## Facts

- EPA issued final regulations under RCRA Subtitle C defining and regulating “hazardous waste,” including the “mixture” rule, the “derived-from” rule, leachate monitoring requirements for land treatment facilities, and a “permit-shield” provision.
- EPA’s proposal emphasized characteristic-based identification of hazardous waste and a list of wastes deemed hazardous, with testing mechanisms to show certain wastes should be excluded from regulation.
- In the final rules, EPA adopted categorical presumptions: (1) any mixture containing a listed hazardous waste is hazardous, and (2) any residue derived from treatment of hazardous waste is hazardous.
- Industry groups petitioned for review, arguing (among other points) that the mixture/derived-from rules and certain monitoring requirements were adopted without adequate notice and exceeded EPA’s authority.
- An environmental group intervened and challenged the permit-shield provision as unlawfully limiting enforcement, including citizen suits.
- The D.C. Circuit consolidated the petitions for direct review of the final rules.

## Issues

1. Whether the mixture and derived-from rules, and certain leachate monitoring requirements, were valid under the APA because they were a logical outgrowth of the proposed rules.
2. Whether EPA’s interpretation of “treatment” under RCRA Subtitle C permissibly allowed regulation of resource-recovery processes.
3. Whether the challenged leachate monitoring requirements were valid, including as to procedural notice.
4. Whether EPA’s permit-shield provision unlawfully restricted enforcement authority and citizen suits or was a permissible exercise of enforcement discretion.

## Decision

- The court vacated the mixture rule and derived-from rule because EPA did not provide adequate notice and opportunity to comment; the final approach was not a logical outgrowth of the proposal.
- The court also invalidated the challenged leachate monitoring requirements to the extent they suffered from the same APA notice defect.
- The court upheld EPA’s broad definition of “treatment” and sustained EPA’s authority to regulate certain resource-recovery processes under RCRA Subtitle C.
- The court upheld the permit-shield provision as a lawful and reasonable exercise of EPA enforcement discretion.
- The court otherwise denied remaining challenges.

## Legal Principles

- Under the APA, a final rule must be a logical outgrowth of the notice of proposed rulemaking; regulated parties need not anticipate regulatory choices not fairly disclosed in the proposal.
- When a final rule adopts a materially different regulatory structure or categorical presumptions not foreshadowed by the proposal, the rule is procedurally invalid for lack of adequate notice and comment.
- RCRA Subtitle C grants EPA broad authority to regulate hazardous-waste management, including a permissible, expansive construction of “treatment” that can reach resource-recovery processes.
- An agency may structure a permit-related enforcement “shield” as an exercise of enforcement discretion when it does not contravene statutory enforcement mechanisms, including citizen-suit provisions.

## Conclusion

The D.C. Circuit required EPA to comply strictly with APA notice-and-comment when reshaping hazardous-waste regulation, vacating the mixture and derived-from rules and related monitoring requirements for inadequate notice, while sustaining EPA’s broad RCRA authority to define “treatment” and maintaining the permit-shield provision as a permissible enforcement policy.


Shell Oil Co. v. EPA, 950 F.2d 741 (D.C. Cir. 1991)