For thirty years, the metal shredding industry has operated under an agency policy document effectively stating that the residue waste generated at the end of the scrap metal recycling process was potentially subject to hazardous waste controls, but the mid-stream processing of scrap metal was not. Two years ago, DTSC rescinded the policy while promulgating an “Emergency Rule” to expand hazardous waste controls over all metal shredding operations. Although a court enjoined the Emergency Rule, DTSC did not reinstate the rescinded policy, and instead has proceeded with enforcement activity that is contrary to the longstanding policy and premised on the same regulatory change of the enjoined Emergency Rule.
In granting the petition, the Superior Court found that, “[b]ased on the industry’s more than 30-year reliance on OPP #88-6, allowing the rescission of OPP #88-6 to remain in effort would increase the costs of scrap metal recycling, thereby causing significant disruption to an issue of critical environmental importance to California.” The Court concluded that the policy rescission violated the California Administrative Procedure Act, and was arbitrary and capricious for failure to consider the industry’s reliance interests. Accordingly, the Court granted the petition to require DTSC to re-instate the policy, pending any rulemaking in compliance with the APA.
The ruling is a significant victory for PARC and the industry in general, which has been litigating these issues for several years across different proceedings.
PARC is a longtime client of Maureen Gorsen (Century City). The multidisciplinary litigation team was comprised of individuals across Sidley’s Environmental, Regulatory Litigation, and Commercial Litigation and Disputes practice groups, including David Carpenter (Los Angeles), Simone Jones (Chicago/Washington, D.C.), Aaron Flyer (Washington, D.C.), Celia Spalding (Los Angeles), and Drew Langan (Washington, D.C.), with support from paralegal Amanda Gonzalez (Chicago) and legal secretaries Lillian Ruiz (Los Angeles) and Annie Yu (Los Angeles).