## Facts

- EPA issued a final rule imposing stringent new emissions limits on hazardous-waste combustors, including commercial incinerators, on-site industrial incinerators (including chemical manufacturers), and cement kilns that co-fire hazardous waste.
- The rule set a three-year deadline for combustors to modify operations to meet the new standards if they continued burning hazardous waste.
- EPA also created an “early cessation” option: combustors that decided compliance was not cost-effective were required to stop burning hazardous waste within two years, rather than continue under existing controls until the three-year deadline.
- Industry petitioners challenged the early-cessation feature via petitions for review in the D.C. Circuit.
- EPA did not quantify, and did not demonstrate on the administrative record, environmental or health benefits from requiring cessation at two years instead of allowing combustion under existing controls for the third year.

## Issues

1. Whether EPA had statutory authority under the Clean Air Act and related provisions to require an early-cessation program for hazardous-waste combustors that elect not to upgrade.
2. Whether EPA’s specific requirement that early-cessation sources stop burning hazardous waste within two years was arbitrary and capricious under the Administrative Procedure Act because EPA failed to justify the costs with record-supported environmental or health benefits.

## Decision

- The court held EPA had statutory authority to adopt an early-cessation program as part of its regulation of hazardous-waste combustion and compliance timing.
- The court held the two-year early-cessation requirement was arbitrary and capricious because EPA failed to show that forcing cessation one year earlier would yield environmental or health benefits.
- The court granted the petitions in part and vacated the early-cessation component of the rule, remanding for further agency action.
- Judge Sentelle dissented and would have upheld the early-cessation requirement as a permissible policy judgment.

## Legal Principles

- An agency may possess statutory authority to regulate and structure compliance schedules yet still violate the APA if it fails to provide a reasoned explanation for the particular policy choice adopted.
- Arbitrary-and-capricious review requires a rational connection between the agency’s stated objectives and record support for the chosen mechanism, especially where the mechanism imposes substantial compliance costs.
- Judicial deference to an agency’s statutory interpretation does not excuse unsupported rule design; the agency must justify why its selected timing or conditions further statutory aims on the record before it.

## Conclusion

The D.C. Circuit accepted EPA’s general authority to condition compliance on early cessation of hazardous-waste burning but set aside EPA’s two-year cessation requirement because the agency did not adequately explain, with record support, how the accelerated shutdown would produce environmental or health gains sufficient to justify its costs.


Chem. Mfrs. Ass’n v. EPA, 217 F.3d 861 (D.C. Cir. 2000)