## Facts

- Federal law required a permit from the Environmental Protection Agency (EPA) before a U.S. corporation could dispose of hazardous materials in ocean waters.
- EPA’s 1977 ocean-dumping regulations had been applied to ocean incineration (burning hazardous waste at sea), while also stating they applied only until incineration-specific criteria were issued.
- EPA planned to adopt ocean-incineration-specific regulations and, on February 28, 1985, published proposed rules and received extensive public comments; no final rules had been issued during the relevant period.
- In 1984, EPA adopted an interim “deferral policy” under which it temporarily declined to accept and process applications for new ocean-incineration permits pending completion of the incineration-specific regulations.
- Waste Management, Inc., a company prepared to seek permits and conduct future ocean incineration, alleged the deferral effectively suspended the existing regulatory regime and unlawfully blocked its ability to obtain permits.
- Waste Management sued under the Administrative Procedure Act (APA), asserting the deferral was a substantive rule adopted without notice and comment and was arbitrary, capricious, and contrary to law.
- The parties filed cross-motions for summary judgment.

## Issues

1. Whether EPA’s temporary refusal to accept and process applications for new ocean-incineration permits constituted a “rule” subject to APA notice-and-comment requirements.
2. If it was a rule, whether it was a legislative (substantive) rule or instead an exempt interpretive rule, general statement of policy, or procedural rule.
3. Whether the deferral policy was arbitrary, capricious, or inconsistent with the governing statute and the APA.

## Decision

- The court granted EPA’s motion for summary judgment and denied Waste Management’s motion.
- The court held the deferral policy did not amend, repeal, or suspend existing regulations and therefore was not a legislative rule requiring notice and comment.
- The court treated the deferral as an interim, discretionary policy decision about timing and prioritization while EPA completed a pending rulemaking.
- The court rejected the claim that the policy violated the governing statute or was arbitrary and capricious.

## Legal Principles

- APA notice-and-comment procedures apply to legislative rules that create or change binding legal obligations; they do not apply to interpretive rules, general statements of policy, or procedural rules.
- An agency’s temporary decision to defer processing a category of applications, without changing the text of governing regulations, may be treated as a policy or procedural choice rather than substantive rulemaking.
- Agencies have discretion to allocate resources and set regulatory and enforcement priorities, including sequencing permitting activity while developing more specific standards, absent a statutory command to act on a particular timetable.
- A deferral tied to an ongoing rulemaking effort is not arbitrary or capricious solely because it has practical adverse effects on regulated entities, so long as it remains consistent with the statutory scheme.

## Conclusion

The court upheld EPA’s interim deferral of new ocean-incineration permit processing while incineration-specific regulations were under development, concluding the action fell within the APA’s exemptions for nonlegislative agency pronouncements and was a permissible exercise of agency discretion rather than unlawful substantive rulemaking.


Waste Mgmt., Inc. v. U.S. Env't Prot. Agency, 669 F. Supp. 536 (D.D.C. 1987)