Petition for Writ of Certiorari — Harendra Enterprises Enterprises, Inc. v. Wisconsin (No. 08-319)
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(7) } Supreme Court U.S.
08-319 SEP 4- 2008
04
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see °" OE EICE OF THE CLERK
Hn the Supreme Court of the United States
HARENDA ENTERPRISES, INC.,
Petitioner,
ws
STATE OF WISCONSIN,
Respondent.
ON PETITION FOR WRIT OF CERTIORARI
TO THE SUPREME COURT OF WISCONSIN
PETITION FOR WRIT OF CERTIORARI
MARK W. RATTAN
Counsel of Record
LITCHFIELD CAVO, LLP
13400 BISHOPS LANE, SUITE 290
BROOKFIELD, WI 53005
(262) 784-8966
ATTORNEY FOR PETITIONER
LEGAL PRINTERS, Washington DC @ 202-747-2400 e@ leyvalprinters.com
QUESTIONS PRESENTED FOR REVIEW
Introductory Statement
Petitioner, Harenda Enterprises, Inc. (HEI), is
one of many firms across the United States that
investigates buildings to determine whether they
contain a level of asbestos that must be abated prior
to renovation. In a 4-3 decision, the Supreme Court
of Wisconsin held HEI liable for asbestos abatement
violations pursuant to a long-held policy of the
federal Environmental Protection Agency (EPA) that
was never enacted by legal administrative
rulemaking under the federal Administrative
Procedure Act (APA), and that is inconsistent with
the asbestos abatement regulation that the EPA did
legally enact under the APA. _ Effectively, the
Wisconsin decision also holds that, when the
defendant’s test results for asbestos are negative and
government’s test results are _ positive, the
government’s positive test results are presumptively
valid and the defendant’s negative test results are
presumptively invalid. The effect of the decision is
to vastly increase the social and economic cost of
asbestos abatement and to impose a presumption of
guilt on a defendant accused of violating asbestos
abatement regulations.
Questions Presented For Review
Issue 1:
Can two publications unilaterally handed-
down by the EPA without observance of legally
required administrative rulemaking -- the effect of
a
which dramatically increases the _ social and
economic cost of asbestos abatement and increases
the criminal and civil liability of owners and
operators of building renovations -- be given the
force of law by the courts and thereby serve as the
basis for imposition of criminal and civil hability
under other properly enacted asbestos abatement
regulations?
Issue 2:
Did the Supreme Court of Wisconsin violate
HEI’s substantive due process rights under the 14th
Amendment to the U.S. Constitution by holding HEI
liable for asbestos abatement violations on a
presumption of guilt under circumstances where the
defendant’s test results for asbestos are negative and
the government’s tests for asbestos are positive?
Issue 3:
If, as the State contended in the lower courts,
and as the Supreme Court of Wisconsin held, the
asbestos abatement regulation that the EPA did
pass through legal administrative rulemaking is
vague, confusing and unclearly written, the issue
becomes whether the regulation is void for
vagueness under the 14th Amendment to the U.S.
Constitution.
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PARTIES TO THE PROCEEDING
The parties to this petition are as indicated on
the caption.
Petitioner is Harenda Enterprises, Inc., and
respondent is the State of Wisconsin.
Harenda Enterprises, Inc. has no _ parent
corporations, and there is no corporation that owns
10% or more of Harenda Enterprises, Inc.’s stock.
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TABLE OF CONTENTS
SECTION TITLE Page
QUESTIONS PRESENTED FOR REVIEW 1
Introductory Statement ............ i
Questions Presented For Review ..... 1
PARTIES TO THE PROCEEDING....... iii
PUI I GADIN EME: os cece vi sseees iv
CITATIONS OF OFFICIAL REPORTS... 1
STATEMENT OF THE BASIS’ FOR
RRO 6k a 5)ns Wb ee ea Sais es wo es 2
CONSTITUTIONAL PROVISIONS,
TREATIES AND ORDINANCES
INVOLVED IN THE CASE............. 3
STATEMENT OF THE CASE........... 4
I. NATURE OF THE CASE......... 4
II. NATURE OF THE FEDERAL
ISSUES INVOLVED IN THE CASE 7
A. ‘The Federal Issue Concerning
The Supreme Court Of
Wisconsin Having Validated
The EPA’s Illegal Attempt
-]1V-
SECTION TITLE Page
To Pass Substantive
Regulations Without
Observing Administrative
Procedure Act Rulemaking... 7
1. Background: The
Legally Passed
Regulations Under The
NESHAP And The
Interim Method...... 7
2. The Federal Issue
Regarding The EPA’s
Illegal Attempt To
Effect A Substantive
Change To The Interim
Method By
Administrative Fiat... 10
B. The Federal Issue Concerning
The Violation Of HEI’s
Substantive Due Process
UG ik vk bwide een ye eaw es 16
C. The Federal Issue Concerning
The Interim Method Being
Void For Vagueness........ 18
il. STAGE OF THE PROCEEDINGS
IN THE LOWER COURTS WHEN
THE FEDERAL QUESTIONS
ee eee 19
SECTION TITLE
RULE 14(h): REASONS WHY THE WRIT
SHOULD BE GRANTED .. 0.0... ce0-
I. THIS COURT SHOULD GRANT
CERTIORARI UNDER RULE 10(c)
BECAUSE THE SUPREME COURT
OF WISCONSIN HAS DECIDED
AN IMPORTANT QUESTION OF
FEDERAL LAW THAT SHOULD
BE SETTLED BY THIS COURT...
A. This Court Should Settle The
Federal Question Concerning
The Single Layer v. Combined
Layer Testing Method
Because The EPA’s Illegal
Rule Significantly Increases
The Economic And Social Cost
Of Asbestos Abatement
OI hee Sk. ck bee aea:s
B. This Court Should Settle The
Federal Question Concerning
The Single Layer v. Combined
Layer Testing Method
Because The Supreme
Court Of Wisconsin’s Decision
Increases Potential
Asbestos Liability In Building
TE ok ep bw ee ess
Il. THIS COURT SHOULD GRANT
CERTIORARI UNDER RULE 10(b)
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Page
No.
22
22
22
25
Il.
SECTION TITLE
BECAUSE THE INCONSISTENT
DECISIONS BY THE LOWER
COURTS WARRANT THAT THE
FEDERAL ISSUE CONCERNING
SINGLE LAYER VERSUS
COMBINED LAYER TESTING BE
SETTLED BY THIS COURT......
THIS COURT SHOULD GRANT
CERTIORARI ON THE
SUBSTANTIVE DUE PROCESS
ISSUE UNDER RULE 10(c)
BECAUSE IT HAS NATIONAL
IMPLICATIONS FOR THE COST
OF ASBESTOS ABATEMENT
ENN as ck eS E Oa ek
A. This Court Should Settle The
Substantive Due _ Process
Issue Concerning Whether
The State’s Positive Test
Results Are Presumptively
Valid And The Defendant’s
Negative Test Results Are
Presumptively Invalid......
B. This Court Should Settle The
Substantive Due _‘— Process
Issue Concerning Whether
Liability For Asbestos
Abatement Violations Must
Be Based Upon
Representative Samples.....
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Page
No.
26
29
29
32
APPENDICES
Document No.
Document No. 1:
State of Wisconsin v. Harenda Enterprises,
Inc., 2008 WI 16, _.. Wis. 2d __, 746
PN, Pe cn er OP I bk svc ee ae wl ee
Document No. 2:
State of Wisconsin v. Harenda Enterprises,
Inc., 2006 WI App 230, 297 Wis. 2d 571,
724 N.W.2d 434 (Wis. Ct. App. 2006).....
Document No. 3:
Order of the Supreme Court of Wisconsin
Denying Rehearing, June 11, 2008.......
Document No. 4:
ee ee NE 6 ecco 8 Cain ie a
Document No. 5:
National Emission Standards For
Hazardous Air Pollutants (NESHAP), 40
Mere Rae, Ob MOO 6 ok C8 he eS ke ies
Document No. 6:
Interim Method of the Determination of
Asbestos in Bulk Insulation Samples,
appendix E, subpart E, 40 CFR part 763,
NN Be kK ob ye Ce ee oe ca en eee
Document No. 7:
Clean Air Act, 42 U.S.C. §7412
-Vill-
Page
A-70
A-73
A-75
A-101
Document No.
Administrative Procedure Act (APA), 5
ee Se ds gi eo ae pg 6. seks ss
Document No. 8:
Administrative Procedure Act, 5 U.S.C.
Document No. 9:
NR 447.04(28), Wisconsin Administrative
ATES SS eg a a er
Document No. 10:
NR 447.01-.02; NR 447.06-.08; NR 447.18,
Wisconsin Admin '‘strative Code..........
Document No. 1°
Asbestos NESH.\P Clarification Regarding
Analysis Of Multi-Layered Systems,
Federal Register, Vol. 59, No. 3, January 5,
kya vined a se sake 4 MN 0.8 Co 6 48
Document No. 12:
Asbestos NESHAP Clarification Regarding
Analysis Of Multi-Layered Systems,
Federal Register, Vol. 60, pp. 65243-44,
te eek ec ewe wees
Document No. 13:
United States v. San Diego Gas & Electric
Company, 2006 WL 391 3457 (Nov. 21,
mouer * wan Diego Gaal’)... ... 2.2.2.0 ee
-1X-
A-124
A-126
A-154
A-159
Document No.
Document No. 14:
Trial Court Stipulation.................
Document Ne. 15:
Order Concerning Summary Judgment
Motions, Other Motions And Scheduling. .
Document No. 16:
Trial Court Order Denying Motion In
a a CK ays eae ROK OR Re ew
Document No.17:
Findings Of Fact And Coriclusions Of Law
Document No. 18:
Final Judgment In Favor Of The State Of
ee ee ee Aa
Document No. 19:
EPA “Notice”, 59 Fed. Reg. 38970 (August
Re a ee alae aba ie
Document No. 20:
UTED. ko eh cerewien
Document No. 21:
et RS SE ROED 66s we dee hoe be ek eee
Document No. 22:
United States v. San Diego Gas & Electric
Company, 2007 WL 4326773 (December 7,
2007) € “San Diedo Gee ff")... wc ce ees
A-202
A-210
A-226
Document No. Page
No.
Document No. 23:
Asbestos-Containing Materials in School
Buildings: A Guidance Document
nD BE eee oa rer re oe er A-277
-X1-
TABLE OF CITED AUTHORITIES
Cited Authority Page
Cases
State of Wisconsin v. Harenda Enterprises, Inc.,
2008 W116,___s- Wis. 2d__, 746 N.W.2d 25
(Wis. 2008) [Appx., Doc. 1]......:.cccsseeeesseeeetesseeseteeesees 1
State of Wisconsin v. Harenda Enterprises, Inc.,
2006 WI App 230, 297 Wis. 2d 571, 724
N.W.2d 434, (Wis. Ct. App. 2096) [Appx., Doc. 2].... 1
United States v. San Diego Gas & Electric )
Company, 2006 WL 391 3457 |
(Nov. 21, 2006) (“San Diego Gas I’)
EArt, TIG6G; LOE ccccsevsesesscosessecens. 13, 16, 21, 23, 26-28
United States v. San Diego Gas & Electric
Company, 2007 WL 4326773
(December 7, 2007) (“San Diego Gas IT’) |
NN oe 4 ies Uavenhns-datvcabenaseden se one 33, 35-38
|
j Women’s Medicai Center of Northwest
Houston v. Bell, 248 F. 3d 411 (5th Cir. 2001)...... 19
|
q Constitutional Provisions
14th Amendment to U.S. Constitution ....... a, 17, 19
Statutes
Be SFG. BAO? TPIE., DIGG, 4) x00... .cccsvecssscncecessces 2
-Xil
Cited Authority Page
Administrative Procedure Act, 5 U.S.C. §553
RN PRIN TE os ch edi als died sidkecanan dekuleasanmpevoinivantnimn swan 7
Clean Air Act, 42 U.S.C. §7412 [Appx., Doc. 7] ...... a.
Clean Air Act, 42 U.S.C. §7413(b)
i lv s abs cesouenains 25
Wis. Stat. §285.87(1) [Appx., Doc. 20]................... 25
Regulations
Asbestos-Containing Materials in School
Buildings: A Guidance Document (“Reference 5”)
SUNN: NE MEE Shas hAnicesucneine daievesmacevascnydes 18, 33-34, 36
Interim Method of the Determination of Asbestos
in Bulk Insulation Samples, appendix E,
subpart E, 40 CFR part 763, section 1.7.2.1.
[Appx., Doc. 6] .......... 7, 8-16, 18-23, 26-28, 33-35, 38
National Emission Standards For Hazardous Air
Pollutants (NESHAP), 40 CFR §61.140, et. seg. [Appx.,
BOOT vasvesasss 7-8, 11-12, 16, 18, 20, 22, 25, 34, 36-38
NR 447.04(28), Wisconsin Administrative Code
I ET a hrc lane aca tekondsais sn Mdacud eased vieitiete 9
-Xill
Cited Authority Page
No.
Other - EPA Publications
Asbestos NESHAP Clarification Regarding
Analysis Of Multi-Layered Systems, Federal
Register, Vol. 59, No. 3, January 5, 1994
SON NS I Da ial eucallsinnne 11
Asbestos NESHAP Clarification Regarding
Analysis Of Multi-Layered Systems, Federal
Register, Vol. 60, pp. 65243-44,
December 19, 1995 [Appx., Doc. 12]...................... 12
EPA “Notice”, 59 Fed. Reg. 38970 (August 1, 1994)
Ss) MN INE Sissi cscs beeps suc eves phicabodl dey aadaetee vata 22
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CITATIONS TO OFFICIAL REPORTS
The citation to the opinion of the Supreme
Court of Wisconsin is State of Wisconsin v. Harenda
Enterprises, Inc., 2008 WI 16, Wis. 2d __., 746
N.W. 2d 25 (2008). [Appx., Doc. 1, pp. A-1 to A-56]
The citation to the Wisconsin Court of Appeals
decision is State of Wisconsin v. MHarenda
Enterprises, Inc., 2006 WI App 230, 297 Wis. 2d 571,
724 N.W.2d 434 (Ct. App. 2006). [Appx., Doc. 2, pp.
A-57 to A-59]
STATEMENT OF THE BASIS FOR
JURISDICTION
The date of the judgment sought to be
reviewed is a decision of the Supreme Court of
Wisconsin dated March 13, 2008. [Appx., Doc. 1, pp.
A-1 to A-56]
The date of the denial of rehearing is June 11,
2008. [Appx., Doc. 3, pp. 70-72]
The statutory provision that confers on this
Court jurisdiction to review a petition for writ of
certiorari the judgment in question is 28 U.S.C.
§1257. [Appx., Doc. 4, pp. A-73 to A-74]
CONSTITUTIONAL PROVISIONS, TREATIES,
STATUTES AND ORDINANCES
INVOLVED IN THE CASE
This case involves the due process clause of
the 14th Amendment to the U.S. Constitution, which
provides in relevant part as follows.
Section 1. ... No State shall make or
enforce any law which shall abridge the
privileges or immunities of citizens of the
United States; nor shall any State deprive
any person of life, liberty, or property,
without due process of law; nor deny to any
person within its jurisdiction the equal
protection of the laws.
Per rule 14.1(f), the remaining provisions are
too voluminous to reproduce here, and are
accordingly reproduced in the Appendix. They are
all cited in the Table of Contents above.
STATEMENT OF THE CASE
I. NATURE OF THE CASE.
Respondent, the State of Wisconsin (“the
State”) filed this action against petitioner, Harenda
Enterprises, Inc. (HED), in the Circuit Court of
Milwaukee County, Wisconsin on July 30, 2003
seeking recovery for HEI’s alleged failure to comply
with various asbestos abatement regulations in
connection with the renovation of a building known
as the Milwaukee Auditorium (“the Auditorium”).
HEI is in the business of environmental, health and
safety consulting and contracting. The Wisconsin
Center District (WCD), a quasi-municipality that
operates the Auditorium, retained HEI to render
professional asbestos consulting services. in
connection with the renovation. HEI’s primary role
was to undertake sampling and testing of ceilings,
walls and other components of the Auditorium to
determine whether any components of the
Auditorium contained asbestos that would have to be
abated prior to renovation under applicable federal
laws and regulations more fully described in the
following section.
In sum and substance, the State contended in
the lower courts that HEI failed to identify all of the
asbestos in the Auditorium under the illegal testing
protocols that the EPA never enacted through proper
rulemaking. Because of HEI’s alleged failure to
identify all the asbestos, the State contended that
various walls of the Auditorium that contained
asbestos were demolished without observance of the
asbestos abatement regulations. HEI’s failure to
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identify all of the asbestos subjected HEI to the
forfeiture penalties imposed by the regulations, the
State contended.
In a 4-3 decision, the Supreme Court of
Wisconsin ruled for the State, and found HEI liable
for asbestos abatement violations pursuant to the
EPA’s illegal testing protocols that were never
enacted by legal administrative rulemaking under
the APA. The Wisconsin decision is inconsistent
with the testing protocols in the asbestos abatement
regulation that the EPA did legally enact under the
APA. Under this decision, when the defendant’s test
results are negative for asbestos and government’s
test results for asbestos are _ positive, the
government’s positive test results are presumptively
valid and the defendant’s negative test results are
presumptively invalid.
If allowed to stand, the effect of the decision is
two-fold. First, it subjects owners and operators of
building renovations to criminal liability and
millions of dollars in civil forfeiture penalties based
upon (1) EPA policies concerning asbestos testing
never enacted as rules, and (2) an illegal
presumption of guilt in favor of the government and
against the individual. Second, the Wisconsin
decision vastly increases the economic and social cost
of asbestos abatement in building renovations on a
national basis, and vastly expands the jurisdiction of
the EPA and the universe of material subject to
regulation. In so doing, the decision imposes
liability found nowhere in the law.
“a
hee
ee ee ee en a, ee eee
This Court has never addressed the federal
issues raised in this appeal. These issues have only
been addressed by the decisions of the Southern
District of California, the Supreme Court of
Wisconsin, and lower Wisconsin courts. As
discussed, infra, the Southern District of California
reached the exact opposite decision from the
Supreme Court of Wisconsin.
Because of the inconsistent federal-state
decisions, the national implications of the Wisconsin
decision on the cost of asbestos abatement, and the
civil and criminal liability the decision imposes on
owners and operators of building renovations
nationally, HEI seeks a writ of certiorari for this
Court to reverse the decision of the Supreme Court
of Wisconsin.
IT. NATURE OF THE FEDERAL ISSUES
INVOLVED IN THE CASE.
A. The Federal Issue Concerning The
Supreme Court Of Wisconsin
Having Validated The EPA’s Illegal
Attempt To Pass’ Substantive
Regulations Without Observing
Administrative Procedure Act
Rulemaking.
i. Background: The _ Legally
Passed Regulations Under
The NESHAP And _ The
Interim Method.
The background of the initial federal question
in this case concerns the asbestos testing protocols
for building renovations that the EPA did legally
enact under National Emission Standards For
Hazardous Air Pollutants (NESHAP), 40 CFR
§61.140, et. seq. [Appx., Doc. 5, pp. A-75 to A-100]
The NESHAP’s mandated method for testing for
asbestos is the “Interim Method of the
Determination of Asbestos in Bulk Insulation
Samples” (“the Interim Method”), codified at
appendix E, subpart E, 40 CFR part 763, section
1.7.2.1. [Appx., Doc. 6, pp. A-101 to A-118] The U.S.
Environmental Protection Agency (EPA) passed the
NESHAP per its authority under the Clean Air Act
(CAA), 42 U.S.C. §7412 = following valid
administrative rulemaking under the Administrative
Procedure Act (APA), 5 U.S.C. §553 [Appx., Doc. 7,
pp. A-119 to A-120; Appx., Doc. 8, pp. A-121 to A-
123]
Under the NESHAP, the owner or operator of
a building scheduled for renovation must undertake
an investigation to determine whether the building
contains what the NESHAP designates as “Asbestos
Containing Material” (ACM). See 40 CFR
§61.145(a). [Appx., Doc. 5, pp. A-84 to A-87] The
investigation involves taking samples of walls,
ceilings and other building material in accordance
with sampling protocols in the Interim Method
[Appx., Doc. 6, pp. A-102 to A-117] The samples are
then tested for asbestos in a laboratory. Essentially,
the testing protocols in the Interim Method require
that a lab analyst determine the asbestos content of
the samples by viewing them through a polarized
light microscope and counting the asbestos fibers, a
process known as “Polarized Light Microscopy.”
The sample is considered ACM if the lab
analyst determines that it contains “more than 1
percent asbestos as determined using the [polarized
light microscopy] methods specified in [the Interim
Method].” 40 CFR §61.141. [Appx., Doc. 5, p. A-78]
If the analyst’s estimate exceeds the 1% regulatory
threshold, all “homogeneous areas” of the wall from
which the sample was taken are considered as
containing ACM. [R. 15: 943-48] If the ACM
containing walls are to be demolished as part of a
renovation, the ACM is considered “Regulated
Asbestos Containing Material” (RACM), and
becomes subject to the NESHAP’s abatement
requirements. 40 CFR §61.141. [Appx., Doc. 5, p. A-
82]
The abatement requirements provide that the
RACM cannot simply be demolished if, for example,
walls with ACMs are to be removed as part of the
renovation. Instead, the abatement requirements
mandate that the walls with ACMs must be
“adequately wetted,” “carefully lowered,” etc. prior to
demolition. 40 CFR §61.145(c)(2)(i)-(1i). [Appx., Doc.
5, pp. A-93] In addition, the abatement
requirements mandate that the EPA be notified of
the planned renovation when the building contains
RACM. 40 CFR §61.145(b).! [Appx., Doc. 5, p. A-87]
1 The State actually brought the lawsuit under NR 447,
Wisconsin Administrative Code. The State’s claims under NR
447, however, do not affect the federal nature of the issue,
because in NR 484.04(28) the State adopted the Interim
Method. [Appx., Doc. 9, pp. A-124 to A-125] In addition, the
State adopted the NESHAP verbatim with the exception of a
few cosmetic, non-substantive changes. The provisions of NR
447 that the State asserted HEI violated are thus virtually
identical to the NESHAP. Compare the violations the State
alleged in NR 447.08(6) concerning “carefully lowering” and
“adequately wetting” to virtually identical provisions in 40 CFR
§61.145(c); the notice violations the State alleged in NR 447.07
to the virtually identical provisions in 40 CFR §61.145(b); and
the prohibition against discharge of asbestos into outside air
the State alleged in NR 447.13(1) to the virtually identical
provisions in 40 CFR §61.150. [Appx., Doc. 10, pp. A-126 to A-
153; Appx., Doc. 5, pp. A-75 to A-100] More important, the
federal issue involves the promulgation and interpretation of
the Interim Method, and both the NR 447 regulations and the
NESHAP expressly adopt the Interim Method. See NR
447.02(1) and 40 CFR §61.141. [Appx., /d.] As discussed
below, one of the major federal issues the lower courts
addressed was whether the asbestos test results upon which
the State relied to establish that the Auditorium contained
ACM satisfied the Interim Method as adopted by 40 CFR
§61.141 and NR 447.02(1).
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2. The Federal Issue Regarding
The EPA’s Illegal Attempt To
Effect A Substantive Change
To The Interim Method By
Administrative Fiat.
The dispute that raises the initial federal
question in this case revolves around the required
testing protocols under the Interim Method for the
type of “layered” wall material that is frequently
encountered in building renovations across the
United States -- i.e., wall material that, because of
prior renovations, may contain a layer of plaster, a
layer of stucco, a layer of dry wall, and perhaps
multi-layers of paint -- where some of the layers may
contain ACM and some may not. The Interim
Method provides in Section 1.2.7.1. that each layer is
tested for asbestos, and the results are combined to
obtain an overall result for the entire sample, as
follows.
1.7.2.1. Gross Examination
Bulk samples of building materials taken
for the identification and quantitation of
asbestos are ffirst examined for
homogeneity at low magnification with the
aid of a stereomicroscope. The core sample
may be examined in its container or
carefully removed from the container onto
a glassine transfer paper or clean glass
plate. If possible, note is made of the top
and bottom orientation. When discrete
strata [i.e., layers] are identified, each is
treated as a separate material so that fibers
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- =
are first identified and quantified in that
layer only, and then the results for each
layer are combined to yield an estimate of
asbestos content for the whole sample.
{Emphasis added] [Appx., Doc. 6, p. A-107]
Clearly, there are two clauses to the testing
requirements in the italicized sentence that fashions
a two-part test, known as “combined layer testing.”
The first clause requires that the asbestos fibers be
quantified in each layer of wall material. Under the
second clause, the numerical results are combined to
obtain an asbestos content for the entire sample.
There is ne requirement in the above italicized
language that the results for each layer be reported.
The EPA was never satisfied with the
combined layer testing method of the Interim
Method that it had enacted under the APA, so it
fashioned a policy that, if not outright secret, was
“unwritten.” The unwritten policy, known as “single
layer testing,” was that, if any one layer of wall
material contained greater than 1% ACM, the entire
sample would be considered ACM under the
NESHAP abatement regulations -- even if the
combined result of all layers resulted in less than 1%
ACM in the sample. Instead of enacting this
unwritten policy by observance of APA rulemaking
procedures, the EPA issued two publications that it
disingenuously characterized as “clarifications” of
Section 1.7.2.1. of the Interim Method.
The first EPA “clarification” is titled “Asbestos
NESHAP Clarification Regarding Analysis Of Multi-
Layered Systems,” and is published in the Federal
«De
——_ bn
Register, Vol. 59, No. 3, January 5, 1994. [Appx.,
Doc. 11, pp. A-154 to A-158] The second
“clarification” is titled “Asbestos NESHAP
Clarification Regarding Analysis Of Multi-Layered
Systems,” and is published in the Federal Register,
Vol. 60, pp. 65243-44, December 19, 1995. [Appx.,
Doc. 12, pp. A-i59 to A-165] These publications are
hereinafter referred to as “the Clarifications.”
Contrary to the express terms of Section
1.7.2.1 of the Interim Method, which do not require
the results of each layer be reported, the first
Clarification dated January 5, 1994 purports to
impose a reporting by layer requirement. “In
general,” this Clarification provides, “when a sample
consists of two or more distinct layers of materials,
each layer should be treated separately and the
results reported by layer.” [Emphasis added] [Appx.,
Doc. 11, A-156]
The second Clarification, dated December 19,
1995, purports to require that if any one layer
contains greater than 1% asbestos, the entire sample
must be considered ACM even though the
mathematical result from the combining of all layers
would be less than 1% asbestos fibers. The “EPA’s
unwritten policy,” the 1995 Clarification states, “was
that each layer in a multi-layered system was to be
analyzed as a separate material (no averaging or
dilution by combining layers of asbestos-containing
materiais with nonasbestos-containing material was
allowed).” [Appx., Doc. 12, pp. A-161] It
characterizes the January 5, 1994 Clarification as
“basically statling] that ali multi-layered wall
systems... must be analyzed as separate materials,
19.
and results were not allowed to be combined to
determine average asbestos content (continuing the
policy that dilution of an _ asbestos-containing
material is not allowed).” [Appx., Doc. 12, pp. A-162]
Finally, the 1995 Clarification states that the entire
sample must be treated as asbestos-containing if any
one layer exceeds the 1% regulatory threshold.
[Appx., Doc. 12, pp. A-164]
If any layer contains greater than one
percent asbestos, that layer must be
treated as asbestos-containing. This will
have the effect of requiring all layers in a
multi-layered system to be treated as
asbestos-containing if the layers can not be
separated without disturbing the asbestos-
containing layer. [Appx., Doc. 12, p. A-164]
In the only other decision to address this
issue, United States v. San Diego Gas & Electric
Company, 2006 WL 3913457 (Nov. 21, 2006) (“San
Diego Gas I’), the court succinctly articulated how
the Clarifications impcse new obligations for
asbestos abatement, and effect a substantive change
to Section 1.7.2.1. of the Interim Method by
eliminating the second part of the test that provides
for mathematically combining the percent results for
each layer.
The [Clarification] test method ... imposes
new obligations on the _ regulated
community by expanding the scope of
regulated asbestos containing material.
Under the [Interim Method], to determine
whether a multi-layered material contains
<2.
more than 1% asbestos, a lab technician
must (1) qualify the amount of asbestos
fibers in each layer; and then (2) combine
the results of each layer to determine “an
estimate of asbestos content for the whole
sample.” The material is not regulated
unless the combined result yields more
than 1 percent asbestos.
The [Clarification] test method eliminates
the second prong of the test. It provides
that the material is regulated if any layer
contains more than 1 percent asbestos.
This test clearly expands the scope of the
regulated asbestos containing material,
because, undoubtedly, some materials
previously considered not regulated under
the [Interim Method] would be swept into
the regulation under the [Clarification] test
method. The _ clarifications, therefore,
impose new obligations and duties on the
regulated community where none existed
prior to the amendment.
The EPA itself acknowledged that the two
test methods have significant differences.
In the [December 19, 1995 Clarification],
the EPA explained its “unwritten policy”
regarding analysis of bulk materials has
been that “each layer in a multi-layered
system would be analyzed as a separate
material (no averaging or dilution by
combining layers of asbestos-containing
material with nonasbestos-containing
material was allowed.)” 60 F. Reg. 65243.
-14-
.
;
)
.
;
.
)
)
)
The clarifications, therefore, attempt to
carry out this unwritten policy without
rulemaking procedures.
* * *
It is clear, therefore, that the EPA did not
consider the change a mere interpretation.
Rather, the EPA’s description of the
resulting differences between the [Interim
Method] and [the Clarifications] suggests a
substantive change. The Notice of Advisory
indicates that the impetus behind the
change was not to clarify ambiguities;
rather, it was to expand the scope of
regulated asbestos material.2 [Appx., Doc.
13, pp. A-182 to A-184]
This differing interpretation of the layered
testing requirements was outcome determinative in
this case, because the State admitted during oral
argument on cross motions for summary judgment in
the trial court that it could not establish that the
Auditorium contained ACM unless the single layer
testing method of the Clarifications applied. “I’m
first to admit,” the State’s counsel stated, “that if you
throw out the clarifications, you throw out the
State’s test results.” [R.77:19] In other words, the
State could not prove the Auditorium contained
greater than 1% ACM under the combined layer
testing method of the Interim Method, but instead
2 The San Diego Gas | case is currently on Appeal to the Ninth
Circuit. See Case Nos. 08-50072, 08-50073, 08-50093, 08-
50094, 08-50097, 08-50098 and 08-50099.
-15-
relied upon the single layer testing method of the
Clarifications. Accordingly, HEI’s liability in this
case was dependent upon the single layer testing
method of the Clarifications that the EPA never
legally enacted through APA rulemaking.
The Supreme Court of Wisconsin’s decision in
this case held HEI liable for civil asbestos abatement
violations under the NESHAP on the basis of the
single layer testing method of the Clarifications. In
so holding, the court endorsed the EPA’s long held
unwritten policy against the combined layer testing
method that the EPA had enacted under Section
1.7.2.1. of the Interim Method. The Wisconsin
decision expressly rejected the reasoning and
holding in San Diego Gas I.
As discussed, infra, the Wisconsin decision, if
allowed to stand, increases the economic and social
cost of asbestos abatement for building renovations
across the United States, and dramatically increases
the lability of owners and operators of building
renovations for asbestos abatement violations --
without the opportunity for notice and comment by
scientists qualified to set safety standards.
B. The Federal Issue Concerning The
Violation Of HEI’s Substantive Due
Process Rights.
The second federal] question is whether -- if
one were to accept the Clarifications as a validly
enacted administrative regulation -- the decision of
the Supreme Court of Wisconsin violated HEI’s
-16-
substantive due process rights under the 14th
amendment to the U.S. Constitution in two respects.
First, the record is uncontroverted, and the
Supreme Court of Wisconsin expressly recognized,
that HEI’s pre-demolition testing and sampling
protocols (1) did not violate either the Interim
Method or the Clarifications, and (2) established
that the Auditorium did not contain ACM. In
summary judgment practice before the trial court,
the State could not prove that HEI’s sampling and
testing protocols violated any regulations, and the
State admitted that it could “only guess or speculate
why [HEIs pre-demolition testing] came back
negative [for ACM].” [R.46:9] Moreover, the parties
stipulated in the trial court that both HEIs tests
results that were negative for ACM and the State’s
test results that were positive for ACM “are accurate
within the analytical testing method that [the]
laboratory utilized . . .” [R. 70:3,93] [Appx., Doc. 14,
p. A-199]
The Supreme Court of Wisconsin nevertheless
held HEI liable on the basis of samples of wall
material the State took during and after demolition
that were positive for ACM. The court, however, did
not articulate a rational basis for accepting the
State’s test results and rejecting HEI’s test results.
Quite the contrary, the Supreme Court of Wisconsin
held that that “liability for asbestos abatement
violations “does not depend on whether an owner or
operator conducts pre-demolition sampling [and]
testing in accord with the regulations.” Harenda,
2008 WI 16, 971, ss Wis. 2d at __, 746 N.W. 2d at
41.
1%.
As discussed, infra, the effect of this decision
on a national basis is that, whenever. the
government’s testing obtains positive “hits” for ACM,
the government is entitled to an _ irrebuttable
presumption that the private citizen is guilty of
criminal and/or civil asbestos abatement violations
even though the private citizen’s sampling and
testing protocols satisfy the NESHAP and are
negative for ACM.
Second, the decision of the Supreme Court of
Wisconsin held HEI liable on the basis of sampling
protocols by the State that violated the sampling
requirements in the Interim Method. The sampling
protocols in Sections 1.7.1, 1.7.2.1, 1.7.2.3, 1.7.2.4
and Reference 5 of the Interim Method require that
the sampler, be it the government or a private party,
obtain representative samples of the wall material
by sampling all of the layers. The record is
uncontroverted that the State failed to prove that its
positive test results for ACM were based upon
representative samples that contained all of the
layers of wall material.
As discussed, infra, the effect of this holding
on a national basis is to write the representative
sampling requirements out of the Interim Method.
va The Federal Issue Concerning The
Interim Method Being Void For
Vagueness.
The third federal issue is whether the Interim
Method is unconstitutionally vague and therefore
-18-
unenforceable under the 14th Amendment to the
U.S. Constitution.
The State’s thesis in the lower courts was that
(1) the operative language of the Interim Method is
vague, confusing, and unclearly written, and
therefore, (2) the clarifications are necessary to give
the Interim Method meaning.
HEI’s rejoinder to this argument was two-fold.
First, HEI argued that the Interim Method is clear
on its face, and requires that the percent asbestos
results for each layer be combined for an overall
result. Second, HEI argued that, if the State were
correct in its thesis that the Interim Method is
unclearly written and in need of clarification, then
the Interim Method, by itself, would be void under
the 14th amendment vagueness doctrine. Women’s
Medical Center of Northwest Houston v. Bell, 248 F.
3d 411 (5th Cir. 2001).
Il. STAGE OF THE PROCEEDINGS IN THE
LOWER COURTS WHEN THE FEDERAL
QUESTIONS WERE RAISED.
HEI raised the federal questions it seeks to
have reviewed in virtually every stage of the
proceedings in the trial court, Wisconsin Court of
Appeals, and the Supreme Court of Wisconsin. The
manner in which HEI raised the federal questions
was 1n a motion for summary judgment to the trial
court and in a motion in limine to the trial court,
both of which the trial court denied. [Appx., Doc. 15,
p. A-204; Appx., Doc. 16, p. A-209 ] Instead, the trial
court granted a cross motion for summary judgment
-19.
filed by the State on liability. [Appx., Doc. 17, p. A-
224] The parties stipulated that the amount HEI
should pay for the alleged violations and costs would
be $37,138.50 should the trial court hold HEI liable
and should the trial court’s rulings on liability be
upheld. [Appx., Doc. 14, p. A-198]. Having granted
the State’s motion for summary judgment on
liability, and the parties having stipulated to
damages, the trial court entered a money judgment
against HEI in the $37,138.50 stipulated amount.®
[Appx., Doc. 18, pp. A-226 to A-229]
In its opinion dated October 31, 2006, the
Wisconsin Court of Appeals addressed the federal
question concerning the enforceability of the
Clarifications, holding that the single layer test
method of the Clarifications effected a substantive
change in the combined layer testing method of the
Interim Method. Since the Clarifications had not
been enacted through valid administrative
rulemaking under the APA or its Wisconsin
equivalent, Wis. Stat. §227.16-18, and since HEI’s
ability for a violation of the NESHAP was
dependent upon the State’s single layer Clarification
Method testing, the Wisconsin Court of Appeals held
that the State’s single layer Clarification method
test results could not serve as the basis to hold HEI
liable for a NESHAP violation. Accordingly, the
Court of Appeals reversed the trial court’s grant of
summary judgment to the State in a unanimous 3-0
3 While the parties stipulated to damages in the amount of
$37,138.50, HEI’s potential exposure in this case in the absence
of a stipulation concerning damages exceeded $4 million. See p.
23, infra.
-20-
Re
es
decision. The court did not address the federal
questions concerning the substantive due process
violation or vagueness. See State of Wisconsin uv.
Harenda Enterprises, Inc., 2006 WI App 230, 297
Wis. 2d 571, 724 N.W.2d 434 (Ct. App. 2006).
[Appx., Doc. 2, pp. A-57 to A-69}
In ruling against HEI, the Supreme Court of
Wisconsin rejected all federal questions concerning
the Interim Method and the _ Clarifications,
substantive due process and vagueness in its opinion
dated March 13, 2008. Accordingly, the Supreme
Court of Wisconsin reversed the Court of Appeals
and reinstated the trial court’s summary judgment
in favor of the State. State of Wisconsin v. Harenda
Enterprises, Inc., 2008 WI 16, __. Wis. 2d ___, 746
N.W. 2d 25 (2008). The Supreme Court of Wisconsin
expressly rejected the reasoning of the Southern
District of California in the San Diego Gas I case.
[Appx., Doc. 1, p. A-32]
HEI moved for reconsideration on April 2,
2008. The Supreme Court of Wisconsin denied the
motion by a 4-3 decision in an order dated June 11,
2008. [Appx., Doc. 3, pp. 70-72]
-21-
RULE 14.1(h): REASONS WHY
THE WRIT SHOULD BE ISSUED
I. THIS COURT SHOULD GRANT
CERTIORARI UNDER RULE 10(c)
BECAUSE THE SUPREME COURT OF
WISCONSIN HAS DECIDED AN
IMPORTANT QUESTION OF FEDERAL
LAW THAT SHOULD BE SETTLED BY
THIS COURT.
A. This Court Should Settle The
Federal Question Concerning The
Single Layer v. Combined Layer
Testing Method Because The EPA’s
Illegal Rule Significantly Increases
The Economic And Social Cost Of
Asbestos Abatement Nationally.
The facts in the record of this case are
uncontroverted that the single layer testing method
of the Clarifications expand the reach of federal
regulation and increases the amount of asbestos that
will have to be abated, and thereby increases the
social and economic cost of building renovations.
[R.52:943] These facts are confirmed by an August 1,
1994 EPA “Notice”, 59 Fed. Reg. 38970, which
recognizes that the Clarifications have the effect of
increasing the amount of asbestos to be abated
under the NESHAP.
The [Interim Method] provided that the
analytical result for a multi-layered sample
with discrete strata be reported as one
result across all layers. Because the
29.
[Interim Method] allowed the result to be
reported as one number, multi-layered
samples which may contain asbestos in a
single layer may have been reported by
laboratories as nonasbestos-containing.
The [Clarifications] directs laboratories to
analyze and report a result for individual
layers. Thus, more than one result will be
reported for multi-layered samples, and a
multi-layered sample which previously was
determined to be nonasbestos-containing
may new have layers which will be
classified as asbestos-containing based on
the presence of asbestos in greater than 1
percent.” [Appx., Doc. 19, p. A-233]
[Emphasis added]
The San Diego Gas I court likewise recognized
that the EPA’s illegal rule will have the effect of
increasing the amount of asbestos required to be
abated. The Clarification test method “clearly
expands the scope of the regulated asbestos
containing material,” the court held, “because,
undoubtedly, some materials previously considered
not regulated under the [Interim Method] would be
swept into the regulation under the [Clarification]
test method.” Therefore, the court held, the EPA’s
illegal rule “expand[s] the scope of regulated
asbestos containing material.” [Appx., Doc. 13, p. A-
182]
Indeed, the cost of asbestos abatement in
buildings has been, and_ continues to _ be,
astronomical. A February 11, 1999 article in USA
Today outlined the following social and economic
-23-
costs of asbestos removal and the limited health
benefits associated therewith.
Asbestos removal, the biggest environmental
cleanup project in U.S. history, has cost an
estimated $50 billion over the past 20 years.
It has forced schools to lay off teachers, caused
owners to abandon buildings and added
considerably to the cost of remodeling many
houses.
But one thing the colossal investment hasn’t
done is produce a measureable improvement
in the public’s health.
These exorbitant costs will continue to mount.
A fall 1991 Masters thesis estimated the cost to
abate asbestos in buildings over the subsequent 25
years to be $100 billion.5 This estimate may be
conservative, as the EPA estimated that more than
733,000 structures, or 20 percent of U.S. commercial
and public properties, are believed to contain
asbestos.6 The annual cost of asbestos. removal from
U.S. buildings is approximately $3 billion.”7
4 Dennis Cauchon, When Removing Asbestos Makes No Sense:
Risk Of Cancer In USA Is Barely Measurable, USA Today,
February 11, 1999, at 01.A.
5 Albert J. Banks, Jr., Asbestos Removal In The Construction
Industry (1991) (M.S. thesis, University of Florida
(Gainesville)), p. 1.
8 Id.; see also Louis S. Richman, Why Throw Money At
Asbestos, Fortune Magazine, June 6, 1988.
7 Cauchon, supra.
-24-
B. This Court Should Settle The
Federal Question Concerning The
Single Layer v. Combined Layer
Testing Method Because’ The
Supreme Court Of Wisconsin’s
Decision Increases Potential
Asbestos Liability In Building
Renovations.
The dollar amount of potential liability of
owners and operators of buildings for asbestos
abatement violations parallels the astronomical
dollar cost of abatement. Indeed, the dollar amount
of the forfeitures under Wisconsin’s version of the
CAA, Wis. Stat. §285.87(1), that the State could have
potentially obtained against HEI in this case for
NESHAP abatement violations under NR 447 are
significant. The statute provides a maximum
forfeiture of $25,000 per day per violation. [Appx.,
Doc. 20, pp. A-238] Forfeitures under the CCA are
comparable. See 42 U.S.C. §7413(b). [Appx., Doc.
21, p. A-240]
The State’s complaint against HEI alleged five
separate violations which the state contends ran for
33 days from March 1, 2002 to April 2, 2002. If the
State were to prove its case, and if the court were to
impose the maximum penalty of $25,000 per day for
five violations for 33 days, then some quick
arithmetic would show that HEI’s potential exposure
would be excess of $4 million (33 days X 5 violations
X $25,000 per day = $4,125,000).
In light of these punishing habilities, huge
economic and social costs of abatement, and
- 26.
questionable health benefits, an EPA rule that
increases the types of unregulated material now
subject to regulation, increases the amount of
asbestos to be abated, and increases the attendant
cost should only be promulgated by strict observance
of proper administrative rulemaking procedures
under the CAA and/or the APA. It should not be
accomplished by the administrative fiat of the
Clarifications. This Court should accordingly settle
the matter by granting certiorari under Rule 10(c).
Il. THIS COURT SHOULD GRANT
CERTIORARI UNDER RULE _ 10(b)
AND/OR RULE 10(c) BECAUSE THE
INCONSISTENT DECISIONS BY THE
LOWER COURTS WARRANT THAT THE
FEDERAL ISSUE CONCERNING SINGLE
LAYER VERSUS COMBINED LAYER
TESTING BE SETTLED BY THIS COURT.
The decisions of the Supreme Court of
Wisconsin in this case and the Southern District of
California in the San Diego Gas I case are squarely
at odds with each other on the federal issue
concerning single layer versus combined layer
testing -- te, on the federal issue whether the
Clarifications are a substantive change to the
Interim Method such that Clarification method,
single layer testing cannot serve as the basis for
liability under the asbestos abatement regulations
because the EPA did not promulgate’ the
Clarifications through observance of rulemaking
procedures under the APA. Indeed, the Supreme
Court of Wisconsin, in holding that the Clarifications
are supposedly a valid interpretation of the Interim
-26-
Method, squarely held “{t}he court’s conchusion [to
the contrary in San Diego Gas [| turns on an
interpretation of § 1.7.2.1 that we have rejected.”
Harenda, 2008 WI 16, 968, __._ ~Wis. 2d __, 746
N.W. 2d at 40. [Appx., Doc. 1, p. A-32]
Technically, Rule 10(b) provides for certiorari
when a decision of a state court of last resort, such
as the Supreme Court of Wisconsin, conflicts with a
decision of a federal court of appeals, not a federal
district court such as the San Diego Gas I court. The
text of Rule 10, however, allows flexibility in the
rule, providing that subparagraphs 10(a)-(c) are
“neither controlling nor fully measuring the Court’s
discretion,” and that subparagraphs 10(a)-(c) merely
“indicate the character of the reasons the Court
considers.” The “character” of Rule 10(b) indicates
that the Court will consider cases where the highest
state court has decided an issue that is at odds with
a federal court on a federal issue of national
importance such as the applicability of the
Clarifications in the instant case.
Even if Rule 10(b) were found not applicable
when the conflicting decisions are between a state
Supreme Court and a federal district court, the
conflicting state/federal decisions in this case
warrant that this Court grant certiorari under Rule
10(c) and thereby settle the federal issue concerning
the enforceability of the Clarifications so that there
can be national uniformity for asbestos testing and
lability. Indeed, the conflicting views of the judges
who have passed on this issue calls out for this court
to settle it once and for all.
-27-
A total of 12 judges, for example, have
considered the federal issue in this case -- one (1) in
the Southern District of California, seven (7) on the
Wisconsin Supreme Court, three (3) on _ the
Wisconsin Court of Appeals, and one (1) in the
Circuit Court of Milwaukee County. Of those 12,
seven (7) have held that the Clarifications are
unenforceable because they effect a substantive
change to the Interim Method without having
undergone rulemaking under the APA. The seven
judges who so held include the judge in the Southern
District of California, three (3) dissenting justices on
the Supreme Court of Wisconsin, the three (3) judge
unanimous decision in the Wisconsin Court of
appeals. The five judges who ruled to the contrary
include four (4) justices in the Supreme Court of
Wisconsin majority decision, and the trial court
judge in the Circuit Court of Milwaukee County.
Given the inconsistency in the decisions of the
12 jurists who have reviewed this issue, it is clear
that the issue is not going away. Litigants in future
cases in other state and federal courts. will
undoubtedly argue in favor of or against the
reasoning of the court in the San Diego Gas I case
and the reasoning of the Supreme Court of
Wisconsin in this case. Given the 7-5 track record of
the issue in Wisconsin and in the Southern District
of California thus far, there will undoubtedly be
more inconsistent decisions. Whether viewed from
the standpoint of this Court resolving inconsistent
decisions under Rule 10(b) or this Court “settling” an
issue under Rule 10(c), certiorari is warranted.
Ill. THIS COURT SHOULD GRANT
CERTIORARI ON THE SUBSTANTIVE
DUE PROCESS ISSUE UNDER RULE
10(c) BECAUSE IT HAS NATIONAL
IMPLICATIONS FOR THE COST OF
ASBESTOS ABATEMENT AND
LIABILITY.
A. This Court Should’ Settle The
Substantive Due Process Issue
Concerning Whether The State’s
Positive Test Results Are
Presumptively Valid And The
Defendant’s Negative Test Results
Are Presumptively Invalid.
The Supreme Court of Wisconsin recognized
that HEI’s “pre-demolition sampling and testing...
did not indicate that material from the disputed area
was ACM.” Harenda, 2008 WI 16, 975, ___ Wis. 2d
at , 746 N.W. 2d at 42. It further recognized that
“the State has offered no argument that Harenda
failed to conduct its pre-demolition sampling and
testing according to the regulations,” and that “the
State offers no opinion on the issue.” Harenda, 2008
WI 16, 471, Wis. 2d at , 746 N.W. 2d at 41.
Notwithstanding its finding that HEI’s_ pre-
demolition testing complied with applicable
regulations, the court nevertheless held that the
hability of an asbestos investigator like HEI “does
not depend on whether an owner or operator
conducts pre-demolition sampling jand] testing in
accord with the regulations.” Td.
-29-
This holding that an asbestos investigator's
hiability “does not depend on whether an owner or
operator conducts pre-demolition sampling [and]
testing in accord with the regulations” begs the
question: On what legal standard does the asbestos
investigator’s liability turn where, as here, a court
recognizes that (1) there are dueling test results, (2)
the investigator’s testing found no ACM, and (3) the
investigator’s testing complied with all applicable
sampling and testing regulations?
According to the Supreme Court of Wisconsin,
HEIs liability turned on the fact that “the array of
positive tests is sufficient to show the presence of
ACM.” Harenda, 2008 WI 16, 975, _—s- Wiis. 2d at
___, 746 N.W. 2d at 42. The court summarized all of
the test results, and noted that “Harenda’s pre-
demolition sampling and testing was the only set of
tests that did not indicate that materials from the
disputed area was ACM.” Id. The “array” of test
results, however, were simply the State’s post
demolition positive hits for ACM and HEI’s pre-
demolition negative hits for ACM. The Supreme
8 HEI “split” one set of the post demolition samples with the
State, and HEI’s results had some positive “hits” for asbestos.
The results of HEI’s split samples tests are not valid, because
the laboratory did not “point count” the results as required by
the Interim Method, and did not mathematically combine the
single layer results for each sample to obtain a composite result
as required by the Interim Method, but instead accepted the
single-layer positive results per the Clarifications. [R. R.47: 20-
25] Accordingly, the “array” of test results to which the court
referred was simply the State’s post demolition positive hits
and HEI’s pre-demolition negative results. (HEI did not have
the laboratory “point count” the results, because the State
obtained what it contended were positive findings for asbestos
-30-
~
Re ae NE eS
oe
is ae
i Sls ar ROS, ee A
ES Ree Loe ey Ra Oe EMO NS eee ee RY
Court of Wisconsin never provided a fair and
rationale explanation of why it accepted the State’s
“array” of post-demolition positive “hits” for ACM,
and rejected HEI’s pre-demolition “array” of negative
test results.
The effect of the court’s decision is to hold
that, when the defendant’s test results are negative
for ACM and the government’s results are positive
for ACM, there is an irrebuttable presumption that
the government’s results are valid, and _ the
defendant’s results are not valid. From here, there
is a concomitant presumption of criminal guilt
and/or multi-million dollar civil liability whenever
the government obtains positive hits for ACM even if
(1) the defendant’s test show no ACM, and (2) both
the court and the government admit that the
defendant’s sampling and testing did not violate any
regulations. The defendant is presumptively and
irrebuttably guilty whenever the government obtains
positive hits for ACM despite overwhelmingly
negative test results to the contrary.
The Supreme Court of Wisconsin’s holding
that the government’s test results are automatically
valid and that the defendant’s are not has national
implications for asbestos abatement. It effectively
means that any post-demolition positive test result
by the State establishes liability despite the number
in its point counting of the positive findings on the split
samples, because HEI did not believe the State would have
agreed to restart the demolition even if HEI’s laboratory had
point counted the split samples to a non-regulated amount of
asbestos of less than 1%, and because point counting involves
additional expense.) [R.63:3]
-31-
of pre-demolition negative tests the defendant
obtained. Under this “any one positive test
establishes liability” standard, the defendant could
have 100 pre-demolition negative tests and 100 post-
demolition negative tests, and the State could find
just one unrepresentative sample in a _ post-
demolition “debris” pile, and hold the asbestos
investigator liable. The defendant’s accurate, good
faith pre-demolition testing that complied with
sampling and testing regulations is irrelevant under
the Supreme Court of Wisconsin’s holding.
This Court should issue the writ of certiorari
in this case under Rule 10(c), because the national
implications of this holding for the cost of asbestos
abatement is catastrophic. Since the defendant’s
accurate and good faith testing becomes irrelevant if
the government obtains one positive hit for asbestos,
the amounts that asbestos investigators, abatement
contractors and others would have to charge in order
to protect themselves from the risk of one positive
hit for asbestos subjecting themselves to ruinous
liability increases dramatically.
B. This Court Should Settle The
Substantive Due Process Issue
Concerning Whether Liability For
Asbestos Abatement Violations
Must Be Based Upon
Representative Samples.
The State’s test results on which the trial
court and the Supreme Court of Wisconsin relied to
find HEI liable raise another federal issue of
national importance concerning the requirement in
Bo
the Interim Method that tests be based upon
representative samples of wall material. As
discussed below, the Interim Method requires that
the samples of wall or other material be
representative in the sense of containing all of the
layers. The record in this case is uncontroverted,
however, that the State’s test results were “grab
samples” from “debris piles” that were not
representative of all of the layers, or were otherwise
non-representative.
The decision of the Supreme Court of
Wisconsin in this case effectively wrote the
representative sample requirement out of the
Interim Method. This decision is again squarely at
odds with another unpublisized decision of the
Southern District of California in the San Diego Gas
case dated December 7, 2007. See United States v.
San Diego Gas & Eleciric Company, 2007 WL
4326773 (December 7, 2007) (hereinafter “San Diego
Gas IT’).2 [Appx., Doc. 22, pp. A-248 to A-276] The
conflicting decisions again warrant certiorari on an
important federal issue that should be settled by this
Court under Rule 10(b) or 10(c).
Section 1.7.1 of the Interim Method, for
example, provides in relevant part that “[s]amples
for analysis of asbestos content shall be taken in the
manner prescribed in Reference 5... If there are
any question about the representative nature of the
sample, another sample should be requested before
proceeding with the analysis.” [Appx., Doc. 6, p. A-
% The San Diego Gas II case is also on appeal to the Ninth
Circuit. See Case Nos. cited in f/n 3, supra.
-33.-
106] Reference 5 is an EPA document entitled
“Asbestos-Containing Materials in School Buildings:
A Guidance Document” (hereinafter “Reference 5”).
[Appx., Doc. 23, pp. A-277 to A-286]!© Under the
heading “How To Take A Sample,” Reference 5
states, “a representative sample should be taken
from within the material itself by penetrating the
depth of material with a sample container.” [Appx.,
Doc. 23, Ch. 5, p. A-283] [emphasis added]
Reference 5 further emphasizes that the sampler
must “be sure to penetrate any paint or protective
coating and all layers of material.” [Appx., Doc. 23,
Ch. 5, p. A-258] In this case, the State admitted that
applicable sampling regulations require the sampler
to attempt to obtain all layers when taking wall
samples. [R.44:72; R.44:141]
In addition to requiring a_ representative
sample that contains all layers, the
NESHAP/Interim Method mandates in Sections
1.7.2.1 through 1.7.2.4 that the laboratory analyst
actually perform the laboratory test on all layers.
The tests include testing on all layers (Section
1.7.2.1), fiber identification (Section 1.7.2.3), and
quantification of the material (Section 1.2.7.4).
[Appx., Doc. 6, pp. A-107 to A-117] Accordingly, the
Interim Method requires both a _ representative
sample containing all of the layers and performance
of the correct test on the sample.
10 Because of the length, only the cover page, table of contents,
introductory material and Chapter 5 of Reference 5 are
included with the Appx., Doc. 23.
-34-
The record in the instant’ case is
uncontroverted that the State did not take
representative samples as required by the Interim
Method. HEI’s liability in this case derived from
three sampling events that the State undertook on
March 21, 2002, April 2, 2002, and April 4, 2002. It
is undisputed that the March 21, 2002 sampling
event was from intact walls that were still standing,
but the State did not prove that it obtained complete
penetration of all wall material in order to obtain a
representative sample as required by the Interim
Method. [R.62:14-15] It is also undisputed that the
samples the State collected in the April 2, 2002
sampling event were from debris piles of demolished
wall material. [R.62:19-20] Finally, the record its
undisputed that the samples the State collected from
the April 4, 2002 sampling event were “grab
samples” from debris piles of demolished wall
material. [R.44:72; R.44:78-79; R.44:83; R.44:148]
As discussed, all of HEI’s_ pre-demolition
testing of wall material in the Auditorium was from
intact walls, and the State was never able to
establish that any of HEI’s sampling or testing
violated the Interim Method, the Clarifications or
any other laws or regulations. The trial court and
the Supreme Court of Wisconsin nevertheless held
HEI liable on the basis of the State’s test results that
were from unrepresentative samples that violated
the Interim Method. Effectively, these two
Wisconsin courts wrote the representative sample
requirements out of the Interim Method.
In its December 7, 2007 opinion granting the
defendants’ motion for a new trial, the San Diego
.35-
Gas lI court phrased the issue as “whether a
‘representative sample’ as defined in Section 1.7.1
and [Reference 5] is required before the sample may
be admitted for purposes of establishing asbestos
content?” [Appx., Doc. 22, p. A-272] The Court held
that the Government committed a manifest error by
offering test results that did not contain all of the
layers and that therefore did not comply with
Section 1.7.1 and Reference 5 and by arguing to the
jury that representative sampling is not req cred.
“The admission of both non-representative samples
and samples tested under methods of debatable
validity combined with the manner in which the
results were argued to the jury,” the court held,
“caused unfair prejudice and confusion of issues.”
[Appx., Doc. 22, pp. A-274 to A-275]
In so holding, the San Diego Gas II court
articulated the following substantive due process
violations inherent in holding an owner or operator
liable on the basis of post-demolition testing of
samples that are not representative.
If the Government is not required to test
samples that are representative of the
suspected ACM, a party’s guilt or innocence
would depend entirely upon the sample
collected, no matter how contaminated or
unrepresentative. The Government’s
proposed rule would permit the following
situation: a company tests ACM using a
representative sample, finds it is not
RACM, and on that information, properly
concludes there is no obligation to comply
with the NESHAP requirements. Later,
-36.
after demolition or renovation activities
begin, the regulatory authorities retrieve
and test bits and pieces from the project
that may not be representative or whole
samples. If such samples reveal high
concentrations of asbestos, the company
would be subject to criminal prosecution for
asbestos NESHAP violations even when
the ACM, based upon a representative
sample, is not RACM. Such a result would
violate basic principles of due process,
which “require[{}] legislatures to set
reasonably clear guidelines for law
enforcement officials and triers of fact in
order to prevent arbitrary and
discriminatory enforcement” of the law.”
Smith v. Goguen, 415 U.S. 566, 572-73
(1974) [f/n omitted]
[San Diego Gas II, Appx., Doc. 22].
A review of the facts in the record in the
instant case indicates that the exact same thing
happened here. The record, as_ stated, is
uncontroverted that HEI’s pre-demolition sampling
and testing was from intact walls and it satisfied all
regulations. Representatives of the State then
“swooped-in” during renovation and after renovation,
and sampled material that did not contain all of the
layers.
The Supreme Court of Wisconsin effectively
heid that the practice of a controlling government
authority to sample less than all of the layers -- a
practice that essentially writes the sampling
-37-
SEE CN TOR REE EP Re EN Oe Mad he TE anti eaie e BA) eM rg) epee NN Men er yk OA Mon yy aay OL SON eae By ce eee ee
tn hf Chase sah gH ttle A nie Sale Sth a Nh i kr miata Ei DN a ieee Se a lal LF hd ees te tind Re aN Faye ee aN ete os ae by’ Seay
Deut: Tae MT SR re SISK GPR ORE Le RMT R REST MIE, Oe IRE AMEN PMT TSE Gres oe a Brae Pee SATE OLN ERE PA EERE apa
requirements out of the Interim Method -- is
perfectly acceptable. The San Diego Gas II court,
however, held that the practice is unacceptable
precisely because it both violates the express terms
and the Interim Method and offends basic notions of
substantive due process. Given the inconsistency
between the decisions by the Supreme Court of
Wisconsin and the San Diego Gas II court on this
issue, and given the significant cost of asbestos
abatement and the potential liabilities for violation
of the abatement regulations, this Court should
accept certiorari under Rule 10(c) and settle the
issue.
CONCLUSION
In the final analysis, the Supreme Court of
Wisconsin endorsed an illegal rule that the EPA
unilaterally issued without administrative
rulemaking. The court also wrote the representative
sampling requirement out of the Interim Method,
and it fashioned its own rule providing that a
defendant is irrebuttably guilty of asbestos
violations whenever the State obtains positive hits
for asbestos even though the defendant’s test results
are negative and even though the defendant’s testing
satisfies the NESHAP. Because of the impact of this
decision nationaily on the economic and social cost of
asbestos abatement, this Court should grant
certiorari and settle the issue. |
-38-
Dated this 3rd day of September, 2008.
Mark W. Rattan
Counsel of Record for Petitioner
Litchfield Cavo, LLP
13400 Bishops Lane, Suite 290
Brookfield, WI 53005-6237
: (262) 784-8966
-39.-
a ee ae ae ee. eee ee i ee a, ee ee gee Me ee Tee ee eee ee Rel
ye re ee ee ea On eT a se Of ee eae ee ee ee Ua ee PA ee NR eee
oe pS gah she ss .
DOCUMENT 1
746 N.W.2d 25, 2008 WI 16
Supreme Court of Wisconsin.
STATE of Wisconsin, Plaintiff-Respondent-
Petitioner,
v.
HARENDA ENTERPRISES, INC., Defendant-
Appellant.
No. 2005AP1829.
Argued Oct. 3, 2007.
Decided March 13, 2008.
A-1
746 N.W.2d 25, 2008 WI 16
Supreme Court of Wisconsin.
STATE of Wisconsin, Plaintiff-Respondent-
Petitioner,
v.
HARENDA ENTERPRISES, INC., Defendant-
Appellant.
No. 2005AP1829.
Argued Oct. 3, 2007.
Decided March 13, 2008.
f 1ANN WALSH BRADLEY, J.
The petitioner, State of Wisconsin, seeks review of a
published court of appeals decision reversing a
circuit court judgment in favor of the State and
imposing civil penalties and surcharges on Harenda
Enterprises, Inc. (Harenda). FX1 The judgment and
sanctions imposed were for violations of Wis. Admin.
Code Ch. NR 447 in connection with Harenda's
contract to inspect the Milwaukee Auditorium for
possible asbestos-containing material (ACM).
FN1.See State v. Harenda Enterprises, Inc.,
2006 WI App 230, 297 Wis.2d 571, 724 N.W.2d
434 (reversing judgment of the circuit court
for Milwaukee County, Kitty K. Brennan,
Judge).
§| 2 The case centers on the question of the proper
method for testing whether material constitutes
asbestos-containing material under Wis. Admin.
Code § NR 447.02FN2 and 40 C.F.R. Pt. 763, Subpt.
E., App. E, § 1.7.2.1. The State asserts that the court
A-2
of appeals erred in concluding that the rule
prescribing the method of testing clearly requires the
averaging of the test results. It contends that the
rule is ainbiguous and that we should give deference
to the clarifications of the rule issued by the United
States Environmental Protection Agency (EPA),
which explain that each layer of a multi-layer
sample must be tested. It maintains that under the
rule, ACM is present if a. single layer of the sample
contains greater than one percert asbestos.
FN2. All references to chapter NR 447 of the
Wisconsin Administrative Code are to the
June 2004 version unless otherwise noted.
4 3 Harenda argues that the State's interpretation is
inconsistent with the plain lenguage of the rule,
which requires averaging of the test results. It
maintains that the clarifications issued by the EPA
are inconsistent with § 1.7.2.1 and should therefore
be accorded no deference. Harenda further argues
that the clarifications outlining the single layer test
method constitute impermissible rule making.
Finally, it argues that the State's enforcement action
violates its substantive due process rights.
4] 4 We determine, first, that the language of §
1.7.2.1 is ambiguous. Giving deference to an agency's
interpretation of its own rule, we conclude that the
EPA's interpretation is controlling because it is
neither inconsistent with § 1.7.2.1 nor clearly
erroneous. We (further determine that the
clarifications do not constitute impermissible rule
making; rather, they are valid interpretive rules.
Finally, we determine that the circuit court's
A-3
judgment does net violate Harenda's substantive due
process rights. We therefore reverse the court of
appeals.
*29 I
A
§| 5 To better understand the issues presented, it is
helpful to examine the regulatory framework. We
begin with a brief summary of the federal and state
regulations at play in this case.
41 6 Under the federal Clean Air Act, the United
States Environmental Protection Agency (EPA) is
authorized to publish a list of hazardous air
pollutants and to establish national emission
standards (National Emission Standards for
Hazardous Air Pollutants, or “NESHAPs”) for each
pollutant on the list. 42 U.S.C. § 7412; United States
v. American Nationai Can Co., 126 F.Supp.2d 521,
523 (N.D.I1.2000). Asbestos was one of the first
pollutants designated as hazardous under the Clean
Air Act. National Can, 126 F.Supp.2d at 5
| 7 The original asbestos NESHAP was published in
1973, and included standards governing removal of
asbestos prior to building demolition. 38 Fed.Reg.
8,820 (1973). In 1975, the asbestos NESHAP was
expanded to address the handling of asbestos during
building renovations. 40 Fed.Reg. 48,293 (1975);
National Can, 126 F.Supp.2d at 523. The current
asbestos NESHAP, which was published in 1990, is
found at 40 C.F.R. § 61.140 et seq.
A-4
{| 8 The Wisconsin Department of Natural Resources
(DNR) is authorized by the Wisconsin Statutes to
promulgate rules implementing clean air standards
consistent with chapter 285 of the Wisconsin
Statutes and the federal Clean Air Act. Wis. Admin.
Cod NR_ 447.01(2); FN3 Wis. Stat. §§ 285.11,
285.13, 285.17, 285.27.EN4 Pursuant to this
authority, the DNR promulgated rules concerning
asbestos inspection, identification, and abatement.
These rules are set forth in chapter NR 447 of the
Wisconsin Administrative Code.
FN3.Wis. Admin. Code § NR _ 447.01(2)
provides:
(2) PURPOSE. This chapter is adopted
under §§ 285.11, 285.13, 285.17 and 285.27,
Stats., to establish emission limitations for
asbestos air contaminant’ sources, to
establish procedures to be followed when
working with asbestos materials and to
create additional reporting and
recordkeeping requirements for owners or
operators of asbestos air contaminant
sources in order to protect air quality.
FN4. All references to the Wisconsin Statutes
are to the 2005-06 version unless otherwise
noted.
4 9 Chapter NR 447 is patterned after the federal
NESHAP standards. See note to Wis. Admin. Code
§ NR 447.01. Most importantly with respect to the
present matter, chapter 447 has adopted measures
requiring owners and operators to inspect facilities
A-5
prior to demolition or renovation. Wis. Admin. Code
§ NR 447.06(1). If such an inspection reveals enough
asbestos, the notification and abatement
requirements of sections NR 447.07 and 447.08
apply to each owner or operator. Wis. Admin. Code §
NR 447.06(2). Violations of the regulations are strict
liability offenses. United States v. B & W_ Inu.
Properties, 38 F.3d 362, 367 (7th Cir.1994).
§, 10 As discussed more fully below in Part III A, the
regulations define ACM as material that contains
“more than 1% asbestos as determined using the
method specified in Appendix E to Subpart E, 40
C.F.R. part 763, section 1, Polarized Light
Microscopy....”Wis. Admin. Code § NR 447.02(1)(a).
The regulations describing the proper way to analyze
a multi-layered sample include the following
instructions: “When discrete strata are identified,
each is treated as a separate material so that fibers
are first identified and quantified in that layer only,
and then the results for each layer are combined to
*30 yield an estimate of asbestos content for the
whole sample.” 40 C.F.R. Pt. 763, Subpt. E, App. E,
§ 1.7.2.1. Wisconsin adopted both the definition and
the instructions describing the method of analysis.
Wis. Admin. Code § NR 447.02; Wis. Admin. Code §
NR 484.04(28)(July 2007).
{/ 11 The text of the instructions, however, quickly
became a source of confusion. On two occasions the
EPA issued notices of clarification to address how
multi-layered samples are _ to be analyzed. 59
Fed.Reg. 542 (Jan. 5, 1994): 60 Fed. Reg. 65,243 (Dec.
19, 1995).
A-6
4] 12 The December 1995 clarification explained that
§ 1.7.2.1 continued EPA's past policy that separate
layers in multi-layered systems were to be analyzed
separately, such that “no averaging or dilution by
combining layers of asbestos-containing material
with nonasbestos-containing material was allowed.”
60 Fed. Reg. 65,243 (Dec. 19, 1995).
§ 13 The clarification allowed that a source sending
a multi-layered sample to a laboratory for testing
may request that certain samples first be composited
for analysis in an effort to reduce time and the costs
associated with the sample. It advised that when the
composite analysis indicates that the average of the
sample's layers is greater than one percent, the
sample is deemed to be ACM and an individual
analysis of the layers is not necessary. However,
when the composited sample analysis results in less
than one percent asbestos, but greater than zero, an
“analysis by layers is required to ensure that no
layer in the system contains greater than one
percent asbestos.” Id.
{ 14 Pursuant to its regulatory authority the DNR
initiated an enforcement action against Harenda. In
this case we examine whether we owe deference to
an agency's interpretation of its own rule concerning
the testing of multi-layered samples for asbestos
content.
B
{| 15 The background facts of this case are not in
dispute. The circuit court set forth those facts in its
Findings of Fact and Conclusions of Law entered
A-7
along with its order granting judgment in the State's
favor.
| 16 This case stems from a decision by the
Wisconsin Center District to renovate’ the
Milwaukee Auditorium. In 2001, the Wisconsin
Center District retained Harenda to conduct an
inspection of the Auditorium for possible ACM prior
to renovation. Among the areas Harenda inspected
were the walls of the Auditorium's second floor bowl
area (the “disputed area”). As part of its pre-
demolition inspection, Harenda took samples from
the disputed area and sent them to a testing
laboratory. The test results indicated that none of
the samples contained greater than one percent
asbestos.
{ 17 The demolition of the disputed area, which was
carried out by a contractor, commenced in March
2002 and proceeded without following chapter NR
447 asbestos abatement’ regulations. After
demolition had started, representatives of the State
took samples from the walls of the disputed area for
testing. The laboratory that tested the samples
found a layer in a multi-layered sample that
contained greater than one percent asbestos.
Demolition ceased, and the State collected three
further samples from the disputed area. The tests on
these samples showed that the samples each
contained greater than one percent asbestos.
{ 18 Two days later, the State collected ten samples
of plaster material from the disputed area that had
been demolished. It provided a “split” of each of
these samples*31 to Harenda. The laboratory found
A-8
that four of the State's ten samples were multi-
layered samples containing a single layer of material
with one percent asbestos or more, but with an
overall asbestos content of less than one percent.
{ 19 Harenda sent its split samples to an
independent laboratory for testing. The laboratory
found five of the ten samples were multi-layered
samples containing a single layer of two percent
asbestos and one layer of material that was a non-
detect for asbestos. In contrast to the laboratory
used by the State, Harenda's laboratory did not
obtain an overall asbestos content for the five multi-
layered asbestos-containing samples.ENs
FN5. We note that all of the tests performed
on samples for both parties were performed
based upon the interpretation of regulations
advocated by the State. The court of appeals
decision in this case indicates some confusion
in this regard. In the first paragraph of its
opinion, the court concludes that “Harenda's
testing for asbestos contamination complied
with the law, and, accordingly, [we] reverse.”
Harenda Enterprises, 297 Wis.2d 571, | 1, 724
N.W.2d 434.At oral argument, however,
Harenda stated that the laboratory
conducting the pre-demolition testing was
instructed to conduct tests that complied with
EPA's clarifications. Thus, the issue is not
whether the test on Harenda's pre-demolition
samples was conducted according to a
different interpretation of the regulations.
Rather, the question is whether a single layer
in a multi-layer system containing greater
A-9
than one percent asbestos must be treated as
ACM.
4 20 The State, upon the request of the DNR, filed a
complaint against Harenda. Based on the tests of its
samples from the disputed area, the State alleged
that material from the disputed area contained a
sufficient amount of ACM for it to be considered
regulated asbestos-containing material. It alleged
that Harenda was therefore liable for violations of
several provisions of Wis. Admin. Code Ch. NR 447.
These include failure to adequately wet ACM in
violation of § NR 447.08(6)(a), failure to carefully
lower ACM in violation of § NR 447.08(6)(b), failure
to remove ACM prior to demolition activity in
violation of § NR 447.08(1), discharge of visible
emissions to the outside air during the disturbance
of ACM in violation of § NR 447.13(1), and failure to
file an accurate notice of intent to renovate a facility
containing ACM in violation of § NR 447.07.
4 21 The parties entered into a stipulation according
to which Harenda would owe $37,138.50 in penalties
and surcharges if it were held liable. They further
stipulated that Harenda is an “operator” under
chapter NR 447 and that the asbestos testing results
from the various laboratories are “accurate within
the analytical testing method that each respective
laboratory utilized.”
{| 22 The circuit court granted a motion for summary
judgment by the State. It determined that the State
satisfied its burden of demonstrating that there was
ACM under § NR 447.01(1)(a) and § NR 447.02(1)(b)
and the relevant federal regulation, 40 C.F.R. Pt.
A-10
763, Subpt. E., App. E, § 1.7.2.1. The circuit court
further determined that the State met its burden in
showing that the ACM was stripped or removed
without complying with the requirements of chapter
NR 447 as alleged in the complaint.
4] 23 Harenda appealed. The court of appeals
determined that the State's interpretation of 40
C.F.R. Pt. 763, Subpt. E., App. E, § 1.7.2.1, which
was based upon clarifications of the rule issued by
the United States Environmental Protection Agency,
was inconsistent with the plain language of § 1.7.2.1.
State v. Harenda Enterprises, Inc., 2006 WI App 230,
79, 297 Wis.2d 571, 724 N.W.2d 434. It
therefore*32 reversed the judgment of the circuit
court. The State petitioned for review.
II
{1] 4 24 The central issue in this case concerns the
interpretation of the method used to test for
asbestos-containing material (ACM) pursuant to
chapter NR 447 of the Wisconsin Administrative
Code. This case is before us on the circuit court's
grant of summary judgment in favor of the State. We
review the grant or denial of summary judgment
independently, but apply the same methodology as
used by the circuit court. Wis. Mall Props., LLC uv.
Younkers, Inc., 2006 WI 95, 4 19, 293 Wis.2d 573
717_N.W.2d 703 (citing Green Spring Farms _ ov.
Kersten, 136 Wis.2d 304, 315, 401 N.W.2d 816
(1987)). Summary judgment is appropriate where
there are no genuine issues of material fact and the
moving party is entitled to judgment as a matter of
law. Wis. Stat. § 802.08(2).
A-11
[21[3){4][5] § 25 Administrative code provisions are
interpreted according to principles of statutory
construction.—N6 Orion Flight Servs., Inc. v. Basler
Flight Serv., 2006 WI 51, J 18, 290 Wis.2d 421, 714
N.W.2d__ 130. When an administrative code
provision is ambiguous, we turn to extrinsic sources
in order to determine agency intent. Id, An
administrative agency's interpretation of its own
regulations is controlling “unless the interpretation
is inconsistent with the language of the regulation or
is clearly erroneous.” Jd. (quoting Bergmann_v.
McCaughtry, 211 Wis.2d 1, 7, 564 N.W.2d 712
(1997)).~N2 Whether an agency's interpretation of a
regulation is inconsistent with the regulation or
clearly erroneous is a question of law that we review
independently of the determinations rendered by the
circuit court and court of appeals. Bergmann, 211
Wis.2d at 8, 564 N.W.2d 712.
FN6.SeeWis. Stat. § 227.27(1), which states:
In construing rules, ss. 990.001, 990.01,
990.03(1), (2) and (4), 990.04 and 990.06
apply in the same manner in which they
apply to statutes, except that ss. 990.001
and 990.01 do not apply if the construction
would produce a result that is inconsistent
with the manifest intent of the agency.
FN7.Pfeiffer_ v. Board of Regents, 110 Wis.2d
146, 154-55, 328 N.W.2d 279 (1983); Beal v.
First Federal Sav. & Loan Ass'n, 90 Wis.2d
171, 182, 279 N.W.2d 693 (1979); see also
DaimlerChrysler _v. Labor & Indus. Review
A-12
Comm'n, 2007 WI 15, 4 11, 299 Wis.2d 1, 727
N.W.2d 311.
[6][7] § 26 In addressing whether the regulation is
clearly erroneous we consider the intent or purpose
of the regulation. In resolving ambiguities, “[i]t is
fundamental! that we must favor a construction of a
statute or regulation which will fulfill the intent of
the statute or regulation over one which defeats its
manifest object.” Baierl v. McTaggart, 2001 WI 107,
4.21, 245 Wis.2d 632, 629 N.W.2d 277 citing Shands
v. Castrovinci, 115 Wis.2d 352, 356, 340 N.W.2d 506
(1983). .
[8][9] | 27 It is often difficult to discern the
difference between an interpretive rule and a
legislative rule, as they lhe upon a “hazy
continuum.” American Hospital Ass'n v. Bowen, 834
F.2d 1037, 1045 (D.C.Cir.1987). “Determining
whether a given agency action is interpretive or
legislative is an extraordinarily case-specific
endeavor.” Jd.; see Harry T. Edwards and Linda A.
Elliott, Federal Standards of Review, 134-35. In
making such a determination courts “consider the
agency's own characterization of the particular
action and will generally give deference to the
agency's views.” Beverly Health & Rehab. Servs. v.
Thompson, 2 F.Supp.2d 73, 103
(D.D.C.2002)(quoting American Hosp. Ass'n, 834
F.2d _ at 1056 and *33British Caledonian Airways
Ltd. v. Civil Aeronautics Bd., 584 F.2d 982, 991
(D.C.Cir.1978))(internal punctuation and citations
omitted).
[10] 4 28 In this case we also address the issue of
A-13
whether the circuit court's judgment violated
Harenda's constitutional right to substantive due
process. Such an inquiry presents a question of law
which we review independently. Kenosha County
Dep't of Human Servs. v. Jodie W., 2006 WI 93, J 22,
293 Wis.2d 530, 716 N.W.2d 845.
III
A
{11} 4 29 Under Wis. Admin. Code 447.02(1
ACM is defined as material “containing more than
1% asbestos as determined using the method
specified in Appendix E to Subpart E, 40 C.F.R. part
763, section 1....” FN8 The parties agree that the
provision of Appendix E, section 1 that is relevant in
this case is § 1.7.2.1, “Gross Examination.” The
parties disagree, however, as to whether the
language is clear or ambiguous. Harenda contends
that § 1.7.2.1 is clear, and that the State's
interpretation conflicts with the plain meaning of
that section. To assess Harenda's argument, we
begin by examining the language of the rule. Section
1.7.2.1 provides as follows:
FN8.Wis. Admin. Code § NR 447.02 provides
in relevant part:
(1) “ACM” means _asbestos-containing
material.
(b) “Category II nonfriable ACM” means any
A-14
material, excluding Category I nonfriable
ACM, containing more than 1% asbestos as
determined using the method specified in
Appendix E to Subpart E, 40 CFR part 763,
section 1, Polarized Light Microscopy that,
when dry, cannot be crumbled, pulverized or
reduced to powder by hand pressure.
See alsoWis. Admin. Code § NR
484.04(28)(July 2007) (incorporating by
reference 40 C.F.R. part 763, § 1 into § NR
447.02(1)(b)).
Bulk samples of building materials taken for the
identification and quantitation of asbestos are first
examined for homogeneity at low magnification
with the aid of a stereomicroscope. The core sample
may be examined in its container or carefully
removed from the container onto a_ glassine
transfer paper or clean glass plate. If possible, note
is made of the top and bottom orientation. When
discrete strata are identified, each is treated as a
separate material so that fibers are first identified
and quantified in that layer only, and then the
results for each layer are combined to yield an
estimate of asbestos content for the whole sample.
40 C.F.R. Pt. 763, Subpt. E, App. E, § 1.7.2.1
(emphasis added).
§] 30 The focus of our inquiry is on the last sentence
of the above rule. It describes two different types of
testing measurements: (1) a quantification of
asbestos fibers in each discrete layer, and (2) an
“estimate of asbestos content for the whole sample”
achieved by combining the results from discrete
A-15
layers. However, it is unclear which of these
measurements is relevant in determining whether
material is ACM.
{ 31 The circuit court aptly describes the ambiguity
in the two main clauses of the sentence, noting that
they say different things:
[I]f they can discern discrete strata, they're
supposed to come up with a number for each layer.
It says that in the first clause of the final sentence
that I read. And then it's got a conjunction-and-
which supports [Harenda's] argument, and the
second clause, which says, And then you composite
or come up with a total for all the layers. And the
question*34 what does it mean?.... I'm going to
borrow from my early life as an English teacher.
There's two clauses in one sentence, and they say
two different things. They don't rule each other
out, either. They say two different things, and
they're joined by a linking conjunction....
[I]t doesn't say whether the violation occurs in both
parts of the sentence, just one, or the other. It is
not clear. However, I think it's significant that
each half of the sentence doesn't rule the other out.
And so then the question becomes, is this interim
method rule ... clear? No, it's not clear. And that's
pretty obvious.EN?
FN9.See also In re LVI Envtl. Servs, Inc., 2001
WL 988722, 10 E.A.D. 99, 106
(Envtl.App.Bd.2001)(noting lack of clarity in
the text of 40 C.F.R. Pt. 763, Subpt. E, App. E,
§ 1.7.2.1 regarding which measure constitutes
A-16
violation).
§ 32 The second clause of the sentence reveals
further ambiguity with respect to how to arrive at an
“estimate of asbestos content for the whole sample.”
It directs that “and then the results of each layer are
combined.” However, it is unclear what is meant
here by the word “combined.” The State asserts that
it is ambiguous, but posits that a reasonable
interpretation is that the results are added together.
Harenda maintains that “combined” means that the
results are averaged.
4{ 33 The court of appeals, without explanation,
concluded that “combining” the results from each
layer requires that the percentage of asbestos for
each layer be averaged. Harenda Enterprises, 297
Wis.2d 571, 7 4, 724 N.W.2d 434.An obvious problem
with the court of appeals' and Harenda's “plain
meaning” interpretation is that the word “average”
cannot be found in the text of the rule.
{ 34 Moreover, “combine” means to “bring into a
state of unity; merge.” American Heritage
Dictionary of the English Language, 377 (8rd
ed.1992). “Average” is defined as the “arithmetic
mean.” Jd. at 127. However, “arithmetic mean”
refers to the “value obtained by dividing the sum of a
set of quantities by the number of quantities in the
set.” Id. at 99. Thus, averaging requires combining
quantities and then dividing. The language of the
rule, however, states only that quantities are to be
combined.
{| 35 Further, the language of the section leaves
A-17
unclear which layers are combined to yield an
estimate of the asbestos content of the whole sample.
There are two plausible interpretations. The first is
that only the results from each layer in which there
are asbestos fibers are combined to yield an estimate
of the asbestos content of the whole sample. The
second interpretation is that the results from every
layer identified, including those in which no asbestos
fibers are identified and quantified, are combined to
yield the estimate of asbestos content for the whole
sample. This appears to be the interpretation
embraced by the court of appeals.
{ 36 In light of these interpretations, we reject
Harenda's contention that the text of the rule is
unambiguous. It is unclear how the first clause of
the relevant sentence relates to the second clause.
Likewise, the meaning of the word “combine” is
uncertain, and there are competing interpretations
as to what layers are to be combined to yield an
estimate of asbestos content. We therefore determine
that the language of § 1.7.2.1 is ambiguous.
B
{| 37 The determination that § 1.7.2.1 is ambiguous,
however, does not end our inquiry. We must next
examine whether the State's interpretation is
inconsistent *35 with the regulation or clearly
erroneous. As we have noted, an administrative
agency's interpretation of its own regulations is
controlling unless the agency's interpretation is
“qnconsistent with the language of the regulation or
is clearly erroneous.” Orion Flight Serus., 290
Wis.2d 421, J 18, 714 N.W.2d 130.
A-18
{ 38 The State maintains that under § 1.7.2.1,
material is ACM if a single layer from a multi-
layered sample contains greater than one percent
asbestos. It bases its position on the interpretations
advanced in two clarifications issued by the EPA in
response to questions regarding the testing of multi-
layered samples.
{ 39 In the first, issued in January 1994, the EPA
stated that the clarification was a response to
members of the regulated community who had
“frequently asked” questions regarding the analysis
of multi-layered samples.
The Agency has learned that some of the regulated
community have questions concerning the analysis
of samples which may contain multiple layers, any
or all of which may be asbestos containing
materials (ACM).... Because these questions are
frequently asked, EPA is making this clarification.
59 Fed.Reg. 542 (Jan. 5, 1994).
{ 40 The clarification provided that when multi-
layered samples are tested, the results from each
layer should be reported. It stated that “fi]n general,
when a sample consists of two or more distinct layers
or materials, each layer should be treated separately
and the results reported by layer (discrete
stratum).” Id.
{ 41 Thus, the EPA's interpretation of § 1.7.2.1 is
that the results of each layer are relevant in
determining whether material is ACM. This
A-19
eet ‘sha oe P 2 CBI phn Seg (ah er an "BS Es of RET ie
Ee ee a, oe ee a te ee Re Ne eee aS PS ke
ee a ee ose
addresses the first ambiguity in § 1.7.2.1 that we
describe above. It sheds light on the circuit court's
question of “whether the violation occurs in both
parts of the sentence, just one, or the other.” The
January 1994 statement clarifies that a violation
occurs in the first part of the sentence.
€ 42 The second clarification in which the EPA
interprets its rule was issued in December 1995 in
response to continued questions regarding the
testing of multi-layered samples. The EPA explains
in the second clarification that prior to adopting the
procedures set forth in 40 C.F.R. Pt. 763, Subpt. E,
App. E, § 1.7.2.1, on November 20, 1990, the EPA
had informal policies of treating each layer in multi-
layer systems separately and against diluting
asbestos-containing layers by combining them with
layers not containing asbestos:
EPA's unwritten policy based on the definition of
“friable asbestos material” was that each layer in a
multi-layered system was to be analyzed as a
separate material (no averaging or dilution by
combining layers of asbestos-containing material
with nonasbestos-containing material was
allowed).
60 Fed.Reg. 65,243 (Dec. 19, 1995).
§{ 43 Further, the December 1995 statement
explained that the January 1994 clarification
interpreted § 1.7.2.1 as precluding averaging. It
states that in multi-layered systems, “results were
not allowed to be combined to determine average
asbestos content (continuing the policy that dilution
A-20
of an asbestos-containing material is not allowed).”
Id.
| 44 The EPA's December 1995 clarification
therefore provides guidance on a second ambiguity
in § 1.7.2.1. “Combining” the results from discrete
layers does not mean averaging the content of those
layers where doing so dilutes the results.
{| 45 The document also describes a potentially cost-
saving method for testing *36 multi-layered samples.
It explains that in testing multi-layered samples,
labs may composite layers first in order to determine
whether it is necessary to perform potentially more
costly and time-consuming testing of discrete layers:
Any source sending multi-layered bulk samples to
a lab may request that certain sample(s) or
portions of sample(s) be composited for analysis
first (to potentially reduce time and cost of
sampling).
(Note: A composite sample does not mean that
multiple samples may be composited into one
sample. It means that multiple layers of one core
sample may be composited for analysis.)
Id.EN10
FN10. The clarification details the procedure
for analyzing composited layers.
{| 46 The clarification then explains that if the
analysis of composited layers shows that the average
content of asbestos for the whole sample is greater
A-21
Rete pe
than one percent, the system must be treated as
ACM. However, if the analysis shows the presence of
asbestos, but in a concentration of less than one
percent, each discrete strata must be treated
separately. If a single layer is found to contain
greater than one percent asbestos, then that layer
must be treated as ACM.
If the result of the composite analysis shows that
the average content for the multi-layered system
(across the layers) is greater than one percent, then
the multi-layered system must be treated as
asbestos-containing and analysis by layers is not
necessary. If the result of the composite sample
analysis indicates that the multi-layered system as
a whole contains asbestos in the amount of one
percent or less, but greater than. none detected,
then analysis by layers is required to ensure that
no layer in the system contains greater than one
percent asbestos. If any layer contains greater than
one percent asbestos, that layer must be treated as
asbestos-containing. This will have the effect of
requiring all layers in a multi-layered system to be
treated as asbestos-containing if the layers can not
be separated without disturbing the asbestos-
containing layer. Once any one layer is shown to
have greater than one percent asbestos, further
analysis of the other layers is not necessary if all
the layers will be treated as asbestos-containing.
Id.
{ 47 The December 1995 statement therefore
reiterates the position of the January 1994
statement that the measure of asbestos content from
A-22
a single layer may render multi-layer material ACM.
It also provides an opportunity to perform first a
composite test in order to determine more quickly
and efficiently that a sample is ACM. Notably, it
does not imply that the “estimate of asbestos content
for the whole sample” described in § 1.7.2.1 is an
average of all layers. Rather, it clarifies that
averaging may not be used to dilute the measure of
acbestos content in multi-layer samples. The
composite test allows averaging, but it is a separate
test used to forestall the expense of analyzing
individual layers and not as a means of dilution.
{ 48 The State's argument regarding the testing
method is therefore supported by the EPA's
clarifications, which are not inconsistent with §
1.7.2.1. Moreover, the EPA's interpretation is not
clearly erroneous, as its interpretation is supported
by the purpose of regulation and basic principles of
statutory construction.
§ 49 The manifest purpose of chapter NR 447 of the
Wisconsin Administrative Code, which incorporates
40 C.F.R. Pt. 763, Subpt. E, App. E, § 1.7.2.1, is to
*37 protect workers and the public from air pollution
from asbestos. Prohibiting the dilution of ACM by
averaging the asbestos content of multi-layer
systems serves that purpose.-Nl
FN11. The dissent emphasizes the importance
of “clear, understandable, enforceable testing
methods” in “an area as crucial as asbestos
removal.” Dissent, { 78. It next warns that
asbestos exposure can lead to a “horrible
death.” J/d., § 79.It advances that “[t]he
A-23
current testing methods and procedures are
dangerously ineffective.” JId., § 95. Finally,
it claims that the clarifications “do not
actually protect the worker.” Id., { 96.
Despite the dissent's purported concern for
protecting the worker, and its concerns about
clarity, horrible consequences, and
dangerously ineffective testing methods, the
dissent nevertheless opts for no meaningful
regulation whatsoever.
Instead it would leave in place an
ambiguous rule. It is unclear how the State
would regulate demolition of ACM if the
interpretive rule is invalidated. It would
appear that under the dissent's view,
workers would receive no protection in the
demolition materials in which some layers
contain greater than one percent ACM.
The dissent's reply that the majority
“invalidates the substantive rule” is
incorrect. Id., § 94 n. 14. The rule is valid,
and the clarifications address its ambiguity.
| 50 The interpretation suggested by Harenda, and
adopted by the court of appeals, runs contrary to the
purpose of the rule. At oral argument, the State
explained that averaging layers would allow that a
layer of wall containing (for example) 1.9 percent
asbestos would constitute ACM if it were standing
alone, but not constitute ACM if attached to a layer
of wall with no asbestos. The State explained,
however, that whether the asbestos-containing layer
is attached to a non-asbestos-containing layer does
A-24
not diminish the amount of asbestos that disperses
into the air when a worker strikes the wall with a
hammer or a wrecking ball.£N!2
FN12. The court of appeals rejected this
argument. It determined that the argument
led to the “absurd” result that a “massively
thick wall with an extremely thin coat of
paint” containing just over one percent
asbestos could constitute ACM. MHarenda
Enterprises, 297 Wis.2d 571 9 n. 4, 724
N.W.2d 434.It is not clear why this is an
absurd result. As the State explained at oral
argument, if a worker strikes the paint-
covered wall with a hammer or wrecking ball,
the amount of asbestos entering the air would
not depend on whether the material under the
paint is thick or thin. Regardless, the
difficulty of making such determinations
demonstrates the value of deferring to an
agency's expertise in_ interpreting its
regulations.
{| 51 The State's and EPA's interpretation is also
required in order to harmonize the language of § NR
447.02(1)(b) and § 1.7.2.1. It is a basic principle of
statutory and administrative rule construction that
“provisions relating to the same subject matter
should be read together and harmonized when
possible.” State v. Morford, 2004 WI 5, 9 21, 268
Wis.2d 300, 674 N.W.2d 349.
4] 52Section 447.02(1)(b) states that “ ‘Category II
nonfriable ACM’ means any material ” that contains
greater than one percent asbestos under § 1.7.2.1.
A-25
(Emphasis added.) Section 1.7.2.1 is explicit that
where a sample contains discrete strata, “each is
treated as a separate material.” (Emphasis added.)
Reading these two provisions together, discrete
strata must be treated as separate material under §
1.7.2.1, and any material containing greater than
one percent asbestos is ACM under § NR
447.02(1)(b). It therefore follows that a discrete
strata containing greater than one percent asbestos
is ACM.
4] 53 Interpreting the regulations such that a
discrete strata in a multi-layer sample cannot be
ACM would require that “material” have different
meanings in § 1.7.2.1 and § NR 447.02(1)(b).
However, it seems implausible that § NR
447.02(1)(b) uses the word “material” to *38 mean
one thing, but employs and directly refers to a test
for ACM that uses “material” to mean something
altogether different.
[12] 9 54 Harenda argues, however, that the EPA's
interpretation of § 1.7.2.1 contradicts the section
because it renders the second clause of the sentence
{estimating the asbestos content of the entire
sample) superfluous. Construction of statutes and
administrative rules should avoid whenever possible
interpretations that render language superfluous.
Hutso r m' 7,449. 2
Wis.2d 612, 665 N.W.2d 212. Harenda's argument
misses the mark for two reasons.
q 55 First, its argument assumes that “combining”
the results from discrete layers to “yield an estimate
of asbestos content for the whole sample” means
~ A-26
averaging the results. The EPA was clear in the
January 1994 and December 1995 documents that
layers could not be averaged as a means to dilute
layers containing greater than one percent asbestos.
59 Fed.Reg. 542 (Jan. 5, 1994); 60 Fed Reg. 65,243
(Dec. 19, 1995). The discussion of averaging the
asbestos contents for muitiple layers occurs in the
context of providing testers the opportunity to do a
preliminary cost-and time-saving test in order to
establish whether analyzing discrete layers is
necessary. Id.
§{ 56 Second, it is Harenda's interpretation of §
1.7.2.1 that renders language superfluous. If the
asbestos content of an entire multi-layer sample is
the only measure relevant in determining whether
material is ACM, there would be no need to treat
each layer “as a separate material so that fibers are
first identified and quantified in that layer only.”
Material could be determined ACM without
analyzing discrete strata. Harenda's argument is
unpersuasive.£N13
FN13. The dissent states that we conclude the
language in § 1.7.2.1 “is ambiguous because of
the word ‘combined.’ ” Dissent, § 83. It further
states that the 1994 and 1995 statements do
not “clarify the alleged ambiguity,” id., 4 85
(emphasis added), and “change the analysis
from a multi-layered approach to a single-
layer approach.” lId., 4 88. The dissent,
however, neglects a substantial portion of our
analysis.
As we discuss in the text, there are two
A-27
:
|
)
:
Eee
Sa’ aa ee SC TP
significant ambiguities in the rule. One
concerns the word “combined.” The other
ambiguity, which vas aptiy described by the
circuit court, is whether a violation occurs
when asbestos content for discrete layers is
quantified or whether a violation occurs only
after the results from the discrete layers are
“combined” (regardless of what “combined”
means). While the dissent is correct that the
clarifications do not fully explain what
“combined” means, they directly address the
ambiguity regarding what aspects of the test
may give rise to a violation. The dissent's
claim that the clarifications “do not address
the alleged ambiguity” and thus “changes”
the analysis is therefore mistaken.
[13][14] { 57 We therefore conclude that the EPA's
January 1994 and December 1995 clarifications are
not inconsistent with the language of § 1.7.2.1. We
also conclude that the EPA's interpretatien is not
clearly erroneous. The EPA's interpretation fulfills
the purpose of the asbestos regulations, whereas the
alternative interpretation Harenda proposes defeats
that purpose. Moreover, the EPA's view is supported
by basic principles of statutory construction. Giving
deference to an agency's interpretation of its own
rule, we conclude that the interpretation of § 1.7.2.1
explained in the EPA's January 1994 and December
1995 clarifications is controlling £XM4
FN14. Harenda further maintains that if §
1.7.2.1 is unclear; it is unconstitutionally
vague and therefore void. However, its
argument on this point is broadly stated and
A-28
not sufficiently developed. It contends that the
provision is unconstitutionally vague under
the test set forth in State v. McManus, 152
7 2 4 89).
According to that test the statute or
regulation must give “persons of ordinary
intelligence who seek to avoid its penalties
fair notice of the conduct required or
prohibited,” and “tiust provide standards for
those who enforce the laws and adjudicate
guilt.” Jd.
The standard Harenda cites applies to
criminal statutes and regulations. See State
v. 1 Wis.2d 670, 677, 586 N.W.2d
(Ct.App.1998). However, Harenda has failed
to explain why that standard should apply
rather than the standard for cases involving
civil penalties. See Gross v. Woodman's
Food Mkt., 2002 WI App 295, 441 56-57, 259
Wis.2d 181, 655 N.W.2d 718 (citing Village
oO ma state lipside offman
Estates, Inc., 455 U.S. 489, 498, 102 S.Ct.
1126, 71 L.Ed.2d 362 (1982)).
Additionally, at oral argument Harenda
acknowledged that the laboratories
conducting tests on its behalf were advised
to use the testing methods set forth in the
clarifications (i.e., the same tests used by the
laboratories conducting tests for the State).
It is unclear how Harenda can now argue
that the regulations fail to provide fair
notice and standards for enforcement when
its lab was advised to use the testing method
A-29
set forth in the clarifications. Because
Harenda’s argument that the regulations
are unconstitutionally vague is insufficiently
developed, we need not address it here.
Kristi L.M. v. Dennis E.M., 2007 WI 85, 4] 20
n. 7, 302 Wis.2d 185, 734 N.W.2d 375.
*39 IV
[15] { 58 Harenda also argues that the clarifications
impose new obligations, and absent’ the
clarifications, there would be no basis for the State's
enforcement action. It contends that’ the
clarifications are therefore legislative rules, and that
they are unenforceable because they were not
enacted through the proper administrative rule
making procedures pursuant to 5 U.S.C. § 553.
[16]{17] § 59 Under the federal Administrative
Procedures Act (APA), an agency may issue a
legislative rule only if it uses the note and comment
procedure described in 5 U.S.C. § 553(b) or
establishes an exception under 5 U.S.C. §
553(b)(3)(B). Hemp Indus. Ass'n v. DEA, 333 F.3d
1082, 1087 (9th Cir.2003). However, an agency need
not follow the note and comment procedure in order
to issue an interpretive rule. Jd. A legislative rule
promulgated without complying with the procedures
of the APA is invalid. Jd. It is not disputed that the
clarifications were issued without the procedures
required to issue a legislative rule. Rather, the
question is whether the _ clarifications are
interpretive or legislative rules.
[18]{19] { 60 The difference between interpretive
A-30
rules and legislative rules is, roughly speaking, that
interpretive rules merely explain substantive law,
and legislative rules create rights, impose
obligations, or effect a change in existing law. Yesler
Terrace Community Council v. Cisneros, 37 F.3d 442,
449 (9th Cir.1994). A rule is legislative if, “in the
absence of the rule, there would not be an adequate
legislative basis for enforcement action.” Hemp
Indus. Ass'n, 333 F.3d at 1087. However, as noted
above, interpretive rules and legislative rules lie
upon a “hazy continuum” and distinguishing them is
a case-specific endeavor. American Hospital Ass'n,
834 F.2d at 1045.
§] 61 Harenda cites to a recent, unpublished case
from Southern California in support of its claim that
the clarifications are legislative rules. In U.S. v. San
Diego Gas & Electric Co., 2006 WL 3913458, 2006
LEXIS 84856 (S.D.Cal. Nov. 21, 2006) (SDG & E ),
San Diego County sued San Diego Gas and Electric
for violating asbestos work practice standards. Jd. at
4. The county's indictment stated that the alleged
ACM contained multiple layers and was tested for
asbestos according to the method outlined in the
clarifications. That is, *40 the county's test would
find that the material is ACM if “any of the layers,
standing alone ... [contains] over 1% asbestos and [is]
friable.” Jd. at 9.
4] 62 The court determined that the “single-layer”
method described in the clarifications conflicts with
the test set forth in § 1.7.2.1. It interpreted the §
1.7.2.1 test to mean that “material is not regulated
unless the combined result yields more than 1
percent asbestos.” Jd. at 22. The court therefore
A-31
held that the government's failure to allege that
multi-layered material contained greater than one
percent asbestos as determined by averaging the
asbestos content of the layers was fatal to its
indictment. Jd. at 27-28.
* 63 The court's conclusion in SDG & E, however,
turns on an interpretation of § 1.7.2.1 that we have
rejected. As explained above, it is our determination
that a reasonable interpretation of § 1.7.2.1 is that
multi-layer material is ACM if a single layer has an
asbestos content of greater than one percent. That
interpretation is supported by EPA's clarifications,
the manifest purpose of the rule, and principles of
statutory construction.-™145 Further, the SDG & E
court uncritically adopts the view, which we reject,
that in § 1.7.2.1 “combine” means average.
FN15. Similarly, the dissent maintains that
the clarifications do not apply because they
have not been formally adopted by the DNR.
Dissent, 94 90-91. However, the dissent's
argument rests on a faulty premise. The DNR
must formally adopt only legislative rules. For
the reasons outlined in the text, the
clarifications are interpretive rules that do not
require formal adoption.
4] 64 Moreover, § 1.7.2.1 provides an adequate basis
for the enforcement action even without the
clarifications. As we discuss above, § 1.7.2.1 is
ambiguous, and the EPA's interpretation is
consistent with the section. Specifically, § 1.7.2.1
supports the interpretation that if a single layer of a
multi-layer sample contains greater than one
A-32
percent asbestos, the material is ACM. Also as
outlined above, that interpretation is supported by
_the purpose of the regulations and basic principles of
construction.
[20] 4 65 Finally, we are mindful that the EPA
characterized the 1994 and 1995 statements as
“clarifications to the final rule” rather than rules.
When courts consider an agency's characterization of
its actions they “generally give deference to the
agency's views.” Beverly Health & Rehab., 223
F.Supp.2ac at 103. The EPA's view supports our
conclusion that the statements are interpretive rules
rather than legislative rules. We therefore determine
that, contrary to SDG & E, § 1.7.2.1 provides an
adequate legislative basis for the State's
enforcement action.-EX16 The clarifications are not
legislative rules. Rather, they are valid interpretive
rules.
FN16. Harenda asserts that the “State admits
that, without the substantive changes
eff2cted by the Clarifications, it loses this case
... [and] admits that it can only establish a
vidation if the Clarification testing method is
used.” At oral argument the State rejected
this characterization of its view. The State's
view, it explained, is that the clarifications do
not effect substantive change at all. Rather,
the State admits that the average asbestos
cortent of the samples from the disputed area
is ess than one percent.
V
A-33
ii His Sik AT ON fem h yao a ek Nk a ahd ge, ae Bs
ee a eee ae eee es
{21] 4 66 We turn finally to Harenda's due process
argument. Harenda contends that its pre-demolition
sampling and testing satisfied the applicable
regulations and indicated that the material in the
disputed area was not ACM. It further maintains
that the differences between the results of its tests
on the split samples and the State's tests on the split
samples create an issue of fact as to whether the
material *41 from the disputed area was ACM.
Thus, it argues that the circuit court granted the
State's motion for summary judgment on the basis of
“conflicting test results.” It maintains that the
decision was therefore arbitrary, and it violated
Harenda's right to due process.
4] 67 Harenda's contention that the circuit court's
decision was arbitrary is unpersuasive. Its due
process argument is thus without foundation.
4 68 The circuit court based its decision on a four-
element test as set forth in National Can, 126
F.Supp.2d 521:
In order to establish liability under the asbestos
NESHAP, the government must prove that 1)
[American Can} was an owner or operator of a
facility, 2) a renovation occurred, 3) asbestos was
removed or stripped without complying with the
requirements and practices delineated in the
asbestos NESHAP, and 4) a jurisdictional amount
of asbestos was disturbed.
Id. at 525, n. 1 (citing 40 C.F.R. § 61.140 et seq.)
{| 69 Under the above test, owners and operators are
A-34
strictly liable for asbestos abatement regulation
violations occurring at their regulated facilities. The
State does not have to prove any negligence or intent
to violate the regulation. As stated in United States
v. B & W Inv. Properties, 38 F.3d 362 (7th Cir.1994):
Having been deemed an owner or operator, [the
defendant] has no valid challenge against
application of the Act, regardless of how minimal
the company's responsibilities or knowledge may
actually have been. The Act imposes strict lability
on all owners and operators of properties in
violation of the Act.
Id. at 367.
4 70 The parties have stipulated that Harenda is an
operator of a facility. There is also no dispute that a
renovation occurred and that removal of material
from the disputed area occurred without following
the procedures outlined in chapter 447. Further,
Harenda does not contest that if the material
removed from the disputed area is ACM, a
jurisdictional amount of asbestos was disturbed.£N12
The issue is whether the material removed from the
disputed area is ACM.
N i in in. 7.06(2
establishes the amounts of ACM that trigger
measures in §§ NR 447.07 and 447.08. It
provides in relevant part:
(2) APPLICABILITY. The requirements of
ss. NR 447.07 and 447.08 apply to each
owner or operator of a demolition or
A-35
zi
*
4
:
renovation activity, including the removal of
RACM as ,vllows:
(a) In a facility being demolished, all the
requirements of ss. NR 447.07 and 447.08
apply, except as provided in par. (c), if the
combined amount of RACM meets any of the
following:
1. At least 80 linear meters (260 linear feet)
on pipes or at least 15 square meters (160
square feet) on other facility components; or
2. At least one cubic meter (35 cubic feet) off
of facility components where the length or
area could not be measured previously.
{ 71 Harenda is correct that the State has offered no
argument that Harenda failed to conduct its pre-
demolition sampling and testing according to the
regulations. In fact, the State offers no opinion on
the issue. Instead, the State asserts that liability
does not depend on whether an owner or operator
conducts pre-demolition sampling testing in accord
with the regulations.
J 72 "e State is correct. The elements set forth
above do not require that the owner or operator
sample or test improperly, and Harenda offers no
argument that sampling and testing according to the
regulations is a defense. Thus, in the present *42
case liability depends on whether the material
disturbed was ACM, not on the quality of Harenda's
pre-demolition sampling and testing.
A-36
{ 73 Harenda's argument that the circuit court made
an arbitrary choice between “dueling test results” is
similarly unpersuasive. It makes much of the fact
that the tesis of the split samples conducted for the
State and for Harenda had different results.
Harenda contends that such “analytic variability” in
testing results undermines the basis of the circuit
court's decision and renders it arbitrary.
§ 74 It is correct that Harenda's tests indicated that
one more sample contained ACM than the State's
test, and it is also correct that the tests differed with
respect to the precise amount of asbestos in some
samples. However, the samples are not “dueling”
with respect to whether the material was ACM
under the regulations. The tests on the split samples
conducted for Harenda and the tests on the split
samples conducted for the State both came back
positive for ACM. Regardless of “analytic
variability,” the two sets of tests were consistent in
the relevant respect, namely, whether the material
was ACM.
§, 75 Harenda's pre-demolition sampling and testing
was the only set of tests that did not indicate that
matcrial from the disputed area was ACM. The
State's test during demolition indicated that the
material was ACM, and the State's test after
demolition was halted indicated that the material
was ACM. Further, both the State's and Harenda's
tests on the split samples indicated that the material
was ACM. The parties have stipulated that the tests
were accurate within their testing method. Thus, the
array of positive tests is sufficient to show the
presence of ACM.
A-37
§| 76 Accordingly, we determine that there was
nothing arbitrary in the circuit court's conclusion
that the tests showed that the material from the
disputed area was ACM. Harenda therefore has no
basis for a claim that the decision violated its right
to due process.
VI
4 77 In sum, we determine, first, that the language
of § 1.7.2.1 is ambiguous. Giving deference to an
agency's interpretation of its own rule, we conclude
that the EPA's interpretation is controlling because
it is neither inconsistent with § 1.7.2.1 nor clearly
erroneous. We further determine that’ the
clarifications do not constitute impermissible rule
making; rather, they are valid interpretive rules.
Finally, we determine that the circuit court's
judgment does not violate Harenda's substantive due
process rights. We therefore reverse the court of
appeals.
The decision of the court of appeals is reversed.
{| 78ANNETTE KINGSLAND ZIEGLER, J.
dissenting.
In an area as crucial as asbestos removal, it is
important to have clear, understandable, enforceable
testing methods. In general, clarifications may be a
useful guide, but the “clarifications” in this case are
inconsistent with the plain language of the rule and
more than interpretive guidelines. In fact, the
“clarifications” effect a substantive change rather
than clarify the alleged ambiguity in the 1990 rule.
A-38
Despite the fact that the “clarifications” do not
clarify the alleged ambiguity, are contrary to the
promulgated rule, and were not adopted in this
state, the majority still gives them the force of law.
As a result, I must respectfully dissent.
I
4 79 Asbestos is a group of minerals that naturally
occur as fibers. It has been *43 widely used in many
industrial products such as flooring, textiles, and
insulation.~EN1 Exposure to asbestos can lead to
mesothelioma, which is a rare form of cancer that
affects the protective sac of most internal organs
such as the lungs. “Most people who develop
mesothelioma have worked on jobs where they
inhaled asbestos particles.” EX2 Symptoms,
however, may not appear until 30 to 50 years after
exposure. The incidence of this rare cancer has
increased over the past 20 years but may be
stabilizing now. Once symptoms appear and the
cancer is diagnosed, the disease is often very
advanced.—X3 Mesothelioma is often associated with
a horrible death.
FN1. National Cancer Institute, U.S. National
Institutes of Health, Mesothelioma: Questions
and Answers, available at http:// www. cancer.
gov/ cancer topics/ factsheet/ Sites- Types/
meso thelioma.
FN2./d.
FN3. American Cancer Society, ACS: What
are the Key Statistics about Malignant
A-39
EOF Ce ee eee ee Ce AS Me nee
Mesothelioma?, available at http// www.
cancer. org/ doc root/ CRI/ content/ CRI_ 2_ 4_
1X_ What _ are_ the_ key_ statistics_ for_
malig nant_ mesothelioma_ 29. asp? site
area= , revision 10/19/06.
Il
{ 80 The Ciean Air Act regulates hazardous
pollutants, such as asbestos. 42 U.S.C.A. § 7412
(West 1999). The Environmental! Protection Agency
(EPA) enacted the National Emission Standards for
Hazardous Air Pollutants (NESHAP) pursuant to its
authority under § 7412. In 1973, the EPA
promulgated the first asbestos NESHAP regulation.
See38 Fed.Reg. 8,820, 8,826-30 (Apr. 6, 1973). The
asbestos NESHAP specifies procedures for removing
certain asbestos materials. 40 C.F.R. Pt. 61, Subpt.
M, § 61.145. The 1973 regulation underwent
significant changes in 1990 in order to “enhance
enforcement and promote compliance with the
current standard without altering the stringency of
existing controls.” 55 Fed.Reg. 48,406, 48,406 (Nov.
20, 1990).
{ 81 Following the proper rule-making process, the
EPA established the “Interim Method” for
determining asbestos content in bulk samples.£%4
See id. at 48,415; 40 C.F.R. Pt. 763, Subpt. E, App.
E, § 1.7.2.1, Gross Examination. The DNR
incorporated by reference the 1990 testing method,
but it did not so incorporate the 1994 and 1995
clarifications.EX$ The 1990 method seems to require
the following: (1) examine the core sample for
homogeneity; (2) if the sample is homogeneous,
A-40
identify fibers and quantify asbestos content for the
sample; (3) when discrete strata are identified, the
fibers in each layer are identified and quantified;
“and then ” (4) after the layers are quantified, the
results of *44 each layer are combined to yield an
estimate of asbestos content for the whole sample.
See, e.g., State v. Harenda Enters., Inc., 2006 W1 App
230, J 4, 297 Wis.2d 571, 724 N.W.2d 434.
FN4. Section 1.7.2.1, Gross Examination,
provides:
Sand PN a
Bulk samples of building materials taken for
the identification and quantitation of
asbestos are first examined for homogeneity
at low magnification with the aid of a
stereomicroscope. The core sample may be
examined in its container or carefully
removed from the container onto a glassine
transfer paper or clean glass plate. If
possible, note is made of the top and bottom
orientation. When discrete strata are
identified, each is treated as a separate
material so that fibers are first identified
and quantified in that layer only, and then
the results for each layer are combined to
yield an estimate of asbestos content for the
whole sample.
Ces ee ee eee
i ab nee ee aa Lie
ayoee
mr ek Say
40 C.F.R. Pt. 763, Subpt. E, App. E, §
1.7.2.1. (Emphasis added.)
FN5. The 1990 testing method, unlike the
clarifications, was incorporated by reference
on December 4, 1994. SeeWis. Admin. Code §
A-41
NR 484.04(28) (July 2007) (ancorporating by
reference 40 C.F.R. Pt. 763, Subpt. E, App. E,
§ 1 for §§ NR 447.02(1)(a) and (b), 447.02(16),
447.02(27), 447.02(36), 447.09(1)(a)
ann(b)(intro)).
| 82 The plain language of the 1990 rule is
instructive. It does not stop at the analysis of each
layer. It reads: “and then the resuits for each layer
are combined to yield an estimate of asbestos content
for the whole sample.” (Emphasis added.) If the rule
was intended to require removal when any one layer
was over one percent, the rule would not need the
last clause, which requires that layers be combined
to yield a result for the whole sample.
1 83 The majority, however, concludes that the
language in § 1.7.2.1 is ambiguous because of the
word “combined.” See majority op., 4 29-36. As a
result, the majority relies on the 1994 and 1995 EPA
clarifications, which undermine the plain language
of the properly promulgated 1990 ruleFX& The
majority accepts the two EPA “clarifications” even
though they do not have the force of law, are
contrary to the plain language of the rule, and read
the “combined” requirement out of existence. See
majority op., {4 38-49. Because the clarifications (1)
do not clarify the ambiguity; (2) were not properly
promulgated and are not the law of this state; and
(3) fail to fully protect the worker, I must dissent.
FN6. The majority defers to the agency's
interpretation stating, “[a]n administrative
agency's interpretation of its own regulations
is controlling ‘unless the interpretation is
A-42
inconsistent with the language of the
regulation or is clearly erroneous.’ "See
majority op., { 25 ey Orion Flight Servs.,
In r t 2006 WI 51, 290
Wis. 2d 421, 714 N.W.2d 130. Because the
agency's interpretation is inconsistent with
the properly promulgated rule, I give no
deference to the agency's interpretation. See
part B of this dissent. However, as the court of
appeals so aptly stated, “[ijrrespective of what
level of deference is appropriate, [ ] an agency
interpretation may not trump a statute's clear
language.” State uv. Harenda Enters., Inc.
2006 WI App 230, 7] 8-9, 297 Wis.2d 571, 724
N.W.2d 434.
A
9 84 Even if we look to the 1994 and 1995
clarifications and ignore the fact that the DNR did
not adopt the clarifications but adopted only the
1990 rule, the clarifications still do not clarify the
alleged ambiguity of what “combined” means. In
1994 and 1995, the EPA produced “clarifications” for
the 1990 rule. The January 5, 1994, clarification
briefly explained, “when a sample consists of two or
more distinct layers or materials, each layer should
be treated separately and the results reported by
layer (discrete stratum).” 59 Fed.Reg. 542 (Jan. 5,
1994). Even if this is an explanation, it still fails to
explain what actions should be taken to combine
layers to yield an estimate for the whole sample.
4 85 To add to the confusion, the second clarification,
issued in 1995, states that combining layers was
A-43
never allowed. That contention, however, is clearly
contrary to the plain language of the rule. The 1995
clarification states that the “unwritten policy” of the
EPA dating back to the 1970s “was that each layer
in a multi-layered system was to be analyzed as a
separate material (no averaging or dilution by
combining layers of asbestos-containing material
with nonasbestos-containing material was
allowed).” 60 Fed.Reg. 65,243 (Dec, 19, 1995). While
this new test-the single layer approach-may be a
better approach, it is contrary to the 1990 rule's
plain language. Rather than clarify the alleged
ambiguity, the clarifications create a new and
distinct rule.
B
§ 86 Under our system of government, any
enforceable rule, however, must be *45 vetted
through the proper rule-making process. The rule-
making process is an important part of our
democracy. It gives’ interested parties’ the
opportunity to be heard. The Administrative
Procedures Act governs the promulgation of new
federal agency rules, 5 U.S.C.A. § 553, and chapter
227 of the Wisconsin Statutes governs’ the
promulgation of Wisconsin agency rules. Rules must
be subjected to a notice and comment period before
they may take effect. 5 U.S.C.A. § 553(b) and (c);
Wis. Stat. §§ 227.16-227.19. The notice and comment
period occurred at the state and federal level for the
1990 rule, but it never occurred with respect to the
1994 and 1995 clarifications. Because’ the
clarifications effect substantive change and create a
new rule, the rule-making process was required.
A-44
4 87 When a rule is interpretive rather than
substantive, the rule is excepted from the notice and
comment period requirements. 5 U.S.C.A. § 553(c).
Whether a rule is_' substantive rather than
interpretive, however, depends upon whether it
creates rights, assigns duties, or imposes new
obligations. See Hemp Indus. Ass'n _v. Drug
Enforcement _Admin., 333 F.3d 1082, 1087 (9th
Cir.2003) (concluding (1) that a legislative or
substantive rule promulgated without following the
rule-making requirements is invalid; and (2) that a
rule is legislative or substantive if it imposes new
obligations or changes existing law).FN7
FN7.See also Yesler Terrace Cmty. Council v.
Cisneros, 37 F.3d 442, 449 (9th Cir.1994)
(discussing the difference between
interpretive and legislative rules); Elizabeth
Williams, What constitutes “interpretative
rule” of agency _so_ as to exempt such_action
from_notice requirements of Administrative
Procedure Act 5 USCS § 5538(b)(3)(A), 126
A.L.R. Fed. 347 (1995).
{| 88 Here, there can be no question that the 1994
and 1995 clarifications effect a substantive change to
the law, impose new obligations on companies such
as Harenda, and create significant civil or criminal
liability. The “clarifications” change the analysis
from a multi-layered approach to a single-layer
approach. This changes the rule-without following
proper rule-making procedures-because instead of a
quantity of asbestos for the whole sample giving rise
to an obligation for special removal procedures, a
A-45
company, such as Harenda, must follow special
removal procedures when only one layer out of many
contains greater than one percent asbestos. Because
the clarifications impose new obligations upon
companies such as Harenda, the clarifications
change the rules governing asbestos testing.£N8 In
fact, the State seems to concede that’ the
clarifications *46 change the rule; the State admits
that it cannot meet its burden of proof if the
clarifications are not the law.EX9 Thus, the
clarifications substantively change the _ rules
governing asbestos testing.
FN8.See, e.g., Robert M. Howard, Patricia
Guerrero, David B. McGrath, Drew R. Van
Orden, The EPA's Prosecution of Clean Air Act
Asbestos NESHAP Cases Based Upon Non-
bindin lk rial Test Methods, 44 Sa
Diego L.Rev. 173, 202-03 (2007) (identifying
five substantive differences between the 1990
and 1993 test methods: (1) averaging of
multilayered material, which has_ been
through federal rulemaking three times, is
rejected by the 1993 test method; (2) the 1990
rule “mandates ‘representative,’ multilayered
samples to quantify esbestos content layer-by-
layer” instead of material becoming regulated
if any single layer is greater than one-percent
asbestos; (3) changing the “small quantity”
criteria for pipe wrap; (4) unlike the 1993 test
method, the 1990 “method makes _ no
laboratory determination of friability, as a
predictor of the material's actual condition in
the field”; (5) “[u]nlike the 1990 test method,
the newer 1993 test method requires
A-46
laboratories to report on friability as that term
is separately defined” in the new test method).
The 1993 method, which this article refers to,
is the method discussed in the clarifications.
See id. at 182-86 (referring to R.L. Perkins &
B.W. Harvey, Test Method, Method for the
Determination of Asbestos in Bulk Building
Materials, U.S. Envtl. Prot. Agency,
EPA/600/R-93/116 (1993)).
FNY. At the summary judgment hearing, the
State said:
Then, question number 2 is whether or not
the clarifications apply. Again, every test
result that the State submitted were-used
the clarification method. Every one. Why?
Because they were all certified labs. And all
certified labs under the NVLAP procedures
have to follow the clarifications. They were
all analyzed by layer. I'm first to admit that
if you throw out the clarifications, you throw
out the State's test results. Every one was
analyzed I believe under the NVLAP
approach. And so this is obviously a pivotal
aspect.
(Emphasis added.)
{| 89 The EPA even acknowledged its responsibility
to promulgate a new rule so that it could properly
enforce the new test. The 1995 clarification itself
states that with regard to the composite analysis
method, the “EPA intends to amend the asbestos
NESHAP in the near future to refer specifically to
A-47
these procedures.” 60 Fed.Reg. 65,243 (Dec. 19,
1995). However, the EPA never took that action.
4 90 The 1995 clarification devised an alternative
cost-saving test method, which allows one to have
the composite analyzed first. Jd. If the “composite
analysis shows that the average content for the
multi-layered” sample is over one percent, then the
material must be treated as asbestos containing
(ACM). Jd. (Emphasis added.) —N12_ However, if the
composite analysis yields asbestos below one percent
but greater than zero, then analysis by layers is
required to ensure that no layer is greater than one
percent asbestos content, which would deem that
layer an asbestos containing layer giving rise to
precautionary measures for the entire sample
without combining. /d. Thus, under this clarification,
if one layer is greater than one percent, the entire
sample is considered ACM. This, however, is
contrary to the language of the 1990 promuigated
rule, and the DNR never adopted the clarifications.
As acknowledged by the EPA, new action is required
to promulgate the 1995 testing method.
FN10. Presumably, this “averaging” arises out
of the last sentence in § 1.7.2.1, Gross
Examination. The 1995 clarification, thus,
appears to try and utilize “combine” from §
| a ee
{ 91 As we see in this case, the clarifications have
been enforced by the DNR as if they have the force of
a properly promulgated rule, despite the fact that
our state did not incorporate by reference the
clarifications FNU and they effect a substantive
A-48
change to the rule. While an agency may interpret
rules, they cannot effect a new rule that changes the
substantive rule. In effect, new rules governing
asbestos testing, which could result in civil or
criminal penalties, have been imposed without
following proper rule-making procedures. See
United States v. San Diego Gas & Elec. Co., No. 06-
CR-65-DMS, 2006 WL 3913457, at *6-8 (S.D.Cal.
Nov.21, 2006) (concluding that the clarifications are
legislative*47 and thus impose new obligations on
companies even though the proper rule-making
process was not followed; therefore, a company
cannot be held hable based on testing methods
articulated by the clarifications).
FN11. In 1994, the DNR incorporated by
reference the federal 1990 rule. SeeWis.
Admin. Code § NR 484.04(28) (incorporating
only 40 C.F.R. Pt. 763, Subpt. E, App. E, § 1,
which does not include the “clarifications’”).
The clarifications have never’ been
incorporated by reference. Moreover, the 1994
clarification was in place when the DNR
incorporated the 1990 rule by reference. If the
DNR wanted to adopt the clarification it could
have taken action in 1994 or at a later time.
Cf.Wis. Admin. de NR _ 484.04withWis.
Admin. Code § NR 352.03 (incorporating by
reference “[a]ll of the following federal
manual, memoranda, guidelines, regulatory
guidance letters or other provision established
by the U.S. Army Corps of Engineers
interpreting the 1987 wetlands delineation
manual shall be used when delineating
nonfederal wetland boundaries’).
A-49
{| 92 Proper rule making is important because
matters are openly debated and people have the
opportunity to be heard. It is fundamentally unfair
to subject anyone to significant liability-especially
criminal liability-when proper rule making did not
occur. Here, Harenda was exposed to $4 million in
hability.EN12If the State intends to hold people or
companies liable-potentially criminally liable-the
rules must be properly enacted.~X13_ Furthermore, it
runs counter to our system of justice to hold anyone
civilly lable, and especially criminally lable, when
the proper testing method is ambiguous as the
majority claims.
FN12. Violations are contrary to Wis. Admin.
Code NR 447.08(6)(a 447.08(6
447.08(1), and 447.13(1). Potential penalties
for violations of asbestos regulations are
provided in § NR 447.19, Penalties; it reads:
(1) The department may take appropriate
enforcement action against any owner or
operator of a demolition or renovation
activity or any owner or operator of an active
landfill, to which this chapter applies, that
violates this chapter. Appropriate |
enforcement action includes letters of non-
compliance, notices of violation, citations,
referrals to the Wisconsin department of
justice, and deferral or referrals to the
United States environmental protection
agency. Any enforcement action’ the
department may take shall be based upon
factors such as severity, duration, frequency
A-50
and environmental or health risks of the
violation.
(3) A citation may be issued which requires a
forfeiture of not less than $500, nor more
than $5,000, for each violation, except as
provided in sub. (4). Each day of continued
violation is a separate offense.
(4) When any owner or operator is found in
violation of the regulatory requirements
listed in sub. (2) by any court of this state,
and the violation remains of record and
unreversed, for any second or subsequent
violation of the regulatory requirements
listed in sub. (2) occurring within a 5-year
period from the date of the _ prior
adjudication, the minimum and maximum
citation forfeitures shall be doubled.
FN13.SeeWis. Stat. § 285.87, Penalties for
violations relating to air pollution (asserting
criminal penalties for violations of ch. 285 of
the Wisconsin Statutes or any rule
promulgated under ch. 285).Wis. Admin. Code
ch. NR 447 was adopted under Wis. Stat. §§
285.11, 285.13, 285.17 and 285.27. Wis. Stat. §
285.87 reads:
(1) Except as provided in §§ 285.57(5) or
285.59(8), any person who violates this
chapter or any rule promulgated, any permit
issued or any special order issued under this
A-51
chapter shall forfeit not less than $10 or
more than $25,000 for each violation. Each
day of continued violation is a separate
offense.
(2)(a) Except as provided in par. (b), any
person who intentionally commits an act
that violates, or fails to perform an act
required by this chapter, except § 285.59, or
any rule promulgated, any permit issued or
any special order issued under this chapter,
except § 285.59, shall be fined not more than
$25,000 per day of violation or imprisoned
for not more than 6 months or both.
(b) If the conviction under par. (a) is for a
violation committed after another conviction
under par. (a), the person is guilty of a Class
I felony, except that, notwithstanding the
maximum fine specified in § 939.50(3)(i), the
person may be fined not more than $50,000
per day of violation.
{ 93 The rule of lenity must be considered. While the
case at hand is a civil action, our interpretation of
the rule will affect those who are subject to criminal
prosecution for “asbestos violations.” The rule of
lenity provides “that ambiguous penal statutes
should be interpreted in favor of the defendant.”
State v. Cole, 2003 WI 5 67, 262 Wis.2d 167, 66¢
N.W.2d_ 700. “More specifically, the rule of lenity
comes into play after two conditions*48 are met: (1)
the penal statute is ambiguous; and (2) we are
unable to clarify the intent of the legislature by
resort to legislative history.” Jd. The majority
A-52
concludes that the rule is ambiguous and thus the
first prong is satisfied. Perhaps the clarifications
could be utilized under the second prong to ascertain
the intent of the EPA, but when the legislative
history or “clarifications” change the substantive
rule's plain language, we cannot rely on it to uphold
liability.
4] 94 Here, the clarifications do not merely explain
substantive law. Rather, they impose new
obligations by changing existing law. Thus, the
clarifications introduce substantive changes in the
law without following the proper rule-making
procedures.£N14
‘+ FN14. The majority claims the dissent leaves
the State of Wisconsin without = any
meaningful regulation, and it claims the
dissent would invalidate the interpretive rule.
See majority op., 4} 49 n. 11. The majority,
however, invalidates the substantive rule.
Here, the clarifications, i.e., the “interpretive
rule,” so change the plain language of the rule
that the clarifications are not entitled to the
force of law unless they are _ properly
promulgated. The properly promulgated 1990
rule, which the State of Wisconsin has
incorporated by reference, is the only valid
rule governing asbestos testing.
C
4] 95 The current testing methods and procedures are
dangerously ineffective. Harenda and the DNR both
had testing completed under the clarifications
A-53
method, yet they still acquired different results. Not
only were the results different pre-and _post-
demolition, but the tests conducted post-demolition
produced competing results. Harenda's _ pre-
demolition samples did not give rise to special
precautions. Post-demolition samples, however,
which were divided and given to both Harenda and
the State, were not consistent with each other
although both results would have required ACM
precautions. When the same test yields different
results, even on the same sample area, how does a
court resolve these competing facts at summary
judgment?
4] 96 While the DNR argues that the clarifications
result in safer \ orking conditions, they still do not
actually protec’ the worker. Although this court
cannot require ¢, our federal and state government
should consider implementing guidelines that
actually protect the worker, such as requiring state
authorities to conduct testing prior to demolition. If
the clarifications are “adopted” by this court, then
the DNR should act to properly adopt them. For
example, the State of New Jersey’ enacted
“emergency rules” for the sole purpose of adopting
the clarifications. See Robert M. Howard, Patricia
Guerrero, David B. McGrath, Drew R. Van Orden,
The EPA's Prosecution of Clean Air Act Asbestos
NESHAP _Cases_ Based Upon Non-binding Bulk
Materi t th San Di Rev. 17
207-08 (2007). “New Jersey explained that the 1993
test fi.e., the 1994 clarification] method is preferable
to the 1990 test method because the enumerated
NESHAP 1990 test method under reports asbestos
content....”"/d. at 208. Our state has not so acted.
A-54
[it
{| 97 The “clarifications” do not clarify the 1990 rule.
The 1994 clarification promotes a single-layer test,
which is not the test articulated in the properly
enacted rule. The 1995 clarification confuses the
issue even more. The clarifications do not clarify
what “combined” means. Moreover, the clarifications
are inconsistent with the plain language of the rule
and are more than interpretive guidelines. In fact,
they effect a substantive change. The *49
clarifications and the majority's interpretation
eliminate the last clause of the rule even though the
clarifications have not been subjected to the proper
rule-making process. The government should be
required to clearly articulate and enact the lawful
test in order to ensure that citizens are not exposed
to asbestos and put companies on notice about
potentially, significant liability for a violation of the
“properly enacted rule.”
4 98 Here, neither the EPA nor the DNR properly
promulgated the clarifications. The clarifications
effected a substantive change to the “Interim
Method,” and they are not the law of this state. In
the case at issue, the State's motion for summary
judgment should not have been granted.
4] 99 For the foregoing reasons, I respectfully dissent.
4] 100 l am authorized to state that Justices DAVID
: 2 PROSSER and PATIENCE DRAKE
ROGGENSACK join this dissent.
Wis.,2008.
A-55
State v. Harenda Enterprises, Inc.
746 N.W.2d 25, 2008 WI 16
A-56
DOCUMENT 2
(Cite as: 724 N.W.2d 434)
State v. Harenda Enterprises, Inc.
Wis.App.,2006.
Court of Appeals of Wisconsin.
STATE of Wisconsin, Plaintiff-Respondent,
Petition for review filed.
Vv.
HARENDA ENTERPRISES, INC., Defendant-
Appellant.
No. 2005AP1829.
Oral Argument Oct. 3, 2006.
Opinion Filed Oct. 31, 2006.
A-57
(Cite as: 724 N.W.2d 434)
State v. Harenda Enterprises, Inc.
Wis.App.,2006.
Court of Appeals of Wisconsin.
STATE of Wisconsin, Plaintiff-Respondent,
Petition for review filed.
Vv.
HARENDA ENTERPRISES, INC., Defendant-
Appellant.
No. 2005AP1829.
Oral Argument Oct. 3, 2006.
Opinion Filed Oct. 31, 2006.
On behalf of the defendant-appellant, the cause was
submitted on the briefs of Mark W. Rattan of
Litchfield Cavo, of Brookfield, WI.
On behalf of the plaintiff-respondent, the cause was
submitted on the brief of Peggy A. Lautenschlager,
Attorney General, and Jeffrey M. Gabrysiak,
Assistant Attorney General.
Before WEDEMEYER, P.J., FINE and KESSLER,
Jed.
1 FINE, J.
Harenda Enterprises, Inc., appeals the trial court's
grant of summary judgment to the State of
Wisconsin imposing environmental penalties and
ancillary surcharges in connection with Harenda's
inspection of asbestos at the Milwaukee Auditorium
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under a contract with the Wisconsin Center
District's renovation of the Auditorium. See Wis.
Stat. § 285.87 (air-pollution penalties). The crux of
this appeal turns on the language of the applicable
federal regulation, adopted by the State, and
whether Harenda's testing for asbestos
contamination at what the trial court referred to in
its order as “an area of the Auditorium identified as
the second floor bowl area” complied with that
regulation. We conclude that Harenda's testing for
asbestos contamination complied with the law, and,
accordingly, reverse.
i
2 Under rules promulgated by the Wisconsin
Department of Natural Resources pursuant to
authority granted to it by Wis. Stat. § 285.11(1), see
also Wis. Admin. _Code § NR 447.01, “asbestos-
containing material” is defined, as pertinent to our
discussion and for the Auditorium area under
consideration, as a substance “containing more than
1% asbestos as determined using the method
specified in Appendix E to Subpart E, 40 CFR part
763, section 1.” Wis. Admin. Code_ § NR
447.02(1)(b); see also Wis. Admin. Code § NR
484.01 (incorporating federal regulations when those
regulations are referred *436 to in the rules issued
by the Department of Natural Resources set out in,
as pertinent here, Wis. Admin. Codech. NR 447);
Wis. Admin. Code § NR 484.04 (incorporating by
reference 40 C.F.R. Pt. 763, Subpt. E, App. E, § 1
in, among other rules, § NR 447.02(1)(b)). If
asbestos might be released into the air by demolition
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or remodeling, asbestos exceeding the one-percent
limit is characterized by the Department rule as
“Irlegulated asbestos-containing material,” § NR
447.02(33)(d), and precautions preventing or
mitigating such release must be taken, Wis. Admin.
Code § NR 447.08. The State charged Harenda
Enterprises in this case with relying on the wrong
method of assessing the asbestos content of parts of
the Auditorium's second-floor-bowl area, so that the
necessary precautions were not taken.
3 As we have seen in the previous paragraph, the
Wisconsin Department of Natural Resources adopted
40 C.F.R. Pt. 763, Subpt. E, App. E, § 1 as the way
to determine the asbestos content of material
pertinent to our discussion. The significant part of
that regulation, which the parties agree apphes to
this appeal, provides:
Bulk samples of building materials taken for the
identification and quantitation of asbestos are first
examined for homogeneity at low magnification with
the aid of a stereomicroscope. The core sample may
be examined in its container or carefully removed
from the container onto a glassine transfer paper or
clean glass plate. If possible, note is made of the top
and bottom orientation. When discrete strata are
identified, each is treated as a separate material so
that fibers are first identified and quantified in that
layer only, and then the results for each layer are
combined to yield an estimate of asbestos content for
the whole sample.EN1
FN1. The word “estimate” is an apparent
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reference to the inability to assure absolute
consistency between the assessment made by
different examiners of asbestos content in a
sample. At oral argument, counsel for the
State referred to this inability as “analytical
variability,” albeit in a context not specifically
tied to the word “estimate” in 40 C.F.R. Pt.
763, Subpt. E, App. E, § 1.7.2.1.
40 C.F.R. Pt. 763, Subpt. E, App. E, § 1.7.2.1
(emphasis and footnote added).
4 Broken into its parts as pertinent to this appeal,
40 C.F.R. Pt. 763, Subpt. E, App. E, § 1.7.2.1
establishes the following testing procedure:
(1) The building materials are first examined to see
if they are homogenous.
(2) If, on that examination the examiner sees that
the material is made up of “discrete strata,” the
examiner must treat each stratum as “a separate
material.”
(3) Each discrete stratum “separate material” is
examined and the “fibers are first identified and
quantified in that layer only.”
(4) Once the step in (3) is finished for all the strata,
“the results for each layer are combined to yield an
estimate of asbestos content for the whole sample.”
Thus, for example, if the material under analysis has
three “discrete strata” and the first layer has no
asbestos, the second layer has asbestos of two-
percent, and the third layer has asbestos of one-half
of one percent, the parties agree that, unless the
“clarifications” are thrown into the mix, the
“asbestos content for the whole sample” is less than
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ia
one-percent.£N2
FN2. Neither of the parties refers us to a rule
or regulation that explains whether the
combining of the asbestos content of each
separate layer “to yield an estimate of
asbestos content for the whole sample” is done
in reference to the mass, weight, or volume of
each layer. Accordingly, we apply the one-
percent threshold without further refinement,
as do the parties.
*437 5 The State contends that 40 C.F.R. Pt. 763,
Subpt. E, App. E, § 1.7.2.1 cannot be looked at ina
vacuum, but, rather, that we must also consider
what everyone refers to as “clarifications” that were
issued by the United States Environmental
Protection Agency. Harenda, on the other hand,
argues that § 1.7.2.1 is clear on its face, that the
“clarifications” contradict the regulation's
unambiguous language, and because, as conceded by
the State, the “clarifications” were never adopted by
either the federal government or the State pursuant
to established rule-making procedures, § 1.7.2.1
must be applied as it is written without resort to the
“clarifications,” to which we now turn.
6 On January 5, 1994, the Environmental
Protection Agency published in the Federal Register
what it called a “clarification” that it said it
“intended solely as guidance” and which did “not
represent an action subject to judicial review under
the section 307(b) of the Clean Air Act or section 704
of the Administrative Procedure Act.” FNS 59
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Fed.Reg. 542. As pertinent here, that “guidance”
suggested the following in connection with the
“analysis of multi-layered samples” for asbestos: “In
gencral, when a sample consists of two or more
distinct layers or materials, each layer should be
treated separately and the results reported by layer
(discrete stratum).” Jbid. It did not explain what the
hedge-phrase “fiJn general” meant.
FN3. Section 307(b) of the Clean Air Act, 42
U.S.C. § 7607(b), deals with the promulgation
by the Administrator of the Environmental
Protection Agency of | standards or
requirements and judicial review. Section
704 of the Administrative Procedure Act, 5
U.S.C. § 704, provides for judicial review of
agency action.
7 The Agency issued another “clarification” on
December 19, 1995, “to address common questions
regarding situations where one or more layers which
may contain asbestos are present, and supplement
the January 5, 1994 Federal Register clarification
(59 FR 542).” 60 Fed.Reg. 65,243. It reiterated, as
pertinent here, that under 40 C.F.R. Pt. 763, Subpt.
E, App. E, § 1.7.2.1, with exceptions not at issue
here, “all multi-layered systems ... must be analyzed
as separate materials, and results were not allowed
to be combined to determine average asbestos
content (continuing the policy that dilution of an
asbestos-containing material is not allowed).” 60
Fed.Reg. 65,243. It further explained:
If the result of the composite analysis shows that the
average content for the multi-layered system (across
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the layers) is greater than one percent, then the
multi-layered system must be treated as asbestos-
containing and analysis by layers is not necessary.
If the result of the composite sample analysis
indicates that the multi-layered system as a whole
contains asbestos in the amount of one percent or
less, but greater than none detected, then analysis
by layers is required to ensure that no layer in the
system contains greater than one percent asbestos.
If any layer contains greater than one percent
asbestos, that layer must be treated as asbestos-
containing. This will have the effect of requiring all
layers in a multi-layered system to be treated as
asbestos-containing if the layers can not [sic ] be
separated without disturbing the _ asbestos-
containing layer. Once any one layer is shown to
have greater than one percent asbestos, further
analysis of the other layers is not necessary if all the
layers will be treated as asbestos-containing.
*438 Ibid. Without application of the “clarifications,”
the State concedes that a sample from a multi-
layered wall would pass asbestos-content muster if
the asbestos-content of each layer averaged together
was below the applicable limit even though one or
more of the layers has an asbestos content greater
than that limit. If the “clarifications” are applied,
the multi-layered wall would exceed the applicable
limit if any of the layers exceeded that limit. The
trial court applied the “clarifications” to interpret 40
C.F.R. Pt. 763, Subpt. E, App. E, § 1.7.2.1, and
granted summary judgment to the State.
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IT.
11) (213}[41[5}{6] 8 Our review of a trial court's grant
of summary judgment is de novo. Green Spring
Farms _v. Kersten, 136 Wis.2d 304, 315-317, 401
N.W.2d 816, 820-821 (1987). In assessing an
administrative agency's interpretation of the
statutes it enforces, we give it varying degrees of
deference, depending on the agency's experience and
expertise in implementing and applying those
statutes. See UFE Inc. v. Labor & Indus. Review
Comm'n, 201 Wis.2d 274, 284-287, 548 N.W.2d 57
61-63 (1996) (discussing the three levels of deference
given to an agency interpretation of a statute within
its purview: “great weight deference, due weight
deference and de novo review’). Irrespective of
what level of deference is appropriate, however, an
agency interpretation may not trump a statute's
clear language. See id., 201 Wis.2d at 282 n. 2, 548
N.W.2d at 60 n. 2 (“The plain meaning of a statute
takes precedence over all extrinsic sources and rules
of construction, including agency interpretations.
For example, even if an agency interpretation is
accorded the highest level of deference by a court,
great weight, it will not be upheld if the
interpretation directly contravenes the _ clear
meaning of the statute.”). Similar considerations
apply to an _ agency's’. interpretation of an
administrative rule or regulation. Orion Flight
Services, Inc. v. Basler Flight Serv., 2006 WI 51,
18, 290 Wis.2d 421, 435, 714 N.W.2d 130, 136-137:
The interpretation of an administrative code
provision is “a question of law subject to independent
appellate review.” Interpretations of code
provisions, and the determination as to whether the
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provision in question is consistent with the
applicable statute, are subject to principles of
statutory construction. If a rule is ambiguous, we
may resort to extrinsic aids to determine agency
intent. In resolving the ambiguity, this court gives
deference to an agency's settled “interpretation and
application of its own administrative regulations
unless the interpretation is inconsistent with the
language of the regulation or is clearly erroneous.”
(Quoted sources, internal citations, and footnote
omitted.)
{7] 9 In this case, the Wisconsin Department of
Natural Resources applied the “clarifications” of 40
C.F.R. Pt. 763, Subpt. E, App. E, § _ 1.7.2.1
disseminated by the United States Environmental
Protection Agency. Additionally, the State points to
a determination by the Environmental Protection
Agency Environmental Appeals Board upholding,
without independent analysis, a hearing officer's
determination that the “clarifications” were
applicable even though it also opined that the
“language” of § 1.7.2.1 “appears to provide some
support for” an interpretation contrary to those
“clarifications.” In _re LVI Envtl. Servs., Inc., 10
E.A.D. 99, 106, 2001 WL 988722
(Envtl.App.Bd.2001), available at http:// www. epa.
gov/ eab/ disk 11/ lvi. pdf. The “clarifications” are,
however, at odds with the clear command of §
1.7.2.1 that the asbestos content for each separate
layer*439 in a sample be “combinea to yield an
estimate of asbestos content for the whole sample.”
Thus, whatever deference we owe to the
Environmental Protection Agency or to the
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Department of Natural Resources, their
interpretation of § 1.7.2.1 is at odds with what the
section plainly says. Accordingly, we reverse the
trial court's grant of summary judgment to the
State.£N4
FN4, While conceding that it cannot prevail
unless the “clarifications” apply, the State
argues that to ignore the “clarifications”
ignores what the drafters of 40 C.F.R. Pt. 763,
Subpt. E, App. E, § 1.7.2.1 intended all
along. But, “[o]urs is ‘a government of laws
not men,’ and ‘it is simply incompatible with
democratic government, or indeed, even with
fair government, to have the meaning of a law
determined by what the lawgiver meant,
rather than by what’ the _ lawgiver
promulgated.’ ” State ex rel. Kalal v. Circuit
Court for Dane County, 2004 WI 58, 52, 271
Wis.2d 633, 667, 681 N.W.2d 110, 126 (quoted
source omitted). The State also contends that
ignoring the “clarifications” leads to what it
calls an “absurd result” of not requiring
asbestos-abatement procedures when _ the
sample as a whole exceeds the one-percent
threshold but no separate layer does. This is
how the State crystallizes that argument in its
brief on appeal:
For example, if a building that was to be
demolished was constructed of walls that were
made of 12 inches of styrofoam insulation
covered by 1/4 inch of plaster that was 5%
asbestos, under Harenda's interpretation of [§
1.7.2.1], the remeval of the material, even
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though obviously dangerous, would not be
subject to Wis. Admin. Code ch. NR 447
safety protections.
That result
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