EPA Fraud

The Osteen decision

The United States Federal Court Decision

Judge Osteen

July 17, 1998


IN THE UNITED STATES DISTRICT COURT


FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

WINSTON-SALEM DIVISION


FLUE-CURED TOBACCO COOPERATIVE
STABILIZATION CORPORATION,
THE COUNCIL FOR BURLEY TOBACCO
INC.,
UNIVERSAL LEAF TOBACCO COMPANY
INCORPORATED,
PHILIP MORRIS INCORPORATED,
R.J. REYNOLDS TOBACCO COMPANY,
and
GALLINS VENDING COMPANY,

Plaintiffs,

V.


UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, and CAROL BROWNER, Administrator,Environmental Protection Agency,

Defendants.

6:93CV00370

ORDER AND JUDGMENT

OSTEEN, District Judge

For the reasons set forth in the memorandum opinion entered contemporaneously herewith,

IT IS ORDERED AND ADJUDGED that Plaintiffs' Motion for Partial Summary Judgment is granted[1171].

IT IS FURTHER ORDERED AND ADJUDGED that Defendants' Cross Motion for Summary Judgment isdenied [1261]. The court vacates Chapters 1-6 of and the Appendices to EPA's RespiratoryHealth Effects of Passive Smoking: Lung Cancer and other Disorders, EPA/600/6-90/006F(December 1992). To ripen its judgment for purposes of appellate review, pursuantto Federal Rule of Civil Procedure 54(b), the court finds there is no just reason fordelaying entry of judgment.


IT IS FURTHER ORDERED AND ADJUDGED that Plaintiffs, Motion for Leave to File SupplementPleading under Rule 15(d) is granted (1201).

This the 17th day 1998.

[signed William L. Osteen]
United States District Judge

IN THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

WINSTON-SALEM DIVISION


FLUE-CURED TOBACCO COOPERATIVE
STABILIZATION CORPORATION,
THE COUNCIL FOR BURLEY TOBACCO,
INC.,
UNIVERSAL LEAF TOBACCO COMPANY,
INCORPORATED,
PHILIP MORRIS INCORPORATED,
R.J. REYNOLDS TOBACCO COMPANY,
and
GALLINS VENDING COMPANY,

Plaintiffs,

V.


UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, and CAROL BROWNER, Administrator,Environmental Protection Agency,

Defendants.

6:93CV00370

MEMORANDUM OPINION

OSTEEN, District Judge

This case is before the court on the parties' cross motions for partial summary judgmenton Counts I-III of the Complaint. These counts raise Administrative Procedure Act (APA)challenges to EPA's report, Respiratory Health Effects of Passive Smoking: Lung Cancerand Other Disorders, EPA/600/6-90/006F, December 1992



(ETS Risk Assessment). EPA claims its authority to conduct the ETS Risk Assessment derivesfrom the Radon Gas and Indoor Air Quality Research Act of 1986, Pub. L. No. 99-499, 100Stat. 1758-60 (1986) (Radon Research Act) (codified at 42 U.S.C. 5 7401 note (1994)). Inthe ETS Risk Assessment, EPA evaluated the respiratory health effects of breathingsecondhand smoke (environmental tobacco smoke or ETS) and classified ETS as a Group Acarcinogen, a designation meaning there is sufficient evidence co conclude ETS causescancer in humans. Disputing the Assessment, Plaintiffs argue: EPA exceeded its authorityunder and violated the restrictions within the Radon Research Act; EPA did not comply withthe Radon Research Act's procedural requirements; EPA violated administrative lawprocedure by making a conclusion regarding ETS before it concluded its risk assessment,and EPA's ETS Risk Assessment was not the result of reasoned decision making. EPA deniesthe same and argues the administrative record (record) demonstrates reasoned decisionmaking. Plaintiffs have also filed a motion to supplement the

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1 Plaintiffs also allege that EPA's issuance of the ETS RiskAssessment violated Plaintiffs, due process rights. The court has stayed consideration ofthe due process claims pending resolution of the APA claims. See Flue-Cured TobaccoCooperative Stabilization Corp. v. EPA, 857 F. Supp. 1137 (M.D.N.C. 1994).



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pleadings. For the reasons stated herein, the court will enter an order grantingPlaintiffs' motions.

I. THE RADON RESEARCH ACT

The Radon Research Act was enacted by Congress as Title IV of the Superfund Amendmentsand Reauthorization Act of 1986 (SARA) and codified with the Clean Air Act at 42 U.S.C. §7401 note. The Act was based on Congress' finding: "exposure to naturally occurringradon and indoor air pollutants poses public health risk[s]," id. § 402(2);"Federal radon and indoor air pollutant research programs are fragmented andunderfunded," id. § 402(3); and an "information base concerning exposureto radon and indoor air pollutants should be developed . . . . Id. § 402(4). Theact provides

(a) Design of Program. - [The EPA] shall establish a research program with respect toradon gas and indoor air quality. Such program shall be designed to -

(1) gather data and information on all aspects of indoor air quality in order tocontribute to the understanding of health problems associated with the existence of airpollutants in the indoor environment;

(2) coordinate Federal, State, local, and private research and development

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efforts relating to the improvement of indoor air quality; and

(3) assess appropriate Federal Government actions to mitigate the environmental and healthrisks associated with indoor air quality problems.

(b) Program requirements. - The research program required under this section shall include-

(1) research and development concerning the identification, characterization, andmonitoring of the sources and levels of indoor air pollution . . . .

. . . .

(2) research relating to the effects of indoor air pollution and radon on human health;

. . . .

(6) the dissemination of information to assure the public availability of the findings ofthe activities under this section.

Id. 403(a) & (b). Congress also required a narrow construction of the authoritydelegated under the Radon Research Act. Nothing in the act "shall be construed toauthorize the [EPA] to carry out any regulatory program or any activity other thanresearch, development, and related reporting, information dissemination, and coordinationactivities specified in (the Radon Research Act]." Id. § 404.

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The Act requires EPA to establish two advisory groups to assist EPA in carrying outits statutory obligations under the Radon Research Act. one of the advisory groups is tobe a committee comprised of representatives of federal agencies concerned with variousaspects of indoor air quality, and the other group is to be "an advisory groupcomprised of individuals representing the States, the scientific community, industry, andpublic interest organizations . . . ... Id. § 403(c). The Act requires EPA tosubmit its research plan to the EPA Science Advisory Board which, in turn, would submitcomments to Congress. Id. § 403(d).

II. STANDARD OF REVIEW 2

Administrative agencies have no power to act beyond authority conferred by Congress. See,e.g., Louisiana Public Serv. Comm'n v. FCC, 476 U.S. 355, 374, 206 S. Ct. 1890, 1901,90 L. Ed. 2d 369 (1986). Title 5 U.S.C. § 706(2)(C) requires the

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2 As this case involves review of administrative agency action, thecourt will not conduct de novo review but must review the record before EPA at thetime EPA made its decision. For a discussion on the scope of review, see Flue-CuredTobacco Cooperative Stabilization Corp. v. EPA, No. 6:93CV00370 at 16-20 (M.D.N.C. May23, 1995) (Memorandum Opinion discussing summary judgment on scope of review).


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court to "hold unlawful and set aside agency action . . . found to be . . . in excessof statutory jurisdiction, authority, or limitations, or short of statutory right."The initial inquiry for judicial review of agency action is "whether Congress hasdirectly spoken to the precise question at issue. If the intent of Congress is clear, thatis the end of the matter; for the court, as well as the agency, must give effect to theunambiguously expressed intent of Congress." Chevron, U.S.A., Inc. v. NaturalResources Defense Council I
Inc
., 467 U.S. 837,
842-43, 104 S. Ct. 2778, 2781, 81, L. Ed. 2d 694 (1984). -The task of resolving thedispute over the meaning of [the statute] begins where all such inquiries must begin: withthe language of the statute itself." United States v. Ron Pair Enter., Inc., 489 U.S.235, 241, 109 S. Ct. 1026, 1030, 103 L. Ed. 2d 290 (1989) (citations omitted). "Thejudiciary . . . is the final authority on issues of statutory construction and will rejectadministrative interpretations which are contrary to the clear congressional intent."Adams v. Dole, 927 F.2d 771, 774 (4th
Cir. 1991).

"[I]f the statute is silent or ambiguous with respect to the specific issue, thequestion for the court is whether the agency's answer is based on a permissibleconstruction of the

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statute." Chevron, 467 U.S. at 843, 104 S. Ct. at 2782. Courts do not alwaysabide by this Chevron deference. Although the circuits appear divided, the majorityof post-Chevron cases hold no deference is accorded to an agency's view of astatute where the statute does not confer rule making authority on the agency. CompareMerck & Co. v. Kessler, 80 F.3d 1543, 1550 (Fed. Cir. 1996) (Chevron doesnot apply to interpretive rules); Atchison. Topeka & Santa Fe Ry. v. Pena, 44F.3d 437, 441-42 (7th Cir. 1994) (en banc) (same), aff'd on other grounds sub nom.Brotherhood of Locomotive Eng'rs v. Atchison, Topeka & Santa Fe Ry., 116 S. Ct.595 (1996) with Trans Union Corp. v. FTC, 81 F.3d 228, 230-31 (D.C. Cir. 1996)(applying Chevron to interpretive rule); Elizabeth Blackwell Health Ctr. forWomen v. Knoll, 61 F.3d 170, 182 (3d Cir. 1995) (same), cert. denied, 116 S.Ct. 816 (1996). See Ronald M. Levin, Scope of Review Legislation: The Lessons of1995, 31 Wake Forest L. Rev. 647, 662-64 (1996). Another factor in determining anagency's discretion in statutory interpretation is the specificity of interpretation.Courts determine the general meaning of legislation, whereas agencies are often betterequipped to determine interstitial meanings. John H. Reese, Administrative LawPrinciples and Practice 709-713 (1995).

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III. EPA's AUTHORITY UNDER THE RADON RESEARCH ACT

The parties assert the plain language of the statute determines whether EPA had authorityto assess the risks of and classify ETS. The court-agrees. However, the parties, readingthe plain language, come to opposite conclusions. Plaintiffs argue EPA exceeded itsstatutory grant of authority under the Radon Research Act by conducting a risk assessment,making a carcinogen classification, and by engaging in de facto regulation. Plaintiffsalso argue Toxic Substance Control Act prohibited EPA's risk assessment of ETS.

A. The Radon Research Act Authorizes EPA's Risk Assessment and Classification ofEnvironmental Tobacco Smoke.
Plaintiffs concede EPA was authorized to conduct research on ETS and indoor airquality but argue EPA's ETS carcinogen risk assessment and carcinogen classification areregulatory activities, not research activities. EPA's Guidelines for Carcinogen RiskAssessment, 51 Fed. Reg. 33,992, 33,993 (1986) (Risk Assessment Guidelines) state:"[r]egulatory decision making involves two components: risk assessment and riskmanagement." See also, 60 Fed. Reg. 52,032, 52,034 (1995) (Risk assessment isa component of the regulatory process.).

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Plaintiffs also rely on the National Resource Council's (NRC) Redbook which recognizesrisk assessment as a distinct element of the regulatory process. See NRC, RiskAssessment in the Federal Government; Managing the Process 3 (1983) (NRC Redbook).Plaintiffs argue that since risk assessment is a component of regulatory activity, riskassessment is not authorized research. but rather proscribed regulatory activity.

EPA's Risk Assessment Guidelines state risk assessment incorporates judgmental positionsand the Agency's regulatory mission. RiskAssessment Guidelines at 33,994. Plaintiffs alsooffer evidence that EPA has promulgated regulations for every other substance for which ithas conducted a risk assessment and classified the substance as a Group A carcinogen .3 3Thus,
Plaintiffs conclude that EPA's guidelines and actions demonstrate risk assessment is aregulatory, not research, tool.

In arguing EPA recognizes this distinction between risk assessment and research,Plaintiffs offer evidence that EPA is assessing the risks of several other indoor airpollutants, none of which are being conducted under the authority of the Radon

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3
See Assessing the Effects of Environmental Tobacco Smoke: Hearing on S. 262 and S. 1680Before the Subcomm. on Clean Air and Nuclear Reg. of the Sen. Comm. on Env't and PublicWorks, 103d Cong. 177, 204-05 (1994) (Browner Hearing Responses).


9



Research Act. Included is evidence that EPA did not conduct its risk assessment of radonunder the authority of the Radon Research Act. 4 Instead, EPA relied on the ToxicSubstance Control Act (TSCA), 15 U.S.C. §§ 2601 et seq., which authorizes EPA todescribe "action levels indicating the health risk associated with different levelsof radon exposure." TSCA § 2663(b)(1). 5

Plaintiffs argue EPA's reliance on TSCA indicates EPA realizes the Radon Research Act doesnot authorize risk assessments or carcinogenic classifications.

EPA replies that the Radon Research Act provides a broad mandate to conduct activitiesshort of actual regulation. Upon a sparse legislative record and subsequent congressionalfunding, EPA urges that Congress intended the act to include ETS.

The court is not persuaded by Plaintiffs, arguments or EPA's reliance on what certainmembers of Congress intended. The plain language of the statute is sufficient to resolvethis dispute. In the Radon Research Act, Congress directed EPA to gather information onall aspects of indoor air quality, research indoor

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4
See
Browner Hearing Responses at 190-92.



5 Plaintiffs also provide evidence that EPA did not include the ETSproject when providing Congress with a listing of Agency research activity.


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pollutants' effects on health, characterize sources of pollution, and disseminate thefindings. Determining whether Congress authorized risk assessments requires defining riskassessment. "Risk assessment is the use of the factual base to define the healtheffects of exposure of individuals or populations to hazardous materials andsituations." NRC Redbook, at 3. -[NRC] use[s] risk assessment to mean thecharacterization of the potential adverse health effects of human exposures toenvironmental hazards." Id. at 18. "The qualitative assessment or hazardidentification part of risk assessment contains a review of the relevant biological andchemical information bearing on whether or not an agent may pose a carcinogenichazard." Risk Assessment Guidelines at 33,994.

Risk assessments include several elements: description of the potential adverse healtheffects based on an evaluation of results of epidemiologic, clinical, toxicologic, andenvironmental research-* extrapolation from those results to predict the type and estimatethe extent of health effects in humans under given conditions of exposure; judgments as tothe number and characteristics of persons exposed at various intensities and durations;and summary judgments on the existence and overall magnitude of the public-health problem.Risk assessment also includes characterization of the uncertainties inherent in theprocess of inferring risk.

NRC Redbook, at 18.

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In researching effects on health, EPA must assess whether pollutants are hazardous tohealth. Researching whether pollutants are hazardous to health necessarily entailsassessing the risk such pollutants pose to health. Thus, researching health effects isindistinguishable from assessing risk to health. Congress, directives to research theeffects of indoor air pollution on human health and disseminate the findings encompassrisk assessment as defined by NRC and explained by EPA's Risk Assessment Guidelines.

The NRC explains "description of the potential adverse health effects" is acomponent of risk assessment. Id. The Radon Research Act requires researching pollutants,effects on health and disseminating the findings. The mandate of the Act requires more ofEPA than merely describing effects. Congress intended EPA to disseminate findings, orconclusions, based upon the information researched and gathered. Utilizing descriptions ofhealth effects to make findings is risk assessment.

The Radon Research Act contains two independent directives which authorize EPA to classifyindoor pollutants as carcinogenic. First, Congress required EPA to characterize sources ofindoor air pollution. Radon Research Act 5 403(b)(1). Since they emit gasses andparticulates, burning cigarettes are a

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source of indoor air pollutants. By determining whether these emissions cause cancer inpeople exposed to burning cigarettes, EPA is characterizing a source of indoor airpollution. Second, Congress required EPA to determine indoor pollutants, effects onhealth. Id. § 403(b)(2). In determining whether health is affected by a pollutant,the researcher must identify whether a causal relationship exists between the pollutantand deteriorating health. Put simply, the researcher must determine how, if at all, apollutant affects health. Once a researcher has identified how a pollutant harms humanhealth, the risk is most often identified.6 This is especially true regarding carcinogens.The Radon Research Act's general language authorizing EPA to characterize sources ofpollutants, research effects on health, and disseminate the findings encompassesclassifying pollutants based on their effects.

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6 For example, if research determines a pollutant harms human healthby causing malignant tumors, it is ipso facto a carcinogen. See Ted A. Loomis &A. Wallace Hayes, Essentials of Toxicology 232-36 (4th ed. 1996) (tests forcarcinogenicity). If research determines the pollutant causes blockage ofneurotransmissions, it is ipso facto a neurotoxin. See David R. Franz, et al., ClinicalRecognition and management of Patients Exposed to Biological Warfare Agents, 278 JAMA399 (1997) (discussing botulinum toxins).



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The court is not persuaded by Plaintiffs' evidence showing risk assessment incorporatesjudgmental positions and an agency's regulatory mission. Researching how a pollutantaffects health entails conducting risk assessment. Judgment and inference do notautomatically remove risk assessment from what constitutes researching health effects. Tothe contrary, judgment and inference inhere in the "use of [a] factual base to definethe health effects of exposure of individuals or populations to hazardous materials andsituations.' NRC Redbook, at 3, 18, 28. "Risk assessment . . . includescharacterization of the uncertainties inherent in the process of inferring risk." Id.at 18.

The uncertainties inherent in risk assessment can be grouped in two general categories:missing or ambiguous information on a particular substance and gaps in current scientifictheory. When scientific uncertainty is encountered in the risk assessment process,inferential bridges are needed to allow the process to continue . . . . The judgments madeby the scientist/risk assessor for each component of risk assessment often entail a choiceamong several scientifically plausible options; the Committee has designated these inferenceoptions.

Id. at 28. In conducting a scientific inquiry into whether a pollutant affectshuman health, a researcher will have to choose inference options. In fulfilling itsobligation under the Radon

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Research Act, EPA must adopt inference options in conducting research, characterizing, andmaking findings. Inference options that are scientifically plausible and fundamentallyfair are part of risk assessment. EPA may conduct risk assessments under the RadonResearch Act so long as the assessments do not impede the Act's general requirements ofgathering all relevant information, researching, and disseminating the findings.

The court disagrees with Plaintiffs' argument that risk assessment constitutes aregulatory activity and is thus prohibited under the Radon Research Act. Both the NRC'sRedbook and EPA's Risk Assessment Guidelines identify regulatory activity as beingcomprised of two elements: risk assessment and risk management. Prohibition of certainconduct does not include prohibition of lesser included activities.' Prohibiting conductentails a prohibition against conducting the lesser included activities in concert toarrive at the proscribed result. Risk assessment is a component of regulation. Congress'prohibition of regulation is not a prohibition against the components comprisingregulation. In the Radon Research Act, Congress intended EPA to research, collect, anddisseminate information

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7 Standing upright is a component of running. A prohibition onrunning is not also a prohibition on standing.


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and findings on indoor air pollutants' effect on health without engaging in regulating.Risk assessments are incidental to researching effects on health, characterizing sourcesof pollutants, and making findings. So long as collecting and researching information anddisseminating the resulting information are EPA's lodestar, Congress, prohibitingregulation under the Radon Research Act does not preclude risk assessment. The court willreview the ETS Risk Assessment to determine whether EPA conducted its research activitiesin accordance with the Act. 8





Finally, Plaintiffs, evidence of EPA's reliance on other statutes for assessing risks ofother indoor air pollutants is not persuasive. In these statutes, Congress granted EPAregulatory power over certain pollutants. EPA has since promulgated regulations pursuantto these statutes. It is unremarkable that when asked its authority to conduct elements ofits regulatory process from which regulation occurred, EPA cited the statutes grantingfull regulatory power.8

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8 Even if it were persuasive evidence that EPA interpreted the RadonResearch Act to exclude risk assessment, the court makes its determination based upon thelanguage Congress used, not agency interpretation.


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B. EPA's Environmental Tobacco Smoke Activities Do Not Constitute a ProhibitedRegulatory Program Under the Radon Research Act.

Plaintiffs have shown that EPA aggressively disseminated information, coordinatedactivities with government agencies and non-governmental organizations, and promoted ETSregulation and prohibition.' Plaintiffs argue EPA's conduct constitutes de factoregulatory activity in violation of the Radon Research Act.

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9
See, e.g., Summary of EPA Draft Conclusions and SAB Review, Steven Bayard, EPA ETSProject Manager, ORD Q.9 at 1 (April 4, 1991) (Joint Appendix (JA) 6,700) ("EPA hasno regulatory authority on ETS, but is coordinating with OSHA which does have regulatoryauthority in the workplace."); EPA Memorandum from William G. Rosenberg, AssistantAdministrator for Air and Radiation, to Erich W. Bretthauer, Assistant Administrator forResearch and Development at 1 (Oct. 7, 1991) (JA 6,696-97) (urging expedition of ETSstudy; local, state and federal agency projects awaiting its issuance); EPA Memorandumfrom William G. Rosenberg, Assistant Administrator for Air and Radiation, to Donald G.Barnes, Director, Science Advisory Board (June 28, 1991), and attached ETS TechnicalCompendium, Draft (May 1991) at 2 (JA 6,755- 56, 6,758) (intended to help statelegislators ban smoking in workplaces, restaurants, and public places).


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EPA's activities did not amount to formal regulation, 10 for it issued no regulations andmade no attempt to directly manage ETS risks. EPA's activities constituted de factoregulatory activity but were achieved through means authorized by Congress. Congressprohibited any regulatory program or activity "other than research,development, and related reporting, information dissemination, and coordination activities. . . . Radon Research Act § 404 (emphasis added). EPA may be using its authority underthe Act more aggressively and effectively than Congress had foreseen, however, suchactivities are within the law as written. Removal of EPA's authority to engage in de factoregulatory activity under the Radon Research Act requires an act of Congress, not thecourt's judgment.

C. The Toxic Substance Control Act's Prohibition With Respect to Tobacco Does Not Applyto the Radon Research Act.


In the Toxic Substance Control Act (TSCA), Congress authorized EPA to regulate chemicalsubstances presenting an

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10 Plaintiffs also seek leave to supplement the pleadings, claimingEPA is promulgating indoor air regulations by funding and controlling a private entitythat drafts indoor air ventilation standards that are adopted in state and local buildingcodes. The court does not consider these allegations in ruling on the parties, summaryjudgment motions.


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unreasonable risk of injury to health or the environment. 15 U.S.C. § 2605. TSCA does notauthorize EPA to regulate tobacco products. Id. § 2602(2)(B)(iii). Some in Congress haveattempted to repeal the tobacco exemption for the purpose of providing EPA with authorityto regulate tobacco smoke under TSCA. See 136 Cong. Rec. E2223, E2224 (daily ed.June 28, 1990) (statement of Rep. Luken). More recently, a bill was introduced to amendTSCA "to protect the public from health hazards caused by exposure to [ETS]." S.1680, 103d Cong., 1st Sess., 139 Cong. Rec. S16222 (daily ed. Nov. 18, 1993). Both billswere introduced after the enactment of the Radon Research Act, and neither passed.Plaintiffs argue the specific language in TSCA, regarding tobacco, takes precedence overthe general conflicting language of the Radon Research Act.

The court does not find the conflict Plaintiffs, argument presumes. In the TSCA, Congressdirected EPA to prohibit, limit, and regulate the manufacture, processing, or distributionof hazardous chemical substances. Congress exempted tobacco from TSCA's regulatory reach.The Radon Research Act contains no regulatory authority. Compare TSCA § 2605(EPA's requirements in regulating manufacturing, processing, and distribution of hazardouschemical substances), with Radon Research Act § 404 (no

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regulatory authority except research, development, dissemination, and coordinationregarding indoor air pollutants).

To the extent the Radon Research Act authorizes de facto regulatory activity, Congresssimply excluded tobacco from the definition of chemical substance as used in the TSCAchapter. See TSCA § 2602 (definitions "As used in this chapter"). Congress,defining "chemical substance" under the TSCA to exclude tobacco does not meanCongress conclusively removed tobacco from EPA's jurisdiction. it means Congress removedtobacco from the authority granted to EPA under TSCA. Congress did not so limit thedefinition of "indoor air pollutant" under the Radon Research Act. Seegenerally Coyne Beahm, Inc. v. FDA, 966 F. Supp. 1374, 1379-80 (M.D.N.C. 1997)(declining to infer preemption of FDA authority to regulate tobacco products from othertobaccospecific legislation or Congress' failure to act). There being no conflict betweenthe statutes and finding Congress, TSCA restriction by definition inapplicable to theRadon Research Act, Plaintiffs, argument fails.


IV. EPA's PROCEDURAL REQUIREMENTS UNDER THE RADON RESEARCH ACT


Plaintiffs argue EPA failed to establish and consult the advisory group mandated by theRadon Research Act, therefore,

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EPA's conduct under the Act was unlawful and must be vacated. EPA responds by arguing itsatisfied its procedural requirements by consulting the EPA Science Advisory Board (SAB).EPA states it formed an advisory group within SAB which included representatives of allthe statutorily identified constituencies., EPA further argues that even if it did notsatisfy the Radon Research Act's procedural requirements: (1) the Act speaks in generalterms and committee formation was not a prerequisite to research activity under the Act,(2) Plaintiffs were not prejudiced because EPA utilized public participation and peerreview procedures in developing the ETS Risk Assessment. In reply, Plaintiffs analyze SABand the members of the board which reviewed the ETS Risk Assessment.

A. Background

"[T]he SAB is an independent group of non-Federal government scientists andengineers who are mandated through the Environmental Research, Development andDemonstration Act of 1978 to provide advice to the EPA Administrator on technical aspectsof issues confronting the Agency." EPA Memorandum from William K. Reilly,Administrator, to Congressman Thomas J. Bliley, Jr., U.S. House of Representatives 1 (Oct.11, 1990) (Reilly Mem.) (.:A

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9,310). See also, 42 U.S.C. § 4365 (statute authorizing SAB). "The objective of theBoard is to provide independent advice . . . . The Board will review scientific issues,provide independent scientific and technical advice on EPA's major programs and performspecial assignments . . ." SAB Charter ¶ 3, reprinted in, EPA, U.S.Environmental Protection Agency Advisory Committees 137 (July 1994) (JA 3,445)."[T]he Board augments its standing committee membership with the inclusion ofsubject-matter experts ('consultants') to provide special insights on particular issues.In identifying appropriate consultants, the [SAB] . . . solicits names of candidates froma variety of public and private sources, which generally include the Agency and theaffected parties." Reilly Mem. at 2 (JA 9,311). SAB then attempts to select expertsfrom "either side of the middle of the spectrum of views in the technical community,with few, if any, coming from either end of the spectrum." Id. at 1 (JA 9,310).

In 1986, Congress passed the Radon Research Act which required that EPA "establish .. . an advisory group comprised of individuals representing the States, the scientificcommunity, industry, and public interest organizations to assist [EPA] in carrying out theresearch program for . . . indoor air quality." Radon Research Act § 403(c). The Actalso required EPA to submit

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its research plan to SAB. Id. § 403(d). In response, "the SAB established the IndoorAir Quality/Total Human Exposure Committee (IAQC) as the forum in which the SAB wouldconsider indoor air issues." Reilly Mem. at 1 (JA 9,310).

An EPA Ethics Advisory sent to IAQC draws the distinction between"representatives" on advisory committees and "Special GovernmentEmployees." EPA Memorandum from Robert Flaak, Assistant Staff Director, SAB, to IAQCat Enclosure G11 (June 17, 1992) (JA 10,938-40) (Flaak Mem.). Representatives are thosewho "appear in a representative capacity to speak for firms or an industry . . . orfor any other recognizable group whereas "Special Government Employees" do not. Id.(JA 10,940). Another attachment, captioned "Procedures for Public Disclosures atSAB Meetings," states the IAQC panel members were serving as Special GovernmentEmployees, not as representatives: %%SAB members and consultants (M/Cs) carry our [sic]their duties as Special Government Employees (SGE's) and are subject to the COI [conflictof interest] regulations." Id. at Enclosure F (JA

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11 Enclosure G: EPA Memorandum from Gerald Yamada, Principal DeputyGeneral Counsel, Designated Agency Ethics Official, to Deputy Ethics Officials (April 24,1992).


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10,936). See 18 U.S.C. 202-09 (restrictions on special government employees).

B. Neither the Science Advisory Board Or Its Subcommittee Is the RepresentativeAdvisory Group Congress Mandated In the Radon Research Act.

The language used in the Radon Research Act, the nature of SAB, and the composition ofthe IAQC which reviewed the ETS Risk Assessment, demonstrate that EPA failed to complywith the procedural requirements set forth by Congress. In § 403(c) of the Radon ResearchAct, Congress clearly requires EPA to establish a representative advisory group to assistEPA in carrying out research programs conducted under the Act. The group is to becomprised of representatives from the states, scientific community, industry, and publicinterest organizations. In the following paragraph, § 403(d), Congress requires that EPAsubmit its research plan "to the EPA Science Advisory Board . . .," which wouldthen submit its comments to Congress. "Where Congress includes particular language inone section of a statute but omits it in another section of the same Act, it is generallypresumed that Congress acts intentionally and purposely in the disparate inclusion orexclusion." Brown v.

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Gardner, 513 U.S. 115, 120, 115 S. Ct. 552, 556, 130 L. Ed. 2d 462 (1994) (citationomitted). The presumption is strengthened where, as here, the disparate language is usedwithin the same section. Had Congress meant SAB when requiring a representative advisorygroup, Congress would have specified SAB as it did in the subsequent paragraph. Further,§ 403(c) calls upon EPA to establish the advisory group. In 1977, Congress mandatedcreation of SAB, and EPA complied. Congress' use of "establish" suggests .--hatEPA should create a group. Congress would not likely direct EPA to establish what alreadyexists. A closer examination of SAB verifies the court's statutory construction.

Congress directed EPA to establish and consult a representative group to assist EPA inconducting research under the Radon Research Act. To "represent" or be a"representative," one must possess the ability to "speak or act withauthority on behalf of," or "act as [a] substitute or agent" for the personor interest represented. 12 Black's Law Dictionary 1301 (6th ed. 1990). In contrast, EPAdesigned SAB to provide independent

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12 The legislative history supports this common sense interpretationof "represent." Senator Lautenberg, one of the sponsors of the bill that becamethe Radon Research Act, said the Advisory Committee was to be "a blue ribbon advisorycommittee, composed of members" of the specified constituencies. 131 Cong. Rec.S11684 (daily ed. Sept. 18, 1985) (JA 657).


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advice. EPA designated SAB employees as special government employees (SGE's), meaning theemployees are temporarily appointed, "as contrasted with members who are designatedas 'representatives' . . . ." Flaak Mem. at Enclosure G (JA 10,938). SGE's may notparticipate in matters that affect their employers, financial interests. 13 Id. (JA10,939). Congress' requiring a collegium of representatives is incompatible with SAB'sindependent and aspiringly neutral composition. Both the role Congress assigned to eachgroup and the composition of the group that provided advice on the ETS Risk Assessmentprovides further evidence of this incompatibility.

Congress set forth in § 403(d) a role for the SAB that tracks the SAB's traditionalmission: providing independent scientific review and comment on EPA's plan forimplementing the research program. In contrast, § 403(c) charged the advisory group withrepresenting specified constituencies and providing assistance to EPA in carrying out theresearch program. Those are two different roles for two different groups.

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13 EPA may waive conflicts where the interest affected isinsubstantial or the need for the SGE's service outweighs the conflict.


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The IAQC group that provided advice to EPA on the ETS Risk Assessment was not therepresentative body required by § 403(c). See ETS Risk Assessment at xviii-xx. Inthe ETS Risk Assessment, EPA lists nine members of IAQC who participated in the reviews oftwo review drafts. Seven of the members are listed as university professors or members ofschools, one was listed as a scientist in a national laboratory, and one was a stateemployee. Of the nine consultants involved, seven were employed by universities, and twoby special interest groups. EPA claims that one of the listed members, Dr. Woods,represented industry. However, this is not possible since Dr. Woods left industry foremployment with a university almost a year before the first draft of the ETS RiskAssessment was made available for review by IAQC. See JA 7,063-73 (Dr. Wood's curriculumvita). EPA further asserts that two other individuals represented industry. The ETS RiskAssessment IAQC listing does not contain the names of these individuals. The individualsare not listed in the IAQC ETS reviews, transcripts, 14 nor does EPA assert or direct thecourt's

----------------

14
See U.S. EPA SAB IAQC ETS Review, I.SAB.16.1 & .2 (December 4 & 5, 1990)(transcript volumes I & 11) (1990 IAQC Transcript) (JA 8,793-9,213); U.S. EPA SABIAQC ETS Review Panel, II.SAB.8.1 & .2 (July 21 & 22, 1992) (transcriptvolumes I & II) (1992 IAQC Transcript) (JA 11,641-12,105).


27



attention to evidence that these individuals provided any participation in the ETS RiskAssessment.

EPA points out that some panelists were associated with organizations that had receivedsome industry funding pursuant to contract. That does not convert those individuals intoindustry representatives under § 4 03(c). EPA also urges that one of the panelists wasselected as a consultant on the recommendation of the tobacco industry. Appropriately, EPAdoes not attempt to argue that one becomes a member or representative of industry upon arecommendation by industry.

EPA confirmed IAQC's independence from outside interests. When he was preparing the panelfor the second public meeting on the draft ETS Risk Assessment, the SAB assistant directorincluded in his transmittal letter a reminder to panel members of their conflict ofinterest and disclosure obligations:

An area of potential sensitivity in our public meetings is the nature of yourinteractions with both the Agency and outside interests on a particular matter. At thebeginning of the meeting, I will ask each person on the Committee to voluntarily discussany such areas they wish to identify. . . . Issues of concern can include the extent towhich you or your organization have received (or will receive) professional or personalbenefits from any individuals, organizations or groups . . . representing any viewpointconcerning the issue(s) under consideration at this meeting.

28



Flaak Mem. at 3. At both IAQC public reviews, no one admitted representing industry or anyother § 403(c) constituency. 15 This result was in accordance with SAB's designed purposeand the EPA ethics advisory sent to IAQC.

After reviewing the Radon Research Act, analyzing the SAB, and reviewing the actualcomposition of the IAQC, the court has found no evidence that the IAQC involved with theETS Risk Assessment satisfied § 403(c) of the Radon Research Act. EPA's procedures,guidelines, and conduct in the ETS Risk Assessment clearly demonstrate that SAB and IAQCare independent bodies. EPA's argument that IAQC was a representative body is withoutmerit. IAQC's membership did not include individuals from industry or representatives frommore than one state. No members were invited to represent or admitted to representing anyconstituency. Rather, EPA's regulations prohibited parties with meaningful outsideinterests from participating. Accordingly, EPA failed to comply with the requirements of§ 403(c).

----------------

15 See 1990 IAQC Transcript at 11-38 (JA 8,803-30); 1992 IAQCTranscript at 16-29 (JA 11,655-668).


29



C. The Timing of Committee Formation

EPA argues that § 403(c) is generally worded and does not make the formation of arepresentative advisory committee a prerequisite that must be satisfied before EPA canundertake a specific activity under the Act. There is no evidence in the record, nor doesEPA argue, that EPA established the committee during or after any activity conducted underthe Act. Since the committee has not been established, EPA's argument about when it couldhave sought the committee's assistance appears academic. However, for purposes offashioning a remedy, § 403(c) requires EPA to seek the committee's assistance "incarrying out the research program . . . . Congress intended consultation at least whileEPA conducted research. ongoing consultation requires more than post hoc consultation. SeeMorabito v. Blum, 528 F. Supp. 252, 264- 66 (S.D.N.Y. 1981) (Under the Social SecurityAct, where consultation with a medical advisory committee is required, committee inputmust be sought and received before action is taken.).

D. Consequences of EPA's Procedural Failure Plaintiffs argue EPA's actions wereunlawful and the ETS Risk Assessment must be set aside. EPA argues Plaintiffs

30



were not prejudiced "because EPA in fact utilized extensive public participation andpeer review drawing upon all of the designated constituencies in developing the ETS RiskAssessment." (Conformed Mem. Supp. EPA's Cross Mot. Part. Summ. J. at 42-43.) Furtherin its memorandum, however, EPA maintains it did "not have an obligation to respondto public comments in the same manner as in [an APA] section 553 rulemaking," id. at49, and the court cannot require EPA to respond to comments because "reviewing courtsare generally not free to impose additional procedural requirements if the agencies havenot chosen to grant them." Id.

Even if EPA did provide a genuine opportunity for comment and SAB review, the Agencywas required to carry out its research program with the assistance of an advisory group ofrepresentatives of the identified interests. EPA may not rewrite the terms of the RadonResearch Act. See Environmental Defense Fund. Inc. v. EPA, 636 F.2d 1267, 1283-84(D.C. Cir. 1980) (agency-created -de minimis" cutoff from application of statute wasstruck down because not in compliance with terms of statute); Alabama Power Co. v.Costle, 636 F.2d 323, 365 (D.C. Cir. 1979) (The agency is not "free to ignore theplain meaning of the statute and to substitute its policy judgment for that of

31



Congress."). When Congress requires specific procedures, agencies may not ignore themor fashion substitutes. 16 A congressional directive to consult an advisory committee ismore than a formality. The Court of Appeals for the District of Columbia emphasized thesignificance of advisory committees in explaining the procedural requirements within theFederal Coal Mine Health and Safety Act of 1969:

The most important aspect is the requirement of consultation with knowledgeablerepresentatives of federal and state government, industry and labor. This goes far beyondthe usual requirements of public notice and opportunity for comment set forth in theAdministrative Procedure Act, and represents the Congressional answer to the fearsexpressed by industry and labor of the prospect of unchecked federal administrativediscretion in the field. These rather unique requirements of the Act are an important partof the ultimate legislative compromise, and must be given their due weight.

-----------------

16 Even so, the IAQC was a poor proxy for industry representation.EPA sought parties near the "middle" of the spectrum when establishing SABpanels and allegedly avoided representation from either end of the spectrum. As a generalrule, the tobacco industry occupies that end of the spectrum contesting thecarcinogenicity of ETS and EPA's motives. A committee aspiring to represent the middle ofthe ETS debate necessarily suppresses the tobacco industry's perspective. Further,industry's ability to submit comments to a "neutral" committee, which itself hadaccess to EPA, is not equivalent to industry access to EPA.


32




Zeigler Coal Co. v. Klelppe, 536 F.2d 398, 403 (D.C. Cir. 1976). In National ConstructorsAss'n v. Marshal, 581 F.2d 960 (D.C.Cir. 1978), the Secretary of Labor was obligated toestablish and consult with a specially constituted advisory committee when promulgatingsafety standards. The Secretary failed to do so. The Marshal court rejected the agency'seffort to equate notice and comment with the required procedures and concluded that"advisory committee consultation should, but in this case did not, consist ofsomething more than a . . . rest stop on the route between a tentative proposal,. and thefinal promulgation Id. at 971.

EPA relies on Vermont Yankee Nuclear Power Corp. v. NRDC, 435 U.S. 519, 558, 98 S.Ct. 1197, 1219, 55 L. Ed. 2d 460 (1978). In Vermont Yankee, the agency compliedwith statutory procedures, but the appeals court held the agency should have done more.The Supreme Court reversed, noting "we find absolutely nothing in the relevantstatutes to Justify what the court did here." Id. at 557, 98 S. Ct. at 1218. In thepresent action, EPA violated a statutory procedure.

At issue then is the proper remedy for agency action that is procedurally deficient.Specifically, the court must determine whether to vacate the ETS Risk Assessment. In VermontYankee,
33



the Court held "[aldministrative decisions should be set aside . . . only forsubstantial procedural or substantive reasons as mandated by statute Id. at 558, 98S. Ct. at 1219.

In Synthetic Organic Chem. Mfrs. Ass'n v. Brennan, 506 F.2d 385, 388-89 (3d Cir.1974), Congress gave the Secretary of Labor the option of requesting recommendations froman advisory committee prior to promulgating certain rules. If the Secretary used thecommittee, interested parties could submit their comments about the rule after thecommittee issued its report. The dispute before the Third Circuit arose when the Secretaryconsulted the committee but published a proposed rule before the advisory committeesubmitted its report. The complainants "were not given adequate time to submitcomments or to prepare for the hearing after the committee's work was completed." Id.at 388. The court remanded the standards to the agency with the directive to republishthem and follow the procedural requirements.

In Marshal, 581 F.2d 960, the agency was required to consult an advisory committeebefore promulgating the disputed standards. The court found the agency greatly deviatedfrom required procedures and agency regulations by not meaningfully consulting thecommittee. The court concluded that, had the agency abided by its procedural requirements,the agency may have promulgated

34



different standards. Accordingly, the court remanded the standards back to the agency forconsultation with the advisory committee. Because the court also found the standards aspromulgated were not illegal and the administrative record did not contain any glaringdeficiencies, the court ordered a minimum remand of ninety days during which the standardswould remain in effect. If the committee recommended alteration, the agency would have toreevaluate the standards.

In Brennan and Marshal, the agencies failed procedural requirements in theprocess of promulgating agency standards. In both Brennan and Marshal, thecourts remanded the disputed agency standards with directives to comply with theprocedural directives. The Marshal decision left the standards intact; the Brennandecision did not.

This case is similar to Brennan and Marshal in that the ETS Risk Assessmentconstitutes an agency characterization promulgated without adherence to statutoryprocedure. However, this case is also unique. First, it is quite clear that the ETS RiskAssessment consumed significantly more resources than the promulgation of standards in Brennanand Marshal. Second, Congress' procedural requirements in the Radon ResearchAct adhere to the research process. Remanding the ETS Risk

35



Assessment for post hoc consultation could not satisfy statutory requirements ofconsultation during research.

To satisfy the Radon Research Act's procedural requirements, the court would have tovacate the Assessment. EPA could then conduct research on ETS with the assistance of arepresentative committee. However, in Vermont Yankee, the Supreme Court advisedthat agency action should be set aside only for substantial reason. By itself,disregarding a statutory mandate to establish and consult an advisory committee issubstantial. Again, EPA expended significant resources over several years in producing anassessment which claimed to deal with public health and safety. The Assessment's subjectmatter and EPA's expenditures raise the threshold of what constitutes a substantialreason.

EPA's complete disregard of statutory procedure and the potential waste of significantexecutive branch resources dealing with health and safety each suggest a different remedy.In resolving this conflict, the court finds persuasive the rationale underlying theDistrict of Columbia's remedy in Marshal. In addition to enforcing Congress'directive, the remedy should ameliorate the harm caused, or being caused, by EPA'sprocedural

36



violation." The court is reluctant to characterize EPA's procedural deficiencysubstantial where EPA would simply reproduce the same ETS Risk Assessment at significantcost. In resolving the substantiality of EPA's procedural defect, the court must inquirewhether EPA's procedural failure affected the Assessment. See Textile Workers Unionof-America v. Lincoln Mills of Alabama, 353 U.S. 448, 457, 77 S. Ct. 912, 918 (1957)(Some federal law "lack[s] express statutory sanction but will be solved by lookingat the policy of -..'ie legislation and fashioning a remedy that will effectuate thatpolicy. The range of judicial inventiveness will be determined by the nature of theproblem."); United States v. Field, 193 F.2d 92, 96 (2nd Cir. 1951)("'[I]t is fundamental that federal courts, in common with other courts, haveinherent power to do all things that are reasonably necessary for the administration ofjustice, within the scope of their jurisdiction.,")

----------------

17 In deciding whether procedural compliance could have produced adifferent outcome, the Marshal decision also distinguished agency action thatviolated the law. EPA's procedural failure constitutes a violation of the law. Wheresignificant agency resources are at stake, the court will not, however, adopt a formal,bright line rule.


37



V. THE ENVIRONMENTAL TOBACCO SMOKE RISK ASSESSMENT

A. Overview

The court reviews the performance of the ETS Risk Assessment to determine whetherconsultation with the representative group would have likely produced a different result.18 19.

Chapter 1 summarizes the claim that ETS is a Group A carcinogen that causes approximately3,000 lung cancer deaths per

----------------

18 Plaintiffs initially argue that had industry been consultedduring the research process, EPA likely would not have conducted a risk assessment andcarcinogen classification. Plaintiffs' argument depends on the ETS Risk Assessment being ultravires. As already addressed, risk assessment is incidental to gathering information,researching, and disseminating the findings.

19 The parties' arguments to the court address whether EPA's conduct was arbitrary andcapricious and whether the record demonstrates reasoned decision making. The court usesthe arguments to determine whether the Assessment would have been different had industry(and state) representatives addressed their concerns directly to EPA. The inquiry turns onthe legitimacy of Plaintiffs, concerns.


38



year among nonsmokers. Chapter 2 provides an introduction and overview. EPA states thestudy was conducted in accordance with its Risk Assessment Guidelines. The report explainsEPA did not use its Guidelines for Health and Risk Assessment of Chemical Mixtures becausemainstream smoke (MS) 20 and ETS are not sufficiently similar. Specifically, using"cigaretteequivalents" to correlate ETS exposure was not conducted for severalreasons.

Although MS and ETS are qualitatively similar with respect to chemical composition(i.e., they contain most, if not all, of the same toxicants and carcinogens), the absoluteand proportional quantities of the components, as well as their physical state, can differsubstantially. . . . Furthermore, it is not known which of the chemicals in tobacco smokeare responsible for its carcinogenicity. Clearly, the comparison of a small number ofbiomarker measures cannot adequately quantify differential distributions of unknowncarcinogenic compounds.

Another area of uncertainty in the "cigarette-equivalents" approach relates topotential metabolic differences between active and passive smokers . . . . Because ofthese uncertainties, the data from active smoking are more appropriate for qualitativehazard identification than for quantitative dose-response assessment.

-----------------

20 Mainstream Smoke is the smoke inhaled by the smoker.



39



ETS Risk Assessment at 2-7 thru 2-8. The report then states that although ETS and MS arechemically similar, "ETS is rapidly diluted into the environment, and consequently,passive smokers are exposed to much lower concentrations of these agents than are activesmokers." Id. at 2-8.

Chapter 3 establishes that ETS and MS are chemically similar because: (a) ETS is composedof aged, diluted sidestream smoke (SS), 21 and aged, diluted, exhaled MS, and (b)fifty-two of the 4,000+ characterized chemical constituents of MS were found in SS, whichinclude most of the suspected carcinogens identified in Ms.

Chapter 4 states that the high relative risks (RR) for lung cancer associated with activesmoking along "with no evidence of a threshold level of exposure," id. at2-9, the chemical similarity between MS and ETS, and corroborative evidence for thecarcinogenicity of tobacco smoke provided by animal bioassay and genotoxicity studies"clearly establish the biological plausibility that ETS is also a human lungcarcinogen." Id. at 2- 9; see also 4-27 thru 4-29. EPA asserts theseobservations

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21 Sidestream smoke is the smoke emitted from a smoldering cigarettebetween puffs.


40



alone are sufficient to establish ETS as a Group A carcinogen designation 22

Chapter 4 concludes with recognition that EPA should examine the "vast body ofepidemiologic data dealing specifically with lung cancer and exposure to ETS." Id. at4-29. The chapter concludes this data should be examined: (1) to promote "theinterest of weighing all the available evidence, as recommended by EPA's [Risk AssessmentGuidelines] (2) because SS and MS rapidly dilute into the environment and ETS componentschange phase distributions over time, which raises questions about the carcinogenicity ofETS exposure under environmental conditions, and (3) since "active smoking data donot constitute a good basis for quantitative estimation of the health effects of passive

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22 A substance is categorized as a Group A Human Carcinogen"only when there is sufficient evidence from epidemiologic studies to support acausal association between exposure to the agents and cancer." Risk AssessmentGuidelines at 34,000.

Three criteria must be met before a causal association can be inferred between exposureand cancer in humans: 1. There is no identified bias that could explain the association.2. The possibility of confounding has been considered and ruled out as explaining theassociation. 3. The association is unlikely to be due to chance.

Id. at 33,999.


41



smoking because the relative uptake and deposition between active and passive smokers ofthe agent(s) responsible for these effects are not known Id.

Chapter 5 analyzes thirty-one epidemiologic studies of nonsmoking women married to smokingspouses (spousal smoking studies). Chapter 5 combines the spousal smoking studies datainto six statistical "meta-analysis" based on geographic origin. Chapter 5 alsoanalyzes high-exposure groups in the studies, conducts a trend analysis, and categorizesstudies into four tiers based on their perceived utility for assessing an ETS/lung cancerassociation. The analysis within Chapter 5 utilizes one- tailed tests of significance and90% confidence intervals. "The justification for this usage is based on the apriori hypothesis [from the theory of biological plausibility] that a positiveassociation exists between exposure to ETS and lung cancer." Id. at 5-2.

Chapter 6 conducts an exposure assessment in an attempt to quantify the threat posed byETS. Chapter 6 concludes that MS and ETS are too dissimilar to use data about MS to assessthe risks of ETS exposure. Id. at 6-6. Chapter 6 thus bases its exposure assessmenton data from the spousal smoking studies and

42



asserts that ETS exposure causes approximately 3,000 nonsmoker lung cancer deaths eachyear."

The Addendum addresses large U.S. spousal smoking studies published in 1992. It claims"these new studies are generally consistent with this report's conclusions . . . .Id. at ADD-1. Appendix A reviews the thirty-one spousal smoking studies and explains howthe studies were assigned to tiers based on their perceived utility. Appendix B explainshow EPA adjusted the data used in Chapter 5's meta-analysis to address the effects ofsmoker misclassification bias.,

There are two issues. The first is whether EPA's consulting a representative committee, onwhich industry's concerns were represented during the research process, likely would havecaused EPA to change the conduct or conclusions of its ETS assessment. The key to thisdetermination is whether industry representatives could have presented meritable criticismand advice. The second issue is whether EPA's conduct was otherwise in accordance with theRadon Research Act.

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23 Chapters 7 and 8 do not involve the carcinogenicity of ETS.


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B. Biological Plausibility

1. Industry Criticism


Plaintiffs argue EPA's "biological plausibility" analysis is flawed becausethe Agency disregarded evidence that MS and ETS are not similar, failed to identify thecriteria used in equating MS and ETS, and disregarded evidence that MS has a no- effectthreshold. The importance of Plaintiffs, arguments is that the biological plausibilityanalysis establishes Chapter 5's "a priori hypothesis" that ETS is a Group Acarcinogen. EPA uses this hypothesis to justify the use of one-tailed significance tests,which the Agency in turn relies upon to switch from a 95% to 90% confidence interval.

Plaintiffs assert the record does not explain why EPA ignored record evidence and EPA'sown findings in the chemical similarity analysis of Chapter 3. Plaintiffs point out thatEPA analyzed the similarity of MS and ETS three times and reached three differentconclusions. Chapter 6 establishes ETS and MS were too dissimilar to use MS data toestablish the carcinogenic risk of ETS, and Chapter 2 states the similarity of ETS to MSwas too indeterminate to assess risk according to EPA's Guidelines for the Health RiskAssessment of Chemical-Mixtures. Chapter 3, however, uses the chemical similarities ofETS and MS to

44



establish ETS as a known human carcinogen. Plaintiffs argue Chapter 3's similarityanalysis fails for three reasons: (1) the chapter ignored Assessment findings about thedifferences between MS and ETS; (2) EPA ignored evidence rejecting any chemicalsimilarity; and (3) EPA did not define the criteria used to reach conclusions about thesimilarity/dissimilarity/indeterminacy of MS and ETS.

Plaintiffs point out Chapter 3's similarity analysis is contradicted by the explanation atthe end of Chapter 4 for analyzing epidemiologic data. Specifically, "[t]he rapiddilution of both SS and exhaled MS into the environment and changing phase distributionsof ETS components over time raise some questions about the carcinogenic potential of ETSunder actual environmental exposure conditions." ETS Risk Assessment at 4-29.

in rejecting using a "cigarette-equivalents" correlation, Chapter 2 states thatalthough MS and ETS are qualitatively similar, the absolute and proportional quantities ofthe components, as well as their physical state, differ substantially. EPA also rejectsthis equivalents analysis because it does not know which tobacco smoke chemicals causecancer nor the effect metabolic differences between active and

45



passive smokers have on carcinogenicity. See id. at 2-7 thru 2-9. Chapter 6 basesits rejection of an equivalents analysis on the differences between MS and SS:

The basic assumption of cigarette-equivalents procedures is that the lung cancer risksin passive and active smokers are equivalently indexed by the common measure of exposureto tobacco smoke, i.e., a common value of the surrogate measure of exposure in an activeand a passive smoker would imply the same lung cancer risk in both. This assumption maynot be tenable, however, as MS and SS differ in the relative composition of carcinogensand other components identified in tobacco smoke and in their physicochemical propertiesin general; the lung and systemic distribution of chemical agents common to MS and SS areaffected by their relative distribution between the vapor and particle phases, whichdiffers between MS and SS and changes with SS as it ages. Active and passive smoking alsodiffer in characteristics of intake . . . which may affect deposition and systemicdistribution of various tobacco smoke components as well. Id. at 6-6. EPA further revealedthat such differences affect carcinogenicity: "Pipe and cigar smokers, who inhaleless deeply than cigarette smokers, have lower risks of lung cancer than cigarettesmokers."

Id. at 4-10.

In a draft response to comments, Kenneth Brown, the primary author of Chapters 5 and 6,and Appendices C and D, rejects using a cigarette-equivalents analysis because "thereare differences between active and passive smoking that may affect carcinogenic

46



risk that are not fully understood." Kenneth G. Brown, Draft Report Responses toPublic Comments on the First
EPA Draft Risk Assessment of ETS with Discussion of Revisions that Appear in the SecondDraft Report,
Response To Comment 3.1.4, at 16 (June 1992) (JA 6,457) (DraftResponses). The author agrees "that active and passive smoking are vastly dissimilarwith regard to exposure," id., and states,

[a]lthough it would be of interest to know more about the physicochemical properties ofETS, the distribution of exposure concentration, exposure duration, and othercharacteristics, these things do not need to be fully understood to conclude that
ETS is a carcinogen . . . . If the unknown characteristics regarding the properties of ETSor exposure to ETS nullified the carcinogenic potential in fresh sidestream smoke, then wewould not expect to see an association of ETS exposure with increased lung cancer, as thestudy data indicate.

Id., Response To 3.1.2, at 14 (JA 6,455).


Plaintiffs assert EPA's statements impact EPA's biological plausibility analysis.Regarding EPA's a priori hypothesis, Plaintiffs conclude: (1) ETS cannot be a knowncarcinogen if dilution and aging raise unresolved questions about its potentialcarcinogenicity, and (2) ETS and MS are not "sufficiently similar" carcinogensif they are "vastly dissimilar" as to exposure.

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Plaintiffs next point to comments submitted by scientists 24 and by the tobacco industryciting scientific literature 21 that reject EPA's similarity conclusions. Plaintiffscontend EPA selectively cites or ignores certain studies, depending on whether the Agencyis explaining or disclaiming similarities between ETS and MS. Plaintiffs also point outthat none of the eleven U.S. epidemiologic studies analyzed in the ETS Risk Assessment, asreported by their authors, shows an overall statistically significant association betweenETS and lung cancer.

Plaintiffs also argue EPA failed to identify the criteria used to determine chemicalsimilarity. Plaintiffs insist the criteria EPA-used to analyze similarity must be precisefor two reasons. First, at different times in the same ETS Risk Assessment, EPA concludedthat MS and ETS are similar,

----------------

24 See, e.g., Comments of Cronan (JA 6,188); Comments of Gori(JA 10,839); Comments of Todhunter (JA 10,072); Comments of Flamm (JA 10,633-34); Commentsof Newell (JA 10,660-61); Comments of Reasor (JA 10,786).

25 See, e.g., Comments of The Tobacco Institute (JA 9,537-38, 9,543); Comments ofReasor (JA 10,789-90); Comments of R.J. Reynolds (JA 5,841-58); Comments of Philip Morris(JA 10,012, 10,024).


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dissimilar, and of indeterminate similarity . 26 Second, EPA's chemical similarityanalysis is inconsistent with the Agency's prior risk assessment practices. See RiskAssessment Guidelines at 33,992 (listing "consistency of carcinogen riskassessments" as an EPA goal). Plaintiffs then provide evidence that., previously, EPAdid not classify agents in Group A because they contain the same constituents as otherGroup A carcinogens. See Tennessee Gas Pipelines Co. v. F.E.R.C., 926 F.2d 1206,1211 (D..C. Cir. 1991) (When an agency decision is inconsistent with prior decisions, itmust explain the change.).

As their final argument against EPA's biological plausibility hypothesis, Plaintiffsdispute EPA's conclusion that ETS exposure causes lung cancer because "[a]clear dose- response relationship exists between lung cancer and amount of exposure [toMS], without any evidence of a threshold level." ETS Risk Assessment at 4-1. EPA's"no threshold" finding means EPA

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26 See Dithiocarbamate Task Force v. EPA, 98 F.3d 1394,1404-05 (D.C. Cir. 1996) (vacating EPA's listing of a carbamate as a "K waste"because EPA could not employ a highly discretionary and unarticulated "environmentalconcern" standard and then fail to explain why that carbamate failed to meet thatstandard); see also Toler v. Eastern Assoc. Coal Co., 43 F.3d 109, 115-16 (4th Cir.1995) (review of denial of medical benefits, requiring an ALJ to identify specific andpersuasive reasons to justify seemingly paradoxical reasoning).


49




purported to find no concentration level at which MS ceases to be carcinogenic. Thisfinding was critical because Plaintiffs assert that nonsmokers are exposed to only minuteconcentrations of ETS. If EPA had found a threshold for exposure to MS, then one wouldhave to be established for ETS. Evidence of an MS exposure threshold would jeopardizeEPA's biological plausibility analysis since ETS is substantially more dilute than MS.Plaintiffs point to comments and evidence in the record of thresholds in human, animal,and genotoxicity studies. Again, Plaintiffs point to EPA's selective use of studies andfailure to consider or respond to contrary evidence.

2. EPA's Response

In response to Plaintiffs, claim that EPA failed to respond to certain publiccomments, EPA asserts that it did not have an obligation to respond to public comments inthe same manner as in formal rulemaking. EPA further reminds that it is not the provinceof the court to impose additional procedural requirements outside those mandated byCongress.

In assessing the health risk of ETS, EPA claims it used a "total weight of theevidence" approach, see Risk Assessment Guidelines at 33,996, 33,999-34,000,and the Agency's conclusions

50



rely upon all of the available evidence, not on any single analysis or theory. EPA offerstwo reasons the ETS Risk Assessment is unique. First, the database of evidence concerningETS is large and derived from human data. "The use of human evidence eliminates theuncertainties that normally arise when one has to base hazard identification on theresults of high-dose animal experiments." ETS Risk Assessment at 2-7. Second, theevidence consists of exposure at environmental levels people are exposed to in everydaylife. EPA states such data are rare in risk assessments and obviate the need toextrapolate a response from high to low exposures. The available data being unique, EPAasserts "the guidelines themselves stress that risk analysis is not subject to hardand fast rules, but rather must be 'conducted on a case-by- case basis, givingconsideration to all relevant scientific information.'" (Conformed Mem. Supp. EPA'sCross Mot. Part. Summ. J. at 47; quoting Risk Assessment Guidelines at 33,992.)

EPA explains that its biological plausibility findings rest on three considerations.First, active smoking causes lung cancer in humans, and MS is chemically similar to ETS.Second, considerable evidence exists that nonsmokers exposed to ETS absorb and metabolizesignificant amounts of ETS, including

51



carcinogenic compounds. Third, laboratory studies show ETS can cause cancer in animals anddamage DNA, which scientists recognize as being an instrumental mechanism for cancerdevelopment. Further, EPA argues that its bioplausibility theory alone need not besufficient to support the Assessment's conclusion, because the theory is confirmed by thefindings from the epidemiologic studies.

EPA defends its Chapter 3 findings of chemical similarity by stating *the Agency neversuggested ETS and MS are identical compounds. Rather, EPA found that ETS and MS aresimilar in some respects and can be compared in terms of carcinogenicity. Differencesbetween the compounds were not disregarded by the Agency. EPA cites to the many portionsin the ETS Risk Assessment where EPA discusses the dissimilarities between MS and

----------------

27 EPA also relies upon IAQC's finding:

There are substantial differences in the relative composition of the smoke formed betweenmainstream and sidestream smoke. . . . but there is no reason to suppose that thequalitative toxicities of ETS and MS are substantively different. In comparing these twoagents the differences are largely ones of dose and duration of exposure rather thanfundamental differences in the toxicity or carcinogenicity of the agent in question.

(continued...


52



EPA asserts the Assessment specifically discusses dilution in ambient air, aging, andexposure characteristics. Review of EPA's citations reveals very limited discussion. Thediscussions primarily admit that these are areas of uncertainty. See ETS RiskAssessment at 3-10 ("Detailed chemical characterizations of ETS emissions . . . arelimited. As a result, the impact on ETS of factors such as the rapid dilution of SSemissions, adsorption and remission of contaminants, and exhaled MS is not wellunderstood."); see also id. at 3-12 (ETS concentration is the result of acomplex interaction of at least 13 variables; studies show large variations in contaminantconcentrations.). EPA asserts that despite these uncertainties, nonsmokers, lungs arenevertheless exposed to and absorb contaminants, including carcinogens, and that exposurecan be at significant levels relative to active smokers.

EPA characterizes Plaintiffs, contrasting the Agency's differing conclusions on ETS-MSsimilarities as nothing more than obfuscating the differences between qualitative andquantitative assessments. EPA claims the first issue (hazard identification)

-----------------


27 ( ... continued)


EPA, An SAB Report: Review of Draft Passive Smoking Health Effects Document,
EPA/SAB/IAQC/93/003,at 11, November 20, 1992.


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in the risk assessment process is a qualitative determination as to whether a substance iscarcinogenic. See Risk Assessment Guidelines at 33,993 ("The hazardidentification component qualitatively answers the question of how likely an agent is tobe a human carcinogen."). EPA asserts that if the substance is identified as ahazard, the second question is a quantitative assessment as to how dangerous acarcinogenic substance is to humans. See id. (Quantitative risk assessment is ageneral term to describe all or parts of dose-response assessment, exposure assessment,and risk characterization.).

EPA also claims it explained four criteria for finding MS and ETS chemically similar: (1)the process resulting in the generation of MS and SS; (2) the identity of toxins andcarcinogens in the two substances; (3) the relative toxicity and carcinogenicity of SS andMS per cigarette smoke; and (4) the demonstrated exposure to and absorption by the body ofsignificant levels of carcinogens and other toxins. In response to the charge that itchanged its approach in evaluating biological plausibility vis-a-vis other Group Acarcinogen determinations, EPA states risk assessments are conducted on a case-by-casebasis. Thus, comparison to other EPA Group A determinations are not relevant. EPA thenre-explains the basis

54



for its plausibility hypothesis and states no other EPA Group A determination involvescomparison with a substance whose carcinogenicity is as potent and as well documented asMS.

EPA asserts the epidemiologic studies reviewed in Chapter 4 establish MS as a humancarcinogen. In defense of chemical similarity, EPA recites the similarities between SS andMS. Both compounds contain the same carcinogenic compounds, moreover, EPA asserts"there is voluminous record evidence demonstrating that SS is more toxic percigarette smoked than the carcinogenic MS." (Conformed Mem. Supp. EPA's Cross Mot.Part. Summ. J. at 62.)

In recognizing that ETS is rapidly diluted into the environment, EPA explains that itanalyzed the extent to which nonsmokers actually absorb and metabolize ETS. First, EPAexamined the extent of nonsmokers, actual exposure to ETS in a variety of indoorenvironments. The studies EPA reviewed showed measurable carcinogens and toxins in ETS atlevels that varied but consistently exceeded background levels. Second, EPA reviewedbiomarker studies which showed at least some of the carcinogens in ETS are absorbed by thebody at a higher rate than nicotine. The human carcinogen 4-aminobiphenyl (4-ABP), whichis emitted at concentrations 31 times greater in SS than MS, was present in the blood ofnonsmokers exposed to ETS in

55



concentrations of one-tenth to one-fifth of that found in active smokers. These studieslead EPA to conclude that nonsmokers exposed to ETS absorb and metabolize ETS, includingcarcinogenic compounds.

EPA asserts that Plaintiffs, arguments are simply attacks on the uncertainties inherent inthe risk assessment process. A risk assessment, by its very nature, is not a finaldetermination about the health effects of a substance but is instead an assessment thatmakes the best judgments possible based upon the available evidence. Ethyl Corp. v.EPA, 541 F.2d 1, 24 (D.C. Cir. 1976). In conducting risk assessments, an agency mustadopt inference options and point out where evidence and scientific knowledge areincomplete. NRC Redbook, at 18, 28.

Finally, EPA defends its determination that there is no safe level of exposure to MS byreferring to several studies that found a risk of lung cancer at the lowest levels ofexposure to MS. EPA also relies upon SAB's finding it plausible that prolonged inhalationof ETS results in some increase of lung cancer. Finally, EPA asserts the record rebutsPlaintiffs, argument that nonsmokers are exposed only to small amounts of ETS.

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3. Analysis

EPA offers three assertions as the foundation for its biological plausibilityhypothesis. Plaintiffs contest EPA's first assertion that MS and ETS are similar. Insupport of its second assertion, EPA points to evidence in the record that some componentsof ETS are absorbed by nonsmokers. EPA does not, however, direct the court to evidence inthe record demonstrating that the observed absorption of ETS constituents answers thequestions of carcinogenicity raised elsewhere in EPA's analysis.

There is limited evidence in the record supporting EPA's final basis for its plausibilityhypothesis. The animal laboratory studies used by EPA present some evidence supportingEPA's hypothesis. EPA conducted no animal lifetime inhalation studies of ETS but didconduct cigarette smoke inhalation studies on Syrian golden hamsters. The studies detectedno evidence of lung cancer but did detect evidence of cancer of the upper larynx and adose- response relationship. The record does not state whether the substance analyzed,air-diluted cigarette smoke (1:15), replicated MS, SS, or ETS. The remaining studies, uponwhich EPA relies, involve analysis of SS condensates from smoking machines. The Assessmentdoes not explain, nor does EPA direct

57



the court to any evidence within the record explaining, how SS condensate demonstratessimilarities between MS and ETS.

The court is disturbed that EPA and Kenneth Brown buttress the bioplausibility theory withthe epidemiology studies. EPA's theory must be independently plausible. EPA relied uponsimilarities between MS and ETS to conclude that it is biologically plausible that ETScauses cancer. EPA terms this theory its "a priori hypothesis" injustifying Chapter 5's methodology. Chapter 5's methodology allowed EPA to demonstrate astatistically significant association between ETS exposure and lung cancer. See FederalJudicial Center, Reference Manual on Scientific Evidence 154-55, (1994) (Narrowingthe confidence intervals makes it more likely that a study will be found to bestatistically significant.). Chapter 5's analysis rests on the validity of the biologicalplausibility theory. It is circular for EPA to now argue the epidemiology studies supportthe Agency's a priori theory. Without the theory, the studies would likely havedone no such thing.

The record also does not support EPA's argument that contrasting EPA's three positions onETS-MS similarities constitutes obfuscation. EPA's Risk Assessment Guidelines establish adistinction between qualitative and quantitative

58



analysis. However, for purposes of EPA's bioplausibility theory, neither the ETS RiskAssessment or administrative record demonstrates a difference or attempt the explanationwhich EPA now offers the court. Quantity versus quality may be a relevant distinction incertain situations, e.g., the amount of arsenic naturally occurring in an apple.Plaintiffs assert that since ETS is a gas, considering the evidence regarding ETS'physicochemical properties and the characteristics of the particles and gases comprisingETS is necessary to determine the quality of ETS. This suggests an analytical processcombining qualitative and quantitative analysis, which is also what EPA's Risk AssessmentGuidelines suggest.

EPA's Risk Assessment Guidelines do not support the Agency's argument that risk assessmentis a bifurcated, quantitative then qualitative, analysis. To the contrary, "[r]iskassessment includes one or more of the following components: hazard identification,dose-response assessment, exposure assessment, and risk characterization (NRC "RiskAssessment Guidelines at 33,993 (emphasis added). "[Q]uantitative risk assessment hasbeen used as an inclusive term to describe all or parts of dose- response assessment,exposure assessment, and risk characterization. . . . [However,] the more explicitterminology

59




developed by the NRC (1983) is usually preferred." Id. Neither the Assessment or theadministrative record explains why physicochemical inquiries require a bifurcated analysisinstead of a combined analysis as per the Guidelines, or why MS and ETS are similar forpurposes of hazard identification, but not for purposes of quantitative risk assessments.Since Chapter 2 found ETS and MS not sufficiently similar, Chapter 3 found them similar,and Chapter 6 found them dissimilar, EPA apparently used a different risk assessmentmethodology for each chapter. Again, neither the Assessment nor the record explains therisk assessment components used in the different chapters, why methodologies variedbetween chapters, or why ETS and MS were or were not similar using each methodology.

The court is faced with the ugly possibility that EPA adopted a methodology for eachchapter, without explanation, based on the outcome sought in that chapter. Thispossibility is most potent where EPA rejected MS-ETS similarities to avoid a"cigarette- equivalents" analysis in determining carcinogenicity of ETS exposure. Use of cigarette-equivalents analysis may have lead to a conclusion that ETS isnot a Group A carcinogen." It

-----------------


28 [S]ome persons suggest a dosimetric approach
(continued...


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is striking that MS and ETS were similar only where such a conclusion promoted finding ETSa carcinogen.

EPA's assertion that "EPA did explain the numerous criteria it used in assessingsimilarity . . . " (Conformed Mem. Supp. EPA's Cross Mot. Part. Summ. J. at 73), iswithout merit. EPA merely parrots the findings made in Chapter 3 of the ETS RiskAssessment. The record presents no evidence of EPA establishing similarity criteria beforethe Assessment .29 Nor did the

-----------------

28 ... continued)
(called "cigarette-equivalents" in the Report) to estimate lung cancer risk fromETS exposure from data on active smoking. An average ETS exposure is determined to beequivalent to actively smoking some percentage of one cigarette per day. Extrapolatingdownward on a does-response [sic] curve for active smoking at that level suggests a"negligible" lung cancer risk.

Kenneth G. Brown, Draft Report Responses to Public Comments on the First EPA Draft RiskAssessment of ETS with Discussion of Revisions that Appear in the Second Draft Report, Comment3.1.4, at 15 (June 25, 1992) (JA 6,456) (Draft Responses). Dr. Brown's response does notrebut the asserted consequences of a cigarette equivalents analysis.

29
See Portland Cement Ass'n v. Ruckelshaus,
486 F.2d. 375, 395 (D.C. Cir. 1973) ("Atroublesome aspect of this case is the identification of what, in fact, formed the basisfor the standards promulgated by EPA - a question that must be probed prior toconsideration of whether the basis or bases for the standards is reliable."); seealso Independent U.S. Tanker Owners Comm. v. Lewis,, 690 F.2d 908, 920 (D.C. Cir.1982) (noting that when agency action is undertaken prior to disclosure of the basis(continued...


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scientists on IAQC's final review panel identify the criteria used to determinesimilarity. 30 EPA's citations reveal only summaries of findings on MS-SS similarities andETS biomarkers. 31

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29 ( continued) of the action, "[t]here is an overwhelminginstitutional bias in favor of justifying the result in any way possible'")

30 The data in Chapter 3 "do not . . . adequately support the conclusion that the twoare chemically similar. . . . [T]he data that are in there, speaking as a chemist, theysimply don't make the case." 1992 IAQC Re I view at 11-41 (Dr Daisey) (JA 11,969)."That also brings you to an issue sue of what you mean by 'chemically similar,, whichis not so simple to discuss . . . . [P]erhaps we don't have to consider it. But in abroader sense, the chapter often talks about sort of vague quantitative terms . . . . id.at 11-43 (JA 111,971). "What does it ;mean? What is the test for chemicalsimilarity?" Id. at 11-51 (Dr. Hammond) (JA 11,979). "[T]he data . . . simply donot demonstrate that they are similar. There are simply not enough data . . . . [Y]ou'renot going to have that data, and ever if you did, you'd: have to decide on criteria forwhat constitutes similarity and what does not constitute similarity." Id. at 11-77(Dr. Daisey) (JA 12,005).

31 Instead of explaining the criteria used to make findings, EPA's citations re I vealmore uncertainty. "Standardized testing protocols for assessing the physical Endchemical: nature of SS emissions . . . do not! exist, and data on SS :are not as extensiveas those for MS emissions." ETS Risk Assessment at 3-2.

Although ETS is a major source of indoor air contaminants, the actual contribution ofETS to indoor air is difficult to assess due to the background levels of many contaminantscontribute from a variety of other indoor and outdoor sources. Relatively few of theindividual constituents of the ETS mix have been identified and characterized. Inaddition, little is known about the role of individual ETS constituents in

(continued...)

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The record does not support EPA's arguments that EPA took MS- ETS differences into accountand, despite them, concluded ETS is a known human carcinogen because nonsmokers areexposed to and absorb carcinogens. EPA conceded that dilution, aging, and exposurecharacteristics fundamentally distinguish ETS from mainstream smoke, and "raise . . .questions about the carcinogenic potential of ETS." ETS Risk Assessment at 2-7 thru2-8, 4-29, 6-6. See also Draft Responses at 14-16 (JA 6,455-57). The record doesnot explain how, after raising these questions, EPA could classify ETS a known humancarcinogen based on similarities between SS and MS. The record also fails to explainwhether or how EPA determined that, because some components of ETS may be absorbed,questions raised in other areas of the assessment about the carcinogenic potential of ETSwere no longer relevant. Finally, both sides cite to independent studies on ETS, done bythird parties, to support their arguments. Both sides often lay claim to the same studies.The studies predominantly contain

-----------------

31 ( ... continued) eliciting the adverse health and nuisanceeffects observed.


Id. at 3-18.

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information useful to both sides, and often conflict with one another. The court finds onereview particularly relevant, a review conducted within EPA on the ETS Risk Assessment.EPA's Risk Criteria Office, a group of EPA risk assessment experts, concluded that EPAfailed to reasonably explain how all relevant data on ETS, evaluated according to EPA RiskAssessment Guidelines, causality criteria, can support a Group A classification. ActingDirector Chris DeRosa advised EPA that the evidence "support[ed] the conclusion thatETS be classified as a Group B1 carcinogen." 32 EPA Toxicologist Larry Glassconcluded, "it is recommended that the [epidemiological] evidence be summarized asbeing limited . . . . This would classify ETS into a weight-of-the-evidence GroupBl." 33 Office Director Terry Harvey also concluded that the ETS Classification'sanalysis violated EPA's Risk Assessment Guidelines: ,[l]ike it or not,

-----------------

32 EPA Memorandum from Chris DeRosa, Acting Director EnvironmentalCriteria and Assessment Office, to William H. Farland, Director, Office of Health andEnvironmental Assessment (OHEA) 1 (April 27, 1990) (JA 6,651).

33 Id. at 4-5 (JA 6,654-55). The same author recognizes "tremendous scientific,regulatory, and political ramifications of categorizing a substance as a Group Acarcinogen. . . . [G]iven the inherent limitations of the data, and the comparativenovelty of the approach used to interpret the data I would recommend that this approachnot be used as the basis of a Group A classification." Id. at 4 (JA 6,654).


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EPA should live within its own categorization framework or clearly explain why wechose not to do so." 34

In summary, Plaintiffs raise legitimate questions not addressed in the record regardingEPA's bioplausibility theory. If confronted by a representative committee that voicedindustry concerns, EPA would likely have had to resolve these issues in the record. It isnot clear whether EPA could have or can do so. These issues are more than periphery. IfEPA's a priori hypothesis fails, EPA has no justification for manipulating theAgency's standard scientific methodology.

C. EPA's Choice of Epidemiological Studies

By the time EPA released the ETS Risk Assessment in 1993, 33 studies had analyzed thelung cancer risk of nonsmoking females married to smoking spouses, 12 studies had analyzedthe risk of females exposed to ETS in the workplace, and 13 studies had analyzed the riskof females exposed to ETS in childhood. Six of the 58 analyses (10.3%) reported astatistically significant association between ETS exposure and lung cancer for

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34 EPA Memorandum from Terry Harvey, Director, EnvironmentalCriteria and Assessment Office, to Linda Bailey, Technical Information Staff, OHEA 2(March 24, 1992) (emphasis added) (JA 6,661).


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nonsmoking females; two of 13 analyses for male nonsmokers were significant. EPA chose 31of the 33 studies done on nonsmoking females married to smoking spouses. Of the 33 studiescompleted in 1993, three large U.S. studies were not completed at the time EPA conductedits second IAQC review. EPA used interim results from one of the three, the Fontham study,and did not include the other two in its overall assessment. EPA did not draw itsconclusions directly from the 31 studies it chose. Instead, EPA pooled the results of thestudies and arranged the data into categories by geographic region and exposure level. EPAthen organized and analyzed the studies by the quality of their methodology. Thistechnique of synthesizing findings across related studies is known as meta-analysis.

The Risk Assessment gives short notice to why the childhood or workplace studies were notevaluated. The assessment states,

[t]he use of a more homogenous group allows more confidence in the results of combinedstudy analyses . . . . Some [studies] also provide information on childhood and/orworkplace exposure, but there is far less information on these exposures; therefore, inorder to develop one large database for analysis, only the female exposures from spousalsmoking are considered.

ETS Risk Assessment at 5-1. The Assessment's overview explains only that childhood andworkplace studies are fewer, represent

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fewer cases, and are generally excluded from EPA's analysis. Id. at 1-8. TheAddendum mentions the two large U.S. female nonsmoker studies but does not explain why thetwo were excluded but the Fontham study included. In its first review, IAQC stated thatone of four criteria necessary to conduct a meta-analysis is a "precise definition ofcriteria used to include (or exclude) studies." EPA, An Report: Review of DraftEnvironmental Tobacco Smoke Health Effects Document, EPA/SAB/IAQC/91/007 at 32-33(1991) (SAB 1991 Review) (JA 9,497-98). Regarding the studies chosen for the ETS RiskAssessment, IAQC stated,

[s]pecific criteria for including studies was not provided. The importance of this wasreinforced at the Committee meeting when a reanalysis was presented on a different set ofstudies than those in the report. This resulted in a change in the overall riskestimate. Decisions as to study inclusion should be made prior to analysis,based on clearly stated criteria. It is also desirable to evaluate the impact onconclusions of closely related, but excluded, studies.

Id. at 33 (first emphasis added) (JA 9,498). In its 1992 review, neither EPA orIAQC addressed again the criteria used to determine which studies were included in themeta-analysis. IAQC stated that the combination of studies used provided a scientificallydefensible basis for estimating the relative risk

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of lung cancer associated with ETS among American women who have never smoked cigarettes.IAQC also supported EPA's general metaanalysis categorization of the studies which EPA hadchosen. EPA, An SAB Report: Review of Draft Passive Smoking Health Effects Document, EPA/SAB/IAQC/93/003at 3-4, 22 (1992) (IAQC review which EPA now misrepresents as a full explanation of EPA'sdatabase choice with express IAQC support) (JA 12,207-08, 12,226).

Plaintiffs contest that EPA exculded studies and data on workplace and childhood exposureto ETS, as well as the "two largest and most recent" U.S. spousal smokingstudies, because inclusion would have undermined EPA's claim of a causal associationbetween ETS exposure and lung cancer. 35 (Conformed Mem. Supp. >Pls.' Mot. Summ. J. at66.) In its memorandum before this court, EPA offers four reasons for excluding theworkplace and childhood data.

"First, such data are less extensive and therefore less reliable." (ConformedMem. Supp. EPA's Cross Mot. Part. Summ. J. at 88.) EPA's three citations to the record donot support this

-----------------

35 Plaintiffs also argue EPA included workplace data that affirmedthe Agency's a priori hypothesis. The court does not find it necessary to reach the meritsof this assertion.


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All three citations state there is less information in the disputed studies. One of Dr.Brown's draft responses also calls the disputed studies inadequate, without reason orexplanation. IAQC also recognized the disputed studies contained less information,however, IAQC concluded "the report should review and comment on the data that doexist . . . ." SAB 1991
Review at 5 (JA 9,470). The court has also found no record support or reason for theassertion that smaller studies are less reliable for purposes of meta-analysis. Thepurpose of meta-analysis is utilization of smaller studies.

Similarly, EPA's second assertion that workplace studies were excluded because ofpotential confounders is without record support. As evidence explaining why EPA excludedworkplace studies from the meta-analysis, EPA cites IAQC's 1991 Review discussinglimitations on EPA's reliance on spousal smoking as an indicator of ETS exposure. IAQCdiscussed that the structure of peoples, homes, where they live and work, the climate, andeven parental influences impact spousal assessments. SAB 1991 Review at 30. The reportcited by EPA does not state workplace data should be disregarded. If at all relevant, thediscussion now cited by EPA supports the opposite conclusion.

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EPA also claims that workplace exposure data were disregarded because only two studiesmade an attempt to classify by amount of exposure. Again, EPA's explanation appearsnowhere in that portion of the Risk Assessment cited by the Agency. Further, EPA'sexplanation appears targeted only at workplace data contained within the spousal smokingstudies and does not address the Agency's decision to disregard workplace and childhoodexposure data reported outside spousal studies.

EPA's final proffer is that childhood studies rely upon distant memories and more limitedlifetime exposure. Again, the record does not reveal that EPA used this as a selectioncriteria. Rather, an assessment on ETS and lung cancer on which EPA now relies states,"No consistent association has been reported for lung cancer and exposure to ETS inchildhood, which might be expected to exert a greater effect . . . . of course, recall ofETS exposure in childhood is more difficult than recall of such exposure in adulthood.,'E.L. Wynder & G.C. Kabat, Environmental Tobacco Smoke and Lung-Cancer: A CriticalAssessment, ORD.C.1 S59- 1 (JA 5,020). Nowhere in the Assessment is there a suggestionthat childhood exposure data should be ignored.

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EPA claims it excluded the latest two U.S. spousal smoking studies because they weresubmitted after the close of the comment period, and EPA already had a considerabledatabase. EPA claims the Fontham study was used because it published interim results, wasthe largest U.S. ETS study, and its methodology was superior to any other study. Therecord contains discussion of the Fontham study, even testimony by Dr. Fontham. However,the evidence is not relevant to Plaintiffs' assertion. There being no indication of studycriteria, it is not possible to determine whether or why the Fontham study was"superior." Even if EPA provided criteria, comparison would not be possiblesince EPA provides no discussion on the two U.S. spousal studies excluded. In summary,EPA's claim of having clearly established criteria is without merit. See Bowen v.Georgetown University Hosp., 488 U.S. 204, 212, 109 S. Ct. 468, 474, 102 L. Ed. 2d 493(1988) ("The courts may not accept appellate counsel's post hoc rationalizations foragency [orders]."); American Trucking Ass'n v. Federal Highway Admin., 51 F.3d405, 411 (4th Cir. 1995) (If agency action is to withstand judicial review, the agency's"actual reasoning . . . must prove reasonable, not the post hoc rationalizationdevised during litigation.").

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EPA's study selection is disturbing. First, there is evidence in the record supporting theaccusation that EPA "cherry picked" its data. Without criteria for poolingstudies into a meta- analysis, the court cannot determine whether the exclusion of studieslikely to disprove EPA's a priori hypothesis was coincidence or intentional.Second, EPA's excluding nearly half of the available studies directly conflicts with EPA'spurported purpose for analyzing the epidemiological studies and conflicts with EPA's RiskAssessment Guidelines. See ETS Risk Assessment at 4-29 ("These data should also beexamined in the interest of weighing all the available evidence, as recommended byEPA's carcinogen risk assessment guidelines (U.S. EPA, 1986a) (emphasis added)). Third,EPA's selective use of data conflicts with the Radon Research Act. The Act states EPA'sprogram shall "gather data and information on all aspects of indoor airquality

Radon Research Act § 403(a)(1) (emphasis added). In conducting a risk assessment underthe Act, EPA deliberately refused to assess information on all aspects of indoor airquality.

At the outset, the court concluded risk assessments were incidental to collectinginformation and making findings. EPA steps outside the court's analysis when informationcollection

72



becomes incidental to conducting a risk assessment. In making a study choice, consultationwith an advisory committee voicing these concerns would have resulted, at a minimum, in arecord that explained EPA's selective use of available information. From such record, areviewing court could then determine whether EPA "cherry picked" its data, andwhether EPA exceeded its statutory authority.

D. EPA's Epidemiologic Methodology

Plaintiffs raise a list of objections asserting that EPA deviated from accepted scientificprocedure and its own Risk Assessment Guidelines in a manner designed to ensure apreordained outcome. Given the ETS Risk Assessment shortcomings already discussed, it isneither necessary or desirable to delve further into EPA's epidemiological web. However,two of Plaintiffs, arguments require mention." The first contention is

-----------------

36 The court finds it unnecessary to resolve Plaintiffs, remainingmethodological contentions: (1) EPA inexplicably departed from its stated procedure forselecting risk estimates from the spousal smoking studies when that allowed the Agency toincrease its summary risk estimate for particular studies; (2) EPA did not include certainstudies and data in its meta-analysis in order to exclude the possibility that confoundersexplain the association between ETS and cancer; (3) EPA adopted statistical testingmethods rejected by epidemiologists, ignored the

(continued...)



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EPA switched, without explanation, from using standard 95% confidence intervals to 90%confidence intervals to enhance the likelihood that its meta-analysis would appearstatistically significant. This shift assisted EPA in obtaining statistically significantresults. Studies that are not statistically significant are "null studies"; theycannot support a Group A classification. See Brock v. Merrell Dow Pharm., Inc., 874F.2d 307, 312 (5th Cir. 1989) ("If the confidence interval is so great that itincludes the number 1.0, then the study will be said to show no statistically significant'association between the factor and the disease.").

EPA used a 95% confidence interval in the 1990 Draft ETS Risk Assessment, but laterswitched to a 90% confidence interval. Most prominently, this drew criticism from IAQC'sepidemiologist, who was also a contributor to the ETS Risk Assessment:

----------------

36 ( ... continued) possibility that more than one confounderinteracting jointly could explain the claimed association, and inconsistently interpretedthe results of confounding analysis to promote finding an association; (4) EPA switchedfrom a peer- reviewed methodology to an unpublished one in excluding study bias as anexplanation for the claimed association; and (5) to create critical ETS dose-responseevidence, EPA inexplicably used a trend analysis that included unexposed (i.e., control)subjects, in violation of EPA's Risk Assessment Guidelines and standard epidemiologicpractice.


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The use of 90% confidence intervals, instead of the conventionally used 95% confidenceintervals, is to be discouraged. It looks like a[n] attempt to achieve statisticalsignificance for a result which otherwise would not achieve significance.

Geoffrey Kabat,
Comments on EPA's Draft Report: "Respiratory Health Effects ofPassive Smoking: Lung Cancer and Other Disorders", II.SAB.9.15 at 6 (July 28,1992) (JA 12,185). Plaintiffs argue that established epidemiologic practice is to use 95%confidence intervals. As evidence, Plaintiffs point out EPA's prior risk assessments,including the 1990 ETS draft, consistently used 95% confidence intervals, as did previousETS analyses by IARC, NRC, and the Surgeon General.
ETS Risk Assessment Chapter 5 states:

Throughout this chapter, one-tailed tests of significance (p=0.05) are used, whichincreases the statistical ability (power) to detect an effect. The 90% confidenceintervals used for the analyses performed are consistent with the use of the one-tailedtest. The justification for this usage is based on the a priori hypothesis . . . that apositive association exists between exposure to ETS and lung cancer.

ETS Risk Assessment at 5-2. Before this court, EPA explains the "use of the 95percent confidence interval with the one-tailed test . . . would have produced an apparentdiscrepancy: study results that were statistically significant using the standard p-valueof .05 might nevertheless have a 95 percent confidence

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interval that included a relative risk of 1." (Conformed Mem. Supp. EPA's Cross Mot.Part. Summ. J. at 96.)

Plaintiffs, second methodological argument requiring comment states, EPA based ETS' GroupA classification in large part on a resulting relative risk of only 1.19, withoutadequately explaining why the Agency had required every other Group A carcinogen toexhibit a much higher relative risk, or why it had recently found relative risks of 2.6and 3.0 insufficient to classify other agents in Group A. All of the 15 chemicals ormixtures previously classified by 'EPA as Group A carcinogens have higher relative risksthan ETS. See, e.g., ETS Risk Assessment at 4-15, 16 & 22 (Risk assessments oncigarette smoking demonstrate relative risks between 7 and 14.9 for lung cancer, andrelative risks between 26 and 60 for undifferentiated carcinoma.); see also EPAReview Draft, Evaluation of the Potential Carcinogenicity of Electromagnetic Fields, EPA/600/6901/005Bat 6-2 (October 1990) (JA 1,562) (declining classifying EMF as carcinogenic for lack ofstrong association with cancer where relative risks in studies seldom exceeded 3.0). IAQCepidemiologist Dr. Kabat observed, "An association is generally considered weak ifthe odds ratio [relative risk] is under 3.0 and particularly when it is under 2.0, as isthe case in the

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relationship of ETS and lung cancer." E.L. Wynder & G.C. Kabat, EnvironmentalTobacco Smoke and Lung Cancer: A Critical Assessment, I.SAB.7.1 at 6 (JA 7,216).

EPA responds that the most impressive evidence from the epidemiologic studies is theconsistent results of many studies showing increased risk, and the dose-responserelationships showing the most risk to the most exposed nonsmokers. EPA explains that ETS'diluted concentration in the atmosphere accounts for the low strength of association.

The record and EPA's explanations to the court make it clear that using standardmethodology, EPA could not produce statistically significant results with its selectedstudies. Analysis conducted with a .05 significance level and 95% confidence levelincluded relative risks of 1. Accordingly, these results did not confirm EPA'scontroversial a priori hypothesis. In order to confirm its hypothesis, EPAmaintained its standard significance level but lowered the confidence interval to 90%.This allowed EPA to confirm its hypothesis by finding a relative risk of 1.19, albeit avery weak association.

EPA's conduct raises several concerns besides whether a relative risk of 1.19 is credibleevidence supporting a Group A classification. First, with such a weak showing, if even a

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fraction of Plaintiffs' allegations regarding study selection or methodology is true, EPAcannot show a statistically significant association between ETS and lung cancer.

Second, the court's conclusions regarding EPA's motive for reducing the confidence levelare based upon EPA's litigation explanations and circumstantial evidence from the record.EPA does not provide explanation in the ETS Risk Assessment or administrative record. Whenan agency changes its methodology mid- stream, as EPA did here, it has an obligation toexplain why. See Western States -Petroleum Ass'n v. EPA, 87 F.3d 280, 284 (9th Cir.1996) ("EPA -may not depart, sub silento, from its usual rules of decision to reach adifferent, unexplained result in a single case.'"); Natural Resources DefenseCouncil, Inc. v. EPA, 859 F.2d 156, 205-11 (D.C. Cir. 1988) (invalidating an EPA rulebecause EPA failed to explain its mid-proceeding switch on the utility of an upsetdefense); see also Motor Vehicle Mfrs. Ass'n of U.S., Inc. v. EPA, 768 F.2d 385,399 (D.C. Cir. 1985) (EPA failed to explain why it departed from "establishedspecific statistical criteria for determining whether a fuel will cause a vehicle toexceed emission standards . . . .").

Finally, when an agency conducts activities under an act authorizing informationcollection and dissemination of findings,

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the agency has a duty to disseminate the findings made. EPA did not disclose in the recordor in the Assessment: its inability to demonstrate a statistically significantrelationship under normal methodology; the reasoning behind adopting a one-tailed test, orthat only after adjusting the Agency's methodology could a weak relative risk bedemonstrated. Instead of disclosing information, the Agency withheld significant portionsof its findings and reasoning in striving to confirm its a priori hypothesis.

E. Summary of the Assessment and Record

In reviewing the parties' arguments, the court has given the benefit of many doubts to EPAby allowing the Agency to adopt third party statements, such as IAQC reviews, as Agencyreasoning. EPA, the decision maker, not IAQC, the independent advisor, has the duty todemonstrate reasoned decision making on the record. See SEC v. Chenery Corp., 332U.S. 194, 196, 67 S. Ct. 1575, 1577, 91 L. Ed. 1995 (1947) ("(A] reviewing court, indealing with a determination or judgment which an administrative agency alone isauthorized to make, must judge the propriety of such action solely by the grounds invokedby the agency."); Motor Vehicle Mfr. Ass'n of the United States v. State Farm Mut.Auto.

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Ins. Co., 463 U.S. 29, 50, 103 S. Ct. 2856, 2870, 77 L. Ed. 2d 443 (1993) ([A]n"agency's action must be upheld, if at all, on the basis articulated by the agencyitself."); see also H.R. Rep. No. 95-722, 95th Cong., 1st Sess., 16 (1977), reprintedin 1977 U.S.C.C.A.N. 3283, 3295 (JA 652-53) (The SAB "is intended to be advisoryonly. The Administrator will still have the responsibility for making the decisionsrequired of him by law."). If EPA's appendages speak on behalf of the Administrator,the opposing conclusions reached between IAQC and the EPA Risk Criteria Office woulddemonstrate schizophrenia. Even allowing EPA the benefit of now adopting IAQC reasoning,the record does not provide answers to Plaintiffs' questions.

EPA determined it was biologically plausible that ETS causes lung cancer. In doing so, EPArecognized problems with its theory, namely the dissimilarities between MS and ETS. Inother areas of the Assessment, EPA relied on these dissimilarities in justifying itsmethodology. EPA did not explain much of the criteria and assertions upon which EPA'stheory relies. EPA claimed selected epidemiologic studies would affirm its plausibilitytheory. The studies EPA selected did not include a significant number of studies and datawhich demonstrated no association between ETS and cancer. EPA did not explain its

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criteria for study selection, thus leaving itself open to allegations of "cherrypicking."

Using its normal methodology and its selected studies, EPA did not demonstrate astatistically significant association between ETS and lung cancer. This should have causedEPA to reevaluate the inference options used in establishing its plausibility theory. Arisk assessment is supposed to entail the best judgment possible based upon the availableevidence. See Ethyl, 541 F.2d at 24. Instead, EPA changed its methodology to find astatistically significant association. EPA claimed, but did not explain how, its theoryjustified changing the Agency's methodology. with the changed methodology and selectedstudies, EPA established evidence of a weak statistically significant association betweenETS and lung cancer.


VI. MOTION TO SUPPLEMENT THE PLEADINGS

Plaintiffs have moved to supplement the pleadings pursuant to Fed. R. Civ. P. 15(d).Plaintiffs, Supplemental Pleading seeks declaratory and injunctive relief against EPArelating to the Agency's alleged unlawful efforts to regulate indoor air,

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tobacco products, and smoking, as documented in August 1996 by EPA's InspectorGeneral."

The Supplemental Pleading contains two counts. Supplemental Count I alleges EPA illegallyfunds and controls a private entity that drafts indoor air ventilation standards that areadopted in state and local building codes. Count I also alleges additional ultra viresregulatory activities by EPA in regard to indoor air and smoking through the Agency'sregional offices and third parties. Supplemental Count II seeks relief from these allegedactivities pursuant to the Administrative Procedure Act's bar on agency actions "inexcess of statutory jurisdiction, authority, or limitations, or short of statutoryright." 5 U.S.C. § 706(2)(C). Plaintiffs' proposed supplemental pleading does notaffect briefing or the court's consideration of summary judgment on Counts I, II, and III.EPA responds that the proposed supplemental pleading is untimely and unrelated to theComplaint and will delay the conclusion of the case.

Fed. R. Civ. P. 15(d) allows a party with leave of court to file a supplemental pleading"setting forth transactions or

-----------------

37 EPA Office of Inspector General, EPA's Relation hip with theAmerican Society of Heating, Refrigerating, and Air-Conditioning Engineers (ASHRAE), AuditReport No. E1FAF513-0075-6100228 (August 14, 1996).


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occurrences or events which have happened since the date of the pleadings sought to besupplemented." Courts apply the rule liberally to allow new claims and allegations tobe added to a suit. See, e.g., Quaratino v. Tiffany & Co., 71 F.3d 58, 66 (2dCir. 1995); Gillihan v. Shillinger, 872 F.2d 935, 941 (10th Cir. 1989); Keith v.Volpe, 858 F.2d 467, 474 (9th Cir. 1988). In reversing a district court's decisionthat refused leave to file a supplemental pleading, the Fourth Circuit found thatsupplemental pleadings so enhanced efficient administration of justice that they should beallowed as a matter of course:

(Supplemental pleadings are] a useful device, enabling a court to award completerelief, or more nearly complete relief, in one action, and to avoid the cost, delay andwaste of separate actions which must be separately tried and prosecuted. So useful theyare and of such service in the efficient administration of justice that they ought to beallowed as of course, unless some particular reason for disallowing them appears, thoughthe court has the unquestioned right to impose terms upon their allowance when fairnessappears to require them.

New Amsterdam Casualty Co. v. Waller, 323 F.2d 20, 28-29 (4th Cir. 1963)."While some relationship must exist between the newly alleged matters and the subjectof the original action, they need not all arise out of the same transaction." Keith,858 F.2d at 474. A supplemental pleading may state a new cause of

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action so long as the matters have some relation to the claim set forth in the originalpleading. Rowe v. United States Fidelity and Guaranty Co., 421 F.2d 937, 943 (4thCir. 1970). A court may in its discretion deny leave to file a supplemental pleading whereit finds undue delay, bad faith, dilatory tactics, undue prejudice to the opposing party,or futility. Quaratino, 71 F.3d at 66.

EPA first asserts Plaintiffs' proposed supplementation is untimely because the eventsrelevant to the new allegations occurred prior to Plaintiffs' agreeing to the joint motionto establish a briefing schedule for summary judgment. The new allegations do not,however, affect the disposition or scheduling of the court's summary judgment analysis ordecision. Further, the court notes EPA's Inspector General's report was not announced orotherwise disseminated by EPA. Approximately seven months after the report was issued,Plaintiffs sought permission to file the Supplemental Pleading. Seven months is not anunreasonable amount of time for multiple plaintiffs to learn of EPA's alleged activities,investigate, develop, and agree upon a complex legal claim.

EPA next argues Plaintiffs, new allegations are not sufficiently related to the Complaint.EPA states the Complaint

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challenges EPA's ETS Risk Assessment, whereas the proposed Supplemental Pleadingchallenges EPA's involvement with a private entity. There are several reasons why theComplaint and proposed Supplemental Pleading are sufficiently related. First, both involveEPA's authority under the Radon Research Act. Specifically, both the Complaint andSupplemental Pleading involve EPA's authority to conduct regulatory activities under theAct. In deciding the parties, motions for summary judgment, the court has become familiarwith the outer limits of EPA's authority under the Radon Research, Act. Second, ETS is theobject of EPA's alleged regulatory attention in each set of allegations. As a result,EPA's conduct as alleged in the Supplemental Pleading causes the very harm for whichPlaintiffs seek a remedy in the Complaint. Third, the court finds probable that EPApremises its involvement with private organizations, as alleged in the SupplementalPleading, on the Agency's conclusions in the ETS Risk Assessment. Fourth, the court, inresolving this case, has become familiar with many organizations EPA has worked with inconducting the ETS Risk Assessment and in establishing de facto regulatory activitiesunder the Radon Research Act. Clearly, the Supplemental Pleading has some relation to theComplaint.

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The impact supplementing the pleadings would have in concluding the case concerns thecourt. EPA has spent years formulating and litigating the ETS Risk Assessment. Since EPAhas been aggressively coordinating with and assisting regulatory programs based upon itsETS Risk Assessment, the court believes EPA desires a final resolution to Plaintiffs,original claims. EPA indicates such, stating "EPA wishes to conclude this casechallenging its ETS Risk Assessment." (Defs.' Resp. Pls.' Mot. Supplemental Pleadingat 5.) Supplementing the pleadings with new causes of action would significantly delayfinal judgment being entered in this case. As a general rule, such delay would prevent theparties from exercising their rights to appeal.

For nearly five years, the parties have disputed the validity of EPA's ETS RiskAssessment. Based upon the Assessment's conclusions, EPA is involved with other governmentand private entities. Resolving Plaintiffs' new allegations may entail pretrial motionsand discovery, possibly prolonging the case for years. There is no just reason for sodelaying final judgment regarding EPA's ETS Risk Assessment. However, Plaintiffs' newallegations are significantly related to the Complaint. Precedent as well as principles ofjudicial economy and justice urge the court to allow Plaintiffs' motion. To cure

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this dilemma, the court will allow Plaintiffs to serve their supplemental pleading andwill sua sponte make an express direction for the entry of judgment regarding theparties, motions for summary judgment. Accordingly, the court's judgment will be certifiedfor review pursuant to Fed. R. Civ. P. 54(b). Though the court creates the possibility ofthe parties, appealing separately under the Complaint and Supplemental Pleading, there islittle risk an appellate court would be faced with redundant issues. Plaintiffs,Supplemental Pleading, although related to the issues raised in the Complaint, isfactually and legally independent from the issues raised in the Complaint. EPA will have20 days after service of the Supplemental Pleading to respond.

VII. CONCLUSION

In 1988, EPA initiated drafting policy-based recommendations about controlling ETSexposure because EPA believed ETS is a Group A carcinogen. See, e.g., EPAMemorandum from William K. Reilly, Administrator, to Congressman Thomas J. Bliley, Jr.,U.S. House of Representatives 1 (March 24, 1992) (JA 6,374; 6,380-82) (Reilly Mem. II)(EPA began drafting a policy guide recommending workplace smoking bans before drafting theETS Risk Assessment.)

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Rather than reach a conclusion after collecting information, researching, and makingfindings, EPA categorized ETS as a "known cause of cancer" in 1989. EPA, IndoorAir Facts No. 5 Environmental Tobacco-Smoke, ANR-445 (June 1989) (JA 9,409-11). EPA'sAdministrator admitted that EPA "managed to confuse and anger all parties to thesmoking ETS debate . . . . EPA Memorandum from William K. Reilly, Administrator, toSecretary Louis W. Sullivan 2 (July 1991) (JA 6,754). The Administrator also conceded,"[B]eginning the development of an Agency risk assessment after the commencement ofwork on the draft policy guide gave the appearance of . . . policy leading science . . .." Reilly Mem. II at 1 (JA 6,391).

In conducting the Assessment, EPA deemed it biologically plausible that ETS was acarcinoqen. EPA's theory was premised on the similarities between MS, SS, and ETS. Inother chapters, the Agency used MS and ETS dissimilarities to justify methodology.Recognizing problems, EPA attempted to confirm the theory with epidemiologic studies.After choosing a portion of the studies, EPA did not find a statistically significantassociation. EPA then claimed the bioplausibility theory, renominated the a priorihypothesis, justified a more lenient methodology. With a new methodology, EPA demonstratedfrom the 88



selected studies a very low relative risk for lung cancer based on ETS exposure. Based onits original theory and the weak evidence of association, EPA concluded the evidenceshowed a causal relationship between cancer and ETS. The administrative record containsglaring deficiencies.

The Radon Research Act authorizes information collection, research, industry inclusion,and dissemination of findings. Whether these actions authorize risk assessments is amatter of general and interstitial statutory construction. So long as informationcollection on all relevant aspects of indoor air quality, research, and dissemination arethe lodestars, the general language of the Radon Research Act authorizes risk assessmentsas they are defined by NRC and explained in EPA's Risk Assessment Guidelines.

It is clear that Congress intended EPA to disseminate findings from the informationresearched and gathered. In this case, EPA publicly committed to a conclusion beforeresearch had begun; excluded industry by violating the Act's procedural requirements;adjusted established procedure and scientific norms to validate the Agency's publicconclusion, and aggressively utilized the Act's authority to disseminate findings toestablish a de facto regulatory scheme intended to restrict Plaintiffs,

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products and to influence public opinion." In conducting the ETS Risk Assessment,disregarded information and made findings on selective information; did not disseminatesignificant epidemiologic information; deviated from its Risk Assessment Guidelines;failed to disclose important findings and reasoning; and left significant questionswithout answers. EPA's conduct left substantial holes in the administrative record. Whileso doing, produced limited evidence, then claimed the weight of the Agency's researchevidence demonstrated ETS causes cancer.

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Gathering all relevant information, researching, and disseminating findings weresubordinate to EPA's demonstrating ETS a Group A carcinogen. EPA's conduct transgressedthe general meaning of the Radon Research Act's operative language. Further, to the extentEPA's conduct in this matter entailed interstitial

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38 Given the holdings in United States v. Lopez, 514 U.S.549, 115 S. Ct. 1624 (1995) and United States v. Hartsell, 127 F.3d 343 (4th Cir.1997), an argument may exist concerning where the federal government derives the authorityto regulate indoor air quality, a patently intrastate environmental concern. Being neitherinterstate or commercial, it is unclear where indoor air finds a nexus with theinstrumentalities of interstate commerce or how it substantially affects interstatecommercial transactions. The Complaint does not raise these concerns. Since the court isgranting Plaintiffs the complete relief requested, it is unnecessary to reach theseissues.


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construction of the Act, the court affords no deference to EPA. Congress did not delegaterule making or regulatory authority to EPA under the Act. EPA's conduct of the ETS RiskAssessment frustrated the clear Congressional policy underlying the Radon Research Act.See 131 Cong. Rec. S7035 (May 23, 1985) (purpose of the Act is to provide clear, objectiveinformation about indoor air quality).

EPA also failed the Act's procedural requirements. In the Radon Research Act, Congressgranted EPA limited research authority along with an obligation to seek advice from arepresentative committee during such research. Congress intended industry representativesto be at the table and their voices heard during the research process. EPA's authorityunder the act is contingent upon the Agency hearing and responding to the representedconstituents, concerns. The record evidence is overwhelming that IAQC was not therepresentative body required under the Act. Had EPA reconciled industry objections voicedfrom a representative body during the research process, the ETS Risk Assessment would verypossibly not have been conducted in the same manner nor reached the same conclusions.

Because EPA exceeded its authority under the Radon Research Act and also failed the Act'sprocedural requirements, the court

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will direct the entry of judgment in favor of Plaintiffs' motion for summary judgment andvacate Chapters 1 thru 6 of and the Appendices to EPA's Respiratory Health Effects ofPassive Smoking: Lung Cancer and Other Disorders, EPA/600/6-90/006F (December 1992).To ripen its judgment for purposes of appellate review pursuant to Fed. R. Civ. P. 54(b),the court will make an express determination that there is no just reason for delay.Accordingly, the court need not address Plaintiffs, remaining arguments, Counts II, III,and IV of the Complaint. The court will also grant Plaintiffs' Motion to Supplement thePleading.

An order and judgment in accordance with this memorandum opinion will be filedcontemporaneously herewith.

This the 17th day July 1998.

[Signed] William L. Osteen
United States District Judge

END OF DOCUMENT


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