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Beazer E., Inc. v. EPA, Region III

ELR Citation: 22 ELR 21161
Nos. No. 91-1692, 963 F.2d 603/34 ERC 1937/(3d Cir., 05/12/1992)

The court upholds the U.S. Environmental Protection Agency's (EPA's) interpretation of the 40 C.F.R. §260.10 definition of "tanks" as requiring tanks to be self-supporting when removed from the ground and filled to capacity with the material they were intended to contain. A coal tar plant operator challenged an administrative complaint, compliance order, and notice of opportunity for hearing charging that two aeration basins that constituted the operator's wastewater treatment system violated groundwater monitoring requirements under the Resource Conservation and Recovery Act (RCRA). The operator claimed that the basins were tanks within the meaning of §260.10, and thus not subject to RCRA's groundwater monitoring program. The court first holds that the appropriate standard of review is whether the agency action is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law. The court holds that EPA's interpretation is not subject to the notice and comment procedures of the Administrative Procedure Act (APA), because EPA is interpreting language already found in the regulation and is not adding to or amending language in it.

The court next holds that EPA's interpretation of the regulation is reasonable and not plainly erroneous or inconsistent with the regulation, because §260.10 requires greater structural integrity from tanks than from surface impoundments. This requirement is consistent with EPA's policy of protecting groundwater from hazardous waste. EPA requires that other tanks subject to RCRA permitting requirements be certified by an engineer to have "sufficient strength . . . to ensure that it will not collapse, rupture, or fall," and there is no reason to believe that the rupture or collapse of the coal plant operator's wastewater treatment basins is any less hazardous to the groundwater than the rupture or collapse of other tanks within the scope of RCRA. Also, EPA's interpretation gives meaning to the operative language of §260.10, thereby creating a bright line by which EPA may determine which wastewater facilities are subject to groundwater monitoring requirements.

The court holds that EPA is not required to give prior notice of its interpretation, because nothing in the APA prohibits an agency from adopting or revising an interpretation of a regulation that has been properly promulgated in an adjudication and applying that interpretation retroactively. This is not a situation where the agency inconsistently interpreted a standard over time. Rather, EPA is making a reasonable attempt to fill the interstices of a complex regulatory scheme by defining regulatory language within its authority.

The court holds that EPA's findings that the coal tar plant operator violated RCRA groundwater monitoring requirements are supported by substantial evidence. The court notes that because the operator's basins do not meet the structural support requirement under §260.10, the court need not decide whether EPA erroneously interprets the term "to contain" in the §260.10 definition of "tanks" to mean that tanks must be designed to be watertight. Finally, the court holds that the assessment of a $30,000 civil penalty by EPA against the operator for groundwater monitoring violations was not arbitrary or capricious.

Counsel for Appellant
Kenneth K. Kilbert
Babst, Calland, Clements & Zomnir
Two Gateway Center, 8th Fl., Pittsburgh PA 15222
(412) 394-5400

Counsel for Appellee
M. Alice Thurston
Environmental and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

Counsel for Amicus Curiae
G. William Frick
American Petroleum Institute
1220 L St. NW, Washington DC 20005
(202) 682-8000

Counsel for Amicus Curiae - American Petroleum Institute
John C. Chambers Jr.
McKenna & Cuneo
1575 I St. NW, Washington DC 20005
(202) 789-7500

Before Sloviter, J. and Scirica, JJ.