On April 11, 2017, the U.S. Court of Appeals for the D. C. Circuit vacated a 2008 EPA rule, which had exempted certain agricultural operations from federal air emission reporting requirements.[1]  These operations will be required to begin reporting emissions of hazardous substances when the decision becomes final.  The EPA has 45 days to request a hearing en banc and 90 days to appeal the decision to the U.S. Supreme Court.  This decision not only has practical implications for farm operators about applicable reporting obligations, but also continues a trend in curbing federal agencies’ reliance on the Chevron deference rule.[2]

Under the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) and the Emergency Planning and Community Right-to-Know Act (“EPCRA”) operators are required to notify the National Response Center and the applicable state and local emergency planning authorities if hazardous materials are released above specified threshold amounts – the “reportable quantity.”  For animal feeding operations, the hazardous substances of concern are typically ammonia and hydrogen sulfide, both of which are produced during the natural decomposition of animal waste.  The reportable quantity for both of the substances is 100 pounds.[3]

One of the issues for animal feeding operations is that emissions from animal waste are not routed through a stack outfitted with emissions monitoring devices.  The emissions from animal feeding operations can be spread out over large tracts which makes emission calculations difficult.  In 2008, the U.S. Environmental Protection Agency (“EPA”) exempted certain beef, dairy, pork, poultry and other agricultural producers from these reporting requirements if the emissions stem from animal waste.  During the rulemaking, EPA explained that it has never taken an emergency response action based on notifications of air release from animal waste.”[4]  Not only had the EPA never previously taken action in response to emissions from animal waste, it could not come up with a credible example of when it would need to take such an action, stating:

The EPA “[c]annot foresee a situation where the Agency would take any future response action as a result of such notification of releases of hazardous substances from animal waste at farms because in all instances the source (animal waste) and nature (to the air over a broad area) are such that on-going releases makes an emergency response unnecessary, impractical and unlikely.”[5]

Under CERCLA, the final rule exempted all farms from reporting air releases from animal waste.  Under EPCRA, however, the exemption did not apply to larger confined animal feeding operations (“CAFOs”) – i.e., farms that confine more than 1,000 head of cattle, or the waste equivalent numbers of dairy cows, swine, poultry or other animals, as set forth in EPA rules.

In Waterkeeper Alliance, the Court of Appeals for the D.C. Circuit ruled that the EPA did not have the statutory authority to provide this reporting exemption to farming operations.  The Chevron deference rule provides that agency interpretations are to be given controlling weight “[i]f Congress has explicitly left a gap for the agency to fill, there is an express delegation of authority to the agency to elucidate a specific provision of the statute by regulation.”[6]  EPA argued that other exemptions in the statutory language of both CERCLA and EPCRA and the provisions granting EPA authority to determine the reportable quantities created sufficient ambiguity as to whether EPA had authority to create its own exemptions from the reporting requirements. The D.C. Circuit found that while the statutes themselves provide for several unrelated exemptions, neither CERCLA or EPCRA leave any ambiguity as to whether EPA has authority to develop its own exceptions to reporting requirements, as they both require “notification of ‘any release . . . of a hazardous substance . . . in quantities equal to or greater than’ the reportable quantities.”[7]

Furthermore, the Court noted that EPA’s argument that a response to air releases from animal waste would be impractical and unlikely did not justify exempting these operations from reporting.  The Court highlighted that fact that at oral arguments, even EPA concluded that one possible response to an exceedance of a reportable quantity might be requiring “some sort of change in the farm’s . . . waste management system [to] eliminate the risk.”[8]

In vacating the rule, the Court concluded that the “EPA’s actions here can’t be justified either as a reasonable interpretation of any statutory ambiguity or implementation of a de minimis exception.”[9]

If you have any questions regarding this case or reporting obligations under CERLCA and EPCRA, please contact Leonard Dougal or Benjamin Rhem of Jackson Walker’s Environmental Practice Group.

[1] See Waterkeeper Alliance v. EPA, No. 09-1017, 17 U.S. App. LEXIS 6174, at *1 (D.C. Cir., April 11, 2017).

[2] See Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984).

[3] 40 C.F.R. §302.4.

[4] Waterkeeper Alliance at *7.

[5] Id.

[6] Chevron at 843-844.

[7] Waterkeeper Alliance at *15.

[8] Id. at *19.

[9] Id. at *23.