Maralex Disposal. LLC v. Environmental Protection Agency, The

Filing 23

ORDER Affirming Agency's Dismissal of Administrative Appeal as Untimely Under Abuse of Discretion Standard. Maralex's appeal of the EABs refusal to accept its untimely formal appeal has been considered and its Petition (Doc. 1) is DENIED. This ruling terminates the appeal and this Civil Action generally by Judge John L. Kane on 07/29/14. (jhawk, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge John L. Kane
Civil Action No. 13-cv-3288-AP
MARALEX DISPOSAL, LLC,
Plaintiff,
v.
THE ENVIRONMENTAL PROTECTION AGENCY,
Defendant.

ORDER AFFIRMING AGENCY’S DISMISSAL OF ADMINISTRATIVE APPEAL
AS UNTIMELY UNDER ABUSE OF DISCRETION STANDARD
Kane, J.
This is an unusual Appellate Procedure (AP) case in that the matter appealed is not a final
agency decision on the merits of an administrative action (here, a penalty assessment under the
Safe Water Drinking Act) but rather an order dismissing Plaintiff’s administrative appeal as
untimely under applicable rules and refusal thereafter to reconsider that dismissal. The matter is
fully briefed, and the parties agree the standard of review is for abuse of discretion. Given the
procedural nature of the appeal, I will rule on it rather than refer it for random assignment to a
merits judge as is the practice under the Court’s Local Appellate Rules for merit-based appeals.
See D.C.COLO.LAP.R.
There is no dispute that Plaintiff Maralex Disposal LLC filed its notice of appeal to the
EPA’s Environmental Appeals Board (EAB) three days late. The question is whether the EAB’s
refusal to relax its rules to accept the untimely notice constituted an abuse of discretion. For the
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concept of “discretion” to have any meaning, clearly it did not.
Maralex contends the EAB abused its discretion “by departing from its prior precedents
of accepting late filings in situations where the EPA provided technically correct but misleading
information to parties regarding the appeal process.” The “technically correct but misleading
information” Maralex refers to is the EPA Regional Hearing Clerk’s response to counsel’s email
informing the Clerk of his intent to appeal the initial decision and asking her to “provide [him]
with the date of receipt of service of the Initial Decision.” See Pet’n for Review (Doc.1) at ¶¶
11-12. At the time, counsel was operating on the mistaken belief that the receipt date was the
date from which he was to calculate the 30 days in which his notice of appeal would be due; the
correct date was the service (mailing) date of the Initial Decision. According to Maralex, the
Clerk’s failure to correct his error was an implicit endorsement of it, misleading him into filing
his Notice of Appeal late. Citing a series of cases in which the EAB waived timeliness
requirements under similar circumstances, Maralex concludes the EAB’s failure to do so in this
case constituted an abuse of discretion. Alternatively, Maralex argues the EAB’s refusal was an
abuse of the EAB’s discretion because the enforcement decision at issue is not time-sensitive
like a dispute over the issuance or denial of a permit that can hold up or thwart entire projects
and the impact of a 3-day extension would have prejudiced no one.
As an initial matter, the “precedent” Maralex seeks to apply is highly selective and does
not, at Maralex itself concedes, truly support its position. In each of the cases – In re Kawaihae
Cogeneration Project, 7 E.A.D. 107, 123-24 (EAB 1997), BASF Corp. Chem. Div., 2 E.A.D.
925, 1989 WL 266771 at *2 n. 3 (1989), and Spitzer Great Lakes Ltd v. EPA, 173 F.3d 412, 416
(6th Cir. 1999) – it was the EPA that initiated the exchange in which technically accurate but
misleading information regarding appellate due dates was given. Here, counsel initiated the
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exchange by asking a direct question that the Clerk correctly answered. Further, there is ample
ample precedent in the other direction, providing that the EAB “strictly construes threshold
procedural requirements, such as the timely filing of a petition,” and will relax a filing deadline
“only where special circumstances exist.” E.g. In re MHA Nation Clean Fuels Refinery, NPDES
Appeal Nos. 11-02, 11-03, 11-04 & 12-03, slip op. at 14 (EAB 2012)(citing In re AES Puerto
Rico, L.P., 8 E.A.D 324, 329 (EAB 1999), aff’d, Sur Contra La Contaminación v. EPA, 202 F.3d
443 (1st Cir. 2000)). This precedent also applies and in this case is dispositive.
I agree that enforcement actions, unlike permitting decisions, are not generally timesensitive. I also agree that where an appeal is filed three days after the 30-day appeals deadline
but well-within the 45-day window of when an initial decision that is not appealed becomes
final, that the effect of the late filing is de minimis. And I agree that the EAB, in its discretion,
could have found counsel’s error in this case was exacerbated by the Clerk’s confirmation of a
receipt date that had no impact on the appeals deadline and could reasonably have concluded that
“special circumstances” warranting a relaxation of the filing deadline. But my view on these
factors is not salient under an abuse of discretion standard of review.
While it seems to me that substance should overcome form where counsel caught his
mistake before the Initial Decision became final under 40 C.F.R. § 22.27, district courts are not
in the position to re-value or re-weigh those factors under an abuse of discretion standard. An
abuse of discretion is one that is grossly unsound, unreasonable, or illegal. Discretion is the
power to act, rightfully exercised, when a litigant is not entitled to demand the act as a matter of
right. An abuse of discretion occurs when a determination is arbitrary, capricious or whimsical.
It is not merely an error of law or judgment, but an overriding of the law by the exercise of
manifestly unreasonable judgment or the result of partiality, prejudice, bias or ill-will as shown
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by the evidence or the record of proceedings. In re Bueno, 248 B.R. 581, *582
(D.Colo.,2000)(Kane, J.)(citing United States v. Wright et al., 826 F.2d 938, 942 (10th
Cir.1987)). Here, the agency’s Consolidated Rules of Practice provide clear filing deadlines that
are strictly construed in the absence of “special circumstances” warranting their relaxation. The
determination of whether special circumstances exist rests soundly within the EAB’s discretion,
and the EAB explicitly rejected them here.
In short, there are interests of finality and predictability in the litigation and appeal of
enforcement actions and the fact that the EAB exercised its discretion and reached different
conclusions on other occasions supports no inference that it abused its discretion in this case.
Given the apparent willingness of the Region 8 Enforcement Counsel to revisit the penalty
assessment at issue, see email dated August 16, 2013 from Amy Swanson to Wm. Zimsky (R. at
1593), perhaps an informal resolution of Maralex’s appeal is possible or has already been
achieved. That would certainly be desirable.
In the meantime, Maralex’s appeal of the EAB’s refusal to accept its untimely formal
appeal has been considered and its Petition (Doc. 1) is DENIED. This ruling terminates the
appeal and this Civil Action generally.
Dated July 29, 2014.
s/John L. Kane
SENIOR U.S. DISTRICT JUDGE

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