D.C. Circuit Revises Its Decision on the Definition of Solid Waste

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On March 6, 2018, the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit or Court) issued an unsigned per curiam opinion revising its July 2017 decision, which struck down portions of the U.S. Environmental Protection Agency’s (EPA) 2015 Definition of Solid Waste (DSW) Rule. American Petroleum Institute v. EPA, D.C. Cir. App., No. 09-1038. This revision followed the Court’s invitation in its July 2017 decision to have parties provide additional briefing. Both industry and EPA took advantage of the invitation and filed petitions for rehearing.

The Court modified its July 2017 opinion in three ways: (1) severing and affirming EPA’s removal of the spent petroleum catalyst bar from the vacated portions of the Verified Recycler Exclusion; (2) vacating the 2015 Rule’s mandatory Factor 4 of the legitimate recycling determination in its entirety; and (3) reinstating the 2008 Rule version of Factor 4 of the legitimate recycling determination. This blog post focuses on the legitimate recycling determination.

EPA has established a legitimate recycling determination for what constitutes legitimate recycling of hazardous materials and described activities it considers to be illegitimate or sham recycling. 40 C.F.R. §260.43. The legitimate recycling determination consists of four factors:

  1. Legitimate recycling must involve a hazardous secondary material that provides a useful contribution to the recycling process or to a product or intermediate of the recycling process.
  2. The recycling process must produce a valuable product or intermediate.
  3. The generator and the recycler must manage the hazardous secondary material as a valuable commodity when it is under their control.
  4. The product of the recycling process must be comparable to a legitimate product or intermediate.

Based on the Court’s 2017 decision, Factors 1, 2, and 3 were upheld as mandatory factors that must be met by a recycler in order for the recycling process to be considered legitimate recycling. However, the Court vacated Factor 4 only as it applied to sham recycling as defined in 40 C.F.R. § 261.2(g). Thus, after its 2017 decision, Factor 4 still applied to those specific exclusions in which Factor 4 was specifically included, for example, the generator-controlled exclusion.

In its amended 2018 opinion, the Court vacated Factor 4 under all circumstances, even those written into specific exclusions. Now, the 2008 version of Factor 4 is reinstated, which requires only that the factor be “considered” and is not mandatory. Therefore, recyclers of hazardous materials must now meet Factors 1, 2, and 3 of the legitimate recycling determination, and must only consider Factor 4.