The Consolidated Appropriations Act, 2018 (Omnibus Bill), signed into law, on March 23, 2018, has exempted the reporting of "air emissions from animal waste at a farm" under CERCLA. This exemption is included in Title XI of the Act, called the “Fair Agricultural Reporting Method Act” or “FARM Act."
Last week, the United States Court of Appeals for the District of Columbia vacated an EPA final rule that had been in place for nine years. The Rule[i] exempted most farms from CERCLA[ii] and EPCRA[iii] reporting requirements for air releases from animal waste. On April 11, 2017, the court ruled that the EPA had exceeded its authority under the statutes in granting the exemptions. As such, the Court vacated the long-standing Rule, subjecting commercial animal farms to reporting requirements the EPA has characterized as costly and burdensome.
CERCLA and EPCRA require parties to notify authorities when large quantities of hazardous materials are released into the environment. Under 42 U.S.C. § 9603 of CERCLA, parties must immediately notify the National Response Center when a release exceeds thresholds set by the EPA. The NRC notifies appropriate government agencies, including the EPA and the Governor of an impacted state. The EPA then determines if a response is necessary. CERCLA grants the EPA broad powers to investigate and respond to actual or threatened releases. The agency can take remedial actions or order further monitoring or investigation. Likewise, 42 U.S. C. § 11004 of EPCRA contains a reporting requirement. This statute, however, requires parties to notify only state and local authorities when “extremely hazardous substances” are released.
When animal waste decomposes, it turns into ammonia and hydrogren sufide. CERCLA and EPCRA designate these substances as reportable hazards when they are released into the air at quanities of 100 pounds per day. The daily emissions of commercial animal farms regularly exceed this threshold. There is, however, no “best way” to measure these releases. The statutes somewhat accommodate this problem by providing for an annual notice of “continuous releases,” for releases that are continuous and stable in quantity and rate. Special notification is also required when there has been a “statistically significant” increase in the quantity above this annually reported amount.
In 2008, the EPA determined that these reporting requirements were unnecessarily burdensome to animal farms, largely because it found no regulatory benefit to the costly requirements. Specifically, the EPA stated that in most cases, a federal response was “impractical and unlikely.” It could not “foresee a situation when the Agency would initiate a response action as a result of such a notification.” The EPA thus issued a proposed rule exempting farms from CERCLA and EPCRA reporting requirements for air releases from animal waste. In response to public comments, however, the EPA crafted the final Rule to carve out from the exemption a reporting requirement for large concentrated animal farming operations (CAFOs) under EPCRA. These CAFOs were required to report releases to state and local authorities under EPCRA. No farms, however, had a reporting requirement under CERCLA. EPA estimated that the Rule would save farms more than a million hours and more than $60 million in compliance costs over 10 years. Correspondingly, the EPA estimated that the government would save 160,000 hours and $8 million in costs in responding to these reports.
In 2009, environmental groups challenged the Rule, arguing that EPA did not have the statutory authority to grant the exemptions. Agricultural groups challenged the Rule on the grounds that the large CAFO carve out from the EPCRA exemption was based upon the public’s desire for information, not the actual purpose of the statute. The purpose of the statute, the groups argued, was to facilitate emergency response.
Eight years after the Rule was first challenged, the United States Court of Appeals for the District of Columbia issued its opinion. The court found that it had exclusive jurisdiction to hear all challenges to CERCLA rules. As such, it also found that it had jurisdiction to consider the entire agency action, including the provisions pertaining the EPCRA, in a comprehensive fashion. Typically, a challenge to an EPCRA rule would have to be initiated in a federal district court.
The court examined the statute and ruled that neither CERCLA nor EPCRA granted the agency the authority to issue the Rule's reporting exemptions. Congress’ “sweeping reporting mandate” required that notification be made when there was “any release of a hazardous substance” equal to or exceeding reportable quantities. Although Congress did lay out several exemptions from the reporting requirement, those exemptions were specific and narrow. Congress did not grant EPA authority to fashion other exemptions consistent with the statutory purpose. The court noted that discretionary words such as “appropriate,” “effective,” or “economical,” were conspicuously absent from the statute. The court also stated that the “agencies are bound, not only by the ultimate purposes Congress has selected, but by the means it has deemed appropriate and prescribed for the pursuit of those purposes.” The court found that the statute unambiguously required the reporting.
The court also took issue with the EPA’s contention that because no regulatory benefit flowed from the reporting requirements, the de minimis doctrine should apply to negate them. The de minimis doctrine allows agencies to disregard the literal terms of a statute if its terms mandate truly pointless expenditures of effort. The court disagreed that the reporting requirements were pointless. The court stated that the record revealed some real benefits, such as allowing the EPA to investigate and issue abatement orders where pumping techniques or other actions lead to toxic levels of hazardous substances. The reporting also gives agencies notice of such a release so that if others contact them because of an odor or a concern about a release, they can quickly narrow their investigation. Because it found benefits to the reporting requirements, the court ruled that the de minimis doctrine was inapplicable. It did not matter if those regulatory benefits were largely outweighed by cost or burden.
The court thus vacated the Rule, finding that it was not justified by any statutory ambiguity or application of the de minimis exception. The court also dismissed the animal groups’ appeal as moot.
As a result of the ruling, all livestock farms large enough to emit levels of ammonia or hydrogen sulfide in excess of 100 pounds per day will be subject to CERCLA and EPCRA reporting requirements. This reporting will cost an estimated $60 million over 10 years. Barring any success on rehearing or appeal, any change to this new requirement must now be made by Congress.
Many of the farms subject to this new reporting requirement can likely comply by issuing an annual report of "continuous releases." Nonetheless, they'll be starting from scratch to implement these procedures. EPA will likely issue future guidance regarding these reports. We'll be watching for a petition for rehearing, as well as a petition for writ of certiorari.
We will keep you posted.
The case is Waterkeeper Alliance v. EPA, 2017 U.S. App. LEXIS 6174 (D.C. Cir. Apr. 11, 2017).
[i] Formally called the CERCLA/EPCRA Administrative Reporting Exemption for Air Releases of Hazardous Substances from Animal Waste at Farms, 73 Fed. Reg. 76, 948, 76,956/1 (December 18, 2008).
[ii] Comprehensive Environmental Response, Compensation, and Liability Act of 1980.
[iii] Emergency Planning and Community Right-to-Know Act of 1986.
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