Howmet Corp. v. Environmental Protection Agency

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued May 7, 2010 Decided August 6, 2010

No. 09-5360

HOWMET CORPORATION,

APPELLANT

v.

ENVIRONMENTAL PROTECTION AGENCY AND LISA PEREZ

JACKSON, ADMINISTRATOR, UNITED STATES ENVIRONMENTAL

PROTECTION AGENCY,

APPELLEES

Appeal from the United States District Court

for the District of Columbia

(No. 1:07-cv-01306-EGS)

Bryan J. Moore argued the cause and filed the briefs for

appellant.

Donald J. Patterson, Jr. and Bethany S. French were on

the brief for amicus curiae Alliance of Automobile

Manufacturers in support of appellant.

2

Justin R. Pidot, Attorney, U.S. Department of Justice,

argued the cause for appellees. With him on the brief was

Robert H. Oakley, Attorney.

Before: SENTELLE, Chief Judge, BROWN and

KAVANAUGH, Circuit Judges.

Opinion for the Court filed by Circuit Judge BROWN.

Dissenting opinion filed by Circuit Judge KAVANAUGH.

BROWN, Circuit Judge: The Environmental Protection

Agency (EPA or the Agency) says Howmet Corporation

(Howmet) violated the Resource Conservation and Recovery

Act and the Hazardous and Solid Waste Amendments of 1984,

42 U.S.C. §§ 6901 et seq. (collectively RCRA), and its

implementing regulations. Howmet says its actions were

permitted by the regulations. Whether viewed as a syntactical

ambiguity or a semantic squabble, the dispute focuses on one

question: when is a material no longer serving “the purpose

for which it was produced?” The EPA insists the initial use of

the material is determinative; Howmet contends the initial use

is irrelevant. The question matters because “spent material” is

subject to RCRA’s hazardous waste regulations, but material

that has not been spent is not. Howmet insisted that used

KOH (liquid potassium hydroxide) sent to a fertilizer

manufacturer for use as a fertilizer ingredient was not “spent

material” and thus not subject to RCRA regulations. After

Howmet lost this argument before an administrative law judge

(ALJ) and the Environmental Appeals Board (EAB), the

district court rejected Howmet’s Administrative Procedure

Act claim and granted the EPA’s cross-motion for summary

judgment, holding the EPA’s interpretation of its “spent

material” regulation was not arbitrary and capricious and that

Howmet had fair notice of the Agency’s interpretation. See

3

Howmet Corp. v. EPA, 656 F. Supp. 2d 167 (D.D.C. 2009).

We affirm.

I

Subtitle C of RCRA, 42 U.S.C. §§ 6921–34, establishes a

“stringent ‘cradle-to-grave’ regulatory structure for overseeing

the safe treatment, storage and disposal of hazardous waste.”

Sierra Club v. EPA, 292 F.3d 895, 896 (D.C. Cir. 2001). The

statute defines “hazardous waste” as a “solid waste [that] may

. . . pose a substantial present or potential hazard to human

health or the environment when improperly treated, stored,

transported, or disposed of, or otherwise managed.” 42

U.S.C. § 6903(5). The EPA has broad investigatory and

enforcement authority under RCRA. See Gen. Motors Corp.

v. EPA, 363 F.3d 442, 444 (D.C. Cir. 2004). Pursuant to this

authority, the EPA has imposed numerous requirements and

restrictions on the generators and transporters of hazardous

waste, including requiring EPA identification numbers, 40

C.F.R. § 262.12(c), the use of hazardous waste manifests

identifying contaminants, id. § 262.20(a), and written

notification of land disposal restrictions, id. § 268.7(a).

Hazardous wastes are a subset of solid wastes. See 42

U.S.C. § 6903(5); 40 C.F.R. § 261.3(a). Since a substance

cannot be a “hazardous waste” or subject to the EPA’s

hazardous waste regulations unless it satisfies the threshold

definition of “solid waste,” our analysis begins with the

definition of solid waste. “Solid waste” is “discarded

material, including solid, liquid, semisolid, or contained

gaseous material resulting from industrial, commercial,

mining, and agricultural operations.” 42 U.S.C. § 6903(27).

Discarded material includes recycled materials (materials that

have been “used, reused, or reclaimed,” 40 C.F.R.

§ 261.1(c)(7)) and spent materials (any material so

4

contaminated by use it can no longer serve “the purpose for

which it was produced without processing,” id. § 261.1(c)(1)).

Under the EPA’s regulations, when a spent material is

recycled, it must be managed as a solid waste. Moreover, if

the material also exhibits a hazardous characteristic, such as

corrosivity,1 see id. §§ 261.3(a), 261.20–.24, it must be

managed as a hazardous waste subject to the RCRA

requirements. Thus, as the EAB noted, when a hazardous

“spent material” is recycled, or “[u]sed to produce products

that are applied to or placed on the land or are otherwise

contained in products that are applied to or placed on the

land,” id. § 261.2(c)(1)(i)(B), it must be managed as

hazardous waste. The resolution of this appeal rests on

whether the materials in question were “spent” and should be

deemed solid waste. Since “spent material” is material that

has been used and as a result of contamination can no longer

serve “the purpose for which it was produced without

processing,” the central issue in this case is the interpretation

of the phrase “the purpose for which it was produced.”

The EAB’s syllabus succinctly summarizes the dueling

interpretations: “Howmet argues that ‘purpose’ implies a

fundamental purpose. Howmet’s interpretation would allow a

multi-use product, such as KOH, to be used first as a cleaning

agent and then as a fertilizer ingredient without being ‘spent,’

because both uses allegedly are consistent with KOH’s broad

fundamental purpose as a concentrated source of hydroxide

ions and of potassium. [The Agency argues] that a product’s

purpose for production (i.e., ‘the purpose for which it was

produced’) must be related to its original use, [so] a product

first used as a cleaning agent becomes a ‘spent material’ when

1

Corrosivity is deemed present if the waste is aqueous and has a pH

of less than or equal to 2 or greater than or equal to 12.5. See 40

C.F.R. § 261.22(a).

5

it becomes too contaminated for that use and then is sent to a

fertilizer manufacturer to be used in a fundamentally different

manner.”

II

The facts in this case are not in dispute. Howmet

manufactures precision investment castings for aerospace and

industrial gas turbine applications. To clean the ceramic core

from the metal castings, Howmet uses an aqueous KOH

solution. During the cleaning process the KOH is

contaminated. Howmet uses the KOH solution until it

becomes so contaminated it can no longer effectively clean

the castings. The used KOH is corrosive. Thus, under the

EPA’s regulations, the used KOH would be regulated as

hazardous waste. See 40 C.F.R. § 261.22.

Typically, Howmet accumulates the used KOH in storage

tanks at an authorized hazardous waste disposal facility.

However, between August 1999 and September 2000,

Howmet sent some of the used KOH to Royster, an

independent fertilizer manufacturing company that, without

processing or otherwise reclaiming it, added the KOH to its

fertilizer to control pH and provide a source of potassium.

Howmet did not prepare any hazardous waste manifest for the

shipments to Royster or otherwise treat the KOH as a

hazardous waste under RCRA, 42 U.S.C. §§ 6901–91.

In 2003, the EPA brought enforcement actions against

Howmet, alleging the used KOH sent to Royster was a solid

and characteristic hazardous waste, in that it was corrosive

and potentially contaminated with chromium, and therefore

subject to RCRA jurisdiction. The EPA alleged Howmet

violated RCRA and its implementing regulations by

(1) shipping hazardous waste to facilities that did not have an

6

EPA identification number; (2) sending hazardous waste

offsite using transporters without EPA identification numbers;

(3) failing to prepare hazardous waste manifests for the KOH

shipments to Royster; and (4) failing to send and maintain on

file appropriate land disposal restriction notifications for the

KOH shipments informing Royster whether the KOH was too

contaminated for land application without prior treatment.

Howmet contested the allegations and requested a

hearing. An ALJ found Howmet liable under RCRA,

concluding the used KOH sent to Royster was a hazardous

“spent material” and therefore a solid waste that must be

managed as a hazardous waste and that Howmet had failed to

manage the KOH in accordance with EPA regulations. The

ALJ also concluded Howmet had not proved it was denied due

process because it had not received fair notice of the EPA’s

interpretation of its spent material regulation. The ALJ

assessed a civil fine of $309,091 against Howmet. Howmet

appealed to the EAB, which upheld the ALJ’s finding in a

lengthy decision detailing RCRA’s statutory and regulatory

framework. Howmet filed a complaint in the district court

claiming the EAB’s decision was arbitrary and capricious, but

the district court awarded summary judgment in favor of the

EPA, holding the EPA reasonably interpreted its “spent

material” regulation and that Howmet had fair notice of the

EPA’s interpretation. Howmet Corp., 656 F. Supp. 2d 167.

This appeal followed.

III

We review the district court’s grant of summary judgment

de novo, see Steele v. Schafer, 535 F.3d 689, 692 (D.C. Cir.

2008), and must set aside the EPA’s final determination if

“arbitrary, capricious, an abuse of discretion, or otherwise not

in accordance with law,” 5 U.S.C. § 706(2)(A). We accord an

7

agency’s interpretation of its own regulations a “high level of

deference,” accepting it “unless it is plainly wrong.” Gen.

Elec. Co. v. EPA, 53 F.3d 1324, 1327 (D.C. Cir. 1995); see

also Exportal Ltda. v. United States, 902 F.2d 45, 50 (D.C.

Cir. 1990) (“It is well established that a reviewing court owes

deference to an agency’s construction of its own

regulations.”). Under this standard, we must defer to the

EPA’s interpretation as long as it is “logically consistent with

the language of the regulation[s] and . . . serves a permissible

regulatory function.” Gen. Elec., 53 F.3d at 1327. But see

Exportal, 902 F.2d at 50 (explaining deference is due “only

when the plain meaning of the rule itself is doubtful or

ambiguous” and thus deference to an agency’s interpretation

“is not in order if the rule’s meaning is clear on its face”).

Moreover, “[t]he policy favoring deference is particularly

important where . . . a technically complex statutory scheme is

backed by an even more complex and comprehensive set of

regulations.” Gen. Elec., 53 F.3d at 1327 (noting that “[i]n

such circumstances, ‘the arguments for deference to

administrative expertise are at their strongest’”).

A. The definition of “spent material” is ambiguous

Both parties seem to agree our analysis should begin with

determining whether the regulatory text of the EPA’s spent

material definition, as applied to Howmet’s KOH shipments

to Royster, is clear on its face. Howmet argues the EPA’s

definition is unambiguous. It claims both the dictionary

definition of “purpose” (“the object . . . for which something

exists”), as well as the context of the regulation, are relevant

and support its position. Howmet insists the plain language of

the definition—“the purpose for which it was produced”—

looks retrospectively to a material’s intended purpose at the

time it was produced, not prospectively to the first use made

of the material following its production and therefore does not

8

permit the interpretation adopted by the EPA. The EPA, on

the other hand, argues the word “purpose” is ambiguous, both

taken alone and in context, and that the phrase “the purpose

for which it was produced” could relate to a material’s use,

especially where, as here, the producer of the material does

not itself put the material to use, but rather creates the product

for sale. We agree with the EPA.

Neither the word “purpose” nor the phrase “the purpose

for which it was produced” are defined in the EPA’s

regulations, and the dictionary definition relied on by Howmet

provides little help in determining the meaning of either the

word or phrase, as they are used in 40 C.F.R. § 261.1. The

everyday meanings of the term and phrase also do not provide

any clarity as to whether the initial use of a material is

relevant to determining the purpose for which the material

was produced. In sum, the text of the EPA’s definition is

simply ambiguous with respect to whether we should adopt

Howmet’s “multiple, original purposes” approach to

determining when a material is “spent,” or whether we should,

instead, adopt the “original use”-based purpose test advanced

by the EPA.

B. The EPA’s interpretation of the “spent material”

regulation is reasonable

Having concluded the plain language of the EPA’s “spent

material” definition does not answer the question whether the

used KOH sent to Royster was a spent material, we examine

whether the EPA’s interpretation of the definition is

reasonable. See, e.g., Gorman v. NTSB, 558 F.3d 580, 589

(D.C. Cir. 2009) (explaining this court must uphold an

agency’s interpretation of an ambiguous regulation if

reasonable); Devon Energy Corp. v. Kempthorne, 551 F.3d

1030, 1037 (D.C. Cir. 2008). In so doing, we look to the

9

EPA’s overall regulatory framework under RCRA, as well as

the regulatory history of the Agency’s “spent material”

definition. Both establish the EPA’s interpretation is

reasonable and consistent with the Agency’s prior

interpretations.

1. Regulatory History of the EPA’s “Spent Material”

Definition

The EPA’s current hazardous waste regulations were

promulgated in 1985 primarily to clarify “which materials are

solid and hazardous wastes when they are recycled.”

Hazardous Waste Mgmt. Sys.; Definition of Solid Waste, 50

Fed. Reg. 614, 614 (Jan. 4, 1985) (to be codified at 40 C.F.R.

pts. 260, 261, 264, 265, 266). The EPA’s original 1980

regulations implementing Subtitle C of RCRA did not include

a reference to “spent material” or a material’s “purpose.”

Hazardous Waste Mgmt. Sys.: Identification and Listing of

Hazardous Waste, 45 Fed. Reg. 33,084 (May 19, 1980) (to be

codified at 40 C.F.R. pt. 261). Instead, a material was

considered “solid waste” when, among other things, it had

been “used” and “sometimes discarded.” See id. at 33,093,

33,119. Under the regulations, a material that “ha[d] served

its original intended use and sometimes [wa]s discarded” was

a “solid waste.” 40 C.F.R. § 261.2(b)(2) (1980) (emphasis

added); see also 45 Fed. Reg. at 33,119.2 Thus, once a

material had been used and could no longer serve its originally

intended use, it was considered waste. Notably, the preamble

to the final 1980 regulations used the phrase “original

intended purpose” rather than “original intended use” to

2

A material was “discarded” if, among other things, it was “placed

into or on any land” without being “re-used, reclaimed or recycled.”

40 C.F.R. § 261.2(c), (d) (1980); see also 45 Fed. Reg. at 33,119.

10

describe “solid waste.” 45 Fed. Reg. at 33,093, 33,099

(emphasis added). The preamble, while not binding, see

Kennecott Utah Copper Corp. v. U.S. Dep’t of the Interior, 88

F.3d 1191, 1223 (D.C. Cir. 1996) (explaining “whether [a]

preamble has independent legal effect . . . is a function of the

agency’s intention to bind either itself or regulated parties);

see also Nat’l Res. Def. Council v. EPA, 559 F.3d 561, 565

(D.C. Cir. 2009), is informative with respect to how the EPA

intended to determine a material’s “purpose.” The fact the

EPA substituted the term “use” for “purpose” in the final

regulation is consistent with the EPA’s current position that a

used material’s original “purpose” should be determined by

looking to how the material was initially deployed after being

purchased as a product—i.e., the material’s “original intended

use.”

In 1983, the EPA proposed the rule containing the current

hazardous waste regulations. See Hazardous Waste Mgmt.

Sys., 48 Fed. Reg. 14,472 (proposed Apr. 4, 1983) (to be

codified at 40 C.F.R. pts. 260, 261, 264, 265, 266). The

Agency proposed several important changes to the definition

of “solid waste.” Most importantly, the EPA’s proposed

definition would no longer base a material’s status as solid

waste on whether it was “sometimes discarded.” See id. at

14,475. Instead, a recycled material’s regulatory status would

depend “upon both what the material [was] and how it [was]

actually managed.” Id. The revised definition of “solid

waste” stated that five types of recycling activities, including

“[u]se constituting disposal . . . which involves the direct

placement of wastes onto the land,” would be within the

EPA’s jurisdiction. Id. at 14,476. The five categories were

further divided according to the type of waste involved. One

such type of waste was “spent material,” which the EPA

described in the preamble as “materials that have been used

and are no longer fit for use without being regenerated,

11

reclaimed, or otherwise re-processed.” Id. (emphasis added).

The EPA explained that “processes using spent materials may

be more logical candidates for regulation because spent

materials (having already fulfilled their original use) are more

inherently waste-like.” Id. at 14,488 (emphasis added). The

proposed regulation itself defined “spent material” as “any

material that has been used and has served its original

purpose.” Id. at 14,508 (proposed 40 C.F.R. § 261.2(b)(1))

(emphasis added). Again, the EPA’s synonymous use of the

singular term “original use” and the term “original purpose”

reveals the Agency viewed the two concepts as closely

connected and interrelated.

The EPA finalized the proposed regulations in 1985. See

Hazardous Waste Mgmt. Sys.; Definition of Solid Waste, 50

Fed. Reg. 614 (Jan. 4, 1985). Although the EPA stated it

“was continuing to define spent materials as those which have

been used and are no longer fit for use without being

regenerated, reclaimed, or otherwise reprocessed,” id. at 624,

the EPA acknowledged its “reference to original purpose [in

the 1983 proposed regulations] was ambiguous when applied

to situations where a material can be used further without

being reclaimed, but the further use is not identical to the

initial use.” Id. The Agency therefore stated it was

“clarifying what [it] mean[t] by spent materials,” id., and,

accordingly, revised the wording of the definition to read as it

does today: “A ‘spent material’ is any material that has been

used and as a result of contamination can no longer serve the

purpose for which it was produced without processing,” 40

C.F.R. § 261.1(c)(1) (1985). In the preamble, the EPA

provided an example of a product used for a subsequent

purpose not identical to its original use that would not be

considered a spent material:

12

[W]here solvents used to clean circuit boards are no[]

longer pure enough for that continued use, but are still

pure enough for use as metal degreasers. These

solvents are not spent materials when used for metal

degreasing. The practice is simply continued use of a

solvent (This is analogous to using/reusing a

secondary material as an effective substitute for

commercial products.). The reworded regulation

clarifies this by stating that spent materials are those

that have been used, and as a result of that use become

contaminated by physical or chemical impurities, and

can no longer serve the purpose for which they were

produced.

50 Fed. Reg. at 624.

As noted above, we recognize an agency’s preamble

guidance generally does not have the binding force of the

agency’s regulations. Nonetheless, it is at least informative.

The example the EPA provided is illustrative of the type of

subsequent use of a material it sought to regulate under

RCRA. The example suggested certain “continued use[s]” of

a material sufficiently similar to or consistent with the

material’s initial use would be considered “a purpose for

which [the material] was produced” and thus permitted under

the Agency’s “spent material” definition. Thus, the example

makes clear the EPA was, in both 1983 and 1985, associating

the concept of “purpose” with “initial use.” The EPA’s

accompanying explanation further indicates the Agency

intended to place limits on the types of reuse allowable under

its regulations. The Agency’s acknowledgement that its spent

material definition was ambiguous when applied to situations

where a material’s “further use is not identical to [its] initial

use” implies the Agency intended to create a distinction

13

between certain types of reuse.3 In fact, had the EPA

intended, as Howmet insists, to allow any reuse that is a

“normal use” of a material, its clarification of situations where

“the further use is not identical to the initial use” would have

been superfluous.

2. RCRA’s overall purpose

In addition to being inconsistent with the regulatory

history of the EPA’s “spent material” definition, we find

Howmet’s position to be incompatible with the overall thrust

of RCRA and its implementing regulations. Congress

described the national policy objective of RCRA as, wherever

feasible, reducing or eliminating “the generation of hazardous

waste.” 42 U.S.C. § 6902(b). “Waste that is nevertheless

generated should be treated, stored, or disposed of so as to

minimize the present and future threat to human health and the

environment.” Id. Congress recognized that “disposal of

solid waste and hazardous waste in or on the land without

careful planning and management can present a danger to

3

Amicus Curiae in support of Howmet, Alliance of Automobile

Manufacturers, argues that, under the EAB’s decision in In Re: Gen.

Motors Auto.-N. Am., No. RCRA 05-2004-0001, Appeal No. RCRA

(3008) 06-02 (EAB June 20, 2008), handed down a year after the

EAB’s decision in Howmet, a material is not “spent” if

subsequently used for a “legitimate purpose,” even if that use is

different “in some sense” from how it was used in its initial

deployment. Amicus Br. at 5–7. However, Amicus’ argument

ignores a key part of the EAB’s holding in General Motors. In

General Motors, the EAB clarified its “continued use” policy by

holding a subsequent use must satisfy two primary conditions in

order to be considered “a purpose for which [the material] was

produced.” In re: Gen. Motors, slip op. at 2. The first condition is

that the continued use “must be similar to or consistent with the

initial deployment or application of the material.” Id.

14

human health and the environment.” Id. § 6901(b)(2).

Moreover, Congress acknowledged that materials being

reused and recycled “can indeed be solid and hazardous

wastes and that these various recycling activities may

constitute hazardous waste treatment, storage, or disposal.”

H.R. REP. NO. 98-198(I), at 46 (1983), reprinted in 1984

U.S.C.C.A.N. 5576, 5605. Congress thus conceded that

certain recycled materials must be regulated in order to further

its overall goal of “protect[ing] human health and the

environment.” Id.

Consistent with Congress’s guidance, the EPA’s

regulations recognize that recyclable materials, if not managed

properly, may present significant risks to public health and the

environment. Congress and the EPA have also indicated their

concerns are heightened when materials and applications

applied to the land are involved. See 48 Fed. Reg. at 14,474

(explaining that “wastes destined for recycling can present the

same potential for harm as wastes destined for treatment and

disposal,” that “using or reusing wastes by placing them

directly on the land . . . may present the same sorts of hazards

as actually incinerating or disposing of them,” and noting

“[f]acilities that recycle hazardous wastes have caused serious

health and environmental problems by directly placing the

wastes on the land” and that “[i]mproper storage,

overaccumulation of inventory, and unsafe transport before

recycling have also been recurring problems”).

Under the EPA’s regulations, certain recycled materials

are not treated as solid wastes when “[u]sed or reused as

ingredients in an industrial process to make a product,

provided the materials are not being reclaimed” or “[u]sed or

reused as effective substitutes for commercial products.” 40

C.F.R. § 261.2(e)(1)(i), (ii). However, “[m]aterials used in a

manner constituting disposal, or used to produce products that

15

are applied to the land,” id. § 261.2(e)(2)(i), are treated as

solid wastes, regardless, “even if the recycling involves use,

reuse, or return to the original process,” id. § 261.2(e)(2).

Accordingly, when a material has become contaminated, and a

party seeks to use the contaminated material for a purpose

substantially different from its original use by applying it to

the land, the party seeking to reuse the material has an

obligation to examine the material, disclose its hazardous

characteristics, and treat it as a hazardous waste. Fertilizer is

indisputably a product “applied to the land.” Thus, the

shipment of a corrosive material such as used KOH to be used

to produce fertilizer appears to be the type of activity the EPA

sought to regulate under RCRA.

Having determined the Agency’s interpretation is

reasonable, we need not evaluate the reasonableness of

Howmet’s proposed interpretation. Once it is established that

an agency has adopted a reasonable interpretation of an

ambiguous regulation, the agency’s interpretation stands even

if a regulated entity has proposed an interpretation that might

comport with the statutory scheme equally well or even better.

IV

We turn briefly to Howmet’s alternative argument that,

even if we conclude the EPA’s interpretation of its “spent

material” regulation was reasonable, we should nonetheless

reverse the district court because Howmet was not given fair

notice of the EPA’s interpretation. Howmet’s second

argument fares no better than its first.

“Traditional concepts of due process incorporated into

administrative law preclude an agency from penalizing a

private party for violating a rule without first providing

adequate notice of the substance of the rule.” Satellite Broad.

16

Co., Inc. v. FCC, 824 F.2d 1, 3 (D.C. Cir. 1987). In

determining whether a party was provided fair notice, we ask

first “whether the regulated party received, or should have

received, notice of the agency’s interpretation in the most

obvious way of all: by reading the regulations.” Gen. Elec.,

53 F.3d at 1329. “If, by reviewing the regulations and other

public statements issued by the agency, a regulated party

acting in good faith would be able to identify, with

‘ascertainable certainty,’ the standards with which the agency

expects parties to conform, then the agency has fairly notified

a petitioner of the agency’s interpretation.” Id. This court has

held published agency guidance may provide fair notice of an

agency’s interpretation of its own regulations. See Star

Wireless, LLC v. FCC, 522 F.3d 469, 474 (D.C. Cir. 2008).

One year after the EPA promulgated its 1985 final rule

defining “spent material,” 40 C.F.R. § 261.1(c)(1), it

published a guidance manual describing the interpretation it

adopted with respect to Howmet’s KOH shipments. See

OFFICE OF SOLID WASTE, U.S. EPA, GUIDANCE MANUAL ON

THE RCRA REGULATION OF RECYCLED HAZARDOUS WASTES

(1986) (Guidance Manual). The 1986 Guidance Manual

states:

[A] spent material is any material that has been used

and as a result of contamination can no longer serve

the purpose for which it was produced without

processing. EPA interprets “the purpose for which a

material was produced” to include all uses of the

product that are similar to the original use of the

particular batch of material in question. For example,

EPA cites the case of materials used as solvents to

clean printed circuit boards . . . . If the solvents

become too contaminated for this use but are still pure

enough for similar applications (e.g., use as metal

17

degreasers), they are not spent materials. Use of

slightly contaminated solvents in this way is simply

continued use of the original material rather than

recycling of a spent material. However, the solvents

would be spent materials if they had to be reclaimed

before reuse or if the manner in which they were used

was not similar to their original application. . . . As

[an] example, used plating baths reused directly in

other plating processes would not be spent materials.

If used for a purpose other than plating, however, the

used plating baths would be a spent material.

Id. at 1–7. The EPA announced the availability of the

Guidance Manual in the Federal Register. See 51 Fed. Reg.

26,892, 26,892 (July 28, 1986) (noting the guidance document

is “designed to assist . . . the regulated community in applying

the definition of solid waste . . . to determine which materials

when recycled are solid and hazardous wastes”); see also

Perales v. Reno, 48 F.3d 1305, 1316 (2d Cir. 1995) (“Due

process cases have long recognized that publication in the

Federal Register constitutes an adequate means of informing

the public of agency action.”).

The EPA’s explanation of the definition of spent material

in the Guidance Manual should have put Howmet on notice of

the EPA’s interpretation of its “spent material” definition, and

Howmet should have been able to determine that, based on the

EPA’s interpretation, the used KOH it transferred to Royster

was a spent material. Use as a fertilizer ingredient is not a use

“similar to” use as an industrial cleaning agent. Thus, even

assuming the EPA’s 1985 Final Rule and its accompanying

regulations lacked enough clarity, on their own, to provide

Howmet fair notice of the EPA’s interpretation of its spent

material definition, the Guidance Manual, made available to

Howmet one year after the regulation was promulgated and

18

thirteen years before the conduct at issue here, was sufficient

to do so.

V

For the foregoing reasons, the judgment of the district

court is

Affirmed.

KAVANAUGH, Circuit Judge, dissenting:

The Resource Conservation and Recovery Act of 1976

grants EPA authority to regulate the generation, storage,

transport, treatment, and disposal of “hazardous waste.” As

relevant here, the statute provides that hazardous waste must

be “discarded material.” 42 U.S.C. § 6903(5), (27). In 1985,

EPA issued regulations that construe “discarded material” to

include certain “spent material.” See 40 C.F.R. § 261.2. A

material is “spent” if it is no longer suitable for “the purpose

for which it was produced.” Id. § 261.1(c)(1). A separate

regulation makes clear that “purpose,” though singular, can

include multiple purposes. See id. § 260.3(b).

The key issue in this EPA enforcement action concerns

the 1985 regulations’ phrase “purpose[s] for which [a

material] was produced.” The material at issue here – liquid

potassium hydroxide – is produced and marketed for, among

other things, use in fertilizer. Yet EPA seeks to impose fines

on Howmet for shipping liquid potassium hydroxide for use

in fertilizer simply because Howmet had already used the

potassium hydroxide as a metal cleaning agent. In justifying

its enforcement action, EPA claims that the “purpose for

which [a material] was produced” includes only the material’s

first use by the purchaser.

In my judgment, EPA’s argument mangles the language

of the 1985 regulations. As a matter of plain English, the

purposes for which a material is produced are not limited to

how the material is initially used by a purchaser. As Howmet

cogently argues, “the first use that is made of a material after

the material is produced simply cannot define or change the

purpose for which the material was previously produced.”

Howmet Reply Br. at 5. To be sure, EPA would prevail here

if the 1985 regulation said that “spent material” is material

that is re-used. But the regulation does not say anything like

that. EPA’s current interpretation of the 1985 regulations in

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effect deletes the word “produced” and substitutes the words

“first used.” EPA’s current interpretation is flatly inconsistent

with the text of its 1985 regulations. To me, this case begins

and ends with that rather simple point.

Courts must not “permit the agency, under the guise of

interpreting a regulation, to create de facto a new regulation.”

Christensen v. Harris County, 529 U.S. 576, 588 (2000).

That’s what EPA is attempting to do here. EPA is seeking to

expand the definition of spent material – and thereby enlarge

its regulatory authority. It may be that broader EPA

regulatory authority in this area would be wise as a policy

matter. But EPA may not obtain that authority by distorting

the terms of the 1985 regulations.

What’s more, EPA’s current interpretation contravenes

EPA’s explicit statement in the preamble to the 1985

regulations – namely, that it was not extending its regulatory

authority to “situations where a material can be used further

without being reclaimed, but the further use is not identical to

the initial use.” Hazardous Waste Management System;

Definition of Solid Waste, 50 Fed. Reg. 614, 624 (Jan. 4,

1985). EPA now wants to read the 1985 regulations to allow

it to regulate precisely what the preamble said it could not

regulate.

Of course, there is good reason the 1985 regulations did

not go as far as EPA now wants to. Doing so would violate

the text of RCRA, the governing statute, which as relevant

here confines EPA’s authority to regulation of “discarded

material.” We have held that Congress intended the term

“discarded material” to carry its “ordinary, plain-English

meaning” – namely, to cover only material that is “disposed

of, thrown away, or abandoned.” American Mining Cong. v.

EPA, 824 F.2d 1177, 1184-85, 1190 (D.C. Cir. 1987); see

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also Ass’n of Battery Recyclers, Inc. v. EPA, 208 F.3d 1047,

1051 (D.C. Cir. 2000). EPA’s current extension of its RCRA

jurisdiction to reach materials that, far from being disposed

of, abandoned, or thrown away, are being used as anticipated

disregards Congress’s decision to restrict EPA’s authority to

regulation of “discarded material.” In our Court, Howmet has

raised a challenge based only on the 1985 regulations, not on

RCRA, so there is no basis here for further exploring the

statutory boundaries. But in light of today’s decision, we may

have to consider in a future case whether EPA’s expansion of

its regulatory authority transgresses RCRA’s limits.

* * *

I would reject EPA’s interpretation of its 1985

regulations as contrary to the clear language of the

regulations. Even assuming the regulations are susceptible to

a range of reasonable readings, EPA’s interpretation is outside

that range. See Auer v. Robbins, 519 U.S. 452, 461 (1997). I

respectfully dissent.