CAMPBELL ESTATE IN THE MATTER OF HAWAIIAN WESTERN STEEL, LIMITED, AND JAMES CAMPBELL ESTATE RCRA (3008) Appeal No. 88-2 ORDER DENYING RECONSIDERATION Decided November 17, 1988 Before the Administrator, U.S. Environmental Protection Agency Opinion by Lee M. Thomas, Administrator: By petition dated March 22, 1988, the James Campbell Estate (the Estate) requests reconsideration of the Chief Judicial Officer's (CJO's) February 22, 1988 order dismissing an interlocutory appeal in this case. For the reasons set forth below, the Estate's petition is denied. 1. BACKGROUND EPA Region IX brought this civil enforcement action under Section 3008(a)(1) of the Resource Conservation and Recovery Act (RCRA), as amended, 42 U.S.C. §6928(a)(1), against the Estate, as owner, and Hawaiian Western Steel, Limited (Western), as operator, of a hazardous waste facility. Western operates a secondary steel mill on land under a 55 year lease from the Estate. In the three counts of the complaint, Region IX proposed penalties of $20,000 for failure of a generator to determine that a waste is hazardous; $500,000 for operation of a hazardous waste land disposal unit without a permit; and $2,000 for operation of a hazardous waste storage facility without a permit. On September 17, 1987, the Estate moved to dismiss the complaint. The Presiding Officer dismissed count I as to the Estate, but denied the motion to dismiss counts II and III. He based his partial denial of the motion on Arrcom, Inc., RCRA (3008) Appeal No. 86-6 (May 19, 1986), which held that a non-participating owner has a duty to comply with the permitting requirements established under RCRA §3005. Nevertheless, the Presiding Officer indicated that were he to decide the case on a "clean slate" (absent Arrcom) he would interpret RCRA § 3005 as not imposing liability on nonparticipating owners who fail to obtain permits. Upon the Estate's motion, the Presiding Officer certified for interlocutory appeal the issue of whether the owner of land leased to an operator of a hazardous waste storage facility is jointly liable with the operator for failure to obtain a permit for the facility. In his Order on Interlocutory Appeal, the CJO declined to revisit the Arrcom opinion and dismissed the appeal. This petition for reconsideration followed. II. DISCUSSION In its petition for reconsideration, the Estate first argues that the CJO's analysis of Section 3005 was too narrow, focusing as it did on a grammatical analysis of the statutory provisions. The argument, however, is unavailing, for the CJO's order did not purport to address all possible points raised in the interlocutory appeal.1 Moreover, I agree with the CJO's analysis that, because of the differences in the words and grammar used, as well as the lack of parallel construction, the use of "or" in Section 3005 (owning or operating) and "and" in Section 3004 (owners and operators) does not by itself demonstrate that the two provisions have different meanings.2 Moreover, the plain and common sense meaning of Section 3005 establishes that the Agency should impose liability on both the owner and the operator for failing to have a permit. Specifically, Section 3005(a) requires the Administrator to promulgate regulations "requiring each person owning or operating [a hazardous waste facility] to have a permit **" 42 U.S.C. § 6925(a) (emphasis added). If the Administrator were to issue regulations that merely required operators but not owners to have a permit, or vice versa, the Administrator would not be fulfilling the statutory mandate of requiring each person owning or operating a hazardous waste facility to have a permit. Any attempt to read non-participating owners out of the permit requirement would be as illogical, for example, as an attempt to read nonowner operators out of the requirement. * The Estate also argues that the CJO's order was flawed in that it ignored the regulations implementing RCRA §3005. In support, the Estate asserts that Section 3005 is only minimally substantive 1 See Order on Interlocutory Appeal at 1-2 (February 22, 1988). 2 The ALJ's ruling implied that there was a substantive difference in the meanings of the two sections resulting from the usage of "and" in one and "or" in the other. CAMPBELL ESTATE and that its real purpose is to authorize the Administrator to create regulations. I agree with the Estate that Section 3005 is primarily an enabling provision, authorizing—indeed, directing-EPA to promulgate regulations. See Jones v. Inmont Corp., 584 F. Supp. 1425, 1431 (S.D. Ohio 1984). Agreement with the Estate on this single point, however, is but one step in the analytical process. The next step is to determine whether EPA issued regulations that fully implement Section 3005(a). In my opinion, it did. 40 CFR §270.1(c), under which counts II and III were brought, provides: "Owners and operators of hazardous waste management units must have permits during the active life *** of the unit * * *"" (emphasis added). This language fully implements the mandate of Section 3005(a) and clearly suffices to hold an owner, such as the Estate, liable for failure to have a permit. This much is beyond dispute. The Presiding Officer nevertheless perceived a conflict between this section and Section 270.10(b), which he interpreted as not imposing liability on non-participating owners who fail to obtain a permit. The Presiding Officer reasoned that because Section 270.1(c) first appeared in the regulations as a result of deconsolidation, which made no substantive changes,3 it could not override Section 270.10(b), whose origins can be traced to the predeconsolidation regulations. I agree with the Presiding Officer that deconsolidation did not substantively change the RCRA regulations. However, the Presiding Officer's statement that Section 270.1(c) first appeared in the regulations as a result of deconsolidation is inaccurate. Prior to deconsolidation, the RCRA regulations that now appear in Part 270 appeared in what was then Part 122, which established the consolidated permit requirements. Subpart B of that Part effectively imposed the same RCRA permit obligation on both owners and operators as does the current Section 270.1(c). Section 122.22(a)(1), entitled "Application for a permit," clearly stated that "owners and operators" of existing hazardous waste facilities "must submit Part A of their permit application" within specified time periods.4 For Part B permit 3 Prior to 1983, the consolidated permit regulations, 40 CFR Part 122, covered several types of EPA permits in addition to RCRA. In 1983, in order to make the regulations easier to understand and use, the regulations for each individual type of permit were moved to separate parts of the CFR. The preamble to the deconsolidation rule stated that the rule made no substantive changes. See 48 Fed. Reg. 14146 (April 1, 1983). 4 See 45 Fed. Reg. 33433 (May 19, 1980) (emphasis added). Section 122.22(b) dealt with obtaining RCRA permits for the construction of new facilities. This section Continued applications, Section 122.22(a)(2) contained a parallel requirement, which described when the "owner and operator" of an existing facility "may be required to submit Part B of their permit application.” 5 Thus, these pre-deconsolidation provisions definitely established the substantive requirement that both owners and operators must submit, and, therefore, by clear implication, must have a permit. This substantive requirement is now mirrored in the present Section 270.1(c). Since the addition of Section 270.1(c) merely restates the previously existing requirement, it does not effect an impermissible change.6 Thus, Sections 270.10(b) and 270.1(c) are not in conflict with each other, contrary to the Presiding Officer's decision. Section 270.1(c) and its precursors establish the substantive requirement that both the owner and operator must have a permit. Section 270.10(b), on the other hand, addresses the limited factual circumstances in which the operator and the non-participating owner are not required to file separate permit applications. Section 270.10(b) provides: Who applies? When a facility * * * is owned by one 40 CFR § 270.10(b) (emphasis added). Although operators should take the lead in obtaining the permit under this section, the last clause imposes an affirmative obligation on the non-participating owner to did not specifically use the terms "owners" or "operators," but instead used the more generic term "person." Id. 5 Id. The authority for the foregoing Subpart B provisions was expressly identified in Section 122.21(b)(5) as including: Section 3005 of RCRA [which] requires EPA to publish regulations See 45 Fed. Reg. 33432 (May 19,1980). Additionally, other sections of Subpart B contained references to the obligations of owners and operators to obtain permits. For example, Section 122.23 provides that "[a]ny person who owns or operates an 'existing HWM facility" shall have interim status if certain conditions are met. This section goes on to state that if the Part A application is deficient, the owner or operator is not entitled to interim status, and therefore, "[t]he owner or operator will then be subject to EPA enforcement for operating without a permit." Id. at 33434. 6 The intent of deconsolidation was to "make the regulations easier to understand and to use." 48 Fed. Reg. 14146 (April 1, 1983). CAMPBELL ESTATE take part in the application process.7 Specifically, it directs the owner to sign the permit application. Notably, however, it in no way excuses an owner from not having a permit, an obligation that flows implicitly from the act of signing the permit application and explicitly from the commands of Section 270.1(c). Thus, when Sections 270.1(c) and 270.10(b) are read together, they are consistent both with each other and with the mandate of RCRA § 3005(a). The Estate's argument that non-participating owners cannot be liable for failure to have a RCRA permit ignores the existence of Section 270.1(c) and its precursors, and relies solely on Section 270.10(b). Under the Estate's interpretation, the requirement that non-participating owners sign the permit exists merely to ensure that owners receive notice that they are responsible for compliance with the permit and performance standards.9 However, in my view, Region IX has a better interpretation to offer, which is also fully consistent with Section 270.1(c). Under this interpretation, Section 270.10(b) serves to streamline the permit process by relieving the owner of the responsibility for obtaining a separate permit when, and only when, the owner signs the operator's permit application. This interpretation becomes even clearer when Section 270.10(b) is contrasted with other EPA regulations. For example, the EPA regulation relating to liability for obtaining NPDES permits under the Clean Water Act (CWA) states: Who applies? When a facility or activity is owned 7 In addition to Section 270.10(b) several other subsections of 270.10 contain references to the responsibilities of "owners and operators” in the permit application process. Thus, when Section 270.10 is read as a whole, it is obvious that its requirements apply to both owners and operators. See 40 CFR §§ 270.10(e)(2), (3), & (4); and (j)(2) (containing the language "owners and operators"). 8 Prior to deconsolidation, the precursor to what is now Section 270.10(b) applied to several types of EPA permits in addition to RCRA. It stated: Who applies? When a facility or activity is owned by one person 45 Fed. Reg. 33424 (May 19, 1980) (emphasis added). Thus, owners have always had more responsibility with regard to permit application requirements under RCRA than under other environmental laws. "The Estate acknowledges that owners, as well as operators, are responsible for complying with the permit and other performance standards. Petition for Administrator's Reconsideration of the Judicial Officer's Order on Interlocutory Appeal at 7 (March 22, 1988). |