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United States v. Hoechst Celanese Corp.

Citation: 28 ELR 20236
No. 96-2003, 128 F.3d 216/(4th Cir., 10/27/1997)

The court holds a company liable for violations of the National Emission Standard for Equipment Leaks of Benzene that occurred after the U.S. Environmental Protection Agency (EPA) provided the company with actual notice of its interpretation of the regulations. The company claimed that one of its plants qualified for an exemption from the requirements of the regulations because the plant continually recycles benzene. EPA, however, defines "use" in the benzene regulations broadly to mean utilization, employment, or putting in place, and the definition includes, but is not limited to, consumption of benzene. The court first holds that EPA's interpretation of the word "use" in the benzene regulations is entitled to deference because it accords with the plain language of the regulations, as well as with the purposes of the Clean Air Act (CAA) and of the exemption itself. However, the court next holds that prior to 1989 the company did not have fair notice of EPA's broad interpretation of the term "use." On the basis of the actions of the Texas Air Control Board (TACB), which concluded that another one of the company's plants qualified for an exemption, and the inaction of EPA, which did not rescind or invalidate the exemption granted by the TACB, the company had reason to believe that its interpretation of the exemption—equating "use" to "consumption"—was accurate. The court further holds that the corporation did not have fair notice of a regulatory obligation to apply for an exemption or file reports. The plain language of the regulation suggests that the exemption is self-executing and provides no discretion to EPA to determine whether or not to grant an exemption. However, the court then holds that by August 1989, EPA had provided the company actual notice that the plant did not qualify for the exemption. Letters from an EPA regional office, stating that recycled benzene must be counted in determining how much benzene a plant is designed to use, placed the company on actual notice of EPA's interpretation. Therefore, the court remands the case for consideration of penalties for the violations occurring after the company was put on notice in 1989. In an opinion concurring in part and dissenting in part, a judge would hold that against the background of inconsistent EPA interpretations over time and throughout different regions, the position of an EPA regional office should not constitute a definite agencywide EPA notice such that penalties could be imposed for noncompliance with one interpretation.

[The district court's decision in this litigation is published at 27 ELR 20487. Briefs and Pleadings in this litigation are published at ELR BRIEFS & PLEADS. 66493 and 66521.]

Counsel for Plaintiff
David C. Shilton
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

Counsel for Defendant
Andrea B. Field
Hunton & Williams
2000 Pennsylvania Ave. NW, Ste. 9000, Washington DC 20006
(202) 955-1555

Before Niemeyer and Stamp, JJ.