Marine Shale Processors, Inc. (Board decision, March 17, 1995)

Read the official release (epa.gov)

Plain-English summary

Marine Shale Processors sought a RCRA permit to operate its Louisiana facility as an industrial furnace under the Boilers and Industrial Furnace rule. EPA Region VI denied the application after finding that the facility did not function as an aggregate kiln and that its output was not commercial-grade aggregate useful to industries that buy such material. The Environmental Appeals Board held that the record adequately supported the Region's conclusion that the facility did not qualify as an industrial furnace, rejected Marine Shale's constitutional and procedural challenges, affirmed the permit denial, and remanded for the Region to issue a final denial.

Decision snapshot

• Cited authorities: 40 C.F.R. §§ 124.13, 124.19, 260.10, 266.20, and 270.66; 42 U.S.C. §§ 6901 and 6926.
• Outcome: The BIF permit denial was affirmed, and the matter was remanded only for issuance of a final permit denial.
• Key point: A facility claiming to be an aggregate kiln must produce and sell a commercially usable aggregate product recognized as such in ordinary commercial dealings.

Full text (EPA EAB public release)

MARINE SHALE PROCESSORS, INC. 751

IN RE MARINE SHALE PROCESSORS, INC.

RCRA Appeal No. 94-12
FINAL DECISION AND ORDER

Decided March 17, 1995

Syllabus

By petition dated October 20, 1994, Marine Shale Processors, Inc. (“MSP”) requested that the Environmental Appeals Board review the decision of Region VI denying MSP’s application for a RCRA permit for MSP’s facility in Amelia, Louisiana. MSP had sought a permit to operate as an industrial furnace under the Boilers and Industrial Furnace (“BIF”) Rule. 40 C.F.R. Part 266 (Subpart H); 56 Fed. Reg. 7134 (February 21, 1991). By order dated December 7, 1994, the Board granted MSP’s petition for review and scheduled oral argu- ment. Oral argument was held on January 12, 1995.

MSP’s facility consists of, among other things, a rotary kiln, two hazardous waste-fired oxidizers, a “slag box,” a baghouse, and an emissions stack. The facility receives and burns hazardous waste from a large variety of sources and, according to MSP, produces a useful product from these wastes, which MSP calls “aggregate.” According to MSP, this “aggregate” is the result of a patented manufacturing process that uses thermal treatment to accomplish the recovery of materials or energy. In addition, MSP asserts that its “aggregate” constitutes a legitimate product which can be sold to interested parties for a variety of uses. MSP asserts that, as an aggregate kiln, it meets the definition of an industrial furnace at 40 C.F.R. § 260.10 and is therefore entitled to a BIF permit. Thus, although MSP has operated the facility since July 1985, MSP claims that it was exempt from obtaining an incineration permit for its kiln until 1991 and promulgation of the BIF rule.

Prior to August 21, 1991, the date on which the BIF rule became effective, combustion facilities, such as aggregate kilns, that were engaged in legitimate recycling operations were exempt from federal RCRA regulations governing the incineration of hazardous waste for destruction set forth in 40 C.F.R. Part 264, Subpart O. MSP has asserted that, as an aggregate kiln it was not incinerating wastes for destruction but was an industrial furnace engaged in legitimate recycling, and thus exempt from Part 264. The pre-BIF regulations, however, did not specify which activities by so-called industrial furnaces constituted legitimate recycling rather than incineration for purposes of waste destruction. The Agency therefore developed certain criteria to determine whether a facility was burning hazardous waste for destruction, and was therefore subject to regulation as an incinerator under 40 C.F.R. Part 264 Subpart O, or was engaged in legitimate recycling and therefore exempt from the standards applicable to incinerators. These criteria are referred to by the Agency as the “sham recycling criteria.” Among the factors the Agency considered relevant in determining whether a facility was a sham or a legitimate recycler were: 1) whether a hazardous waste was ineffective or only marginally effective for the claimed use, 2) whether a hazardous waste was used in excess of the amount necessary to make a product; 3) whether the material burned was as effective as the material it was replacing; 4) whether sufficient records were kept documenting recy-

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cling transactions; 5) whether materials were stored and handled in a manner consistent with their use as raw materials or commercial product substitutes; 6) whether wastes were solicited and accepted indiscriminately; and 7) whether the hazardous waste had little or no energy value. With promulgation of the BIF rule in 1991, however, all facilities burning hazardous waste, including aggregate kilns engaged in legitimate recycling, are now subject to regulation.

Region VI denied MSP’s BIF permit application on several grounds. First, utilizing the sham recycling criteria, the Region concluded that MSP’s rotary kiln and associated equip- ment are not integral components of an aggregate manufacturing process. Thus, according to the Region, MSP is subject to regulation as an incinerator rather than as a BIF. The Region also considered whether the facility produced an effective commercial-grade aggregate use- ful to industries who generally purchase such products. The Region stated that in order to make this determination the material exiting MSP’s facility was tested by experts retained by the Agency as well as the Louisiana Department of Transportation and Development (“La. DOTD”) and compared to aggregate commonly accepted by the construction industry. The La. DOTD concluded that the material did not meet applicable requirements for use in road and bridge construction in the State of Louisiana. In addition, Agency experts concluded that MSP’s material could not be considered “aggregate” from a civil engineering perspective. Second, the Region concluded that MSP’s oxidizer units are themselves incinerators, and MSP was therefore required to obtain an incinerator permit even if MSP was otherwise engaged in a manufacturing process. Finally, the Region asserted that under the “omnibus” authority of RCRA § 3005(c)(3), MSP’s prior history of non-compliance with various environ- mental statutes and regulations justified the permit denial.

MSP makes the following arguments challenging the Region’s determination: 1) the BIF permit denial violated MSP’s constitutional right to due process because the permit application was reviewed and decided upon by biased decisionmakers who had prejudged adjudicative factual and legal issues relating to the application; 2) under the separation of powers doctrine, the Board should defer to the rulings of the Federal District Court for the Western District of Louisiana in a related enforcement action brought by the Agency and stay the current permit proceedings pending the final outcome of that action; 3) under the seventh amendment to the United States Constitution, the Board may not rule on factual issues delegated to the jury in the enforcement action; 4) the Board is collaterally estopped from redeciding issues previously decided by the district court; 5) the Agency's reliance on the sham recycling criteria was clearly erroneous and violates the Administrative Procedure Act; 6) the Region’s determination that MSP is not a legitimate recycler was clearly erroneous and based upon an incomplete review of the administrative record; 7) the Region’s conclu- sion that MSP’s facility does not meet the definition of an industrial furnace is clearly erroneous and impermissibly disregards the jury’s findings and the district court’s rulings in the enforcement action; 8) MSP’s aggregate is a legitimate product within the meaning of 40 CFR. § 266.20; and 9) the Region may not deny the permit application based on the Region's conclusions regarding MSP’s prior regulatory history.

Held: The Board concludes that there is more than adequate evidence in the record to support the Region’s conclusion that MSP’s facility does not function as an “aggregate kiln” within the meaning of 40 C.F.R. § 260.10 and thus does not meet the definition of industrial furnace. In particular, analyses of the material produced by MSP indicate that it is not of sufficient quality and consistency to be considered commercial-grade aggregate that is use- ful to industries that regularly purchase that product. An analysis of MSP’s material by experts retained by the Agency as well as the Louisiana Department of Transportation and Development support the conclusion that the material is not a commercially useful aggre- gate. Although MSP presented evidence to show that some portion of the more than 200 thousand tons of material it produces may be useful and marketable as fill material, and possesses some of the attributes of aggregate, it did not present any evidence to show that its product has ever been used in any substantial quantities as aggregate by anyone in the

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MARINE SHALE PROCESSORS, INC. 753

construction industry. In such circumstances, the Board finds that the Region correctly concluded that MSP’s facility is not an industrial furnace within the meaning of 40 C.RR. § 260.10.

In addition, MSP has not presented the Board with any legal basis for rejecting the Region’s determination. The Board concludes that it is not collaterally estopped by the jury’s answers to interrogatories in the civil enforcement proceeding from concluding that MSP’s facility is not an industrial furnace. In addition, the Board finds that neither the Seventh Amendment nor separation of powers principles preclude the Board from acting on MSP’s permit application. Finally, after a careful review of the record the Board does not believe that MSP’s allegations of bias warrant a reversal of the Region’s permit denial.

The Region’s denial of the BIF permit application is therefore affirmed and this matter is remanded so that the Region can issue a final permit denial.

Before Environmental Appeals Judges Nancy B. Firestone and Ronald L. McCallum.'

Opinion of the Board by Judge McCallum:

Before us is a petition for review of U.S. EPA Region VI’s decision to deny a Part B application submitted by Marine Shale Processors, Inc. (“MSP”) in April of 1992 for a permit under the Resource Conser- vation and Recovery Act (“RCRA”), 42 U.S.C. § 6901 et seq, for MSP’s facility located in Amelia, Louisiana. See Petition for Marine Shale Processors, Inc. for Review of BIF Permit Denial (“Petition”). MSP had sought a permit to operate as an industrial furnace under the Boilers and Industrial Furnace (“BIF”) Rule. 40 C.F.R. § 270.66; 56 Fed. Reg. 7134 (Feb. 21, 1991). Although the State of Louisiana has been autho- rized under section 3006 of RCRA, 42 U.S.C. § 6926, to administer certain aspects of the RCRA program in lieu of the federal program, MSP’s permit application was handled by EPA in this case because Louisiana has not yet been authorized to implement the BIF rule. By order dated December 7, 1994, the Board granted MSP’s petition for review and scheduled oral argument. Oral argument was held on Janu- ary 12, 1995.

I. BACKGROUND

MSP’s facility consists of, among other things, a rotary kiln, two hazardous waste-fired oxidizers (referred to by the parties as oxidizers number 1 and number 2), a “slag box,” a baghouse, and an emissions stack. The facility receives and burns hazardous waste from a large variety of sources, and, according to MSP, produces a useful “aggre- gate” from these wastes for use as fill material and in asphaltic mix- tures, among other things.

1 Environmental Appeals Judge Edward E. Reich did not participate in this decision.

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754 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

Waste materials are initially fed into the rotary kiln and burned at temperatures ranging from 1600 to 2500 degrees Fahrenheit. Statement of Basis for Proposed Denial of Permit Application by Marine Shale Processors, Inc. at 4 January 31, 1994). After exiting the kiln, the metals concentration of the remaining ash material, referred to by MSP as “primary aggregate,” is tested to determine whether it contains metal concentrations exceeding applicable land disposal restrictions.’ Jd. MSP frequently places ash material that fails to meet applicable land dis- posal treatment standards into the oxidizers where many of the mate- tials melt and flow into the “slag box.” /d. The molten material is then cooled by dropping the material into a water “quench,” producing a black, glassy material referred to by MSP as “slagged aggregate.” Id. MSP tefers to this process as “slagging” or “vitrification.” Id.

Although MSP has operated the facility since July of 1985, it did not seek a RCRA operating permit for its combustion activities until after promulgation of the BIF rule in 1991. Prior to August 21, 1991, the date on which the BIF rule became effective, MSP contended that it was a legitimate recycler engaged in the production of “aggregate” and therefore exempt from RCRA’s waste incineration regulations, 40 C.F.R. Part 264 Subpart O. More specifically, MSP contended, as it still con- tends, that it is an “aggregate kiln” engaged in legitimately recycling hazardous waste into aggregate, and thus it is an industrial furnace under 40 C.E.R. § 260.10? and not an incinerator destroying hazardous wastes. We note that the pre-BIF regulations, however, did not specify which activities constituted legitimate recycling rather than incinera- tion. The Agency therefore developed certain criteria to determine whether a facility was burning hazardous waste for destruction, and was therefore subject to regulation as an incinerator under 40 C.FR. Part 264 Subpart O, or was an industrial furnace engaged in legitimate recycling and therefore exempt from the standards applicable to incin- erators. These criteria are referred to by the Agency as the “sham recycling criteria.” See 50 Fed. Reg. 638 January 4, 1985), Memoran- dum from Lisa K. Friedman, Associate General Counsel, Solid Waste and Emergency Response Division, to Administrative Record for Ma- rine Shale Permit Decision, dated August 8, 1994 (Responding to MSP on Issues Relating to Use of EPA’s Sham Recycling Criteria), Adminis- trative Record (AR), Exh. E-6. Among the factors the Agency consid- ered relevant in determining whether a facility was a sham or a legiti- mate recycler were: 1) whether a hazardous waste was ineffective or only marginally effective for the claimed use; 2) whether a hazardous waste was used in excess of the amount necessary to make a product;

2 See generally 40 C.ER. Part 268 (Land Disposal Restrictions).

3 See infra note 5.

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3) whether the material burned was as effective as the material it was replacing; 4) whether sufficient records were kept documenting recy- cling transactions; 5) whether materials were stored and handled in a manner consistent with their use as raw materials or commercial prod- uct substitutes; 6) whether wastes were solicited and accepted indis- criminately; and 7) whether the hazardous waste had little or no en- ergy value. With promulgation of the BIF rule in 1991, however, all combustion units listed in 40 C.F.R. § 260.10, including aggregate kilns engaged in legitimate recycling, are now subject to specific permit requirements. In fact, facilities falling within the definition of a BIF are subject to more stringent requirements than are those facilities regu- lated as incinerators. See 56 Fed. Reg. 7,188 (February 21, 1991).

In May of 1991, MSP submitted its Part A permit application for the purpose of obtaining interim status as a BIF. See infra, note 46 and accompanying text. In April of 1992, at the Region’s request, MSP submitted a six-volume Part B application for a BIF permit to Region VI pursuant to 40 C.F.R. Part 266. See id. According to MSP, the so- called aggregate it produces is the result of a patented manufacturing process that uses thermal treatment to accomplish the recovery of materials or energy. In addition, MSP asserted that this aggregate con- stitutes a legitimate product which can then be sold to interested par- ties for a variety of uses.4 MSP concludes that its facility is an “aggre- gate kiln” and therefore meets the definition of industrial furnace at 40 C.ER. § 260.10.5 Thus, MSP asserts that it is entitled to a BIF permit.

4Pursuant to an order issued by the Louisiana Department of Environmental Quality (LDEQ),

MSP has not sold any of its material to the general public since May 26, 1989. See Administrative Record (AR) Exh. A-25. Citing concerns over whether MSP’s material met applicable land disposal treatment requirements at 40 C.F.R. Part 268, LDEQ forbad MSP from removing any of this material from MSP’s premises. Pursuant to a court order dated August 2, 1991, issued by the United States District Court for the Western District of Louisiana, MSP has been permitted to sell its material only for use in the development of an industrial park in the vicinity of MSP’s plant owned by Recycling Park, Inc. (RPI). RPI is a “sister corporation” of MSPs that owns 200 acres of property near the facility. See Corrected Response of United States Environmental Protection Agency to petition of Marine Shale Processors, (“Region's Response”) at 3.

*The industrial furnace definition reads as follows:

Industrial furnace means any of the following enclosed devices that are integral components of manufacturing processes and that use thermal treatment to accomplish recovery of materials or energy:

(1) Cement kilns
(2) Lime kilns

(3) Aggregate kilns
(4) Phosphate kilns

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756 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

A. BIF Permit Denial

On January 31, 1994, the Region proposed to deny MSP’s BIF permit application on several grounds. See Statement of Basis for Pro- posed Denial of Permit Application by Marine Shale Processors, Inc. (“Proposed Denial”). The primary basis for the proposed denial was the Region’s conclusion that “MSP does not meet the definition of an aggregate kiln and, therefore, does not meet the definition of indus- trial furnace as stated in 40 C.F.R. § 260.10.” Proposed Denial at 1

(5) Coke ovens
(6) Blast furnaces

(7) Smelting, melting and refining furnaces (including pyromet- allurgical devices such as cupolas, reverberator furnaces, sinter- ing machinels], roasters, and foundry furnaces)

(8) Titanium dioxide chloride process oxidation reactors (9) Methane reforming furnaces (10) Pulping liquor recovery furnaces

(11) Combustion devices used in the recovery of sulfur values from spent sulfuric acid

(12) Halogen acid furnaces (HAFs) for the production of acid from halogenated hazardous waste generated by chemical pro- duction facilities where the furnace is located on the site of a chemical production facility, the acid product has a halogen acid content of at least 3%, the acid product is used in a manufactur- ing process, and, except for hazardous waste burned as fuel, hazardous waste fed to the furnace has a minimum halogen content of 20% as-generated. (13) Such other devices as the Administrator may, after notice and comment, add to this list on the basis of one or more of the following factors:

@ The design and use of the device primarily to ac-

complish recovery of material products;

Gi) The use of the device to burn or reduce raw ma-

terials to make a material product;

Gii) The use of the device to burn or reduce second-

ary materials as effective substitutes for raw materi-

als, in processes using raw materials as principal feed-

stocks;

(iv) The use of the device to burn or reduce second-

ary materials as ingredients in an industrial process

to make a material product;

(v) The use of the device in common industrial prac-

tice to produce a material product; and

(vi) Other factors, as appropriate.
40 CER. § 260.10.

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MARINE SHALE PROCESSORS, INC. 757

(footnote omitted). According to the Region, MSP’s facility functions not as an industrial furnace but as a commercial incinerator and there- fore is subject to the incinerator rather than the BIF regulations. Pro- posed Denial at 10. The Region further stated that, pursuant to 40 C.F.R. § 260.10, the essential attribute of an industrial furnace “is to be an integral component of a manufacturing process.” Id. Utilizing the sham recycling criteria discussed above, the Region concluded that, contrary to MSP’s assertion, MSP does not operate an aggregate kiln because MSP’s rotary kiln and associated equipment are not integral components of a manufacturing process.® The Region also concluded that the output from MSP’s facility does not qualify as a recycled ma- terial or meet the requirements for a recycled product at 40 C.F.R. § 266.20. Thus, according to the Region, the facility does not meet the definition of an “industrial furnace” at Section 260.10. Id. at 10-11.

The proposed denial was also based on the Region’s belief that MSP’s oxidizer units are themselves used to incinerate hazardous waste and cannot be classified as industrial furnaces under Section 260.10. Thus, according to the Region, “[elven if MSP’s arguments that it is engaged in manufacturing a product are taken as true and the oxidiz- ers are considered to be ‘integral components of [al manufacturing process,” the facility was still required to obtain an incinerator permit. Id at 27-28 (brackets in original). Finally, the Region asserted that under the “omnibus” authority of RCRA § 3005(c)(3), even if MSP were otherwise entitled to a BIF permit, the Region properly denied the permit application based on MSP’s prior history of non-compliance with various federal and State environmental regulations. Id. at 28.

During the comment period on the Proposed Denial, MSP submit- ted a two-page letter charging that the Agency had applied “result- oriented” and “urged for” interpretations of the applicable regulations in an attempt to “purposely drive MSP out of business.” See Letter from

Upon application of the sham recycling criteria, the Region concluded that: (1) MSP has burned, and continues to burn, large volumes of hazardous wastes that have no recycling value: (2) MSP’s material is not useful by industries that use aggregate and is not a marketable aggregate product; (3) MSP is using hazardous waste in excess of what it would need if it were merely using the hazardous waste to produce aggregate; (4) The hazardous waste used by MSP is not as effective for producing aggregate as the raw materials normally used to produce aggregate; (5) There is an enormous dis- parity between the revenues that MSP receives from accepting hazardous waste from generators and the insignificant revenues it receives from selling its aggregate; (6) MSP accepts hazardous wastes indiscriminately without regard for how those wastes might affect the quality of its output; (7) The hazardous constituents in the wastes used by MSP do not contribute any valuable qualities to MSP’s output, suggesting that the hazardous constituents are merely being burned for destruc- tion; (8) MSP does not keep adequate records documenting the disposition of its output; (9) There is a strong similarity between MSP’s operating practices and those of a commercial hazardous waste incinerator; and (10) MSP cannot demonstrate a known market or disposition for its “aggregate.” Denial at 9-36.

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George Badge Eldredge, Vice President and General Counsel of MSP, to Allyn M. Davis, Director, Region VI Hazardous Waste Management Division, at 1 June 30, 1994). The letter also stated that many of the grounds for the proposed denial “have already been obviated by the jury’s findings and the judge’s rulings” in a related enforcement pro- ceeding in the Federal District Court for the Western District of Loui- siana. Id. at 2. Along with this letter, MSP submitted eighteen boxes of documents which it stated “demonstrate that the company should be granted a BIF permit.” Jd. According to Region VI, this amounted to approximately 80,500 pages of documents. See The Environmental Protection Agency’s Expedited Motion to Deny Review, at 6 (Nov. 4, 1994). MSP’s letter did not specifically identify any issues raised by these documents, nor did it reference any specific issues raised in the Proposed Denial. The Region did, however, “in its discretion chose to interpret MSP’s submissions and respond as best it could.” Id. See Response to Comments, AR Exh. E-17.

The Region issued a final decision denying MSP’s BIF permit ap- plication on September 15, 1994. See Statement of Basis for Denial of Permit Application by Marine Shale Processors, Inc. (“Denial”). In the Denial, the Region essentially adopted the rationale articulated in the Proposed Denial, i.e., MSP’s facility is not an “aggregate kiln” and therefore does not meet the definition of “industrial furnace” at 40 C.F.R. § 260.10, the facility's output does not meet the definition of recycled materials or the requirements for a recycled product, the oxidizer units are themselves incinerators and are therefore subject to regulation as incinerators, and, under the Agency’s omnibus authority, the permit was properly denied because of MSP’s prior history of non- compliance with various environment regulations. Denial at 1.

In analyzing whether or not MSP’s facility could be considered an aggregate kiln, one of the 12 devices specifically identified as indus- trial furnaces at Section 260.10, the Region considered, inter alia, whether the facility produced an effective commercial-grade aggre- gate useful to industries which generally purchase such products. See Denial at 13 (“The issue here is whether the hazardous wastes used by MSP produce an effective, usable ‘aggregate’ or whether the hazard- ous wastes produce ineffective or marginally effective ‘aggregate.’”). The Region stated that the material exiting MSP’s facility was tested by experts retained by the Agency as well as the Louisiana Department of Transportation and Development (“La. DOTD”) and compared to other material commonly accepted by industry. Jd. As discussed more fully below, the La. DOTD concluded that the material did not meet appli- cable requirements for use in road and bridge construction in the Sate of Louisiana. In addition, Agency experts concluded that MSP does not

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produce a marketable aggregate product. The Region relied on the fact that MSP never established a market for its material as a commercial- grade aggregate, despite the fact that MSP had produced over 200 thousand tons of this material and that between 1985 and 1989 MSP was free to sell the material to the construction industry. The Region concluded, based on these and other factors, that MSP’s facility did not meet the definition of “industrial furnace” at 40 C.F.R. § 260.10. This appeal followed.

B. District Court Proceedings

In June of 1990, prior to promulgation of the BIF rules, the Agency initiated a civil enforcement proceeding in the United States District Court for the Western District of Louisiana alleging, among other things, that MSP’s combustion of hazardous waste since it began operating in 1985 constituted incineration rather than legitimate recycling. Thus, according to the Agency, MSP was required under the regulations governing the incineration of hazardous waste to obtain an incinerator permit before it began operating.

Southern Wood Piedmont Company (SWP) filed a complaint in intervention in the district court proceeding, alleging that SWP deliv- ered certain materials (mostly soils contaminated with organic wood preserving substances such as creosote) to MSP and that MSP pro- cessed this material separately from material received from other sources. In Count 1 of its complaint, SWP sought a declaration that the material exiting MSP’s kiln after burning SWP’s waste (unmixed with any other waste) was a “product” within the meaning of 40 C.FR.
§ 266.20(b)’ and thus did not have to be disposed of as a “hazardous waste,”

Following a trial on the merits, the jury was asked to respond to a total of thirteen interrogatories. The interrogatories that relate to the issues before us are as follows:

1. Was MSP entitled to a recycler exemp-
   tion from the requirement of a permit as

7 Section 266.20(b) states, in part as follows:

Products produced for the general public’s use that are used in a manner that constitutes disposal ((applied or placed on land)] and that contain recyclable materials are not presently subject to regulation if the recyclable materials have undergone a chemi- cal reaction in the course of processing the products so as to become inseparable by physical means and if such products meet the applicable treatment standards * * *,

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2(a).

10.

11.

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ENVIRONMENTAL ADMINISTRATIVE DECISIONS

an operator of an incinerator of hazard-
ous waste?

Were all of the hazardous wastes ac-
cepted by MSP beneficially used or re-
used or legitimately recycled?

If your answer to question number 2 is
“YES”, skip question 2(a) and go on to
Question No. 3.

If your answer to question No. 2 in “NO”,
answer the following question No. 2(a).

Were all of he hazardous wastes ac-
cepted by MSP prior to August 21, 1991,
beneficially used or reused or legiti-
mately recycled?

Was the material produced by MSP from
[SWP’s] waste a “product” produced for
the general public’s use?

Did the waste material received by MSP
from [SWP] undergo a chemical reaction
in the course of processing the material
so as to become inseparable by physical
means?

Was the material produced by MSP from
waste other than [SWP’s] waste a “prod-
uct” produced for the general public’s
use?

Did the waste material received by MSP
from waste other than [SWP’s] waste
undergo a chemical reaction in the
course of processing the material so as
to become inseparable by physical
means?

Is MSP’s rotary kiln an aggregate kiln?

Are Oxidizers 1 and 2 aggregate kilns?

MARINE SHALE PROCESSORS, INC. 761

12. Is MSP’s slag box an aggregate kiln?

13. Are the rotary kiln, oxidizers Nos. 1 and
    2, and slag box part of a kiln system that
    produces aggregate?

The jury was unable to reach a decision on interrogatories 1-2 and 5-6. That is, the jury was unable to decide whether MSP was a “sham recycler” and was therefore required to obtain an incinerator permit before it began operating. In addition, the jury could not decide whether the material produced by MSP (other than from SWP’s material) met the requirements of Section 266.20(b) (Recyclable material used in a manner constituting disposal) and thus was not subject to regulation as hazardous waste. The parties have indicated that these issues will be retried in the district court.*

With regard to the material from SWP (interrogatories 3 and 4), the jury responded in the affirmative. That is, the jury concluded that all materials produced by MSP from wastes sent by SWP when un- mixed with other wastes satisfied the requirements of Section 266.20(b), and thus need not be disposed of as a hazardous waste. In response, the District Court entered a final judgment giving effect to the jury’s findings on this issue. See Judgment and Reasons for Judgment (Civ. Action No. 90-1240, W.D. La. June 15, 1994) (granting SWP’s motion for entry of judgment pursuant to rule 54(b) of the Federal Rules of Civil Procedure)?

®The district court also heard claims by the Agency alleging certain additional violations aris- ing under the Clean Air Act, the Clean Water Act, and RCRA. By order dated August 30, 1994, the court assessed penalties against MSP for violations of each of these statutes. Specifically, for Clean Air Act violations (failure to obtain a Prevention of Significant Deterioration Permit and failure to obtain a permit for certain minor emission sources) the court assessed penalties of $3,500,000. For Clean Water Act violations (unpermitted discharges of non-contact cooling water) the court as- sessed a penalty of $3,000,000. Finally, for various RCRA violations (involving land disposal and storage requirements) the court assessed penalties of $1,500,000, The court noted that the $1,000,000 fine for storage violations was in addition to a $600,000 fine previously assessed for the same viola- ons in an earlier criminal prosecution. See United States v. Marine Shale Processors, Inc., Civ. Action No. 90-1240, Section “H”, Order and Reasons, (August 30, 1994).

°’Rule 54(b) states as follows:

Judgment Upon Multiple Claims or Involving Multiple Parties.

When more than one claim for relief is presented in an action, whether as a claim, counterclaim, cross-claim, or third-party claim, or when multiple parties are involved, the court may di- rect the entry of a final judgment as to one or more but fewer than all of the claims or parties only upon an express determi- nation that there is no just reason for delay and upon an express

Continued

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762 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

On interrogatories 10 through 13, the jury made the following findings: MSP’s rotary kiln is an aggregate kiln; MSP’s oxidizers are not aggregate kilns; MSP’s slag box is not an aggregate kiln; and the rotary kiln, oxidizers nos. 1 and 2, and the slag box are part of a kiln system producing aggregate. The court, however, did not enter a final judg- ment on these issues.

C. Arguments on Appeal

On October 20, 1994, MSP filed a petition for review with the Environmental Appeals Board. As stated previously, the Board granted MSP’s petition on December 7, 1994, and held oral argument on Janu- ary 12, 1995." The Petition raises a total of nine arguments. These are as follows: 1) the BIF permit denial violated MSP’s constitutional right to due process because the permit application was reviewed and de- cided upon by biased decisionmakers who had prejudged adjudicative factual and legal issues relating to the application; 2) under the sepa- ration of powers doctrine, the Board should defer to the rulings of the district court in the enforcement action and stay the current permit proceedings pending the outcome of that action; 3) under the Seventh Amendment to the United States Constitution, the Board may not rule on factual issues delegated to the jury in the enforcement action; 4) the board is collaterally estopped from redeciding issues previously de- cided by the district court; 5) the Region’s use of the sham recycling criteria was clearly erroneous and violates the Administrative Proce- dure Act; 6) the Region’s determination that MSP is not a legitimate recycler is clearly erroneous and based upon an incomplete review of the administrative record; 7) the Region’s conclusion that MSP’s facility does not meet the definition of an industrial furnace is clearly errone- ous ana impermissibly disregards the jury’s findings and the district court’s rulings in the enforcement action; 8) MSP’s aggregate is a legiti-

direction for the entry of judgment. In the absence of such de- termination and direction, any order or other form of decision, however designated, which adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties shall not terminate the action as to any of the claims or parties, and the order or other form of decision is subject to revision at any time before the entry of judgment adjudicating ail the claims and the rights and liabilities of all the parties.

Fed. R. Civ. P. 54(b).

© Following public notice of the Board’s grant of review pursuant to 40 C.FR. § 124.19(c), the Board received amicus briefs from the Environmental Technology Council and Concerned Mothers. In addition, the Board has received approximately 600 letters from various individuals asking that the Board suspend the current permit proceedings pending the outcome of the district court action. The Board has also received a letter from the Atchafalaya Delta Society opposing any stay of the current permit appeals process.

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MARINE SHALE PROCESSORS, INC. 763

mate product within the meaning of 40 C.ER. § 266.20; and 9) the Region may not deny the permit application based on the Region's conclusions regarding MSP’s prior regulatory history.

For the following reasons, the Region’s denial of MSP’s BIF permit application is affirmed and this matter is remanded to Region VI so that the Region can issue a final permit denial.”

Il. DISCUSSION

The Board’s role in these permit proceedings is defined by section 124.19(a). Under that section, the Board ordinarily will not review a RCRA permit decision unless it appears to be based on a clearly erro- neous finding of fact or conclusion of law, or involves an important policy consideration or exercise of discretion that warrants review. See 45 Fed. Reg. 33412 (May 19, 1980). Once the Board has granted re- view, as it has in this case, it will overturn the Regional Administrator's permit decision only if it concludes that: (1) the Regional Administrator's

4. In a motion dated November 4, 1994, the Region argued that the Board should dismiss the
   majority of the issues raised in MSP’s petition for review on the ground that these issues were not raised during the public comment period. See The Environmental Protection Agency's Expedited Motion to Deny Review (“Expedited Motion”). The Board, however, declined to rule on any portion of MSP’s petition prior to receiving the Region’s response. The Expedited Motion was therefore denied. See Order on the Region’s Expedited Motion to Deny Review (November 15, 1994). In its response to MSP’s petition, the Region again argues that the Board should deny review on the majority of the issues raised in the petition on the ground that MSP failed to preserve these issues for review. See Region's Response at 38.

We agree with the Region that MSP’s written comments in response to the proposed permit denial do not appear to be of sufficient specificity to preserve many of the above-mentioned issues for review by the Board. See 40 C.ER. §§ 124.13 (persons objecting to a draft permitting decision “must raise all reasonably ascertainable issues and submit all reasonably available arguments sup- porting their position by the close of the public comment period (including any public hearing) under §124.10.”) and 124.19 (a petition for review must include a “demonstration that any issues being raised [on appeal] were raised during the public comment period * * *."). We note, however, that many of the issues in dispute were indeed raised by various individuals during the comment period either in writing or at the March 14, 1994 public hearing and, as the Board has previously stated, as long as an issue has been raised by someone during the comment period, that issue is preserved for review even of the petitioner is not the one who made the comment. Jn re Patowmack Power Partners, L.P., PSD Appeal Nos. 93-13, 93-14, at 3 (EAB, Feb 24, 1994) (an issue that is reason- ably ascertainable during the comment period must be raised at that time by someone (not neces- sarily the petitioner) if it is to be preserved for review). In any case, given the importance of the issues involved and the fact that the Region (in responding to comments on the proposed permit denial) proceeded to address many of these issues, the Board has decided that, regardless of which issues were or were not raised during the comment period, the Board will examine the merits of MSP's petition. See American Farm Lines v. Black Ball Freight Services, 397 U.S. 532, 539 (1970) (Agency may relax procedural rules if the ends of justice so require); In re Genessee Power Station Limited Partnership, PSD Appeal Nos. 93-1 through 93-7 at 6 n.5 (EAB, Sept. 8, 1983) (excusing failure to comply with filing requirements of 40 C.F.R. § 124.19 given the nature of the deficiency and the importance of the issues involved).

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764 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

permit decision is based on a clearly erroneous factual or legal conclu- sion; (2) for compelling policy reasons, the Regional Administrator should have reached a different result; or (3) the Regional Administra- tor abused his or her discretion. On review, the burden is on MSP to show that the Regional Administrator's decision should be overturned. For the reasons set forth below, we conclude that MSP has not carried its burden.

As discussed in greater detail infra, we arrive at this conclusion by first examining the threshold issue of whether MSP’s rotary kiln meets the definition of industrial furnace under 40 C.F.R. § 260.10. To meet that definition MSP had to show that its facility is more than an aggre- gate kiln in name; as an existing facility it must also function as an aggregate kiln by producing an aggregate product that is commercially recognized as such. The best evidence of commercial recognition is actual sales of commercial-grade aggregate in the market for which it is made. This market includes the Louisiana Department of Transpor- tation and Development (“La. DOTD”), which is responsible for ap- proving aggregate for use in State highway and related construction projects in Louisiana (MSP’s home State). Under La. DOTD require- ments, ail aggregates must be from an approved source and, in order to be approved, “each sample submitted” shall pass all appropriate tests. AR Exh. A-15. If MSP’s material does not qualify as commercial- grade aggregate our inquiry is ended, because unless MSP'’s facility is an aggregate kiln within the meaning of § 260.10, MSP is not an indus- trial furnace and is not eligible for a BIF permit. The Region denied MSP’s permit application in large measure based on evidence that MSP’s kiln does not produce or sell any significant quantities of com- mercial-grade aggregate. Although MSP introduced into the record evidence to show that some of its product is similar to commercial- grade aggregate in some respects, it failed to identify any evidence to this Board showing that, despite many thousands of tons of produc- tion, any substantial quantity of its product has in fact been used as a commercial-grade aggregate. Therefore, following a thorough review of the record, we agree with the Region’s conclusion that MSP does not function as an aggregate kiln within the meaning of § 260.10. We therefore conclude, for that reason alone, that MSP’s rotary kiln cannot qualify as an industrial furnace and that MSP is not entitled to a permit under the BIF rule. In such circumstances, MSP is required to obtain a permit from the State of Louisiana under the State-equivalent of the subpart O incinerator regulations.

In addition, as also discussed in greater detail infra, we reject

MSP’s process-oriented challenges to the Region’s permit denial. These challenges include MSP’s arguments as to why the Board is prevented

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[MARINE SHALE PROCESSORS. INC. 765
from even reaching the merits of the industrial furnace issue by the doctrine of collateral estoppel, by constitutional separation of powers considerations, or by the Seventh Amendment to the Constitution. We conclude that the Board is not so prevented. Also included among the process-oriented challenges is MSP’s contention that the decisionmakers below prejudged the adjudicative facts at issue in this permit proceed- ing and thereby deprived MSP of its property without due process of, Jaw in violation of the U.S. Constitution. We conclude that MSP has not been denied its Constitutional due process rights.

A, MSPs Status as an Industrial Furnace

‘With promulgation of the BIF rule, 4 combustion device burning hazardous waste is subject to one of two possible regulatory regimes depending on how itis classified." If itis classified as a boiler or an industrial furnace, itis subject to the BIF rule at subpart H of part 266; if it is classified as an incinerator, itis subject to the incinerator rules at subpart O of part 264. MSP does not claim that its facility meets the “boiler” definition, so its facility will be subject to the BIF rule only if it meets the definition of “industrial furnace.”

‘The Agency defines the term “industrial furnace” as a combustion device that: (1) falls into one of several categories of combustion de- vices designated in the definition; (2) is an integral component of @ manufacturing process; and (3) uses thermal treatment to accomplish recovery of materials or energy.'® To date, the Agency has designated twelve categories of combustion devices in the industrial furnace defi nition: cement kilns; lime kilns; aggregate kilns; phosphate kilns; coke ‘ovens; blast furnaces; smelting, melting and refining furnaces; tita rium dioxide chloride process oxidation reactors; methane reforming furnaces; pulping liquor recovery furnaces; combustion devices used in the recovery of sulfur values from spent sulfuric acid; and halogen acid furnaces.

Both parties are in agreement that “only those devices specifically named in the regulations ((., in the definition of industrial furnace ‘contained in § 260.10) are considered to be industrial furnaces for purposes of the regulation.” See 50 Fed. Reg. 627 Jan. 4, 1985) (final rule promulgating industrial furnace definition). Thus, even if MSP's rotary kiln satisfies the second and third requirements listed above— that is, even if its an integral component of a manufacturing process

=e ae tat poe to promolgtion of the BF le the regulations 2nd preambles to those regulations made t very dea at BI engage any waste dso aes wos be
{ed csi an cneaton perm rer Pan 254 Spr ©, See 40 CFR. § 2643991990

se supa nee (efnion of instal mace)
voUUMES

cannot mee ie defiation of ngusralfumace ales tals al fad MSP claims that its facility belongs othe aggregate kiln categoy ‘To quay as an aggregate kiln MSPs aclly must on only have a agurezat kiln by actually produetng aggregate since detining char aterisc ofan agurewate in is that a previaces aggregate A teshold inquiry in determining whether MSP’ facility come within the Indus that oupat should be called aggregate The Agency has expressly rejected the notion that the regulatory regime applicable toa facity whether MBP’ output constitutes aggregate must be judged according a ae ae gs Porcher restelreyeneterpett penance ed eta ber atiorsfonate ptr remehid ulna eee cea san Fel ot 864 Cen 9.185. eee ea eer i eens yas cay reanen nnn teh ecstrdonc ase needernewee eres Nee a eccatenttnnal spent searg

[MARINE SHALE PROCESSORS, INC. 767
to objective indicia. The language of the industrial furnace definition particularly terms like “manufacturing process,” “industrial process,” and “product"—makes clear that appropriate indicia for making such a judgment must be drawn from a commercial context. Thus, to be an industrial furnace and exempt from the rules governing incinerators an existing combustion unit claiming status as an aggregate kiln must be producing and selling a commercially-usable aggregate product, ree- ‘ognized as such by those who buy, sell, or use aggregate in the ordi- nary course of their commercial dealings.

In its denial of MSP’s BIF permit application, the Region looked to recognized experts to help determine whether MSP produces commer- cial-grade aggregate. These experts indicated that industries secking, to use aggregate material in civil engineering projects such as road and bridge construction must obtain material that conforms to certain speci fications depending on how itis to be used. See Summary of Studies ‘and Technical Opinions of Dr. Dallas Little and Dr. W. Ronald Hudson With Regard to Output of Marine Shale Processors Incinerator Residue Clittle & Hudson Report") AR Exh, A-14 at 3 Call civil engineering projects have relatively tight specifications”); Louisiana Department of ‘Transportation, Standard Specification for Roads and Bridges § 1003 (4982) AR Exh. A-15. The record shows, for example, that in Louisiana, MSP's home state, aggregate material must meet detailed specifications prior (0 use in road or other State construction projects and must pass all appropriate tests, including soundness and abrasion tests. [d. at Exh A-15 (all aggregates shall be from an approved source and shall pass all tests specified in the appropriate section)." Based on the resulls of tests performed by EPA experts and others (such as the Louisiana Department of Transportation and Development (La, DOTD")), the Region concluded that "MSP's material is not useful by industries that use aggregate and is not a marketable aggregate prod uct.” Denial at 14,

In support of this conclusion, the Region relied primarily on a report by the La, DOTD addressing the use of MSP’s output for road construction and the Little & Hudson Report addressing the civil engi- neering quality of MSP's output and the potential use of this output for such things as road and bridge construction." See Denial at 13-14. The Region also relied on Dr. Hudson's expert testimony during the civil

"Louisiana als has dead specication for aggegtes Ue or sch hings as pan ‘cement conceeasphalc concrete mite atl san shell mires SOAR Fx AS

tle & Hudson Repo, AK Bah. A-4 at The ft pe ofthe seo sates tha was “suppones by the Texas Research and Development Foundation, ae done incom ith Metcalf and Ely anes els prided by Sous Laborers,

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768 ENVIRONMENTAL ADMINISTRATIVE DECISIONS
enforcement proceeding regarding the potential usefulness of MSP’s ‘output as construction aggregate." Id.

‘The record before this Board contained the following information. First, in 1989, the La, DOTD attempted to test MSP's material and concluded that: 1) it could not test MSP's so-called primary aggregate because it did not have the composition or particle size necessary to perform certain tests; and 2) MSP's so-called slagged aggregate did not pass soundness and abrasion tests required prior to the approval of aggregates for use in road construction. (AR Exh. A-15,). In fact, noth- ing in the record before this Board indicates the La. DOTD has ever approved MSP’s material for any uses commonly associated with ag sgregate in the State of Louisiana.”

Second, the Little & Hudson Report detailed a variety of problems ‘with MSP’s output that would make this output of questionable value for use in construction projects. For example, the report states that due to the variability of the materials entering MSP's combustion facility and the “relatively random way in which the stock piles are stored, sorted, moved, and restored, there is considerable variability in the properties of the material [exiting the facility.” Litle & Hudson Report at 3, The report states that “[since all civil engineering projects have relatively tight specifications which require close tolerances on the various properties of the material and since the physical behavior of ‘any material depends upon it's) physical characteristics to a large ex: tent, this variability is a severe detriment.” Id. At the enforcement proceeding, Dr. Hudson testified that testing results revealed consider- able variability in both the gradation (size) of the material and the ‘material's water absorption. See Tr. Vol 9 at pp. 58, 62. According to Dr Hudson, if the samples tested were “delivered co a consteuction site each day, you would not be happy if you had this much variability on 4 day-to-day basis in the water absorption of the material you pur- chased. It would make your construction process very difficult." Id. at

62. De. Litle further stated that "any material that has day-to-day vari-
    ability in its engineering properties [such as MSP’s output] will have trouble and limited use as a construction material.” Id. at 69.

"Sora Transcript ol 910. Herinater references othe Wal arr wl be ced as ellos lat.

‘nt this connection, lee tat commercial rae agar recogni 52 speci prodksthtcan be ese nd creo or rows purposes Were a we MSP teed Tet 0 sugest ht MSs meal could have some prs esa aggre” MSP as ‘Shs! tt MSU's mtr Py Ul and without an urbe roc ol sti the La DOD requirement for use a Sat ees vOUMES

MARINE SHALE PROCESSORS, INC. 769

‘The Little & Hudson report further concluded that MSP's material would be unsuitable for the following uses: a) as base course or sub- base material because the material does not meet La, DOTD gradation specifications (Little & Hudson Report at 8); b) as aggregate in port land cement concrete because the materials have not been approved by the La. DOTD, “are too fine for use as a coarse aggregate in con- cretei,]* * * and do not meet gradation requirements for fine aggregate for sand.” (Id. at 9); and c) as asphalt aggregate because of gradation variability and high moisture absorption in the “primary aggregate.” Ud. at 11. The study also found that the slagged material was unsuitable for use as an asphalt aggregate because it did not meet minimum specifications in abrasion tests.” Id. at 12. Dr. Hudson concluded that MSP's output is not an aggregate from an engineering perspective because it does not meet the necessary specifications required of ag- gregate generally used in the construction industry. Tr. Vol. 9 at 65. Although, Dr. Hudson did state that at least the “primary aggregate" could be used as general fill material, he indicated that “anything can be used as fill” Id. at 66. Dr. Hudson thus concluded that, in his expert ‘opinion, neither MSP's “primary aggregate” nor its “slagged aggregate” could be considered “aggregate” from an engineering perspective. Jd. at 65,

MSP has argued that the Region ignored clear evidence that the ‘output from MSP's facility has a variety of potential uses including as general fill material, in brick material, asphalt, concrete, and tile. Pe- tition at 193, MSP points out that several companies have already purchased MSP's material and have been completely satisfied with the material's performance. Id. at 189-191. In addition, several other indi- viduals testified that, absent any restrictions, they would purchase (MSP's material in the future. 1d. at 191-92. MSP Further contends that its assertions regarding the usefulness of MSP’s output in construction- ‘elated activities are supported by various expert studies, but that the Region ignored these studies,

Although we recognize that MSP’s experts testified on the poten- tial for using MSP's material in asphalt, cement, or bricks, and that its ‘material has some similarities to some commercial aggregate prod: ucts,” we are struck by the fact that nothing in the record indicates

"in histesimony athe enforcement preceeding. Dr Hadi ted tha he re fe son ting nated a MSPs ouput id nx met aun seiements for asphalt coetee ‘hein ro paving, Te WO! 9 a,

among ecotd evidence edn the ptiton fr even in suppan of MSPs asseion at
{acy rstices commercial aggregate pros tea the allowing De al Que, 1 metus who compared simples Gf sige msl peneaed by oer facies which

770 ENVIRONMENTAL ADMINISTRATIVE DECISIONS
that the material has ever in fact been used commercially for any of these purposes despite the fact that the facility has been in operation since July 1985." Further, we are also struck by the fact that MSP's experts were themselves equivocal in their recommendations regard- ing the potential value of MSP's output, For example, Mr. Sendukas testified that he would not use MSP's material in asphalt mixtures nor did he recommend it for use in concrete mixtures. Tr. Vol. 30 at pp. 7- 8, In fact, the only uses for which he would unequivocally recommend MSP's material is as general fill or for soil cement, Id. at 9, Mr. Sendukas further stated that the results of a 1988 slag characterization study produced a sol hg for commercial purposes with MSPs material and conch ha MS ‘ater hassel” physical and chemeal popes eer waster rods ener bythese ther cin Paton 194,17 We 8 pp 2-32 9 De So Aika, peor ‘fc engineering at Clemton University, who, io 1993, at MSPs equ, condocted tay a Iysing the potential forsang MSPs material in spl nd cement ates fo etre MSs ‘lee could he used for pking ks deve, seeny sad ee scaly ave work 1 Vol 32 at pp. 39-4 Seva AK Fah AZ, conclaed that ater containing I MSP, azar" and 1% “prinacy aggregate" when compare to contol samples, “telly proce yet much the sume eu: ***"T Ve. Bar pp. 4-4, Dr Amihanan also coped ests ‘Sctemine wheter MSs atrial would te untlin concrete, 1, nd hse onthe es ‘once that comers samples containing 1% primary mater (cae mith tesa om? aggregate sources), could be ued for parking ls demas secon onde a se lke i a 8; ©) Rhard Reo, Preset of Chkogo Fesing Labor. in eng, ompany providing ems series tothe gpk pati indsty, AR uh A2, conc “Shorty analssof MSP mater in 199 ote ss nap are for oad ving Vo 0p. 63, and conde hat MSs mater “oud be woe accel n asp ‘atures 7 and VE Seles, professional engineer employed by he consign ‘of Woodway, purcpated i feast stu ofthe beneficial ures MSP materia Fb ‘ary of 7, se vo 29.24 AR Exh A, a conchae that MSPS prney ae alae for sen cment station a tha, en sted wth cmon he resin ater
[ses a: DOTD sandr for so cement, Tro 39 at pp 9435. and a embnknet feundaton Forroad costection a 61 NSP abo res onthe flloing reper 2 sept prepared December a 199, by Dr Deni A roman, profesor of eran eneting aed diese of he Center or Engineering Cenmie Manutatoring a lense Uwe, AR Exh, A 38, which De Brosnan descr MSPs primary aggregate” sul aalogous "send ly aparece ‘ell for auch hinge fl in insisting proses, for prion of concrete Hock. ad footer fonea ses faggots Inlasngconsrtion, il sd paving at. The sagged tea ‘ts ails ps ceramic that Tl analogous to ther glascenmie ncusing on ‘sae CTD which are wellknown ncomenece a5 Acconing to De Brosnan. VSP tra ould be wef inh ee ik making proces ann the rodton of rn es Pons TBS: AR Fx, A181 25.25 and) repo prepare at MSP recs by Baty 1 Mone, ‘nginer working the mana esti eld Me Moore reviewed the ies reared by exes Fee on By the government nthe es enfcemens proceeding sd pepe a sunmay ois pinons eu the wetness of MSP mera Sev AR Exh, 2, Conary tothe Fe of he
[cre expes, Me Mere und that MSPs mata wa stat oes vary of ppstons Sicha pipe bah the development of as or surfae corse win ene wah ater ag ace mae, apa and ase wget Parad cement concrete, Pion 319) we acknowledge tht MSP har Ben pent fom slings ati sins 989, However, ‘hist eaves 2 fourjear period wan which MSPs teil wast sod sommes pede sree but sed pinay as genera vOLUMES

MARINE SHALE PROCESSORS, INC. m
indicated that MSP’s slagged material had “limited potential as a con- struction material since itis extremely brittle and can be easily crushed. by moderate pressure or impact.” Id at 28. In addition, in a February 24, 1987 letter from Mr. Sendukas to Larry Johnson, MSP's Environ- ‘mental Manager (AR Exh. A-19 (Plaintiff's exh, 7 to Jan, 28, 1993, deposition of V. E, Sendukas)), Sendukas stated that MSP's “aggregate samples" were tested and compared to La, DOTD specifications for seven classes of aggregates used in highway construction. The results Of this comparison indicated that MSP's material “meets only the gra- dation requirements for sand used in Sand-Shell mixtures ** *" (Em phasis in original). The letter also states that the material was evalu- ated to determine if, subsequent to further processing, the material might have other uses. The letter states that the material “does not meet any DOTD specifications until it has been screened over the No. 80 sieve; at that point it barely meets the requirements for concrete sand. It should be considered, however, that processing through a No. 80 sieve will remove approximately 50 percent of the original material for which we have not determined any possible use." Id. at 2. The letter concludes that the most promising use for the material "will be as sand in DOTD Sand-Shell mixtures or as a ‘fil! material” 1d.

In addition, during his deposition, Mr. Sendukas expressed his full agreement with the conclusions of a study done by the Petrographic Laboratory of the United States Bureau of Reclamation (the “Bureau. AR Exh A-19 January 28, 1993 deposition of V. E, Sendukas at 466-67) In a memorandum dated October 5, 1988, reporting the results a pet rographic examination of MSP's material designed to determine the suitability of the material for use in aggregate concrete, the Bureau, using applicable standards adopted by the American Society for Test” ing and Materials “with emphasis on the uniformity and homogeneity of the material," concluded as follows:

Visual observation, petrographic particle count, and physical properties tests including gradation, absorp- tion, and average specific gravity indicate the product produced by burning organic and inorganic wastes are not uniform and homogeneous in pasticle type, size distribution, and physical quality. Petrographic examination and physical quality evalua- tion tests indicate [that the sampled materials} are of accorting to Mr Sends, the 198 lind ha iF MSP were oat cok sagged teria te mater would have beter poses ora a consent P-ARABP, homever, never adopted ts gestion Id at 0. vous

™m. ENVIRONMENTAL ADMINISTRATIVE DECISIONS

poor physical quality and would be unsuitable for use

in Reclamation concrete.
AR Exh A-19 (Plaintiff's Exhibit 10 to January 28, 1993, deposition of V. E. Sendukas), at 7.

Finally, we find it significant that the authority charged with ap- proving aggregate sources in the State of Louisiana has not approved
[MSP's facility as an “aggregate source.” As stated above, any aggregate used in Louisiana State highway and related construction projects must come from an approved source and each aggregate sample must pass all appropriate tests. See AR Exh. A-15. The record indicates, however, that the only time MSP's material was tested to determine whether it met minimum requirements for aggregate under La, DOTD specitica- tions, the material did not meet applicable specifications. AR Exh. A- 15, MSP does not dispute this, nor does it assent that the La, DOTD has, ever officially approved MSP's material for any use in the State of Louisiana.

Indeed, the evidence regarding the actual use of MSP's material indicates that it has been purchased primarily for use as general fill material. See Petition at 187-189. While we recognize that general fill ‘material can certainly serve an engineering purpose in certain types of construction activities, we agree with the Region that material suit- able for use as 2 general fill material does not by that fact alone meet the requirements for “aggregate” as contemplated by Section 260,10. See Denial at 16-17

Thus, despite the fact that MSP presented testimony tending to support its assertion that the material it produces “could” have a vari ety of potential uses, viewing the record in its entirety, we do not believe that the Region committed any error in concluding that MSP's facility does not function to produce a commercial-grade aggregate and thus cannot be classified as an “aggregate kiln” as contemplated by 40 CER. § 260.10. In our view, for a so-called "aggregate kiln” that

in fic one of MSP expen witness (Mr Ser) cone tht ee MSPs primary aggregate nor a0 ald caged aggre as vee cede telat aed ‘Products maine by the La DOTD, Serr Vol Sat pp.

"Ao MSP sates ins pttion, Dr Hon testis atthe ch forcement pocesing tt fll ‘mae can in certain tances serve an engnring purpose ah as fo ras the Wve of ase 10 peeve Nocing Te NaL 10 pp.910

® se 56 Fe Reg 7159 (Fey 21, 1991 (The Ageny alg en skeptical of ais that Imzardous wastes are reyes when they subse for very coon arabe and economy cally marginal ype of materiale VOLUMES

MARINE SHALE PROCESSORS, INC. ™
claims to have been in the “aggregate manufacturing” business since July of 1985," MSP should have easily been able to produce convine- ing and unequivocal evidence of actual commercial uses and sales of its material as commercial-grade aggregate, rather than having to rely ‘on testimony regarding potential uses ofits material or on laboratory comparisons of its material with that of others. Yet, despite its longev- ity and the fact that MSP has produced over 285,000 tons of material,” MSP was not able to counter the Region's contention that MSP has never established the existence of a market for its so-called aggregate by showing that it has regularly sold its aggregate for use in industries typically utilizing commercial-grade aggregate, such as, industries en- gaged in highway or building construction or cement manufacturing.” ‘As noted, for the most part MSP could only produce witnesses t0 say they purchased the material for general fill” In such circumstances, ‘we agree with the Region's finding and conclusion that MSPs facility is not an aggregate kiln. We therefore conclude that the Region was correct when it determined that MSP does not operate an aggregate Kiln” within the meaning of Section 260.10, and is not, therefore, an industrial furnace.” For the reasons stated above, we affirm the Region's permit denial.”

See agen 2

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sr4 ses 28.04 GC bole consent Nsom ene nee even
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nis connection dat that he mater pod by MSP ay wel be “pda” within iemesningol CFA 528820 me dpe the quinn ower MSP pet 'sSgurete” Hee here more han ace cinch white Re coal come Conde ta MSPs prt it "ae

"Asan adsl sor dein MSP pet appt ion cond hat MSP cary nex a gl compes of» aching pies Rents onsen based on ts dtrminaton at SP Dus aaron wae by yy sh parse

vouwMes

™ ENVIRONMENTAL ADMINISTRATIVE DECISIONS
B. Collateral Estoppel, Separation of Powers, and the Seventh ‘Amendment

MSP argues that the Board is prevented from reaching the issue of whether MSP's facility is an industrial furnace by the doctrine of col- lateral estoppel, by constitutional separation of powers considerations, and by the seventh amendment to the United States Constitution, For the reasons set forth below, these arguments are rejected,

1. Collateral Estoppet

In late May 1994, approximately four months after the Region had tentatively determined that MSP's facility did not meet the definition of an aggregate kiln,” a trial took place in the RCRA enforcement action and the case was submitted (0 the jury for its verdicts on several interrogatories posed to it by the court. The jury, however, was unable to arrive at a unanimous decision on all of the interrogatories, and was discharged from further service on the case on May 24, 1994. As a direct consequence of the jury's indecisiveness, MSP moved for, and was granted, a mistrial on the undecided interrogatories. Tr. Vol. 59, at 12-13, 24 (May 24, 1994). Moreover, because of the incompleteness of. the jury’s verdicts, the court was unable f0 enter a judgment on any of the claims against MSP (although the verdicts were sufficient for the ‘court to enter a judgment on Southern Wood Piedmont's (SWP's) claim, which concerned the regulatory status of certain materials that SWP had sent to MSP). Thus, at the end of the current phase of the district ‘fdestton, rer tan fr lena eying purposes. In upholding the Region's denial of "Sts permit applet, we do mre ths conclanon, Whe we nes ne define die ‘hese nw, weet that we have serous doubt ar to wheter afer promulgation he IF oe ‘he pupone Fr which MSP is uring hazard wea the faye clea ote desea tin of whcher MSs fay met the nal race dein, Our reading othe ngage thelr ofthe indi Frac defn and eB appli provion ttn 2681000) ‘Spe hat TIP may be engaged io mpl eterpases inducing During wanes for det ‘hm an thas the purpose for which irda wae bred athe alt fas ie ono Dean. ‘on wheter the fay ct the sil race defn Nor the pape elvan yes ft act that MS caso using hazatdous waste a mgr nt proses.

‘The Reo perm deni was lo bse the elie hat MSP cies ae terse Incinerators. Ths, acconting the Region even MSP were ined engaged in manu, process andthe xiiaes wee considered to be integral components of tat proce, he Fay ‘would til equ an incinerator perms. See Proposed Denial at 228, Dena at 1. Howeve 35 todays decom afm he Regios pent denim the oud that SPs fact Joes at po. luce agente contemplated yy 40CER 28010, and thertore des no met he defini minds furnace, we do pox decide the ata of MSPs ni

‘Proposed Denial at 1 anwar 31,1990.

1 Wo. $9atp 24 (May 24, 1990,
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court RCRA enforcement proceeding as we know it, the case is subject to a retrial (except for the SWP matters)

‘The record before us does not disclose what effect, if any, the court intends to give on retrial to the interrogatories for which the jury ‘was able t© provide answers.” For example, the jury affirmatively found that MSP's “rotary kiln was an aggregate kiln” (interrogatory 10), and the “rotary kiln, Oxidizers Nos. 1 and 2, and slag box [ate] part of a kiln system that produces aggregate” (Interrogatory 13). Based on these answers, MSP strenuously argues that the Region was precluded, under the doctrine of collateral estoppel, from having decided in its September 15, 1994 final permit decision that the facility is not an aggregate kiln. Petition at 47-53. In response, the Region argues with equal conviction that the jury's answers are not entitled to preclusive effect, since the requirements of collateral estoppel are not satistied in this instance.” Region's Response at 83-110. As discussed below, we believe that the law in the Fifth Circuit, which is controlling for pur- poses of analyzing the alleged preclusive effects of the jury's answers, is on the side of the Region.

‘There are three elements to collateral estoppel: (1) the contro- verted issue must be identical in both the prior and subsequent ac- tions; (2) the issue must have been actually litigated in the prior action; and (3) the resolution of the issue in the prior action must have been, a necessary part of the judgment in the earlier action, Recoveredge 1.P. v, Pentecost, 1995 U.S. App. LEXIS 3019 at 15 (Sth Cir, Feb. 17, 1995), Hughes v. Santa Fe Intern. Corp., 847 F.2d. 239, 240 (Sth Cir. 1988) For purposes of this decision, we assume that the first 1wo elements

NSP refers tothe jury's anes “spose jury vedi." Petion aS, n.12 The only mates crigating nthe ry that are appropetly characteied a aap jy vec te ‘hej Sarse to merogaorc 3 and 4, which form he has forthe ou eey odie ‘espocigthe eglory status of material prediced MSP foe SPs mater Asch ha ‘vert isnot dspostive ofthe aggregate in ans of NSP ay,

the jury determin Nowever that nether onze nos and 2 nor the ge were azure kn letemogatores 1 ap 12

The Regions postion an appeal content wh ts erm in efi pet ni econ tht th jury's arse id nox pete ening a Macy Ws 0 a
[te hin for parpoes of 0 CER (2510 (Gfining nda fume" So Denia 1 CEPA is ‘Sexermined that it wal den the pera appoon case NSP doe ot me the dein fa sri hla 7, Del 2 Cte Agency des nce nance was nay a ea ‘Sbiy ore adem oh emptor vite ened 0).

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have been satisfied As to the third element, it reflects in part the finality of an issue's resolution, In other words, an issue that has been resolved and incorporated into a final judgment has the requisite final- ity. The focal point of our analysis therefore centers on the finality of. the jury's answers to Interrogatories 10 and 13, which declare that the MSP facility is an aggregate kiln, in dizect contradiction to the Region's tentative determination of January 31, 1994 (which the Region later reaffirmed in its final decision of September 15, 1994). As discussed below, we conclude that the requisite degree of finality is missing from the jury's answers to these interrogatories,

In Avondale Shipyards, Inc. v. Insured Lloyd's, 786 F 2d 1265 (Sth is. 1986), the court clearly affirmed that in the Fifth Circuit collateral estoppel is only applicable when a final judgment is rendered. The court held that a partial, interlocutory summary judgment “was not a final judgment for purposes of either true res judicata or collateral estoppel,” explaining as follows

[As we said in International Union of Operating Engi- neers v. Sullivan Transfer, Inc., 650 F.2d 669, 676 (Sth Cir, 1981), “Ihe requirement of finality applies just as strongly to collateral estoppel as it does to res judicata.” See also, eg., White v. World Finance of Meridian, Inc,, 653 F.2d 147, 149-52 (Sth Cir. 1981) (reciting “final

ins connection, we do ot necessary ace tht the suse a at, end Whee M's combust facty andi race maha the caning of Scion 250.10 rele the ppl of aww feta ad we do nt edhe urs answers the teepatores as neces

"in ond tn court hel tat spe part rcetory suman udgment a al Judgment, # does nt have any ada ean exo elec The ror acon was @ Peto injury ction inven» spite da hip tat ws under conan i a ya ‘The pat sammary let nese hn ofthe sp cers, adel hat hep yard owner, Avondale, was the owner pro hac eof the ven in qoenion. The ermal fry 2etion was eventual stled, and he cou sgned al Jxjpnen aPproring the setement ith the ned hiptiner bur wth making any ference o he hadi he par arena

Asstucuee action n ances cou was brought by Avondale gan Aton’ nse =n ‘he employer fhe ted ships nan efor wo collet on an insane pando be ine ‘ied by the employer under the terms cts contact mth Avondale. Avondale se that the ‘ace prt sumuy jms holding tat x was the owner pr Bacco the ves, wis ‘cde incor ad therefore sould ae be acted om ecocrng insurance by reason 2 “Satercaf exclusion’ inthe insurance pole. Avondale made anlar contersons reading the spent ate The dive oun ue again Avondale on that pee, Buon appeal the Ph ‘Grout agreed wih the sip omer ad eld tha Avondale was or cally expe fam ligating the oweertip question by reason ofthe ee pata sumaray den ‘voUMES

[MARINE SHALE PROCESSORS. INC. ™
judgment” requirement for both claim and issue preclu~ sion). This partial summary judgment order did not even determine Avondale’s liability—there being no deter- ‘ination either of fault on its part or of causation— ‘much less King's damages, and hence was interlocu- tory and not appealable. Cf. Fed R.Giv.P, 56(c) (sum- mary judgment on liability alone “interlocutory in char- acter"), 786 F.2d at 1269 (footnote omitted) (brackets in original)

Importantly, the court in its ruling specifically acknowledged that there ate some authorities which hold that less than complete finality may nevertheless suffice for purposes of issue preclusion, or collateral estoppel. It noted, however, that the most prominent of these cases involved instances where the issues were already resolved on appeal before the final judgment in the first action. 786 F.2d at 1270. Tt ex- pressly declined to apply the doctrine of collateral estoppel to situa- tions where appellate review had not taken place. Id. at 1270-71. The court also expressly disavowed the position espoused in the Restate- ‘ment (Second) Judgments, § 13, which adopts the view that final judg- ‘ments for purposes of issue preclusion include a prior adjudication in ‘nother action that is “sufficiently firm" to be accorded “conclusive effect,” It noted that Moore's Federal Practice treatise takes the posi- tion that the Restatement approach presents serious problems. Accord- ingly, the court concluded that it would not depart from its previously stated rule that “an order granting partial summary judgment ‘has no *
** collateral estoppel effect." 786 F.2d at 1272 (citation omitted).”

“sexton 15 of he Restatement Second) fudgments provide a allows

“The mes of res att ate appeal only when al ul
trent is rendered Homever. or purposes of ie preclusion CStisingsea fom megan), nal agen cs Shy prov aoc ofan sen sesh acon that dee tine be sient Rr io be acorded conch let,

‘The Gut of Appea fore Fh Ci may have recente ts own carey cons “red opin on his pon. acesrege Potent ra. ne court appears rey on he esarement view tepaing concsvenss, Kl af, denied xp reecton of that Ye 0 "mal Spurs Ine. Specialy the cou soggets prea hat “ry vet ‘perc eu ffl dgnen scone for purposes fase rehsion” Hd pare ‘alrcerece to tant 3 the Retemen§ 13). The fat hart de hs comet ‘Sahout mending te srin iver tthe Resatcmet Avondale Sopra, nc sagas at Uhccounmay have onehoked he arondal precedent even thowgh Arndale peat Cc cuewher inthe cous onan, but for an unelated mater In any even, base there ae Unt creumstnoes a ight ean dfcation Or ever uth econ fay vert fr to city offal ude, we tink x more acute eto af he pit the ou 38

78 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

Because the issues decided by the jury in the MSP case have not ‘been incorporated into a final judgment, or partial final judgment," we find that the jury's answers to the aggregate kiln interrogatories lack the requisite finality to be accorded preclusive effect in this permit proceeding. We arrive at this result based on our understanding of the law in the Fifth Circuit. See, Avondale Sbipyard, Inc., supra, In addi- tion, we base it on the following additional considerations, which ‘establish, individually and collectively, that the jury's answers are not sufficiently firm to be accorded preclusive effect. First, we don't know what effect the district court intends 10 give t0 the jury’s answers on retrial, eg., the extent and manner to which they will be integrated into the proceedings on retrial. The district court expressed uncer- tainty over the relevance of the jury’s answers to Interrogatories 10 and 13 to any final judgment that might be rendered in the continuing enforcement action, noting that the answers "may be of no conse- quence” because “Ihe only real issue concerning interim BIF status ‘may be whether Marine Shale was a recycler before the BIF regulation went into effect.” Order and Reasons: Motions for Judgment under Rule 54(b), at 6, n.1 (Civ. Action No. 90-1240, W.D. La, June 21, 1994) (emphasis added), Second, because the jury's answers to Interrogato- ries 10 and 13 have not been incorporated into a judgment having finality, the issues decided by the jury are subject to retrial before another jury, pursuant to the court's plenary authority under Rule 54(b) to revise any order of form of decision (which encompasses jury ver: dicts) not certified final in accordance with the rule, Fed. R. Civ. P, 54(b); see Thompson v. Trent Maritime Company, Lid., 343 F.2d 200, 203 (Sed Cit. 1965) Clik is submitted that, under the language of Rule 54(b), wherein it refers to ‘any order or other form of decision, how- ever designated,’ is inclusive of jury verdicts, as well as court orders."). ‘Third, the jury's answers are also subject to revision under Rule 49 if they are in any way inconsistent with the answers to any other inter- rogatories on retrial, or with any general verdict. Fed. R. Civ. P., 49. Fourth, the jury's answers are presumably subject to a motion notwith- standing the verdict at end of the new trial. See Fed. R, Civ. P., 50. Fifth, the jury’s answers have not been subject to appellate review, which could only take place after the retrial. Sixth, and last, since the jury did ‘merting to maken Recordi that a ary vere rendered before cay ofl jeden say be (rater than“) conclusive for purpses of ise pecusion Even under Racers the u's aprwer fo integer 10 and 1} sl would ao be given prelsive effects, Caplaned elvewhere inthe text, they are not slice fen to be given tat eft

“Under le 54) of Ue ede les of Gil Procedure aj may emer a dgment on sex than al ofthe clans pending foe te cout if eo hed ha there no enon 0 (yt cave ber and ypctcly dr the clerk wo enter ado the i) a hc ‘tn Absent complance with ose requirement, ay sch ul ones ha al the ls subject eve at anytime The ent fhe re pcan cone above vouMes

MARINE SHALE PROCESSORS, INC. a
not answer the interrogatories until after the Region had already made a tentative determination to the contrary on the ageregate kiln issue, there is ample basis for arguing that the Region's final decision, which relates back to the earlier tentative determination, is actually prior in time to the jury's answers, In that event, the jury's answers lack the necessary temporal quality of being antecedent to the Region's deter- ‘mination for preclusion to take effect.

As a separate matter, MSP also contends that, in addition to the jury's answers, various rulings of the district court should be accorded preclusive effect and thereby preclude the Region from determining that MSP is not an aggregate kiln, or industrial furnace. Petition at 47- 53, This contention is also subject to, and fails, the finality test of Avondale Sbipyards, Inc. There simply has been no ruling by the court that constitutes a final judgment precluding the Region from determin- ing that MSP’s facility is not an industrial furnace. The district court's only ruling under RCRA, of which we are aware, that has attained the requisite finality (ie., reduced to a final judgment under Rule 54(b)) is the ruling that concems the regulatory status of materials produced by MSP from Southern Wood Piedmont (SWP) materials. See Judgment and Reasons for Judgment (Civ. Action No. 90-1240, W.D. 1a. June 15, 1994). That ruling was made pursuant to Rule $4(b), and thus may be regarded as final for purposes of issue preclusion. However, the con- ‘clusion in that ruling that such materials are not subject to regulation as hazardous waste does not in any way compel the conclusion that MSP'S facility is an aggregate kiln or an incinerator. The ruling was based on the jury's answers 10 Interrogatories 3 and 4, which do not reach the issue of MSP's status as an aggregate kiln. Therefore, con- trary to MSP’S contentions, that ruling does not preclude the Agency from denying MSP a permit under 40 CER. Part 266 on the grounds that the facility is not an aggregate kiln

Accordingly, for the reasons stated above, we conclude that col- lateral estoppel is not a bar to the Region's denying MSP's permit application on grounds that the MSP facility is not an aggregate kiln, and hence, not an industrial furnace,

2, Separation of Powers Doctrine

MSP contends that EPA is violating the separation of powers doc- trine of the Constitution by continuing the permit proceeding while the enforcement case is pending before an Article Il court Petition at 38-43, To correct this situation, MSP argues that; (1) EPA must defer to various determinations of fact and law made in the district court pro-

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ceeding:* and (2) EPA must stay its hand in this matter pending the ‘outcome of the district court proceeding, The basis for this later con- tention is not entirely clear, for MSP neither explains it clearly nor cites any case law directly analogous to the instant proceeding. ** See id. We will assume for the sake of discussion, however, that MSP is contend.
{ng that the Region has in some way first submitted a particular matter for decision 10 the court but has subsequently initiated a separate administrative proceeding to resolve the same matter. If chat were the Scenario presented to us we would agree that an issuc would arise as to which forum should properly exercise jurisdiction in those circum- stances. But that is demonstrably not the situation we face,

Here, we are confronted with one proceeding that was initiated bby the Region and the other by MSP. EPA Region 6 initiated the first proceeding by filing a civil lawsuit in federal district court in June of 1990, alleging inter alia that MSP’s combustion of hazardous waste since it began operating in 1985 constituted incineration rather than legitimate recycling. Thus, according to the Region, MSP was required to obtain an incineration permit from the Louisiana permitting authori- ties (because authority to administer the incinerator permit program

“For al patil pups, ths contention sas separately, above under the cll

“MSP apps ory principally up Town of Dol N¥- FOG, 992 F240, 428 2d
{1999 nic he cou a] jude etered by an Ane cout having jus
{ion ter that udgments nox subtree ranch of the omerment= CE pis ae) Ye, MSP pete o no dmc ofthe ds cour thatthe Agency allegedly Fenorng or ply overuming MSP a es hea upon te dseetng opin in
{EF 791 241254 Cl cot. den, 442 US. 921579) Tee the oy ected an tent to-enoin an adminstrave enorcemen: action, which the CFTC bad comunenced cou “hase tn the sume vations of aw involved inthe administrative proceedings, xt seeking deret ‘elit Hn 391 Fda 1238, SP stlance on Bae cse i uavating fei vos the alg the eae adel exchaey upon the sens, which bloat natibe wth case Ane ‘ase upon mach MSP places comiderslerelance California FPG 369 US. 452 (195). But that case dingustabl, in part ea on the pound hat he execive beanch the over Inet was self de oer the Fede! Pere Commsons cece fanart uae lon. The Atorney Gea win coun peewee cil anti chon regain he acqustion ‘Fone composts sack by aot, et he FC, an independent agen, wa approving the mengrofthe to corpo The Alomcy Gener oppasd the PPC scree of amansaive icon approve the merger for ht approval was abou inconsisert wth the postion ring taken incr y the Deparment of juice, Under the cecustances, at spas ha ‘he Coun hel. "We le only on one select ie ad hat should the Commision proceed 02 ‘tcslon onthe ments meses apaton wen tees pening the count challenging.
{he vay ofthe tat ansacton unser the ant laws? We nk nt We hin the Commission inthe ccumances shold sat the decison he courts” 309 US. at 187 oh stant pro coting there no sich confi Hetween the Dearne of Junie ad PA thereover tht ‘son alone, California FC isnot controling VOLUMES

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had previously been delegated to the State)" under State regulations governing the incineration of hazardous waste. Since MSP had. not obtained a State incineration permit, the government's lawsuit alleged Violations of the RCRA permitting requirements. Importantly, at the time of filing the lawsuit, the BIF rule requirement was not even in existence, Although the Agency had earlier proposed rales governing the permitting of BIFs, the rules were not adopted in final form until their promulgation in the Federal Register on February 21, 1991. 56 Fed, Reg, 7134, et seq. The second proceeding was initiated by MSP, solely of is own volition, in May 1991, when it filed a Part A applica. tion for a BIF permit in order to obtain interim status under the BIF rule. In addition, in April of 1992, in response to Region VI's directive to file Par B of the application, ASP submitted a six-volume applica- tion for 4 BIF permit.” By submitting Part A of the application, MSP took the first formal step in requesting the Region to issue ita permit lunder the BIF rules; also, by submitting a six-volume application in response to the Region’s subsequent request tha it file Part B of the application, MSP thereby further confirmed its intention that EPA should proceed with the processing of the permit application, Following re- ‘ew of the permit application, the Region proposed denial of the permit on January 31, 1994, and thereafter, following a public hearing
{ind period for public comment, made the final decision on September 415, 1994, (Although the Region obviously did not grant MSP’s request for a BIP permit, it did ultimately make a decision on the request, ‘which is all that any applicant is entitled to after asking the Agency (0 process a permit application.)

From the foregoing chronology, it can readily be seen thatthe two proceedings arose separately; and since the second proceeding was

“The Ste of Lut sched im asorton anier baafos wae ro- rom ink lt fra gs onan 2,198 Fl alton as eleve n Febs 71985 eS ed Ree 33889 24 185)

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7 ENVIRONMENTAL ADMINISTRATIVE DECISIONS
initiated by MSP, that proceeding can scarcely be characterized as an EPA-initiated push to acquire jurisdiction over matters properly re- served to the district court under Article III of the Constitution. The permit proceeding thus went forward at the behest of MSP, after the enforcement action against it had been filed in district court. Neverthe- Tess, early on MSP could have sought a suspension of the permit pro- ceeding if it truly believed that a constitutional collision between EPA and the courts Was about to occur, For example, immediately after filing the Part A application, MSP could have requested the Region to stay processing of the application, but it did not. It also could have requested the Region to stay further processing of the application when it was asked to file Part B of the application, but it did not. In fact, MSP did not ask the Agency to stay its hand until shortly after it received the Region's proposed decision on its permit application.” ‘Thus, it was not until alter MSP was able to take a look at the Region's hand did it become inspired to seek a stay of the very proceeding it had initiated. The Region denied the request on February 22, 1994, responding in part as follows EPA disagrees with your characterization that [the] proceeding on the permit application causes itreparable harm to MSP and is a waste- ful use of administrative resources, First, MSP's vice president and general counsel George Eldredge has already been quoted as stating that “whatever action EPA proposes, and whatever the outcome of the lawsuit, the ease is going to drag on for years. In the meantime, we'll be doing business as usual.” This assessment contradicts your asser- tion of irreparable injury. We also note that it was MSP that filed the permit application, and the application has been reviewed by EPA and
{ready for administrative disposition, It is in fact an Agency permit- ting priority, announced as part of the Agency's May 1993 Draft Com- bustion Strategy, to expedite processing of permit applications of ex- isting, operating hazardous waste burning incinerators, boilers and industrial furnaces. Furthermore, as you are aware, a key reason for the timing of the Agency's tentative denial was the express urging of the District Court in the civil enforcement action. Lotter from Walter L, Sutton, Jr, Acting Regional Counsel, Region 6, to Christopher H, Marraro, Howrey & Simon (Peb. 22, 1994) (empha sis added) (citations omitted). Thus, assuming that there is no material rror in the Region's characterization of the district court’s actions, it ‘appears that not even the court looked upon the Region’s processing atc een Cvstopher Maar, Hare & Simon to Carol M. Bowne, Adminsator of a re 10, 198 This eer was evenly eer othe Reon fr response. See fm Wer Sato, Acting Regional Counsel yon 6 Copher Haar, Hone Simon (Feb 2,990. ‘vouUMEs

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of the permit application as an infringement upon the court's powers. We naturally see no reason to find a conflict between the court and the Agency when the court itself sanctioned the continued processing of MSP’s application, Although obviously there are overlapping issues in the two proceedings, their resolution is aimed at fundamentally differ- ent objectives, which fall outside of each other's assigned domain. Thus, the cour. is charged with determining whether MSP violated pre- DIF rule permitting regulations, whereas EPA is charged with applying the BIF rule in determining whether MSP is entitled to receive a BIF permit in the BIF rule era. For obvious reasons, the court is in no position to make the latter determination; nor is EPA in a position to make the cours ruling."

Accordingly, we reject MSP's contention that continuation of this proceeding violates the separation of powers doctrine of the US. Constitution,

3. The Seventh Amendment and Issues Before the Jury

Because there are issues in the district court enforcement action that are common to issues before the Agency in the administrative ‘permit proceeding, and because the enforcement action is being tried before a jury, MSP contends that the Seventh Amendment bars the
[Agency from deciding those same issues in the permit proceeding. Petition at 43 et seq. This argument is litle more than a variation on the separation of powers and collateral estoppel arguments discussed above, for it amounts to no more than telling the Agency that it should stay its hand because the case is now before an Article IIT court that is being tried before a jury. This argument is rejected for essentially the same reasons discussed earlier. For example, MSP contends that, with respect 0 issues on which the jury has already made findings, the ‘Agency is bound by those findings.” Id; Tr. at 20 Jan. 12, 1995) (oral argument), The practical import of this contention is to give preclusive ‘effect to the jury's findings even though the law of collateral estoppel,

• Moroney, thee his bee Ho sdminktatne review cr miiton ofan Arle coun’s
  pigment, could the he, becuse the dart cou has sme pigment inthe dl Coforemont scion that weld recone he Agency fom conclu that sey ot a ae fe hn The oe judgment wich he duct cou entered (peraingt the produc” ade by INSP fom Se mara to ey lite scope, and docs nok determine any moe respecting NSPS lite lay, mach xe redone the Reon tom Sing any ofthe round or he Region's permit decom

“Accor to MS, ry fxd ha NSP ln an aprepate atMSP pent system that prouces 2 agp, and aa sgicat perce ofthe waste recived by MSP “ergoes chemsca acon sos toPeconc spare by phy mca ands transformed into" produced er the general plc's se" Peon at

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784 ENVIRONMENTAL ADMINISTRATIVE DECISIONS
as discussed earlier, clearly provides that “issue preclusion” only at- taches when an issue has been incorporated into a final judgment. tn the present instance, the issues that are subject fo jury findings have never been reduced to a final judgment; consequently, they cannot have a preclusive effect on issues pending before the Agency in the ‘permit proceeding. We note also that neither the progress nor comple- tion of the instant permit proceeding does anything to prevent the ‘court case from continuing to be tried before a jury, and hence, does nothing to deprive MSP of its rights under the Seventh Amendment." None of the Region's findings, nor ours, will deprive MSP in any way of its right to have the enforcement case tried before a jury. The en- forcement case will move forward, before a jury, in accordance with the district court's own schedule, and subject to whatever rulings it ‘ight (or might not) make pertaining 0 our findings.” Accordingly, for the reasons stated, MSP's Seventh Amendment claims are rejected.
©. The Bias Argument
[MSP charges that the denial of its BIF permit application consti- tutes a deprivation of property without due process of law because the person or persons who made the decision to deny the permit applica- tion were biased. See Goldberg v. Kelly, 397 U.S. 254, 271 (1970) (An essential clement of any meaningful due process hearing is an unbi fased decisionmaker), Specifically, MSP charges that the ultimate decisionmaker, Dr. Allyn Davis, who is and was at all relevant times the Director of the Region's Hazardous Waste Division, and the Re- gional staff members who reviewed MSP's permit application prejudged the adjudicative factual issues in the case. MSP also charges that Agency personnel involved in the prosecution of the District Court action against MSP unduly influenced the Regional staff members responsible for reviewing MSP’s permit application, thereby infecting the permitting Staff with prosecutorial bias, For the reasons set forth below, we reject te Seventh Ament poids “In Sit commn aw, whet the ae in cosroversy sal exceed event las te i fal yy sal preserved 2 fae by a ay Shall beotherwse r-erained nay Cour othe United Sates, han acon heres the Common iw US. Const amend VI ‘eis not inconceivable ous thatthe set out mig ook upon ou dings as having some cider) weight ol vale, for purpones of the court proceedings Ia that ever, sce the coun procecung il peng the coum asthe ex 1 aro dsm a ings iro slings inching ny ings peainng tthe flet of the a's eae dings Inher ttrds sprite orthe cna to aes and anion the eos of posal cei sn “tn ray, 35 F3 199(6t Ce. 1990, ae Grfinanceraw Nordbr. 92 US. 38 (1989), are napposie and tsp MSs inerpeaton Oe Seventh Arendt ‘vOUMES

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MSP's claims of prejudgment and bias. The evidence MSP cites in ‘suppor of its claims does not come close to overcoming the presump- tion of honesty and integrity that attach to the actions of government personnel. We also conclude that review by the Environmental Ap- peals Board is an integral part of MSP's due process hearing and en- Sures that MSP's claims are heard by an independent body within the ‘Agency before final Agency action is taken on MSP's permit application.

1, Prejudgment

Decisionmakers at administrative agencies are frequently required to perform multiple functions within the agency. For example, 2 decisionmaker might be called upon to participate in the investigation Of the facts of a particular case, come to preliminary conclusions about the facts of the case, recommend a disposition of the case based on those conclusions, and then serve as the decisionmaker in the same case. The due process implications of such mixing of functions were discussed at length in the U.S. Supreme Court decision in Withrow v. Larkin, 421 US, 35 (1975),

In Withrow, Wisconsin's State Examining Board was charged with enforcing State statutes prohibiting various acts of professional mis- ‘conduct by physicians. The Court held that it would not violate due process for the Board, which has the power to adjudicate charges and Issue license suspensions, £0 investigate the conduct of a licensed physician, make findings of fact and conclusions of law that the phy- sician had engaged in certain proscribed conduct and that there was probable cause to believe that he had violated certain criminal provi- sions, and then institute charges on the basis of those findings and ‘conclusions, The Court observed that:

It is also very typical for the members of administrative agencies to receive the results of investigations, to ap- prove the filing of charges or formal complaints insti- tuting enforcement proceedings, and then to partici- pate in the ensuing hearings. This mode of procedure does not violate the Administrative Procedure Act, and it does not violate due process of law. ***

Here, the Board stayed within the accepted bounds of due process. Having investigated, i issued findings and conclusions asserting the commission of certain acts ‘and ultimately concluding that there was probable cause to believe that appellee had violated the statutes.

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786 ENVIRONMENTAL ADMINISTRATIVE DECISIONS
‘The risk of bias or prejudgment in this sequence of functions has not been considered to be intolerably high of to raise a sufficiently great possibility that the adjudicators would he so psychologically wedded to their complaints that they would consciously or uncon sciously avoid the appearance of having erred or changed position, * ** ‘The initial charge or determination of probable cause and the ultimate adjudication have different bases and purposes. The fact that the same agency makes them in tandem and that they relate to the same issues does not result in a procedural due process violation. Withrow at 36-58 (Footnotes and citations omitted). The Court also described the heavy burden that must be bone by one who would claim that the mixing of investigative and adjudicative functions has worked a denial of due process: ‘The contention that the combination of investigative and adjudicative functions necessarily creates an un ‘constitutional risk of bias in administrative adjudication has a much more difficult burden of persuasion to carry. It must overcome a presumption of honesty and integ rity in those serving as adjudicators; and it must con- vince that, under a realistic appraisal of psychological tendencies and human weakness, conferring investiga- tive and adjudicative powers on the same individuals poses such a risk of actual bias or prejudgment that the practice must be forbidden if the guarantee of due pro- cess is to be adequately implemented, Withrow at 47. MSP must carry this burden if itis to demonstrate that Dr. Davis and his staff prejudged the adjudicative factual issues of this ‘case oF were infected with prosecutorial bias from the District Court enforcement action against MSP.

‘To show that Dr. Davis and his staff prejudged the adjudicative factual issues of this case, it is not enough for MSP to show that they formed or even expressed opinions about those issues before the hearing. Rather, in the words of the Withrow decision quoted above, MSP must show that Dr. Davis and his staff were “so psychologically wedded to [those opinions that they] would consciously or uncon- sciously avoid the appearance of having erred or changed position,” and that such opinions “as a practical or legal matter foreclosed fair voUUMES

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and effective consideration” of the evidence presented during the permitting process. fd at 57-58. Put another way, MSP must show that the minds of Dr, Davis and his staff were “irrevocably closed” on the adjudicative factual issues raised by MSP's permit application. FT-C. v. Cement Institute, 333 US. 683, 701 (1948) (no due process violation despite fact that Commission had prior to hearing indicated in reports to Congress its position on facts at issue in pending case, where the Commission's earlier investigations of the issue “did not necessarily ‘mean that the minds of its members were irrevocably closed” on the issue and persons suffering deprivation were “legally authorized par- ticipants in the hearing’). MSP has not even come close to making the showing necessary to establish prejudgment. At most, MSP has shown that Dr. Davis and his staff formed preliminary opinions about the nature of MSP's combustion activities and its status within the RCRA regulatory scheme, as they were required to do in the course of Fulil- ing their statutory and regulatory obligations.

In support of its prejudgment argument, MSP relies on the tran- sctipt of a deposition of Dr. Davis taken by MSP in the District Court enforcement action. During the deposition, MSP asked Dr. Davis whether he had formed opinions about the nature of MSP’s combus- tion activities and MSP’s status within the RCRA regulatory scheme. In response, Ds, Davis revealed that he and his staff had indeed formed ‘opinions on those subjects. This revelation, however, does not mean that Dr. Davis and his staff prejudged the adjudicative issues of this cease, In the first place, any opinions formed by Dr. Davis and his stalt ‘were formed in the context of an ongoing, integrated regulatory pro- ‘cess which culminated in MSP’s submission of a part B permit applica- tion, During this process, Dr. Davis and his staff were required as a part of their regulatory and statutory duties to investigate MSP’s com- bustion activities and co form opinions concerning the status of MSP’s facility within the RCRA regulatory scheme." Second, the deposition

"sed on Dr, Davis respemne ina Jly 1993 deposi hen by MSP, MSP ase hat Dr avis nd his sl pce he folowing ada determination: (1) wheter NSP’ ary Kin stra an inna frnace, 2) wheter MSP produces 3 product forthe general publics
{he ) whether MSP con demonste anon market or depen ort aggregate) wheter
[NSP agua unos 3 heme reacion 038 become nsepure D Psel reas nd) whether MSP sham rye

“ror example, beeen 1985, when MSP commenced operating is combustion device, ae 1991, wha he BI ele was promulgated, twas the Regn ting als hyo investigate MSP’ city detemine wheter was engaged in lena reyling ates and thus ex ‘pt ror euiton Lae wen the DIP ews promlgaed nd MSP chased enero! ©
[Finer suns, x wae te permiting wats ayo ivesigate MSP self-harm a8 an usa farce eed to IF nein sats Kal wan eed osetia weer MSP was mpg wid he nea sats sand ppc ost ADCER § 256.103 Asp hse Shey the Regina members vesting MSP were eure rt thes dg to De Dv

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788 ENVIRONMENTAL ADMINISTRATIVE DECISIONS
relied on by MSP makes clear that the opinions of Dr, Davis and his staff concerning MSP’s facility are the kind of working hypotheses that form naturally and inevitably as a result of obtaining information through an investigation and that evolve with the addition of more information. In other words, they are not the kind of entrenched ‘opinions that prevent a decisionmaker from fairly assessing new infor- mation. Thus, MSP has failed to demonstrate, as it was required to do, that Dr. Davis oF his staff were "so psychologically wedded to [their opinions that they] would consciously or unconsciously avoid the appearance of having erred or changed position,” and that such opin. fons “as a practical or legal matter foreclosed fair and effective consid. eration” of the evidence presented during the permitting process Withrow, supra, 421 US. at 57-58. Nor has MSP demonstrated that their minds were “irrevocably closed,” in the words of the Cement Institute decision. Rather, the mixing of investigative functions (and the tentative opinions that form as a natural consequence of such functions) and adjudicative functions by Dr. Davis and his staff is precisely the kind of mixing of functions that was upheld as constitu. tionally permissible in Witbrowand has since been approved by many courts. We conclude, therefore, that MSP has not met its heavy bur “In hisdepastion, Dr. Davis makes ear tachi opinions were base nly on the esi ions of his staff nde indicts tate would be receptive to any new informa ae Ss Fay, Peon for Review at IOC The leer nde that sed on he neat sae oe that ine, yes dat 11 ln 1985, when {nae at the Agency ek Mar Sale nso incinerator, that was be on he information aa tha ine dat 18 Aga, ned oo ‘retings that ve had over the years" a1 Basen the lfm tat ene sean "a atthat ine, Marine Shae wis sha eye cha rested spc enforcement acon) a 181 bebe once th engin determination vas mae thee ws tera oe scot at changed cur mind. Ys at ee We feta Ste Sass mans eee “See Rese en Mare, nv. Natal Lar Relations Board 24881, 88 (eh Cie) (Go due proces problem where sattryschertlums NLRB fet pre a infancon ann
{ny employe to restan fret actryinvotonthe tan hen dees lh te hey proces, whee the employer has vted the AD cat 493 8 820IBBDY US Bao 782 £24 147, 13161815 (i Ce) even assuring tht he heanng offers had die bee ‘und hi the fats conse prohaied scheme or dere, tet no gneve Inca that ny hewn ofcers mind was eesti cloned" °*) cent donde SCI Alabnians fora Chen Ensronment Tomas 1387S Dist LEX S108 2.25, Als TOO (EPs RCRA perm proces, no imperil is even Repos pom ios cape redopstion to grant permit apikason before pic ean on the pepe pi oe ‘Maat Oi Company BPA 504 £20 125384 Cle 197) In Maan te US our Appeals forthe Nigh Cait conse a chllenge the pay ofthe Regional Anite he Peri proces The Reponal Adnsstaor mae peli devs on he pe aces Permit decison to an adinisratve lw age for an eer Reng, a then ses el "eso lterthe lJ had completed the eveeity hen. The Cat ecle ta Its neither self-evident, nor have petitioner presented ‘evidence to suggest that the review procedure here poses ‘VOLUMES

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den of overcoming the presumption of honesty and integrity attaching, to the actions of government decisionmakers.” *

the “unacceptable rf bia” presenta Noms Murcio
for Tum. Rather, veang the ial don i the ego
‘minster whose fer earings before an Arnis
fhe Law Judge review the mais pet he ance of 28
inal ices move early resem the pense combina
Aono! ives and addiction ancien by Tbr
arin, 42 08.38.9550. 1496.18 Bd 287120979,
fer example the station wtih ge recone compe
‘Stn pros fine whch he ves, may. Oba, sra We
‘emo more eson astm at Region Administra
foc bjtvely review hs eater decison Int of ction Fess than ssn ta feral age ann Ry oF ow sas i ied lowing teal al eee 1265, ‘that Davi publi announced is opinions ina depstion ken by MSP docs nt ster
«his concn, Dr Davis was compelled oatower under oath whether be ad formed opinions. Shout Mss combustion device He ad no cee ut to reveal hte on the spn and ‘Pncotions that he had rev rom is a, heed indeefoeedepnonseonceming YP embarson acinen ae was fequited eo dow al is story and elatory blgatons.
{inthe he FT. Comminsenes who ave speech announcing is psson on a eng mate n ‘indorala Caer ishing Sebocs cw PT. 42 2458, 590(D € Ci 1970) eo by A Dr Dav tenon athe deposition dl ain our iw have the “fet feet Pl
{na postion which he hs bel stated, aking fea, nex posable, fo m0 reach 2 ‘ferent concn nthe event he deen nest do 0 afer cemadeation of he econ” I forthe sme reason. the cher pub announcement cases he by MSP ae napposke 1 to points oseveral FD, Dav’ actors a even of pegmen special (D his effon to soe the cncuence of another regulon bodys the consi hat the Dexter eon propery pos an ines snd subantlendangermet (2) Ms tvolvement in FFAS RCRA 307 enforcement acon agains MSP relating othe Dexter Leonard property and) his prepa nthe governments prowecson of MSP Wh spect hela of these sons MSP ‘Soe dt Dr Das iste te vest i the sata of MSP ay, refed he mateo ‘Repional Counsel for pone enone, un copersed wih Real Couns! ad he Wish inom cunterprs hho the ener acon, spd bas had ex pate cont concen the mer of he ce, ‘pen careful evew of MSsanpsnts andthe Repo’ response to bem, we conde dha
_e Dart inolveren inthe ations td above, noe, docs testis that Dr Davis pe Feige the adudcatve facil ues ae hy NSP perm appetion. At ost De Dl ‘oem nthe actors ced above ewes oor shat Dr. Davis wast al ties eee
{oth cane the Dirsvtor ofthe Hanson Waste Margeset Dison wth over aunty et (he RCRA Enlercenet ranch a wellathe RCRA Pera’ Branch Inorderto ase a do proces ‘onsen MSP would eed show not nytt Dr Dai exces oversight fhe ations sted “hove but that his overnight of thse actors cused hin o develop erence opinions once ing the acoicane fac ses raved nthe pert pocesing, MSP amp to make Such & ‘Sowing wi cans othe 1998 depron cncused nthe et above, Forte reasons ied 0 the eu homerer we concide tat he depntion dos ot uppom te contin that De. Das
[rad the acca ual ics fhe ane. We erefore conclode tat, wh respect othe
[Sb ise above MSP his ot cred ts bevy burden of enercomang te presumption oon (ey and ey nthe scons of goverment cecionakers, voUMES

7390 ENVIRONMENTAL ADMINISTRATIVE DECISIONS

2. Involvement in the Enforcement Action

MSP also charges that Agency personnel involved in the prosecu- tion of the District Court action against MSP unduly influenced Re- gional permitting stalf members responsible for reviewing MSP's per mit application, thereby infecting the permitting staff with prosecutorial bias. MSP believes that the standard for decermining whether enforce- ‘ment personnel exerted undue influence over the Regional permitting staff may be derived from the decision of the United States Court of Appeals for the Seventh Circuit in Betblebem Steel Corporation v. E.PA., (638 F.2d 994, 1008 (7th Cir. 1980). Because commingling of prosecutorial and adjudicative functions is only proscribed under certain circum- stances, Bethlehem Stee! provides a useful benchmark of the level of commingling that compromises the neutrality of a decisionmaker. We therefore discuss the decision at some length below.

In the Bethlebem Steel case, EPA's Administrator disapproved the Indiana Air Pollution Control Board's CIAPCB") issuance to Bethlehem Stecl of a delayed compliance order DCO"). The DCO would have extended the time in which Bethlehem Steel was required to comply ‘with the Indiana State Implementation Plan CSIP"). After the LAPCB. issued the DCO, but before the Administrator disapproved it, EPA enforcement attorneys instituted an enforcement action against Bethlehem Steel for violations of the SIP. The EPA attorneys in charge of the enforcement proceeding were the same attorneys who were Principally in charge of reviewing the DCO and recommending a dis- Position of the DCO to the Administrator. Bethlehem Stee! challenged the disapproval of the DCO, contending that the commingling of prosecutorial and adjudicative functions in the same EPA attorneys amounted to a denial of due process. The Court agreed. The Coun ‘noted that, in addition to such commingling, the following circum- stances created at least the appearance of a due process violation: (1) the timing of the DCO decision so as to gain tactical advantage in the enforcement action; (2) the attempt to requite Bethlehem Steel to waive various defenses it might have had in the enforcement action as a condition of obtaining approval of the DCO; (3) the communication between enforcement attorneys and the Administrator’ office after the time had passed for public comment and after the enforcement action hhad been filed; (4) the use of language in the Administrator's proposed and final disapprovals that was substantially identical to the language Used in a memorandum written by the lead attorney engaged in the enforcement action; and (5) the Agency's refusal to disclose all of the information that was relevant to its decision. 1d, at 1008-1010. The Court concluded that ‘VOLUMES

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[Although many of these practices may not raise sig- nificant problems in normal Agency operations, we believe they do raise significant questions here where enforcement attorneys with substantial and significant input into the Administrator's decision on the DCO were, at the relevant time, engaged in litigation with Bethlehem over the same issues, These questions cast a shadow over, at least, the appearance of fairness in the Agency's review procedures utilized in this case Td, at 1010 (footnote omitted). Using the Bethlebem Steel decision as our standard for determining whether the level of commingling in this case deprived MSP of its due process rights, we conclude for the reasons set forth below that whatever minimal commingling of prosecutorial and adjudicative functions took place in this case, itis insignificant compared to the commingling that the Court found in Bethlebem Steel As evidence of such commingling in this case, MSP cites the fol- lowing: (1) After the tentative decision to deny the permit was made, the Regional permitting staff received assistance in drafting the State” ment of Basis from Steven Silverman, who had testified in the District Court action as an expert on the sham recycling criteria, and from Terry Sykes, who at various times was patt of the staff in the enforce- ment action; and (2) William Honker, who directed the Regional per- ‘mitting staff responsible for reviewing MSP's application, sent enforce- ‘ment personnel a memorandum asking for “any information or analy- sis of information” available concerning the issues raised in the permit proceeding. For the following reasons, however, we do not believe that this evidence supports a conclusion of improper or undue com mingling of prosecutorial and adjudicative functions under the stan- dard set forth in Bethlehem Steel After the proposed decision to deny the permit had been made, the Statement of Basis embodying the decision was sent to Steven Silverman and Brian Grant of the Agency's Office of the General Coun- sel COGC") so that they could review and “finalize” the document. MSP believes that this was inappropriate because Steven Silverman, was “intimately involved” in the enforcement action. We reject this conclusion, Mr. Silverman was never part of the staff that is prosecut- ing the enforcement action.” His role in the District Court action was limited to testifying as an expert on legal issues surrounding the sham "Te Steen Sivernan wh heed ra the Stem as forthe Proposed Deni not tae eve eran wo wa re ern ot an wh pig he VOWMES

m ENVIRONMENTAL ADMINISTRATIVE DECISIONS
recycling criteria, Region's Response to Petition at 73. Giving expert testimony on legal issues at a trial, in our view, hardly counts as “intimate involvement.” In light of Mr. Silverman's limited involvement in the enforcement action, it does not strike us as inappropriate for the Region to refer the Statement of Basis co him and Brian Grant for finalizing. The document contained an extensive legal analysis involv: ing the sham recycling criteria, and Mr. Silverman is a recognized expert in that area within OGC. One of the functions of OGC is to review Regional decisions for the soundness of the legal analysis in those decisions, Compared to the commingling found in Betblebem ‘Steel, we find that Mr. Silverman's role in finalizing the drafting of the Statement of Basis is of litle consequence for due process purposes.

Terry Sykes’ involvement in the enforcement action was more extensive than Mr. Silverman's, although the fact that Ms. Sykes re- signed from the staff of the enforcement action, at least for a time, ‘suggests that she did not play a leading role in that action. Despite her involvement in the enforcement action, the Region allowed Ms. Sykes to assist Elaine Taylor, a Regional staff attorney, in drafting the State- ment of Basis for the proposed denial. Elaine Taylor explains in her affidavit that Ms. Sykes was called in to perform this task after the decision was made to issue a proposed denial of MSP's permit appli- cation. Ms, Taylor also explains that the task of drafting the Statement Of Basis had been assigned to a Regional attorney, Hortense Haynes, but Ms, Haynes resigned from the case for health reasons. (Declaration of Elaine Taylor at 5.) Rather than assign the task to another member of the Regional permitting staff, the task was assigned to Ms. Sykes because of the complexity of the legal issues, the limited personnel resources available to the Region, and the short time frame involved. (Declaration of Elaine Taylor at 5.) Ms. Taylor also asserts that Ms. Sykes had resigned from the enforcement staff several months before she assisted in drafting the Statement of Basis (Declaration of Elaine ‘Taylor at 5), although she may have had sporadic involvement in the ‘case both several weeks before and several weeks after drafting the Statement of Basis. Region's Reply Brief at 13-14

‘The record suggests that the Region was sensitive to the possibil- ‘ty of improper commingling of prosecutorial and adjudicative func: tions in this case, and therefore took great pains to maintain a wall of separation between the enforcement action and the permit proceed- ing, (Declaration of William K. Honker; Declaration of Allyn M. Davis.) In view of Ms, Sykes" involvement in the enforcement action, however, Ms. Sykes’ role in drafting the Statement of Basis represents a signifi cant breach in the Region's efforts. Given her involvement in the en- Forcement action, the decision to allow Ms. Sykes to assist in drafting, ‘vowMes

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the Statement of Basis was, in our view, a mistake in judgment, albeit fan understandable mistake in light of the staffing problems that unex- pectedly arose when Hortense Haynes resigned from the case. Never- theless, we do not share MSP's view that the breach has constitutional implications,

It is important to keep Ms, Sykes’ involvement in the permit pro- ceeding in perspective. The record supports the conclusion that Ms. Sykes neither recommended nor made the decision to deny the permit application, (Declaration of Elaine Taylor at 5.) Ms. Sykes was falled in to assist in the drafting of the Statement of Basis only after the decision to deny the permit had been made. Id. It appears that Ms. Sykes? role was akin to that of a law clerk who drafts a decision for a Judge according to instructions that dictate both the result to be reached ‘and the rationale for reaching it. (Declaration of Elaine Taylor at 5.) We conclude, therefore, that Ms. Sykes did not have a “substantial and ‘significant input” into Dr, Davis decision to deny MSP’s permit, in the words of the Bethlehem Steel decision.

Its also important to remember that, as matter of law, “a certain amount of commingling [between EPA adjudicative and EPA prosecutorial functions) is normal and acceptable.” United States v. National Steel Conp., 767 F.2d 1176, 1182 (6th Cir. 1985) (no due pro- ‘cess violation where EPA personnel responsible for enforcing Clean ‘Air Act consent decree interacted on a limited basis with EPA person: rel responsible for adjudicating National Stee!'s application for an al- temate emission reduction option that would have allowed National Steel to avoid meeting certain requirements of consent decree). The Region's effort to maintain a strict separation between the enforce- ‘ment action and the permit proceeding appears to have gone further than the law requires, A deviation from the Region's strict program of ‘separation, therefore, does not necessarily rise to the level of a consti- tutional violation, Ms, Sykes’ role in drafting the Statement of Basis is in our view, the only real breach in an otherwise successful effort to ‘maintain this strict separation. The Region should not be punished for falling short of a self-imposed standard of separation that is actually more strict that the Constitution requires.

[As evidence of improper commingling of prosecutorial and adju: dicative functions, MSP also cites the memorandum from William Honker, asking enforcement attorneys to provide “any information or analysis of information” they possessed on the issues raised by MSP's permit application. MSP treats this memorandum as a “smoking gun,” Arguing that it is obviously a coded message inviting enforcement fttorneys to tell the permitting staff how to decide MSP's permit appli-

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cation. We reject MSP's interpretation as pure speculation, A far more plausible reading of the memorandum is that Me. Honker simply wanted to obtain any information generated by the enforcement staff that might be relevant to the permit proceeding. Because some of the issues in the enforcement action are similar to those in the permit proceeding (almost identical, according to MSP), some minimal level ‘of commingling was inevitable if only to allow the permitting staff to ‘gain physical access (o relevant information previously generated in connection with the enforcement action,

In sum, using the Bethlebem Stee! standard endorsed by MSP, we conclude that whatever commingling between prosecutorial and adju: dicative functions occurred in this case, the level of such commingling, ‘was minimal and thus did not begin to approach the level of commin: gling found in Bethlebem Steel Although the Region committed an error in judgment when it allowed Ms. Sykes’ to assist in drafting the Statement of Basis, nothing in the record suggests that she or any other member of the enforcement staff had a “substantial and significant input" into the decision to deny MSP's permit application. We con- clude, therefore, that MSP has failed to carry its heavy burden of over- ‘coming the presumption of honesty and integrity that attaches to the actions of government decisionmakers."

3, The Role of the Environmental Appeals Board

In assessing whether these permit proceedings meet the dictates of due process, the role of the Environmental Appeals Board must also be considered. The Region’s consideration of MSP's part B permit application is merely one stage in an integrated permitting process that did not end with the issuance of the Regional decision that is now on review. Because MSP appealed the Region’s decision, the decision

"SP ao nukes mach ofthe fc hate tric of ass For the propos dial alse deol to the Suen’ of Basis for the fal permit decison. MSP beeves ht the slay beeween te wo documents mans tha the Regio ad ot conse the sfonaton sete lrg the comment pros In suppor of ths sserion, MSP pois ot the ral Steet of "isi es ony tortion fom the al hat soppor te Regions cco. We et hs a ‘ei for sever easons Fst sts name mages Sateen of Bans et comin "he formation that the Regen ied on aking fs desu. Deca he Region was pe meant contin the Room rexponseoinkermaton hat # ok no ron o ake Rs deci The Region di respond to MSP meals ine Response wo Comms aly, ew o eft
{hat MS ime sts cemeents eas undigested al scrips, watt ging rifean pans explaining ts esos fr suing the teas, tained chvious UethartheRegon war even reqledto respon MSP mater ht nal wad ough ‘hese ater and respondetotem at al scompelingevisence fhe Repons fos ath on

MARINE SHALE PROCESSORS, INC. 5
did not constitute final agency action. Consequently, the Board's re- view is the final stage of the permitting process and is integral (0 MSP’s due process hearing. The Board is not part of any other office in the Agency and answers only to the Administrator of the Agency. In addition, the Board has devoted considerable time and effort to this ‘case and has given careful and independent review to the record that ‘was before the regional staff, including transcripts of the expert testi ‘mony that serves as the linchpin of each side’s argument, As a conse- quence, the Board has been able to consider MSP’s contentions with- ‘out any Regional filtering. The transcripts and studies that form the factual basis of both the Region's and MSP's reports were presented to the Board without any abridgement, Further, the Board has had the benefit of oral argument and voluminous briefing from the parties. It is based on this independent assessment of the record that the Board finds itself in agreement with the Region’s conclusion that MSP does not function as an aggregate kiln within the meaning of § 260.10. The “Where the decison of the Region s appealed to the Boar the Repos don does nat ‘become fal agency ato, uns the oud denies resiw sO CER § 1201912). Pueo Ro “Ae and Seuerdutry EPA, Sip op. 98290, 3, 3 Cnt Cr 1994) (Wa espe fo NPDES peemis "he nal decsicn [lt Region! consti agency aon ony when the Boant denies review or sus ais, see 40 CER § 124 910) 98S), ox where ashe the Board wees afallopion® ">
5e Alabama fora lean Bnsinment Tomas 198 1S, Dist UNIS SAB. Al 1967) I Alahamtans EPA ap he Sate of Alabama ey sued a RCRA pei. Ale the TO ‘genes had ade thelial decent gat he pom lens roups peed ane on ‘Ges thigs that her de proces hth een snnged because some of the EPA all had ‘ae siterens bfore the public henge he fect that they wee redspsed to wa the ‘rit The cizem groupe aq that sich atermens reece prejudgment and bias The out ‘edhe stack spear bose the chiens group ad ot exited hr arin Femi The Cit cnr hat “Te plies de paces atcks focus on wheter the consi ‘raion the penn wasimeoper However nether agency ‘Sse al itn The procedares which ei ner RCRA sn he Alsons ahonmentl Management Act ‘ep othe process by which a sere person ay ve the permit ecto sane: the pls ose tac the agencies permit conieraton an grounds that Sich “eandenton sive or adequate bor the process fon "dcrston complete would be unecessary spective 1a. 23. Te Cou’ ctwensaton sugges thatthe pple proces an nega pat Fhe per ‘iting process and that eh adequacy of de process henng cannot be ed nthe Ageny = Sppeliterocedres have ron he couse se 4O CER § 218), 57 Fes Re 530, $822 (Feb 18,1992 CAnathervinwe ofthe few ested oat ha wil wake ea athe Administ senercemer autor (depos 0 ‘arcu Regional and Headquarters enforcement fice) and the AdMob 3 Uhonty ane Gelato, ad exec by, spate and dint componente of the Agen, iepiing confidence inthe fares of Agency additions, VOLUMES

18 ENVIRONMENTAL ADMINISTRATIVE DECISIONS
Board's involvement in this ease ensures that MSP’s claims have been fainly heard and carefully considered by an independent component of the Agency. In keeping with established principles of due process, this hncaring has taken place before final Agency action on MSP's permit application. Ia view of the Board's involvement, we believe that MSP simply has no basis for arguing that its contentions supporting issu- ance of a BIF permit were not fairly heard and considered by an impanial decisionmaker. MIL. CONCLUSION

Tor the reasons stated above, the Region’s decision to deny MSP's BBIF permit application is affirmed and this matter is remanded so that the Region can issue a final permit denial“ The basis for this affie- mance is the Region's conclusion that MSP's facility does not produce aggregate and therefore does not meet the industrial furnace defini- tion. We recognize that the Region based its decision on other grounds a5 well, and to the extent we have not ruled on those other grounds, nothing in this decision should be construed as preventing the Region fom basing its final permit decision on these other grounds. An ap- peal 10 the Board from the Region's final permit denial will not be

~ Ao separ bas for pei deci, eo ao denied MSPs perma appeaon because bees hats cant be ante on fo copy with be er conan cad opening pea gens nd nna va emit sah pl So a pel Asay denying he prt on sts th Rein ces he male "mn Cine” at econ SSCA of RCRA 42 US$ 692KCA), Tat ton rove n pertnent pa ht “Each perms sed pe scons cnn sche nd condi
$the Admintatr (orth Se) determines nee fo rth esha hea inet aught gg ft pun Jos not appt cote ena erm, the Acny henna he Pron sauder pe hee te Agen Cin ca ose por condons ext tha cre potion ran heron he avian 39 Fa eg 28.723 hy 1 198) CT ageey bree at esa toe pesmi conning conden dete nest ptt human ea an he ene tustenompe ti ath to dey pet where cesar to aflordstch pean) ee "kan nes RCRA Appa o.7-14 hae, Doe 1, kano Sch any ei omen Stic uatom whee prec of human heh sn he even cane cre ‘sen th ora compel aith tn her wen complnce abs pesmi cam ese fevecton of aan hand he eon no mae what ona ems pe She perm, ene Agency has ur ander omar fod ps Ina ce, eevee Reon woul extent sth fo deny peri eer he ons where Comune waht cnr sn iran ftp wae praccon Puen heh dn the emenment I ot means os eer the Agcy hy dey peas sus he ens cats eet uch tons Ia ay Sen ad ak skfnstvey seve thse ow, sce mete phoma Ros elon snr goa vowwMes

MARINE SHALE PROCESSORS, INC. 7
necessary to exhaust administrative remedies, See 40 C.RR.
§ 124.1900).

So ordered.

“the panics have fled vera mosins.on which he Horas ot yet ed. The Hoard now rules se flows 1 the Monon of Maron Sha Process Ine Supplement be Record on Al (Wu te tached sii Oxtober 0, 1998) and Maton of Pion Marne Sole Process In. Spplomen he dinitrate cord oA (Novem 1, 1991, ae gente. The Stnplemental cxhibs accompanying ewe ations mere eiewed ror siance vod dc
{id 2) the pedi ation of Pair Marne Shale Proceso Ine for Dvr Regarding evisonmaor asm gion Vs tao USP DIF aptcaion (Oct 28,1991) denis. AS itsnom clear who was involved in he permng decison fectng MSP acy, ay such i oncyisecesuy 8 the Met an incorporated Memorandum of Marine SbleProcesor In Include Newly Dicer Btdence te Adminis Record (Decenber 20, 198) 6 (ed arate tach meeran rr Walla . Honket, chief the RCRA Pers rine
{Srandy Bown Chie RCRA Enforcement Brac, has been renewed prior wo reaching ty»
{conn Poon of Mee Sle Proce, Inc for Rv of Dot of esto Bday “Howry and Neston fo Conolidte with RCRA Appel! 4-12 CReqoet for Esdentary Bean) ‘November 18, 1990 ders. Flloming te Repos fel deason denn MSP IF permit “pleaton, SSP sought an evar Hearing the etn the devia was based on NSP alleged ‘roe on compliance wth vans de and Sate envionment: The ptton sas hat
{he Rogen’ are respond oth esque win ty day onsite a ef denial ofthe rele tom which MSP seks review By the Bear. eget for ruderary Hoang. at 3. The epson fly emied MEPs seus or an evidentiary earn on December 8, 199%, Atay tlcison af he Region's orn denial the rooney sso an area an Set has doesn meet the Sefton oat fomace a 0 CER § 20010 the se upon ‘hich SP sels an vse heang su ent Se pote 6 MSs Resor dra nein therefore dent) the Regions ato 0 Fade Docent we te Bard (eo 1995) dere The Reon sect le wits the Board a Fever Regier Nouce extending the tie pec fer coment on proposed re lain placemen: of sigs derived frm weatment ‘turds wastes KOG2 td FI (5) Fed. Ry, €7.256 (Dee 2, 1960) As this ate Is
{evant fo he fue Bloe the Reponmton dese: a 6) he following ions ate
[nied andthe scompanying submissions ave been vie aon ofthe Cited tats Et ronmenial Potion Agony Fea Coren Renae, Nove 2, 1998, Monon of Marine ‘Shle Pes, or Lett ea Reply Memsrand Supt of Peton for Revi of "BU Form Donal December 5,199), PAs Raqucs for lave Respond 0 SPs Rey Memo rant (Decenbet 3 19, Marine Sbale Pocssor, Ine» gue 0 le Response fhe ‘Rayon’ Ler Memon ana Das Afar, anaary 6,19) (Marie Sale Presor’s Re quo Sum Ps Hearing Memorandum, ansary 17195) (gion Vs Regus Sub ‘Rajonse to Pttone’ oc caring Memorandum ad us Rated at Oral Argument an 235 25,1998) an MSP gue apo gon Vs Repose to MSP Ps Hearing Memorar ‘dim (say 27.195)

VOLUMES

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agency: epa_eab
case_name: "Marine Shale Processors, Inc."
dockets:

• "RCRA 94-12"
  doc_type: commission
  date: "1995-03-17"
  outcome: mixed
  judge: ""
  epa_authorities:
• "40 C.F.R. § 124.13"
• "40 C.F.R. § 124.19"
• "40 C.F.R. § 260.10"
• "40 C.F.R. § 266.20"
• "40 C.F.R. § 266.20(b)"
• "40 C.F.R. § 270.66"
• "42 U.S.C. § 6901"
• "42 U.S.C. § 6926"
  finality: final
  reviewed_by: ""
  source_url: "https://yosemite.epa.gov/oa/EAB_Web_Docket.nsf/All%20By%20Appeal%20Number/0A4EBF958CA99CD685257069005F7C2E?OpenDocument" pdf_url: "https://yosemite.epa.gov/oa/EAB_Web_Docket.nsf/Decision~Date/0A4EBF958CA99CD685257069005F7C2E/$File/mshale.pdf" ocr: true accessed: "2026-08-24"

---

In re Marine Shale Processors, Inc. (EAB RCRA Appeal No. 94-12): permit denial affirmed and remanded for final denial

> Final EAB decision. This Environmental Appeals Board Final Decision and Order is a final disposition of Marine Shale Processors, Inc.'s RCRA permit appeal. The Board affirmed EPA Region VI's denial of the facility's BIF permit application and remanded so the Region could issue a final permit denial. The full text below is the official EPA release, transcribed from a scanned PDF with OCR proofreading.

Plain-English summary

Marine Shale Processors sought a RCRA permit to operate its Louisiana facility as an industrial furnace under the Boilers and Industrial Furnace rule. EPA Region VI denied the application after finding that the facility did not function as an aggregate kiln and that its output was not commercial-grade aggregate useful to industries that buy such material. The Environmental Appeals Board held that the record adequately supported the Region's conclusion that the facility did not qualify as an industrial furnace, rejected Marine Shale's constitutional and procedural challenges, affirmed the permit denial, and remanded for the Region to issue a final denial.

Decision snapshot

• Cited authorities: 40 C.F.R. §§ 124.13, 124.19, 260.10, 266.20, and 270.66; 42 U.S.C. §§ 6901 and 6926.
• Outcome: The BIF permit denial was affirmed, and the matter was remanded for issuance of a final permit denial.
• Key point: A facility claiming to be an aggregate kiln must produce and sell a commercially usable aggregate product recognized as such in ordinary commercial dealings.

Full text (EPA EAB public release)

---

agency: epa_eab
case_name: "Marine Shale Processors, Inc."
dockets:

• "RCRA 94-12"
  doc_type: commission
  date: "1995-03-17"
  outcome: mixed
  judge: ""
  epa_authorities:
• "40 C.F.R. § 124.13"
• "40 C.F.R. § 124.19"
• "40 C.F.R. § 260.10"
• "40 C.F.R. § 266.20"
• "40 C.F.R. § 266.20(b)"
• "40 C.F.R. § 270.66"
• "42 U.S.C. § 6901"
• "42 U.S.C. § 6926"
  finality: final
  reviewed_by: ""
  source_url: "https://yosemite.epa.gov/oa/EAB_Web_Docket.nsf/All%20By%20Appeal%20Number/0A4EBF958CA99CD685257069005F7C2E?OpenDocument" pdf_url: "https://yosemite.epa.gov/oa/EAB_Web_Docket.nsf/Decision~Date/0A4EBF958CA99CD685257069005F7C2E/$File/mshale.pdf" ocr: true accessed: "2026-08-24"

---

In re Marine Shale Processors, Inc. (EAB RCRA Appeal No. 94-12): permit denial affirmed and remanded for final denial

Final EAB decision. This Environmental Appeals Board Final Decision and Order is a final disposition of Marine Shale Processors, Inc.'s RCRA permit appeal. The Board affirmed EPA Region VI's denial of the facility's BIF permit application and remanded so the Region could issue a final permit denial. The full text below is the official EPA release, transcribed from a scanned PDF with OCR proofreading.

Plain-English summary

Marine Shale Processors sought a RCRA permit to operate its Louisiana facility as an industrial furnace under the Boilers and Industrial Furnace rule. EPA Region VI denied the application after finding that the facility did not function as an aggregate kiln and that its output was not commercial-grade aggregate useful to industries that buy such material. The Environmental Appeals Board held that the record adequately supported the Region's conclusion that the facility did not qualify as an industrial furnace, rejected Marine Shale's constitutional and procedural challenges, affirmed the permit denial, and remanded for the Region to issue a final denial.

Decision snapshot

• Cited authorities: 40 C.F.R. §§ 124.13, 124.19, 260.10, 266.20, and 270.66; 42 U.S.C. §§ 6901 and 6926.
• Outcome: The BIF permit denial was affirmed, and the matter was remanded for issuance of a final permit denial.
• Key point: A facility claiming to be an aggregate kiln must produce and sell a commercially usable aggregate product recognized as such in ordinary commercial dealings.

Full text (EPA EAB public release)