American Petroleum Institute v. Environmental Protection Agency

The Resource Conservation and Recovery Act (RCRA) regulated solid waste. The Environmental Protection Agency (EPA) (defendant) considered discarded hazardous materials as solid waste subject to RCRA regulations. In 2008, the EPA promulgated a rule (the 2008 rule) that deregulated many hazardous secondary materials. Hazardous secondary materials were excluded from the definition of solid waste if the company that generated the materials (the generator) controlled the recycling of those materials (generator-controlled exclusion) or if the generator transferred the materials to an off-site recycler the generator had audited to ensure compliance with proper recycling practices (transfer-based exclusion). Under the transfer-based exclusion, the generator could send materials to a reclaimer that possessed a RCRA permit or to a reclaimer that lacked a permit if the generator made reasonable efforts, including investigating and affirmatively answering specific questions that RCRA posed about the reclaimer, to ensure that the reclaimer intended to properly and legitimately reclaim the secondary material and not discard it. In 2015, the EPA promulgated a rule (the final rule) that modified the 2008 rule and replaced the transfer-based exclusion with the verified-recycler exclusion. The verified-recycler exclusion eliminated the reasonable-efforts option of the transfer-based exclusion and instead required generators to send materials to reclaimers who either had a RCRA permit or a RCRA variance. The EPA based this change heavily on a theoretical study that predicted that when the value of a recycled product is low, reclaimers have an incentive to maximize the amount of hazardous secondary materials they can accept to increase profits and not recycle them. The American Petroleum Institute (plaintiff) challenged the rule and insisted that the EPA has no reason to shift to the verified-recycler exclusion.