Court Opinion

ID: 9481765
Source: CourtListenerOpinion
Date Created: 2023-08-05 08:31:25.035747+00
Date Added: 2024-06-11T17:48:34.104118
License: Public Domain

EDWARDS, Circuit Judge,
dissenting in part and concurring in part:
As is clear from the majority opinion, no reasonable reader of the disputed regulations could have known that EPA’s current construction of the regulations is what the agency originally had in mind. This being the case, there is no way that Rollins can be held to have violated the cited regulations.
It is true that “[cjourts must give deference to an agency’s interpretation of its own regulations.” Gates & Fox Co. v. OSHRC, 790 F.2d 154, 156 (D.C.Cir.1986) (Scalia, J.) “Where the imposition of penal sanctions is at issue, however, the due process clause prevents that deference from validating the application of a regulation that fails to give fair warning of the conduct it prohibits or requires.” Id. Thus, “[i]f a violation of a regulation subjects private parties to criminal or civil sanctions, a regulation cannot be construed to mean what an agency intended but did not adequately express.” Diamond Roofing Co. v. OSHRC, 528 F.2d 645, 649 (5th Cir.1976) (cited with approval in Gates, 790 F.2d at 156).1 If Rollins could not reasonably have known what the agency had in mind, it cannot now be held to have violated the regulation.
As Judge Scalia suggested in Gates, it does not matter “whether, in a non-penal context, the [agency’s] ... interpretation of [the disputed regulation] ... might be permissible.” 790 F.2d at 156. If a regulation does not give “fair warning” of the conduct it prohibits or requires, no violation can be found.2
*655The majority seems to suggest that the question in this ease is whether inadequate notice vitiated the violation. This is not the issue. The question is whether Rollins had “fair warning” sufficient to justify a finding of a violation. There can be no violation to vitiate if Rollins could not reasonably have known what the agency had in mind. Notice is not merely a mitigating circumstance; it is an element of proof of violation. That is exactly the point of Judge Scalia’s opinion in Gates (and every other case that has considered the question).
Furthermore, I cannot fathom the argument in the majority opinion suggesting that we cannot consider the “notice” issue because Rollins never raised a defense of inadequate notice. The majority appears to find that Rollins cannot prevail on the liability issue because the “due process clause” was never mentioned as such in any of the pleadings in this case. This makes no sense to me. The whole point of petitioner’s argument in this case has been that a party cannot be found to have violated a regulatory provision absent “fair warning” that the allegedly violative conduct was prohibited. This is a cardinal rule of administrative law, see Phelps Dodge Corp., supra note 1, the breach of which is so egregious that the courts have gone so far as to hold that a lack of notice may offend the due process clause, see Gates, 790 F.2d at 156. But it is not necessary for us to “reach out” to decide a constitutional issue in order to resolve the merits of the notice issue in this case. It is a simple principle of administrative law that, in adopting administrative regulations, an agency “has the responsibility to state with ascertainable certainty what is meant by the standards ... promulgated.” See Diamond Roofing, 528 F.2d at 649 (violation overturned because agency’s regulation did not give regulated parties “fair warning” of prohibited conduct; no mention was made of the “due process clause”). Throughout the proceedings in this case, both before the agency and this court, Rollins has claimed that no violation should be found because the company could not reasonably have known what the agency had in mind with its regulations. So it cannot be claimed that the issue is not before us.
The opinion of the Chief Judicial Officer (“CJO”) makes it absolutely clear that the “fair warning” argument was raised and decided at the agency level. Indeed, the CJO devoted ten pages in his opinion to “regulatory clarity,” because, as he stated, “[ajs a general proposition, the Agency recognizes the importance of regulatory clarity and its obligation to draft rules in a manner that puts the regulated community on notice as to the obligations thereunder. ” Rollins Environmental Services (NJ) Inc., Docket No. II-TSCA-PCB-88-0116, at 13 (EPA Sept. 28, 1990) (emphasis added), reprinted in Joint Appendix (“J.A.”) 34, 46. The CJO observed that, pursuant to this principle, “[t]he Agency has repeatedly ruled against enforcement staff where the applicable rules did not support the complainant’s case or were fatally ambiguous.” Id. at 13 n. 14, reprinted in J.A. 46 n. 14. The CJO went on to note that “[t]he question here is whether the applicable rules are sufficiently clear to support an enforcement action, to put the regulated community on notice as to its obligations, and to avoid penalty mitigation.” Id. at 18 n. 20 (emphasis added), reprinted in J.A. 51 n. 20. And, in his ruling against Rollins, the CJO found that the “complexity” of the regulations did not “excuse ignorance of the law or justify penalty mitigation.” Id. at 18-19 (emphasis added), reprinted in J.A. 51-52. In other words, the CJO considered the lack of notice question in connection with both the violation and penalty issues.
Thus, it is utterly specious to suggest that “inadequate notice” was not an issue in the agency’s enforcement action before the CJO. And it borders on the frivolous to claim that the CJO failed to address the issue because he never mentioned the “due process clause.” As noted above, and as is *656obvious from the ten pages of the CJO’s opinion that are devoted to the issue, one need never reach the constitutional question in deciding whether a regulated party has received notice sufficient to justify an enforcement action.
The only remaining question is whether Rollins preserved the issue of inadequate notice in petitioning for review of the CJO’s opinion before this court. The answer to this question is clear because Rollins raised the notice issue in both its original and reply briefs. In the opening sections of its initial brief, Rollins' principal claim is that it could not have violated the disputed regulations because the company’s actions were consistent with the only reasonable interpretation of those regulations. See, e.g., Brief for Petitioner at 10 (“Thus, Rollins’ actions in not disposing of the PCB rinsate as a PCB were consistent with the regulation since it is undisputed that the rinsate contained less than 50 ppm PCB. Any contrary reading of the regulation inescapably leads to a question as to how this language could be chosen if any other meaning was intended.”) (emphasis in original). In response, EPA expressly addresses petitioner’s argument that the disputed regulations could “not [be read to] apply to Rollins’ activity here,” quoting the CJO’s conclusion that the relevant regulations “make clear that rinsate with less than 50 ppm PCB must be disposed of in a TSCA-approved ... incinerator.” Final Brief of Respondent Environmental Protection Agency at 41, 43 (emphasis added); see also id. at 41-43.
Rollins’ argument on inadequate notice is expounded further in its reply brief. The petitioner first quotes the CJO’s ruling that, “[a]s a general proposition, the Agency recognizes the importance of regulatory clarity and its obligation to draft rules in a manner that puts the regulated community on notice as to the obligations thereunder,” then challenges the CJO’s finding that the ambiguity in the regulation was not sufficient to vitiate an enforcement action. Reply Brief for Petitioner at 8. The petitioner also asks how the “regulated community [can] be considered to be ‘on notice as to ... [its] obligations’ ... if the EPA is uncertain as to what the obligations are?” Id. The petitioner concludes by contending that, “[i]n view of [the foregoing arguments on liability], ... Rollins did not violate ... any ... applicable rule or regulation, and therefore is not liable for its handling of less than 50 ppm rinsate.” Id. at 10. Following these arguments on liability, Rollins then advances an alternative argument, contending that, even if a violation is found, no penalty should be assessed due to mitigating circumstances. Id. at 10-11.
The majority opinion contends that petitioner’s argument on inadequate notice cannot be considered because it was not raised until petitioner’s submission of its reply brief. As a factual matter, this contention is simply wrong: the “notice issue” was dealt with at length in the CJO’s opinion; it was raised in petitioner’s opening brief; it drew a response in respondent’s brief; and it was expounded on in petitioner’s reply brief. Furthermore, the majority’s reasoning is bizarre, for, in upholding Rollins’ claim for mitigation, the majority reaches the very issue it would now avoid, finding that “[n]o reasonable reader of [the disputed regulations] ... could have known that EPA’s current construction is what the agency originally must have had in mind.” In other words, the majority’s mitigation analysis relies on the same lack of notice that a priori forecloses a finding of a violation as a threshold matter.
Even if we assume that Rollins did not raise the notice issue until its reply brief, this would not be dispositive of the question before us. It is true that, as a general matter, the court will not consider a legal argument first advanced in a reply brief. See, e.g., McBride v. Merrell Dow and Pharmaceuticals, Inc., 800 F.2d 1208, 1210 (D.C.Cir.1986). However, it is also the law of the circuit that, “notwithstanding the requirements of Federal Rule of Appellate Procedure 28, regarding the contents of briefs on appeal, we may ... consider points not raised in the briefs or in oral argument. Our willingness to do so rests on a balancing of considerations of judicial orderliness and efficiency against the need for the greatest possible accuracy in judicial decisionmaking.” Consumers Union of United States, Inc. v. Federal Power *657Comm’n, 510 F.2d 656, 662 (D.C.Cir.1974) (footnote omitted); see also Columbia Gas Transmission Corp. v. F.E.R.C., 844 F.2d 879, 880 (D.C.Cir.1988) (per curiam). This court surely has the authority to consider the question at hand so as to avoid the “unduly harsh” result reached by the majority opinion. Consumers Union, 510 F.2d at 662 n. 10.
It strikes me as both absurd and injudicious to ignore the undeniable legal and logical implications of Rollins’ notice argument simply because petitioner failed to mention the “due process clause.” The due process clause is not in issue, nor is it critical to a resolution of the notice issue that is before the court. To reach the result that it has today, the majority has strained to embrace a notion a legal formalism that defies every notion of justice. The problem is that the “formalism” sought to be embraced is not even well-founded, so that the majority opinion produces nothing more than an unduly harsh result.
Because I would reverse the finding of violation, I concur in the majority’s holding that the penalty imposed against Rollins was contrary to law.

. It is basic hornbook law in the administrative context that "the application of a regulation in a particular situation may be challenged on the ground that it does not give fair warning that the allegedly violative conduct was prohibited.” Phelps Dodge Corp. v. Federal Mine Safety and Health Review Comm’n, 681 F.2d 1189, 1192 (9th Cir.1982).

. Although Rollins will avoid a monetary penalty in this case, the violation found is still a significant penalty. Not only has Rollins unfairly been labelled a "law breaker,” but this violation can be used against the company in assessing penalties with respect to any future violations. See 15 U.S.C. § 2615(a)(2)(B) (1988) (requiring EPA, in selecting amount of civil penalty for violation of TSCA, to consider viola*655tor’s “history of prior such violations”); Notice of Availability of Polychlorinated Biphenyls Penalty Policy, 55 Fed.Reg. 13,955 (1990) (indicating that prior finding of violation justifies upward adjustment of penalty amount).