Environmental Transactions and Brownfields
Committee Newsletter
A joint newsletter of the Environmental Transactions and Brownfields Committee and the
Superfund and Natural Resource Damages Litigation Committee.
Vol. 20, No. 2
CHAIRS’ MESSAGE
Gene Schmittgens Jr., Anne Viner,
John Gullace, and Lauren Daniel
On May 22, 2017, Scott Pruitt, Administrator
of the U.S. Environmental Protection Agency
(EPA), established a Task Force to review the
federal Superfund program and to “provide
recommendations . . . on how the agency can
restructure the cleanup process, realign incentives
of all involved parties to promote expeditious
remediation, reduce the burden on cooperating
parties, incentivize parties to remediate sites,
encourage private investment in cleanups and sites
and promote the revitalization of properties across
the country.” The Task Force completed its work
within a month of its creation, and on July 25,
2017, released a 26-page report to the public with
42 specific recommendations for improving the
Superfund program.
The pace at which EPA will address the Task
Force recommendations is not entirely known at
this point, but as of now all signs point to speed.
In December 2017, EPA published an initial
list of sites targeted “for immediate and intense
attention”—one of the specific recommendations
made by the Task Force. The list is intended to be
dynamic, with sites moving on and off, but for now
it includes 22 sites with which the Administrator
intends to be directly involved. In addition, in the
first few months of 2018, EPA released a list of
sites “with the greatest expected redevelopment
July 2018
and commercial potential,” and issued new
guidance designed to enable EPA to use money
from site special accounts to provide incentives
for developers and other bona fide prospective
purchasers to undertake cleanups. EPA intends
to issue quarterly reports on its progress toward
implementing the Task Force’s recommendations,
and to host a series of “listening sessions” for
interested stakeholders.
In this special joint newsletter, the Environmental
Transactions and Brownfields (ETAB) Committee
and the Superfund and Natural Resource
Damages Litigation Committee have teamed up
to present a series of articles to our readership
that are specifically focused on the Task Force
recommendations. The newsletter presents six
articles covering a range of topics from strategies
on effective implementation of the Task Force
recommendations to what the Task Force may have
missed altogether. We thank each of our authors for
their contributions, and hope you enjoy the articles!
Gene Schmittgens Jr. and Anne Viner are chairs
of the Environmental Transactions and Brownfields
Committee. John Gullace and Lauren Daniel are
chairs of the Superfund and Natural Resource
Damages Litigation Committee.
Environmental Transactions and Brownfields Committee, July 2018
1
Environmental Transactions and
Brownfields Committee Newsletter
Vol. 20, No. 2, July 2018
Rob Gelblum, Tom Doyle, and
Lindsay Howard, Editors
AMERICAN BAR ASSOCIATION
SECTION OF ENVIRONMENT,
ENERGY, AND RESOURCES
In this issue:
Chairs’ Message
Gene Schmittgens Jr., Anne Viner,
John Gullace, and Lauren Daniel ...........1
Superfund Reform Through Communication: Is
Better Communication with Stakeholders the
Key to Superfund Reform?
Ilene Munk and James P. Brady ..............3
July 24, 2018
The Administration’s Regulatory Reform for
Fuel Economy and Vehicle Greenhouse Gas
Standards: Assessing the Significant Changes
and Potential State Conflicts
Committee Program Call
Expediting Cleanup and Remediation
at Complex Sites Through Adaptive
Management
Chris Moody, R.G. .....................................7
August 2-7, 2018
ABA Annual Meeting
Chicago, IL
Superfund Reforms: Potential Impacts on
Private Party CERCLA Claims
J. Barton Seitz and
Thomas C. Jackson .................................10
August 10, 2018
30th Annual Texas Environmental
Superconference
Austin, TX
Primary Sponsor: State Bar of Texas,
Environment & Natural Resources Law Section
Working with EPA and PRP Groups to Achieve
Task Force Goals
David Batson and Stephen Smithson ...14
Alternative Financing Offers Advantages for
Superfund Remediation
Timothy D. Hoffman ................................17
42 Shades of Superfund
Larry Schnapf ...........................................19
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Send requests to Manager, Copyrights and Licensing, at the
ABA, by way of www.americanbar.org/reprint.
Any opinions expressed are those of the contributors and shall
not be construed to represent the policies of the American
Bar Association or the Section of Environment, Energy, and
Resources.
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October 17-20, 2018
26th Fall Conference
Marriott Marquis San Diego Marina
San Diego, CA
March 25-27, 2019
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Grand Hyatt Denver
Denver, CO
March 27-29, 2019
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Grand Hyatt Denver
Denver, CO
For full details, please visit
www.ambar.org/EnvironCalendar
Environmental Transactions and Brownfields Committee, July 2018
SUPERFUND REFORM THROUGH
COMMUNICATION: IS BETTER
COMMUNICATION WITH STAKEHOLDERS THE
KEY TO SUPERFUND REFORM?
Ilene Munk and James P. Brady
Foley & Mansfield, PLLP
Portland, Oregon
The Superfund program has been the source of
both criticism and praise since it was signed into
law on December 11, 1980. The strict, joint and
several liability scheme in Superfund was designed
to assign liability for cleanup costs related to the
historic releases of hazardous substances, even in
instances where the entities that released those
hazardous substances were no longer living,
solvent, or identifiable. Those parties within
the four broad categories of Superfund liability1
(owner, operator, arranger for disposal, or
transporter) quickly found themselves with a large
cleanup liability for releases caused by entities no
longer solvent or identifiable. These Potentially
Responsible Parties (PRPs) complained bitterly to
their elected officials about the manifest injustice
of the liability scheme, and potential chilling effect
on property development. Those concerns resulted
in some minor changes to Superfund in 1986 with
the Superfund Amendments and Reauthorization
Act (SARA), but criticism remained related to both
the liability scheme and the delays in addressing
some of the most contaminated sites—those on the
National Priorities List (NPL).
The Trump administration, through EPA
Administrator Scott Pruitt, has made Superfund
reform a priority. Administrator Pruitt convened
a Superfund Task Force that identified five
goals, the last of which is “Engaging Partners
and Stakeholders.” The Task Force’s strategy for
stakeholder engagement was directed solely to
“key stakeholder engagement.” The focus on “key”
stakeholders appears to perpetuate many of the
issues faced by PRPs before the Task Force issued
its recommendations.
The first recommendation directed at this
final Superfund Task Force goal is that key
stakeholders are to be identified and “targeted”
for communication. The key stakeholders the
Task Force identifies include (1) states, local
governments, and recognized Native American
tribes, (2) industry, PRP groups and organizations,
(3) community groups, (4) environmental
organizations including environmental justice
groups, and (5) financial and banking associations.
This focus on groups and associations, though, may
not address the inequities in PRP identification and
the allocation of liability for large complex sites
described below.
The Task Force recommends that EPA collaborate
with other federal agencies to solicit views on how to
better engage federal agencies involved in cleanups
of federal properties. This recommendation is an
important recognition of the difficulties inherent
in the “unitary executive” theory of government
(the realization that one federal agency seldom
sues another because they are all part of the same
federal family). Singling out the federal facility
sites for increased engagement is an important
acknowledgment that such facilities are not subject
to the same statutory penalties for noncompliance
with an EPA information request under Section
104(e) of the Comprehensive Environmental
Response, Compensation, and Liability Act
(CERCLA) as private parties due to EPA’s longstanding policy of not seeking enforcement against
other federal agencies. Although there have
been a few very limited exceptions, federal PRP
participation at most Superfund sites occurs with a
more relaxed timeline and reduced scrutiny of the
comprehensiveness of information exchange than the
timeline and information exchange for private PRPs.
The Task Force Report acknowledges this deference,
calling for EPA to obtain the recommendation of
the federal agency site owner on how to “achieve
the Administrator’s goals” at the agency site. The
Task Force nods to this less stringent enforcement
by offering “feedback sessions” to federal PRPs
while bringing the full force of EPA’s informationgathering authority to private parties. Thus, the
recommendations do not appear to call for changes
in EPA’s deferential treatment of federal PRPs.
Environmental Transactions and Brownfields Committee, July 2018
3
The third recommendation for achieving the goal
of partner and stakeholder engagement is the
establishment of a federal advisory committee. The
advisory committee is to identify barriers to site
cleanup and reuse by engaging community groups,
developing financing and infrastructure ideas,
constructing new ways to address mining and
sediment site use, and to propose a methodology
and forum for evaluating the effectiveness of the
Task Force recommendations. The ideas generated
by this advisory committee are anticipated
to provide the structure for Congressional
reauthorization of the Superfund program. The
1980 CERCLA statute was first re-authorized in
1986 with SARA. Some of the most notable SARA
amendments included the importance of permanent
remedies and innovative treatment technologies;
inclusion of standards and requirements in
other state and federal environmental laws and
regulations; new enforcement tools; increased state
involvement and citizen participation; and focus on
human health problems posed by hazardous waste
sites. By the mid-1990s, the tax on the chemical
and petroleum industries that funded the Superfund
expired and today the Superfund Trust is without
sufficient capital to address legacy contamination
in the manner anticipated when the statute was
enacted. Deposits into the Trust Fund from other
remediation activities around the country have
proved to be inadequate to restore the Trust Fund to
significant levels.
In light of all of these realities, will the Task Force’s
recommendations achieve the goal of increasing
stakeholder engagement and cooperation? Issues
that limit stakeholder engagement at present include
a) limited PRP identification; b) the possibility
of large “orphan share” liability, and c) the need
for more predictable and reliable remedies. The
impact of the Task Force recommendations on these
important issues is unclear.
The “Big Fish” May Continue to Swim
Alone
A long-standing concern by many practitioners
in the Superfund process is inequity in the
4
identification of PRPs. Section 104(e) of CERCLA
provides EPA with the ability to conduct extensive
investigations and learn a great deal about PRPs.
When the EPA issues a 104(e) request, EPA
can seek a wide array of disclosures, including
information about materials disposed of on a
property, the history of any releases of hazardous
substances on a property, and the ability of a
party to pay for the cleanup. EPA can also request
to inspect and copy company documents and
enter a site to conduct sampling under its 104(e)
authority. The information gathered from these
“information requests” plays a significant role in
the ultimate determinations of relative liability
among PRPs even when those allocations take
place outside of EPA’s purview. Yet, if only a
small number of parties receive those mandatory
disclosure questionnaires, other PRPs could be
at a distinct advantage in allocation negotiations
because they have not been forced to complete the
highly invasive search that is required by EPA’s
104(e) process and have not been compelled—
under the weight of civil and criminal penalties for
nondisclosure—to provide as complete and robust
a picture of past activities.
However powerful this information-gathering
authority is, EPA does not always utilize this power
to its full potential. A common complaint among
PRPs is that EPA fails to pursue all the PRPs that
could be identified at a particular Superfund site.
Often, once EPA has secured participation from
a few “Big Fish” PRPs with deep pockets, EPA
stops the 104(e) process of searching for additional
PRPs to participate in a cleanup. These “Big Fish”
PRPs are then left to take on a larger portion of
the cleanup because less information is known
about the other, smaller parties. The paradox for
larger, solvent parties is that cooperating with EPA
often brings an end to the PRP search activities
and fewer parties with whom to share the cost of
cleanup.
This issue was raised by several members
of the House of Representatives Energy and
Commerce Subcommittee during a January 18,
2018, Congressional hearing. When specifically
Environmental Transactions and Brownfields Committee, July 2018
asked how PRPs are identified, EPA Deputy
Assistant Administrator of the Office of Land and
Emergency, Barry Breen, stated, “We continue
to look for potentially responsible parties.
Ultimately, we’ll pick those that we think both
have responsibility and the assets to pursue.”2
Unfortunately, he did not say EPA would pursue all
parties with responsibility and assets.
The Task Force recommendations may perpetuate
rather than alleviate the “Big Fish” problem. By
focusing on achieving the engagement of key
stakeholders such as PRP groups (often made up of
the larger companies), the recommendations may
not achieve or even address the identification of
smaller stakeholders who are nonetheless important
to an equitable allocation of responsibility for
cleanup costs. The time and expense of that
PRP search effort are often passed along to the
PRP groups without the commensurate statutory
mandates that would accompany those inquiries if
made by EPA.
The Orphan Share Remains an Orphan
The portion of cleanup liability at a Superfund site
that is attributable to insolvent or defunct parties
is commonly referred to as the orphan share. Many
Superfund sites were historically home to or used
by entities that are now insolvent or defunct. As
a result, the orphan share can often make up a
sizeable portion of cleanup liability at Superfund
sites. CERCLA is a joint and several liability statute,
which results in financially viable PRPs absorbing
the orphan share. In an effort to reduce the impact
on viable parties in the past, EPA allowed for an
exercise in enforcement discretion in which EPA
would absorb a share of the “orphan” costs to reward
those PRPs willing to step forward and undertake
remediation. Plans fostered under the Clinton
Administration gave EPA enforcement discretion
to forgive a portion of EPA’s oversight or past cost
collection and absorb a percentage of the orphan
share in exchange for settlement with PRP groups.
All of these plans utilized Section 122 of CERCLA
and placed time periods and moratoriums on EPA
enforcement to facilitate settlement.3
However, EPA does not uniformly contribute to
settlements in this manner. There are no guarantees
to PRPs that EPA will choose to forgive any
portion of a PRP’s orphan share obligation. EPA
is free to require liable, solvent parties to pay for
the entire cleanup, including orphan shares. It is
no wonder that negotiated settlements can take
years as EPA and private parties wrestle with the
magnitude and distribution of the orphan shares.
The Task Force recommendations regarding the
“key stakeholder” concept is an important step in
bringing state, local, tribal, and industry groups to
the table to begin talking to EPA and each other
and developing levels of trust and communication.
EPA has statutory tools that may facilitate that
process and recognize the importance of engaging
all potential stakeholders.
The End of the Engagement
The ultimate result of meaningful dialogue with
PRPs, regulators, environmental groups, and
communities is the successful completion of the
cleanup activities and natural resource restoration.
Without incentives for cooperation, the parties
may be less motivated to work together in an
expeditious manner toward cleanup. The goal
of remedy completion, though, exists within
the backdrop of increasingly sophisticated
technology capable of detecting more minute
levels of hazardous substances or new human
health and environmental toxins, which can result
in the proverbial moving of the goal posts in
environmental remediation. The Five-Year Review
for evaluation of remedy effectiveness at NPL sites
can lead to uncertainty with respect to the ultimate
issues of just how much remediation is needed,
and whether the remedy will still be effective if
new technology allows for the identification of
previously unknown hazards. Is it any wonder that
regulators are hesitant to make decisions that may
be outdated scientifically before remediation is
complete? Can a cooperative PRP ever have hope
of achieving final site cleanup?
Environmental Transactions and Brownfields Committee, July 2018
5
Engagement of key stakeholders could be greatly
facilitated by determining a mechanism for
ensuring the finality of a remedy. The advisory
committee created as a means of engaging key
stakeholders would perhaps be an appropriate
vehicle to raise this type of issue. Bringing all
stakeholders together is certainly a worthy goal
and foundation for which the other Task Force
recommendations will succeed or fail.
Irene M. Munk is the managing partner in the
Portland, Oregon office of Foley & Mansfield, PLLP.
Her practice focuses on Superfund litigation, cost
recovery and allocation work as well as complex
toxic tort matters. She actively advises clients
around the country on Brownfields redevelopment
and contaminated property re-use matters.
James P. Brady is an associate attorney in the
Seattle office of Foley & Mansfield PLLP. His
practice areas includes Superfund litigation, toxic
tort defense with a focus on asbestos –exposure
cases, and representation of homeowners and
financial institutions in real estate litigation.
Endnotes
1 42 U.S.C. § 9607a(1-4).
2 Footage of the entire hearing is available at
https://energycommerce.house.gov/hearings/
modernizing-superfund-cleanup-program/.
3 Interim Guidance on Orphan Share Compensation for
Settlors of Remedial Design/Remedial Action and NonTime-Critical Removals, June 3, 1996, https://www.epa.
gov/sites/production/files/2013-10/documents/orphanshare-rpt.pdf.
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6
Environmental Transactions and Brownfields Committee, July 2018
EXPENDING CLEANUP AND REMEDIATION
AT COMPLEX SITES THROUGH ADAPTIVE
MANAGEMENT
Chris Moody, R.G., Principal Geologist
Farallon Consulting, L.L.C.
Portland, Oregon
The Superfund Task Force identified several
opportunities to accelerate cleanup and reuse of
Superfund sites. In its recommendations to the
administrator, the Task Force identified the need to
promote the “application of adaptive management
at complex sites.” Adaptive management has a
long history of usefulness in evaluating complex
resource systems and is mentioned in several
guidance documents and Environmental Protection
Agency (EPA) memos. The methodology can
be used to identify the ways in which complex
food webs react to remedies and overcome other
uncertainties in the remediation process. Although
stakeholders have raised objections about the
uncertainties of costs and time frames inherent in
an adaptive management approach, these concerns
can be alleviated by building trust among the
stakeholders and providing a specific path forward
with triggers based on monitoring. In short,
the phased nature of the adaptive management
approach reduces uncertainty with management
decisions and can return all or parts of these sites to
their intended uses.
What Is Adaptive Management?
Adaptive management is used in business,
environmental science, and industrial ecology. Its
learning-based approach is built on the concept
that complex resource systems like those at EPA
Superfund sites are only partially understood at
the outset. Greater understanding of these resource
systems is attained through the practice of adaptive
management. Rather than delaying action until
“enough” is known about a system, adaptive
management supports action in the face of the
uncertainties and complexities of large ecosystems.
Adaptive management is not, however, a trial-anderror approach, nor is it classical experimental
science. It is a structured approach of iterative
decision-making designed to refine understanding
of complex systems. Understanding gained about
resource systems at one site is then applied to
other sites. Essentially, adaptive management is
a decision framework that describes one or more
series of actions that are selected based on the
previous cycle of study results.
Adaptive management has been formally used in
environmental management theory since the late
1970s to manage waterfowl harvests, evaluate
forest management approaches, determine the
impact of harvesting on fish populations, and
identify the intersection of social and ecological
systems.
Contaminated-site managers adopted the theory
in the 2000s, although studies by the National
Research Council (NRC) found that adaptive
management has been inappropriately applied.
Nonetheless, it has been included in numerous
guidance documents, such as the 2001 NRC
Framework for Risk Management, 2002 EPA
Principles for Contaminated Sediment Sites; 2003
NRC Environmental Cleanup at Navy Facilities,
2005 EPA OWSER guidance, and EPA directives
and memoranda such as the Horinko Principles
2002, Risk Management Principles 2002, and
OLEM Directive 2017. EPA’s 2002 Principles
for Managing Contaminated Sediment Risks at
Hazardous Waste Sites “recommends that EPA
site managers make risk-based decisions using an
iterative decision process.” Although the majority
of guidance documents to date are directed at large
sediment sites, recent communication from EPA
staff indicates that EPA believes this approach
could help with management and cleanup at large
groundwater sites, as well.
Why Use Adaptive Management?
There are inherent uncertainties in large-scale
remediation. Uncertainties typically encountered
in sediment sites include ongoing sources, the
dynamic nature of heterogeneous sediment
deposits, estimates of bioaccumulation and
Environmental Transactions and Brownfields Committee, July 2018
7
magnification for ecological receptors, and the
predicted effectiveness of various remedial
alternatives. At groundwater sites, uncertainties
include hydraulic conductivity values for the
aquifer and data uncertainties such as measurement
errors.
These and other uncertainties cause decision
paralysis, when interested parties and stakeholders
believe there is only one chance to find the correct
solution. The traditional approach is to select a
highly conservative remedy that seems most certain
to achieve the remedial action objectives (RAOs).
Such conservative methods are less successful,
however, in accounting for a project’s inherent
uncertainties. For example, in a complex river
system investigation, investigation and remedial
action planning can take so long that original
sampling data become outdated, resulting in further
design delays while new samples are collected
and analyzed. Even after the selected conservative
design has been implemented, the actual
protectiveness of the remedy may not be known
until construction is complete. Add to these delays
the evolving science behind toxicity evaluations
(recent examples include the vapor intrusion
pathway, “new” Contaminants of Concern (COCs)
such as 1,4-dioxane and per- and polyfluoroalkyl
substances, and EPA and state agencies’ health
assessment of trichloroethylene), which may
require revisions to ongoing remediation and
reassessment of once-closed sites.
Adaptive management could support the
implementation of an active management solution
following a round or two of data collection, and
could prevent or minimize the need to continue
to investigate and postpone cleanup. Parties can
use adaptive management to verify an action’s
protectiveness over time. This allows the
communication of actual measured effects, which
make a much more compelling case than modeled
effects when communicating to stakeholders.
In the scenario where there is uncertainty in the
relationship between sediment concentrations,
biota accumulation factors, and their effect on
human health, adaptive management could also
8
be used to determine how active management
influences those relationships.
Concerns About Implementation
Although adaptive management is often the most
efficient and effective management approach
at sites with uncertainty, the dynamic nature of
adaptive management often conflicts with the
desire of potentially responsible parties (PRPs) for
a firm schedule and an identified cost of exposure.
It can be difficult to persuade upper management to
approve funding for a mutable plan, or to convince
the public and stakeholders to take interim remedial
steps, especially if public resources are involved.
Legal teams strain to craft orders/agreements.
Decision-makers resist committing time and
money to an iterative process that advocates action
despite uncertainty, or may view an admission of
uncertainty as an admission of weakness.
Typical concerns about the use of adaptive
management include:
• Uncertain time frame—How many cycles
of active management and monitoring
events are needed before a decision can be
made that the work is complete?
• Uncertain costs—Active management
selected on the first round of work may or
may not be enough.
• Excuse to do less active management—For
stakeholders not familiar with the approach,
it can seem that PRPs are trying to “get
away with” a remedy that has less active
management. The risk associated with the
implementation of the remedy needs to be
explained and put in context.
• Difficulties with settlements—It can be
especially tough to structure settlements,
including how to address groups of smaller
parties since PRPs need some certainty to
allow relative costs and settlement factors
to be considered.
There are ways to manage these stated concerns
and limit the back-end risks, most of which are
already in place in regulations and guidance.
Environmental Transactions and Brownfields Committee, July 2018
Solutions
Problem: Lack of trust between stakeholders leads
to a push for a more final solution.
Solution: Create a work group approach with a
central goal of preparing and using a conceptual
site model (CSM) to discuss how risk management
decisions should be addressed. According to
practitioners, one of the main concerns is that
different stakeholders want to handle uncertainties in
different ways. The framework of a CSM provides a
common base around which to focus the discussions,
and allows a more cooperative approach.
Problem: PRPs are often reluctant to agree to a
settlement when the total cost of the remedy is
uncertain.
Solution: Cost and timing uncertainties can be
bounded by providing a specific path forward with
triggers based on monitoring. Early or interim
records of decision (RODs) can specify the process
to be followed in later stages. RODs must include
a preferred alternative, but also can “[w]hen
appropriate, provide a commitment for further
analysis and selection of long-term response
measures within an appropriate time frame” (40
C.F.R. § 300.420(f)(5)(iii)(D)). As discussed in
OLEM Directive 9200.1-130, key points in an
adaptive management plan include specific key
indicators tied to RAOs; selection of criteria that
might trigger a change in the remedy; and specific
actions to be taken if the trigger is not met. An
added benefit to interim remedies is that the
National Contingency Plan (NCP) does not require
numerical cleanup numbers to be achieved (40
C.F.R. § 300.430(f)(C)(1)).
Problem: At large multi-party sites, there is
typically a group of smaller parties who can and
should be allowed to settle their liability and not
wait until all phases of a remedy are completed and
final costs understood (aka, the cash-out parties).
Solution: Cash-out settlements could be limited to
one remedy phase, and specific reopeners could be
identified in the settlement (e.g., if costs exceed a
certain percentage over those anticipated or if new
sources or contaminants are identified).
Problem: No specific guidance or rules addressing
the use of adaptive management are identified.
Solution: The existing five-year review process
could help provide a framework for adaptive
management. Five-year reviews are required if
hazardous substances remain that pose potential
risk, which would be the case if a site was using
adaptive management. A protectiveness evaluation
is one of the key goals of a five-year review and
could provide the mechanism to identify the need
for more or different actions. Furthermore, fiveyear reviews can be conducted on an operable
unit (OU) by OU basis. Using an existing process
may assist in explaining to stakeholders how
the active management and monitoring rounds
could be used to support a more beneficial final
solution.
Conclusion
Adaptive management is a powerful tool that has
the potential to reduce the time to clean up large
sediment and groundwater sites. Once common
concerns are addressed, adaptive management
has demonstrated successes, including the Berry’s
Creek site in New Jersey, which is phasing the
work to determine how surrounding marshes will
react to sediment removal, and the South River site
in Virginia, which is using adaptive management to
assess how removal affects mercury loading rates.
If the process is structured appropriately, adaptive
management may also offer the opportunity
for early off-ramps for areas of the site, so that
these areas can get back into full productive use
(ecologically or socially speaking).
The use of adaptive management is not appropriate
for all sites. Sites with relatively manageable
uncertainties and cost implications, for example, do
not require a process of learning to understand how
to manage risks.
Environmental Transactions and Brownfields Committee, July 2018
9
The recommendation by the task force of using
adaptive management to expedite cleanup is well
supported by the science and described in guidance
materials. The experiences of the parties from the
Berry’s Creek and South River sites should be
shared, and their findings used to identify more
sites where adaptive management could potentially
reduce the time and costs needed to move sites to
closure.
Mr. Moody has over 24 years of experience in
providing oversight and technical assistance
for remedial investigations/feasibility studies
and remedial design/remedial construction
projects with a focus on in-water sediment sites.
His specialty areas include the investigation and
cleanup of large riverine sediment sites, sediment
strategy development, and allocation and
litigation support.
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10
SUPERFUND REFORMS: POTENTIAL IMPACTS
ON PRIVATE PARTY CERCLA CLAIMS
J. Barton Seitz and Thomas C. Jackson
Baker Botts L.L.P.
Washington, D.C.
In May 2017, U.S. Environmental Protection Agency
(EPA) Administrator Scott Pruitt embarked on an
ambitious plan to reinvigorate the federal Superfund
program, announcing his intent to restore “Superfund
and the EPA’s land and water cleanup efforts . . . to
their rightful place at the center of the agency’s core
mission.” Since then, EPA has commenced a series
of actions designed to effectuate the Administrator’s
Superfund objectives. As EPA continues to move
forward with these actions—particularly at
individual Superfund sites—potentially responsible
parties (PRPs) will likely need to reassess their
timing and strategy for pursuing reimbursement of
cleanup costs from other responsible parties. This
reassessment is particularly apt given the Agency’s
intent to use the full range of its enforcement
authorities under the Comprehensive Environmental
Response, Compensation, and Liability Act
(CERCLA) to drive remediations forward and recent
judicial trends specifying strict time frames for
pursuing CERCLA contribution actions.
Superfund Task Force and Related EPA
Actions
When the Superfund Task Force issued its
recommendations in July 2017, they included a
number of initiatives intended to expedite and
enhance the cleanup process at contaminated sites
across the United States. These recommendations
included, for example, proposals to “[i]mplement[]
early response actions at selected portions of sites,”
“utiliz[e] enforcement authorities to get work
underway quickly and to keep work on schedule,”
and “increasing PRP . . . adherence to project
deadlines.”
A consistent theme underlying the Task Force
recommendations is Administrator Pruitt’s desire to
achieve greater and quicker progress in completing
Superfund site remediations. EPA announced
Environmental Transactions and Brownfields Committee, July 2018
in early December 2017 an initial list of 21
contaminated sites across the United States that
are targeted for “immediate and intense action.”
According to the Agency, these sites were not
necessarily the largest or most complex, but rather
were those “with critical near-term milestones
and/or site-specific situations that will benefit
from the Administrator’s direct engagement . . .
[and] require timely resolution of specific issues
to progress towards cleanup and redevelopment
efforts.” The Agency’s plans for these sites include,
among other things, achieving prompt agreements
by PRPs to perform work, resolving disputes
over the scope and/or scale of proposed cleanups,
and using federal enforcement authorities where
necessary.
EPA’s objectives are laudable and may well allow
sites to be returned more quickly to productive
re-use. However, the Agency’s emphasis on
expediting Superfund cleanups could have
significant ramifications for parties confronting
substantial site cleanup liabilities. For example,
recent experience indicates that regional EPA
staff are under substantial pressure from Agency
headquarters to move more quickly to complete
negotiations on PRP settlements—whether
they involve PRPs conducting removal actions,
commencing remedial investigations and feasibility
studies (RI/FSs), and/or performing longer-term
remedial actions. Shorter deadlines are being
identified, less flexibility is seemingly being
afforded to PRPs to vary from EPA-specified
“model” settlement terms, and overall the Agency
is reemphasizing the importance of PRPs achieving
established milestones and work plan deadlines.
At the same time, the Agency is buttressing these
initiatives with the substantial threat of using
CERCLA section 106 unilateral administrative
orders (UAOs) to force reluctant PRPs to accede to
EPA requests. For example, in December 2017 EPA
Region 5 issued two separate UAOs to a group of
six PRPs for the U.S. Smelter and Lead Refinery
site in East Chicago, directing that the PRPs
conduct an approximately $24 million residential
yard cleanup to address impacts from historical
lead salvage/recycling operations, and perform an
estimated $2.25 million cleanup of related indoor
lead dust. The Agency is pursuing UAOs at other
contaminated sites across the country as well.
CERCLA Litigation Landscape
EPA’s recent focus on prompt resolution of site
negotiations and quicker (and even more stringent)
cleanups may force PRPs to accelerate their
decision-making on whether and when to pursue
claims to recoup cleanup costs from other PRPs.
Indeed, given the magnitude of the costs incurred
in cleaning up Superfund sites, there can be a
strong incentive for PRPs to look for opportunities
to recover some or all of their costs. However,
the road map for doing so can get complicated
depending on how the cleanup progresses and
what legal mechanisms are used to govern the
work. In the legal landscape as it exists after the
U.S. Supreme Court’s decision in United States
v. Atlantic Research Corp., 551 U.S. 128 (2007),
parties that undertake cleanups on their own may
be able to assert a cause of action against PRPs
to recover their costs under section 107(a) of
CERCLA, 42 U.S.C. § 9607(a). Depending on
the type of cleanup work being undertaken, this
type of cause of action is subject to either a threeyear statute of limitations that starts to run when
a removal action is concluded or, in the case of a
remedial action, a six-year statute of limitations
that commences to run when on-site construction
of the remedy begins. 42 U.S.C. § 9613(a)(2).
While PRPs conduct cleanups on their own in some
cases, work at Superfund sites more often proceeds
instead under judicial or administrative orders or
settlements. Typically, EPA will seek to negotiate
an Administrative Settlement Agreement and Order
on Consent (ASAOC) with PRPs to conduct the
RI/FS for the site. In some cases, initial steps to
address immediate risks—e.g., removal of leaking
drums, securing the site through installation of
fencing—are taken before the RI/FS is even
initiated. EPA will generally seek to negotiate
an ASAOC with PRPs to conduct these removal
actions as well.
Environmental Transactions and Brownfields Committee, July 2018
11
While courts have reached varying conclusions
about whether consent orders provide a basis for
a claim against other PRPs, the prevailing view is
that EPA’s current model ASAOC for conduct of
an RI/FS or a removal action serves as the basis
for a cause of action for contribution under section
113(f)(3)(B) of CERCLA. For example, in Hobart
Corp. v. Waste Management of Ohio, Inc., 758 F.3d
757 (6th Cir. 2014), the U.S. Court of Appeals for
the Sixth Circuit held that an ASAOC that EPA
negotiated with the appellants to conduct an RI/
FS resolved the appellants’ liability for some of the
overall response action (the RI/FS), and therefore
served as a basis for a contribution claim under
section 113(f)(3)(B). Although there has been some
disagreement among the courts, several courts have
held that such claims are subject to the three-year
statute of limitations in section 113(g)(3), which
begins to run on the date of the order. (In contrast,
within the Fifth Circuit, courts have found that
section 113(g)(2) establishes the applicable statute
of limitations for PRPs’ CERCLA contribution
claims for costs incurred pursuant to an EPA
administrative settlement. See, e.g., Geraghty &
Miller, Inc. v. Conoco Inc., 234 F.3d 917, 925 (5th
Cir. 2000).) Under section 113(g)(2), the statute of
limitations varies depending on whether the costs
being sought are associated with a removal action
(claims generally must be commenced within three
years after completion of the removal), or remedial
action (claims must commence within six years
after initiation of physical on-site construction
of the remedial action). As the Hobart court
noted, section 113(g)(3) does not explicitly cover
contribution actions under section 113(f)(3)(B), but
neither does any other section of CERCLA dealing
with statutes of limitations. At the same time the
court found that section 113(g)(3) does cover other
types of contribution claims, and therefore provides
the most suitable limitations period and triggering
event for actions for contribution under section
113(f)(3)(B).
Once the RI/FS is complete and EPA has issued
its Record of Decision, the Agency will usually
negotiate a consent decree with the PRPs to govern
the Remedial Design/Remedial Action (RD/RA)
12
phase of the cleanup, which gives rise to a cause
of action for contribution under section 113(f)(1).
This cause of action is again subject to the threeyear statute of limitations in section 113(g)(3), with
the statute running from the date of entry of the
decree by the court.
As noted above, EPA also has authority to rely
on UAOs issued under CERCLA section 106 to
require PRPs to undertake the work specified in an
order, with a party facing the prospect of significant
statutory penalties if it declines to comply with
the order without having a good faith basis to do
so. Some courts have viewed UAOs as equivalent
to civil actions that would give rise to a cause of
action for contribution under section 113(f)(1) of
CERCLA. However, since the Supreme Court’s
decision in Atlantic Research, the majority of
courts have rejected this view because UAOs
“don’t share the same characteristics as a ‘civil
action’ in terms of scope, finality and opportunity
to appeal.” Diamond X Ranch v. Atlantic Richfield
Co., 2016 WL 4498211 (D. Nev.), at *5. Because
a PRP that is subject to a UAO could otherwise be
left without a means of seeking contribution from
other PRPs, several courts have found that UAO
recipients have an implied right of contribution
under CERCLA section 107(a). For example, in
Emhart Industries, Inc. v. New England Container
Co., Inc., 478 F. Supp. 2d 199 (D.R.I. 2007),
Emhart incurred costs—which it alleged could
ultimately amount to $15,000,000—addressing
contamination at the Centredale Manor Superfund
site pursuant to several administrative orders,
including UAOs. The court followed the majority
of other courts in concluding that a cause of action
under section 113(f)(1) was unavailable because
the UAOs were not “civil actions.” Nevertheless,
the court went on to hold that “[t]he implied right
of contribution under § 107 provides an avenue
for recoupment of legitimate cleanup costs where
other avenues, either cost recovery under § 107 or
contribution under § 113(f), are foreclosed.”
It is not clear what statute of limitations would
apply to such a claim. However, given the rationale
used by courts in finding that the three-year statute
Environmental Transactions and Brownfields Committee, July 2018
of limitations in section 113(g)(3) applies to claims
for contribution for costs incurred pursuant to
ASAOC—i.e., that section 113(g)(3) applies to
all forms of actions for contribution regardless of
whether section 113(g)(3) specifically mentions
them—the prudent course would be to assume
that causes of action based on an implied right of
contribution under section 107(a) are also subject
to the short, three-year limitations period of section
113(g)(3).
Potential Ramifications
Given EPA’s focus on accelerating site activities
and completing site cleanups, PRPs are under
increased pressure to quickly assess their
potential CERCLA liabilities, achieve reasonable
agreements for performing necessary work where
warranted, and perform required investigation and
cleanup activities. At the same time, due to the
courts’ increasing application of a short three-year
statute of limitations to all CERCLA contribution
actions, PRPs might have only a limited three-year
time frame following the execution of an ASAOC
or consent decree, or the issuance of a UAO, to
commence CERCLA claims against other PRPs.
As a result, parties that enter into judicial or
administrative settlements with EPA or are subject
to UAOs may wish to adopt a creative “two-track”
strategy for managing their site investigation and/
or cleanup responsibilities, while concurrently
and expeditiously pursuing their CERCLA
contribution rights (to the extent available) against
other PRPs to avoid a possible statutory time bar.
Such a strategy should seek to take advantage of
EPA’s apparent willingness to “streamline” the
cleanup process—consistent with certain Task
Force recommendations—while still satisfying
legal obligations to the government. In parallel,
the assessment of possible contribution claims
will need to efficiently identify other PRPs,
preliminarily assess their respective liability shares
based on relevant legal, historical, and possibly
contractual factors, and evaluate the benefits
and costs of a litigation approach to recoup an
appropriate share of site-related response costs.
J. Barton Seitz is a partner in the Washington, D.C.,
office of Baker Botts L.L.P. His practice focuses
on complex litigation and regulatory counseling
involving a broad range of environmental, health,
and safety matters, with a particular emphasis on
environmental contamination cases.
Thomas C. Jackson is a special counsel in Baker
Botts’ Washington, D.C., office. His practice
includes representation of PRPs at a variety of sites
around the country.
connect.americanbar.org/seerconnect
Environmental Transactions and Brownfields Committee, July 2018
13
WORKING WITH EPA AND PRP GROUPS TO
ACHIEVE TASK FORCE GOALS
David Batson and Stephen Smithson
AlterEcho
Washington, D.C.
For much of the its first three decades, the
Environmental Protection Agency (EPA) Superfund
program has plucked lots of low-hanging fruit,
remediating most of the relatively simpler
contaminated landfills and facilities. Now, current
and future generations must remediate the most
complex sites—typically large areas of aquatic
sediments and/or groundwater with extensive
contamination from multiple historic sources. EPA
and private parties subject to the Comprehensive
Environmental Response, Compensation, and
Liability Act (CERCLA) face increasing challenges
in addressing these contaminated sites across
the nation. They are complex and problematic
because they generally involve contamination
that has spread over large geographic areas and
requires decades of extremely expensive remedial
action. Also, both the identification of potentially
responsible parties (PRPs) and the determination
of legal and equitable responsibility for site costs
are complicated by the often long, and sometimes
convoluted, histories of facility operations, which
may involve numerous owners and/or operators
that are no longer in existence. The EPA Superfund
Task Force was established, in large part, to help
the government and private parties address these
problems. What follows are recommendations
to help EPA achieve four of the Task Force’s
five overarching goals: expediting cleanup and
remediation; reinvigorating responsible party
cleanup; encouraging private investment; and
engaging partners and stakeholders. It is a new
opportunity for the EPA Superfund program to
promote a collaborative approach in reaching the
hard-to-harvest fruits of successfully remediating
complex sites.
Implementation of the Task Force
recommendations regarding expediting cleanup and
remediation efforts will have a potentially dramatic
impact on the current process and timeline for
14
remediation of complex Superfund sites. For
instance, PRPs and their counsel have developed
practical methods and approaches to coordinate
interests and resources to collaboratively remediate
hazardous waste sites without the need for
preliminary litigation. To address these complex
sites, however, PRPs will inevitably need to rethink
long-established methods and approaches to
addressing CERCLA liability and remediation of
hazardous waste sites.
To oversimplify an otherwise complicated set
of interactions, to succeed private parties must
organize and maintain an effective PRP group
to provide a forum for pooling of resources and
expertise, determining joint interests, making
collaborative decisions, negotiating with EPA,
and jointly funding investigation and remediation
actions. The success of PRP groups in these
endeavors is critical to the functioning of the
federal Superfund program and to meeting the
goals of the Superfund Task Force. It is through
the activities of PRP groups that EPA is able to
negotiate work and funding agreements with the
maximum number of PRPs, without entering
multiple individual negotiations. There are two
activities critical to the success of a PRP group,
convening and allocation, that we suggest
could benefit from EPA initiatives in support of
Superfund Task Force goals.
“Convening” (the organization of a PRP group
and establishment of group norms) is a complex
and important step in the life of a PRP group.
It is at this stage when PRPs come together and
negotiate contracts regarding group decisionmaking and governance, sharing of common costs,
and joint defense commitments. Historically, at
complex sites, this can involve the interactions
and coordination of scores of PRPs and counsel,
regarding responsibility for hundreds of millions,
if not billions, of dollars. Meanwhile, PRP groups
at such sites need to be prepared to function
effectively over multiple years, sometimes decades,
as site remedial actions progress and as substantial
transaction costs are incurred.
Environmental Transactions and Brownfields Committee, July 2018
We suggest that EPA can support the successful
convening of effective PRP groups, including
reducing the associated time and cost, in two
important ways.
•
•
Provision of funding for retention of
impartial convening neutrals. Frequently,
complex sites languish because PRPs,
placed in an adversarial position by
issuance of EPA notice letters, are unwilling
or unable to coalesce into a functioning
group, potentially leading to increased site
costs if uncontrolled contamination is able
to spread. EPA can help PRPs overcome the
challenges of collaborating by providing
funding for the use of an impartial neutral
professional to bring PRPs together and
facilitate their organization into an effective
PRP group.
Use of CERCLA information-gathering
authorities to support PRP group efforts to
maximize participation of PRPs. One of
the common interests of PRPs and EPA is
to maximize the number of parties sharing
site costs. However, PRP groups often have
difficulty obtaining credible evidence to
identify additional PRPs who might help
them address site contamination. EPA can
use its information-gathering authority
to aid PRP groups in the identification
of additional PRPs, potentially leading
to a critical mass of PRPs who can move
forward to address site issues.
“Allocation” is a voluntary process used by PRPs
to collaboratively assess and reach agreement
on the responsibility of group members for the
costs associated with remediation of a Superfund
site. An allocation involves the consideration and
application of relevant equitable factors to the facts
of the case to determine the relative responsibility
of PRPs for the costs associated with remediation
of harm created by each party’s activities. An
allocation, as an equitable distribution of remedy
costs, considers the type of anticipated remedy
to determine the relationship between a party’s
activities and the costs of the remedy. See, e.g.,
United States v. Atlas Minerals and Chems.,
Inc., Civ. A. No. 91-5118, 1995 U.S. Dist.
LEXIS 13097, at *271 (E.D. Pa. Aug. 22, 1995)
(“Ultimately, the allocation of response costs . . .
should consider each party’s relative responsibility
for (1) the need for remediation at the site, (2) the
selection of the particular remedy, and (3) the cost
of the selected remedy.”)
Designed originally to determine PRP
responsibility for remediation for landfill sites,
current allocation methods and processes can be
extremely costly and may require a number of
years to complete at complex sites. At sites with
contaminated sediments, for example, a multitude
of facilities adjacent to or within the watershed of
the waterway have typically engaged in operations
or practices that have led to the release of a
wide variety of hazardous substances into the
environment over an extended period. Generally,
these substances have migrated to the aquatic
sediments through various pathways, including
process discharges, spills, dumping, sewer systems,
groundwater, and surface water. The ultimate
location of these substances in the sediments may
have been affected by daily tidal and river flows,
storm events, contributions from upstream and
downstream sources, and navigational dredging.
An allocation of such a site requires an intensive
investigation to identify and assemble relevant
facts, and to evaluate the history of facility
operations on multiple properties and the relative
impact and fate and transport of contaminants.
This complicated factual matrix of differing types
and degrees of potential impacts on the need for
and costs of a remedy must then be evaluated
using appropriately derived equitable factors to
determine allocated shares of PRPs.
Given EPA’s policy of preferring to negotiate with
PRP groups, the success of PRP group allocation
efforts is critical to obtaining agreements for
remediation of Superfund sites. We suggest that
EPA could support the success of PRP allocations
in several different ways, while again reducing
overall cost and time requirements:
Environmental Transactions and Brownfields Committee, July 2018
15
•
•
•
Use of information-gathering authorities
to obtain information needed for conduct
of an allocation. EPA typically uses its
information-gathering authorities to obtain
information on the potential liability of
contaminating entities. However, as noted
previously, the level of information required
for an equitable determination of party
responsibility for site costs is much more
substantial and difficult for PRP groups
to credibly obtain. By adding requests for
data identified by PRP groups as needed
for allocation purposes, such as detailed
explanations of facility operations and
practices, EPA can obtain information that
will greatly enhance the effectiveness and
ultimate success of PRP allocations.
Provision of time for conduct of allocation
in site enforcement plans. Allocations
require a substantial commitment of both
resources and time on the part of PRPs,
often requiring efforts in excess of two years
for complex sites. EPA can support PRP
success by building time for the conduct of
an allocation into its notice and negotiations
schedules.
Adopting a policy of accepting the outcome
of credible allocations as the basis for EPA
cash-out and work party settlements with
PRPs. At complex sites, it is difficult for
EPA to justify the relative responsibility
of a settling party if challenged based on
the limited information typically obtained
for a liability determination. In light of the
historic support of courts for the use of
allocation, EPA would gain a substantial
benefit if able to credibly use an impartial
allocator’s recommendation of allocated
shares to support settlement determinations,
including ones regarding a site orphan share.
This would require changes in both PRP
and EPA practices to allow EPA to obtain
sufficient understanding of an allocation’s
conduct to justify use of the allocation
outcome. One possible approach is for EPA
to sponsor the allocation through providing
funding for and oversight of the allocation.
The effective involvement and collaboration of
PRPs is the most direct route to accomplishing
the administration’s goals for increasing the
effectiveness of remedial efforts at complex
Superfund sites. In addition to the valuable actions
recommended by the Superfund Task Force, EPA
can substantially increase the success and pace of
site cleanups by supporting the convening of PRP
groups and the activities undertaken by PRPs to
allocate responsibility for site costs.
David Batson, Senior Allocator and Mediation
Specialist with AlterEcho, has over 35 years
of experience assisting corporate, legal, and
government clients resolve complex, multi-party
hazardous waste sites and other environmental
disputes.
Stephen Smithson is General Counsel for AlterEcho.
He has been involved with environmental issues for
more than 25 years, and has represented PRPs in
dozens of cost recovery actions.
Ethics and Environmental Practice: A Lawyer's Guide
Irma S. Russell and Vicki J. Wright, Editors
Sometimes the practice of environmental law seems to involve an endless stream of
ethical problems, and there is added importance to these issues because there is real
potential for public safety concerns in these cases. This book provides a broad focus
for the practitioner, addressing the diverse and important issues of legal ethics that can
arise in the context of environmental law.
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16
Product Code: 5350259
2017, 280 pages, 6 x 9, Paperback
Environmental Transactions and Brownfields Committee, July 2018
ALTERNATIVE FINANCING OFFERS
ADVANTAGES FOR SUPERFUND
REMEDIATION
Timothy D. Hoffman
Dinsmore & Schohl LLP
Dayton, Ohio
Of the Superfund Task Force’s many
recommendations, perhaps the greatest opportunity
for expediting the remediation, reducing expense,
and encouraging redevelopment lies in encouraging
non-traditional approaches to financing site
cleanups. The Task Force identifies employing
nontraditional financing as its first strategy
to promote its goal of “Encouraging Private
Investment.”1 According to the Task Force, thirdparty investment is a way “for the Agency to
accelerate cleanups and promote reuse of NPL
sites.” To achieve this goal of increased third-party
investment, the Environmental Protection Agency
(EPA) proposes to consider “alternative approaches
to financing site cleanups, including environmental
liability transfer approaches.”
If the Task Force recommends increasing use of
“non-traditional financing,” what is wrong with
“traditional” financing? Contracting mechanisms
impact both cost and efficiency. For example,
according to a 2013 report by the EPA Office of the
Inspector General (OIG), EPA’s continued reliance
on “high risk cost-reimbursement and timeand-materials task orders” in its own Superfund
contracts lead to dramatically increased expenses.2
As described in the report:
One contract was a T&M contract, and the
other contract was awarded by paying the
contractor a fixed price per ton of remediated
land. Tasks performed for each contract were
similar. We used a conversion rate to convert
tons to cubic yards and found the cost per
cubic yard for the T&M contract was $80.16,
while the cost per cubic yard for fixed price
type contract was $32.74. EPA awarded the
first contract using a high risk T&M contract.
It later awarded the second contract using a
fixed price per ton because of several concerns,
one of which was the cost being incurred to
clean up the yards using the T&M contract. By
moving to the fixed-price type contract, Region
7 saved $13,828,003 for the 261,607 cubic
yards removed by the fixed-price contractor.
According to the OIG, “[r]educing the reliance
on these [T&M] contracts can result in numerous
benefits, including cost savings, increased
competition, and achievement of socio-economic
goals.”
When considering the financing of cleanup and
redevelopment, the type of funding matters as
well. While there are certainly benefits in holding
property owners and Potentially Responsible
Parties (PRPs) accountable, mere accountability
is not a predictor of creativity, efficiency, and
vision in returning a property to beneficial use.
Ultimately, the best solution will find a way to get
contaminated properties into the hands best suited
and incentivized to complete the remediation in a
timely and cost-efficient manner. Communities do
not want to see a vast swath of property labeled
“Superfund” and kept from beneficial use for
decades. Ideally, a cleanup would quickly return a
property to a condition in which the property is not
just safe, but also a potentially attractive property
for local investment. However, the fundamental
question is why would an investor decide to invest
in a Superfund cleanup?
Historically, EPA has sought to encourage
the transfer and reuse of a property through
developments such as Bona Fide Prospective
Purchaser status, comfort/status letters, and Ready
for Reuse Determinations. At the same time, PRPs
have sought to transfer liability and achieve cost
certainty through combinations of indemnities,
hold harmless clauses, fixed price contracts,
and insurance agreements. Large and uncertain
environmental remediation costs can pose a risk for
not just a company’s value, but its viability.
While EPA’s traditional tools to encourage reuse
are certainly helpful, the Task Force recommends
Environmental Transactions and Brownfields Committee, July 2018
17
exploration of additional approaches to risk
management to improve efficiency and encourage
the reuse of CERCLA sites. In particular, the
Task Force recommends review of environmental
liability transfer (ELT) approaches at PRP
cleanups. In addition to exploring the expanded use
of ELTs, the Task Force recommends establishing a
national working group to identify “[c]reative uses
of insurance, annuities, indemnification and other
tools for third parties interested in buying/selling
the risk of cleanup.”
An ELT has advantages over traditional funding
mechanisms. In an ELT, a contractor normally
agrees to accept title for the contaminated property
and agrees to accept liability for the remediation.
The contractor assumes this liability for a fixed
price and accounts for possible overruns through
insurance. This approach allows the property
owner to transfer a potentially large and uncertain
liability for a fixed price. In theory, the contractor
assuming liability for the property would be
sufficiently motivated to complete the remediation
in an efficient manner and redevelop the site for a
profit. As expenses increase with time, a fixed price
approach should incentivize speed in completing
the remediation.
The ELT approach is not without risk. In 2017,
an ELT contractor sued a PRP for rescission of
the agreement based on alleged failure by the
PRP to disclose the extent of contamination
on the property. While the case settled, it does
demonstrate that an erroneous calculation of
remediation costs could pose a threat to the
viability of an ELT. Ultimately, a default on
cleanup obligations by a contractor, for whatever
reason, negates the advantages of a private fixed
price solution. For this reason, it would be difficult,
if not impossible, to enter into an ELT without
a clear picture of the nature and extent of the
contamination at a site.
Fundamentally, an investor will only take on the
obligation of cleaning up and redeveloping a
Superfund property if it has a level of certainty in a
profitable outcome. As stated by Stephen A. Cobb,
18
on behalf of the Association of State and Territorial
Solid Waste Management Officials3 at a hearing
on the Superfund Task Force’s recommendations,
“Investors require a level of certainty not typically
found in the Superfund program.” Prospective
purchasers of a Superfund property must negotiate
a confusing array of statutory protections, liens,
and representations that can make financing
difficult.
While it remains to be seen what specific actions
the Task Force will recommend to promote
alternative financing at site cleanups, it is worth
exploring fixed price solutions in the interest of
speeding up and reducing the cost of remediation.
Timothy B. Hoffman is a partner and member of
the Board of Directors at the 650 attorney law
firm of Dinsmore & Shohl, LLP. He has practiced
environmental law for over 35 years representing
regulated parties in a variety of cases.
Endnotes
1 Superfund Task Force Recommendations, U.S.
Environmental Protection Agency, July 25, 2017.
2 EPA Should Increase Fixed-Price Contracting for
Remedial Actions, U.S. Environmental Protection
Agency, Report No. 13-P-0208, Mar. 28, 2013.
3 U.S. House of Representatives Committee on Energy
and Commerce Subcommittee on the Environment, Jan.
18, 2018.
The Superfund Manual:
A Practitioner's Guide
to CERCLA Litigation
Peter L. Gray
Product #: 5350254
2016, 478 pages,
6 x 9, Paperback
shopABA.org
Emphasizing the practitioner's needs
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this guidebook to CERCLA litigation
casts light on the cases and issues
that are central to current Superfund
litigation. It provides key summaries
of the state of the law under CERCLA
along with invaluable practice tips.
Environmental Transactions and Brownfields Committee, July 2018
42 SHADES OF SUPERFUND
Larry Schnapf
Schnapf LLC
New York, New York
One of the highlights of Scott Pruitt’s first year
as Environmental Protection Agency (EPA)
Administrator has been his focus on improving
the federal Superfund program. One of his
strategies was to appoint a Superfund Task
Force to provide recommendations for achieving
five goals, although the principal problem that
Administrator Pruitt asked the Task Force to
address was the long period that Superfund sites
languish on the National Priorities List (NPL).
The 13 strategies and 42 recommendations of
the Task Force Report actually consisted of 153
specific actions and 85 additional sub-actions,
for a total of 238 potential actions that EPA could
take “to reinvigorate and prioritize the Superfund
program in a most expeditious manner.”
The Task Force conceded that the
recommendations “do not represent all potential
actions that may be needed in the future,” but
rather are “a good beginning” aimed at leading
to program efficiencies and areas in need of
refinement. The sheer number of proposed
actions resembles the old aphorism of “throwing
spaghetti against the wall to see what sticks.”1
While the Task Force Report contains good,
common-sense management practices, it contains
few recommendations for addressing the primary
reason for the slow pace of site cleanups—the
rigid and complex remedy selection process.
Instead, most of the Task Force proposals focus
on actions that could be taken after the remedial
investigation/feasibility study (RI/FS) has
been completed. Thus, this author believes the
Task Force Report will likely only improve the
Superfund program at the margins.
The Most Promising Task Force
Recommendations
From this author’s standpoint, the following Task
Force recommendations hold the most promise for
expediting cleanups and promoting redevelopment
of NPL and brownfield sites.2
 Specific Action #4–Identify sites where
human exposure is not under control and
prioritize effecting controls (included in
Recommendation 1);
 Specific Action #12–Issue directive for
greater use of early actions and interim
Records of Decision (RODs) (Recommendation 3);
 Specific Action # 24–Issue directive for
greater use of early/interim actions utilizing
interim response actions (Recommendation
5);
 Specific Action #26–Evaluate the groundwater beneficial use policy involving
aquifers that are not reasonably anticipated
to be used for drinking water use (Recommendation 6);
 Specific Action #46–Issue directive requiring consideration of early actions and a
separate track for Remedial Design (RD)
actions at PRP-funded Superfund Sites
(Recommendation 12);
 Specific Action #47–Reissue/revise remedial design guidance (Recommendation 12);
 Specific Action #48–Develop criteria for
utilizing alternate tools to pursue liable
parties at NPL-caliber sites such as greater
use of the Superfund Alternative Approach
(SAA) (Recommendation 13);
 Specific Action #50–Designate states as
leads on sites where appropriate (Recommendation 13);
 Specific Action #52–Examine use of special accounts for Bona Fide Prospective
Purchasers (BFPPs) that agree to perform
cleanup, develop guidance for disbursing
such funds to BFPPs, and consider financial
incentives available to BFPPs (Recommendation 14);
Environmental Transactions and Brownfields Committee, July 2018
19
 Specific Action #64–Identify efficiency opportunities for timely resolution of disputes
with PRPs that arise in implementing cleanups (Recommendation 16);
 Specific Action # 65–Establish and promote
strict adherence to project deadlines (Recommendation 16);
 Specific Action #70–Consider greater use of
unilateral orders for recalcitrant parties to
discourage protracted negotiations (Recommendation 16);
 Specific Action #75–Increase use of Memoranda of Understanding to identify state
agencies that can take lead for sites (Recommendation 19);
 Specific Action #76–Identify situations or
phases of cleanup where state agencies can
assume primary responsibility (Recommendation 19);
 Specific Action #81–Work with PRPs, local
governments, and local professionals to
identify opportunities for PRP-led cleanups
to integrate reuse outcomes (Recommendation 21);
 Specific Action #82–Issue directive to encourage integration of reuse outcomes into
PRP-led cleanups (Recommendation 21);
 Specific Action #84–Create a task force to
explore uses of insurance, indemnification,
and other tools to incentivize third-party
liability transfers and revise comfort letters
to encourage such approaches (Recommendation 22);
 Specific Action #85–Identify regional best
management practices for addressing BFPP
concerns and use tailored comfort/status
letters/BFPP agreements (Recommendation
23);
 Specific Action #86–Improve process for
responding to requests for site-specific
tools and create regional third-party inquiry
teams (Recommendation 23);
 Specific Action #87–Develop a model for
such requests and streamline/expedite regional/headquarters/DOJ approval process
20







(Recommendation 23);
Specific Action #88–Expand use of prospective purchaser agreements (Recommendation 23);
Specific Action #93–Develop new policy
memorandum for expanded use of Prospective Purchase Agreements (PPAs) and windfall lien resolution agreements with third
parties at NPL sites (Recommendation 25);
Specific Action #96–Revise BFPP agreements to identify site-specific reasonable
steps for satisfying appropriate care obligations to address future liability (Recommendation 26);
Specific Action #109–review and revise
comfort letters to address concerns such as
windfall lien uncertainties, comprehensive
reasonable steps, lender liability (Recommendation 28);
Specific Action #110–Revise “Common
Elements Guidance” and identify potential
opportunities to expand Good Samaritan
settlements (Recommendation 29);
Specific Action #113–Propose guidance to
address concerns over municipal liability
(Recommendation 31); and
Specific Action #114–Revise model comfort letter to address municipal liability
concerns (Recommendation 32).
The bulk of the recommendations would be
implemented by guidance and policy. While it is
understandable that the Task Force would heavily
rely on the use of guidance since these documents
can be drafted quickly, there is no shortage of
irony in this approach, considering the recent
Department of Justice memorandum barring
the use of guidance documents for purposes of
civil enforcement litigation. Indeed, guidance
documents and policies were principal mechanisms
used by the Clinton Administration to adopt its
own Superfund reforms.
The good news is that the Task Force considers
its Report to be a living document that will evolve
over time. To truly implement meaningful reforms
Environmental Transactions and Brownfields Committee, July 2018
to the Superfund program, the Task Force should
now turn its attention to revising the National
Contingency Plan (NCP), the critical response
planning document that is at the heart of what ails
the Superfund program.
Proposed Changes to the NCP
The Hazardous Substance Response subpart of
the NCP was last revised in 1990. In the ensuing
years, EPA and the states have learned much
about remediating contaminated sites. EPA should
consider the following amendments to the NCP:
Amend ARARs—The NCP requires remedial
actions to comply with applicable or relevant
and appropriate requirements (ARARs).3 When
the NCP was amended in 1982 to incorporate
CERCLA, states had not yet established soil or
groundwater cleanup standards or guidance.4 The
principal cleanup criteria that were then available
were federal and state water quality criteria that
EPA concluded were too rigid and would require
the use of potentially inappropriate levels of
cleanup that would not allow consideration of
individual circumstances at each release.5 So,
instead of establishing cleanup standards, EPA
developed “a system for decision-making which
has as its primary feature a reasoned process that
contains a series of checks throughout to ensure
that the decision-making process produces an
effective remedy. The methodology emphasizes
cost-effective, environmentally sound remedies
which are feasible and reliable from an engineering
standpoint.”6
The state of New Jersey and the Environmental
Defense Fund challenged the 1982 NCP revisions
for not including cleanup standards.7 EPA settled
this litigation by agreeing to amend the NCP to
include the concept of ARARs. In the preamble
to the 1985 revisions to the NCP, EPA stated that
ARARs could only be determined on a site-by-site
basis.8
among EPA, responsible parties and states.
According to a position paper by the Association
of State and Territorial Solid Waste Management
Officials (ASTSWMO), the problems with ARARs
have included:
 Inconsistencies in ARAR determinations;
 Inconsistent application of State requirements by EPA;
 EPA inappropriately determining that a
State requirement is procedural rather than
substantive when the State believes it is an
ARAR critical to implementation of the
chosen remedy;
 Reluctance of other federal entities to
recognize State environmental laws and
regulations as ARARs;
 Lack of written documentation when EPA
finds that a State cleanup requirement was
not an ARAR; and
 Inadequate time for states to challenge
EPA’s determination that a State requirement is not an ARAR.9
As previously explained, the ARAR concept was
developed when state soil and cleanup standards
and criteria did not exist. Now that virtually every
state has adopted risk-based cleanup criteria, EPA
should redefine ARARs so that there is a rebuttable
presumption that state cleanup standards should
be used to establish the remedial goals. If a state
has established a risk-based cleanup standard
for a particular contaminant, the process for
searching for a remedial goal should stop there.
The cumbersome process of identifying other
cleanup criteria should only be used when a state
has not adopted a cleanup criterion for a particular
contaminant or a specific exposure pathway such as
vapor intrusion. While some will argue this could
result in different cleanup standards at different
sites depending on state cleanup criteria, such a
critique is really a Trojan horse since inconsistent
cleanups among the regional offices have long
plagued the Superfund program.
The process of establishing ARARs can be timeconsuming, confusing and often results in disputes
Environmental Transactions and Brownfields Committee, July 2018
21
Incorporate Land Use and Groundwater Policy
in the NCP—When one reads the preamble to
the 1988 proposed NCP amendments and the
1990 final regulation, the dearth of any discussion
on considering land use or redevelopment in
the remedy selection process is striking. EPA
first issued guidance and policy in the 1990s to
incorporate land use considerations in remedy
selection and has also adopted several groundwater
protection/restoration policies as well as
institutional/engineering controls guidance. Given
increasing criticism of agency use of guidance,
EPA should incorporate these principles into the
NCP.10
Revise Subpart H to Allow for Streamlined RI/
FS Process—Recall that EPA adopted the RI/FS
approach when it added the Hazardous Substance
Response Subpart F to the NCP. The purpose of
this addition was to provide a reasoned decisionmaking process for remedy selection in the absence
of media cleanup standards and limited agency
experience with remedial technologies. Another
rationale for adopting the rigid stepwise approach
was to ensure that the federal government could
recover its response costs. It may have made
sense to require the evaluation of five alternative
remedies in 1982 and 1985, but this is a wasteful
and time-consuming exercise in 2018.
The states now have mature remedial programs
that use risk-based cleanup criteria, and many have
adopted streamlined site investigation and remedial
procedures. EPA should revise NCP Subpart H
to allow responsible party- and BFPP-funded
cleanups to proceed under these state superfund,
RCRA and voluntary/brownfield cleanup programs
without having to comply with the more rigid
Subpart F requirements.
For example, dozens of NPL-caliber sites
have been remediated under the New York
State Brownfield Cleanup Program (BCP),
which does not require an assessment of five
alternatives. The BCP requires applicants to select
a proposed remedy and evaluate an unrestricted
cleanup alternative. The New Jersey Technical
22
Requirements for Site Remediation (Tech Regs)11
do not require an alternatives analysis, but
instead rely on the state minimum Remediation
Standards.12 Indeed, in responding to comments
to its Tech Regs, the New Jersey Department of
Environmental Protection stated in 1993:
The Department, however, does
not advocate the specific stepwise
approach used by the Environmental
Protection Agency in the CERCLA
RI/FS process because the
Department does not believe it is
necessary or appropriate for all
sites.13
EPA can enter into State Memoranda of
Understanding (SMOUs) with states with remedial
programs that satisfy the requirements of Section
128 (State Response Programs) that would allow
the states to implement CERCLA in lieu of EPA.
Indeed, it may be that EPA’s resources may be
best focused on performing removal actions to
eliminate imminent risks and issuing unilateral
administrative orders with the long-term remedial
actions performed by or under state oversight.
Other Recommended Changes to Help
Expedite Cleanups
There are additional suggestions that go beyond the
Superfund program but that could help expedite the
cleanup of the nation’s inventory of contaminated
sites, which is estimated to be approximately
294,000 sites:14
Require States to Use Parceling to Encourage
RCRA Brownfields—EPA RCRA Brownfield
Reforms urged states to allow owners or
operators of Treatment, Storage and Disposal
Facilities (TSDFs) to sell off clean parcels of
their facilities (e.g., portions never used for any
waste management) while the Hazardous Waste
Management Units (HWMUs) or Solid Waste
Management Units (SWMUs) were undergoing
corrective action. Only a handful of states have
followed this suggestion. EPA could use its Section
Environmental Transactions and Brownfields Committee, July 2018
128 State Response Program approval authority to
require states to adopt parceling at corrective action
sites.
Clarify RCRA Liability for Generator-only
Sites—There is much confusion if closure
obligations for a generator site run with the land.
A prospective purchaser may be interested in
redevelopment of a site that appears on the RCRA
generator database but is concerned that it will
become subject to closure obligations for the areas
where wastes were managed. Presumably, generator
sites could be treated as any brownfield site without
the need to undergo formal RCRA closure.
Add Landowner Liability Protections to TSCA
for PCB Cleanups—Purchasers often take steps
to qualify for CERCLA BFPP only to learn after
taking title that the property has been impacted
with PCBs, and that they are subject to the Toxic
Substances Control Act cleanup obligations. Given
the ubiquity of PCBs in the environment and
particularly in the nation’s water infrastructure,
EPA should consider including this concept when
it submits a legislative package to Congress for
Superfund reforms.
TSCA PCB Reform—The PCB cleanup and
disposal rules are a bit RCRA-like, a bit CERCLAlike, and not well integrated. The cleanup should
also not depend on the original spill concentration
but on current concentrations and media. EPA
should take another look at its PCB cleanup
regulations and consider repealing the entire
Subpart D to 40 C.F.R. 761. Disposal of PCBcontaining material could be handled entirely
within RCRA via the listed-waste and Land
Disposal Restrictions (LDR) route.
Pursue Cost Recovery from PRPs for Sites
Receiving Brownfield Grants—EPA has been
awarding brownfield grants to local governments
without considering if there is a responsible party
that could be incentivized to participate in a
cleanup. EPA should conduct PRP searches for all
sites that are awarded brownfield grants or loans,
and then seek cost recovery from those entities to
replenish the brownfield funding program or the
Superfund Trust. This will allow these programs
to be more sustainable and not be as reliant on
Congressional appropriations. This approach
would ensure that polluters are forced to pay for
the contamination they leave behind when they
abandon a community and would also impose
“consequences” on those firms that closed plants
to export jobs to foreign nations. Congress could
instruct EPA to seek recovery from responsible
parties for brownfield funds that are awarded for
sites where such responsible parties exist.
Reform EPA Remedial Programs into a
Single Unified Cleanup Program—The federal
government’s remedial programs were created as
we became aware of new environmental concerns.
As a result, multiple remedial programs were
established by separate laws. This has resulted in
different cleanup standards and procedures.
EPA has separate staffs for CERCLA, RCRA,
TSCA (PCBs), and USTs. We now have four
decades of experience remediating sites. If
Administrator Pruitt wants to implement truly
transformative changes to the federal remedial
programs, he could task the Office of Land and
Emergency Management with consolidating the
CERCLA, RCRA corrective action, and PCB
cleanup program of TSCA into one remedial
program with a consistent regulatory approach.
Such an approach could reduce redundant staff
and therefore advance the Administration’s goal of
shrinking the EPA workforce.
In closing, the Task Force recommendations
remind the author of the first fireside chat of
President Carter in 1977 when he announced that
Department of Energy Secretary James Schlesinger
would come up with a national energy plan within
90 days. President Carter came to understand
that strict deadlines—while occasionally useful
for prodding the bureaucracy—could also be
destructive since such deadlines might force
him to go ahead with ideas that are not effective
or viable. Hopefully, the Task Force will now
turn its attention to developing longer-term
Environmental Transactions and Brownfields Committee, July 2018
23
recommendations like those discussed above so
that EPA’s administrator 20 years hence will not
have to announce another round of management
efficiency and guidance-based Superfund reforms.
Larry Schnapf is the principal of Schnapf LLC
and adjunct professor at New York Law School.
His practice focuses on environmental issues
associated with business, real estate and financing
transactions as well as brownfield redevelopment
projects.
6 47 Fed. Reg. 31180 (July 16, 1982). The 1982
NCP placed heavy emphasis on cost-effectiveness (§
300.68(j)), and Fund-balancing (§ 300.68(k)).
Endnotes
1 The process of testing many different tactics at the
same time to identify what works (sticks) and what
doesn’t work (falls to the floor).
2 The author numbered the specific actions. The
Task Force Report only assigned numbers to the
Recommendations. For the ease of the reader, the
Recommendation number where the specific action is
located follows each item.
3 Generally, “applicable” standards are those that
would otherwise be legally applicable if the actions
were not undertaken pursuant to CERCLA section 104
or section 106. “Relevant” standards are those designed
to apply to problems sufficiently similar to those
encountered at CERCLA sites that their application is
appropriate, although not legally required. Standards
are also relevant if they would be legally applicable to
the CERCLA cleanup but for jurisdictional restrictions
associated with the requirement. See 50 Fed. Reg. at
5861, 47917 (Feb. 12 and Nov. 20, 1885). The 1986
Superfund Amendments and Reauthorization Act
(SARA) codified EPA’s definition of ARARs with some
variations. See 42 U.S.C. 9621(d).
4 The NCP was originally developed to provide a
framework for emergency responses to oil spills. The
passage of CERCLA required revision of the NCP
because CERCLA provided that the NCP would become
the national roadmap for responding to releases of
hazardous substances, pollutants, and contaminants.
5 See 47 Fed. Reg. 10972, 10978 (Mar. 12, 1982) “Most
of the comment focused on the provisions for determining
the appropriate extent of remedy. While some commenters
supported the process established in § 300.68 for selecting
24
a remedy, many commenters criticized the Plan for not
explicitly requiring consideration of State and Federal
health and environmental standards in development of
remedies. Similar comments stated that the Plan should
include specific levels of clean-up that must be attained
with any remedy. . . . It must be noted, however, that
circumstances will frequently arise in which there are
no clearly applicable standards. For instance, acceptable
levels of hazardous substances in soil are not established,
and there are no generally accepted levels for many other
hazardous substances in other media.”
7 Environmental Defense Fund v. EPA, No. 82-2234;
New Jersey v. EPA, No. 82-2238 (D.C. Cir. Feb. 1,
1984). See 50 Fed. Reg. 5862 (Feb. 12, 1985).
8 EPA was again sued over the 1985 NCP amendments,
with some litigants complaining that ARARs were too
vague. The ARARs were upheld in Ohio v. EPA, 997
F.2d 1520, 1525 n.1 (D.C. Cir. 1993).
9 “State Concerns with the Process of Identifying
Comprehensive Environmental Response,
Compensation and Liability Act (CERCLA) Applicable,
or Relevant and Appropriate Requirements” (Feb. 28,
2018) (available at http://astswmo.org//files/policies/
PositionPapers/ARARs-Position-Paper-Feb-2018.
pdf). The position paper was prepared in response to
a recent EPA memorandum, “Best Practice Process
for Identifying and Determining State Applicable or
Relevant and Appropriate Requirements Status Pilot,”
OLEM Directive 9200.2-187 (Oct. 20, 2017).
10 For example, see “Summary of Key Existing EPA
CERCLA Policies for Groundwater Restoration,”
OSWER Directive 9283.1-33 (June 26, 2009), listing
various policies.
11 N.J.A.C. 7:26E.
12 N.J.A.C. 7:26D.
13 25 N.J.R. 2412 (June 7, 1993) (response to comment
1193).
14 See CLEANING UP THE NATION’S WASTE SITES:
MARKETS AND TECHNOLOGY TRENDS, EPA 542-R-04-015
(2004).
Environmental Transactions and Brownfields Committee, July 2018