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National Recycling Coalition v. Browner

ELR Citation: 23 ELR 20534
Nos. No. 88-1703, 984 F.2d 1243/36 ERC 1273/(D.C. Cir., 02/16/1993) Aff'd

The court upholds the U.S. Environmental Protection Agency's (EPA's) regulations promulgated under the Resource Conservation and Recovery Act (RCRA) §6002(e) that govern the procurement by the federal government, or for use in federally funded government projects, of products containing re-refined oil, retread tires, and building insulation, against challenges that the regulations violate RCRA and the Administrative Procedure Act (APA). A recycling coalition, which includes corporations engaged in commercial recycling, challenged EPA's final regulations required under RCRA §6002(e) for the use of procuring agencies in complying with RCRA. The coalition specifically challenged the final regulations' failure to include in their scope purchases that are incidental to federal funding, such as those by contractors to federal projects unrelated or incidental to the federal funding. The coalition also challenged the regulations' failure to provide information as to the availability, relative price, and performance of recycled materials.

The court first holds that the recycling coalition meets both constitutional and prudential standing requirements to challenge the final regulations. The coalition's position in this challenge is similar in relevant respects to its previous challenge to EPA's final recycling regulations for paper and paper products, in which the court found the coalition met the requirements for constitutional standing. The court concludes that the coalition also satisfies the requirements for prudential standing, because it is within the zone of interests that RCRA §7002(a)(2)'s citizen suit provision protects. The coalition itself has several contracts with EPA governed by the terms of the challenged guidelines, and individual corporations included in the coalition are engaged in commercial recycling and so would have standing to bring this action in their own right. The court also holds that the coalition's challenge is ripe for review, because EPA's guidelines constitute final agency action. Contrary to EPA's argument, the regulations do not have to be adopted by other agencies before they become ripe for review, since EPA is itself a procuring agency and Congress has expressed its preference for prompt judicial review.

Turning to the merits, the court holds that EPA's interpretation of RCRA §6002 to permit an incidental purchases exception for procuring agencies is rational and survives both steps of the analysis require under Chevron U.S.A., Inc. v. Natural Resources Defense Council, 14 ELR 20507. First, RCRA does not clearly preclude the interpretation allowing the incidental purchases exception. The statutory definition of "procuring agency" in RCRA §6003(17), which is incorporated into the procurement provisions of §6002, permits, if not compels, the conclusion that while every federal agency is a "procuring agency" subject to the guidelines, state and local agencies and governmental contractors are "procuring agencies" only to the extent that they expend "appropriated funds for procurement" under the contract or act "with respect to work performed under" such contracts. At a minimum, there is sufficient ambiguity to preclude a conclusion that Congress has directly spoken to the propriety of an incidental purchases exception to RCRA, and there is no merit in the coalition's claim that EPA's interpretation is without authorization and contrary to the clear intent of Congress.

The court next holds that under the second step of the Chevron analysis, EPA's interpretation of RCRA is rational, and the court may not substitute either its own or the coalition's in its place. First, although RCRA's legislative history contains expressions that Congress intended to use federal purchasing power to stimulate other levels of government and private industry to increase use of recovered materials, the legislative history does not indicate a congressional purpose as to the scope of applicability of the procuring regulations or the permissibility of an incidental purchases exception. Nothing in the congressional reports suggests that Congress intended no exceptions other than the $10,000 floor of purchases per year for which the guidelines would attach. The court also holds that the incidental purchases exception is permissible under step two of Chevron analysis, because RCRA's definition of "procuring agency" makes clear that a nexus must exist between an item purchased by a contractor or nonfederal agency and the contract or other federal funding agreement. Moreover, the legislative history is consistent with EPA's position that the primary impact of its guidelines on nonfederal entities is through a stimulus, and that the guidelines apply with binding force to state and local governments and private industry only when they purchase items with federal funds directly for use by the federal government or in federally funded contracts.

The court next holds that the guidelines are not arbitrary and capricious under the APA, and are based on sufficient reasoning to be upheld. EPA's interpretation of RCRA §6002(a), explained by the Agency in five different sets of guidelines, meets the standard of being reasonably discerned. For the tire, insulation, and oil guidelines, EPA explained the basis for its legal interpretation in its proposals. In the insulation proposal, EPA further distinguished between purchases that directly result from a contract with a procuring agency and those that do not, explained that the basis for this distinction is found in §§1004(17) and 6002, and provided examples to illustrate how its interpretation might apply to specific situations. These explanations satisfy APA §553(c)'s requirement of a "concise general statement of [the rules'] basis and purposes."

The court holds that although the final guidelines do not include price and availability data as required by RCRA §6002(e), EPA satisfied its obligation to provide that information by informing interested persons where they may secure price and availability data. EPA determined that price and availability information for the products at issue was highly variable and depends on various factors that constantly change. Thus, EPA's decision to provide the identity of sources where that changing information could be readily obtained was not arbitrary and capricious.

Finally, the court holds that EPA acted reasonably in determining that adequate supplies of usable recovered materials do not exist to warrant establishing a minimum content standard for fiberglass building insulation. The court upholds EPA's decision to use a case-by-case approach for fiberglass insulation as the most efficient method to implement the preference for recovered materials, because the statutory language indicates Congress' intent that EPA resolve open questions and ambiguities and EPA adequately explained its decision.

[Previous decisions in this litigation are published at 19 ELR 21424 and 20 ELR 20427.]

Counsel for Petitioner
Clifford P. Case III
Berle, Cass & Case
45 Rockefeller Plaza, Ste. 2350, New York NY 10111
(212) 765-1800

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

Richard T. Witt
U.S. Environmental Protection Agency
401 M St. SW, Washington DC 20460
(202) 260-2090

Before WILLIAMS, SENTELLE, and RANDOLPH, Circuit Judges.