D.C. Circuit Vacates Portions of EPA's Definition of Solid Waste Rule

On July 7, 2017, the United States Court of Appeals for the District of Columbia Circuit (the D.C. Circuit) vacated portions of the U.S. Environmental Protection Agency's (EPA) 2015 rule on the Definition of Solid Waste (the 2015 Rule). See American Petroleum Institute v. EPA, No. 09-1038 (D.C. Cir. 2017) (API Opinion). Both industry and environmental groups challenged the 2015 Rule. The 2015 Rule revised a Definition of Solid Waste Rule promulgated by EPA in 2008 (the 2008 Rule). See 80 Fed. Reg. 1694 (Jan. 13, 2015) (the 2015 Rule) and 73 Fed. Reg. 64668 (Oct. 30, 2008) (the 2008 Rule).
2008 Rule

The 2008 Rule excluded hazardous secondary materials from the definition of solid waste in two circumstances: (1) if the company that generated the materials controlled the recycling of those materials, a.k.a., the "Generator-Controlled Exclusion;" and (2) if the generator transferred the materials to an off-site recycler it had audited (i.e., taken "reasonable efforts") to ensure compliance with proper recycling practices, a.k.a., the "Transfer-Based Exclusion." 2008 Rule at 64670. To qualify for either exclusion, secondary materials had to be recycled "legitimately," a term EPA defined by reference to certain "legitimacy factors," which distinguished "true" recycling from "sham" recycling, in which companies claim to reuse materials they in fact discard as waste. Id. at 64675.
2015 Rule

The 2015 Rule revised the 2008 Rule in several ways, relevant to this case. See KEAG Bulletin No. 2014‑98, dated December 17, 2014. The 2015 Rule revised the definition of "legitimate recycling" and expanded the scope of the legitimacy factors to cover all recycling. 2015 Rule at 1719. Second, the 2015 Rule replaces the Transfer-Based Exclusion with the "Verified Recycler Exclusion," a new standard governing when transferred materials qualify as solid waste. Third, the 2015 Rule deferred a decision on whether to add conditions to 32 previously promulgated exclusions from the definition of solid waste that were pre‑2008 Rule exclusions. Finally, the 2015 Rule established that spent catalysts, which were ineligible for exclusions under the 2008 Rule, could qualify for the exemption under the Verified Recycler Exclusion. API Opinion at 5.

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