The worldwide bulk chemical transport trade depends on chemical transportation depots to be conscious of market calls for by briefly holding trailers and containers of chemical merchandise en path to their ultimate locations at buyer services. Because the Nineteen Seventies, the momentary storage operations at these depots have been ruled by laws overseen by the U.S. Division of Transportation (DOT). On account of being topic to DOT laws, and to keep away from regulatory overlap and battle, these depots have traditionally been topic to „in-transit“ exemptions beneath sure environmental frameworks overseen by the U.S. Environmental Safety Company (EPA), together with the „storage incident to transportation“ exemption beneath Part 112(r) of the Clear Air Act’s (CAA) Danger Administration Program (RMP) and the Emergency Planning and Group Proper to Know Act (EPCRA).
Nonetheless, these exemptions have just lately been topic to vital consideration by EPA and trade, together with an EPA proposed rulemaking in early 2024 that tried to restrict the CAA’s RMP in-transit exemption to get rid of these transportation containers that had been „disconnected from motive energy“ for 48 hours. Even with no new rule in place, EPA has challenged use of the in-transit exemption, together with a case determined by the U.S. Courtroom of Appeals for the Ninth Circuit in December 2024, United States v. Multistar Industries, Inc. No. 23-3765 (ninth Cir. Dec. 10, 2024) (Multistar).
In Multistar, the Ninth Circuit affirmed a 2023 district courtroom choice that concluded that railcars containing Trimethylamine (TMA, a regulated hazardous substance) saved at Multistar’s facility didn’t fulfill the standards for the CAA and EPCRA’s in-transit exemptions. Particularly, the Ninth Circuit concluded that, as a result of the railcars have been disconnected from motive energy whereas saved on website at Multistar’s facility (in most situations, for a couple of month), they didn’t fulfill the exemptions.
The Multistar choice leaves open many unanswered questions for the chemical transportation trade, together with what affect this choice may have on the jurisdictional limits of EPA and DOT to manage hazardous chemical substances in interstate commerce and the way these authorities could overlap or must be coordinated by way of rulemaking or new laws. Within the interim, chemical transporters are left to marvel what actions could also be taken by the Trump Administration to restrict or distinguish the boundaries of company authority and/or rely on the choice to provoke enforcement actions in opposition to chemical transporters, transloaders and depot services.
This weblog gives an outline of the Ninth Circuit’s choice and opines on how the trade could count on the Trump Administration’s EPA to deal with these uncertainties.
The Ninth Circuit’s Resolution
On Dec. 10, 2024, the Ninth Circuit’s choice in United States v. Multistar Industries, Inc. affirmed the 2023 choice of the U.S. District Courtroom for the Japanese District of Washington that railcars containing TMA at Multistar’s facility in Washington state didn’t fulfill the standards for transportation exemptions from the CAA’s RMP necessities and EPCRA.
The district courtroom beforehand held that the railcars that sat at Multistar’s facility previous to transloading for ultimate supply to the shopper didn’t qualify for the „storage incident to transportation“ exemptions beneath EPCRA and the CAA for 4 causes:
- A number of the railcars sat on Multistar’s rails for a big size of time (between six days and 26 weeks after supply).
- The railcars weren’t related to motive energy whereas at Multistar’s facility.
- Multistar’s contracts with the TMA producer supported a discovering that the first objective of Multistar’s operations was „storage,“ not transportation.
- The railcars weren’t beneath energetic transport papers (i.e., invoice of lading) whereas at Multistar’s facility.
In its unpublished opinion, the Ninth Circuit largely relied on the primary two components (size of time and motive energy) to affirm the decrease courtroom’s choice and proffer a vivid line of one month because the size of time that stationary transportation containers could also be saved earlier than they’re not in transportation, noting EPA’s lack of such customary. Particularly, the courtroom concluded that TMA-containing railcars sitting stationary for greater than one month „plainly [were] not in transportation“ and that storage was the „principal objective.“1 For railcars that sat at Multistar’s facility for lower than one month, the courtroom relied on EPA’s „motive energy“ customary to conclude that, as a result of the railcars have been disconnected from motive energy whereas at Multistar’s facility, they should be thought of a „stationary supply“ beneath the CAA, no matter another issue.2 The courtroom additionally briefly famous the shortage of energetic transport papers in help of its choice however didn’t analyze this consider additional element.
The Ninth Circuit’s choice didn’t handle the jurisdictional argument raised by Multistar’s counsel that EPA is making an attempt to train authority over an space that’s outdoors of its jurisdiction and experience – and already regulated by DOT – and appeared to argue that it ought to defer to EPA’s technical experience (over environmental issues) with out consideration of alternate experience in transportation issues that may arguably higher sit with DOT.
Trying Ahead
Although EPA’s latest concentrate on the in-transit exemptions and the Multistar choice elevate many uncertainties for the majority chemical trade, it’s anticipated that the Trump Administration’s touted concentrate on deregulation could show favorable to the trade. It’s anticipated that the Trump Administration will probably be extra seemingly than the earlier administration to defer to the long-held delineation between DOT and EPA authority that has been relied upon by the chemical transportation trade in figuring out their regulatory compliance obligations. Accordingly, to the extent it is ready to exert management over EPA’s regional management and enforcement personnel, the Trump Administration could select to primarily revert to the established order, neither implementing a brand new rulemaking nor specializing in enforcement actions to implement the courtroom’s ruling within the Multistar choice.
Alternatively, given the obvious disconnect between EPA headquarters, which dropped this problem throughout prior rulemaking by eradicating the 48-hour window, and its regional enforcement personnel and the U.S. Division of Justice, which has argued {that a} container is not in transit as quickly as it’s indifferent from motive energy, the Ninth Circuit’s choice could additional refined by means of litigation. Multistar could search en banc overview of the Ninth Circuit’s opinion or an eventual attraction to the U.S. Supreme Courtroom can be doable. Ought to that happen, the scope of the exemptions or company jurisdiction could also be additional restricted by judicial selections. Chemical transport corporations can prepared themselves for any consequence by guaranteeing that they’ve a full understanding of the CAA’s RMP laws and EPCRA necessities and take steps to guage how their operations might adjust to these necessities.
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Holland & Knight’s Transportation & Infrastructure Business Sector Group is ready to help trade purchasers in adapting to the anticipated adjustments by the brand new administration. Our group is writing new weblog posts every day main as much as President-Elect Donald J. Trump’s inauguration, with insights concerning seemingly impacts on the assorted segments of the trade, together with Aviation, Development, Maritime, Freight Rail, Motor Carriers, Transit and Autonomous Transportation. Bookmark our Election Impacts on Transportation & Infrastructure useful resource web page to comply with alongside.
Notes
1 Resolution, at 4.
2 Id.
