Opinion ID: 185674
Heading Depth: 2
Heading Rank: 2

Heading: Jurisdiction under the TSCA

Text: 15 Before we can reach the merits, we must consider whether the Document is a rule subject to our review under § 19(a)(1)(A) of the TSCA, 15 U.S.C. § 2618(a)(1)(A). That section provides: 16 Not later than 60 days after the date of the promulgation of a rule under section... 2605(e) ... of this title, ... any person may file a petition for judicial review of such rule with the United States Court of Appeal for the District of Columbia Circuit. 17 GE contends that the term rule should be read broadly to track the definition in the APA. See 5 U.S.C. § 551(4). The EPA takes the narrower view that direct appellate review is limited to legislative rules, i.e., rules which were (or should have been) promulgated through notice and comment rulemaking. See, e.g., Appalachian Power, 208 F.3d at 1020 & n. 11. We need not decide which interpretation of the term rule in § 19(a)(1)(A) is correct because we conclude that the Guidance Document is indeed a legislative rule. 18 GE argues that the Guidance Document is a legislative rule rather than a statement of policy or an interpretive rule because it gives substance to the vague language of 40 C.F.R. § 761.61(c) (unreasonable risk of injury to health or the environment), does so in an obligatory fashion, and is treated by the EPA as controlling in the field. See Community Nutrition Inst. v. Young, 818 F.2d 943, 946 (D.C.Cir.1987); McLouth Steel Prods. Corp. v. Thomas, 838 F.2d 1317, 1320-22 (D.C.Cir.1988); Appalachian Power, 208 F.3d at 1021. The EPA argues that under the three-part test applied in Molycorp, Inc. v. EPA, 197 F.3d 543, 545 (D.C.Cir.1999), the Guidance Document is not a legislative rule. Although it is not entirely clear what in the EPA's view the Document is, the EPA comes closest to characterizing it as a statement of policy; thus: 19 [T]he portion of the guidance at issue here is simply an expression of EPA's policy judgment, based on the available scientific data and analysis, that when the total toxicity analysis is used, the 4.0 (mg/kg/day) -1 toxicity value is appropriate to avoid an unreasonable risk to health or the environment. 20 With the Agency's argument so understood, the question before us can be framed as whether the Guidance Document is a legislative rule or a statement of policy. 21 As GE argues, in cases where we have attempted to draw the line between legislative rules and statements of policy, we have considered whether the agency action (1) impose[s] any rights and obligations or (2) genuinely leaves the agency and its decisionmakers free to exercise discretion. Community Nutrition Inst., 818 F.2d at 946; Chamber of Commerce v. Dep't of Labor, 174 F.3d 206, 212 (D.C.Cir. 1999). In McLouth, we recognized that [i]n practice, there appears some overlap in the Community Nutrition criteria because [i]f a statement denies the decisionmaker discretion in the area of its coverage, so that [the agency] will automatically decline to entertain challenges to the statement's position, then the statement is binding, and creates rights or obligations. 838 F.2d at 1320. We emphasized that an agency announcement has present-day binding effect if the agency is simply unready to hear new argument in proceedings governed by the announcement. Id. at 1321. 22 The EPA urges the court to consider three factors: (1) the Agency's own characterization of its action; (2) whether the action was published in the Federal Register or the Code of Federal Regulations; and (3) whether the action has binding effects on private parties or on the agency. Molycorp, Inc., 197 F.3d at 545; see also Florida Power & Light Co. v. EPA, 145 F.3d 1414, 1418 (D.C.Cir.1998); American Portland Cement Alliance v. EPA, 101 F.3d 772, 776 (D.C.Cir.1996). As the EPA concedes, however, the third factor is the most important: [T]he ultimate focus of the inquiry is whether the agency action partakes of the fundamental characteristic of a regulation, i.e., that it has the force of law. Molycorp, Inc., 197 F.3d at 545. 23 The two tests overlap at step three of the Molycorp formulation — in which the court determines whether the agency action binds private parties or the agency itself with the force of law. This common standard has been wellstated as follows: 24 If a document expresses a change in substantive law or policy (that is not an interpretation) which the agency intends to make binding, or administers with binding effect, the agency may not rely upon the statutory exemption for policy statements, but must observe the APA's legislative rulemaking procedures. 25 Robert A. Anthony, Interpretive Rules, Policy Statements, Guidances, Manuals, and the Like — Should Federal Agencies Use Them to Bind the Public?, 41 DUKE L.J. 1311, 1355 (1992). 26 Our cases likewise make clear that an agency pronouncement will be considered binding as a practical matter if it either appears on its face to be binding, Appalachian Power, 208 F.3d at 1023 ([T]he entire Guidance, from beginning to end ... reads like a ukase. It commands, it requires, it orders, it dictates.), or is applied by the agency in a way that indicates it is binding, McLouth, 838 F.2d at 1321. As Professor Robert A. Anthony cogently comments, the mandatory language of a document alone can be sufficient to render it binding: 27 A document will have practical binding effect before it is actually applied if the affected private parties are reasonably led to believe that failure to conform will bring adverse consequences, such as ... denial of an application. If the document is couched in mandatory language, or in terms indicating that it will be regularly applied, a binding intent is strongly evidenced. In some circumstances, if the language of the document is such that private parties can rely on it as a norm or safe harbor by which to shape their actions, it can be binding as a practical matter. 28 Interpretive Rules, 41 DUKE L.J. at 1328-29. 29 GE argues that the Guidance Document is binding both because it facially requires an applicant for a risk-based variance to calculate toxicity by one of two methods — either use a total toxicity factor of 4.0 (mg/kg/day) -1 or use a cancer potency factor and account for the specified non-cancer health risks — and because, considering the cost, delay, and uncertainty entailed in the latter course, [f]or all practical purposes, the Guidance is a rule that directs PCB toxicity to be measured by a 4.0 (mg/kg/day) -1 CPF. 30 The EPA counters that the Guidance Document lacks the force of law because it does not purport to be binding and because it has not been applied as though it were binding. First, we are told, the Document allows great flexibility because it not only recognizes two broad approaches to risk assessment, but also acknowledges (at 44) that 31 some risk assessments may have components that require the use of nonstandard reference materials, unique exposure scenarios or assumptions, or require the use of unconventional methods for estimating risks. These risk assessments will need to be addressed on a case-by-case basis. 32 Second, the EPA says that it has not in practice applied the guidance document inflexibly, as if it were a rule or regulation. By this, however, the EPA means only that it has received and approved applications based upon the use of the total toxicity factor and upon a separate analysis of cancer and non-cancer risks — and even this limited assertion is disputed by GE. Finally, the Agency contends that the Guidance Document is an expression of EPA's judgment on values to be used in conducting risk assessments, much like the data in the Agency's Integrated Risk Information System (IRIS), which this court held are not subject to the requirements of notice and comment rulemaking. See Chemical Mfrs. Ass'n v. EPA, 28 F.3d 1259, 1263 (1994). 33 We think it clear that the Guidance Document does purport to bind applicants for approval of a risk-based cleanup plan under 40 C.F.R. § 761.61(c). Consider the principal directives: When developing a risk-based cleanup application ... both the cancer and non-cancer endpoints must be addressed.... Guidance Document at 21. If an applicant chooses not to use the 4.0 total toxicity factor, then it must, at a minimum account for the risk from non-cancer endpoints for neurotoxicity, reproductive and developmental toxicity, immune system suppression, liver damage, skin irritation, and endocrine disruption for each of the commercial mixtures found at the cleanup site. Id. Although the Guidance Document does, as noted, anticipate and acknowledge that some risk assessments may have components that require the use of non-standard ... unique... or unconventional methods for estimating risk, id. at 44, that does not undermine the binding force of the Guidance Document in standard cases. See McLouth, 838 F.2d at 1321 (such a provision for exceptions ... does not push it much in the direction of a policy statement). Furthermore, even though the Guidance Document gives applicants the option of calculating risk in either of two ways (assuming both are practical) it still requires them to conform to one or the other, that is, not to submit an application based upon a third way. And if an applicant does choose to calculate cancer and non-cancer risks separately, then it must consider the non-cancer risks specified in the Guidance Document. To the applicant reading the Guidance Document the message is clear: in reviewing applications the Agency will not be open to considering approaches other than those prescribed in the Document. 34 The Guidance Document also appears to bind the Agency to accept applications using a total toxicity factor of 4.0 (mg/kg/day) -1 to calculate the risk from both cancer and non-cancer endpoints. Guidance Document at 21. The EPA recognized this in its principal brief: By indicating that [a] total toxicity value [of 4.0 (mg/kg/day) -1 ] will be accepted without detailed justification, the guidance document offers an applicant an opportunity to reduce the time and expense associated with risk assessment. In its supplemental brief, however, the EPA backs away from this statement, asserting that the EPA is not `bound' to approve an application under Section 761.61(c) if the applicant uses a total toxicity factor of 4.0 (mg/kg/day) -1 , even assuming that the application falls within the framework of the guidance document. How can this be? According to the Agency, its position with respect to the total toxicity factor is a matter of policy that can be changed at any time to respond to, inter alia, advances in scientific knowledge. But the Guidance Document itself says nothing of the sort. Clearly the EPA's initial response more accurately describes the Agency's approach in the Document: Stating without qualification that an applicant may use a total toxicity factor of 4.0 (mg/kg/day) -1 strongly implies that use of that value will not be questioned; an applicant reasonably could rely upon that implication. 35 The EPA argues that the Guidance Document neither adds to EPA's prior position nor imposes any further obligations on EPA or the regulated community because the Agency had used the toxicity factor of 4.0 (mg/kg/day) -1 when it establish[ed] the generic cleanup standards in the 1998 [PCB] regulations. In its supplemental brief, however, the Agency explicitly states that it does not think its use of 4.0 (kg/mg/day) -1 in the 1998 regulations requires it to approve use of that factor in an application under § 761.61(c). Because we conclude that the Guidance Document does bind the Agency to accept use of 4.0 (kg/mg/day) -1 , it follows that the Document does indeed impose a further obligation[] on the EPA. In this way the Guidance Document is not like the risk data at issue in Chemical Mfrs., which we held constrain no one until ... applied in a particular rule. 28 F.3d at 1263. 36 Furthermore, the EPA does not contend that in practice it has not treated the Guidance Document as binding in the ways described above. The EPA does not claim, for example, that it has accepted any applications that (1) use neither of the two methods of risk assessment approved in the Guidance Document; or (2) calculate risk separately for cancer and non-cancer endpoints, but fail to calculate endpoints for all the non-cancer risks required by the Guidance Document to be addressed. Nor does the EPA contend that it has ever rejected an applicant's use of 4.0 (mg/kg/day) -1 . Whether an applicant has successfully used the second method of risk assessment set out in the Guidance Document — as the EPA asserts and GE disputes — is immaterial because, even if both methods are practically available, the Document nonetheless binds applicants and the Agency in the ways described above. 37 In sum, the commands of the Guidance Document indicate that it has the force of law. On its face the Guidance Document imposes binding obligations upon applicants to submit applications that conform to the Document and upon the Agency not to question an applicant's use of the 4.0 (mg/kg/day) -1 total toxicity factor. This is sufficient to render it a legislative rule. Furthermore, the Agency's application of the Document does nothing to demonstrate that the Document has any lesser effect in practice. Consequently, we conclude that the Guidance Document is a legislative rule. The Guidance Document is therefore undisputedly a rule for purposes of § 19(a)(1)(A) of the TSCA, and the manner of its promulgation is subject to review.