EPA May Obtain Administrative Warrants Under TSCA

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SandBar 7:4, January, 2009 EPA May Obtain Administrative Warrants Under TSCA U.S. v. M/V Sanctuary, 540 F.3d 295 (4th Cir. 2008). *Neil B. Paradise, 3L, Florida State University School of Law* Trade in toxic ships is dangerous. Toxic chemicals can remain on ships for many years, causing harm to human health or the environment. The Fourth Circuit’s recent decision in U.S. v. M/V Sanctuary helps ensure that toxic ships are properly decontaminated before they are converted to other uses or broken down. The court held that the Environmental Protection Agency’s (EPA) authority to inspect the premises under the Toxic Substances Control Act (TSCA) allows the agency to seek an administrative warrant in the event the site owner does not co-operate. In this instance, the court determined the agency was justified in seeking an administrative warrant to search the docked ship M/V Sanctuary when it had evidence of the presence of polychlorinated biphenyls (PCBs). The court further held that the district court was justified in granting a warrant and a preliminary injunction preventing the vessel owner from moving the vessel until the EPA’s inspection was complete. Background The chemical known as polychlorinated biphenyls (PCBs) is a dangerous one. PCBs are toxic and persistent, may promote the formation of cancer tumors, and may also cause reproductive effects and developmental toxicity in humans. Since 1979, TSCA has prevented PCBs from being manufactured, processed, distributed in commerce, or used, unless used in a “totally enclosed manner” which results in insignificant human exposure to a PCB as determined by the EPA.1 The export of PCBs is also restricted: exports for distribution in commerce require an exemption and exports for the purpose of disposal may obtain an exemption only if the concentration is above fifty parts per million (ppm).2 PCBs are often found on ships built before the 1979 ban, in particular on the plastics, rubbers, and other commercial nonmetal products used on these types of ships. Ex-navy ships built between 1940 and 1970 are almost certain to contain some amount of PCBs. Restrictions on the export of these toxic ships are important because as the U.S. Navy has downsized its fleet, a global trade in “shipbreaking,” or breaking down ships for scrap metal, has grown.3 After detailed coverage in a Pulitzer-prize winning investigatory journalism series published by the Baltimore Sun, U.S. navy ships are no longer sold directly for scrap. Additionally, no waivers have been granted for PCB-laden ex-naval ships since a lawsuit by environmental nonprofits in 2003 stopped the planned export of twelve ships to Britain.4 However, a creative path around these restrictions has evolved, as this case has revealed. The M/V Sanctuary, an old ex-navy ship built during World War II as a hospital vessel, was sold in 1989 to a nonprofit for humanitarian purposes. Unfortunately, the nonprofit failed to pay docking fees at its pier in Baltimore, and the Maryland Port Authority won default judgment in 2007 for failure to pay the fees. The ship was sold to Potomac Navigation, Inc. at a court-ordered public auction for $50,000. Potomac had 60 days to tow the ship from Baltimore and stated its intent was to move the ship to Piraeus, Greece or another location for refurbishment, most likely for use as a storage unit or hotel platform. Shortly before the planned towage, however, an environmental watchdog group (the Basel Action Network) e-mailed EPA and communicated its belief that the Sanctuary contained PCBs and contended the planned towage to another location violated TSCA’s ban on the export of PCBs. The EPA learned that PCBs were in fact present on the Sanctuary from a bidder on the ship who had tested the paint and found concentrations of PCBs over 50 ppm in four out of five samples. The EPA also learned from a ship recycling consultant that many buyers of ships built in the pre-ban period claim that they plan to repair and refurbish the ship but instead sell them for scrap in third world countries. In early November, the EPA requested permission from Potomac to inspect the Sanctuary for materials containing PCBs pursuant to its TSCA authority. Potomac denied the EPA’s request. The EPA then approached the district court and applied for and received an administrative warrant authorizing the inspection and a preliminary injunction preventing Potomac from moving the ship until the EPA could conduct its inspection and determine compliance with TSCA. Potomac appealed the issuance of the warrant and the injunction, and also contended that the EPA lacked authority to request a warrant under TSCA. Warrant Authority TSCA does not specifically confer warrant authority to the EPA. TSCA does explicitly authorize EPA to inspect a “premises or conveyance” that has substances regulated by the Act.5 Regulatory or enforcement authority vested by Congress in an agency generally carriesall “modes of inquiry and investigation traditionally employed or useful to execute the authority granted.”6 As such, federal courts have consistently held that regulatory agencies are authorized to apply for a warrant, so as to execute statutorily-granted inspection authority. While TSCA explicitly grants EPA subpoena power, the Fourth Circuit determined that this power was not granted by Congress in lieu of warrant authority because the two powers cover different subjects of investigation. EPA’s warrant authority stemmed from its authority to conduct a physical inspection of premises or conveyance, while the subpoena power involves persons or entities who may be compelled to testify or produce information. The court held EPA may obtain administrative warrants to carry out its inspection authority under TSCA. District Court Did Not Err in Issuing Warrant and Preliminary Injunction The Fourth Circuit gave “great deference” to the district court’s finding of probable cause to issue the warrant. Courts can find probable cause for an administrative warrant based on either “specific evidence” from an existing violation, or a showing that reasonable legislative or administrative standards for conducting an inspection are met. The warrant based on the legislative standard in TSCA was met because there was a substantial basis for the district court to find that 1) PCBs were held on the Sanctuary and 2) EPA needed to access the ship to conduct an inspection so it could administer TSCA. The court also found the preliminary injunction to be proper. The district court determined whether to issue a preliminary injunction by balancing the potential threat to the public against the harm to Potomac (which was economic). The court’s injunction was proper, as the risk to human health was great due to the mobility of PCBs and their possible adverse effects in humans, which tipped the balancing scale sharply in favor of EPA (acting on behalf of the public interest). Conclusion In holding that EPA has the authority to request an administrative warrant to effectuate its responsibilities under the Toxic Substances Control Act, the Fourth Circuit ensured the EPA’s ability to investigate a recalcitrant ship owner whom EPA had probable cause to investigate for violations of TSCA. The Fourth Circuit’s decision takes another step in ensuring that toxic waste in older ships is cleaned up responsibly at home. Endnotes 1. 15 U.S.C. A7 2605(e)(2)(A)-(C). 2. See 15 U.S.C. A7A7 2605(e)(2)(A), 2611(a)(2); 40 C.F.R.A7A7 761.20(c), 761.97(a). 3. The industry is prevalent in areas such as Alang, India, where squalid conditions exist and worker and environmental protections are virtually nonexistent. See generally Pulitzer Prizes, 1998 Pulitzer Prize Winners in Investigative Journalism: The Shipbreakers (Gary Cohn and Will Englund), Baltimore Sun, http://www.pulitzer.org/works/ 1998,Investigative+Reporting (last visited December 1, 2008). 4. Gary Cohn and Will Englund, Navy Halts Plans to Scrap Ships Abroad, Baltimore Sun, Dec. 23, 1997; Press Release, Basel Action Network, Environmentalists Warn of Illegal Export of Toxic Naval Vessel from Baltimore, http://www.ban.org/ban_news /2007/071113_illegal_export.html (November 13, 2007) (last visited Dec 1, 2008). 5. U.S. v. M/V Sanctuary, 540 F.3d 295, 299 (4th Cir. 2008). 6. Id.
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SandBar 7:4, January, 2009

U.S. v. M/V Sanctuary, 540 F.3d 295 (4th Cir. 2008).

Neil B. Paradise, 3L, Florida State University School of Law

Trade in toxic ships is dangerous. Toxic chemicals can remain on ships for many years, causing harm to human health or the environment. The Fourth Circuit’s recent decision in U.S. v. M/V Sanctuary helps ensure that toxic ships are properly decontaminated before they are converted to other uses or broken down.
The court held that the Environmental Protection Agency’s (EPA) authority to inspect the premises under the Toxic Substances Control Act (TSCA) allows the agency to seek an administrative warrant in the event the site owner does not co-operate. In this instance, the court determined the agency was justified in seeking an administrative warrant to search the docked ship M/V Sanctuary when it had evidence of the presence of polychlorinated biphenyls (PCBs). The court further held that the district court was justified in granting a warrant and a preliminary injunction preventing the vessel owner from moving the vessel until the EPA’s inspection was complete.

Background
The chemical known as polychlorinated biphenyls (PCBs) is a dangerous one. PCBs are toxic and persistent, may promote the formation of cancer tumors, and may also cause reproductive effects and developmental toxicity in humans. Since 1979, TSCA has prevented PCBs from being manufactured, processed, distributed in commerce, or used, unless used in a “totally enclosed manner” which results in insignificant human exposure to a PCB as determined by the EPA.1 The export of PCBs is also restricted: exports for distribution in commerce require an exemption and exports for the purpose of disposal may obtain an exemption only if the concentration is above fifty parts per million (ppm).2
      PCBs are often found on ships built before the 1979 ban, in particular on the plastics, rubbers, and other commercial nonmetal products used on these types of ships. Ex-navy ships built between 1940 and 1970 are almost certain to contain some amount of PCBs.
      Restrictions on the export of these toxic ships are important because as the U.S. Navy has downsized its fleet, a global trade in “shipbreaking,” or breaking down ships for scrap metal, has grown.3 After detailed coverage in a Pulitzer-prize winning investigatory journalism series published by the Baltimore Sun, U.S. navy ships are no longer sold directly for scrap. Additionally, no waivers have been granted for PCB-laden ex-naval ships since a lawsuit by environmental nonprofits in 2003 stopped the planned export of twelve ships to Britain.4
   However, a creative path around these restrictions has evolved, as this case has revealed. The M/V Sanctuary, an old ex-navy ship built during World War II as a hospital vessel, was sold in 1989 to a nonprofit for humanitarian purposes. Unfortunately, the nonprofit failed to pay docking fees at its pier in Baltimore, and the Maryland Port Authority won default judgment in 2007 for failure to pay the fees. The ship was sold to Potomac Navigation, Inc. at a court-ordered public auction for $50,000. Potomac had 60 days to tow the ship from Baltimore and stated its intent was to move the ship to Piraeus, Greece or another location for refurbishment, most likely for use as a storage unit or hotel platform.
      Shortly before the planned towage, however, an environmental watchdog group (the Basel Action Network) e-mailed EPA and communicated its belief that the Sanctuary contained PCBs and contended the planned towage to another location violated TSCA’s ban on the export of PCBs. The EPA learned that PCBs were in fact present on the Sanctuary from a bidder on the ship who had tested the paint and found concentrations of PCBs over 50 ppm in four out of five samples. The EPA also learned from a ship recycling consultant that many buyers of ships built in the pre-ban period claim that they plan to repair and refurbish the ship but instead sell them for scrap in third world countries.
      In early November, the EPA requested permission from Potomac to inspect the Sanctuary for materials containing PCBs pursuant to its TSCA authority. Potomac denied the EPA’s request. The EPA then approached the district court and applied for and received an administrative warrant authorizing the inspection and a preliminary injunction preventing Potomac from moving the ship until the EPA could conduct its inspection and determine compliance with TSCA. Potomac appealed the issuance of the warrant and the injunction, and also contended that the EPA lacked authority to request a warrant under TSCA.

Warrant Authority
TSCA does not specifically confer warrant authority to the EPA. TSCA does explicitly authorize EPA to inspect a “premises or conveyance” that has substances regulated by the Act.5 Regulatory or enforcement authority vested by Congress in an agency generally carriesall “modes of inquiry and investigation traditionally employed or useful to execute the authority granted.”6 As such, federal courts have consistently held that regulatory agencies are authorized to apply for a warrant, so as to execute statutorily-granted inspection authority.
While TSCA explicitly grants EPA subpoena power, the Fourth Circuit determined that this power was not granted by Congress in lieu of warrant authority because the two powers cover different subjects of investigation. EPA’s warrant authority stemmed from its authority to conduct a physical inspection of premises or conveyance, while the subpoena power involves persons or entities who may be compelled to testify or produce information. The court held EPA may obtain administrative warrants to carry out its inspection authority under TSCA.

District Court Did Not Err in Issuing Warrant and Preliminary Injunction
The Fourth Circuit gave “great deference” to the district court’s finding of probable cause to issue the warrant. Courts can find probable cause for an administrative warrant based on either “specific evidence” from an existing violation, or a showing that reasonable legislative or administrative standards for conducting an inspection are met. The warrant based on the legislative standard in TSCA was met because there was a substantial basis for the district court to find that 1) PCBs were held on the Sanctuary and 2) EPA needed to access the ship to conduct an inspection so it could administer TSCA.
The court also found the preliminary injunction to be proper. The district court determined whether to issue a preliminary injunction by balancing the potential threat to the public against the harm to Potomac (which was economic). The court’s injunction was proper, as the risk to human health was great due to the mobility of PCBs and their possible adverse effects in humans, which tipped the balancing scale sharply in favor of EPA (acting on behalf of the public interest).

Conclusion
In holding that EPA has the authority to request an administrative warrant to effectuate its responsibilities under the Toxic Substances Control Act, the Fourth Circuit ensured the EPA’s ability to investigate a recalcitrant ship owner whom EPA had probable cause to investigate for violations of TSCA. The Fourth Circuit’s decision takes another step in ensuring that toxic waste in older ships is cleaned up responsibly at home.

Endnotes
1. 15 U.S.C. A7 2605(e)(2)(A)-(C).
2. See 15 U.S.C. A7A7 2605(e)(2)(A), 2611(a)(2); 40 C.F.R.A7A7 761.20(c), 761.97(a).
3. The industry is prevalent in areas such as Alang, India, where squalid conditions exist and worker and environmental protections are virtually nonexistent. See generally Pulitzer Prizes, 1998 Pulitzer Prize Winners in Investigative Journalism: The Shipbreakers (Gary Cohn and Will Englund), Baltimore Sun, http://www.pulitzer.org/works/ 1998,Investigative+Reporting (last visited December 1, 2008).
4. Gary Cohn and Will Englund, Navy Halts Plans to Scrap Ships Abroad, Baltimore Sun, Dec. 23, 1997; Press Release, Basel Action Network, Environmentalists Warn of Illegal Export of Toxic Naval Vessel from Baltimore, http://www.ban.org/ban_news /2007/071113_illegal_export.html (November 13, 2007) (last visited Dec 1, 2008).
5. U.S. v. M/V Sanctuary, 540 F.3d 295, 299 (4th Cir. 2008).
6. Id.