## Facts

- General Electric Company (GE) operated an apparatus service shop in Chamblee, Georgia that decommissioned large electrical transformers containing PCB-contaminated dielectric fluid.
- Under the Toxic Substances Control Act (TSCA), EPA regulated PCB disposal through 40 C.F.R. pt. 761, including transformer-disposal requirements in 40 C.F.R. § 761.60(b)(1).
- Section 761.60(b)(1) required transformer disposal either by incineration or by placing the transformer in a chemical waste landfill after draining PCB fluid and rinsing with a PCB solvent (the “drain-and-landfill” option).
- GE selected the drain-and-landfill option and handled certain PCB-contaminated fluids through recycling or reuse rather than disposing of them in the manner EPA later asserted the regulations required.
- After an administrative enforcement proceeding, EPA concluded GE had processed PCBs in an unauthorized manner under EPA’s interpretation of its regulations and assessed a $25,000 civil penalty.
- GE petitioned for review in the U.S. Court of Appeals for the D.C. Circuit, challenging both EPA’s interpretation and the penalty.

## Issues

1. Whether EPA’s interpretation of the PCB transformer-disposal regulations in 40 C.F.R. § 761.60(b)(1) was a permissible reading of the regulatory scheme under TSCA.
2. Whether EPA could impose a civil penalty when the regulations did not give GE fair warning that GE’s conduct was prohibited under EPA’s interpretation.

## Decision

- The court held that EPA’s interpretation of the relevant PCB-disposal regulations was permissible.
- The court nevertheless vacated EPA’s finding of liability and set aside the $25,000 penalty because GE lacked fair warning of EPA’s interpretation.
- The petition for review was granted in part, with relief limited to vacatur of liability and the penalty.

## Legal Principles

- An agency’s reasonable interpretation of its own ambiguous regulations may be accepted as permissible.
- Due process limits penal enforcement: a regulated party may not be subjected to civil penalties for violating a regulation that fails to provide fair warning of what the regulation requires or prohibits.
- Interpretive permissibility and penal enforceability are distinct; even a permissible agency interpretation cannot support a civil penalty if regulated entities lacked adequate notice of that interpretation at the time of the conduct.

## Conclusion

The D.C. Circuit accepted EPA’s interpretation of PCB transformer-disposal rules as permissible but vacated GE’s liability and civil penalty because the regulations did not clearly notify GE that EPA would apply the rules in the manner asserted in enforcement.


General Electric Co. v. U.S. Env't Prot. Agency, 53 F.3d 1324 (D.C. Cir. 1995)