Court Opinion

ID: 9012
Source: CourtListenerOpinion
Date Created: 2010-04-25 05:41:47+00
Date Added: 2024-06-11T14:55:00.330557
License: Public Domain

IN THE UNITED STATES COURT OF APPEALS

                       FOR THE FIFTH CIRCUIT

                             No. 94-30419

UNITED STATES OF AMERICA, ET AL.,
                                             Plaintiffs,

UNITED STATES OF AMERICA,
                                             Plaintiff-Appellee,
                                             Cross-Appellant,

                                versus

MARINE SHALE PROCESSORS,
                                             Defendant-Appellee,

           ********************************************

SOUTHERN WOOD PIEDMONT COMPANY,
                                             Intervenor-Appellant,
                                             Cross-Appellee.

           Appeal from the United States District Court
              for the Western District of Louisiana

                            April 18, 1996

Before REYNALDO G. GARZA, KING, and HIGGINBOTHAM, Circuit Judges.

HIGGINBOTHAM, Circuit Judge:

     This is an appeal and cross-appeal from a Rule 54(b) judgment

in favor of a company attempting to clean up its hazardous waste

sites.   It is one of the trio of cases described in United States

v. Marine Shale Processors, Inc., No. 94-30664.            We vacate the

judgment and remand.
                                    I

     From 1923 to 1985, Southern Wood Piedmont Company operated

several wood treatment facilities designed primarily to manufacture

railroad ties and telephone poles.       These facilities treated wood

with preservatives such as creosote and pentachlorophenol, leaving

behind acres of soil contaminated with toxic wastes.                 Facing

slackening demand, SWP in 1985 decided to close its facilities and

clean up its waste sites.      It sought to avoid regulation under the

Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901-92K, and

liability   under    The    Comprehensive    Environmental         Response,

Compensation & Liability Act, 42 U.S.C. §§ 6901-75, by recycling

its contaminated soil into a product covered by EPA regulations

known as the Product Rule.     See 40 C.F.R. § 266.20(b).     If SWP were

successful in recycling its hazardous waste into a product covered

by the Product Rule, the resulting material could be placed on the

ground   without   violating   RCRA.    Relying   in   part   on    its    own

investigation and in part on letters from the Louisiana Department

of Environmental Quality stating that Marine Shale Processors, Inc.

was a legitimate recycler of hazardous waste, SWP contracted with

MSP to dispose of SWP's contaminated soil.

     From 1986 to 1989, ninety-five percent of the material SWP

sent to MSP arrived in shipments called "campaign runs."                  In a

campaign run, MSP earmarked one to two weeks of kiln time to

process SWP's soil exclusively.         Until 1989, MSP processed the

other five percent of SWP's material together with whatever other

material happened to be available at the time.         In 1989, SWP and

                                    2
MSP modified their contract so as to require MSP to process SWP's

material separately from all other materials.   Before beginning a

campaign run pre-1989 or any SWP processing post-1989, MSP purged

its kiln but not its baghouses or its oxidizers.

     This appeal concerns SWP’s intervention in the suit described

in No. 94-30419. SWP’s complaint in intervention alleged that "MSP

has taken delivery of certain material from [SWP] . . . and, using

its thermal process, has made a product from that material."     The

complaint in intervention further alleged that SWP's soil "[was]

and at all times has been processed by MSP separately from material

from other sources."   SWP sought a declaratory judgment that the

Product Rule exempted the material produced from its contaminated

soil from RCRA regulation.

     The district court submitted interrogatories to the jury. The

jury returned answers to some of these questions and found itself

unable to agree on others.   The interrogatories relevant to this

appeal, together with the jury's answer if any, are set out below:

          1. Was MSP entitled to a recycler exemption from
     the requirement of a permit as an operator of an
     incinerator of hazardous waste? (unable to answer)

          2. Were all of the hazardous wastes accepted by MSP
     beneficially used or reused or legitimately recycled?
     (unable to answer)

          2(a). Were all of the hazardous wastes accepted by
     MSP prior to August 21, 1991, beneficially used or reused
     or legitimately recycled? (unable to answer)

          3. Was the material produced by MSP from Southern
     Wood Piedmont Company's waste a "product" produced for
     the general public's use? (yes)

          4.    Did the waste material received by MSP from
     Southern   Wood Piedmont Company undergo a chemical

                                3
     reaction in the course of processing the material so as
     to become inseparable by physical means? (yes)

          5.   Was the material produced by MSP from waste
     other than Southern Wood Piedmont Company's waste a
     "product" produced for general public's use? (unable to
     answer)

          6.   Did the waste material produced by MSP from
     waste other than Southern Wood Piedmont Company's waste
     undergo a chemical reaction in the course of processing
     the material so as to become inseparable by physical
     means? (unable to answer)

     Because the jury found itself unable to answer interrogatories

1, 2, 2(a), 5 and 6, among others, the district court declared a

mistrial.      Based   on   the   jury's   affirmative   answers   to

interrogatories 3 and 4, SWP moved for the entry of judgment under

Fed. R. Civ. P. 54(b). District court judge Duplantier obliged and

entered an order stating in relevant part:

     [A]ll material produced by Marine Shale Processors, Inc.
     from Southern Wood Piedmont Company materials processed
     separately from other materials satisfies all criteria of
     40 C.F.R. § 266.20(b) and corresponding Louisiana
     regulations, and, as such, is not subject regulation as
     a hazardous waste . . . . (emphasis added)

     SWP objects to the emphasized portion of the district court's

judgment.   On appeal, SWP asks this court to modify the judgment to

read as follows:

     [A]ll material produced by Marine Shale Processors, Inc.
     from Southern Wood Piedmont Company materials satisfies
     all criteria of 40 C.F.R. § 266.20(b) and corresponding
     Louisiana regulations, and, as such, is not subject to
     regulation as a hazardous waste . . . .

The dispute on this issue focuses on the fact that MSP often mixed

metal-bearing baghouse dust with material emerging from its kiln in

a slagging process. Because MSP did not clean its baghouses before

processing SWP waste, the material produced from the processing of

                                  4
SWP’s contaminated soil was mixed with quantities of toxic metals

from other sources.

     On cross appeal, the United States contends that the district

court erred in entering a Rule 54(b) judgment for several reasons.

The United States first attacks the judgment in favor of SWP on the

ground that the district court improperly entered judgment when the

jury had been unable to answer the question of whether MSP was

engaged in a process of legitimate recycling.      Second, the United

States contends that the district court erred in holding that MSP

had obtained an express exemption from the Louisiana Department of

Environmental   Quality   as   required   by   Louisiana   Regulations

operating in lieu of the federal Product Rule.       See 42 U.S.C. §

6926(b).   Third, the United States argues that the court gave

erroneous jury instructions addressed to interrogatory 3. Finally,

the United States contends that the district court abused its

discretion on certain evidentiary rulings.

     We discuss the issues raised by the United States’ cross

appeal first.   Because we agree with the United States on some of

the contentions in its cross-appeal, we vacate and remand.      Given

our disposition of the United States’ cross-appeal, we do not reach

the questions posed by SWP’s appeal. On remand, the district court

may choose to structure additional or substitute interrogatories so

as to eliminate any dispute springing from the ambiguity in the

language of questions three and four.

                                  II

                                  5
     The United States argues that the district court improperly

entered a Rule 54(b) judgment in the absence of a jury resolution

on the question of whether MSP was engaged in a process of

legitimate recycling.     According to the United States, the federal

Product Rule1 exempts a product produced for the general public’s

use only if the product emerges from a process of legitimate, as

opposed to sham, recycling.      Because the jury failed to answer

interrogatories 1, 2, and 2(a), the United States argues, it had

failed to determine the analytically prior issue of whether MSP was

engaged in legitimate recycling.          Thus, the district court abused

its discretion by entering a Rule 54(b) judgment when the jury had

not decided all issues relating to the SWP declaratory judgment.

     40 C.F.R. § 261.6(a)(2) declares that “recyclable materials

used in   a   manner   constituting       disposal”   are   “not   subject   to

[regulation as listed or characteristic wastes] but are regulated

under subpart[] C . . . of part 266.”         The Product Rule appears in

Subpart C of part 266; this regulation provides,

     Products produced for the general public’s use that are
     used in a manner that constitutes disposal and that
     contain recyclable materials are not presently subject to
     regulation if the recyclable materials have undergone a
     chemical reaction in the course of producing the products
     so as to become inseparable by physical means and if such
     products meet the [treatment standards for land disposal]

     1
        We address here the content of the “federal Product Rule”
even though, as we explain in the next section, Louisiana has
operated its own RCRA program under 42 U.S.C. § 6926(b) since 1985.
The parties have assumed throughout this case that the only
difference in content between the Louisiana and federal product
rules is the one discussed in the next section. We use the more
accessible version of the regulations contained in the Code of
Federal Regulations, as opposed to the less widely distributed
Louisiana Administrative Code, throughout this opinion.

                                      6
      for each recyclable material (i.e. hazardous waste) that
      they contain.

40 C.F.R. § 266.20 (alterations added).        Accordingly, in order to

be exempt from regulation under the Product Rule, a substance must

(1) be produced for the general public’s use, (2) used in a manner

that constitutes disposal, (3) contain recyclable materials, (4)

have undergone a chemical reaction during the production process so

as to be inseparable by physical means, and (5) meet land ban

standards for each hazardous waste it contains.        The United States

focuses on the third element.

      The third element of the Product Rule requires that the

substance at issue contain recyclable materials. “Hazardous wastes

that are recycled will be known as ‘recyclable materials.’”            40

C.F.R. § 261.6(a)(1).       “A material is “recycled” if it is used,

reused, or reclaimed.”      40 C.F.R. § 261.1(c)(7).2    “A material is

‘used or reused’ if it is . . . [e]mployed as an ingredient

(including use as an intermediate) in an industrial process to make

a product.” 40 C.F.R. § 261.1(c)(5)(I). Accordingly, in order for

its substance to meet the third element of the product rule, a

facility must have employed the hazardous waste as an ingredient in

an   industrial   process   to   make   a   product.    Mercifully,   the

regulatory definitions end here; the regulations do not define the

terms “ingredient” or “industrial process.”

     2
       Despite the government’s implication, these definitions do
apply to Part 266.      Section 261.1(c) establishes that its
definitions are “[f]or the purposes of §§ 261.2 and 261.6.” 40
C.F.R. § 261.6(a)(2)(I) refers specifically to Part 266. Nothing
in 40 C.F.R. § 261.2(e)(2) limits the scope of these definitions.

                                    7
     The    United   States   points   out   that   EPA   has   consistently

interpreted the Product Rule to include a requirement that the

substance at issue be produced from a process of legitimate, as

opposed to sham, recycling.3       According to these documents, sham

recycling, as opposed to legitimate recycling, occurs when the

hazardous waste purportedly recycled contributes in no significant

way to the production of the product allegedly resulting from the

recycling.    One EPA publication, in the midst of discussing an

example involving the recycling of hazardous waste to produce

aggregate in an aggregate kiln, states that legitimate recycling is

occurring if “the prohibited hazardous wastes and their hazardous

constituents do contribute legitimately to producing aggregate.”4

        3
            See Final Rule, Hazardous Waste Management System;
Definition of Solid Waste, 50 Fed. Reg. 614, 638-39, 646 n.36 1985)
(articulating sham recycling criteria); see also Final Rule, Land
Disposal Restrictions Phase II -- Universal Treatment Standards,
and Treatment Standards for Organic Toxicity Characteristic Wastes
and Newly Listed Wastes, 59 Fed. Reg. 47,982, 48,026 n.1 (1994);
Proposed Rules, Land Disposal Restrictions for First Third
Scheduled Wastes, 53 Fed. Reg. 17,578, 17,605-06 (1988); Proposed
Rule and Request for Comment, Identification and Listing of
Hazardous Wastes; Amendments to Definition of Solid Wastes, 53 Fed.
Reg. 519, 522 (1988); Proposed Rule and Request for Comment,
Hazardous Waste Management System: General, 48 Fed. Reg. 14,472,
14,474 (1983); Enforcement Guidance, 48 Fed. Reg. 11,157, 11,158
(1983); United States v. Self, 2 F.3d 1071, 1079 (10th Cir. 1993)
(referring to “EPA’s long-standing distinction between legitimate
and sham burning for energy recovery”).
    4
       Proposed Rules, Land Disposal Restrictions, 53 Fed. Reg. at
17,606;     see    also    Proposed     Rules,    Land     Disposal
Restrictions--Supplemental Proposal to Phase IV, 61 Fed. Reg. 2338,
2343 (1996) (“Sham recycling is, of course, nothing more than waste
disposal or waste treatment.”);     Burning of Hazardous Waste in
Boilers and Industrial Furnaces, 52 Fed. Reg. 16,982, 16,989 (1987)
(discussing previous EPA policy of presuming that the burning of
materials with less than a specified BTU/lb ratio constituted sham
recycling because combustion of such materials was not an efficient
method of producing heat).

                                       8
In other words, the sham versus legitimate recycling inquiry

focuses on the purpose or function the hazardous waste allegedly

serves in the production process.             If the waste does not in fact

serve its alleged function in the process, then sham recycling is

occurring.

     Although the text of 40 C.F.R. § 266.20(b) itself does not

mention sham or legitimate recycling, the distinction is inherent

in the language “[e]mployed as an ingredient . . . in an industrial

process to make a product” in 40 C.F.R. § 261.1(c)(5)(I).                              A

hazardous    waste    is    not   “employed      as    an        ingredient”     if    it

contributes in no legitimate way to the product’s production.

EPA’s    interpretation      of   its   own    regulation           as   including     a

distinction between sham and legitimate recycling is entitled to

deference.     Ford Motor Credit Co. v. Milhollin, 444 U.S. 555, 566

(1980).      In this case, the interpretative exercise is fairly

straightforward.       A substance cannot be an ingredient in making

something if it is merely along for the ride.

     We agree with the United States that the district court should

not have entered a Rule 54(b) partial judgment without deciding

whether MSP was engaging in sham versus legitimate recycling.                         To

illustrate    our    reasoning,    we   provide       the    following        examples.

Hypothetical Facility A generates a large amount of liquid organic

waste.    In order to rid itself of the waste, Facility A heats the

liquid to very high temperatures in the presence of oxygen, causing

the carbon and hydrogen in the organic waste to burn away.                            The

temperatures    in    the   heating     device    are       so    high   as    to   make

                                        9
irrelevant any heat contribution from the burning of the organic

waste.5     Facility A has incinerated, not recycled, its organic

waste.    To the extent that Facility A has made a product, it has

done so without using its hazardous waste.

     Hypothetical Facility B also generates a large amount of

liquid organic waste.       In order to rid itself of the waste, the

facility dumps it into soil.         Facility B then digs up the soil

containing the waste and heats it to very high temperatures in the

presence of oxygen, causing the carbon and hydrogen in the organic

waste to burn.      The temperatures in the heating device are so high

as to make irrelevant any heat contribution from the burning of the

organic waste. The soil, however, conglomerates together and forms

something    that    Facility   B   calls   “aggregate.”    Under   such

circumstances, Facility B has not recycled its hazardous waste.

The only difference between Facilities A and B is that Facility B

dumped its waste in soil first.           If the organic waste provides

neither energy nor materials, then the organic material contributes

nothing to the production of the “aggregate.”          Facility B could

have manufactured the exact same “aggregate” by dumping virgin soil

into its heating device.

     SWP argues that producing a product is recycling.              This

contention ignores the fact that the hazardous waste in MSP’s

     5
        An easier case is presented if the organic compound is a
low energy hazardous waste, thus making it an inappropriate fuel.
In a third possibility, the facility does not use the lion’s share
of the heat produced from the burning of its organic waste. See
Marine Shale Processors, Inc. v. United States Environmental
Protection Agency, No. 95-60228, at 22-23.

                                     10
“feedstocks” may simply be along for the ride.                   At bottom, SWP’s

argument depends on the idea that soil contaminated with organic

waste is a fundamentally distinct substance from the organic waste

itself.    We do not agree.        See Chemical Waste Management, Inc. v.

Environmental Protection Agency, 869 F.2d 1526, 1539 (D.C. Cir.

1989) (holding that EPA could reasonably reject the argument that

“an agglomeration of soil and hazardous waste is to be regarded as

a new and distinct substance”).           Incineration does not cease to be

incineration when one dumps the waste to be incinerated into a

temporary medium like soil.

     In    Marine    Shale        Processors,   Inc.        v.     United    States

Environmental Protection Agency, No. 95-60228, at 17-26, we held

that EPA could conclude that MSP is burning its organic wastes for

destruction, and thus that the waste is not recycled or reclaimed

or reused.    This holding supports our conclusion that, at minimum,

an issue of fact exists as to whether SWP’s organic waste is a

legitimate    ingredient     in    the   production    of    any    Marine   Shale

product.     Accordingly, we vacate the district court’s Rule 54(b)

judgment and remand for further proceedings. We express no view as

to the sufficiency of the evidence to support a jury finding in

favor of or against SWP, nor regarding any possible preclusive

effect of EPA’s conclusions in number 95-60228.

                                         III

             The United States argues that the district court erred by

issuing a declaratory judgment because the court mistakenly held

                                         11
that MSP had complied with a Louisiana regulation including a more

stringent requirement than the federal Product Rule. Specifically,

the government refers to the Louisiana counterpart to the federal

Product       Rule,    L.H.W.R.       §    33.V.4139.A.2,      formerly   L.A.C.    §

22.20(a)(2).        This Louisiana regulation, the government contends,

included a requirement that LDEQ issue an exemption before the

facility could place a recycled product on the ground under the

Product Rule.         The United States asks us to render judgment on the

ground that the district court erred in determining that LDEQ

issued an exemption to MSP.

                                               A

       RCRA    is     an   exercise       of   federalism.     Congress   initially

required EPA to promulgate regulations governing the treatment of

hazardous waste from cradle to grave.                      42 U.S.C. § 6921.       EPA

complied with the congressional order in 1980, and promulgated what

became a federal regulatory floor.                   See, e.g., 40 C.F.R. pts. 260-

272.    Under 42 U.S.C. § 6926(b), however, states could assume

primary responsibility for RCRA enforcement by developing their own

programs, which EPA would approve after a review to assure that the

state program provided for a level of regulation at least as high

as the federal floor.             See 40 C.F.R. pt. 271.            RCRA expressly

allowed states to impose regulations more stringent than those

outlined in the federal floor.                     42 U.S.C. § 6929.   42 U.S.C. §

6928(a) gave EPA the power to enforce the substance of an approved

state’s program against private parties in that state.

                                               12
     42 U.S.C. § 6929 imposed a duty upon approved states to

maintain their RCRA programs at a level at least as stringent as

the federal floor. Because EPA often amended the regulatory scheme

governing the treatment, storage, and disposal of hazardous wastes,

approved states also had to enact conforming amendments. 40 C.F.R.

§ 271.216 provided a procedure governing EPA scrutiny of state

program amendments.     This process required the state to submit its

proposed alterations to EPA; EPA then approved or disapproved of

the amendments depending on whether they maintained a level of

regulation at least as high as the federal floor.              40 C.F.R. §

271.21(a-b).

     Between 1980 and 1985, Louisiana constructed its RCRA program

and sought EPA approval under 42 U.S.C. § 6926(b).             In 1985, EPA

amended its floor regulations and promulgated what became the

federal Product Rule.          Final Rule, Hazardous Waste Management

Systems; Definition of Solid Waste, 50 Fed. Reg. 614, 666 (1985);

see 40 C.F.R. § 266.20(b).          The previous section outlined the

substance   of   the   federal    Product   Rule;   briefly,    it    allowed

facilities that recycled hazardous waste into products for the

general public’s use to place these products on the ground without

violating RCRA.        Very shortly after promulgating the federal

Product Rule, EPA approved Louisiana’s RCRA program.             Notice of

Final   Determination     on     Louisiana’s   Application      for     Final

    6
       No party has argued that EPA lacked the power to promulgate
40 C.F.R. § 271.21, or that the operation of section 271.21 is
unconstitutional.   See New York v. United States, 505 U.S. 144
(1992).

                                     13
Authorization, Louisiana; Decision on Final Authorization of State

Hazardous Waste Management Program, 50 Fed. Reg. 3348 (1985).

Because of the short time between EPA promulgation of the federal

Product    Rule   and    its       approval        of   the   Louisiana     submission,

Louisiana’s   program        had    no    counterpart         to   the   Product   Rule.

Instead, the Louisiana program included a counterpart to the

general exemption in the original 1980 floor regulations.

       The federal Product Rule as promulgated in 1985 was self-

executing.    That is, a facility did not have to obtain an express

permit or exemption from EPA before operating under its terms.                          If

a facility violated the terms of the federal Product Rule by, for

instance, placing non-recycled hazardous waste on the ground, then

the    facility   was    subject         to   administrative         penalties     or   an

enforcement action. Louisiana’s counterpart to the federal Product

Rule    was   L.H.W.R.       §      22.20(a)(2),          superseded       by   L.H.W.R.

33.V.4139.A.2.     This provision, unlike the federal rule, was not

self-executing.         It   provided         that      facilities    meeting    certain

conditions “may be exempted by the Administrative Authority” and

thereby allowed to place a product resulting from the recycling of

hazardous waste on the ground.

       The parties agree that the following fairly unusual chain of

events occurred regarding L.H.W.R. § 22.20(a)(2).                        For reasons not

addressed in the record Louisiana did not submit the Louisiana

Product Rule for EPA approval until May 16, 1989.                        The submission

included the version of the Louisiana Product Rule requiring a

facility to obtain LDEQ approval before placing recycled materials

                                              14
on the ground.       Four days later, LDEQ deleted the provision

requiring LDEQ approval and made L.H.W.R. § 20.22(a)(2), now L.A.C.

§ 33.V.4139.A.2, self-executing. LDEQ did not, however, change its

submission to EPA.       As a result, when EPA approved the Louisiana

amendments effective January 29, 1990, see Immediate Final Rule,

Louisiana: Final Authorization of State Hazardous Waste management

Program Revisions, 54 Red. Reg. 48,889 (1989), it approved the

version of the Louisiana Product Rule requiring that LDEQ grant an

express exemption in order to allow a facility to place products on

the ground.

                                       B

      The above discussion illustrates that the United States’

argument implicates at least three separate questions.                 First,

when, if ever, did EPA become able to enforce the requirement that

a   facility   wishing    to   take   advantage   of   the   Product   Rule’s

exception from RCRA regulation receive an express exemption from

the “Administrative Authority”?            Second, did LDEQ, which all

parties have assumed to be the “Administrative Authority” specified

in the Louisiana Product Rule, in fact issue an exemption to MSP?

Third, if LDEQ did issue an exemption at one time, did LDEQ later

revoke it?

      The first question depends in part upon a construction of 40

C.F.R. § 271.21.   We note that the parties have assumed, and Marine

Shale has expressly argued in a separate section of its brief, that

an authorized state’s attempt to alter, amend, or repeal a portion

of its own regulations does not become effective in the state until

                                      15
approved by EPA pursuant to section 271.21.          The operation of this

regulation    may   raise    significant    statutory   and   constitutional

concerns.

       The record on the latter two questions is, to say the least,

equivocal.      LDEQ issued a series of letters to MSP generally

suggesting that MSP’s operations were in compliance with many

Louisiana     regulations.      None   of   these   letters   mentioned   the

Louisiana Product Rule, and many occurred before that rule took

effect in Louisiana.        Some years later, LDEQ issued orders to MSP

that the United States has argued constituted revocations of any

previously issued exemptions.          Some of these letters and orders

were    the   subject   of    conflicting    deposition    testimony.      In

particular, two LDEQ officials gave polar opposite interpretations

of a June 9, 1986 letter from LDEQ to MSP.              To some extent, the

resolution of whether LDEQ issued an exemption may require findings

of fact depending on the credibility of witnesses.

       The district court expressly noted that the exemption issue

remained outstanding at several stages of the litigation below.

The parties have cited to no place in the record, however, in which

the district court focused on the three questions outlined above.

The judgment issued by the district court included a declaration

that certain material “satisfied all criteria of 40 C.F.R. §

266.20(b) and corresponding Louisiana regulations.”               From this

phrase, we are unable to determine whether the district court held

that the Administrative Authority exemption requirement was never

                                       16
enforceable by the United States,7 and thus did not constitute a

“corresponding Louisiana regulation,” or that LDEQ had issued an

exemption to MSP that remained in effect.

     Because the district court did not issue express findings of

fact and conclusions of law on this question, we are uncertain as

to the scope and grounds of its decision.   Our uncertainty renders

appellate review on this matter difficult; this difficulty is

particularly acute because resolution of the last two of the three

above questions may depend on credibility determinations properly

made by the district court.   Under such circumstances, we think it

proper to vacate any finding that the district court made on this

question and remand for further proceedings consistent with this

opinion.   We note that no party has suggested, and we do not

believe, that the presence or absence of an exemption from the

Administrative Authority affects a facility’s duty to comply with

the substantive requirements of the Product Rule. Accordingly, our

remand on this issue leaves unaffected any of our holdings or the

jury’s findings on the Product Rule’s substantive criteria; should

the district court decide this case on MSP’s failure to meet one of

the substantive criteria of the Product Rule, it may not need to

reach the exemption question.

                                 IV

     7
        Although LDEQ intervened in this litigation, the terms of
the district court’s order allowing the intervention appear to
prevent LDEQ from arguing in this suit that state law unenforceable
by EPA imposed an Administrative Authority exemption requirement.

                                 17
     The United States argues that the district court committed two

fatal errors in its jury instructions.8              First, the United States

argues that the district court erroneously failed to include an

interrogatory and a jury instruction regarding whether any product

manufactured   from    the     recycling      of   SWP’s   waste   met   land   ban

standards.     Second, the United States argues that the district

court erroneously defined the phrases “for the general public’s

use” and “inseparable by physical means.

                                         A

     We do not discuss the United States’ land ban argument because

the United States waived it below. At the charging conference, MSP

asked the district court for a directed verdict on the issue of

whether the material produced from the process of SWP soil met land

ban standards.       Judge Duplantier stated, “I’m not directing a

verdict on it.        There is just nothing to be said about it.”

Counsel for    the    United    States       responded,    “No   contest.”      The

district court had by this time made clear that it would consider

all matters orally raised at the charging conference preserved for

appeal.   Regardless of the content of the submissions before the

charging conference, the United States at this point in the trial

      8
         Despite the fact that we vacate and remand the district
court’s Rule 54(b) judgment on other grounds, we reach the United
States’ arguments concerning instructional and evidentiary error.
Had the United States identified harmful error, we would have been
obligated to vacate the jury’s responses to interrogatories 3 and
4 and remand for a new trial on those matters. Judicial economy
counsels that we reach these issues now, so that any error may be
corrected in a single proceeding on remand.

                                      18
agreed   that   nothing   need   be   said   to   the   jury   regarding   the

application of land ban standards to the SWP material.

                                      B

     The United States argues that the court improperly instructed

the jury regarding the meaning of the federal Product Rule’s

requirement that the product be “produced for the general public’s

use.”    The court instructed the jury on this subject as follows:

     MSP must prove . .. that there is a known market for its
     materials for the general public’s use, not just for
     MSP’s own use.
          . . . When you consider [interrogatory numbers 3
     and 5], you should consider all of the evidence
     concerning the sales by MSP and its use of the material
     on its own property prior to the court order of August,
     1991. After that court order, sales were restricted to
     [MSP’s sister corporation, Recycling Park, Inc.] only,
     and use of the material was restricted to [RPI’s
     property] only. So, you remember what the court order
     said, that after that time, of course, they couldn’t
     produce that evidence because they couldn’t sell it.

     The United States first argues that the district court should

not have mentioned the August, 1991 court order because that order

was irrelevant to the existence of a market when MSP voluntarily

ceased sales to the public a year before this order.               We do not

agree.    The best evidence of a market for MSP’s material would be

evidence that MSP sold it.            The court committed no error by

reminding the jury why MSP could not come forward with evidence of

a sale after the court enjoined it from moving the material.

     The United States’ second argument regarding general public

use is that the district court’s instruction improperly prevented

the jury from considering the fact that MSP continued to produce

its so-called product for years even after it was unable to

                                      19
complete a sale.       The court’s instruction did nothing of the sort.

The instruction informed the jury that it should only consider

evidence of the use and sale of the product before 1991; nothing in

this instruction barred the jury from considering MSP’s continued

production.

     The United States’ final attack on the jury instructions

concerns    the   court’s   definition      of   inseparable.        Taking   the

instruction as a whole, we hold that it sufficiently communicated

to the jury that the proper question was whether the hazardous

waste constituents had undergone a chemical reaction so as to

become inseparable by physical means.

                                       V

     The United States also attacks three evidentiary rulings of

the district court.       We find any error harmless.

     The first ruling concerns expert testimony. The United States

called    Dr.   John   Drexler   to   testify    as   an   expert    on   certain

geological matters.       The United States sought to elicit testimony

from Dr. Drexler based on data contained in a report prepared by an

MSP expert hired in preparation for the litigation.                 The district

court sustained objections to this testimony because the report was

not in evidence.       The United States relies on Fed. R. Evid. 703,

which specifies that an expert may rely on inadmissable facts and

data “of a type reasonably relied upon by experts in the particular

field.”    MSP responds by noting that, as the Fourth Circuit has

recently stated, “[r]eports specifically prepared for purposes of

                                       20
litigation are not, by definition, of a type reasonably relied upon

by experts in the particular field.”             United States v. Tran Trong

Cuong, 18 F.3d 1132, 1143 (4th Cir. 1994) (internal quotation marks

omitted).

     That    a   research    protocol      or    method     was   conducted   in

anticipation of litigation does not mean that it cannot be the type

of study an expert would rely upon in expressing his opinion.                  At

the same time, a district court may decide that the financial and

other incentives of litigation pose an unacceptable risk to the

objectivity and neutrality of the person gathering the data, such

that the data would not normally be considered reliable in the

relevant    field.    We    note    that     this    rationale    suggests    the

usefulness of cross-examination of the data gatherer, a core

hearsay principle.    On the other hand, a district court may decide

that the combination of scientific discipline and the constraint

imposed by a well-accepted testing methodology provides sufficient

indicia of reliability so as to make the data something that those

in the field normally use.         This result might be more likely when

a party’s own expert gathers data adverse to the party.                 In this

case, we do not reach this question.                We find any error in the

exclusion of this data harmless.

     Next, the United States complains that the district court

improperly    admitted     evidence    and      permitted    closing   argument

regarding the impact upon MSP of an adverse verdict, a company

providing jobs to 364 citizens of Louisiana.              The government also

objects to MSP’s characterization of this lawsuit as a government

                                      21
attempt to put MSP out of business.              MSP and SWP provide no

explanation for the relevance of the evidence.               They defend the

argument by referring to the fact that, in response to MSP’s

attempt to elicit evidence of the economic effect of an adverse

judgment, the government unsuccessfully attempted to cross-examine

on the same issue, even though the district court called the

government’s questions “wrong and unprofessional” in the jury’s

presence, and even though the court struck all of the evidence and

instructed the jury to disregard it.          Such evidence and argument,

especially where as here it lacks any relevance to issues the jury

must decide, can carry the danger of significant prejudice.                  See

Fed. R. Evid. 402, 403; Whitely v. OKC Corp., 719 F.2d 1051, 1054-

55 (10th Cir. 1983).          Again, we note that MSP and SWP have

articulated   no    theory   of   relevance   for    this   evidence   and    no

credible explanation for the argument.         Nevertheless, we hold that

none of the trial judge’s rulings substantially prejudiced the

United States in this case.        The district court struck all of the

evidence, and the comments during argument certainly did not “so

permeate the proceedings that they impair[ed] substantial rights

and cast doubt on the jury’s verdict.” Bufford v. Rowan Companies,

Inc., 994 F.2d 155, 157 n.1 (5th Cir. 1993).

     Finally,      the   United   States   attacks   the    district   court’s

admission of evidence proving that United States agencies sent

waste to MSP for processing.       We find any error in the admission of

this evidence harmless.

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                               VI

     We VACATE the Rule 54(b) judgment and REMAND for further

proceedings consistent with this opinion.

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