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BARRICK GOLDSTRIKE MINES, INC. v. WHITMAN

April 2, 2003

BARRICK GOLDSTRIKE MINES, INC., PLAINTIFF,
v.
CHRISTINE T. WHITMAN AND UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, DEFENDANTS.



The opinion of the court was delivered by: Thomas Jackson, Senior District Judge.

MEMORANDUM AND ORDER

Plaintiff Barrick Goldstrike Mines, Inc., ("Barrick") brings this action pursuant to the Administrative Procedure Act ("APA"), 5 U.S.C. § 706, to review certain administrative actions taken by defendant the United States Environmental Protection Agency ("EPA") under sections 313(b) and 328 of the Emergency Planning and Community Right-to-Know Act of 1986 ("EPCRA"), 42 U.S.C. § 11023(b) and 11048. Specifically, Barrick asserts that EPA unlawfully expanded the definitions of two statutory terms and contracted the scope of a regulatory exemption by the devices of a guidance document, agency letter, and preambles to agency rulemakings without following formal rulemaking procedures, the effect of which is to require Barrick to make public report of significant increases in the amounts of "toxic chemicals" released in conjunction with its goldmining operations. EPA asserts that its "interpretative guidance" of the EPCRA and its own regulation warrants deference, is reasonable, and is consistent with past practice and rulemakings, and that formal rulemaking is unnecessary. Presently before the Court are parties' cross-motions for summary judgment for declaratory relief.*fn1

I.

Section 313 of EPCRA requires certain facilities that manufacture, process or otherwise use chemicals on the Toxic Release Inventory ("TRI") list to submit annual reports to the EPA and state officials. 42 U.S.C. § 11023(b)(1)(A). These reports must contain information about whether the facility manufactures, processes, or otherwise uses listed "toxic chemicals," an estimate of the maximum amounts of each listed chemical present at the facility at any time, methods of disposal or treatment of waste, and an estimate of the amount of each toxic chemical entering the "environment." 42 U.S.C. § 11023(g). The EPA compiles the data from these reports into a computer database and makes it accessible to the public. 42 U.S.C. § 11023(j). The purpose of the TRI program is "to inform persons about releases of toxic chemicals to the environment; to assist governmental agencies, researchers, and other persons in the conduct of research and data gathering; and to aid in the development of appropriate regulations, guidelines, and standards. . . ." 42 U.S.C. § 11023(h).

Initially, the TRI reporting requirements applied to facilities having ten or more employees and belonging to certain manufacturing industries specified in Standard Industrial Classification ("SIC") Codes. 42 U.S.C. § 11023(b)(1)(A). Facilities so designated are required to file TRI reports if they "manufactured, processed or otherwise used" a toxic chemical. Id. To manufacture is "to produce, prepare, import, or compound a toxic chemical." 42 U.S.C. § 11023(b)(1)(C)(i). The term "process" means "the preparation of a toxic chemical, after its manufacture, for distribution in commerce." 42 U.S.C. § 11023(b)(1)(C)(ii).

On May 1, 1997, after proper notice-and-comment procedures, the EPA promulgated a final rule adding seven new industry groups to the list of facilities subject to the TRI reporting program. 62 Fed. Reg. 23,834 (May 1, 1997). One of the newly included industry groups was metal mining, thereby expanding the reporting program to include Barrick's mining facility. Starting with the July 1, 1999, reporting deadline, Barrick was required to submit reports concerning its mining activities to the EPA pursuant to section 313 of EPCRA.

Nearly a decade earlier EPA had issued its final rule implementing section 313 of the EPCRA in February, 1988. 53 Fed. Reg. 4500 (Feb. 16, 1988). This rule established an exemption (the "de minimis exemption") allowing facilities to disregard certain minimal concentrations of toxic chemicals in mixtures or other trade name products when making TRI reporting determinations. See 40 C.F.R. § 372.38(a); 53 Fed. Reg. 4500, at 4504, 4509. If a toxic chemical is present in a mixture or trade name product at levels below 1 percent, or 0.1 percent if the chemical is a carcinogen, a facility is generally not required to account for those quantities in its TRI reporting. 40 C.F.R. § 372.38(a).

Plaintiff Barrick is a Colorado gold mining corporation that has been mining gold and other precious metals at two mines (collectively making up the "Goldstrike Project") in north-central Nevada since 1913. Burke Decl. ¶ 4. The gold mining process, Barrick explains, begins by removing soil and rocks from the mines. Id. at ¶ 5. The rock contains only naturally occurring substances, including trace concentrations of gold and other minerals, some of which are listed as "toxic chemicals" under the EPCRA. Id. Barrick keeps only the ore, i.e. rock from which gold may be economically extracted. Id. at ¶ 6. The ore Barrick has recovered over the past three years had less than 1 percent (and less than .1 percent of those known to be a carcinogen) of metal compounds listed as toxic chemicals with one exception: the ore did contain approximately .2 percent of a carcinogenic arsenic compound. Id. at ¶¶ 8-9; Supplemental Burke Decl. at ¶ 16.*fn2

Barrick then crushes and grinds the ore into the consistency of facial powder and mixes it with water to create an "ore slurry." Burke Decl. at ¶ 10. The ore slurry is put through an autoclave to oxidize the minerals in order to free gold, silver, and mercury from the crystalline structure of the pulverized rock. Id. After autoclaving, the ore slurry is mixed with a diluted cyanide solution with which the gold, silver, and mercury combine. Id. at ¶ 11. Those minerals are then absorbed onto activated carbon from which they later may be removed from the ore slurry. Id. at ¶ 12.

The remaining ore slurry, called "tailings," contains trace quantities of many minerals, some of which are categorized as "toxic chemicals" under the EPCRA. Id. Similar to the ore from which it originated, however, the tailings too, typically contain less than 1 percent (or less than .01 percent for a carcinogen) of metal compounds listed as toxic chemicals, again with the single exception of certain arsenic compounds. Id. Barrick permanently places the tailings in a lined impoundment designed to ensure their containment. Id. at ¶ 13.

After separating out the mercury,*fn3 Barrick makes the gold and silver into a product called "dore," (pronounced "dor-AY"), which it then pours into metal bars and distributes in commerce. Id. at ¶¶ 14-15. The dore is predominantly gold and silver but also contains impurities, including elements and compounds that are listed as "toxic chemicals" under the EPCRA. Id. at ¶ 15.

In conjunction with its promulgation of the 1988 final regulation implementing section 313 of the EPCRA and establishing a de minimis exemption, the EPA has attempted to assist facilities in meeting their reporting obligations by issuing preambles to the 1988 and 1997 rulemakings, as well as various guidance documents, and letters responding to specific questions about interpreting the 1988 regulation. The EPA's publication known as "EPCRA Section 313 Industry Guidance: Metal Mining Facilities" (hereinafter "Metal Mining Guidance"), issued in January, 1999, and a letter from Maria Doa, Chief of EPA's Toxic Release Inventory Branch (hereinafter "the Doa letter") on March 18, 1999, are examples, and are particularly significant with respect to the issues in this case. None of these interpretive documents was issued pursuant to formal APA rulemaking process.

Barrick complains that the EPA used these documents to improperly modify the TRI reporting requirements without the appropriate APA formalities by altering the scope of the de minimis exemption and the meaning of two statutory terms ("manufacture" and "process"). Specifically, plaintiff argues that:

(1) EPA has used guidance documents and non-contemporaneous preamble statements to exclude "waste rock" and "tailings" from the de minimis exemption;
(2) EPA has used guidance documents to expand the statutory definition of "manufacturing" a "toxic chemical" to include changes in mineral compounds that remain the same "toxic chemical," and
(3) EPA has used guidance documents to expand the statutory definition of "process[ing]" to include impurities remaining in the doray produced for distribution in commerce.
Barrick contends that the explicit language of the de minimis exemption applies to its waste rock and tailings, but EPA's preambles and guidance documents appear to exclude these materials. Accordingly, Barrick is prevented from applying the de minimis exemption to ignore, for reporting purposes, de minimis amounts of naturally occurring minerals in the rock that it mines. Barrick argues that EPA's expansive interpretations of the terms "manufacturing" and "processing" formulated outside the APA rulemaking process also impermissibly subjects Barrick's mining activities to TRI reporting.

II.

The parties' cross-motions for summary judgment effectively seek declaratory relief concerning the following three questions: (1) whether the de minimis exemption applies to plaintiff's waste rock and tailings; (2) whether existing toxic metal compounds that change in chemical composition during plaintiff's process are "manufactured" under the EPCRA, and (3) whether plaintiff's extraction and beneficiation*fn4 of precious metals involves the "processing" of toxic chemicals under the EPCRA. Because the legal standards for questions (2) and (3) are largely the same, they will be analyzed together.*fn5

The De Minim is Exception

In February 1988, the EPA established the de minimis exemption to TRI reporting when it issued a final rule implementing Section 313 of the EPCRA. See 53 Fed. Reg. 4500 (February 16, 1988). Because the language of the exemption is central to the issue at hand, the Court will cite it in full here:

If a toxic chemical is present in a mixture of chemicals at a covered facility and the toxic chemical is in a concentration in the mixture which is below 1 percent of the mixture, or 0.1 percent of the mixture in the case of a toxic chemical which is a carcinogen as defined in 29 C.F.R. § 1910.1200(d)(4), a person is not required to consider the quantity of the toxic chemical present in such mixture when determining whether an applicable threshold has been met under § 372.25 or determining the amount of release to be reported under § 372.30. This exemption applies whether the person received the mixture from another person or the person produced the mixture, either by mixing the chemicals involved or by causing a chemical reaction which resulted in the creation of the toxic chemical in the mixture. However, this exemption applies only to the quantity of the toxic chemical present in the mixture. If the toxic chemical is also manufactured (including imported), processed, or otherwise used at the covered facility other than as part of the mixture or in a mixture at higher concentrations, in excess of an applicable threshold quantity set forth in § 372.25, the person is required to report under § 372.30. This exemption does not apply to toxic chemicals listed in § 372.28, except for purposes of § 372.45(d)(1).
40 C.F.R. § 372.38(a).

Intending to provide "a step-by-step guide to compliance with EPCRA Section 313," EPA issued its Metal Mining Guidance in January, 1999. See Metal Mining Guidance at iv. The guidance document states that waste rock and tailings are not eligible for the de minimis ...


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