Opinion ID: 185864
Heading Depth: 1
Heading Rank: 4

Heading: the adequacy of the cost-benefit analyses performed for the uranium mcl

Text: 50 By contrast to the 2000 radium and beta/photon regulations, the uranium M.C.L. issued in that year represented a new standard, as there was no pre-existing M.C.L. for uranium. See 65 Fed.Reg. at 76,708. Section 1412(b)(3)(C)(i) therefore required EPA to prepare and publish a cost-benefit analysis, and it did so. Petitioners contend that EPA's analysis failed to satisfy the requirements of that section and the APA.
51 Petitioners' first argument is that EPA failed to comply with § (b)(3)(C)(i) because it did not analyze the costs and benefits associated with compliance with the uranium M.C.L. in contexts other than the SDWA. 13 In particular, petitioners assert that EPA failed to evaluate the costs and benefits arising from compliance with the MCLs at hazardous waste sites governed by CERCLA. EPA counters that the SDWA does not require it to analyze such costs. 52 EPA again has the better of the argument. Section (b)(3)(C)(i)(III) requires EPA to analyze: 53 Quantifiable and nonquantifiable costs for which there is a factual basis in the rulemaking record to conclude that such costs are likely to occur solely as a result of compliance with the maximum contaminant level, including monitoring, treatment, and other costs and excluding costs resulting from compliance with other proposed or promulgated regulations. 54 42 U.S.C. § 300g-1(b)(3)(C)(i)(III) (emphasis added). EPA reasonably reads the italicized words, particularly the phrase excluding costs resulting from compliance with other ... regulations, as excluding costs associated with compliance with regulatory regimes other than the SDWA itself. As EPA argues, the purpose of the MCLs is to protect the public, as much as feasible, from the adverse health effects of drinking contaminated water. See id. § 300g-1(b)(4)(A), (B). That purpose would be undermined if the cost-benefit balance were skewed by consideration of the additional costs imposed by other uses of the MCLs, unrelated to protecting consumers of drinking water. 55 Petitioners attack EPA's view on a number of grounds. First, they note that the cited exclusion refers only to costs resulting from compliance with other regulations. CERCLA, they correctly point out, is not a regulation but a statute — one that specifically instructs that the clean-up of hazardous waste sites must satisfy contamination standards promulgated under the SDWA. See 42 U.S.C. § 9621(d)(2)(A). But EPA, equally correctly, points out that like most statutes, CERCLA's mandate is implemented by regulations, which, among other things, set forth the circumstances under which MCLGs and MCLs of the which compliance with them can be waived. See 40 C.F.R. § 300.430(e), (f); see generally 40 C.F.R. pt. 300. Moreover, as EPA further notes, CERCLA itself imposes no requirement that EPA consider the costs and benefits of compliance with MCLs as an element of clean-up standards, and certainly no requirement that the agency do so as part of its obligations under a separate statute like the SDWA. 56 Second, petitioners contend that the legislative history of the SDWA indicates that the exclusion of consideration of the costs of compliance with other regulations applies only to those regulations that are themselves the product of cost-benefit analysis. This argument relies on a single sentence from a Senate report: [T]he Administrator is not to consider the benefits (or costs) that are attributable to compliance with other proposed or promulgated regulations, if those benefits and costs are considered in a determination as to whether benefits justify costs under those regulations. S.Rep. No. 104-169, at 29-30. But as EPA notes, while this passage mandates that the agency may not consider benefits and costs under such circumstances, it does not state that the agency must do so under all other circumstances. Since the statute itself contains no such qualification on its exclusion of the consideration of the costs and benefits of other regulations, that is hardly an unreasonable view for the agency to take. 57 Third, petitioners assert that even if the SDWA does exclude consideration of the costs associated with the application of MCLs in other contexts, the Act does not also exclude consideration of the benefits of applying MCLs under other regulatory regimes. In support, petitioners point to the benefits provision of § 1412(b)(3)(C)(i)(I), which, unlike the costs provision of § (b)(3)(C)(i)(III), contains no exclusion relating to compliance with other regulations. See supra note 6. Without qualification, the benefits provision requires an analysis of [q]uantifiable and nonquantifiable health risk reduction benefits ... likely to occur as the result of treatment to comply with each level. 42 U.S.C. § 300g-1(b)(3)(C)(i)(I). But while it is true that § (b)(3)(C)(i)(I) contains no exclusion, in context it is also clear that the section's use of the phrase the result of treatment refers to drinking water treatment, and not to treatment of contaminants for other purposes. See id. § 300g-1(b)(3)(C)(ii); id. § 300g-4(e)(3). Moreover, we do not understand what petitioners hope to gain by requiring EPA to add further to the benefits (but not to the costs) of MCLs in conducting its cost-benefit analysis; such a calculus would only increase the justification for the MCLs actually promulgated by EPA, as compared to the higher levels favored by petitioners. 58 Finally, petitioners contend that EPA has itself acknowledged the necessity of evaluating benefits and costs of MCLs at CERCLA sites. Petitioners' Br. at 26. It is true that EPA's preliminary cost-benefit analysis stated that the impact of the regulations on other programs, such as the use of MCLs in site clean-up decisions, was a factor[ ] ... of interest to decision-makers and will be taken into account in the final selection of the regulatory options to be implemented. PHRRCA, at 6-8. But regarding something as a factor of interest is not the same as regarding it as a statutory obligation, and nothing else in the agency's statements suggests that EPA has regarded the consideration of CERCLA costs and benefits as mandatory. 59 For the foregoing reasons, we reject petitioners' contention that EPA's cost-benefit analysis failed to analyze costs and benefits as required by § 1412(b)(3)(C)(i).
60 In conducting the cost-benefit analysis for the uranium regulations, EPA published both an initial cost-benefit analysis, issued before the NODA, and a final cost-benefit analysis, issued about a month before the final regulations were published in the Federal Register. The initial cost-benefit analysis, for which EPA requested comments, provided discussion of the 20, 40, and 80 µg/L standards. The final cost-benefit analysis also included a discussion for the 30 µg/L standard that EPA ultimately promulgated; that discussion was based in large part on an interpolation by EPA from the analyses for the other proposed levels. 61 Petitioners contend that (1) EPA failed to comply with the SDWA's requirement that a cost-benefit analysis be performed for the 30 µg/L uranium standard that EPA implemented in the final rule, and (2) EPA failed to comply with the APA with respect to both the cost-benefit analysis and the issuance of the 30 µg/L rule. EPA responds that it did not violate the SDWA provisions or the APA because it provided ample opportunity for public comment on the uranium MCL, conducting a cost-benefit analysis for several possible uranium MCLs in the range of 20 to 80 Sg/L. Respondent's Br. at 43. According to EPA, its final 30 µg/L rule was a logical outgrowth of the proposed rule, such that the notice and opportunity to comment on the original three proposed MCLs incorporated the final 30 µg/L rule. Id. Petitioners reply that the logical outgrowth test is inapplicable because the plain language of the SDWA requires that EPA shall, with respect to ... each alternative maximum contaminant level that is being considered ..., publish, seek public comment on, and use for the purposes of paragraphs (4), (5), and (6) an analysis of the costs and benefits of that alternative. 42 U.S.C. § 300g-1(b)(3)(C)(i) (emphasis added); Petitioners' Reply Br. at 9-10. 62 The traditional APA logical outgrowth test applies where an agency changes its final regulation in some way from the proposed regulation for which it provided notice and requested comment, as required under the APA. As this court has recognized: 63 EPA undoubtedly has authority to promulgate a final rule that differs in some particulars from its proposed rule. As we noted in International Harvester Co. v. Ruckelshaus, 478 F.2d 615, 632 n. 51 (D.C.Cir.1973), [a] contrary rule would lead to the absurdity that ... the agency can learn from the comments on its proposals only at the peril of starting a new procedural round of commentary. However, if the final rule deviates too sharply from the proposal, affected parties will be deprived of notice and an opportunity to respond to the proposal. 64 Courts have devised various verbal formulas for the extent to which an agency can make changes in the final rule that were not clearly presaged by the notice of proposed rulemaking. This court has held, both under the APA and under Clean Air Act § 307(d), that the final rule must be a logical outgrowth of the proposed rule. 65 Small Refiner Lead Phase-Down Task Force v. United States Envtl. Prot. Agency, 705 F.2d 506, 546-47 (D.C.Cir.1983) (alterations in original). Under the logical outgrowth test, then, the key question is whether commenters should have anticipated that EPA might use a 30 µg/L standard when it first provided notice of its proposals. Id. at 549. 66 Contrary to petitioners' position, the fact that the SDWA establishes a somewhat different notice-and-comment format for new regulations than the standard APA procedures does not necessarily mean that the logical outgrowth test is inapplicable. Under other statutes that have altered the notice-and-comment format for rulemaking, such as the Clean Air Act, the court has held that the logical outgrowth test is applicable. See, e.g., Husqvarna AB v. EPA, 254 F.3d 195, 203 (D.C.Cir.2001). Further, strictly applying the plain language of the SDWA, as petitioners advocate, would lead to the absurd results that the doctrine is intended to avoid in the first place. Without a logical outgrowth test, EPA would be prevented from issuing a final M.C.L. of 20.1 µg/L, even where it had conducted a cost-benefit analysis for 20 µg/L and EPA had decided that a slight shift in the M.C.L. would be advantageous. Indeed, petitioners conceded at oral argument that their position would have required EPA to conduct an entirely new cost-benefit analysis in order for it to adopt the MCLs that petitioners themselves had suggested to EPA in their comments. 67 Turning then to consider whether the logical outgrowth test was satisfied by EPA, we bear in mind that the doctrine must be considered in the context of this specific statute, where its applicability may be somewhat stricter than in the generic APA case. Cf. Nat'l Constructors Ass'n v. Marshal, 581 F.2d 960, 970-71 & n. 27 (D.C.Cir.1978). As noted, in making that determination the court must consider whether the party, ex ante, should have anticipated the changes to be made in the course of the rulemaking. Ariz. Pub. Serv. Co. v. EPA, 211 F.3d 1280, 1299 (D.C.Cir.2000) (quotation omitted). Thus, one factor is whether a new round of notice and comment would provide the first opportunity for interested parties to offer comments that could persuade the agency to modify its rule. Id. (emphasis in original) (quotation omitted). At oral argument, petitioners conceded that there were no additional comments or evidence they could have proffered for the record during the administrative proceedings as to how the costs and benefits would have differed for an M.C.L. at 30 µg/L as opposed to 20 µg/L or 40 µg/L. Aside from a cursory statement that interpolation does not constitute the required best available methods, 42 U.S.C. § 300g-1(b)(3)(A)(ii), for the cost-benefit analysis, petitioners have not suggested any criticism they would have raised concerning EPA's method of interpolation of the data. 68 Of course, the failure of an interested party to show how their comments would have been different had adequate notice been provided does not necessarily preclude a successful claim of inadequate notice-and-comment or a lack of a logical outgrowth connection between the proposed and final rule. The APA requires petitioners to show prejudice from an agency procedural violation. See 5 U.S.C. § 706. In making such a showing in the context of a violation of notice-and-comment requirements, petitioners may be required to demonstrate that, had proper notice been provided, they would have submitted additional, different comments that could have invalidated the rationale for the revised rule. See Shell Oil Co. v. EPA, 950 F.2d 741, 752 (D.C.Cir.1991) (citing Air Transport Ass'n of Am. v. CAB, 732 F.2d 219, 224 n. 11 (D.C.Cir.1984)). On the other hand, there are also situations where prejudice need not be shown by petitioners in a notice-and-comment rulemaking challenge, where the agency has entirely failed to comply with notice-and-comment requirements, and the agency has offered no persuasive evidence that possible objections to its final rules have been given sufficient consideration. Id. at 752. Either way, a rule requiring petitioners in all logical outgrowth cases to show what additional comments they would have submitted had notice been adequate would improperly merge the analysis on the merits of whether the final rule is a logical outgrowth with any applicable prejudice analysis. We therefore leave open the possibility that there may be situations where a petitioner who challenges an agency logical outgrowth argument is unable to provide a proffer of additional comments for valid reasons, but note that in the instant case petitioners have not offered any such reason. 69 We nonetheless consider petitioners' failure to suggest how their comments would have been different as a factor in our logical outgrowth analysis, separate from any analysis as to whether petitioners were prejudiced by any alleged procedural flaws. We do this because where the final rule falls within the range of the alternatives addressed in the agency's initial cost-benefit analysis, such a failure shows that for notice-and-comment purposes, the initial proposal and the final rule were essentially the same. Given the proximity, both higher and lower, of the adopted M.C.L. to the proposed MCLs, the fact that petitioners were unable to present any additional and new comments that would have been raised had they been aware of the 30 µg/L proposal, and the fact that petitioners have not identified any comment they would have presented regarding EPA's interpolation method, the court has no basis on which to conclude that EPA failed to comply with the SDWA's cost-benefit analysis requirement or violated the notice-and-comment requirements of the SDWA and the APA.