The Environmental Protection Agency can inspect a former U.S. Navy hospital ship for toxic chemicals, the 4th circuit ruled.

The EPA was issued a warrant under the Toxic Substances Control Act to board the M/V Sanctuary, built in 1944, to test for polychlorinated biphenyls (PCBs), which may lead to reproductive and developmental problems.

Potomac Navigation Inc. bought the ship for $50,000 at a court-ordered auction in 2007, with plans to use it for storage or as a hotel platform, but ship recycling consultant Polly Parks warned that ship buyers often sell PCB laden ships to third-world countries for a "huge profit on the scrap metal market," the ruling states.

Environmental group Basel Action Network intervened before Potomac had a chance to move the ship offshore, saying the possible presence of PCBs on the vessel demanded that it remain at the Baltimore pier under the Act's export clause. As a result, the district court ordered the ship to stay docked.

Potomac argued that the ship was exempt from the Act's regulations because it was not intended for commerce, but could not prove that PCBs "were not distributed in commerce before the ship was built," Judge Michael wrote.

The appeals court said that the export concern was "immaterial" to finding probable cause, because sampling and research data showed that there were likely PCBs on the ship, prompting an EPA inspection. A ship recycling firm that considered bidding on the Sanctuary had already confirmed the presence of PCBs, the ruling states, finding four out of five paint samples contained PCBs in concentrations greater than 50 parts per million.

The three-judge panel found that public health interests outweighed the possible economic loss of the ship, and encouraged the EPA to either determine if possible PCBs were "totally enclosed," as required by the Act, or call for proper disposal.