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Fertilizer Institute v. USEPA

United States Court of Appeals, District of Columbia Circuit
935 F.2d 1303 (1991)
ELI5:

Rule of Law:

Under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), a reportable "release" requires the actual movement of a hazardous substance from a facility into the environment; an agency's interpretation defining it as mere placement into an unenclosed container is invalid as it contradicts the statute's plain meaning. Additionally, a final agency rule must be a "logical outgrowth" of the proposed rule, and creating a new category of administrative exemptions not mentioned in the proposal fails this test.


Facts:

  • Congress enacted CERCLA, which requires parties to notify the EPA of any "release" of a "reportable quantity" (RQ) of a hazardous substance into the environment.
  • The EPA initiated rulemaking to establish the RQs for approximately 1,500 different radionuclides.
  • In the preamble to its final rule, the EPA interpreted the term "release" to include the placement of a hazardous substance into any "unenclosed containment structure" where it is exposed to the environment.
  • Under the EPA's interpretation, this placement would constitute a reportable release regardless of whether any of the substance actually escaped into the air, soil, or water.
  • The final rule also created several "administrative exemptions" from this reporting requirement for certain industries and land uses, such as farms, golf courses, and coal ash dumps.
  • The Fertilizer Institute and other industrial trade associations challenged the EPA's interpretation and the creation of the exemptions.

Procedural Posture:

  • The EPA published a proposed rule in the Federal Register to set Reportable Quantities (RQs) for radionuclides under CERCLA.
  • Following a period of public notice and comment, the EPA issued a final rule on May 24, 1989.
  • The Fertilizer Institute, the American Mining Congress, and other trade associations (Petitioners) filed petitions for review of the final rule in the U.S. Court of Appeals for the District of Columbia Circuit.
  • The court consolidated the various petitions for review.

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Issue:

Does the Environmental Protection Agency's (EPA) interpretation of "release" under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), which defines a release to include the mere placement of a hazardous substance into an unenclosed containment structure, contradict the plain meaning of the statute?


Opinions:

Majority - Circuit Judge Henderson

Yes, the EPA's interpretation of "release" contradicts the plain meaning of CERCLA. While the interpretation was properly promulgated as an "interpretative rule" exempt from notice-and-comment requirements, it fails on the merits because it conflicts with the clear statutory language. CERCLA defines a "release" as the movement of a substance, such as by spilling or leaking, from a "facility" (like a tank) into the "environment" (air, water, or land). The EPA's rule incorrectly equates placing a substance into an unenclosed facility with a release into the environment. The court rejected the EPA’s argument that the threat of a release is sufficient to trigger reporting, noting that other sections of CERCLA explicitly distinguish between actual releases and threatened releases, and Congress's omission of 'threatened release' from the reporting section must be considered intentional.



Analysis:

This decision reinforces a key principle of administrative law under the Chevron doctrine: an agency's interpretation cannot stand when it contradicts the clear and unambiguous text of a statute. By invalidating the EPA's broad definition of "release," the court narrowed the scope of CERCLA's reporting requirements to actual, not merely potential, instances of environmental contamination from storage. The ruling also clarifies the "logical outgrowth" test for APA rulemaking, setting a limit on an agency's ability to introduce new regulatory concepts in a final rule that were not reasonably foreseeable from the initial proposal, thereby protecting the integrity of the public notice-and-comment process.

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