioaccumulate, a significant adverse effect on the environment." According to EPA, phosphoric acid satisfies this criterion because phosphates can stimulate algae growth in a water body, which can in turn deplete the level of dissolved oxygen, which can in turn injure resident fish (a phenomenon known as "eutrophication").
TFI challenged this decision in federal district court. Specifically, TFI argued that EPA's interpretation of the environmental effects criterion is unlawful because the statute requires a showing that the chemical's toxicity is the cause of the adverse environmental effect. Judge Gladys Kessler agreed: "EPA is in effect flipping the causation arrow: instead of saying (as the statute requires) that phosphoric acid has significant effects on the environment because of its toxicity, EPA is saying that phosphoric acid is toxic because of its significant adverse effects on the environment." Consequently, the Court held that EPA's interpretation of toxicity is not a permissible construction of the statute, granted TFI's motion for summary judgment, and reversed EPA's denial of TFI's petition.
By reversing EPA's decision on TFI's petition, the petition now stands as granted. Under EPCRA § 313(e), EPA must proceed to initiate a rulemaking to remove phosphoric acid from the toxic chemical list. EPA has not stated whether it plans to appeal the decision. For further information, please feel free to call Peter Gray (202/496-7707).
The RMP Decision
Equally gratifying was the April 27, 1999, decision of the D.C. Circuit Court granting a motion filed by McKenna & Cuneo on behalf of our client NPGA for a stay of EPA's RMP Rule as applied to stationary sources with more than 10,000 pounds of propane in a process. NPGA v. EPA, No. 96-1287 (D.C. Cir. April 27, 1999). As a result of the stay, and pending the Court's consideration of the merits of NPGA's underlying Petition for Review, an estimated 1,000,000 sources which would be subject to the RMP Rule because they handle propane are not required to implement the Rule.
EPA's RMP Rule requires the owner or operator of a source handling more than a "threshold quantity" of a designated "regulated substance" in a process to implement an RMP at their facility. EPA identified over 100 regulated substances, including propane, for which EPA set a threshold quantity of 10,000 pounds. Owners and operators of sources subject to the RMP Rule are required to conduct "worst-case" and "alternative" release modeling for hypothetical releases of the regulated substance and implement emergency response, prevention, and management programs at their sources. These RMP activities must be described in a "risk management plan," which must be submitted to EPA by June 21, 1999.
Following the promulgation of the RMP Rule in 1996, NPGA, among others, filed a Petition for Review of certain provisions of the Rule. At the heart of NPGA's legal challenge are several key statutory construction arguments. First, NPGA argues that EPA's listing of flammable substances, including propane, as regulated substances violated the clear statutory language of Clean Air Act ("CAA" or "Act") Section 112(r), the section of the Act which mandated that EPA promulgate an RMP Rule. NPGA argues that the characteristic of flammability may be used by the Agency to set thresholds once a substance has been identified as a regulated substance for inclusion on the RMP list, but Congress did not intend that flammability be the sole basis for EPA's inclusion of a substance on such list.
Second, NPGA asserts that EPA's failure to recognize an "exemption" from the RMP Rule for flammable substances held as fuel was arbitrary and capricious in light of OSHA's decision to promulgate such an exemption in its analogous accident prevention program, the Process Safety Management ("PSM") Rule. On a related issue, NPGA argues that EPA violated the CAA by failing to coordinate its RMP Rule with OSHA's PSM Rule, as the statute required. NPGA points to clear statutory language and related legislative history to support its position that, in determining not to provide a fuel use exemption, EPA failed to satisfy its statutory obligation.
Shortly after filing its Petition for Review, NPGA and EPA engaged in settlement discussions. With the approaching June 21, 1999 RMP compliance deadline, and settlement discussions reaching an impasse, NPGA filed its motion for a partial stay of the RMP Rule with the D.C. Circuit Court on March 23, 1999.
In granting the stay, the Court expressed the view that NPGA "satisfied the stringent standards required for a stay pending court review." Based on the Court's Order, it is expected that oral argument on NPGA's legal challenge to the RMP Rule will be scheduled for early Fall 1999.
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Mindful that challenges to EPA regulatory determinations, before either the D.C. District or Circuit Courts, are not often successful, we were particularly gratified by our recent successes in protecting the interests of the firm's clients in these matters. McKenna & Cuneo has extensive historic and current administrative law experience. We regularly assist clients in analyzing, commenting on and, often, successfully modifying the impacts of proposed Agency rulemakings. When such efforts have not succeeded, McKenna & Cuneo is prepared, as the case summaries above demonstrate, to turn to the Courts to seek judicial relief.
We would be pleased to discuss any such administrative law issues your company may confront.
For more information, please contact:
| Robert A. Matthews - | Washington, D.C. - (202-496-7500) |