DC Circuit Rejects Challenge to EPA’s CERCLA Decision Regarding Hardrock Mining Industry

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In a decision that will likely be welcomed by the electrical power, chemical manufacturing, and petroleum and coal products manufacturing industries, on July 19, 2019, the U.S. Court of Appeals for the District of Columbia Circuit held in the case of Idaho Conservation League et al., v. Wheeler, that EPA acted reasonably in deciding not to issue CERCLA financial responsibility regulations for the hardrock mining industry. CERCLA (a.k.a., Superfund) was enacted in 1980 and amended in 1986, and Section 108(b) of CERCLA provides that EPA shall promulgate requirements that classes of facilities establish and maintain evidence of financial responsibility “consistent with the degree and duration of risk” associated with the production, transportation, treatment, storage or disposal of hazardous substances. However, no action was taken to implement Section 108(b) until 2009, and then only as the result of litigation challenging EPA’s failure to act. EPA and the petitioners agreed to a schedule by which the agency would propose financial responsibility rules for the hardrock mining industry—which was the initial class of industry facilities selected for the possible application of these rules—and the DC Circuit approved this schedule in 2016, which contained the court’s caveat that EPA retained the discretion not to issue any rule at the conclusion of the rulemaking.

The proposed hardrock mining rules were published in January 2017, and EPA noted then that there was abundant evidence that hardrock mining facilities “continue to pose risks associated with the management of hazardous substances at their sites.” However, at the conclusion of this proceeding, EPA had changed its mind: modern mining techniques and the development of strong mining regulatory programs at the state and federal level persuaded the agency that the financial risks that it feared (being threats to the federal fisc from cleaning up Superfund mining sites) were no longer significant enough to warrant the promulgation of these rules. The environmental petitioners challenged this decision of the agency, but their challenge was unsuccessful.

Applying the traditional Chevron analysis, the court held that EPA’s interpretation of the term “risk” as employed in the statue was reasonable, and provided the agency with the discretion it needed to determine that the emphasis on “risk” in Section108(b) was limited to financial risks to the government and not exclusively environmental risks. All of the issues raised by the petitioners were rejected by the court, and therefore the EPA’s actions were not arbitrary and capricious. The court agreed that this industry was involved in many large historic CERCLA sites, but it would not substitute its judgment on these factors in place of EPA’s.

Presumably, EPA will work its way through the other industry categories it selected for consideration of new CERCLA financial responsibility rules, but the prospect of additional regulation may no longer seem so imminent.

 

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