The Erosion of Federally Permitted Releases and the Domestic Sewage Exclusion
By Doris K. Nagel
INTRODUCTION
The interface between two environmental statutes is one of the most frustrating areas of the practice of environmental law, since Congress seldom analyzes how a given statute will dovetail precisely with other, related statutes. The interface between the Resource Conservation and Recovery Act (RCRA) and the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) frequently has been a source of debate and controversy. New EPA regulations implementing RCRA's “domestic sewage exclusion” and proposed regulations addressing CERCLA's “federally permitted release” exemption are focusing attention on the interaction of both with a third statute: the Clean Water Act (CWA).
Both the RCRA domestic sewage exclusion and the CERCLA federally permitted release provision recognize that entities whose pollution is regulated under the CWA should not be penalized for that activity under CERCLA or RCRA. These provisions contain a natural tension between (1) the government's desire to ensure that a polluter is properly regulated under the CWA before exempting him entirely from CERCLA or RCRA; and (2) the regulated entity's desire not to be subjected to CERCLA or RCRA when it has already made extensive investments to comply with the CWA.
Problems arise, however, when compliance under the CWA is not the same as compliance under RCRA's domestic sewage exclusion or CERCLA's federally permitted release exception. Under the new final domestic sewage exclusion regulations and particularly under the proposed federally permitted release regulations, an entity that believes itself unaffected by RCRA or CERCLA because it holds a CWA permit may find that it now has RCRA regulatory obligations and may face future CERCLA cleanup liability for past discharges.
EPA's recent guidance and regulations addressing these two provisions are causing a number of regulated entities and regulators to ask the following questions:
(1) Under what circumstances can a regulated CWA discharger avoid RCRA obligations by claiming that its hazardous waste discharges were permitted under the domestic sewage exclusion; and
(2) Under what circumstances can a regulated CWA discharger avoid CERCLA liability by successfully asserting that its discharges of hazardous substances were federally permitted releases.
There are particular problems for industrial dischargers which discharge their pollutants into a publicly-owned treatment works (POTW) or a privately-owned treatment works. A discharger to a treatment plant may assume that the treatment works is in compliance with the CWA, particularly if it is owned and operated by an arm of the state. Under EPA's proposed CERCLA regulations, however, the indirect discharger may still be liable under CERCLA if the POTW it discharges to does not fully comply with the CWA. POTWs are also faced with new obligations under the newly interpreted provisions.
An understanding of these new and proposed regulations is crucial for past and present CWA dischargers to ensure that they remain exempt from RCRA and to ensure that they are fully aware of any potential CERCLA liability. Although the RCRA and CERCLA statutory language suggests that the two exclusions are relatively broad, the new and proposed regulations, together with relevant preamble statements and related guidance documents, significantly narrow these RCRA and CERCLA exemptions. If an entity which has or is currently discharging hazardous waste cannot qualify under the regulations for a domestic sewage exclusion, or manages the waste prior to discharge, a number of RCRA requirements may be imposed. These requirements address such issues as storage, treatment, disposal, testing, and manifesting. Similarly, if an entity cannot qualify for a CERCLA federally permitted release, and cleanup of the past discharges is necessary, it may be found liable under CERCLA as a generator of hazardous substances.
Virtually all entities regulated under the CWA may be affected by EPA's recent interpretation of the two provisions. Thus, an analysis of these two statutory provisions and their proposed regulations is crucial so that all CWA permit holders will understand their potential CERCLA and RCRA exposure. Part I of this article will address the issues surrounding RCRA's domestic sewage exclusion. The different treatment afforded direct and indirect dischargers of hazardous waste will be explored and analyzed. Part II will address CERCLA's federally permitted release exemption and how it impacts direct and indirect dischargers of hazardous waste.
The interface between two environmental statutes is one of the most frustrating areas of the practice of environmental law, since Congress seldom analyzes how a given statute will dovetail precisely with other, related statutes. The interface between the Resource Conservation and Recovery Act (RCRA) and the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) frequently has been a source of debate and controversy. New EPA regulations implementing RCRA's “domestic sewage exclusion” and proposed regulations addressing CERCLA's “federally permitted release” exemption are focusing attention on the interaction of both with a third statute: the Clean Water Act (CWA).
Both the RCRA domestic sewage exclusion and the CERCLA federally permitted release provision recognize that entities whose pollution is regulated under the CWA should not be penalized for that activity under CERCLA or RCRA. These provisions contain a natural tension between (1) the government's desire to ensure that a polluter is properly regulated under the CWA before exempting him entirely from CERCLA or RCRA; and (2) the regulated entity's desire not to be subjected to CERCLA or RCRA when it has already made extensive investments to comply with the CWA.
Problems arise, however, when compliance under the CWA is not the same as compliance under RCRA's domestic sewage exclusion or CERCLA's federally permitted release exception. Under the new final domestic sewage exclusion regulations and particularly under the proposed federally permitted release regulations, an entity that believes itself unaffected by RCRA or CERCLA because it holds a CWA permit may find that it now has RCRA regulatory obligations and may face future CERCLA cleanup liability for past discharges.
EPA's recent guidance and regulations addressing these two provisions are causing a number of regulated entities and regulators to ask the following questions:
(1) Under what circumstances can a regulated CWA discharger avoid RCRA obligations by claiming that its hazardous waste discharges were permitted under the domestic sewage exclusion; and
(2) Under what circumstances can a regulated CWA discharger avoid CERCLA liability by successfully asserting that its discharges of hazardous substances were federally permitted releases.
There are particular problems for industrial dischargers which discharge their pollutants into a publicly-owned treatment works (POTW) or a privately-owned treatment works. A discharger to a treatment plant may assume that the treatment works is in compliance with the CWA, particularly if it is owned and operated by an arm of the state. Under EPA's proposed CERCLA regulations, however, the indirect discharger may still be liable under CERCLA if the POTW it discharges to does not fully comply with the CWA. POTWs are also faced with new obligations under the newly interpreted provisions.
An understanding of these new and proposed regulations is crucial for past and present CWA dischargers to ensure that they remain exempt from RCRA and to ensure that they are fully aware of any potential CERCLA liability. Although the RCRA and CERCLA statutory language suggests that the two exclusions are relatively broad, the new and proposed regulations, together with relevant preamble statements and related guidance documents, significantly narrow these RCRA and CERCLA exemptions. If an entity which has or is currently discharging hazardous waste cannot qualify under the regulations for a domestic sewage exclusion, or manages the waste prior to discharge, a number of RCRA requirements may be imposed. These requirements address such issues as storage, treatment, disposal, testing, and manifesting. Similarly, if an entity cannot qualify for a CERCLA federally permitted release, and cleanup of the past discharges is necessary, it may be found liable under CERCLA as a generator of hazardous substances.
Virtually all entities regulated under the CWA may be affected by EPA's recent interpretation of the two provisions. Thus, an analysis of these two statutory provisions and their proposed regulations is crucial so that all CWA permit holders will understand their potential CERCLA and RCRA exposure. Part I of this article will address the issues surrounding RCRA's domestic sewage exclusion. The different treatment afforded direct and indirect dischargers of hazardous waste will be explored and analyzed. Part II will address CERCLA's federally permitted release exemption and how it impacts direct and indirect dischargers of hazardous waste.
