Denver » The longstanding battle between government regulators and US Magnesium over toxic chemicals released from the company's plant in Tooele County landed before a federal appeals court on Wednesday.

At issue is whether Congress in 1989 exempted the company from certain hazardous waste remediation at the site, which sits at the southwest edge of the Great Salt Lake.

The Environmental Protection Agency accuses U.S. Magnesium of violating the Resource Conservation and Recovery Act, the federal statute that governs the storage and disposal of hazardous waste. The EPA alleges that dioxins and other cancer-causing agents that are byproducts of the magnesium extraction process are a threat to workers, wildlife and public health.

U.S. Magnesium's lawyer, Francis Wikstrom, argued that Congress excluded the company from the law, and that the EPA was retroactively applying new guidelines.

"They [the EPA] can change the procedures prospectively," Wikstrom told the three-judge panel of the 10th U.S. Circuit Court of Appeals. "What they can't do is change it retroactively and then turn around and sue my client for millions of dollars."

Utah regulators have been at odds with US Magnesium since at least 1992. The company extracts brine from the Great Salt Lake, and in its magnesium-production process releases a host of chemicals into the air, unlined ditches and a retention pond at the plant about 65 miles west of Salt Lake City.

In 2001 the EPA stepped in, filing a $1 billion lawsuit against the company after state authorities turned the case over to the federal government.

U.S. District Judge Dee Benson of Salt Lake City sided with the company in a 2007 ruling and the EPA appealed his decision, setting the stage for Wednesday's review by the appeals court.

Government lawyer Robert Oakley was sharply questioned by Senior Judge David Ebel about what he said seemed to be a "settled regulation" by Congress.

"At what point does the waste issue become a historical fact?" Ebel asked.

Oakley countered that US Magnesium's flouting of environmental laws and regulations are what prompted the EPA to take action.

He characterized the company's position as "Anything generated [at the plant] can be poured down the drain."

Wikstrom said after the hearing that the EPA is changing rules in the middle of the game.

"After extensive rule making and interpretation in the late 1980s, they changed their position dramatically, which is inappropriate and violates due process," Wikstrom said.

This month the EPA designated the 4,525-acre plant as a Superfund site, making millions of dollars available for a multi-year cleanup. The EPA will handle that case out of Washington, D.C., and it will entail "totally different proceedings," Oakley told The Tribune after Wednesday's hearing.