Federal and State Hazardous Substance Litigation
By John C. Cruden
CERCLA OVERVIEW n1
- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - n1 By John C. Cruden. This outline was prepared in my individual capacity and does not necessarily reflect the position of the Department of Justice.
- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - A. INTRODUCTORY/OVERVIEW
1. HISTORY
a. CERCLA was passed in 1980 at the end of the ninety-sixth Congress to clean up leaking, inactive
or abandoned sites and provide emergency response to spills. CERCLA is the abbreviation for the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. §
9601-9675, as reauthorized and substantially amended by the Superfund Amendments and Reauthorization Act of 1986 ("SARA"), Pub L. No. 99-499, 100 Stat. 1613 (1986). SARA introduced more
stringent cleanup standards, created a new independent regulatory program - the Emergency Planning and Community Right-to-Know Act, 42 U.S.C. §§ 11001-11050, and codified some court decisions.
b. The statute was initiated as a response to severe environmental and health problems at abandoned toxic waste sites such as Love Canal in New York and Times Beach in Missouri. n2
c. Federal funding for the "Superfund" was initially $ 1.6 billion (1981-85). Revenue source was primarily a direct tax on sales of petroleum and certain chemical feedstocks. SARA increased the fund
to $ 8.5 billion through additional taxes. In 1991, Congress reauthorized CERCLA for an additional
three years and the funding authority for an additional four years. The taxing authority expired on
December 31, 1995.
d. Superfund Reauthorization - In the 103<rd> Congress, two bills were introduced at the request of
the administration to reauthorize CERCLA: H.R. 3800 and S. 1834. In the 104<th> Congress the
most significant bills were S. 1285 and H.R. 2500. In the 105<th> Congress S. 8, as amended, was
voted out of the Senate Environment and Public Works Committee on March 26, 1998 and H.R.
2727 was voted out of the House Transportation and Intrastructure Committee, Water Resources
and Environment Subcommittee on March 11, 1998. In the 106<th> Congress, S. 1090 was the
major Senate Bill. Although none of the reauthorization bills passed, there have been significant
changes since 1986 including new language on lender and fiduciary liability, recycling, and brownfields and small business. Pub. L. No. 104-208, Asset Conservation, Lender Liability, and Deposit
Insurance Protection Act of 1996, Subtitle E (amending CERCLA § 101(20), the secured creditor exemptions under CERCLA); Pub. L. No. 106-113, the Superfund Recycling Equity Act of 1999 (SREA)
(adding new CERCLA § 127); Pub. L. No. 107-118, the Small Business Liability Relief and Brownfields Revitalization Act (adding new and amended CERCLA Sections 107(o)-(r); 101(35), (39)-(41);
122(g)(7)-(12)).
- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - n2 The Resource Conservation & Recovery Act ("RCRA"), 42 U.S.C. § 6901 et seq., as amended by the Hazardous
& Solid Waste Amendments of 1984 ("HSWA"), Pub. L. No. 98-616, 98 Stat. 3221 (1984), and other environmen-
tal statutes provided only limited authorities to deal with abandoned sites at the time CERCLA was enacted. RCRA
§ 7003, 42 U.S.C. § 6973, now provides corrective action requirements similar to CERCLA authorities, and covers
hazardous or solid wastes presenting an "imminent and substantial endangerment to public health or the environment."
- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - 2. STRUCTURE AND PURPOSE
a. CERCLA is remedial. It creates a response, compensation, and liability scheme. B.F. Goodrich Co.
v. Murtha, 958 F.2d 1192 (2d Cir. 1992); Young v. United States, 394 F.3d 858, 862 (10th Cir. Jan.
4, 2005).
b. The CERCLA theory is restitution. Those responsible for causing hazardous substance releases
should pay the cost of cleanup.
c. CERCLA is not a prescriptive or regulatory program and does not make any conduct unlawful (with
the exception of a criminal provision under Section 103, which governs spill reporting requirements). n3
d. By Executive Order 12580, 3 C.F.R. 193, most authorities for non-federally owned sites are delegated to the Environmental Protection Agency ("EPA"), except natural resource damages.
e. The primary CERCLA regulation is the National Oil Hazardous Substances Pollution Contingency
Plan ("NCP"). n4 The NCP was challenged and substantially upheld in Ohio v. United States Envtl.
Protection Agency, 997 F.2d 1520 (D.C. Cir. 1993).
- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - n3 Section 103(b) imposes criminal sanctions for failure to notify the government of releases of hazardous substances in particular quantities. Section 103(c) and (d), known as the community right-to-know provisions, require
certain owners and operators to notify the government and maintain records convey treatment, storage or disposal of hazardous wastes. Violations can result in maximum penalty of five years' imprisonment and significant fines.
See, e.g., United States v. Freter, 31 F.3d 783 (9th Cir. 1994). See amendments by Title I, Pub. L. 104-108 (October 11, 1996).
n4 40 C.F.R. Part 300 et seq. The NCP sets forth the basic criteria that a) governs responses to releases and
threatened releases and b) oversees the development of appropriate remedies, whether privately or publicly financed. The NCP was re-promulgated in 1990. 55 Fed. Reg. 8666 (1990).
- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - 3. FURTHERANCE OF STATUTORY GOALS
a. CERCLA was enacted to provide a framework for cleanup of the nation's worst hazardous waste
sites. The primary goal of CERCLA is to protect and preserve public health and the environment from
the effects of releases or threatened releases of hazardous substances to the environment. See
Voluntary Purchasing Groups, Inc. v. Reilly, 889 F.2d 1380, 1386 (5th Cir. 1989); Dedham Water
Co. v. Cumberland Farms Dairy, Inc., 805 F.2d 1074, 1081 (1st Cir. 1986); New York v. Shore Realty Corp., 759 F.2d 1032, 1040, n.7 (2d Cir. 1985); O'Neil v. Picillo, 682 F.Supp. 706, 726 (D.R.I.
1988) aff'd, 883 F.2d 176 (1st Cir. 1989).
b. Congress intended that those responsible for creation of hazardous conditions bear the burden of
cleaning up those conditions. See Carter-Jones Lumber Co. v. LTV Steel Co., 237 F.3d 745, 749 (6th
Cir. 2001); Monarch Tile, Inc. v. City of Florence, 212 F.3d 1219, 1221 (11th Cir. 2000); Lone Pine
Steering Committee v. Envtl. Protection Agency, 777 F.2d 882, 886 (3d Cir. 1985), cert. denied,
476 U.S. 1115 (1986); OHM Remediation Servs. v. Evans Cooperage Co., 116 F.3d 1574 (5th Cir.
1997).
c. Voluntary private party cleanup of sites is strongly encouraged, as the Fund is insufficient to finance cleanups at all sites and, therefore, must be allocated to those sites where there are no viable potentially responsible parties. See 42 U.S.C. § 9622; United States v. Conservation Chem. Co.,
628 F. Supp. 391 (W.D. Mo. 1985).
d. CERCLA's legislative history indicates that Congress intended to have the scope of liability determined under common law principles. The Restatement (Second) of Torts applied in United States v.
Chem-Dyne, 575 F. Supp. 802, 806 (S.D. Ohio 1983) was endorsed in the legislative history of
SARA.
B. CERCLA'S LIABILITY STANDARD
1. STRICT LIABILITY
a. The definition of strict liability under § 101(32) n5 is the same as under Section 311 of the Clean
Water Act ("CWA"), 33 U.S.C. Section 1321. Liability for the Government's response costs was
termed by the 9th Circuit to be "super-strict." United States v. Burlington Norther & Santa Fe Railway
Co., 479 F.3d 1113, 1124 (9th Cir. 2007).
b. Accordingly, plaintiffs need not prove that a potentially responsible party's ("PRP") conduct was
negligent. See United States v. R.W. Meyer, Inc., 889 F.2d 1497 (6th Cir. 1989), cert. denied, 494
U.S. 1057 (1990); Kaladish v. Uniroyal Holding, Inc., Civil Action No. 3:00 CV 854, 2005 U.S. Dist.
LEXIS 17272, *8-9 (D. Conn. Aug. 9, 2005).
- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - n5 Statutory section citations to this outline generally are to CERCLA. To convert to the statute codified at 42
U.S.C, change "1" to "96," i.e., CERCLA § 107 is 42 U.S.C. § 9607.
- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - 2. JOINT AND SEVERAL ("J&S") LIABILITY
a. Courts have uniformly ruled that PRP liability under Section 107(a) is joint and several if two or
more persons have contributed to a single indivisible harm. Thus, each and every PRP at a site
where the harm is indivisible can be held liable for the entire cost of site cleanup. Meyer, 889 F.2d
at 1506-08.
b. J&S liability is applicable unless a PRP can prove that the harm is divisible. See Chem. Nuclear
Sys., Inc. v. Bush, 292 F.3d 254, 259 (D.C. Cir. 2002); Boeing Co. v. Cascade Corp., 207 F.3d 1177,
1183 (9th Cir. 2000); Meyer, 889 F.2d 1497; United States v. Monsanto Co., 858 F.2d 160 (4th Cir.
1988), cert. denied, 490 U.S. 1106(1989). Cf, United States v. Alcan Aluminum Corp., 964 F.2d
252 (3d Cir. 1992) on remand 892 F.Supp. 648; aff'd 96 F.2d 1434 (3rd Cir. 1996); cert. den., 521
U.S. 11023 (1997); United States v. Alcan Aluminum Corp., 990 F.2d 711 (2d Cir. 1993), on remand 97 F. Supp. 2d 248 (N.D.N.Y. 2000); In re Bell Petroleum Service Inc., 3 F.3d 889 (5th Cir.
1993); United States v. Bell Petroleum Services, Inc., 64 F.3d 202(5th Cir. 1995); Vertac, 364 F.
Supp. 2d at 950.
c. Courts cite to Restatement (Second) of Torts (1965) for the "traditional and evolving principles of
common law" to determine divisibility. Meyer, 899 F.2d at 1507; Vertac, 364 F. Supp. 2d at 950.
Under Restatement § 433A - "[t]he universal starting point for divisibility of harm analyses in CERCLA cases," United States v. Hercules, Inc. 247 F.3d 706, 717 (8th Cir. 2001) -- a defendant can
avoid joint and several liability if it proves (a) there are distinct harms, or (b) there is a reasonable
basis determining the contribution of each cause to a single harm." To determine what constitutes
"a reasonable basis," federal common law applies. United States v. Township of Brighton, 153 F.3d
307 (6th Cir. 1998); Burlington Northen, 479 F.3d at 1126 ("[A]ll of the courts of appeals that have
addressed the question" have held that the application of these standards "must be a uniform federal rule.").
d. Section 113(f) provides qualifying guarantees PRPs the right to seek contribution against other
PRPs that are liable under Section 107. "In resolving contribution claims, the court may allocate response costs among liable parties using such equitable factors as the court determines are appropriate" in order to reduce potentially harsh results of J&S liability. Section 113(f)(1). A PRP does not
have a right to obtain a J&S ruling against another PRP. (See cases cited at section M infra.)
3. RETROACTIVE LIABILITY
a. Congress intended CERCLA to apply retroactively to situations in which past acts have contributed
to existing endangerment. Franklin County Convention Facilities Auth. v. American Premier Underwriters, 240 F.3d 534, (6th Cir. 2001); United States v. Northeastern Pharm. & Chem. Co. ("NEPACCO"), 810 F.2d 726, 734 (8th Cir. 1986), cert. denied, 484 U.S. 848 (1987); United States of America v. Olin Corp., 107 F.3d 1506, (11th Cir. 1997) (reversing 927 F.Supp. 1502 (S.D. Ala. 1998)).
See also United States v. Alcan Aluminum Corp., 49 F. Supp. 2d 96, 99 (N.D.N.Y. 1999) (rejecting
application of Eastern Entes. v. Apfel, 524 U.S. 498 (1998) to CERCLA). Accord Combined Props, v.
Morrow, 58 F.Supp. 2d 675 (E.D. Va. 1999); United States v. Dico, Inc., 266 F.3d 864 (8th Cir.
2001).
b. For natural resource damages, there is no cause of action if both the release of hazardous substances and the resulting damages that occurred were "wholly before" CERCLA was enacted. Section 107(f)(1). See In re Acushnet River and New Bedford Harbor: Proceedings re Alleged PCB Pollution, 716 F. Supp. 676, 683 (D. Mass. 1989).
C. GOVERNMENTAL ALTERNATIVES AT A SUPERFUND SITE
1. RESPONSE ACTIONS
a. Under Section 104(a), EPA may spend Superfund monies whenever there is a release or substantial threat of release of any hazardous substance into the environment. n6
b. The President is given the discretion to take necessary "removal" or "remedial" actions in response to releases or threat of releases of hazardous substances, pollutants or contaminants. n7
(1) Removal Actions are broadly defined in Section 101(23) to include short-term actions necessary to protect public health or welfare or the environment. This type of action has temporal (twelve months) and monetary ($ 2 million) restrictions, but the site
does not need to be on the NPL. See U.S. v. W.R. Grace & Co., 429 F.3d 1224 (9th
Cir. 2005). A removal action can either be "time-critical," when the lead agency determines that cleanup must begin in less than six months, or "non-time critical," when
the lead agency determines that a planning period of at least six months is available
before on-site activities must begin. 40 C.F.R. § 300.415(b). For non-time-critical removals, the lead agency must undertake an Engineering Evaluation/Cost Analysis
(EE/CA) to investigate the site, characterize the potential risks involved, and identify
the alternatives for removal action. 40 C.F.R. § 300.415(B)(4)(I). The lead agency, after a public comment period, then selects the removal action alternative by documenting the decision in a removal action memorandum.
(2) Remedial Actions ("RA") are also broadly defined in Section 101(24) to include
long-term, permanent actions necessary to abate a release and contamination. A site
must be listed on the NPL to undergo federal RA using Superfund monies. These actions must be funded jointly by Federal and State governments. The State must agree
to pay 10% of RA costs (and all Operations and Maintenance costs), before EPA can
use superfund monies. If the release is from a state facility, the state share is 50%.
Section 104(c)(3). See Minnesota v. Abrams Metals Inc., 155 F.3d 1019 (8th Cir.
1998) (Because state project was remedial and not removal, state actions were inconsistent with NCP). n8
- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - n6 Section 104 (a)(3) has three limitations on response authority, associated with naturally occurring substances,
products part of structures, and releases into drinking water supplies. These limits may be overcome by criteria
set forth in Section 104(a)(4).
n7 Depending on the type of action, e.g., "removal," Section 101(23), or "remedial," Section 101(24), there are
limits on the cost expenditures and requirements as to state shares. See generally Section 104(c)(1), (3), and (4).
The most seriously contaminated sites are placed on the National Priorities List ("NPL"), a compilation that now
includes over 1200 sites across the nation. However, any property where hazardous substances have been deposited may fall under CERCLA authority. See United States v. W.R. Grace, 280 F. Supp 2d 1135, 1149 (D. Mont
2003), appeal pending (EPA's decision to conduct removal action rather than remedial action was consistent with
NCP and could not be second-guessed.)
n8 These temporal and monetary limits do not apply to privately funded removal actions, CERCLA § 104(c)(1).
- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - 2. INFORMATION GATHERING AND SITE ACCESS
a. Section 104(e) provides substantial authorities for EPA to gather information and gain site access. See United States v. Gurley, 235 F. Supp. 2d 797 (W.D. Tenn., 2002), aff'd 304 F.3d 316 (6th
Cir. 2004).
b. U.S. must show reasonable basis to believe there may be a release or threat of release of a hazardous substance. EPA may obtain access by warrant, agreement, or administrative order. EPA access orders comply with Four Amendment. United States v. Tarkowski, 248 F.3d 596 (7th Cir.
2001).
c. Section 104(e) requests are equivalent to administrative discovery, and subject to a penalty of $
27,500 for each day of inadequate response or non-compliance. See; e.g., United States v. Crown
Roll Leaf, Inc., 29 E.R.C. 2018 (D.N.J.), aff'd 888 F.2d 1382 (3d Cir. 1989), cert. denied, 493 U.S.
1058 (1990); United States v. Barkman, 784 F. Supp. 1181 (E.D. Pa. 1992); United States v. JG-24,
Inc., 331 F.Supp.2d 14 (D.Puerto Rico 2004). Pharmacia Corp. v. Clayton Chem. Acquisition, LLC,
No. 02-cv-0428-MJR, 2005 U.S. Dist. LEXIS 5286, at *10 (S.D. Ill. Mar. 8, 2005).
d. CERCLA Section 113(h) applies to limit judicial review. (See outline at section O, infra.)
3. CLEANUP PROCESS
a. To accomplish the goal of cleaning up release of hazardous substances, Section 105(a) requires
EPA to promulgate a list of sites subject to releases or threatened releases which require remediation. This is known as the National Priority List (NPL) of hazardous waste sites, and it is included in
the National Contingency Plan (NCP). 40 C.F.R. pt. 300, app.B.
b. The remedy selection is a three-step process. First, EPA conducts a study and prepares a report
called a remedial investigation and feasibility study (RI/FS) which determines the extent of contamination at a particular site or operable unit and the alternatives available to remediate the site. 40
C.F.R. 300.430(a), (d), (e) (detailing purpose and content of RI and FS). Second, EPA uses the RI/FS
to develop a proposed remedy for a particular hazardous waste site, 40 C.F.R. 300.430(a)(2), which
is made available to interested persons prior to selection of a remedy for a site. Finally, EPA reviews
and responds to the comments, and consults with the affected state and other agencies where appropriate, before making a final decision.
c. EPA's final decision selecting a remedy is determined in a Record of Decision (ROD), which is also
made available to the public before the commencement of any remedial action. CERCLA § 117, 40
C.F.R. 300.430(f)(1)(ii); 300.430(f)(4), (5), (6). EPA compiles and maintains an administrative record, which contains the documents relevant to the remedy selection. CERCLA limits judicial review of
any response action to administrative record.
d. The ROD documents the decision that selects the remedy from among the alternatives evaluated.
40 C.F.R. §300.430(f). At sites where there is typically a separate ROD for each Operable Unit, and
the remedial action selected for each Operable Unit comprises an incremental step toward comprehensively addressing the site problems. EPA may also approve "interim" RODs or action that allow
for selection of initial measures that are expected to advance the cleanup process and can be implemented while the RI/FS is being completed and a final ROD issued, in which case the interim
measure may become part of the final remedial action at the site. See Preamble to the NCP, 55 Fed.
Reg. 866, (CHECK SITE)
4. WORK OPTIONS
a. EPA can do the work itself using money from the Superfund and charge the PRPs; or
b. EPA can order the PRPs to do the work by an administrative order ("AO") or court-ordered injunctive relief.
D. PRIVATE PARTY RESPONSE ACTIONS UNDER GOVERNMENT DIRECTION - CERCLA SECTION 106
1. STANDARDS (WHETHER ADMINISTRATIVE ORDER OR INJUNCTION)
a. A PRP may be ordered to take response actions by an Administrative Order (AO) or injunctive relief
when there "may be" an imminent and substantial endangerment. United States v. E.I. du Pont de
Nemours & Co., 341 F. Supp. 2d 215 (W.D.N.Y. 2004).
(1) Imminent: Only the risk of harm need be imminent, not the harm itself. Risk may
be imminent even if actual harm is months/years away.
(a) "[W]hile the risk of harm must be 'imminent' for the Administrator to act, the harm
itself need not be. Thus, for example, the Administrator may invoke this section when
there is an imminent likelihood of the introduction into drinking water of contaminants that may cause health damage after a period of latency." Safe Drinking Water
Act, Pub. L. No. 93-523, H.R. Rep. 1185, 1974 U.S.C.C.A.N. (88 Stat.) 6454, 6488.
(b) The term refers to the imminence of risk, not harm. Imminent endangerment is
one likely to materialize, even though this may be far off in time. "[T]he imminence of
a hazard does not depend on the proximity of the final effect but may be proven by
the setting in motion of a chain of events which would cause serious injury." See United States v. Hardage, Civ-80-1031-W slip op. at 3, 4 (W.D. Okla. Dec. 2, 1980). Actual
proof of harm need not be shown. See United v. Vertac Chem. Corp., 489 F. Supp.
870 (E.D. Ark 1980) and United States v. Dickerson, 660 F. Supp. 227 (M.D. Ga.
1987).
(2) Substantial: "Among those situations in which the endangerment may be regarded
as 'substantial' are the following: (1) a substantial likelihood that contaminants capable of causing adverse health effects will be ingested by consumers if preventive action is not taken; (2) a substantial statistical probability that disease will result from
the presence of contaminants in drinking water; or (3) the threat of substantial or serious harm (such as exposure to carcinogenic agents or other hazardous contaminants)." H.R. Rep. 1185, 1974 U.S.C.C.A.N. (88 Stat.) 6454, 6488.
(3) Endangerment: "[E]ndanger means something less than actual harm. It is sufficient if harm is threatened; no actual injury need ever occur." Endangerment "is not
prone to factual proof alone but must be decided by assessment of risk." Risk is to be
assessed "from suspected, but not completely substantiated, relationships between
facts, from trends among facts, from theoretical projections . . . or from probative preliminary data." United States v. Vertac Chem. Corp., 480 F. Supp. 870, 885 (E.D. Ark.
1980), quoting Reserve Mining Co. v. Envtl. Protection Agency, 514 F.2d 492, 529
(8th Cir. 1975); Interfaith Cmty. Org. v. Honeywell Int'l, Inc., 399 F.3d 248, 258 (3d
Cir. Feb. 18, 2005).
(a) Endangerment includes harm to public health or welfare or environment. This
phrase encompasses a very broad standard. Public "welfare" potentially embraces
safety, recreational, aesthetic, environmental, and economic interests.
(b) Harm may occur due to actual or threatened release of hazardous substances
from a facility. An actual or threatened release must be a listed hazardous substance,
not merely a "pollutant" or "contaminant."
b. Parties liable under Section 107.
(1) Section 106 does not define liable parties, but the United States argues that it applies to the same category of parties as under Section 107, i.e., owners, operators,
generators, and transporters. See this outline at Section E.
2. SANCTIONS FOR NON-COMPLIANCE
a. Administrative Order
(1) The civil penalty for violating an Administrative Order "without sufficient cause" is $ 27,500 per
day of noncompliance ($ 25,000 before January 30, 1997) per day (Section 106(b)(1)) plus treble
damages (Section 107(c)(3)) if EPA must spend Superfund monies to carry out the response action.
See United States v. Parsons, 723 F. Supp. 757 (N.D. Ga. 1989), vacated on other grounds by (11th
Cir. 1991) (treble damages and punitive penalty of $ 2.26 million).
(2) If a party complies and then later proves that it was not a liable party under Section 107, the
party has the right to seek reimbursement from the Superfund under Section 106(b). No later than
60 days after completing the work required by an administrative order, a party may "petition the
President for reimbursement from the Fund for reasonable costs of such action, plus interest." Section 106(b)(2)(1). Before filing suit, a petitioner must exhaust its administrative remedies with EPA.
United States v. Dico, 136 F.3d 572 (8th Cir. 1998).
(3) Under Section 113(h), there is no right to pre-enforcement judicial review of an Administrative
Order. See Solid State Circuits, Inc. v. United States Envtl. Protection Agency, 812 F.2d 383 (8th Cir.
1987). But see General Electric v. Whitman, 257 F. Supp. 2d 8 (D.D.C. 2003),reversed on appeal,
(DC Circuit Court of Appeals held constitutional challenge to 106 order could be considered).
(4) Sufficient Cause Defense: Congress and the courts have construed "sufficient cause," as an
"[o]bjectively reasonable, good faith belief that one has a valid defense." United States v. Parsons,
723 F. Supp. 757, 763 (N.D. Ga. 1989) (citing cases). See also Solid State Circuits v. United States
Envtl. Protection Agency, 812 F.2d 383, 391-392 (8th Cir. 1987). The author of the bill in the Senate advised:
We intend that the phrase "sufficient cause" would encompass defenses such as the
defense that the person who was the subject of the President's order was not the party responsible under the Act for the release of the hazardous substance . . . There
could also be "sufficient cause" for not complying with the order if the party subject to
the order did not comply or if no technological means for complying was available.
United States v. Reilly Tar & Chem. Corp., 606 F. Supp. 412, 420 (D. Minn. 1985) (citing remarks of
Senator Stafford in 1 Legislative History, 770-71). See also United States v. LeCarreaux et al., Civ.
No. 90-1672, 1991 WL 341191, (D.N.J. 1992) (financial status is not "sufficient cause" for failure
to comply with an Order) and Solid State Circuits v. United States Envtl. Protection Agency, 812 F.2d
383, 390 (8th Cir. 1987) (equitable arguments are not "sufficient cause" for non-compliance with
order and are not a defense to liability).
(5) EPA may order a party to participate in a cleanup even if another party has agreed in a consent
decree to perform that cleanup. United States v. Occidental Chem. Corp., 200 F.3d 143 (3d Cir.
1999).
b. Injunctive Relief
(1) Injunctive relief is available only to the United States, not states or private parties. See Colorado
v. Idarado Mining Co., 916 F.2d 1486, 1494-1498 (10th Cir. 1990); Ohio v. United States Envtl.
Protection Agency, 997 F.2d 1520 (D.C. Cir. 1993) (NCP Litigation).
(2) Executive Order 13016 (August 1996) amended Executive Order 12580 and delegated § 106
authority to Secretaries of Interior, Commerce, Agriculture, Defense, and Energy with respect to facilities under their management or control, to be exercised with concurrence of either the Coast Guard
or EPA, as appropriate. These agencies and DOJ entered into a MOU (September 1997) detailing the
implementation process.
E. COST RECOVERY ACTIONS - CERCLA § 107
1. BASIC ELEMENTS OF LIABILITY
a. When there is a release or threatened release of hazardous substances by a responsible party
from a facility that causes the incurrence of response costs, and the costs are not inconsistent with
the National Contingency Plan ("NCP"), all government costs are recoverable.
b. States and tribes can also take actions and seek reimbursement from private parties for their expenditures pursuant to Section 107(a).
2. THE FOUR ELEMENTS OF LIABILITY - SECTION 107(a)
a. Liability is created in part by the release or substantial threat of release. n9
(1) These terms are defined broadly and include leaking, leaching, abandonment of
drums or containers, as well as dumping or disposing into the environment. See, e.g.,
Dedham Water Co. v. Cumberland Farms Dairy, Inc., 889 F.2d 1146, 1152 (1st Cir.
1989).
(2) There is no minimum threshold release, concentration, or reportable quantity required to create liability. E.g. Johnson v. James Langley Operating Co., 226 F.3d 957
(8th Cir. 2000); B.F. Goodrich Co. v. Murtha, 958 F.2d 1192 (2d Cir. 1992); United
States v. Alcan Aluminum Corp., 964 F.2d 252 (3d Cir. 1992); Esso Std. Oil Co. v. Perez, CIVIL 01-2012 (SEC), 2004 U.S. Dist. LEXIS 19954, at *33 (D. P. R. 2004).
(3) In establishing CERCLA liability, the U.S. need not prove that the responsible party
is the only source of the contamination or that the releases occurred in any particular
amount. Alcan-Aluminum, 964 F.2d at 264, 259-60.
(4) Liability for "passive disposal" (i.e., mere migration of pre-existing contamination)
is unsettled. Carson Harbor Village, Ltd. v. Unocal Corp., 270 F.3d 863 (9th Cir. 2001)
(en banc decision that active human conduct is not required for "disposal" of a hazardous substance, but holding that the mere movement of contamination in the soil
in this case did not constitute disposal). Compare, Nuard, Inc. v. William E. Hooper &
Sons, Co., 966 F.2d 837, 844-47 (4th Cir. 1992)(passive migration and leaking from
underground storage tanks established "disposal") with United States v. 150 Acres of
Land, 204 F.3d 698 (6th Cir. 2000); United States v. CDMG Realty, 96 F.3d 706 (3d
Cir. 1996); Solvent Chem. Co. v. E.I. DuPont de Nemours Co., 01-CV-425C(SC), 2005
U.S. Dist. LEXIS 16573, at *20-22 (W.D.N.Y. June 28, 2005).
b. The release or threat of release must be of a hazardous substance n10
(1) A minimum amount or reportable quantity requirement does not exist. Mere listing
or designation as a hazardous substance is sufficient to create liability for disposal of
any amount of the substance. See, e.g., Stewman v. Mid-South Woods Prods. Of
Mena, Inc., 993 F.2d 646, 649 (8th Cir. 1993).
(2) This term includes municipal solid waste. B.F. Goodrich Co. v. Murtha, 958 F.2d
1192 (2d Cir. 1992). See EPA Municipal Solid Waste Policy, 54 FR 51071.
(3) Mining wastes known as "Bevill Wastes" may still be hazardous substances under
CERCLA § 101(14). La. Pacific Corp. v. ASARCO, Inc., 13 F.3d 1378 (9th Cir. 1994).
c. The release or threat of release must come from a vessel or at a facility
(1) Facility is defined very broadly under Section 101(9) to include:
(a) Any building, structure, installation, equipment, pipe or pipeline, ... well, pit, pond, lagoon, impoundment, ditch, landfill, storage container, motor vehicle, rolling stock, or aircraft, or
(b) Any site or area where a hazardous substance has been deposited, stored, disposed of, or
placed, or otherwise come to be located; but does not include any consumer product in consumer
use or any vessel. n11
d. The release or threat of release must be caused by a responsible party, i.e., a person that falls within one or
more of the following four categories for a PRP:
- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - n9 Defined in CERCLA § 101(22). Statute excludes certain categories from definition of release including workplace exposure, engine exhaust emissions, and "the normal application of fertilizer". See City of Tulsa v. Tyson
Foods, 258 F. Supp. 1263, 1287-88 (N.D. Okla 2003), vacated and settled by City of Tulsa v. Tyson Foods, No. 01
CV 0900EA(C) 2003 U.S. Dist. LEXIS 11269 (N.D. Okla. 2003).
n10 Hazardous substances are defined broadly under CERCLA by referring to substances listed under other federal statutes. See 40 C.F.R. § 302.4 (comprehensive listing of CERCLA hazardous substances), published at 50 Fed.
Reg. 13486 (April 4, 1985). The term includes "hazardous wastes" under Section 3003 of RCRA, 42 U.S.C. §
6923, "hazardous substances" identified under Section 311 of the CWA, 33 U.S.C. § 1321, "toxic pollutants" designated under Section 307 of the CWA, 33 U.S.C. § 1317, "hazardous air pollutants" designated under Section
112 of the Clean Air Act ("CAA"), 42 U.S.C. § 7412, and "imminently hazardous chemical substances or mixtures or
any article containing such a substance or mixture" under Section 7 of Toxic Substance Control Act, 15 U.S.C. §
2606. Petroleum, however, is not a hazardous substance unless already included in the above categories, or natural gas. 42 U.S.C. § 9601(14).
n11 "Facility" is so broadly defined that this element is rarely in issue, but the extent of the facility in question, and
whether an area comprises one facility or several, may be an issue in some cases. See N.J. Turnpike Auth. v. PPG
Inds., 197 F.3d 96, 105 (3d Cir. 1999).
- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - 3. CURRENT OWNERS AND OPERATORS
a. The term applies to all current owners or operators. The plaintiff does not have to prove that disposal of hazardous substances occurred at the time of ownership or operation. "Owner" has been
held to include tenants whose leases grant them broad rights over leased property, e.g. United
States v. A & N Cleaners & Launderers, Inc., 788 F.Supp. 1317, 1332-34 (S.D.N.Y. 1992). The Second Circuit held that a lessee is liable as an "owner" only if it is a "de facto owner" as opposed to
merely "exercis[ing] control over the facility"; the latter may suffice for "operator" liability. Commander Oil Corp. v. Barlo Equipment Corp., 215 F.3d 321, 331 (2d Cir. 2000).
b. Ownership status is usually determined as of the time plaintiff files complaint.
c. The Supreme Court in Bestfoods stated: "an operator must manage, direct, or conduct operations
specifically related to pollution, that is, operations having to do with the leakage or disposal of hazardous waste, or decision about compliance with environmental regulations." 524 U.S. at 66-678.
See also Consol. Edison Co. of N.Y., Inc. v. UGI Utils., Inc., 310 F. Supp. 2d 592 (S.D.N.Y. 2004);
Esso Std. Oil, 2004 U.S. Dist. LEXIS 19954; GenCorp Inc. v. Olin Corp., 390 F.3d 433 (6th Cir. 2004)
(co-venturers constructive "ownership and possession").
4. PAST OWNERS AND OPERATORS
a. Section 107(a)(2) imposes liability on "any person who at the time of disposal of any hazardous
substance owned or operated" the facility. The United States need not prove a release or threat of a
release at time owned/operated, only that disposal of a hazardous substance occurred during relevant time.
b. Individual liability
(i) Officers and directors can be found directly liable as an "operator." See NEPACCO,
810 F.2d at 734 (president and major shareholder and vice president and principal
responsible official of the company were found liable for arranging for disposal); New
York v. Corp., 759 F.2d 1032, 1043 (2d Cir. 1985) (individual stockholder who manages the business was also an "owner"); Sidney S. Arst Co. v. Pipefitters Welfare Education Fund, 25 F.3d 417, 421 (7th Ct. 1994) (individual operator liability). A contrary
decision by the 6th Circuit was vacated by the Supreme Court: Donahey v. Bogle, 129
F.3d 838 (6th Cir. 1997), vacated, 524 U.S. 924 (1998). Subsequently, the 6th Cir.
has upheld a finding of individual liability: Carter-Jones Lumber Co. v. Dixie Distrib.
Co., 166 F.3d 840 (6th Cir. 1999); Carter-Jones Lumber Co. v. LTV Steel Co., 237 F.3d
745 (6th Cir. 2001). See also, Browning - Ferris Industry v. Ter Maat, 195 F.3d 953
(7th Cir. 1999); GenCorp, Inc. v. Olin Corp., 390 F.3d 433, 447 (6th Cir.
2004)(holding that can officer and directors may be liable as operators even if they
were unaware of the exact location of disposal).
(ii) Shareholders can be held liable by corporate veil-piercing, if the required elements
are satisfied. See Carter-Jones, 237 F.3d 745 (applying state law for veil-piercing
standard but interpreting it broadly); Ter Maat, 195 F.3d 953 (leaving open whether
federal or state law governs veil piercing).
c. Successor liability
(i) CERCLA § 101(21) includes "corporations" in list of liable entities. 1 U.S.C. § 5 indicates when the words "company" or "association" are used then successors are automatically included. United States v. Mex. Feed & Seed Co., 980 F.2d 478, 486 (8th
Ct. 1992).
(ii) Courts have held normal principles of successor liability apply to CERCLA: the leading decision is Smith Land and Improvement Corp. v. Celotex Corp., 851 F.2d 86 (3d
Cir. 1988), cert. denied, 488 U.S. 1029 (1989). In general, "where one company sells
or otherwise transfers all its assets to another company, the latter is not liable for the
debts and liabilities of the transferor." 15 W. Fletcher, Cyclopedia of the Law of Private
Corporations § 7122 (perm. ed. rev, vol. 1999). However, the doctrine of successor
liability permits exceptions to the general rule in four specific instances: when (a) the
purchaser expressly or implicitly agrees to assume liability; (b) the purchase is a de
facto consolidation or merger; (c) the purchaser is a mere continuation of the seller;
or (d) the transfer of assets is for the fraudulent purpose of escaping liability. See,
e.g., Philadelphia Elec. Co. v. Hercules, Inc., 762 F.2d 303, 308-309 (3d Cir. 1985),
cert. denied, 474 U.S. 980; Interfaith Community Organization v. Honeywell International Inc. 263 F. Supp. 796 (D.N.J. 2003), aff'd 399 F.3d 248 (2d Cir. 2005), cert.
denied 125 S.Ct 2951. In addition, some federal courts have recognized another theory of CERCLA successor liability under federal common law. This theory is known as
the "substantial continuity" or "continuation of the enterprise test". See United States
v. Carolina Transformer Co., 978 F.2d 832, 837-838 (4th Cir. 1992). Contra
Atchinson Topeka & Santa Fe R.R. Co., et al. v. Brown & Bryant, et al., 159 F.3d 358
(9th Cir. 1998); New York v. Nat'l Servs. Indust., 352 F.3d 682 (2d Cir. 2003), on re-
mand, 380 F. Supp. 2d. 122 (E.D.N.Y. 2005); United States v. General Battery Corp.
Inc., 423 F.3D 294 (3d Cir. 2005) (holding that "substantial continuity is untenable as
a basis for successor liability under CERCLA").
iii. Courts are divided on whether state or federal law controls. Compare Anspec Co.,
Inc. v. Johnson Controls Inc., 922 F.2d 1240 (6th Cir 1991) reversing district court
decision, holding that Congress included successor corporations within description of
liable parties (applied state law) to United States v. Mex. Feed & Seed Co., 980 F.2d
478 (8th Cir. 1992) (substantial continuity test); North Shore Gas Co. v. Salomon, Inc.,
152 F.3d 642 (7th Cir. 1998) (parties stipulated federal common law applied); U.S. v.
General Battery Corp., Inc., 423 F.3d 294 (3d Cir. 2005) (holding that a de facto merger creates successor liability under federal common law).
d. Parent Company Liability. Parent companies may also be directly liable as an operator if the parent actively participated in, and exercised control over, the operations of a subsidiary's facility. United States v. Bestfoods, 524 U.S. 51 (1998) (Court unanimously reversed lower court's en banc decision in United States v. Cordorva Chem. Co., 113 F.3d 572 (6th Cir. 1997). See also United States
v. Township of Brighton, 153 F.3d 307 (9th Cir. 1998); Atlantic Gas Light Co. v. UGI Utilities, Inc.,
463 F.3d 1201 (11th Cir. 2006) (applying Bestfoods to hold parent not liable); and United States v.
Kayser-Roth Corp., 272 F.3d 89, 102 (1st Cir. 2001)(finding parent liable, court stated: "[w]hatever
the ambiguity created by [Bestfoods'] reference to [general facility operations], we think it is clear
that direct operator liability requires an ultimate finding of the parent's involvement with 'operations
having to do with the leakage or disposal of hazardous waste, or decisions about compliance with
environmental regulations.'" Bestfoods presumes that activities conducted by dual officeholders
were taken on behalf of the subsidiary, not the parent. 524 U.S. at 71; Raytheon Constructors, Inc.
v. ASARCO, Inc., 368 F.3d 1214 (10th Cir. March 11, 2003). A parent company also faces "derivative" liability if the corporate veil can be pierced. In Bestfoods, the Supreme Court recognized that
courts and commentators disagree "over whether, in enforcing CERCLA's indirect liability, courts
should borrow state law, or instead apply a federal common law of veil piercing." 118 S.Ct. 1876.
Because that issue was not presented, the court expressly did not resolve the conflict.
e. Dissolved Corporations, In the 7th Cir., state law governs whether dissolved company remains
amendable to CERCLA suit, Citizens Electric Corp. v. Bituminous Fire & Marine Insurance Co., 68
F.3d 1016, 1019-20. Accord La. Pacific Corp. v. ASARCO, Inc., 5 F.3d 431 (9th Cir. 93). But see
Town of Oyster Bay v. Occidental Chem. Corp., 987 F.Supp. 182 (E.D.N.Y. 1997), United States v.
Sharon Steel Corp., 681 F. Supp. 1492 (D. Utah 1987); and AM Props. Corp. v. GTE Prods. Corp.,
844 F. Supp. 1007 (D.N.J. 1994) (holding that CERCLA preempts inconsistent state law and allows
suit against dissolved corporation.)
f. Federal Lien. Section 107(1) establishes a federal lien in favor of U.S. upon "all real property and
rights to such property ... subject to or affected by a removal or remedial action," although the lien
must be perfected to ensure priority over subsequent lienholders. In Reardon v. United States, 947
F.2d 1509 (1st Cir. 1991) (en banc), the court found EPA procedures lacked adequate procedural
safeguards. Subsequently, EPA promulgated procedures for instituting such liens which were upheld
in United States v. 150 Acres of Land, 5:95 CV 109, 1998 U.S. Dist. LEXIS 1289 (E.D. Ohio 1997),
aff'd in pertinent part by 204 F.3d at 710-11. A new statutory "windfall lien" has also been established. (See Outline at Section H.12).
5. GENERATORS
a. Section 107(a)(3) imposes liability on "any person who by contract, agreement or otherwise arranged for disposal or treatment, or arranged with a transporter for transport for disposal or treatment, of hazardous substances owned or possessed by such person, by any other party or entity, at
any facility or incineration vessel owned or operated by another party or entity and containing such
hazardous substances, . . ." see generally Motion Intern, Inc. v. A.E. Staley Mfg. Co., 343 F.3d 669
(3d Cir. 2003).
b. A generator is liable if 1) it owned or possessed hazardous substances, 2) substances were
shipped to the site in question, and 3) similar substances were found at the site.
c. The plaintiff need not prove that the generator selected the facility; a generator is liable even if it
directed transporter to take hazardous substances to another facility. O'Neill v. Picillo, 883 F.2d 176
(1st Cir. 1989).
d. Plaintiffs need not prove that the generator owned or possessed hazardous substances if it exercised sufficient control over disposal. NEPACCO, 810 F.2d 726; United States v. Aceto Agr. Chems.
Corp., 872 F.2d 1373 (8th Cir. 1989). In Aceto, the Court of Appeals held that pesticide company
who supplied raw materials to pesticide formulator, but retained ownership, was liable, as the generation of hazardous wastes was an inherent part of process. See also Jones-Hamilton Co. v. Beazer
East Materials & Services Inc., 973 F.2d 688 (9th Cir. 1992). But see Fla. Power & Light Co. v. AllisChalmers Corp., 893 F.2d 1313 (11th Cir. 1990) (party who sells only raw materials or a finished
primary product is not liable); Concrete Sales & Services v. Blue Bird Body Co., 211 F.3d 1333 (11th
Cir. 2000) (party who contracted with electroplating company is not liable as generator of wastes
resulting from electroplating operations).
e. Plaintiffs need not prove that the hazardous substances found, released, or cleaned up at the site
were generators' wastes, i.e., need not "fingerprint" the wastes, but plaintiffs must prove that generator's wastes were shipped to the site and that "like substances" were found there. Further, proof of
specific intent to arrange for disposal of hazardous substances is not required. Tosco Corp. v. Koch
Industries Inc., 216 F.3d 886, 892 (10th Cir. 2000); Carson Harbor Village, 227 F.3d at 1211; United States v. TIC Invest. Corp., 68 F.3d 1082, 1088 (8th Cir. 1995), cert denied, 117 S.Ct. 50
(1996); and Redwing Carriers Inc. v. Saraland Apartments, 94 F.3d at 1489, 1512 (11th Cir. 1996).
f. Whether the disruption or movement of contaminated earth constitutes a "disposal" is unsettled.
Compare, Tanglewood East Homeowners v. Charles Thomas, Inc., 849 F.2d 1568, 1573 (5th Cir.
1988) (land filling and grading by developer constitutes disposal) with Alcan-Togo America, Inc. v.
Northern Illinois Gas Co., 881 F. Supp. 342 (N.D. Ill 1995)(owners excavation and stockpiling did not
constitute disposal). See also Geraghty & Miller, Inc. v. Conoco Inc., 234 F.3d 917, 929 (5th Cir.
2001) (possibility that environmental contractors caused migration of hazardous substances precludes summary judgment that contractors are not liable as generators); Blasland, Bouck & Lee, Inc.
v. City of North Miami, 96 F.Supp.2d 1375 (S.D. Fla. 2000) (absent negligence, response action
contractor cannot be held liable for failing to remedy contamination without worsening it); United
States v. CDMG Realty Co., 96 F.3d 700 (7th Cir. 1996) (disposal includes the spreading of contaminants already introduced at the facility during a soil investigation); Redwing Carriers, 94 F.3d at
1510-12; Kaiser Aluminum, 976 F.2d at 1342. In Dent v. Beazer Materials, 156 F.3d 523 (4th Cir.
1998), Court found prior owners not liable because of leaking of wood-treating substances on their
property from creosote processing facility on adjacent property by subsurface migration.
g. Sale of useful product. CERCLA Section 101(9), the definition of "facility" excludes "any consumer
product in consumer use ..." "The sale of a useful, although hazardous substance, to serve a particular purpose, is not an arrangement for disposal and will not impose CERCLA liability," Douglas County, Neb v. Gould, Inc., 871 F. Supp. 1242, 1245 (D. Neb. 1994); Cal. Dep't of Toxic Substances Control v. Payless Cleaners, 368 F. Supp. 2d 1069, 1077 (E.D. Cal. Mar. 4, 2005); Fla. Power and Light
Co. v. Allis Chambers Corp., 893 F.2d 1313, 1317 (11th Cir. 1990); State of California v. Summer
Del Caribe, Inc., 821 F. Supp. 574, 581 (N.D. Ca. 1993). Compare, AM Int'l Inc. v. Int'l Forging
Equipment Corp., 982 F.2d 98, 998 (6th Cir. 1993) (sale of electroplating business did not constitute disposal) with United States v. Cello-Foil Products, Inc., 100 F.3d 1227 (6th Cir. 1996) (although intent to arrange for disposal is part of establishing generator liability, government need not
demonstrate subjective intent to have waste disposed in particular manner or at particular site, and
intent may be proven circumstantially). See also Amcast Indust. Corp. v. Detrex Corp., 2 F.3d 746,
751 (7th Cir. 1993), cert. denied, 510 U.S. 1044 (1994) ("arranged for" implies intentional action);
United States v. Petersen Sand & Gravel, 806 F. Supp. 1346, 1354 (N.D. Ill. 1992); and Pneumo
Abex Corp v. High Point, 142 F.3d 769 (4th Cir. 1998)(used bearings were sale of valuable material).
h. The parent company of a subsidiary generator may also be held liable if the plaintiff meets the
Supreme Court's Bestfood standards. Carter-Jones Lumber Co. v. Dixie Distribution Co., 166 F.3d
840 (6th Cir. 1999).
6. TRANSPORTERS
a. Section 107(a)(4) imposes liability on "any person who accepts or accepted any hazardous substances for transport to disposal or treatment facilities, incineration vessels or sites selected by
such person, . . ." See Prisco v. AED Carting Co., 168 F.3d 593 (2d. Cir. 1999).
b. Plaintiff must have evidence that the transporter PRP selected the site. See e.g., B.F. Goodrich v.
Betkoksi, 99 F.3d 505 (2d Cir. 1996), (decision clarified on denial of rehearing) 112 F.3d 88
(1997), cert. denied, 524 U.S. 926 (1998).
c. CERCLA § 107 (c)(1)(A) limits recovery of a vessel to $ 300 per gross ton of the vessel, or $ 5 million, whatever is greater, unless there is willful misconduct or willful negligence. See also Section
108(a)(1) (vessel certificate of financial responsibility).
F. RECOVERABLE COSTS
1. GOVERNMENTAL RESPONSE COSTS
a. Section 107 allows the government to recover its response costs "notwithstanding any other provision or rule of law, and subject only to the defenses set forth in subsection (b) of this section."
Courts have emphasized that consistency with the NCP is "the only criterion for the recoverability of
response costs under CERCLA." United States v. Hardage, 982 F.2d 1436, 1444-1445 (10th Cir.
1992); United States v. NEPACCO, 579 F.Supp. 823, 852 (W.D. Mo. 1984) and Laidlaw Waste Sys.
v. Mallinckrodt, Inc., 925 F.Supp. 624, 632 (E.D. Mo 1996); United States v. JG-24, Inc., 331 F.
Supp. 2d 14, 64 (D.P.R. 2004). In considering consistency under the NCP, courts review EPA's selection of a response action under an arbitrary and capricious standard, based on the administrative
record, pursuant to section 113 (j). See United States v. Burlington Northern R.R. Co., 200 F.3d 679
(10th Cir. 1999); United States v. Chapman, 146 F.3d 1166 (9th Cir. 1998); United States v. Akzo
Coating of Am., Inc., 949 F.2d 1409, 1424 (6th Cir. 1991). This burden of proof and standard for
cost recovery applies not only when EPA is exercising the President's CERCLA authorities to clean up
to EPA, but also to federal land managing agencies exercising that authority to clean up federallyowned land. See United States v. Chrysler, 157 F. Supp. 2d 849 (N.D. Ohio 2001) (U.S. entitled to
maintain cost recovery, not contribution action despite being the property owner); United States v.
Chrysler, 168 F. Supp. 2d 754 (N.D. Ohio 2001) (U.S. entitled to presumption of consistency with
the NCP even where majority of costs were incurred by the National Park Service, the federal land
manager).
b. Recoverable costs include government's past response costs, the costs of any remediation paid
for by the government, prejudgment interest, indirect costs, enforcement costs, and future costs at
the site that the government may incur. United States' litigation costs and attorney fees are considered enforcement activity costs. See United States v. Gurley, 43 F.3d 1188, 1199-1200 (8th Cir
1994), (recoverable costs include government payroll expenses); B.F. Goodrich v. Betkoski, 99 F.3d
505 (2d Cir. 1996) (enforcement costs including attorney's fees); United States v. Hardage, 750
F.Supp 1460, 1497-1504 (site investigation, enforcement, indirect and litigation costs); Meyer, 889
F.2d at 1499, 1504-05 (indirect or "overhead" costs recoverable), cert. denied, 494 U.S. 1057
(1990); O'Neil v. Picillo, 883 F.2d l76, 178 (1st Cir. 1989), cert. denied, 493 U.S. 1071 (1990) (prejudgment interest); United States v. E.I. Dupont de Nemours and Co., Inc., 432 F.3d 161 (3d Cir.
2005) (EPA may recover overight costs), overruling United States v. Township of Brighton, 153 F.3d
307, 321 (6th Cir. 1998) (prejudgment interest).; United States v. Rohm & Haas Co., 2 F.3d 1265
(3d Cir. 1993); see also United States v. Lowe, 118 F.3d 399 (5th Cir. 1997); Atlantic Richfield
Company v. Am. Airlines, 98 F.3d 564 (10th Cir. 1996) (holding EPA oversight costs are recoverable); United States v. Dico, Inc., 266 F.3d 864 (8th Cir. 2001), reh'g and reh'g en banc denied, cert
den., 122 Sup. Ct. 2291 (2002). United States v. Chromalloy Am. Corp., 158 F.3d 345 (5th Cir.
1998) (oversight costs are recoverable even if Economy Act not compiled with); JG-24, 331 F. Supp.
2d at 64 (explaining,"[r]ecoverable response costs include not only the costs of actual cleanup or
removal activities, such as excavation and removal of drums and other wastes, but also the costs of
sampling, site assessment, investigations, monitoring, oversight, and litigation and other enforcement costs. Moreover, recoverable response costs include indirect costs, as well as direct costs. The
United States is also entitled to prejudgment interest on its past response costs"); U.S. v. W.R. Grace
& Co., 429 F.3d 1224 (9th Cir. 2005) (award EPA $ 11 million in indirect costs).
c. The United States and States are entitled to "all costs" of response action incurred not inconsistent with the NCP, not limited to "reasonable" or "necessary" costs. Dico, 266 F.3d 864; NEPACCO, 810 F.2d 726; United States v. Hardage, 982 F.2d 1436, 1441-43 (10th Cir. 1992); United
States v. Domenic Lombard Realty, Inc., 334 F. Supp. 2d 105, 108 (D.R.I. 2004); Solvent Chem. Co.,
2005 U.S. Dist. LEXIS 16573, at *242-243, United States v. Gurley, 317 F. Supp. 2d 870, 878 (E.D.
Ark. 2004). But see Chapman, 146 F.3d at 1176 (attorney's fees portion of enforcement costs limited to reasonable attorney's fees). The United States may prove its costs by means of cost summaries and payroll reports with underlying documentation. United States v. Findett Corp., 220 F.3d 842
(8th Cir. 2000); Chapman, 146 F.3d at 1171; Hardage, 982 F.2d at 1442-43. A defendant may object to costs by offering "evidence to counter or otherwise challenge the extensive government documentation of its costs." Meyer, 889 F.2d at 1508; Solvent Chem. Co., 2005 U.S. Dist. LEXIS
16573, at *230; United States v. E.I. Dupont Nemours & Co., 341 F. Supp. 2d 215 (W.D.N.Y. 2004)
Gurley, 43 F.3d at 878.
d. PRPs challenging government expenses bear the burden of proving that response actions giving
rise to costs were selected in manner inconsistent with the NCP. Hardage, 982 F.2d at 1491; United
States v. Kramer, 913 F. Supp. 284 (D.N.J. 1995); United States v. Am. Cyanamid Co., 786 F.Supp.
152 (D.R.I. 1992), aff'd, 381 F.3d 6 (1st Cir. 2004). Response actions need not "advance" NCP
goals to be recoverable. 150 Acres, 204 F.3d at 710. To show costs are "inconsistent," a party must
demonstrate: (1) on the administrative record, that the decision to choose a particular remedy was
arbitrary and capricious, Hardage, 982 F.2d at 1443; E.I. Dupont Nemours & Co., 341 F. Supp. 2d
at 215.; and (2) that the cleanup, due to the variance from the NCP, resulted in demonstrably
avoidable and unnecessary remediation costs. O'Neill v. Picillo, 682 F. Supp. 706 (D.R.I. 1988), aff'd
883 F.2d 176 (1989); United States v. Kramer, 913 F. Supp. 848, 866 (D.N.J. 1995); Miami-Dade,
345 F. Supp. 2d at 1334; Gurely, 317 F. Supp. 2d at 878; Domenic Lombard Realty, 334 F. Supp.
2d at 107. See 42 U.S.C. § 9613(j)(4). See Alex A. Beehler, Steve C. Gold, and Steven Novick, Contesting of CERCLA Costs by Responsible Parties -- There Is No Contest, 22 Env't L. Rep. (Envtl L.
Inst.), Dec. 1992, at 10763. See also U.S. v. Vertac Chemical Corp., 966 F. Supp. 1491 (E.D. Ark.
1997), aff'd 247 F.3d 706 (8th Cir. 2001) cert. denied 534 US 1065, on remand 364 F. Supp. 2d.
941 (E.D. Ark. ).
e. Section 107(a)(4) allows the government to also recover interest on amounts recoverable, from
the later of the date of demand or date of expenditure.
f. In addition to the recovery of costs, CERCLA § 113(g)(2) authorizes the imposition of a declaratory
judgment as to liability for future response costs. See also City of Wichita Kan, v. Trs. of APCO Oil
Corp., 306 F. Supp. 2d 1040 (D. Kan. 2003).
2. RECOVERABILITY OF PRE-CERCLA COSTS
a. Courts have held that CERCLA § 107 permits recoverability of costs incurred at a site prior to the
enactment of CERCLA. See NEPACCO, 810 F.2d 726.
b. State was held not entitled to recover NRD when it did not show that the injuries occurred after
effective date. CERCLA § 107(f)(1). Montana v. Atlantic Richfield Co., 266 F. Supp. 1238 (D. Mont.
2003).
3. PRIVATE COST RECOVERY ACTIONS
a A party seeking recovery of costs has the burden of proving the costs were "necessary" and incurred "consistent with" the NCP. Section 107(a)(4)(B). NEPACCO, 810 F.2d at 747. Key issues will
be whether private remedy selected was protective of human health and the environment, a range
of alternatives were legitimately considered, and there was adequate public participation. See Carson Harbor Village, 227 F.3d at 1203 (necessity judged against degree of threat to human health
and environment); Young, 394 F.3d at 863-864; Regional Airport Authority v. Louisville, LFG, 460
F.3d 697 (6th Cir. 2006).
b. Response costs do not include tort damages for personal injury, property damage, or economic
losses. Artesian Water Co. v. Gov't of New Castle, 659 F. Supp. 1269, 1285-86 (D. DE 1987), aff'd
in part and remanded in part 851 F.2d 643 (3rd Cir. 1998). Private recovery actions also do not include "medical monitoring" for public health. Prisco, 902 F. Supp. at 410-11.
c. Key Tronic Corp. v. United States, 511 U.S. 809, 114 S. Ct. 1960, 128 L. Ed. 2d 797 (1994). In a
6-3 decision, the Court ruled that private parties cannot recover attorney's fees in a contribution action under CERCLA. However, attorney's fees incurred for legal work that "increased the probability
of an effective cleanup" are recoverable. See also Franklin County Convention Facilities Auth. v.
American Premier Underwriters, Inc., 240 F.3d 534 (6th Cir. 2001); Sealy Conn., Inc. v. Litton Inds.,
Inc., 93 F.Supp.2d 177 (D. Conn. 2000); Syms v. Olin Corp., 408 F.3d 95, 104 (2d Cir. May 18,
2005).
d. Response actions "carried out in compliance with the terms of an order issued by EPA pursuant to
section 106 of CERCLA, or a consent decree entered into pursuant to section 122 of CERCLA will be
considered 'consistent with the NCP.'" 40 C.F.R. § 300.700(c)(3)(ii).
e. Other response actions must be in "substantial compliance" with the NCP to allow for private cost
recovery. 40 C.F.R. § 300.700(c)(5-6); Franklin County Convention Facilities Auth. v. Am. Premier
Underwriters, Inc., 240 F.3d 534 (6th Cir. 2001); Union Pacific R.R. Co. v. Reilly Industries Inc., 215
F.3d 830, 834-39 (8th Cir. 2000) (holding plaintiff did not substantially comply with public participation requirements); Nutrasweet Co. v. X-L Engineering Co., 227 F.3d 776, 791 (7th Cir. 2000);
Sherwin-Williams Co. v. ARTRA Group Inc., 125 F. Supp. 739 (D. Md. 2001); Young, 394 F.3d at
864-865; Regional Airport Authority, 460 F.3d 697 (6th Cir. 2006).
4. EXTRATERRITORIALITY
CERCLA is not extraterritorial. See Arc Ecology v. U.S. Dept of Air Force, 294 F. Supp. 2d 1152 (N.D.
Cal 2003), aff'd 411 F.3d 1092 (9th Cir. 2005). cf Pakootas v. Teck Comminco Metals, 452 F.3d
1066 (9th Cir. 2006), cert. pending (although original source of hazardous substance was Canada,
CERCLA jurisdiction covered subsequent release in U.S.).
G. DEFENSES TO LIABILITY - SECTION 107(b)
There are only three § 107(b) affirmative defenses available. See e.g., Betkoski, 99 F.3d at 514
(plaintiff entitled to summary judgment if defendants cannot establish one of three affirmative defenses); Town of Munster, Ind. v. Sherwin-Williams Co., 27 F.3d 1268, 1271 (7th Cir. 1994); Elementis Chems. Inc. v. T. H. Agric. & Nutrition, LLC, 373 F. Supp. 2d 257 (S.D.N.Y. Jan. 31, 2005).
Note that Defendant must show that the release or threatened release was caused solely by one of
the following:
1. ACT OF GOD
a. This term means an "unanticipated grave natural disaster or other natural phenomenon of an exceptional, inevitable, and irresistible character, the effects of which
could not have been prevented or avoided by the exercise of due care or foresight."
See United States v. M/V Santa Clara I, 887 F. Supp. 825 (D.S.C. 1995); United
States v. Barrier Industry, 991 F. Supp. 678 (S.D.N.Y. 1998) (unprecedented cold
spell not defense); U.S. v. W.R. Grace & Co., 429 F.3d 1224 (9th Cir. 2005) (mine
owner not entitled to defense).
2. ACT OF WAR
a. An act of war connotes a sudden hostile action. The sinking of ships belonging to a
belligerent nation by submarines of another nation, or torpedoing a destroyer, constitutes an act of war. See Stankus v. New York Life Insurance Co., 44 N.E. 2d 687
(Mass. 1942); Farbwerke Vormal Meister Lucius & Bruning v. Chemical Found., Inc.,
283 U.S. 152 (1931) (capture of enemy-owned patent is an act of war); Hijo v. United
States, 194 U.S. 315 (1904) (seizure of enemy vessel).
b. The leading CERCLA case on this issue is United States v. Shell Oil Co., 841 F.
Supp. 962 (CD. Cal. 1993), aff'd 281 F.3d 812 (9th Cir 2002).
The court found that oil companies could not invoke "act of war" defense to escape liability for dumping hazardous substances which were disposed of following production of aviation fuel during World War II; further, the term "act of war" as used in CERCLA could not reasonably be construed to cover either government's wartime contracts to purchase aviation fuel or its regulation of oil companies' production of aviation fuel.
3. THIRD PARTY DEFENSE
a. This Section 107(b)(3) defense applies to an act or omission of a third party (other
than an employee or agent of the defendant), or one whose act or omission occurs in
connection with a contractual relationship, existing directly or indirectly, with the defendant. The third party defense requires proof that the acts or omissions of a third
party were the sole cause of a release.
b. Current owner may rely on third party defense only if it can establish the elements
of the "innocent landowner" defense set forth in Section 101(35). See, e.g., Foster v.
United States, 922 F. Supp. 642, 653-57 (D.D.C. 1996).
c. Defendant must show that "(a) he exercised due care with respect to the hazardous
substance concerned . . . and (b) he took precautions against foreseeable acts or
omissions of any such third party and the consequences that could foreseeably result
from such acts or omissions", CERCLA § 107(b)(3). See also Carter-Jones Lumber Co.
v. Dixie Distribution Co., 166 F.3d 840 (6th Cir. 1999). Allowing migration of hazardous substances can be failure to exercise due care, even if the defendant did not
bring hazardous substances to the site and was not negligent in contributing to the release. Franklin County Convention Facilities Auth. v. Am. Premier Underwriters, Inc.,
240 F.3d 534 (6th Cir. 2001) but cf. 150 Acres, 204 F.3d at 706 (narrowly tailoring
due care and precautions inquiry to particular circumstances of inheritance of property); Advanced Tech. Corp. v. Eliskim, Inc., 96 F. Supp.2d 715, 718 (N.D. 2000) (party
that inadvertently exposes hazardous substances deposited by another may be innocent landowner).
d. Section 101(35)(a) defines the term "contractual relationship" to include "land contracts, deeds, or other instruments transferring title or possession." Compare State of
New York v. Lashins Arcade Co., 91 F.3d 353, 360 (2d. Cir. 1996) (contract must relate to hazardous substances) to Lefebvre v. Central Maine Power Co., 7 F. Supp. 2d
64 n3 (D. Me. 1998) (rejecting Lashins)
4. PROCEDURES
a. Defendant must prove these defenses with a preponderance of evidence. Arguments that costs were inconsistent with the NCP relate to recoverability of particular
costs but are not defenses to liability. United States v. Kramer, 757 F. Supp. 397,
436 (D.N.J. 1991); Illinois v. Grigoleit Co., 104 F. Supp. 2d 967 (CD. Ill. 2000); United
States v. Cantrell, 92 F. Supp. 2d 704 (S.D. Ohio 2000). Arguments that individual
costs are unreasonable, excessive, duplicative, improper, and/or not cost effective do
not provide a defense as NCP is limited in its requirements. United States v. Kramer,
913 F. Supp. 284 (D.N.J. 1995).
b. Courts have held that the following are not adequate defenses: absence of causation, absence of negligence, United States laches, and "unclean hands." Equitable defenses not available. See Kramer, 757 F.Supp. 397; Kelley v. Thomas Solvent Co.,
714 F. Supp. 1439, 1451-52 (W.D. Mich. 1989)(equitable defense of laches denied);
United States v. Stringfellow, 661 F. Supp. 1053, 1062 (CD. Cal. 1987); United States
v. Vineland Chem. Co, 692 F. Supp. 415, 423-24 (D.N.J. 1988) (striking estoppel defenses); California ex rel. Dept of Toxic v. Neville Chem., 358 F.3d 661, 672 (9th Cir.
2004) ("Every court of appeals that has considered the precise question whether
§9607 permits equitable defenses has concluded that it does not, as the statutory
defenses are exclusive").
c. Defendants bear the burden of proof as to all statutory exemptions. See Idaho v.
Hanna Mining Co., 882 F.2d 392, 396 (9th Cir. 1989).
H. EXCLUSIONS
1. PETROLEUM
a. Crude oil, or any fraction thereof, natural gas, natural gas liquids, liquefied natural gas, or synthetic gas usable for fuel (or mixtures of natural gas and such synthetic gas) are excluded from the definition of a "hazardous substance" under Section 101(14). See Wilshire Westwood Assoc. v. Atlantic
Richfield Corp., 881 F.2d 801 (9th Cir. 1989) (petroleum exclusion covers leaded gasoline); Petrovic
v. Amoco Oil Co., 200 F.3d 1140 (8th Cir. 1999).
b. Petroleum mixed with hazardous waste, such as used oil, is not exempt. EPA Final Rule, 50 Fed.
Reg. 13456 (April 4, 1985); Wilshire, 881 F.2d at 805. See also Tosco Corp v. Koch Industries Inc.,
216 F.3d 886, 892 (10th Cir. 2000) (petroleum mixed with hazardous substances in environmental
media not within scope of exclusion); Southern Fuel Company Inc. v. Amoco Oil Co., Civil Action No.
WN-92-3322, 1994 U.S. Dist. LEXIS 15769 at 13 (D. Md. 1994) (petroleum products that are contaminated with hazardous substances do not come under the ambit of CERCLA's petroleum exclusion); Cose v. Getty Oil Co., 4 F.3d 700 (9th Cir. 1993)(discarded crude oil tank bottoms are not entitled to exclusion); Esso Std. Oil, 2004 U.S. Dist. LEXIS 19954, at *29-34 (holding co-defendants
didn't fall under petroleum exemption because they released crankcase oil which is contaminated
by wear metals and fuel residue).
2. SECURITY INTEREST HOLDERS
a. Section 101(20)(A) excludes owners or operators "who, without participating in the management
of a vessel or facility, holds indicia of ownership primarily to protect his security interest in the vessel
or facility." A mortgagee or lender is generally not liable unless he participates in management of the
facility (other than providing financial advice). 42 U.S.C. § 9601(F)(i)(20). See also In re Bergsoe
Metal Corp., 910 F.2d 668 (9th Cir. 1990); Monarch Tile Incorporated v. City of Florence, 212 F.3d
1219, 1222 n. 2 (11th Cir. 2000).
b. This exemption was the subject of an EPA Rule: Lender Liability Under CERCLA, 57 Fed. Reg.
18344 (Apr. 29, 1992). This rule was vacated by the D.C. Court of Appeals on the ground that EPA
lacked authority to promulgate it. Kelley v. Envtl. Protection Agency, 15 F.3d 100 (D.C. Cir. 1994),
reh'g denied, 25 F.3d 1088, cert. denied, Am. Bankers Ass'n v. Kelly, 115 S.Ct. 900 (1995). The
Rule was then reissued as policy: 57 Fed. Reg. 18, 344 (1992). Congress resolved conflicting court
decisions in 1996 when it enacted the Asset Conservation, Lender Liability, and Deposit Insurance
Protection Act of 1996, Pub. L. No. 104-208.
c. The Asset Conservation, Lender Liability, and Deposit Insurance Act of 1996, Pub. L. 104-208
added a new Section 101(20)(E)-(G) similar to the Lender Rule. The secured creditor defense protects lenders from liability if they did not participate in the management or exercise actual control
over the facility. That Act also validates that portion of the Rule which addresses involuntary acquisition by government entities. See "EPA Policy on Interpreting CERCLA provisions addressing Lenders
and Involuntary Acquisitions by Government Entities," 62 Fed. Reg. 36, 424 (July 7, 1997).
3. INNOCENT LANDOWNERS
a. Section 101(35) provides protection for defined "innocent landowners." The defense arises from
the definition of "contracted relationship" for purposes of a Section 107(b)(3) third-party defense.
See Westwood Pharms., Inc. v. National Fuel Gas Distribution Corp., 964 F.2d 85 (2d Cir. 1992).
This defense applies if: (a) the defendant acquired real property after the disposal of hazardous
substances, did not know, and had no reason to know about the hazardous substances on, in, or at
the facility when it was acquired, Foster v. United States, 922 F. Supp. 642 (D.D.C. 1996); (b) the
defendant is a government entity, who through its responsibilities acquired the facility, Hercules v.
United States, 938 F.2d 276, 281 (D.C. Cir. 1991); or (c) the defendant acquired the facility by inheritance or bequest Snediker Developers L.P. v. Evans, 773 F. Supp. 984, 990 (E.D. Mich. 1991).
b. Pub. L. No. 107-118, 115 Stat. 2356 (2001) Small Business Liability Relief and Brownfields Revitalization Act amended Section 101(35) as follows: (1) it makes clear that the defense applies to
easement holders and tenants of proper holders; (2) it requires that the landowner took reasonable
steps to stop continuing releases and prevent future releases; and (3) it further defines what constitutes "all appropriate inquiry." See United States v. Domenic Lombardi Reality, Inc., 290 F. Supp. 2d
198, 209 (D.R.I. 2003)(holding the amendment was not retroactive); "G" St. Assocs. v. Rookwood
Pigments NA, No. DKC 2002-1622, 2004 U.S. Dist. LEXIS 19178, at * 39 (D. Md. 2004)(relying on
the assumption that the Brownfield Amendments are not retroactive in finding that the plaintiff had
satisfied all necessary elements of the innocent landowner defense).
4. FEDERALLY PERMITTED RELEASES
a. Section 101(10) sets out numerous examples of releases of hazardous substances that are allowable under CERCLA because of established permits set out in various other environmental statutes such as CAA, CWA, Solid Waste Disposal Act, 42 U.S.C. § 6901 et seq., Safe Drinking Water
Act, 42 U.S.C. § 300f et seq., Marine Protection, Research, and Sanctuaries Act, 33 U.S.C. § 1401
et seq., and Atomic Energy Act, 42 U.S.C. § 2011 et seq..
b. "[T]he exception for federally permitted release states an affirmative defense." United States v.
Freter, 31 F.3d 783 (9th Cir. 1994). Accordingly, defendant has burden of going forward with sufficient evidence to raise the exception as an issue.
c. Section 107(j) applies.
5. COMMON CARRIERS
a. Section 101(20)(B) insulates shipper of hazardous substances from being "considered to have
caused or contributed to any release during such transportation which resulted solely from circumstances or conditions beyond his control."
6. PESTICIDE
a. Section 107(i) exempts application of pesticide products registered under the Federal Insecticide,
Fungicide Act. See Redwing Carriers v. Saraland Apartments, 875 F. Supp. 1545, 1564-65 (S.D. Ala.
1995).
b. Improper application of pesticide may result in CERCLA liability. United States v. Tropical Fruit,
S.E., 96 F. Supp. 2d 71 (D.P.R. 2000).
7. CONSUMER PRODUCTS
a. Section 101(9) excludes from the definition of facility "any consumer product in consumer use."
See discussion at E.2d (3)(g), supra.
b. Uniroyal Chem. v. Deltech Corp., 160 F.3d 238 (5th Cir. 1998). Court defined exception as "any
goods normally used for personal, family, or household purposes, which was being used in that
manner when the subject release occurred."
8. RECYCLERS
a. Superfund Recycling Equity Act (SREA), P.L. 106-113, 113 Stat. 1536 (Nov. 29, 1999) provides
liability exemption to recyclers (scrap paper, plastic, glass, textiles, rubber (not whole tires) and
some batteries meeting specified criteria. See CERCLA § 127. PRP has burden to demonstrate exemption applies.
b. SREA does not affect any concluded administrative or judicial action, or any pending judicial action initiated by the United States prior to enactment. See Morton Int'l v. A.E. Staley Mfg. Co., 106 F.
Supp. 2d 737 (D.N.J. 200); United States v. Atlas Lederer Co., 97 F. Supp. 2d 830 (S.D. Ohio 2000);
United States v. NL Indus., No. 91-CV-578-JLF, 2005 U.S. Dist. LEXIS 10713 (S.D. Ill. may 4, 2005).
Courts have applied SREA retroactively to cases filed by private parties that were pending at the
time of enactment. See Gould, Inc. v. A & M Battery & Tire Service, 232 F.3d 162 (3d Cir. 2000).
c. Any person who brings action in contribution against a recycler not liable under CERCLA shall pay
for costs of defending the action. Section 127(j).
d. Section 114(c) exempts service station dealers who generate or transport recycled oil (if RCRA
requirements are met). Service stations can still be liable as owners or operators.
9. DE M1CROMIS EXEMPTION SECTION 107(o)
a. Section 107(o) exempts generators and transporters where the amount of hazardous substances
is quite small. Parties may be exempt at NPL sites if: hazardous substances are less than 110 gallons of liquid waste or 200 pounds of solid waste.
b. The treatment, disposal, or transport must have occurred before April 1, 2001.
c. The exemption does not apply if EPA finds the hazardous substances contributed significantly to
the costs. This determination is not judicially reviewable.
d. In Section 107 cost recovery action by the government, the PRP has the burden of proof. In Section 113 private contribution action, plaintiff must prove defendant does not fall within this exemption.
10. MUNICIPAL SOLID WASTE EXEMPTION (MSW) SECTION 107(p)
a. Section 107(p) addresses municipal solid waste (MSW). MSW is household waste, collected and
disposed of as part of normal collection service, containing typical amounts of hazardous substances (ie., food, household, and yard waste).
b. Owner/operator/lessees of residential property which dispose of MSW at NPL sites are exempt
under Section 107(p). Transporters and municipalities are not exempt.
c. Small business or a tax exempt entity (under 100 employees) that generate MSW are exempt under Section 107(p).
d. The exemption does not apply if EPA finds the hazardous substances contributed significantly to
the costs. This determination is not judicially reviewable.
11. CONTIGUOUS PROPERTY OWNERS SECTION 107(q)
a. Section 107(q) exempts contiguous property owners/operators that did not "cause, contribute, or
consent to the release or threatened release."
b. In order to qualify for the defense, owner/operator must establish by preponderance of the evidence that it meets a series of statutory conditions, including that the owner is not "affiliated with
any other person that is potentially liable," takes reasonable steps to deal with the contamination,
provides full cooperation to authorities, and is in compliance with applicable law.
12. PROSPECTIVE PURCHASER SECTION 107(r)
a. Section 107(r) protects a buyer who would otherwise become liable as owner or operator solely
because it purchased contaminated property. Buyer must meet 8 conditions (including not being a
PRP).
b. Subject to certain conditions the new purchaser will not be liable except for a windfall lien that
covers unreimbursed response costs. The lien shall not exceed the increase in fair market value of
the property attributable to the response action.
13. BROWNFIELDS
a. Section 128(b) prohibits EPA from taking § 106(a) or § 107(a) enforcement action against a PRP
conducting or completing a response action that is in compliance with the applicable state cleanup
program.
b. Exceptions include requests by the State for EPA to act where EPA determines that there is an
"imminent and substantial endangerment". This section applies only to response actions conducted
after February 15, 2001.
14. RADIONUCLIDES SECTION 101(22)(c)
a. CERCLA exempts from release definition "source, by product, or special nuclear material". This
exemption applies to releases covered under the Price Anderson Act, 42 USC § 2210, and releases
arising out of remedial activities under the Uranium Mill Tailings Radiation Control Act, 42 USC §
7212(a) and 7942(a). RCRA excludes "source, special nuclear or by product material as defined by
the Atomic Energy Act" from the definition of "solid waste". 42 USC § 6903(27). However all major
radionuclides are hazardous air pollutants under CAA regulations, 40 CFR 61.01. See also Amoco
Oil Co. v. Borden, Inc., 889 F.2d 664, 669 (5th Cir. 1990); United States v. United Nuclear Corp.,
814 F. Supp. 1552 (D. N. Mex. 1992) (addressing EPA's remediation of leachate from radioactive
mine tailings).
I. STANDARD OF REVIEW
1. ADEQUACY OF RESPONSE COSTS
a. In Section 107 actions for cost recovery, while the elements of liability must be established de
novo, the standard for reviewing costs themselves is arbitrary and capricious. See Meyer, 889 F.2d
at 1508; JG-24, 331 F. Supp. 2d at 65. Judicial review of any issue concerning the adequacy of any
response action taken or ordered by the United States is limited to the administrative record, and
the standard of review is arbitrary and capricious. Section 113(j)(1), (2).
b. Defendants have the burden of proving that specified costs claimed are inconsistent with the
NCP. NEPACCO, 810 F.2d at 747-48; Gurley, 317 F. Supp. 2d at 878; JG-24, 331 F. Supp. 2d at 6465.
c. Once it is shown that selection of response action was not arbitrary, capricious or inconsistent
with the NCP, the United States is entitled to all costs (not just all reasonable costs) incurred in implementing response action. See Meyer, 889 F.2d 1497, and Hardage, 982 F.2d 1491.
J. STATUTE OF LIMITATIONS
1. Under Section 113(g)(2)(A), which discusses removal actions, the United States must bring an action within three years after completion of the removal action (unless remedial action has begun by
then). See United States v. Chromatex, Inc., 832 F. Supp. 900 (M.D. Pa. 1994); United States v.
Cantrell, 92 F.Supp.2d 704, 716 (S.D. Ohio 2000) (completion of final site investigation rather than
completion of construction of clay cap would be completion of removal action for limitations pur-
poses). In Colorado v. Sunoco, 337 F.3d 1233, 1242 (10th Cir. 2003), the Court of Appeals held
that in a site where there were multiple removal and remedial activity, "the key issue in determining
the timeliness of Colorado's action is when 'physical on-site construction of the [first] remedial action' occurred at the site." See California Dept. Of Toxic Services v. Neville Chemical Co., 213 F.
Supp. 1115 (2003) aff'd 358 F.3d 661 (9th Cir. 2004), cert. denied 125 S.Ct. 303 (excavating wells
not "initiation of physical on-site construction of the remedial action.").
2. Under Section 113(g)(2)(B), which discusses remedial actions, the United States must bring an
action within 6 years after initiation of physical on site construction (removals included if the remedial action was initiated within three years of completion of removal). See United States v. Navistar
International, 152 F.3d 702 (7th Cir. 1998); Findett, 220 F.3d at 848. See also California v. Neville
Chem. Co., 358 F.3d 661, 671 (9th Cir 2004)(holding that the statute of limitations cannot begin to
run until a final remedial action plan has been adopted); Schaefer v. Town of Victor, 57 F.3d 188
(2nd Cir. 2006) (plaintiff barred).
3. CERCLA authorizes subsequent actions for later-incurred response costs if the initial action is
timely filed. See Section 113(g)(2) (statute of limitations for initial actions, authorizing declaratory
judgments for future costs); Findett, 220 F.3d at 845.
K. SECTION 107 COST RECOVERY ACTIONS DO NOT ALLOW FOR TRIALS WITH JURIES
1. It is well settled that a CERCLA cost recovery action, an action in equity for restitution, does not
provide a right to jury trial. United States v. Northeastern Pharm. & Chem. Co., Inc., 810 F.2d 726,
749 (8th Cir. 1986), cert. denied, 484 U.S. 1987; United States v. Vertac, 966 F. Supp. 1491 (E.D.
Ark. 1997); United States v. Mex. Feed & Seed Co., Inc., 729 F. Supp. 1250, 1254 (E.D. Mo. 1990);
Miami-Dade County v. United States, 245 F. Supp. 2d 1319, 1324 (S.D. Fla. 2004)(rejecting county's demand for jury trial in CERCLA action). There has been one reported jury trial in a case brought
by the United States. United States v. Vertac, Case No. LR-C-80-C-109, 1993 U.S. Dist. LEXIS 19311
(E.D. Ark. 1993) (advisory jury returned verdict in favor of United States against Uniroyal Chemical
Ltd.).
2. In natural resource damages cases, however, several courts have held that there is a right to jury
trial. See In re Acushnet River and New Bedford Harbor, 712 F. Supp. 994, 1000 (D. Mass. 1989).
But See GE v. United States Envt'l Protection Agency, 18 F. Supp. 2d 138, 144 (D. Mass. 1998).
L. CERCLA SETTLEMENTS (SECTION 122)
1. STATUTORY GOAL
a. A fundamental goal of CERCLA is to facilitate voluntary settlements in order to expedite remedial
actions and minimize litigation. The specific settlement provisions found in Section 122 of CERCLA
were added in 1986 in an effort by Congress to eliminate impediments to settlement of claims relating to the cleanup of Superfund sites.
2. DISCRETIONARY AUTHORITY
a. Section 122(a) affords the United States the discretion to enter into an agreement with any person to perform response action at a site.
b. Scope of Attorney General's authority addressed in United States v. Hercules, Inc., 961 F.2d 796
(8th Cir 1992)(rejecting defendants assertion that Section 122(h) limits AG's settlement authority).
See also United States v. ASARCO, Inc., 814 F. Supp. 951, 957 (D. Colo. 1993).
3. PROCEDURE AND SCOPE
a. Section 122 authorizes EPA and DOJ to conduct negotiations under specified procedures, defines
the scope of covenants not to sue, and provides for public comment on proposed settlements. Section 122(d), (e), (f).
b. Section 122(e) provides moratorium following PRP notification under § 122(a). Absent a significant public health or environment threat, EPA must want at least 90 days from commencing RI/FS
and 120 days for any cleanup or remedial action.
4. CONSENT DECREE
a. Section 122(d) requires that settlements involving implementation of remedial actions be embodied in judicial consent decrees, subject to court approval. Two standard consent decrees are for
PRPs to perform the site work remedy as set forth in the Record of Decision or to pay past EPA expenses.
b. Model Work Consent Decree. Remedial Design/Remedial Action Consent Decree model has been
revised and was published at 63 Fed. Reg. 9541 (Feb. 25, 1998). It is also on the Internet at
(http://es.epa.gov/oeca/osre/950713.htnil). Many of the provisions are nationally consistent and
always included.
c. Reopeners. CERCLA § 122(f)(6)(i) provides that where settlements contain a covenant not to sue,
the settlement "shall include an exception to the covenant that allows the President to sue such
person concerning future liability resulting from the release or threatened release that is the subject
of the covenant where such liability arises out of conditions which are unknown at the time ... that
remedial action has been completed at the facility concerned."
5. DE M1NIMIS SETTLEMENT
a. Section 122(g) authorizes administrative and judicial de minimis settlements when the claim involves a minor portion of the response costs at the facility and, in EPA's judgment, the amount and
toxicity of hazardous substances contributed by the settling party are minimal in comparison to other hazardous substances at the facility. Cannons, 720 F. Supp. at 1027.
b. This type of settlement is appropriate for small volume generators (usually less than 1%) whose
waste contains no greater toxicity than anyone else.
c. Settlors must agree to settle their liability for a share of the total costs and "cash-out." The share
usually includes a premium. United States v. Cannons Eng'g Corp., 899 F.2d 79 (1st Cir. 1990) (upheld EPA determination, including premium).
d. Section 122(g)(7) was amended in 2002 to codify DOJ and EPA practice of settling with PRPs who
have a limited ability to pay. In addition, § 122(g)(8) was added requiring that settlements under §
122(g) require that the PRP waives all claims (including contribution) against other PRPs ("unless
the President determines that requiring a waiver would be unjust."). Model CERCLA deminimis Consent Decree and Administrative Order on Consent is at 60 Fed. Reg. 62, 849 (Dec. 7, 1995).
6. CONTRIBUTION PROTECTION
a. Under Section 113(f)(2), a person who has resolved its liability to the United States is protected
against third party contribution claims for matters addressed by the settlement.
b. Most courts have rejected non-settlors efforts to limit the intended effect of CERCLA's contribution protection provisions. See United States v. SEPTA, 235 F.3d 817, 823 (3d Cir. 2000) (rejected
attempt to limit contribution protection to response actions settlor would perform, which would have
reserved contribution claim for work to be performed by non-settlor); United States v. Cannons Eng'g
Corp., 899 F.2d 79 (1st Cir. 1990) (rejected attempt to end run contribution protection through assertion of a common law indemnification claim); Dravo v. Zuber, 13 F.2d 1222 (8th Cir. 1994) (rejected challenge to de minimis settlement that provided contribution protection against the nonsettlors' costs); United States v. ASARCO, Inc., 814 F. Supp. 951, 956 (D. Colo. 1993) (a liable party
can not assert an independent cost recovery claim which negates another liable party's contribution
protection); Avnet v. Allied-Signal, 825 F. Supp. 1132, 1141 (D.R.I. 1992) (contribution protection
provided against costs incurred in responding to EPA 106 Orders); Transtech Indust. v. A & Z SepticClean, 798 F. Supp. 1079 (D.N.J. 1992) (same ruling as Avnet). See also Akzo Coating, Inc. v. Aigner
Corp., 30 F.3d 761 (7th Cir. 1994) (CERCLA does not afford contribution protection where matter is
"not addressed" in settlement); United States v. Acorn Eng'g Co., 221 F.R.D. 530 (CD. Cal.
2004)(holding that non-settling PRPs did not have a right to intervene in action to approve consent
decree). But see Waste Mgmtt v. City of York, (E.D. Pa. 1995, )(non de minimis AOC under 122(h) contribution protection limited to costs incurred by U.S.).
c. Under Section 113(f)(2), liability of non-settling parties is reduced by the amount of any settlement with the United States. The House report indicates that non-settling parties will "remain potentially liable for the amounts not received by the government through settlement," H.R. Rep. No. 253,
Part 3, 99th Cong., 1st Sess., 19 (1995). UCFA does not apply. Cannons Engineering, 720 F. Supp
at 1049, n.26.
7. MIXED FUNDING
a. Section 122(b)(1) allows EPA to reimburse settling parties for this work. The purpose of this mixed
funding authority is to "mix funds from Superfund with private party monies, where appropriate ...,
so as to enable response actions by the settling parties to proceed as quickly as possible." H.Rep.
No. 253, 99th Cong. 2d Sess. 101 (1985) reprinted in 1980 U.S.C.C.A.N 2835, 2883.
b. EPA may choose, for example, to settle for less than 100% when an "orphan share" exists at the
site or defendants do not have the financial ability to pay.
c. Pre-authorization agreements from EPA allow PRP reimbursement from the Superfund.
8. NON-BINDING ALLOCATIONS OF RESPONSIBILITY ("NBAR")
a. The NBAR process is encouraged under § 122(e)(3). More often, PRPs decide their own internal
allocation through PRP committees which are usually formed to negotiate with the United States.
b. Alternative Dispute Resolution (ADR) has significantly increased in CERCLA settlements.
9. RELEASES FROM LIABILITY/COVENANT NOT TO SUE
a. Section 122(f)(1) authorizes release from liability if (1) it is in the "public interest," (2) it would expedite the response action, (3) the PRPs are in full compliance with the consent decree, and (4) the
response action has been approved by EPA.
b. All covenants (except special covenants and de minimis settlements) are subject to a reopener
clause that allows for future liability for unforseen and unknown conditions that arise following
completion of the remedial action Section 122(f)(6)(A).
c. The AG can also grant a covenant not to sue to future owners with a "prospective purchaser
agreement". See 60 Fed. Reg. 34, 792 (July 3, 1995).
10. STANDARD OF REVIEW FOR CONSENT DECREES
a. Remedial Action. CERCLA § 122(d) specifies the procedures applicable where "the President enters into an agreement under this section with any potentially responsible party with respect to remedial action under Section 9606 of this title." Section 122(d)(1)(A).
b. Cost Recovery. Settlement of cost recovery claims under CERCLA § 107 does not invoke the Section 122 procedures, except insofar as cost claims are included in Section 106 remedial action settlements, or the Section 107 settlement includes a covenant not to sue for Section 106 claims.
c. Public Comment. CERCLA § 122 settlements are subject to public comment and notice of lodging
of a consent decree is provided by Federal Register Notice. The normal comment period is 30 days.
Section 122(d)(2)(B) provides as follows:
The Attorney General shall provide an opportunity to persons who are not named as parties to the
action to comment on the proposed judgment before its entry by the court as a final judgment. The
Attorney General shall consider, and file with the court, any written comments, views, or allegations
relating to the proposed judgment. The Attorney General may withdraw or withhold its consent to the
proposed judgment if the comments, views, and allegations concerning the judgment disclose facts
or considerations which indicate that the proposed judgment is inappropriate, improper, or inadequate.
d. The Attorney General moves for entry of the decree following review of any comments received.
Most consent decrees are entered without significant delays in proceedings after close of the comment period. DOJ presents all comments to the court and non-parties may seek to intervene.
e. There is a strong presumption of validity favoring consent decrees, given the Attorney General's
inherent discretion to settle litigation and EPA's technical expertise. See, e.g., United States v.
Hooker Chems. & Plastics Corp., 540 F. Supp. 1067, 1080 (W.D.N.Y. 1982), aff'd by 749 F.2d 968
(2d Cir. 1984); United States v. Chevron U.S.A., Inc., No. C 03-4650 CRB, 2005 U.S. Dist. LEXIS
13291, at *48 (N.D. Cal. June 24, 2005). The trial court has the discretion to deny intervention,
United States v. Tex. E. Transmission Corp., 923 F.2d 410 (5th Cir. 1991). The court has discretion
whether or not to conduct a hearing. Hooker, supra; United States v. Seymour Recycling Corp., 554
F. Supp. 1334 (S.D.Ind. 1982).
f. Three-Part Test under Judicial Review. There is a three-part standard for review of CERCLA consent decrees: (I) fairness, (2) reasonableness, and (3) consistency with statutory goals. H.R. Rep.
No. 253, Part 3, 99th Cong., 1st Sess. 19 (1985). See United States v. Charles George Trucking Co.,
34 F.3d 1081 (1st Cir. 1994); United States v. Cannons Engineering Corp., 899 F.2d 79, 85 (1st Cir.
1990); United States v. ASARCO, Inc., supra, 814 F. Supp. at 954; United States v. Akzo Coatings of
America, Inc., 949 F.2d 1409, 1435 (6th Cir. 1991). Although the court is not a rubber stamp, review is deferential. United States v. Hooker Chem. & Plastics Corp., 540 F. Supp. 1067 (W.D.N.Y.
1982), aff'd, 749 F.2d 968 (2d Cir. 1984); United States v. SEPTA, 235 F.3d 817, 822 (3rd Cir.
2000); United States v. Dibiase, 45 F.3d 541 (1st Cir. 1995). Courts need not conduct an evidentiary hearing in evaluating CERCLA consent decrees. United States v. CUCCO, 204 F.3d 275, 278-79
(1st Cir. 2000); 55 Motor Ave. Co. v. Liberty Indus. Finishing Corp., 332 F. Supp. 2d 525, 530
(E.D.N.Y. 2004); United States v. Fort James Operating Co., 313 F. Supp. 2d 902, 907 (E.D. Wis.
2004).
M. CONTRIBUTION SUITS
1. Section 113(f) (added by SARA) establishes that a PRP has a right to seek contribution "during or
after" a Section 106/107 enforcement action from any other person that is liable under Section
107, and specifically provides that "in resolving contribution claims, the court may allocate response
costs among liable parties using such equitable factors as the court determines are appropriate."
a. A number of court have used the so-called "Gore factors" in allocating response costs. See Kalamazoo River Study Group v. Rockwell Int'l, 107 F. Supp. 2d 817 (W.D. Mich. 2000); Bancamerica
Commercial Corp. v. Trinity Indust., Inc., 900 F. Supp. 1427, 1472 (D. Kan 1995). These factors to
be considered in equitable were originally proposed by then - congressman Gore as an amendment
to the 1980 CERCLA bill which did not pass. These factors are often summarized as follows:
(1) the ability of the parties to demonstrate that their contributions to a discharge, release, or disposal of a hazardous waste can be distinguished;
(2) the amount of the hazardous waste involved;
(2) the degree of toxicity of the hazardous waste involved;
(4) the degree of involvement by the parties in the generation, transportation, treatment, storage, or disposal of the hazardous waste;
(5) the degree of care exercised by the parties with respect to the hazardous waste
concerned, taking into account the characteristics of such hazardous waste; and
(6) the degree of cooperation by the parties with federal, state, or local officials to
prevent any harm to the public health or the environment.
b. The Gore factors are neither mandatory nor exclusive of other considerations when allocating liability. See Boeing Co. v. Cascade Corp., 207 F.3d 1177 (9th Cir. 2000) (discretion to select factors);
Westerns Props Serv. Corp. v. Shell Oil, 358 F.3d 678, 690 (9th Cir. 2004)(same); Tosco Corp. v.
Koch Indust., Inc., 216 F.3d 886, 894-95 (10th Cir. 2000) (years of operation); B.F. Goodrich Co. v.
Murtha, 958 F.2d 1192 (2d Cir. 1992)(financial resources of the parties involved); United States v.
R. W. Meyer, Inc., 932 F.2d at 576-77; Foster v. United States, 130 F. Supp. 2d 68, (D.D.C. 2001)
(whether current owner contributed to wastes); Anscutz Mining Corp. v. NL Indust., Inc., 891 F. Supp
492 (E.D. Mo. 1995); Weyerhauser Co. v. Koppers Co., 771 F. Supp. 1420 (D. Md. 1991)(benefits
received by the parties from the activities leading to the release); Amoco Oil Co. v. Borden, Inc., 889
F.2d 664, 673 (5th Cir. 1989) (circumstances involved in the property's conveyance, including the
price paid and discounts granted); New York v. Westwood-Squibb Pharm. Co., No. 90-CV-1324C,
2004 U.S. Dist. LEXIS 13841, at *64-70 (W.D.N.Y. 2004)(circumstances of property conveyance).
Courts distinguish factors that affect allocation from those that determine liability in the first instance. See Kalamazoo River Study Group v. Menasha Corp., 228 F.3d 648 (6th Cir. 2000) (causation not an element of liability though it may bear on allocations); Boeing Co. v. Cascade Corp., 207
F.3d 1177 (defendant may owe contribution even if plaintiff would have incurred same costs had
defendant disposed of no hazardous substances at site); Cadillac Fairview v. Dow Chemical, 299
F.3d 1019 (9th Cir. 2002) (U.S. pay 100% costs for World War II activity because of indemnification
agreement).
2. A PRP's claim against liable parties liable "for an appropriate division of the payment one of them
has been compelled to make that PRP is by definition making a [Section 113(f)] claim for contribution." Accordingly, a PRP is not entitled to a finding of joint and several liability against another PRP
in a Section 113 contribution action. Bedford Affiliates v. Sills, 156 F.3d 416, 424 (2d. Cir. 1998);
New Castle County v. Haliburton NUS Corp., 111 F.3d 1116, (3d Cir. May 2, 1997); Control Data
Corp. v. S.C.S.C. Corp., 53 F.3d 930, 935 (8th Cir. 1995); Morrison Enters, v. McShares, Inc., 302
F.3d 1127, 1135 (10th Cir. 2002); United States v. Colo. & Eastern R.R., 50 F.3d 1530, 1534-36
(10th Cir. 1995) ("CERRC II"); United Techs. Corp. v. Browning-Ferris Industries, 33 F.3d 96, 103
(1st Cir. 1994), cert. denied, 115 S. Ct. 1176 (1995); Akzo Coatings, Inc. v. Aigner Corp., 30 F.3d
761, 764 (7th Cir. 1994); In re Dant & Russell, Inc., 951 F.2d 246, 249 (9th Cir. 1991); Amoco Oil
Co. v. Borden, Inc., 889 F.2d 664, 672 (5th Cir. 1989); Smith Land & Improvement Corp. v. Celotex
Corp., 851 F.2d 86, 88-89 (3d Cir. 1988), cert. denied, 488 U.S. 1029 (1989).
3. In December 2004, the Supreme Court in Cooper Indust., Inc. v. Aviall Servs., Inc., 543 U.S. 157
(2004) held that a private party not sued under CERCLA § 106 or § 107(a) could not bring a contribution action under Section 113 (f)(1). The Court expressly held that "Section 113 provides two express avenues for contribution Section 113(f)(1) ('during or following' specified civil actions) and
Section 113 (f)(3)(B) after an administrative or judicially approved settlement that resolves liability
to the United States or a State." The Court, however, did not resolve a number of collateral questions, including whether Aviall has a direct or an implied right to contribution under Section 107.
Since Aviall there has been significant litigation and a circuit split. See, Atlantic Research Corporation v. US, 459 F.3d 827 (8th Cir. 2006); Consolidated Edison, New York v. UGI Utilities Inc., 423
F.3d 90 (2nd Cir. 2005), E.I. Dupont De Nemours and Co. v. U.S, 460 F.3d 515 (3rd Cir. 2006). Atlantic Research was argued to the Supreme Court in early 2007.
4. The law is unsettled on how to allocate costs in a contribution suit when there have been prior
settlements. The National Conference of Commissioners of Uniform State Laws has developed two
model statutes that address the situation in which claimant settles with one of several joint tortfeasors: Uniform Contribution Among Joint Tortfeasors (UCATA) in 1955 and the Uniform Comparative
Fault Act (UCFA) in 1977. UCATA has been adopted by 19 states and UCFA by states. State law,
however, does not control pursuant to Section 113 (4)(3)(C). When a litigant has settled with another party, the UCFA would reduce the contribution share of the remaining defendants by the percentage of total fault of the settlors. UCATA, on the other hand, only credits the amount of money paid in
the settlement. Some courts have applied the UCFA profata share credit rule which reduces the nonsettlors' liability by the settlors' equitable share of liability. Other courts advocated use of the UCATA
pro tanto credit rule which reduces the non-settlors' liability by the dollar amount specified in the
settlement. The Supreme Court in McDermott applied UCFA in an admiralty proceeding. The Seventh
Circuit, however, held that McDermott's approach was not appropriate in CERCLA cases and applied
UCATA instead of UCFA: Akzo Nobel Coatings, Inc. v. Aigner Corp., 197 F.3d 302 (7th Cir. 1999). See
also, SCA Services, 827 F. Supp. 526, 532 (N.D. Ind. 1993); Douglas County, Neb. v. Gould, Inc., No.
CV. 90-0-395, (D. Neb. Mar. 24, 1994); Barton Solvents, Inc., 834 F. Supp. 342, 345-46 (D. Kan.
1993); Am. Cyanamid Co. v. King Indust, Inc., 814 F. Supp. 215, 217 (D. R.I. 1993); Allied Corp. v.
Acme Solvent Reclaiming, Inc., 771 F. Supp. 219, 223 (N.D. Ill. 1990): Applying UCFA are Comerica
Bank-Detroit, 769 F. Supp. 1408, 1413 (E.D. Mich. 1991); United States v. Western Processing Co.,
756 F. Supp. 1424, 1429 (W.D. Wash. 1990); Lyncott Corp. v. Chem. Waste Mgmt, Inc., 690 F.
Supp. 1409, 1418-19 (E.D. Pa. 1988). But see Am. Cyanamid Co. v. Capuano, 381 F.3d 6, 21 (1st
Cir. 2004)(refusing to choose one approach over the other and deferring to the district court's discretion to allocate response costs under CERCLA).
6. District courts are split as to whether a right to a jury trial exists in Section 113(f) contribution
cases. Compare, American Cyanamid Co. v. King Industries, Inc., 814 F. Supp. 209, 213-215(D.R.I.
1993) and Hatco Corp. v. W.R. Grace & Co., 59 F.3d 400 (3d Cir. 1995) (no jury trial right) with United States v. Shaner, Civ. A. No. 85-1375, 1992 WL 154618 (E.D. Pa. 1992) (right to jury trial exists).
Fed. R. Civ. Pro. 39(c) also applies.
7. CERCLA § 113(g)(3) provides a three-year statute of limitations for contribution suits, after a party's liability is determined by judgment, administrative order, or judicially approved settlement.
Courts have taken various approaches to determining statute of limitations absent any of these
events. See Gerahghty & Miller, 234 F.3d at 924; Sun Company Inc. v. Browning-Ferris Inc., 124
F.3d 1187, 1192 (10th Cir. 1997); Sherwin-Williams, 125 F. Supp. 2d at 745-56; Reichhold Chemicals Inc., v. Textron Inc., 888 F. Supp. 1116 (N.D. Fla. 1995).
N. NATURAL RESOURCES DAMAGES n12
- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - n12 Similar Federal claims for natural resource damages exist under Section 1002(b)(2)(A) of the Oil Pollution Act
of 1990, 33 U.S.C. § 2710(b)(2)(A); Section 311(f)(4) & (5) of the Clean Water Act, 33 U.S.C. § 1321(f)(4) & (5);
Section 312 of the Marine Protection, Research, and Sanctuaries Act, 16 U.S.C. § 1443; and the Park System Resources Protection Act, 16 U.S.C. § 19.
- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - 1. A natural resource damages claim is a statutory cause of action arising from: "[a] injury to, destruction of, or loss of [b] natural resources [c] resulting from such a release [of a hazardous substance]." CERCLA § 107(a)(4)(c). In New Mexico v. General Electric Co., 467 F.3d 1223 (10th Cir.
2006), (barred use of state common law theories to obtain unrestricted money damages).
2. Natural resources: CERCLA § 101(16) defines "natural resources" as "land, fish, wildlife, biota,
air, water, ground water, drinking water supplies, and other such resources belonging to, managed
by, held in trust by, appertaining to, or otherwise controlled by the United States . . ., any State or local government, any foreign government, any Indian tribe, or, if such resources are subject to a trust
restriction on alienation, any member of an Indian tribe."
a. "Customarily, natural resource damages are viewed as the difference between the
natural resource in its pristine condition and the natural resource after the cleanup,
together with the lost use value and the costs of assessment. As a residue of the
cleanup action, in effect, [damages] are thus not generally settled prior to a cleanup
settlement." In re Acushnet River & New Bedford Harbor, 712 F. Supp. 1019, 1035
(D. Mass. 1989) (AVX litigation).
b. Congress deliberately excluded "purely private" property from the definition of natural resources. Ohio v. Dept of Interior, 880 F.2d 432, 460 (DC. Cir. 1989). However,
resources need not be owned by the government to be CERCLA "natural resources."
Id. "Rather, a substantial degree of government regulation, management or other
form of control over property would be sufficient" to make the CERCLA natural resource damages provisions apply. Id. at 461.
3. Natural resource damages claims may be brought exclusively by State or Federal government
trustees, or by designated trustees of Indian tribes. CERCLA § 107(a)(4)(C). EPA is not a trustee. Private entities may not bring CERCLA natural resource damage claims. Artesian Water Co. v. New Castle County, 851 F.2d 643, 649 (3d Cir. 1988); Nat'l Ass'n of Mfrs v. United States, 134 F.3d 1095
(D.C. Cir. 1998).
4. Recovery of natural resource action costs can only be used to restore, replace, or acquire equivalent natural resources. CERCLA § 107(f)(1).
5. NRD Statute of Limitations
a. Under Section 113(g)(1), which discusses natural resource damages actions, the
United States must bring an action within three years after the later of the following:
(1) the date of the discovery of the loss and its connection with the release in question, and
(2) the promulgation of Department of the Interior regulations. The D.C. Court of Appeals held that the promulgation of the last DOI Regulation was on March 1987.
Kennecott v. Dep't of the Interior, 88 F.3d 1191, 1213-13 (D.C. Cir. 1996). See also
United States v. Montrose Chem. Corp., 104 F.3d 1507 (9th Cir. 1997).
b. If claim arises at a site which is listed on the NPL or which RA has been initiated,
SOL is 3 years from completion of remedy.
6. NRD Assessments
a. CERCLA § 301(c) required the President to promulgate two types of regulations for
assessment of NRD: (A) simplified procedures and (B) protocols for full assessments.
DOI promulgated the Type A Rule which uses a computer model to calculate damages
in 1987, at 43 C.F.R. §§ 11.40 -.41. DOI also promulgated the Type B Rule, 43 C.F.R.
11.60 - .84, amended at 53 Fed. Reg. 5166 (Feb. 22, 1988). In 1989, the D.C. Court
of Appeals remanded both the Type A and B Rules for revisions consistent with its
opinion. State of Ohio v. Dep't of the Interior, 880 F.2d 432; State of Colorado v. Dep't
of the Interior, 880 F.2d 481 (D.C. Cir. 1989).
b. DOI promulgated revised Type B Rule on March 25, 1994, 59 Fed. Reg. 14262.
n13 The DOI regulations were substantially upheld in Kennecott Corp. v. Dep't of the
Interior, 88 F.3d 1191 (D.C. Cir. 1996). Type A procedures were upheld in Nat'l Ass'n
of Mfrs. v. United States Dep't of the Interior, 134 F.3d 1095 (D.C. Cir. 1998).
c. The DOI NRDA regulations define "injury" as "a measurable adverse change, either
long or short-term, in the chemical or physical quality or the viability of a natural resource." 43 C.F.R. §§ 11.14(v). The regulations allow proof of injury by evidence either of an adverse change in a given natural resource or of the exceedance of a regulatory standard, such as water quality standards, see 43 C.F.R. §§ 11.62, whereby
the exceedance of such a standard is per se injury. Nonetheless, natural [finish]
d. Use of DOI regulations is optional for trustees, but following the regulations provides rebuttable presumption of validity. See Utah v. Kennecott Corp., 14 F.3d 1489
(10th Cir.) cert. denied 513 U.S. 872 (1994).
7. Natural Resource Damages
a. Damages may be measured as the cost of directly restoring the injured resource to
"baseline," the physical, chemical, and biological condition the resource would have
been in absent the release. 43 C.F.R. §§ 11.14(e). Alternatively, a trustee may seek
to replace or acquire natural resources "equivalent" to those that have been lost, in
which case the injury is valued as the cost of acquisition, habitat improvement, or the
like, sufficient to return equivalent services, in both human and ecological terms, to
those that have been lost. "Congress intended the damage assessment regulations to
capture fully all aspects of the loss." Ohio, 880 F.2d at 463.
b. At a minimum, liability for natural resource damages includes the costs of restoring,
replacing, or acquiring the equivalent of an affected resource, injury assessment and
restoration planning costs, and indirect costs necessary to support such activities. 42
U.S.C. §§ 107(f)(1); 43 C.F.R. §§ 11.83(b)(1). Generally, the cost of restoration or replacement does not capture the full loss to the public. The ecological services, and
public use and enjoyment, provided by an injured resource lost from the date of the
injury until the date the services those resources provided are fully returned to their
baseline conditions may also be recovered. See 42 U.S.C. § 9607(f)(1);; 43 C.F.R. §§
11.83(c)(I). Damages for these losses, known as "interim losses," are also recoverable. Ohio, 880 F.2d at 454 n.34.
- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - n13 NOAA also proposed a rule of NRD assessment of OPA damages at 61 Fed. Reg. 440 (Jan. 5, 1996). That
regulation was substantially upheld in General Electric v. Dep't of Commerce, 128 F.3d 767 (D.C. Cir. 1997).
- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - O. JUDICIAL REVIEW
1. EXCLUSIVE FEDERAL JURISDICTION
a. Section 113(b) provides that, subject to Section 113(h), the federal district courts have exclusive
original jurisdiction over all "controversies" arising under the Act.
2. TIMING OF REVIEW OF RESPONSE ACTIONS
a. Section 113(h) specifically controls the timing of judicial review, and divests the federal courts of
jurisdiction to review challenges to: "removal or remedial action selected under Section 9604 . . ., or
to review any order issued under Section 9606(a) . . . in any action except one of the following:
(1) An action under Section 9607 . . . to recover response costs or damages or for
contribution.
(2) An action to enforce an order issued under Section 9606(a) . . . or to recover a
penalty for violation of such order.
(3) An action for reimbursement under Section 9606(b)(2) . . . .
(4) An action under Section 9659 [citizens' suit] . . . alleging that the removal or remedial action taken under § 9604 ... or secured under Section 9606 . . . was in violation of any requirement of this chapter. Such an action may not be brought with regard to a removal where a remedial action is to be undertaken at the site.
(5) An action under Section 9606 . . . in which the United States has moved to compel
a remedial action."
b. NPL listings. In United States v. ASARCO Inc., 214 F.3d 1104 (9th Cir. 2000), the 9th Circuit held
that it lacked jurisdiction to review the breadth of a "site" listing on the NPL because NPL listing is a
regulation and exclusive jurisdiction to review regulations under CERCLA lies with the D.C. Circuit.
CERCLA § 113(a).
3. PRE-ENFORCEMENT REVIEW
a. Section 113(h) bars pre-implementation and pre-enforcement challenges to removal or remedial
actions under CERCLA. Thus, subject to the five enumerated exceptions, federal court jurisdiction is
precluded under any law for a challenge to any EPA response action prior to the action's completion,
or to the filing of an enforcement action. OCAW International Union v. Richardson, 214 F.3d 1379,
1382 (D.C. Cir. 2000) (no NEPA jurisdiction over activity within CERCLA's definition of "removal");
Boarhead Corp. v. Erickson, 923 F.2d 1011, 1021-22 (3d Cir. 1991) (no jurisdiction under the National Historic Preservation Act); Schalk v. Reilly, 900 F.2d 1091, 1095 (7th Cir. 1990), cert. denied,
111 S. Ct. 509 (1990) (no jurisdiction under RCRA or NEPA); North Shore Gas Co. v. Envtl. Protection Agency, 930 F.2d 1239, 1244-45 (7th Cir. 1991) (no jurisdiction to review challenges under
RCRA or NEPA); Southern Pines Ass'ns. v. United States, 912 F.2d 713, 716 (4th Cir. 1990) (CERCLA allows "EPA to act to address environmental problems quickly and without becoming entangled
in litigation"); Frey v. Envtl. Protection Agency, 270 F.3d 1129 (7th Cir. 2001) (§ 113(h) is not technically a subject matter jurisdictional bar, but rather a prerequisite to relief; discusses when response action is completed for purposes of bar); Reynolds v. Lujan, 785 F. Supp. 152, 153-54
(D.N.M. 1992) (commencement of CERCLA action at federal facility listed on the NPL barred suit
under citizen suit provision of RCRA); North Penn Water Auth. v. Bae Systems, Civil Action No. 044446, 2006 U.S. Dist. LEXIS 14773, at *22-27 (E.D. Pa. July 19, 2005)(holding court lacked subject
matter jurisdiction to hear RCRA arguments due to Section 113(h)); Neighborhood Toxic Cleanup
Emergency v. Reilly, 716 F. Supp. 828, 834-35 (D.N.J. 1989) (§ 113(h)(4) prohibits review through
citizen suits until the remedial action selected is completed); New Mexico v. General Electric Co.,
467 F.3d 1223, 1249 (10th Cir. 2006)(state NRD claim "in al respects, a challenge to an EPA - ordered remeditaion" and barred). But cf. Cabot Corp. v. Envtl. Protection Agency, 677 F. Supp. 823,
828-29 (E.D. Pa. 1988) (in dicta the court suggested that while a suit brought by PRPs challenging a
remedial plan was subject to dismissal under § 113(h)(1), citizens' challenges to the plan's adequacy before implementation might arguably be permitted under § 113(h)(4). Other courts have specifically rejected the reasoning in Cabot. See Neighborhood Toxic Cleanup Emergency, supra, at 83435. But see United States v. Princeton Gamma-Tech., Inc., 31 F.3d 138 (3d Cir. 1994) (Court had jurisdiction under § 113(h)(1) and (4) to consider remedy challenge where alleged continuance of project would cause irreparable harm to public health and the environment). The 3rd Circuit, however,
reversed this position as to § 113(h)(4) in Clinton County Commissioners v. Environmental Protection Agency, 116 F.3d 1018(3d Cir. 1997)(en banc) cert. denied sub nom., Arrest the Incinerator
Remediation, Inc. v. Envtl. Protection Agency, 522 U.S. 1045 (1998). Finally, in APWU v. Potter, 343
F.3d 619 (2d Cir. 2003), the Court dismissed the challenge to the postal services cleanup of anthrax, holding that USPS was authorized to take removal action and Section 113(h) applied. But see
Fort Ord Tex. Project v. Cal. Envtl. Protection Agency, 189 F.3d 828 (9th Cir. 1999). (Section 113(h)
does not bar review of remedial actions conducted by federal agencies under Section 120 authority); General Electric v. EPA, 360 F.3d 188 (DC Cir. 2004) (constitutional challenge to EPA § 106 order may be considered).
b. A remedial investigation/feasibility study constitutes a removal or remedial action so that Section
113(h) bars judicial review. Razore v. Tulilap Tribes of Wash, et al., 66 F.3d 236 (9th Cir 1995).
c. In United States v. Colorado, 990 F.2d 1565, 1576 (10th Cir. 1993), cert. denied, 510 U.S. 1092
(1994), the 10th Circuit held that a state suit seeking to enforce state hazardous waste procedural
requirements at a federal facility on the NPL was not barred by Section 113(h), relying upon 42
U.S.C. § 9614(a), which provides that "[n]othing in [CERCLA] shall be construed as preempting any
state from imposing any additional liability or requirements with respect to the release of hazardous
substances within such state." The court impliedly found that there was no inconsistency between
what the state was seeking to require, and the ongoing CERCLA process. The case leaves open the
question of whether CERCLA would preempt, or section 113(h) would bar jurisdiction to hear, an attempt by a state to compel a cleanup action that was irreconcilably inconsistent with an action being undertaken pursuant to CERCLA.
4. CITIZEN SUITS
a. Violations of CERCLA Requirements: Section 310(a)(1) allows citizens (including states) to bring
suit against the United States or other persons "alleged to be in violation of any standard, regulation, condition, requirement, or order which has become effective" under CERCLA, including the provisions of a § 120 agreement.
b. Mandatory Duties: Section 310(a)(2) allows citizens to sue the "President or any other officer of
the United States . . . where there is alleged a failure" to perform any non-discretionary act or duty,
including acts or duties under Section 120 agreements.
c. Notice: Sixty day notice is a jurisdictional requirement for any suit under Section 310. Boarhead,
923 F.2d at 1019 n.13.
5. INTERVENTION STANDARD
a. CERCLA confers a broad, but not unconditional right to intervene which mirrors the language in
FRCP 24(a). See United States v. Alcan Aluminum, Inc., 25 F.3d 1174 (3d Cir. 1994). Section 113(i)
of CERCLA provides for intervention as a matter of right in any proceeding under CERCLA when the
person seeking to intervene shows:
an interest relating to the subject of the action and is so situated that the disposition
of the action may, as a practical matter, impair or impede the person's ability to protect that interest, unless the President or the State shows that the person's interest is
adequately represented by existing parties.
b. United States v. Union Electric Co., 64 F.2d 1152 (8th Cir. 1995) aff'd 132 F.2d 422 (8th Cir.
1997) (allowed non-settler to intervene if applicant "is or may be bound by the judgment in the action"). See also United States v. Flanders Electric Motor Services, Inc., 64 F.3d 1152 (8th Cir. 1995).
Compare United States v. Acorn Eng'g Co., 221 F.R.D. 530 (CD. Ca 2004) (PRP lacked right to intervene) v. United States v. City of Glen Cove, 221 F.R.D. 370 (E.D. N.Y. 2003) (PRP has right to intervene).
6. SOVEREIGN IMMUNITY
a. CERCLA defines a "person" to include the United States government. Section 101(21).
b. CERCLA expressly provides that the federal government can be held liable. See Pennsylvania v.
Union Gas Co., 491 U.S. 1, 10 (1989), overruled on other grounds by Seminole Tribe of Fla. v. Florida, 116 S.Ct. 1114 (1996); FMC Corp. v. United States Dep't of Commerce, 29 F.3d 833 (3d Cir.
1994)(en banc); City of Bangor v. Citizens Commun. Co., Civil No. 02-283-B-S, 2004 U.S. Dist. LEXIS
3845 (D. Me. 2004). But see United States v. Vertac Chem. Corp., 46 F.3d 803 (8th Cir.), cert. denied, 115 S. Ct. 2609 (1995)(nationwide control over supply of raw materials during wartime does
not make government liable) and East Bay Mun. Util. Dist. v. United States Dep't of Commerce, 142
F.3d 479 (D.C. Cir. 1998). (U.S. not liable for WWII effort despite regulatory control of private zinc
mine production).
c. Waiver of sovereign immunity, Section 120(a) (emphasis added):
(1) In General: Section 120(a)(1):
Each department, agency, and instrumentality of the United States (including the executive, legislative, and judicial branches of government) shall be subject to, and
comply with, this chapter in the same manner and to the same extent, both procedur-
ally and substantively, as any nongovernmental entity, including liability under Section
9607 of this title. Nothing in this section shall be construed to affect the liability of
any person or entity under Sections 9606 and 9607 of this title.
(2) Application of Requirements to Federal Facilities: Section 120(a)(2)
All guidelines, rules, regulations, and criteria which are applicable to preliminary assessments carried out under this chapter for facilities at which hazardous substances
are located, applicable to evaluations of such facilities under the National Contingency Plan, applicable to inclusion on the National Priorities List, or applicable to remedial actions at such facilities shall also be applicable to facilities which are owned or
operated by a department, agency, or instrumentality of the United States in the same
manner and to the extent as such guidelines, rules, regulations, and criteria are applicable to other facilities. No department, agency, or instrumentality of the United
States may adopt or utilize any such guidelines, rules, regulations, or criteria which
are inconsistent with the guidelines, rules, regulations, and criteria established by the
Administrator under this chapter.
(3) Exceptions: Section 120(a)(3)
This subsection shall not apply to the extent otherwise provided in this section with
respect to applicable time periods. This subsection shall also not apply to any requirements relating to bonding, insurance, or financial responsibility. Nothing in this
chapter shall be construed to require a State to comply with Section 9604(c)(3) of this
title in the case of a facility which is owned or operated by any department, agency, or
instrumentality of the United States.
(4) Application of State laws at Non-NPL Facilities: Section 120(a)(4) (as amended)
State laws concerning removal and remedial action, including State laws regarding
enforcement, shall apply to removal and remedial action at facilities owned or operated by a department, agency, or instrumentality of the United States or facilities that
are the subject of a deferral under subsection (u)(3)(c) of this section when such facilities are not included on the National Priorities List. The preceding sentence shall not
apply to the extent a State law would apply any standard or requirement to such facilities which is more stringent than the standards and requirements applicable to facilities which are not owned or operated by any such department, agency, or instrumentality;
d. Claims based on agency regulatory activities. Courts have consistently held that when EPA under
CERCLA (or the Coast Guard under the Oil Pollution Act) is carrying out regulatory authority to implement the cleanup program there is no waiver of immunity to subject the agency to liability as a
PRP. See United States v. Am. Color & Chem. Corp., 858 F. Supp. 445 (M.D. Pa. 1994); United
States v. Atlas Minerals & Chem., Inc., 797 F. Supp. 411, 420 (E.D. Pa. 1992); In re Paoli R.R. Yard
PCB Litigants, 790 F. Supp. 94 (E.D. Pa.), aff'd, 980 F.2d 724 (3d Cir. 1992); United States v. Skipper, 781 F. Supp. 1106 (E.D.N.Y. 1991); United States v. Israel, 765 F. Supp. 1239 (D. Md. 1991);
United States v. Western Processing Co., 761 F. Supp. 725, 729-30 (W.D. Wash. 1991). Cases involving other agencies carrying out non-cleanup regulatory authorities have held there was a waiver
of immunity. FMC v. United States, 29 F.3d 833 (3d Cir. 1994). On July 5, 1994, the Third Circuit en
banc reaffirmed panel decision holding the United States liable as operator of a facility that government closely regulated during World War II. The en banc court deadlocked with regard to whether
the U.S. was also subject to arranger liability. See also East Bay MUD v. Commerce, 142 F.3d 479
(D.C. Cir. 1998) (U.S. not entitled to sovereign immunity but not liable as operator of mine because
facts did not establish "actual government control"); United States v. Shell, 281 F.3d 812 (9th Cir.
2002) (holding CERCLA did waive sovereign immunity, but reversed district court holding U.S. liable
as a generator as a result of exercising its pervasive World War II regulatory authority); Cadillac Fairview v. Dow Chem., 299 F.3d 1019 (9th Cir. 2002) (U.S. liable for World War II activity due to indemnification agreement).
e. 5th Amendment Takings. If money damages are asserted against the United States, the exclusive
remedy is an action against the United States in the United States Court of Federal Claims under the
Tucker Act, 28 U.S.C. 149l(a)(1) when the claim exceeds $ 10,000. Heller, Ehrman, White, and Macauliffe v. Babbitt, 992 F.2d 360, 361-64 (D.C. Cir. 1993); see Hendler v. United States, 175 F.3d
1374 (D.C. Cir. 1999); Bublitz v. Brownlee, 309 F. Supp. 2d 1 (D.D.C. 2005).
f. Supremacy Clause. City cannot stop federally-directed action by serving PRP during CERCLA remedy with cease and desist order pursuant to zoning ordinance. United States v. City and County of
Denver 100 F.3d 1509 (10th Cir. 1996), Esso Std. Oil, supra.
g. State immunity. The statutory definition of "person" also includes a state. The Supreme Court,
however, held that Congress's authority under the Interstate Commerce Clause was insufficient to
waive state sovereign immunity in the Eleventh Amendment and Congress could not authorize suits
by private parties against unconsenting states. Seminole Tribe of Florida v. Florida, 517 U.S. 44
(1996)(overruling Pennsylvania v. Union Gas Co., 491 U.S. 1 (1989). In Burnette v. Carothers, 192
F.3d 52 (2d. Cir. 1999) court held 11<th> Amendment immunity also barred action against state
agencies and officials. But see In re Dairy Mart v. Nickel, 411 F.3d 367 (2d Cir June 13, 2005).
h. Medical Monitoring Costs. Sections 301(a) and 120 do not provide cause of action to force U.S.
to pay medical monitoring costs. Pritkin v. United States Department of Energy, 47 F. Supp. 2d
1225 (E.D. Wash. 1999), aff'd Pritkin v. Dep't of Energy, 254 F.3d 791 (9th Cir. 2001). See also
Struhar v. City of Cleveland, 7 F.Supp 2d 948 (N..D. Ohio 1998).
7. CERCLA AND BANKRUPTCY LAW
a. Priority of Environmental Claims in Bankruptcy
(1) Environmental claims have been found to have administrative expense pri9ority in
bankruptcy based on at least two legal rationales. The first involves debtors' obligations under nonbankruptcy law for property that they own or have an interest in. The
leading Fifth Circuit case is In re H.L.S. Energy Co., 151 F.3d 434, 436 (5th Cir.
1998), (State of Texas was entitled to administrative expense priority under 11 U.S.C.
§§ 503(b)(1)(A), 507(a)(2), to satisfy the bankruptcy "estate's post-petition environmental obligations" to plug unproductive oil wells). Four other Courts of Appeal agree
with the Fifth Circuit that the Government is entitled to an administrative expense priority for response costs incurred post-petition with respect to property of the bankruptcy estate since the trustee or debtor-in-possession has an obligation to manage
its property in accordance with applicable non-bankruptcy law. See Pennsylvania v.
Conroy, 24 F.3d 568, 569-70 (3d Cir. 1994) (Alito, J.); In re Chateaugay Corp., 944
F.2d 997, 1009-10 (2d Cir. 1991); In re Wall Tube & Metal Products Co., 831 F.2d
118, 123-24 (6th Cir. 1987); In re Smith-Douglass, Inc., 856 F.2d 12, 17 (4th Cir.
1988).
(2) A second rationale for administrative expense priority for environmental claims is
where environmental harm or liability results off-site from the debtor's post-petition
acts or property. The debtor has administrative expense liability for the costs of responding to the environmental problems and liabilities resulting from its own property
or acts post-petition. This kind of administrative expense liability is based on the reasoning of the Supreme Court in Reading Co. v. Brown, 391 U.S. 471 (1968). Under
this rationale, Debtors can also have administrative expense liability for fines and
penalties for violations of environmental laws. See e.g., In re Charlesbank Laundry,
Inc., 755 F.2d 200 (1st Cir. 1985) (fine incurred by Chapter 11 debtor for failing to
abate nuisance was an administrative expense). The Fifth Circuit has twice cited approvingly to the First Circuit's decision in Charlesbank Laundry. See Jack/Wade Drilling, 258 F.3d at 388. Al Copeland Enterprises, 991 F.2d at 239.
(3) Environmental claims can also have priority as secured claims, including sites
where EPA has perfected a lien for its cleanup costs, monies held in trust for cleanup
obligations, setoffs for tax refunds, and insurance proceeds from insurance coverage
for the contaminated sites.
b. Consent Decrees, Administrative Orders, Injunctions, Regulatory Obligations, and Bankruptcy
(1) A debtor-in-possession is required to comply with work requirements arising under
orders of courts, administrative orders, injunctions, and other environmental regulatory requirements imposed by law. During a bankruptcy case, the police and regulatory
exception to the automatic stay permits governmental units to continue with any police or regulatory actions or proceedings "including the enforcement of judgment other
than money judgements." 11 U.S.C. §§ 362(b)(4). Courts making this determination
consider whether: (1) the order is within the framework of what is traditionally considered a recovery of money damages for a sum certain; and (2) the order seeks performance of remedial acts to prevent potential future harm and obtain compliance with
law. See In re Commonwealth Oil Ref. Co., 805 F.2d 1175, 1186-88 (5th Cir. 1986);
Penn Terra Ltd. v. Dep't of Envtl. Resources, 733 F.2d 267, 275-78 (3d Cir. 1984);
United States v. ILCO, Inc., 48 B.R. 1016, 1022-23 (N.D. Ala. 1985).
(2) When a Plan of Reorganization is confirmed, the Reorganized Debtors must still
comply with injunctive obligations and work requirements. Since the debtor does not
have the right to pay money and refuse to deal with ongoing releases of its hazardous
wastes threatening public health and safety, these injunctive obligations are not dischargeable claims. In re Chateaugay Corp., 944 F.2d 997, 1008 (2d Cir. 1991) See
also In re Torwico Electronics, Inc., 8 F.3d 146, 151 (3d Cir. 1993) (order was not a
dischargeable claim because State sought cleanup rather than money and the release of hazardous wastes was "threatened and ongoing," and was "an attempt to
prevent additional damage").
c. Environmental Liabilities Are Estimated Based on the Legal Rules Which Govern CERCLA Liability
The Supreme Court recently restated the settled rule that bankruptcy courts must
look to non-bankruptcy law in evaluating claims in bankruptcy, Travelers Casualty &
Surety Co. v. Pacific Gas and Electric Co., 127 S. Ct. 1199 (2007). See generally In Re
National Gypsum Co., 139 B.R.397, 414-15 (N.D. Tex. 1992) (CERCLA claims must be
estimated under the usual rules under CERCLA governing joing and several liability
and divisibility). See also In re Ford, 125 B.R. 735, 738 (E.D. Tex. 1991) (bank entitled to joint and several liability in bankruptcy), aff'd, 967 F.2d 1047 (5th Cir. 1992).
P. OBLIGATIONS AT FEDERALLY-OWNED FACILITIES
1. FEDERAL AGENCY HAZARDOUS WASTE ASSESSMENT AND EVALUATION: SECTION 120(d)
a. EPA is required to establish a public "docket," published in the Federal Register and updated every six months, listing the information required of every federal agency and/or federal facility under
RCRA §§ 3005, 3010, and 3016, or CERCLA § 103. These sections of RCRA and CERCLA essentially require federal agencies to report all facilities and activities whereby the agency generated, transported, treated, stored or disposed of hazardous waste whether currently or in the past, or where
there has been a release of a reportable quantity of hazardous substances. EPA must then take
steps to assure that a preliminary assessment is conducted in accordance with NCP to determine
which sites should be listed on the NPL. CERCLA § 120(d), see Conservation Law Foundation v. Reilly, 755 F. Supp. 475 (D. Mass 1991).
b. Required Federal Action at NPL Facilities: Section 120(e)
(1) RI/FS: Within six months of NPL listing the agency must commence the Remedial
Investigation and Feasibility Study, (RI/FS) pursuant to a timetable set by EPA and the
relevant State.
(2) ROD: After completion of the RI/FS the lead agency must issue a Record of Decision choosing preferred remedy; EPA either concurs in agency remedy choice or
chooses a different remedy Section 120(e)(4).
(3) FFA/IAG: Not later than six months after completion of EPA review of RI/FS (which
culminates in issuance of the Record of Decision ("ROD") by the federal facility, the
agency must enter into an interagency agreement ("LAG" or "Federal Facility Agreement ["FFA"]") with EPA, and in some instances the federal facility and EPA include the
state in the IAG for a three-party agreement.
(a) Generally the FFA/IAG will be negotiated and signed prior to commencement of
the RI/FS in order to provide a comprehensive guide and agreement concerning how
the entire cleanup will progress. EPA has negotiated "model" FFA/IAGs with DOD and
DOE;
(b) Private PRPs may also be included in the agreements if they are carrying out a portion of the response action.
(c) U.S. decision to act under FFA or IAG is remedial action decision barred from preenforcement review by Section 113(h). World Works, Inc. v. United States, 22 F. Supp.
2d 1204 (D. Colo. 1998).
(4) Starting Work: Within fifteen months of completion of the RI/FS (i.e., issuance of
the ROD), the lead agency must commence "substantial continuous physical on-site
remedial action," 120(e)(2).
2. FEDERAL PROPERTY TRANSFERS: § 120(h) (as amended)
a. Notice. "[W]henever any department, agency, or instrumentality of the United States enters into
any contract for the sale or other transfer of real property which is owned by the United States and
on which any hazardous substance was stored for one year or more, known to have been released,
or disposed of, the head of such department, agency, or instrumentality shall include in such contract notice of the type and quantity of such hazardous substance and notice of the time at which
such storage, release, or disposal took place, to the extent such information is available on the basis of a complete search of agency files." Section 120(h)(1). Form of notice is set forth in regulations
at 40 C.F.R. Part 373 (1992). See generally Hercules v. Environmental Protection Agency, 938 F.2d
276 (D.C. Cir. 1991)(reviewing EPA rule on federal notice and covenant requirements when transferring real property contaminated by hazardous substances).
b. Contents of certain deeds- In accordance with EPA regulations at 40 C.F.R. Part 373, any deed to
transfer real property owned by the United States on which "any hazardous substance was stored
for one year or more, known to have been released, or disposed of," must contain:
(1) a notice of the type and quantity of such hazardous substances, notice of the time
at which such storage, release, or disposal took place, and a description of the remedial action taken, if any;
(2) a covenant warranting that -- (I) all remedial action necessary to protect human
health and the environment with respect to any such substance remaining on the
property has been taken before the date of such transfer, and (II) any additional remedial action found to be necessary after the date of such transfer shall be conducted by the United States; and
(3) a clause granting access if remedial or corrective action is necessary.
(4) The requirements of the covenant shall not apply in any case in which the person
or entity to whom the property is transferred is a potentially responsible party with respect to such real property. These requirements are also not applicable if the property, to be closed or realigned, is leased and certain other conditions are met.
(5) Deferral. EPA with concurrence of State Governor may defer requirements of remedial action following certain required findings in Section 120(h)(3)c). Such a deferral does not change the obligations of the Federal Agency Section 120(h)(3)(c)(iv).
(6) Warranty. When necessary cleanup work is done, the U.S. will give a warranty to
the transfer. Section 120(h)(3)(c)(iii) see Conservation Law Foundation v. Department
of Air Force, 864 F.Supp. 265 (D. N.H. 1994).
3. THE COMMUNITY ENVIRONMENTAL RESPONSE FACILITIES ACT ("CERFA"), SECTIONS 120 (h)(4) and (h)(5):
a. Scope - CERFA applies to any federal property "on which the United States plans to terminate federal government operations" except certain DOD property subject to base closure legislation; the
amendments clarify somewhat the extent of the due diligence search.
b. Petroleum Products- The agency must, in addition to the other requirements of Section 120, identify property where petroleum products were treated, stored, disposed of etc., and 6 months prior to
any "termination of operations" must identify portions of the property that are not. contaminated;
c. EPA Concurrence- For uncontaminated areas that are part of parcels listed on the NPL, the agency must seek concurrence from EPA with the delineation of uncontaminated property;
d. State Concurrence- For such property that is NOT listed on the NPL, the concurrence must be
sought from "the appropriate state official"; concurrence is presumed if not denied within 90 days;
e. When "all" remedial action taken- CERFA amends Section 120(h)(3) by defining when "all remedial action has been taken" as the point when "the construction and installation of an approved remedial design has been completed, and the remedy has been demonstrated to the Administrator to be
operating properly and successfully."
f. Leases- CERFA requires federal agencies to notify the state of any lease of the property the term
of which extends past the date federal operations are terminated. Note that Section 2834 of the
1996 Defense Authorization Act amended Section 120(h)(3) to specifically allow DOD to enter into
long-term leases for contaminated property, subject to certain specified conditions.
g P.L.104-106 and 104-201 (1999) added CERCLA Sections 120(a)(4), (d), and (h) excepted real
property leases from covenant requirements but directed federal agency leasing property at installations approved for closure or realignment to make a determination that the lease use would be consistent with protection of human health and the environment and that the United States would take
all necessary environmental remedial action.
UNITED STATES DEPARTMENT OF JUSTICE
ENVIRONMENT AND NATURAL RESOURCES DIVISION
SUMMARY OF LITIGATION ACCOMPLISHMENTS
FISCAL YEAR 2006
FOREWORD
It is my pleasure to present the Environment and Natural Resources Division's Accomplishments Report for
Fiscal Year 2006. The Environment and Natural Resources Division brings both affirmative civil and criminal enforcement actions on behalf of our client agencies and defends federal agencies generally when their actions or
decisions are challenged in court on the basis of our environmental public lands and resources laws. This year the
Division achieved significant victories for the American people in each of the many areas for which it has responsibility. These responsibilities include protecting the Nation's air, water, land, wildlife and natural resources, upholding our trust responsibilities to American Indians, and furthering important federal programs, including the
government's mission to ensure national security.
The Division is dedicated to the vigorous and fair enforcement of our Nation's environmental laws, in both the
civil and criminal arenas. Such enforcement is a critical component of environmental protection and helps ensure
that our citizens breathe clean air, drink clean water, and will be able to enjoy the country's public lands, wildlife
and other natural resources for generations to come. It also helps ensure that law-abiding businesses have a level
economic playing field on which to compete.
The Division's vigorous civil enforcement of our environmental laws has generated record-breaking results
over the past few years, and this year was no exception. In Fiscal Year 2006 the Division secured more than $ 3.7
billion in corrective measures through court orders and settlements to protect the nation's environment and safeguard the public's health and welfare. The required actions obtained by ENRD include compliance measures, land
and river cleanup, state of the art pollution-abatement controls, training, and education that will significantly benefit the health and welfare of the nation. For example, the Division secured over $ 227 million worth of cleanup of
superfund sites, and recovered more than $ 140 million in past EPA costs to be used to finance future cleanups.
In addition, ENRD attorneys achieved extraordinary environmental results in five consent decrees with large petroleum refiners, resulting in over $ 2 billion in new pollution controls. With these new settlements, the Division has
now brought enforcement actions against more than 80 refineries comprising approximately 77% of the nation's
refining capacity, thereby reducing air pollutants more than 315,000 tons per year.
Fiscal Year 2006 was one of the most successful years of the last decade for the Division's criminal enforcement of environmental laws, based on the amount of jail time and criminal penalties imposed against corporate
polluters and other environmental law breakers. This year courts imposed $ 70.4 million in total criminal penalties, including fines, restitution, and supplemental sentences, and 65 years of jail time, the second highest figure
for jail time in the past ten years.
Although the public is generally familiar with the Division's role as enforcer of the environmental laws, much of
our attorneys' time is actually spent defending a wide range of federal programs and interests. The Division has
defended almost every federal agency, handling cases that challenge such diverse and critical matters as military
training programs, government cleanup actions, resource management programs, and environmental regulations.
The Division's eminent domain and takings cases also facilitate important federal programs by enabling agencies
to acquire needed property or other rights in a fiscally responsible manner while respecting the property interests
of citizens.
The Division currently has a docket of approximately 6,800 active cases and matters. These cases involve
more than 70 different environmental and natural resources statutes, including the Comprehensive Environmental Response, Compensation and Liability Act, the Clean Water Act, the Clean Air Act, the National Forest Management Act, the Federal Land Policy and Management Act, the National Environmental Policy Act, and the Endangered Species Act. The Division litigates in every judicial district in the Nation.
The Division's exemplary record in protecting the environment, American Indian rights, and the Nation's natural resources, wildlife, and public lands is due to the hard work of the Division's attorneys and staff in partnership
with our client agencies, the United States Attorney's Offices, and state and local officials around the country. The
Division's many accomplishments this year reflect the professionalism and dedication with which all these people
work together to carry out the Division's mission.
Sue Ellen Wooldridge
Assistant Attorney General
Environment and Natural Resources Division
January 2007
CRIMINAL ENFORCEMENT OF OUR NATION'S ENVIRONMENTAL AND WILDLIFE LAWS
Vessel Pollution Prosecutions. The Vessel Pollution Initiative is an ongoing, concentrated effort to prosecute those
who illegally discharge pollutants from ships into the oceans, coastal waters and inland waterways. The Division
continues to have great success prosecuting such activity, and these prosecutions serve as a significant deterrent
to would-be polluters.
In United States v. MSC Ship Management (Hong Kong) Limited, the defendant, a Hong Kong-based container
ship company, pleaded guilty to conspiracy, obstruction of justice, destruction of evidence, false statements and
violating the Act to Prevent Pollution from Ships (APPS). MSC Ship Management paid $ 10.5 million in penalties,
the largest fine in which a single vessel has been charged with deliberate pollution and the largest criminal fine
paid in an environmental case in Massachusetts history. MSC Ship Management admitted that crew members on
the MSC Elena circumvented required pollution prevention equipment in order to discharge oil sludge and oilcontaminated waste directly overboard. After the discovery of the bypass pipe during a U.S. Coast Guard inspection in Boston Harbor, senior company officials in Hong Kong directed crew members to lie about it to the Coast
Guard. Senior ship engineers also ordered that documents be destroyed and concealed. The Chief Engineer of the
ship was sentenced to serve two months in prison and ordered to pay a $ 3,000 fine.
In United States v. Wallenius Ship Management, Pte., Ltd., a Singapore shipping company pleaded guilty to
conspiracy to violate APPS and multiple felony counts. Under the plea agreement, the company has agreed to pay
a $ 5 million fine with an additional $ 1.5 million payment devoted to community service. The company also will
serve a three-year term of probation and implement an environmental compliance plan. Crew members on the
M/V Atlantic Breeze, a car carrier vessel managed by Wallenius Ship Management, sent a fax to an international
seafarers' union that they were being ordered to engage in deliberate acts of pollution, including the discharge of
oil-contaminated bilge waste and sludge as well as garbage and plastics. In addition, a bypass system hidden in
various parts of the ship had dumped oily wastes illegally for about three years.
In United States v. Pacific-Gulf Marine, Inc., an American-based ship operator pleaded guilty to violating APPS,
by deliberately discharging hundreds of thousands of gallons of oil-contaminated bilge waste from four of its ships
through a bypass pipe. PGM admitted to circumventing the oily water separator on four of its giant "car carrier"
ships. This case was also significant in the substantial credit given defendant for its extensive cooperation, facilitating Division efforts to hold other vessel pollution violators accountable.
In United States v. Stickle, the Eleventh Circuit upheld the conviction of a vessel owner for conspiracy to violate U.S. laws and for unlawfully operating a freight vessel as an oil transportation vessel. In 1998 the defendant's
vessel had been transporting wheat from the United States to Bangladesh. En route, diesel fuel leaked from a
separate storage compartment and contaminated the wheat. When the Bangladeshi importer refused the wheat
shipment, the vessel owner authorized disposal of the oil-contaminated wheat on the high seas. The court rejected
the argument that because the vessel was once an oil transportation vessel, it should still be considered as such,
even though it was not licensed and did not meet current standards for carrying oil.
Prosecuting Hazardous Waste Violations, Clean Water Act and Clean Air Act Crimes, and Worker Endangerment.
The Division has successfully prosecuted several companies owned by Mc Wane, Inc., a company that the U.S.
Occupational Health and Safety Administration (OSHA) has cited for violations hundreds of times since the mid1990s. To date, Mc Wane has paid nearly $ 20 million in criminal fines, and the national prosecution effort
against Mc Wane has been a centerpiece of the Justice Department's worker endangerment activities.
In United States v. Atlantic Slates Cast Iron Pipe Company, a seven month trial resulted in guilty verdicts
against Atlantic States (a division of Mc Wane) and four of the five manager defendants on multiple felony counts.
Evidence adduced at trial established a corporate philosophy and management practice that led to an extraordinary history of environmental violations, workplace injuries and fatalities, and obstruction of justice. Atlantic States
and the four current and former managers were found guilty of conspiracy to violate the Clean Water Act (CWA)
and Clean Air Act (CAA); to make false statements and to obstruct the Environmental Protection Agency (EPA) and
OSHA; and to defeat the lawful purpose of OSHA and EPA. These five defendants also were variously found guilty
of substantive CWA, CAA, Comprehensive Environmental Reclamation, Compensation and Liability Act (CERCLA),
false statement, and obstruction charges.
In United States v. Pacific States Cast Iron Pipe Company, a Utah division of McWane was convicted of making
false statements, and sentenced to pay a $ 3 million fine. The company's vice president and general manager was
sentenced to serve 12 months and one day for violating the CAA. In United States v. McWane, Inc., McWane was
sentenced to pay a $ 5 million fine and $ 2.7 million in community service, for conspiring to conceal illegal
wastewater discharges into Avondale Creek, from its Birmingham, Alabama facility, substantive CWA counts, making false statements and obstruction of justice.
In United States v. Puerto Rico Aqueduct and Sewer Authority (PRASA), the defendant pleaded guilty to a 15count indictment charging CWA violations based upon a 25-year history of inadequately maintaining and operating
the island's wastewater and water treatment systems. PRASA is a public corporation of the Commonwealth of
Puerto Rico created to provide water and sanitary sewer service, and operates the island's entire sewage collection and treatment system. PRASA admitted to nine counts of discharging in violation of its National Pollutant Discharge Elimination System (NPDES) permit at the nine largest publicly-owned treatment works on the island; five
counts of illegal discharges from the five water treatment plants that supply drinking water to the largest portion of
the local population; and one count of a direct discharge from the PRASA system to the Martin Pena Creek.
In United States v. Bezhad Kahoolyzadeh, the defendant was sentenced to serve 37 months incarceration
and pay $ 1.29 million in restitution for cleanup costs, conspiracy, illegally transporting hazardous waste and illegally storing hazardous waste. The defendant illegally stored drums of perchloroethylene waste and then shipped
them to unpermitted facilities to evade state and city inspectors.
In United States v. Ortiz, the defendant was convicted of negligent and knowing violations of the CWA for disposing of wastewater from the manufacture of airplane de-icing fluid into Grand Junction, Colorado's storm drain
system, which flows into the Colorado River. The Tenth Circuit held that the CWA does not require proof of
knowledge that a discharge will enter waters of the United States, in reversing the lower court. It also held that a
sentencing enhancement should have been imposed for multiple discharges.
Protecting Homeowners and Enforcing the Clean Water Act. In United States v. Robert Lucas, a developer was
sentenced to serve nine years in prison for violating the CWA by illegally filling in wetlands, and for conspiracy and
mail fraud for selling homes to hundreds of families despite warnings from public health officials that the illegal
septic systems were installed in saturated soil and were likely to fail, causing contamination of the underlying
property and the drinking water aquifer. Lucas' co-defendants were each sentenced to serve 87 months in prison,
and his two companies were ordered to pay a total of $ 5.3 million in criminal fines.
In United States v. Gordon Tollison, the owner and chief executive of a corporation that owned and operated
eight wastewater treatment plants servicing housing developments containing approximately 900 homes was sentenced to serve one year and a day of incarceration for four CWA violations. The defendant's plants had been in
perpetual violation of their state NPDES permits, discharging untreated or under-treated sewage into state waterways for more than 25 years.
Enforcing the Laws Protecting Wildlife. In United States v. Jonathan Corey Sawyer, the defendant was sentenced
to serve 15 months incarceration for illegally importing and exporting more than 230 reptiles worth approximately
$ 30,000 during an eight-month period.
In United States v. Panhandle Trading Inc., two companies and their vice president entered pleas of guilty to
conspiracy to violate the Lacey Act and conspiracy to commit money laundering for their role in an illegal catfish
importation scheme. The defendants intentionally mislabeled frozen farm-raised catfish fillets imported into the
U.S. from Vietnam to evade import duties. The scheme involved over a million pounds of catfish labeled as grouper, channa, snakehead, or bass.
In United States v. Beau Lee Lewis, the defendant was sentenced to serve 23 months in prison for violating
the conspiracy and smuggling statutes when he imported more than 300 protected reptiles and amphibians into
the United States.
United Slates v. Hoang Nguyen involved the smuggling of red snapper caught in violation of the Magnuson
Stevens Fisheries Act. The captain of the fishing vessel was ordered to serve 30 months in prison, while a crew
member received a sentence of 21 months for his role in concealing and selling commercial quantities of red
snapper that had been illegally imported into the United States.
In United States v. Estremar S.A., an Argentine company was sentenced to pay a $ 75,000 fine for violating
the Lacey Act, as well as forfeit all assets including $ 158,145.53 in proceeds from the sale of Patagonian toothfish, a.k.a. Chilean seabass. The company knowingly imported and attempted to sell over 30,000 pounds of this
toothfish which had been illegally harvested and transported.
Combating Fraud in the Asbestos Abatement Training Industry. In United States v. ACS Environmental, Inc., the
president of one asbestos abatement company was sentenced to serve 21 months incarceration and pay a $ 1.5
million fine and the president of another asbestos company was sentenced to serve five months in prison and pay
a $ 1 million fine for conspiring to defraud OSHA, EPA, and the Small Business Administration (SBA). The companies purchased 250 false training certificates for their employees and then directed their employees to do work
involving asbestos, lead, and hazardous waste removal at schools and federal facilities under SBA contracts set
aside for minority-owned businesses.
Prosecuting Illegal Sales of Ozone-depleting Chemicals. In United States. v. Dov Shellef, two sellers of refrigeration
chemicals were sentenced on 87 counts of conspiring to avoid excise taxes on ozone-depleting chemicals, money
laundering, wire fraud, and tax violations. Shellef was ordered to serve 70 months and his co-defendant 18
months incarceration. Both were held jointly and severally liable for $ 1.9 million in restitution for taxes due on
domestic sales of the ozone-depleting chemical referred to as CFC-113. The defendants told manufacturers that
they were purchasing CFC-113 for export in order to buy the product tax-free and then sold it tax-free in the domestic market without notifying the manufacturers or paying the excise tax.
PROTECTING OUR NATION'S AIR, LAND, AND WATER
Reducing Air Pollution from Coal-Fired Power Plants. During this past year, the Division continued to successfully
litigate CAA claims against operators of coal fired electric power generating plants. The violations arose from companies engaging in major life extension projects on their aging facilities without installing required state of the art
pollution controls. The resulting tens of millions of tons of excess air pollution has adversely affected human
health, degraded forests, damaged waterways, and contaminated reservoirs. In June 2006, the Division obtained
a partial settlement in which Alabama Power Company agreed to install and operate state-of-the-art pollution controls at two units, to purchase and retire $ 4.9 million in sulfur dioxide (SO[2]) emission allowances allocated under the acid rain program, and to pay a $ 100,000 civil penalty. And in July 2006, the court entered a consent decree with Minnkota Power Cooperative which will substantially reduce air pollution from SO[2] and nitrogen oxide
(NO[x)] each year from the two coal-fired units at its facility through the installation of pollution control measures
estimated to cost in excess of $ 100 million. Minnkota and Square Butte will also pay a civil penalty of $ 850,000
and spend at least $ 5 million on environmentally beneficial wind turbine projects in North Dakota. The State of
North Dakota was a co-plaintiff in this action. The Division, along with co-plaintiffs Connecticut, New Jersey, and
New York, also made progress in its case against Cinergy Corp. when, in August, the Seventh Circuit upheld the
District Court's ruling for the United States on the key legal test for an emissions increase under CAA regulations.
This year the Supreme Court accepted certiorari in Environmental Defense v. Duke Energy Corp., a case that addresses whether, under EPA regulations governing the Clean Air Act's Prevention of Significant Deterioration program, changes to a plant that increase total annual emissions, but do not increase hourly emissions, constitute a
"modification" under the CAA. The United States filed briefs in support of the total annual emissions regulatory
standard.
Settlements achieved to date with operators of coal fired power plants will ultimately remove more than a million tons of pollutants from the air a year.
Addressing Air Pollution from Oil Refineries. The Division also continued to make significant progress in its series
cases aimed at CAA violations within the petroleum refining industry. During the past year, consent decrees were
entered in an additional five enforcement actions against Exxon Mobil Corp., ConocoPhillips Co., Valero Energy
Corp., Sunoco Refinery, Inc., and Chalmette Refining, LLC. The Exxon Mobil settlement addresses all six domestic
petroleum refineries owned by Exxon Mobil and ExxonMobil Oil Corporations. The decree requires installation of
controls that will reduce air pollutant emissions by more than 51,000 tons per year, at a cost of approximately $
537 million. The company will also pay a $ 7.7 million civil penalty, and another $ 6.7 million for environmentally
beneficial projects near the refineries. The United States was joined in this settlement by the States of Illinois, Louisiana, and Montana. The ConocoPhillips settlement covers nine refineries in seven states representing more than
10% of total domestic refining capacity. Under the decree, ConocoPhillips will install an estimated $ 525 million in
pollution control technology expected to reduce annual emissions of NOx and SO[2] by more than 47,100 tons per
year, pay a civil penalty of $ 4,525,000, and perform $ 10.1 million in supplemental environmental projects. The
United States was joined in this settlement by co-plaintiffs Illinois, Louisiana, New Jersey, Pennsylvania, and the
Northwest Clean Air Agency of Washington. In the Valero settlement, the settling companies will implement more
than $ 700 million in pollution control technologies that will result in emission reductions of over 20,400 tons per
year, pay a civil penalty of $ 5.5 million, and spend $ 5.5 million to implement facility and community-based supplemental environmental projects. Under its settlement, Sunoco will install $ 285 million in pollution control technologies at its refineries in Philadelphia (PA), Marcus Hook (PA), Toledo (OH), and Tulsa (OK), pay a $ 3 million civil
penalty, and perform $ 3.9 million in supplemental projects. Finally, the settlement with Chalmette requires the
installation of approximately $ 34 million in air pollution controls at a refinery in Chalmette, Louisiana, payment of
$ 1 million in civil penalties, and performance of $ 3 million in environmental projects. The States of Illinois, Louisiana, and Montana joined the United States as co-plaintiffs in this action.
With these additional settlements, the Division has now addressed more than 80 refineries, comprising approximately 77% of the nation's refining capacity, and will reduce air pollutants by more than 315,000 tons per
year. In related cases, the Division also completed civil enforcement actions under the CAA and CWA against Motiva Enterprises LLC, another petroleum refiner. The civil action was a companion to a criminal case and concerned
a fatal 2001 explosion and fire at a Motiva oil refinery in Delaware. Under the consent decree, Motiva will pay a $
12 million penalty that will be shared with our co-plaintiff, the Delaware Natural Resource and Environment Commission, and spend at least $ 3.96 million on environmental projects. The new owner of the refinery, The Premcor
Refining Group Inc., now a subsidiary of Valero, also agreed to implement enhanced safety procedures estimated
to cost about $ 7.5 million.
Reducing Air Pollution at Other Diverse Industrial Facilities. The Division also improved the nation's air quality
through enforcement actions against numerous other facilities operating in diverse industries, including methyl
methacrylate and acrylic sheeting facilities (U.S. v. Lucite International Inc.), polystyrene foam manufacturing facilities (U.S. v. Atlas Roofing Corp.), rubber tractor treads manufacturing facilities (U.S. v. Caterpillar and Camoplast
Rockland, LTD), ethanol production (U.S. v. Cargill, Inc., U.S. v. MGP Ingredients of Illinois, Inc.), grocery store refrigeration units (U.S. v. Newly Wed Foods, Inc.), polyvinyl chloride (PVC) manufacturing facilities (U.S. v. Formosa
Plastics Corp., U.S. v. Oxy Vinyls, L.P.), hazardous waste treatment, storage and disposal facilities (U.S. v. Clean
Harbors Environmental Services), and pulp and paper mills (U.S. v. Weyerhaeuser Company, Willamette Industries, Inc.). Those efforts, addressing similarly diverse CAA violations, resulted in commitments by defendants to
perform more than $ 535 million in facility improvements, to undertake SEPs valued at $ 6.8 million to benefit
local communities, and to pay more than $ 4 million in civil penalties. The States of California, Illinois, Delaware,
New Jersey, and Louisiana joined the United States as co-plaintiff in one or more of the actions listed above. Just
one of these settlements, which involved ethanol production (Cargill), will result in a reduction of an estimated
25,000 tons per year of harmful air emissions at 29 of defendant's facilities in thirteen states. The states of Alabama, Georgia, Illinois, Indiana, Iowa, Missouri, Nebraska, North Carolina, North Dakota, and Ohio, and counties in
Tennessee, Ohio and Iowa, were Plaintiff-Interveners and signatories to the consent decree.
Controlling Contaminated Storm Water Run-off. The Division also directed significant effort toward assuring that
companies comply with the CWA's provisions governing the discharge of storm water, a significant source of environmental harm because of the pollutants it may contain. In January 2006, the District Court for the District of
Hawaii entered a consent decree with the Hawaii Department of Transportation (HDOT) resolving CWA violations
resulting from discharges along HDOT's roadways, construction projects, and at three airports. The consent decree
requires HDOT to undertake comprehensive corrective measures, at an estimated cost of $ 60 million over the
next five years, to achieve compliance with the CWA. HDOT will also pay a $ 1 million civil penalty and perform $ 1
million in environmental projects in the affected communities. In June 2006, the same district court entered a
consent decree with an Hawaiian property developer in U.S. v. James H. Pflueger, resolving defendants' illegal discharges of storm water, sediment discharges, and placement of unpermitted fill in stream courses from construction activities on the Island of Kaui. The decree requires defendants to spend an estimated $ 6 million on corrective measures, pay a $ 2 million penalty, and perform a $ 200,000 environmental project. The State of Hawaii
joined the United States as co-plaintiff in the actions against HDOT and Pflueger.
Also in June, the District Court for the District of Idaho in U.S. v. Idaho Department of Transportation (ITD) entered two consent decrees resolving stormwater violations by ITD and a contractor in connection with a road building project. Under the decrees' terms, defendants will pay civil penalties totaling $ 895,000 and undertake various
actions to better train their employees. IDT must also improve its efforts to inspect for and comply with storm water regulations. And in August 2006, the District Court for the Northern District of Texas entered a consent decree
in U.S. v. City of Dallas, settling allegations that the City violated the CWA by failing to adequately staff and implement its storm water management program. The decree requires the City to undertake comprehensive injunctive
relief, pay a civil penalty of $ 800,000 and spend $ 1.2 million on environmental projects. Texas was a co-plaintiff
in this action.
Ensuring the Integrity of Municipal Wastewater Treatment Systems. The Division continued to protect the Nation's
waterways by ensuring the integrity and proper operation of municipal wastewater treatment systems. In August
2006 the Division lodged a second partial consent decree with the City of San Diego requiring further injunctive
measures to address unlawful discharges from the City's sewer system at a cost of an additional $ 87 million. This
decree follows a 2005 partial consent decree that required the City to undertake injunctive relief valued in excess
of $ 187 million. In December 2005 a consent decree was entered in U.S. v. Washington Suburban Sanitary
Commission (WSSC), resolving CWA claims against the sewage authority that serves Montgomery and Prince
George's Counties in Maryland. Pursuant to the decree, WSSC will spend an estimated $ 200 million on a comprehensive set of improvements to control the overflow of sanitary sewage, pay a $ 1.1 million penalty, and perform $
4.4 million in environmental projects. Maryland joined the United States as co-plaintiff in this case. In August
2006, a consent decree was entered in U.S. v. Metropolitan District Commission, Hartford (MDC)) under which
MDC, the operator of the largest sewage collection system in the State of Connecticut, will upgrade the sewer collection system at a cost of more than $ 100 million and pay a civil penalty of $ 850,000 which will be split between the United States and the State of Connecticut. The injunctive relief is intended to eliminate sanitary sewer
overflows in the collection system and improve water quality in streams in the Hartford area.
And in landmark criminal and civil enforcement actions (U.S. v. Puerto Rico Aqueduct and Sewer Authority
(PRASA)), the Puerto Rico Aqueduct and Sewer Authority (PRASA) agreed to pay $ 10 million in criminal and civil
fines and to perform more than $ 1.7 billion in injunctive relief to resolve repeated environmental violations at
wastewater treatment plants and drinking water treatment plants throughout Puerto Rico. To comply with the settlement, PRASA will complete a total of 145 capital improvement projects, including short-term and mid-term projects over the course of two years from the entry of the settlement. The consent decree with PRASA was lodged
with the Puerto Rico District Court in June 2006.
The Division also helped ensure the integrity of municipal wastewater treatment systems by concluding enforcement actions against a number of smaller municipalities: City of New Iberia (LA), City of Nashua (NH), City of
Okmulgee (OK), City of Chicopee (MA), and City of Brockton (MA). In these actions, the United States secured
commitments by defendants to spend an estimated $ 310 million to improve their municipal wastewater systems.
In all of these cases, the States joined the United States as co-plaintiff and signed onto the consent decree.
Ensuring Safe Drinking Water. The Division also achieved a significant victory under the Safe Drinking Water Act in
the Ninth Circuit. The appellate court affirmed a judgment in favor of the United States in United States v. Alisal
Water Corp., an action involving 232 violations of the Act against five water companies which provided water to
28,000 people in Monterey County, California. The Ninth Circuit upheld the district court's order appointing a receiver and requiring the sale of several of the defendants' systems.
Protecting the Nation's Wetlands. In United States v. Lone Moose Meadows, LLC, working with the U.S. Attorney's
Office for the District of Montana, the Division successfully sued the developer of a ski resort in Big Sky, Montana,
for the illegal filling of wetlands. The Montana District Court entered the consent decree in January 2006, and ordered Lone Moose Meadows to restore streams and wetlands, create new wetlands in mitigation, and pay a $
165,000 civil penalty. In another enforcement matter, United States v. Don Prow d/b/a Rochester Topsoil, the
Minnesota District Court in April 2006 entered a consent decree requiring the defendant to pay a $ 250,000 civil
penalty and comply with onsite/offsite restoration and mitigation projects for the unauthorized discharge of fill
material into approximately 73 acres of wetlands in Rochester, Minnesota.
In May 2006 the Supreme Court ruled in S.D. Warren v. Maine Board of Environmental Protection, consistent
with the amicus brief filed by the Department of Justice; the Court held that dams produce "discharges" and are
therefore subject to State authority under section 401 of the Clean Water Act.
ENSURING CLEANUP OF OIL AND HAZARDOUS WASTE
Continuing Progress to Cleanup Contaminated River Systems. This year the Division continued to secure significant river cleanups. In October 2005, the Division reached an agreement with the General Electric Company (GE),
requiring it to begin the dredging of sediment contaminated with polychlorinated biphenyls (PCBs) at the Hudson
River PCB Superfund site in upstate New York. Under the settlement, GE will perform the first of two phases of the
dredging and pay EPA up to $ 78 million for the Agency's past and future costs. The first phase will remove about
10 percent of the total volume of PCB-contaminated sediment slated for dredging during the entire cleanup, at an
expected cost of between $ 100 million and $ 150 million. The second phase of the dredging is expected to take
five years. The GE cleanup project is unprecedented in size and scope and addresses the PCB discharges from
two GE manufacturing plants that for years discharged hazardous PCBs directly into the upper Hudson River. The
goal of the project is to restore one of the country's most important cultural and ecological resources, while using
approaches to minimize impacts on local communities. In February 2006, the District Court for the District of Montana entered a consent decree in U.S. v. Atlantic Richfield Co. (Milltown Reservoir Sediments) resolving CERCLA
claims against Atlantic Richfield and NorthWestern Corporation in connection with the Milltown Reservoir Operable
Unit, one of the numerous Superfund sites within the Clark Fork River Basin in Montana. Under the consent decree, ARCO and NorthWestern will remove the Milltown Dam and millions of cubic yards of contaminated sediment
accumulated behind the dam, at an estimated cost of $ 106 million. In April 2006, the Division lodged a consent
decree with NCR Corp. and Sunoco-U.S. Paper, which requires those parties to perform the first phase of remedial
action for Operable Unit 4 of the Lower Fox River and Green Bay site in northeastern Wisconsin. Wisconsin is participating as a co-plaintiff in the Fox River cleanup. The site is contaminated with PCBs discharged into the Fox
River from several paper manufacturing and recycling facilities. The site was divided into five operable units for
purposes of remediation and will cost more than $ 500 million to address overall. Phase 1 is expected to cost
about $ 30 million and features dredging, dewatering, and landfill disposal of PCB-contaminated sediments from a
hot-spot of contamination near the U.S. Paper manufacturing plant. This is the fifth partial consent decree negotiated in connection with cleanup of the site.
Conserving the Superfund through Securing Cleanup of Hazardous Waste Sites by Responsible Parties and Recovering Superfmnd Monies Expended for Cleanups. The Division secured the commitment of responsible parties
to clean up additional hazardous waste sites, at costs estimated in excess of $ 227 million, and recovered more
than $ 140 million for the Superfund to help finance future cleanups. Examples of some of the major Superfund
cases resolved by the Division this year include: U.S. v. Carrier Corp. (defendants to perform the shallow zone
remedy for the Puente Valley Operable Unit of the San Gabriel Valley Superfund site, valued at $ 27 million, and
pay $ 800,000 in past response costs); U.S. v. Allegiance Healthcare Corp.; v. Lockheed Martin Corp.; v. White &
White Properties; v. Leach International Corp.; v. Azusa Land Reclamation Co., Inc.; v. Aerojet-General Corp.; and.
v. Phaostron Instrument and Electronic Co. (seven consent decrees with 16 defendants required to pay $ 14.3
million in response costs and 88 percent of future oversight costs at the Baldwin Park Operable Unit of the San
Gabriel Valley Superfund site); U.S. v. Asarco, Inc. (developer will purchase Asarco's Tacoma Smelter Superfund
site and perform site remedy at an estimated cost of $ 28 million and Asarco will pay $ 1.5 million to Superfund
from the proceeds of sale); U.S. v. NCH Corp. and U.S. v. FMC Corp. (defendants will pay over $ 26 million in past
and future costs and perform remedial work estimated at more than $ 13 million at the Higgins Farm and Higgins
Disposal Superfund sites in New Jersey); U.S. v. Dominick Manzo (judgment in favor of the United States for $ 31
million in costs incurred cleaning up the Burnt Fly Bog Superfund site, also in New Jersey). Additionally, the Division entered into a settlement agreement with Teck Cominco America, Inc. (TCAI), and its Canadian parent, Teck
Cominco Metals, Ltd. (TCM), requiring TCAI to perform a remedial investigation and feasibility study (RI/FS) at the
Upper Columbia River Superfund site. The site, consisting of 150 miles of the Columbia River and adjoining lands
between the Canadian border and the Grand Coulee Dam, has been contaminated by millions of tons of smelter
slag and heavy metals discharged into the Columbia River from TCM's Canadian zinc and lead smelter, approximately 10 miles north of the border.
The Division also achieved notable victories on appeal in U.S. v. W.R. Grace & Co., in which the Ninth Circuit
Court of Appeals affirmed EPA's decision to clean up asbestos contamination in Libby, Montana that resulted from
W.R. Grace's mining operations as a "removal" action under CERCLA instead of a "remedial" action, and the district
court's order requiring W.R. Grace to reimburse EPA for $ 54.5 million. In U.S. v. Vertac Chemical Corp., the Eighth
Circuit Court of Appeals affirmed that Hercules and other companies were liable for costs associated with EPA's
cleanup of hazardous waste contamination at a chemical plant site in Jacksonville, Arkansas.
Enforcing Cleanup Obligations In Bankruptcy Cases. The Division's bankruptcy practice has continued to grow. This
year, the Division represented the United States in many proceedings, including the Dana Corp., Delta Air Lines,
Asarco, Delphi Automotive, Sal tire, Encycle, and Safety-Kleen bankruptcies, where debtors had significant environmental responsibilities. The Division filed proofs of claim to require that at least part of debtors' estates be applied to the costs of environmental remediation for which the debtors are liable. In the Eagle Picher bankruptcy,
the Division secured the agreement of the debtor to deposit $ 13.6 million into a custodial trust to be used to fund
environmental cleanup work at sites in several states. The Division also lodged proposed settlements in bankruptcy courts in the Gulf States Steel, W.R. Grace, Armstrong and Saltire Industrial bankruptcies. In these proceedings,
the Division received distributions this year totaling more than $ 6 million in reimbursement of response costs.
These settlements avoided abandonment of contaminated properties by debtors and enabled companies to avoid
liquidation and loss of jobs by facilitating reorganization or sales of ongoing operations.
Recovering Natural Resource Damages.
The Division obtained significant results in its efforts to recover for natural resource damage claims securing settlements worth more than $ 33 million. Some of the Division's recovery efforts include U.S. v. Schlumberger Technology Corp, U.S. v. Elkem Metals Co., U.S. v. Sunoco, Inc., U.S. v. American Energy, Inc. and U.S. v. BP Amoco
Chemical Co. South Carolina and Georgia joined the United States as co-plaintiffs in Schlumberger; Ohio and West
Virginia were co-plaintiffs in Elkem Metals, Kentucky was a co-plaintiff in Sunoco, and Texas was a co-plaintiff in
the case against BP Amoco. Restoration activities included the removal of two dams, dredging PCB contaminated
sediments behind the dams, and improving the stream corridor leading to Lake Hartwell in South Carolina
(Schlumberger); the restoration of mussels, fish, and snails damaged by releases of hazardous substances to the
Ohio River (Elkem); the preservation of at least 100 acres of bottomland hardwood forest habitat, the recolonization of 19 acres of former pasture with native vegetation, and the creation of six acres of riparian wetland
in the vicinity of two Superfund sites in Harris County, Texas (BP Amoco).
PROMOTING RESPONSIBLE STEWARDSHIP OF AMERICA'S NATURAL RESOURCES AND WILDLIFE
Implementing the President's Healthy Forest Initiative and Defending Federal Forest Management Programs. The
Division continued its string of victories defending against challenges to projects to restore public forest lands,
improve wildlife habitat, and recover the value of damaged timber on federal forest lands -- projects which implement President Bush's Healthy Forest Initiative. In Defenders of Wildlife v. Kempthorne, the Division prevailed in a
challenge to the counterpart Endangered Species Act (ESA) Section 7 consultation regulations enacted as part of
the Healthy Forests Initiative. These regulations empower the Forest Service and Bureau of Land Management to
render their own "not likely to adversely affect" determinations concerning threatened and endangered species for
specified actions without further process, thereby expediting forest recovery under the Healthy Forests Initiative.
The Division successfully defended other forest management actions, including timber management on Forest
Service land in grizzly bear habitat in Swan View Coalition v. Barbouletos and the issuance of oil-and-gas leases in
New Mexico v. the Bureau of Land Management.
Tending Fire-Damaged Forests and Capturing Economic Value From Dead and Dying Timber. The Administration
made increased active management of the Nation's forests a priority in 2006, including dealing with the ravages
of wild fires. The Division continued its successes in defending against emergency motions for injunctive relief in
lawsuits challenging Forest Service projects to salvage dead and dying trees, reduce fire risks, and secure economic value from burned-over areas in the Pacific Northwest. In FSEEE v. United States Forest Service, the court
denied a motion for emergency relief, finding that the plaintiffs were not likely to succeed on claims challenging
the Forest Service's interpretation of the applicable Eastside Forest Plan and its use of tree mortality guidelines.
As a result of the favorable decision, the Easy Fire Recovery Timber Salvage Project on the Malheur National Forest was able to proceed, and the harvest was completed, allowing for restoration efforts and providing revenue to
local communities. In Lands Council v. Martin, the district court also denied a motion for a preliminary injunction,
finding that plaintiffs were not likely to succeed on claims under the National Environmental Policy Act (NEPA) and
the National Forest Management Act against the School Fire Recovery Project on the Umatilla National Forest. As
a result of the Division's victory, that project has been able to proceed with similar benefits. Similarly, the Division
successfully defended the Forest Service's ability to use "categorical exclusions" under the National Environmental
Policy Act for timber sale projects under 250 acres in size in Allegheny Defense Project v. Bosworth.
Defending Multiple Federal Agencies Operating the Federal Columbia River Power System. The Federal Columbia
River Power System, a system of dams and reservoirs on the Columbia and Lower Snake Rivers, provides over
50% of the power for the four states in this region. These rivers are also the habitat for 13 protected species of
salmon. The Division facilitated coordination of the client agencies and fellow sovereigns to move forward in complying with the 2005 remand order in National Wildlife Federation v. National Marine Fisheries Service and, in
American Rivers v. National Oceanic and Atmospheric Administration Fisheries, on May 23, 2006, obtained a critical decision rejecting plaintiffs' claims that the Upper Snake and Columbia River operations had been illegally
segmented, thereby protecting the Snake River Basin Adjudication agreement from collateral attack. In related
litigation, the Division obtained dismissal on jurisdictional grounds of two cases collaterally challenging the United
States' compliance with and enforcement of a Canadian salmon harvest treaty in Salmon Spawning and Recovery
Alliance v. Department of State and Salmon Spawning and Recovery Alliance v. U.S. Customs and Border Patrol.
Restoring the San Joaquin River and Securing Bureau of Reclamation Project Water Supplies. The Bureau of Reclamation's California Central Valley Project is one of the Nation's major water conservation developments. Seventy
years ago, Congress authorized construction of the Friant Division of the Project. Friant Dam diverts all but a fraction of the waters of California's second-longest river, the San Joaquin -- de-watering a lengthy reach of the River
for most of the year -- for storage in Miller Lake and eventual distribution, primarily for agricultural use in the Central Valley. After eighteen years of contentious litigation over the Bureau's renewal of long-term water supply contracts, the Division negotiated an historic settlement in Natural Resources Defense Council v. Rodgers. The settlement delineates a monumental intergovernmental project by the State of California and the Bureau of Reclamation to restore flows in 153 miles of the San Joaquin River, harmonizing agricultural interests in securing irrigation
water supplies with environmental interests in enhancing water quality and reviving two salmon runs that dried up
when the Dam was built in the late 1940s.
Defending Fisheries Legislation. The Division successfully defended the constitutionality of a provision of the Atlantic Coastal Act. That Act creates a cooperative federalism framework under which the States have primary authority to regulate fisheries within 3 miles of shore, together with the federal government. In Medeiros v. Vincent,
lobster fisherman challenged this legislation under the Tenth Amendment and equal protection clause. The First
Circuit rejected this challenge and the Supreme Court has now denied certiorari.
Protection of the Florida Everglades. The Division continues to contribute to the restoration and protection of the
Everglades ecosystem -- including the 1.3 million-acre Everglades National Park, the largest, most important subtropical wilderness in North America. In United States v. South Florida Water Management District, the U.S. District
Court entered a consent decree in 1992 requiring the State of Florida to restore water quality in the Everglades
through regulation of agricultural runoff and construction of vast wetland treatment systems. After more than a
year of negotiations, the Division this year negotiated an agreement with the State of Florida on additional remedial measures to complement those specified in the consent decree. The consent decree's ambitious strategy to
restore and preserve the Everglades ecosystem -- and the federal-state collaboration that produced it -- have heralded a new era of intergovernmental cooperation on the Everglades historic $ 7.8 billion restoration effort, fulfilling a top priority of the past three federal administrations. The Division this year continued its participation in
the proceedings of the South Florida Ecosystem Restoration Task Force, the intergovernmental body codified by
Congress in 1996 to coordinate the restoration of the Everglades. The Division has also participated in the Miccosukee litigation, in which it has defended the joint federal-State approach to Everglades restoration.
The Division also contributes to protection of the endangered Everglades ecosystem by acquiring lands within
Everglades National Park and Big Cypress National Preserve through exercise of the power of eminent domain, as
authorized by Congress and requested by the National Park Service. Related acquisitions on behalf of the U.S.
Army Corps of Engineers took place to improve water deliveries to the Everglades. The largest case to date is United States v. 480 Acres of Land in Miami-Dade County, Florida, and Gilbert R. Fornatora, et al. This is the lead case
in a consolidated trial group of seven tracts totaling 1,000 acres in the Everglades National Park expansion project.
Defense of Offshore Oil and Gas Lease Sale. Domestic energy production has become increasingly visible as the
Nation's energy needs grow and the role of foreign energy increases. In Blanco v. Burton (E.D. La.), the Governor of
Louisiana sought to halt an Interior Department offshore lease sale in the western Gulf of Mexico for alleged violations of NEPA, the Outer Continental Shelf Lands Act and the Coastal Zone Management Act. The court denied the
Governor's motion for an emergency injunction to halt the lease sale because she had failed to show irreparable
harm if the sale proceeded. The Interior Department and Governor ultimately settled the case favorably to federal
interests. The Governor dropped all her claims against the lease sale in return for an Interior Department agreement to conduct additional environment analysis on the next lease sale and future lease activities.
PROMOTING NATIONAL SECURITY AND MILITARY PREPAREDNESS
Defending Military Readiness Activities. The Navy's use of various sonar systems for submarine detection has
been the subject of several cases. This year, the Division aggressively defended a challenge to the U.S. Navy's use
of mid-frequency active sonar during the multi-nation Rim of the Pacific ("RIMPAC") anti-submarine warfare exercise scheduled to take place off the coast of Hawaii in conjunction with the navies of 7 other countries. In Natural
Resources Defense Council v. Winter, plaintiffs asserted Marine Mammal Protection Act (MMPA), NEPA, and Administrative Procedure Act (APA) challenges. During litigation of a motion for a temporary restraining order the
Secretary of Defense invoked the National Defense Exemption under the MMPA, but the court still enjoined the
exercise under NEPA. Despite that injunction, Division attorneys were able to negotiate terms limiting the injunction to a number of mitigation measures that the Navy was already undertaking pursuant to its standard operating
procedures or its marine mammal incidental harassment authorization, and the exercise was able to proceed.
In Ilioulaokalani Coalition v. Rumsfeld, the Division continued to defend a challenge to a critical link in the
Army's 30-year, Army-wide modernization plan to meet the national security needs of the future. The plaintiffs in
this action challenged the Army's compliance with NEPA concerning its decision to transform a light infantry division into a Stryker Brigade Combat Team at an Army training facility in Hawaii. After the Ninth Circuit reversed the
district court's decision granting summary judgment in favor of the Army, the Division presented argument and
evidence in opposition to the plaintiffs' request to enjoin military training and modernization in Hawaii while the
Army works to complete additional environmental documentation required by the court for compliance with NEPA.
Defense of Immigration and National Security Initiatives. In Sierra Club v. Gonzales (S.D. Cal.), the Division secured an important victory upholding the authority of the Department of Homeland Security to undertake important initiatives at a speed appropriate to circumstances. The case was originally a challenge under NEPA to
construction of a 14-mile fence on the Mexican border to deter illegal immigration. Pursuant to recently enacted
authority, Secretary Chertoff waived compliance with environmental laws as they applied to construction of the
fence. Plaintiffs responded with three Constitutional arguments attacking the waiver. In its favorable ruling, the
court emphasized that "Congress' delegation of authority to the Executive Branch relates to matters over which the
Executive branch has independent and significant constitutional authority: immigration and border control enforcement and national security." The court further found that the waiver authority as applied "in the completion of
a project uniquely within the national security and immigration policy provinces of the Executive Branch" was not
unconstitutional.
Property Acquisitions to Improve Military Readiness and National Security. As directed by federal agencies acting
under authority of Congress, the Division exercised the federal government's power of eminent domain to initiate
litigation enabling a number of land acquisitions. United States v. 1,098.221 Acres in Duval County, Florida, and
Gate Maritime Properties., et al., was filed to acquire a port facility on Blount Island near Jacksonville, Florida,
used by the Department of the Navy for weapons shipping around the globe. Estimated just compensation of $
101,000,000 was made immediately available to the landowner; the landowner claimed compensation of $
199,290,000 based on a highest and best use of conversion to high-end residential development, with a marina,
hotel, commercial and cruise ship terminal. Following a two week jury trial conducted last November, the jury returned a verdict of $ 162,000,000 resulting in a cost saving in excess of $ 30,000,000.
United States v. 17.69 Acres of Land in San Diego County, California, and National Enterprises, et al., concerned land condemned by the Border Patrol, via the Army Corps of Engineers, for construction of a second fence
and patrol zone along the San Diego-Tijuana border. In a three week trial, held last December, defendants argued
that just compensation was $ 48,000,000 to $ 72,000,000 based on a highest and best use of development of a
NASCAR stadium. The United States' appraiser testified that the value of the property was $ 265,400 as holding
for future industrial use. The verdict, after two days of jury deliberation, was that just compensation for the taking
is $ 1,232,280, resulting in a minimum cost saving in excess of $ 46,000,000.
The Division has acquired land in a number of cases to facilitate the U.S. Army's transformation of its 2nd Brigade, 25th Infantry Division (Light) to a Stryker Brigade Combat Team. In the lead action filed last year, United
Slates v. 1,402 Acres of Land Honolulu, Hawaii and the Estate of James Campbell, et al., the parties reached a $
15,900,000 settlement, and related NEPA claims were held not to be a defense to a taking. The Division has also
acquired land on behalf of the Department of the Navy United for encroachment protection, training, and operations at Harvey Point Defense Testing.
The Division has been working closely with the U.S. Attorney (E.D. La.) and his Office, along with the Army
Corps of Engineers in New Orleans, to assist and train those offices in anticipation of what is estimated will be
some 400 Hurricane Katrina related condemnations for the reconstruction and enhancement of flood control systems.
DEFENDING VITAL FEDERAL PROGRAMS AND INTERESTS
Defending the Department of Energy's Operations at Its Hanford Nuclear Reservation. In United States v. State of
Washington, the Linked States succeeded in its efforts to invalidate a Washington State voter initiative that would
have significantly interfered with the activities of the Department of Energy and the Navy in Washington State and
across the country. The new state law, originally known as "I-297," and now the "Cleanup Priority Act," sought to:
(1) bar shipments of nuclear waste to the Department of Energy's Hanford Facility -- including shipments from other sites in the Department of Energy's nationwide complex as well as nuclear components from the Navy's Pacific
Fleet -- pending cleanup of waste currently at Hanford; (2) change current storage, treatment and disposal practices at Hanford and its associated laboratories; and (3) expand the State's jurisdiction over radioactive materials.
After obtaining a temporary injunction against implementation of the new law, the Division largely prevailed on its
interpretation of the law during a certification proceeding in the Washington State Supreme Court. The District
Court for the Eastern District of Washington in June 2006 granted the government's motion for summary judgment. The court found that the law was preempted by the federal Atomic Energy Act, barred by sovereign immunity, and violated the Commerce Clause. As a result, the court held that the law was invalid on its face, and struck it
down in its entirety. This case is now on appeal.
Defending EPA's Clean Water Act Standards for Coal Mining. In Citizens Coal Council v. EPA, petitioners under the
CWA challenged effluent limitations guidelines and new source performance standards for subcategories within
the coal mining category. The Division successfully sought en banc reversal of a prior adverse panel decision in
which the court held that EPA incorrectly applied the statutory factors in setting effluent limitations. The Sixth Circuit granted en banc review, and in May 2006, the en banc court issued a favorable decision upholding the rule.
The court reaffirmed the panel's decision that the Rahall Amendment -- which sought to encourage remining of
abandoned mines by providing limited exceptions from the statute's effluent limitation requirements -- did not bar
EPA from promulgating additional regulations to provide for broader exceptions for remining. The court also upheld
EPA's use of best management practices (BMPs) in lieu of numerical effluent limitations, its treatment of remining
discharges that are commingled with other waste streams, and its decision to set the effluent reduction attainable
at remining areas at zero.
Upholding EPA Actions Implementing the Montreal Protocol. In Natural Resources Defense Council v. EPA, the Division successfully defended EPA's approval of the 2005 critical use exemption for the ozone-depleting substance
methyl bromide. In August 2006, in a revised decision the D.C. Court of Appeals held that NRDC had demonstrated standing, but upheld the position of EPA on the merits. The court held that post-treaty decisions of parties to
the Montreal Protocol on Ozone Depleting Substances were not "law" that could bind courts of the United States,
as they were not signed by the President or ratified by the Senate.
Resolving Federal Liability to Ensure the Cleanup of Hazardous Waste. Through the use of alternative dispute resolution and with the assistance of a court-approved mediator, the Division was able to resolve a claim under CERCLA by Kerr-McGee Corporation (now Tronox LLC) seeking to force the United States to pay the vast majority of the
cost of cleaning up groundwater contamination near its manufacturing facility in Henderson, Nevada. In January
2006, the D.C. District Court in Kerr-McGee Chemical LLC v. United States entered a consent decree requiring the
United States to pay the agreed upon share of cleanup allocated to the United States, which was approximately
one-third of the amount that Kerr-McGee originally sought. Similarly, in Crane Co. v. United States, a complex action under CERCLA seeking $ 30 million in alleged past costs and undetermined future costs related to the cleanup of TCE and perchlorate at a former military ordnance and pyrotechnics manufacturing plant in Goodyear, Arizona, the United States was able to negotiate a favorable consent decree providing for a payment by the United
States of approximately 15% of plaintiffs' claimed past costs and 21% of future costs. The Arizona District Court
entered the consent decree in August 2006, fully resolving the matter. Finally, in Rhode Island v. United States,
the State sued under CERCLA to recover natural resource damages and response costs at the Allen Harbor Landfill and associated wetlands in North Kingstown, Rhode Island. With the assistance of court-sponsored mediation,
the United States reached a $ 1.2 million settlement of all claims for past response costs and damages to natural
resources in connection with the Allen Harbor Landfill. The Rhode Island District Court entered the consent decree
in August 2006.
Defending EPA's Cleanup Actions. In Benzman v. Whitman, residents of Lower Manhattan and Brooklyn filed a
class-action suit alleging constitutional tort, mandamus, APA, and CERCLA claims against actions taken by EPA to
clean up inside buildings following the collapse of the World Trade Center. In February 2006, the District Court for
the Southern District of New York held that the Stafford Act precluded judicial review of claims that EPA failed to
comply with various provisions of the National Contingency Plan because those provisions were discretionary rather than mandatory. However, the court found that the APA claim for violation of plaintiffs' substantive due process rights could proceed. The court allowed constitutional tort claims filed against former Administrator Whitman
to proceed. Whitman appealed, and EPA sought and obtained certification for interlocutory appeal on the one
claim against EPA that the court did not dismiss.
Defending EPA's Toxic Release Inventory and Community Right-to-Know Program. In Ad Hoc Metals Coalition v.
Whitman and National Federation of Independent Business v. Johnson, the D.C. District Court in January 2006,
upheld an EPA rule lowering the reporting threshold for lead under the Toxic Release Inventory program, under
which industrial facilities must file reports on all releases of listed toxic chemicals. The court also held that the
statute authorizes EPA not only to raise the reporting thresholds established in the Emergency Planning and
Community Right to Know Act, but also to lower them, finding that such authority was not an unconstitutional delegation of legislative power. Finally, the court held that EPA reasonably applied a scientific methodology that uses
persistence, bioaccumulation and toxicity to assess the hazard presented by lead.
Defending the Clean Water Act's Nationwide Permits. In National Association of Home Builders v. U.S. Army Corps
of Engineers, the D.C. District Court in September 2006, held in the government's favor on a "a myriad of challenges" to the new Nationwide Permits issued in 2002 to replace a permit that had previously authorized filling
that affected up to 10 acres of wetlands. The court determined that the Corps acted reasonably in issuing nationwide permits with more restrictive conditions than those it had issued in the past, finding that the Corps adequately explained its reasons for making each of the challenged decisions.
Defending EPA's Interpretation of the Clean Water Act. In Dominion Energy Brayton Point, LLC v. Johnson, the Division successfully defended the EPA's regulatory interpretation of the Clean Water Act term "opportunity for public
hearing" in a challenge by a power company. The First Circuit rejected the argument that its prior decision in Seacoast Anti-Pollution League v. Costle, which interpreted the disputed language, created a "non-discretionary duty"
under the CWA. The First Circuit held that in light of the evolution of Supreme Court case law on statutory interpretation, deference was owed to EPA's reasonable interpretation of the ambiguous term.
Defending the Army Corps of Engineers' Emergency Authority. In Louisiana Environmental Action Network v. U.S.
Army Corps of Engineers, the District Court for the Eastern District of Louisiana, in April 2006, refused to enjoin
construction of a New Orleans landfill for the disposal of hurricane debris. The court found that plaintiffs failed to
establish a likelihood of success on the merits or irreparable harm, and that the Corps' emergency authorization
contained the requisite finding of an emergency necessary to by-pass notice and comment procedures and to defer NEPA analysis. The court noted: "One need only look around to know the tragic truth of these statements and
findings."
Defending the U.S. Army Corps of Engineers' Clean Water Act Permits.
Division attorneys defeated three challenges to the Mills Corporation's permit in connection with the proposed
Xanadu shopping, entertainment, sports, lodging and office complex in the Meadowlands, in East Rutherford, New
Jersey. In Hartz Mountain Industries, Inc. v. U.S. Army Corps of Engineers, and Borough of Carlstadt v. U.S. Army
Corps of Engineers, the New Jersey District Court dismissed in October 2005 and February 2006, respectively,
challenges to the permit brought by a disappointed competing bidder and a neighboring municipality on grounds
that the plaintiffs lacked standing to sue. Then, in Sierra Club v. U.S. Army Corps of Engineers, the New Jersey District Court reviewed the voluminous record compiled by the Corps, and on September 28, 2006, held that the
Corps had properly and adequately analyzed the project under NEPA. The court also held that, consistent with
Clean Water Act requirements, the Corps reasonably adopted a definition of the project proffered by the state development agency and gave sufficient consideration to alternative configurations that could have avoided the fill
before concluding that there was no practicable alternative that would meet the project purpose.
Defending Federal Water Management Programs. The continued drought in regions of the country and the pressure on water resources generally results in constant litigation, as more fish species are listed under the Endangered Species Act due, in part, to these events. This year the Division prevailed against several challenges to federal management of water resources. In Consejo de Desarrollo Economico de Mexicali v. United States, a major
concrete lining project for the All-American Canal, which delivers Colorado River water to the Imperial Irrigation
District (IID) along the border with Mexico, and in Alabama v. United States Army Corps of Engineers, where the
adverse impacts on protected species of the Corps' operation of dams and reservoirs in the Apalachicola- Chattahoochee-Flint Basin were worsened by drought, the Division successfully defended against emergency motions for
injunctive relief. The court found that the Corps could not be held liable for drought and allowed the Corps to continue status quo operations.
Defending Fish and Wildlife Service's Endangered Species Act listing program.
Several cases resolved by the Division this year concerned interpretation of ESA provisions that allow for the listing
as threatened or endangered species of "distinct population segments" of species, and provisions that require the
Fish and Wildlife Service to address a species status in "a significant portion of the range." Division attorneys asserted carefully articulated legal theories explaining the agency's interpretations and achieved notable success in
Center for Biological Diversity v. Fish and Wildlife Service, which affirmed the coastal cutthroat trout "no-list" decision, and Center for Biological Diversity v. Norton, which affirmed the Rio Grande cutthroat trout "no-list" decision.
Ensuring Limited Federal Jurisdiction is Enforced. The Administrative Procedure Act and other special review provisions circumscribe federal jurisdiction, and in several cases the Division prevailed on these or similar defenses.
In Environmental Protection Information Center v. Fish and Wildlife Service, the court held that there was no judicial review of prosecutorial discretion where plaintiffs claimed the Fish and Wildlife Service failed to revoke an ESA
Section 10 permit when the permittee was allegedly in violation of the permit's terms of the permit. In American
Bird Conservancy v. Federal Communications Commission the court dismissed an ESA challenge to permits for
communications towers where exclusive jurisdiction was in the court of appeals. Similarly, in Geertson Seed Farms
v. Johanns, the court dismissed ESA claims against EPA regarding tolerance levels of Roundup where plaintiffs
failed to exhaust administrative remedies and exclusive jurisdiction rested with the court of appeals. Finally, in
Salmon Trollers Marketing Ass'n v Gutierrez, the court denied a preliminary injunction as unavailable under the
limited judicial review provisions of the Magnuson Stevens Fisheries Conservation Management Act.
Defending Federal Criminal Jurisdiction. The Division routinely assists other Department components in securing
federal enclave or legislative jurisdiction. This year, the Division assisted another Department component in
demonstrating the existence of federal legislative jurisdiction at a national forest site in Michigan. As a result, the
Court upheld a death penalty imposed as a result of a murder committed at that site.
Defending the Establishment of a Nuclear Waste Depository. The Division advanced the important policy goal of
developing a central nuclear waste repository in Western Shoshone National Council v. United States. The Western
Shoshone Tribes brought this case pursuant to the Treaty of Ruby Valley and attempted to enjoin the federal government from taking any further steps to license or develop Yucca Mountain as a nuclear waste repository and
seeking a declaratory judgment preventing any use of the land not specified in the treaty. The Court granted the
government's motion to dismiss on sovereign immunity grounds.
Improved Definition of Land Use Planning Responsibilities and other Principles. In the consolidated cases State of
New Mexico v. BLM and New Mexico Wilderness Alliance v. Rundell (D. N.M.), plaintiffs challenged the Bureau of
Land Management's amendment of the Resource Management Plan for Southern New Mexico to govern issuance
of oil and gas leases. Plaintiffs alleged that the BLM and Fish and Wildlife Service violated several environmental
statutes in adopting the Plan, which they claimed did not adequately protect the Otero Mesa grasslands. The court
held in the government's favor on all major claims. Most significantly, it found that BLM complied with the Federal
Land Policy and Management Act by considering a proposed alternative of New Mexico's Governor. BLM was not
required to adopt or provide for public comment on the Governor's precise alternative. The court further held that
BLM's "not likely to adversely affect" determination for the endangered Aplomado Falcon and the Fish and Wildlife
Service's concurrence complied with the ESA.
Defense of Corps Permit Facilitating Mass Transit Construction. In many urban areas, mass transit projects and
efforts to relieve the burden of auto traffic are controversial and end up in litigation. In Advocates For Transportation Alternatives Inc, v. Army Corps of Engineers (D. Mass.), plaintiffs claimed that the Army Corps of Engineers
violated NEPA and the Clean Water Act when it issued a CWA permit to the Massachusetts Bay Transportation Authority to fill up to 7.60 acres of wetlands for construction of a 17.7-mile commuter rail line extension to serve the
southeast suburbs of Boston. Plaintiffs alleged, among other things, that the Corps failed to adequately review
important environmental impacts. The court found that the Corps' environmental analysis properly considered
beneficial and adverse effects, mitigation measures, public health and safety risks from train accidents and diesel
emissions, and effects on recreation areas, wetlands, historic resources, and State-designated Areas of Critical
Environmental Concern, and thus allowed this important project to proceed.
Protecting Taxpayers Against Unwarranted Claims. The Division has a responsibility to protect the public fisc
against unwarranted claims and to provide just compensation when the government takes private property for
public purposes. This year, the Division prevailed against a number of claimants bringing suits as a result of a wide
variety of federal program decisions. For example, in Cane Tennessee, Inc. v. United States (Court of Federal
Claims), the plaintiff alleged that the Secretary of the Interior's decision to designate an area encompassing his
property as unsuitable for surface coal mining operations under the Surface Mining Control and Reclamation Act
resulted in an unconstitutional taking. In October 2005, following trial, the court held that the plaintiff failed to
establish that the government's regulatory action caused a loss sufficient to constitute a taking.
Major federal construction projects frequently result in takings claims. In Ingram v. United States (Court of
Federal Claims), a group of property owners alleged that the construction and operation of the Red River Navigation Project in Louisiana resulted in the taking of flowage easements across their property in violation of the Fifth
Amendment. In September 2006, following trial, the court ruled in favor of the United States in 15 cases, holding
that the Project did not cause surface flooding on any of the plaintiffs' properties, nor did it cause groundwater
levels to rise on the properties.
The Division also had an outstanding year defending important federal regulatory programs against takings
claims. In Brace v. United States (Court of Federal Claims), the plaintiff alleged that a portion of his farm in Pennsylvania had been taken as result of a Clean Water Act enforcement action that required him to restore previously
drained wetlands. In August 2006, following trial, the court dismissed all claims, finding that the government's
actions did not take the farmer's property in violation of the Fifth Amendment. In DuMarce v. Scarlett (Court of
Appeals for the Federal Circuit), the heirs of several Indian decedents, alleged a taking of property in violation of
the Fifth Amendment as a result of the government's application of the Sisseton-Wahpeton Sioux Act of 1984. The
Act provides that small fractional interests in land escheat to the tribe instead of passing to the heirs. In May
2006, the Federal Circuit reversed the trial court's holding and found that the government, acting as trustee, timely informed the plaintiffs of all facts pertaining to their potential causes of action and, as a result, their claims were
time-barred under the statute of limitations.
General Motors v. U.S. Army Corps of Engineers involved a state law claim against the Corps for recovery of
response costs in connection with the cleanup of the Middleground Landfill site on Middleground Island, in the
Saginaw River. In November 2005, the District Court for the Eastern District of Michigan dismissed the complaint
against the Corps with prejudice, finding that neither the Resource Conservation and Recovery Act nor CERCLA
waived the federal government's sovereign immunity from state law claims for recovery of response costs at this
privately owned, third party site. Similarly, in Rhode Island Resource Recovery Corp. v. EPA, a suit challenging remedial action at the Central Landfill Superfund site in Johnston, Rhode Island, the court held that there is no
waiver of sovereign immunity for suing EPA.
There has also been significant litigation, in multiple federal district courts and courts of appeals, relating to
the interpretation and application of the Supreme Court's decision in Cooper v. Aviall (holding that a § 113 contribution action may be brought only if there is a pending or completed §§106 or 107 civil action or a settlement). A
particular focus has been on the issue of whether a liable party who has not satisfied the requirements of section
113(f) of CERCLA for bringing a contribution action may instead bring an action under section 107 of CERCLA. The
Division has taken the position that such suits are not permitted, and prevailed on this issue in the Third Circuit in
E.I. Dupont De Nemours v. United States. The Eighth Circuit ruled adversely in Atlantic Research Corp. v. United
States; the United States has sought certiorari from that decision.
Enforcing Environmental Laws Through International Capacity Building. The Division has developed considerable
expertise in providing civil and criminal environmental enforcement and related training to practitioners, country
officials, and judges, and it continues to get requests from both agencies and foreign countries to provide such
training. Among other activities, Division attorneys assisted senior officials from ASEAN nations to create a Southeast Asia wildlife law enforcement network at a late 2005 Workshop entitled "Stopping the Illegal Wildlife Trade in
Southeast Asia" and have conducted several follow-up training workshops throughout the area in 2006. Division
attorneys also lectured at the Lobster Workshop sponsored by the Gulf and Caribbean Fisheries Institute (GCFI) in
Colombia in late 2005 to discuss Lacey Act prosecutions based on foreign law violations. As part of their work with
the Enforcement Working Group of the Commission on Environmental Cooperation (CEC), Division attorneys developed and presented, with representatives from Canada and Mexico, a judicial training program for Mexican
judges in Mexico City and an innovative enforcement techniques conference in Washington, D.C.. The Division also
helped organize numerous meetings in D.C. to share information and expertise with visiting foreign enforcement
and other personnel from countries such as China, Belgium, and the U.K. Finally, as a member of the U.S. Coral
Reef Task Force, the Division organized and led extremely well-received interagency enforcement training workshops in three Task Force member jurisdictions. Together with a number of other federal agencies the Division is
currently working with the Commonwealth of Puerto Rico on a similar workshop.
PROTECTING INDIAN RESOURCES AND RESOLVING INDIAN ISSUES
Defending Tribal and Federal Interests in Water Adjudications. Water adjudications are complex cases, often involving the rights of thousands of parties. During the past year, the Division settled or achieved entry of a final decree based on a settlement in four major water rights adjudications in which the United States asserted water
rights claims for the benefit of tribes. First, in Arizona v. California, the Supreme Court issued a consolidated final
decree that ended 54 years of litigation in the oldest original action brought before the Court. The decree approved the settlements between the United States, the Quechan Indian Tribe, and the State of Arizona, and between the Quechan Tribe, the Metropolitan Water District of Southern California, and the Coachella Valley Water
District. The decree also consolidated five separate decrees previously issued by the Court. Second, the United
States sought the adjudication court's final approval of the Gila River Indian Community Water Rights Settlement
Agreement in In re Gila River System and Source. The settlement, if approved, will be the largest water rights
agreement in Arizona history, and will provide the Gila River Indian Community with 653,000 acre-feet of water
annually. Third, in United States v. Washington Department of Ecology (Lummi), the Division worked with the Interior Department, the State of Washington, private water users, and the Lummi Indian Nation to craft a historic settlement of an important water rights lawsuit involving groundwater underlying the Lummi Reservation. Finally, the
Division negotiated a consent decree resolving the United States' claims on behalf of Duck Valley Reservation in In
re SRBA.
Protecting Tribal Hunting, Fishing, and Gathering Rights. The Division litigates to defend treaty-protected tribal
hunting, fishing, and gathering rights. In United States v. Michigan, the United States, several tribes, the State of
Michigan, and interested Michigan hunting and conservation groups negotiated the terms of an agreement in
principle that, when formalized in a consent decree, will recognize the existence and extent of the inland hunting
and fishing rights of five tribes in Michigan. In United States v. Washington, the Division worked with 17 tribes, the
State of Washington, and commercial entities to reach a settlement of the tribes' treaty right to take shellfish.
Protecting Tribal Lands. The Division also defends and brings suits relating to over 50 million acres of land that the
United States holds in trust for tribes. In Fidelity Exploration & Production Co. v. United States, the Division successfully defended a challenge to whether the United States had a colorable claim that a portion of the Tongue
River bed lies within the Northern Cheyenne Indian Reservation.
Protecting Tribal Governmental Authority. Following a decision by the Supreme Court that Indian tribes lacked jurisdiction to bring criminal prosecutions against members of other Tribes, Congress enacted legislation reinstating
that authority. The Division has successfully opposed two constitutional challenges to that legislation, and secured
rulings from the Ninth Circuit that the legislation does not violate due process or equal protection. The two cases
are Means v. Navajo Nation and Morris v. Tanner; certiorari has now been denied in both cases.
Upholding Agencies' Authority to Implement Indian Policies. In addition to actively defending the Secretary of the
Interior's land trust acquisition authority against constitutional and administrative law challenges, the Division
successfully resolved a challenge to the Secretary's ability to take land into trust for use by the Nottawaseppi Huron Band of Potawatomi Indians in CETAC v. Norton.
Defending Implementation of Indian Gaming Laws. The explosion in Indian gaming has brought an increasing
number of challenges to its regulatory structure. The Division was successful in defending the constitutionality of
provisions of the Indian Gaming Regulatory Act in Santee Sioux Tribe of Nebraska v. Kempthorne, in which the
court rejected constitutional and statutory challenges to a regulation that provides procedures in lieu of a TribalState compact allowing gaming. The court also upheld the Interior Secretary's determination that casino games
were not permitted under Nebraska law and could not be the subject of procedures in lieu of a compact. In Wyandotte Nation v. Sebelius, the Division preserved the exclusive jurisdiction of the United States to enforce Indian
gaming laws on Indian lands in Kansas. In Sebelius v. Norton, the court affirmed that the Secretary acted properly
in taking these same Indian lands into trust for the Wyandotte Nation as a mandatory acquisition directed by Congress and not subject to NEPA or the National Historic Preservation Act.
SUPPORTING THE DIVISION'S LITIGATORS
New ENRD Intranet. In April, the Executive Office rolled out its new and improved ENRDNET, an intranet site featuring daily announcements as well as one-stop access to more than 35 Division-wide services and programs with
related guidance and online forms. The intranet upgrade has been well received by Division staff, and usage statistics (over 1 million page-views in the first 6 months) show that it is improving communication and knowledge
management for the staff.
Computer System Upgrade. ENRD continued its commitment to providing top-quality technology for Division litigators with an upgrade to the JCON desktop office automation system in 2006. Over the first three months of the
year, the desktop was upgraded with the latest software available in both the Microsoft and Corel office automation suites, the latest version of the Internet software, and new versions of the most-used litigation tools. This new
desktop image was rolled out to all employees with minimal disruption. The Division also upgraded its videoteleconferencing hardware with portable systems that allow video-conferencing where a network system drop is
available.
Automated Litigation Support. The Office of Litigation Support provided outstanding support to some of ENRD's
most complex cases, making excellent use of technology, contract staff, and in-house expertise. We provided onsite trial support for major civil and criminal cases across the country, in locations as diverse as San Diego, Port-
land, Salt Lake City, Miami, Ohio, and Virginia. Case support ranged from assisting with document management to
establishing technological infrastructure that can link the courtroom and hotel prep rooms with DOJ offices in DC
or elsewhere. The litigation support team met complex demands for physical and electronic security of documents.
The Office of Litigation Support continued its exemplary "back office" support of trial teams this year with the
creation of a mock electronic courtroom which trial teams can use to practice litigating in the new, entirely electronic, courtroom environment. The Division also saw growth in the use of technology through the expanded use of
its secure extranet connection over which trial teams share documents with experts, outside agency counsel and
other interested parties. ENRD's document scanning lab and other innovative approaches to automated litigation
support have served as models of best practices that have been emulated by other DOJ components and outside
agencies.
Security and Emergency Planning. In 2006, ENRD pursued an aggressive agenda for security and emergency
planning. The Division completed writing a comprehensive Continuity of Operations Plan (COOP Plan) several
months ahead of the required Departmental schedule and began required employee training on the Plan (which
will continue into 2007). As part of the Plan, the Division's information technology staff developed a sophisticated
mirror network system that will serve as an instantly available backup, current to within 24 hours, should the primary computer network system become unavailable due to an area-wide emergency event. About two-thirds of
ENRD's employees have the capability to access the Division's computer network from a remote site if the office
buildings are not fit for occupancy. This network redundancy ensures a more flexible and efficient work capability
for ENRD employees. The Assistant Attorney General also approved extension of a telework policy for attorneys
which can be expanded, if necessary, in support of the COOP and other emergency planning initiatives.
The Division is working with building security committees and other Federal agencies to ensure that physical
security in our buildings continues to improve to the highest levels needed for the health and safety of all our employees. We have begun implementing the changes required for the issuance of government-wide identification
cards mandated under Homeland Security Presidential Directive 12 (HSPD-12).
President's Management Agenda. ENRD has been an active participant in the DOJ initiatives to improve the management of the Federal Government under the President's Management Agenda. The Division contributes to the
Departmental rating for three initiatives: Human Capital, Budget and Performance Integration, and e-Government.
We were awarded a "green" score for each quarter of 2006 in which we received a "report card" rating. Beyond the
regular quarterly contributions, ENRD also has worked with the DOJ Human Resources office on the Skills Gap
survey analysis, Human Capital Survey, and the updating of the Department's Human Capital Strategic Plan.
Support Programs. ENRD's Human Resources staff implemented an Honors Paralegal Program, as part of the
Federal Career Intern Program, that will provide a strong recruiting avenue for entry-level paralegal support. Several litigating sections and individual trial teams elected to participate in a pilot program for mail scanning, which
allowed them to receive all of their mail in electronic format after it had already been opened and catalogued to
the proper case. This pilot program was successful and will become the basis for a fully electronic mail and file
management program to be implemented in 2007.
In compliance with new requirements from the Office of Management and Budget, the Comptroller's Office assisted the Division with implementing stronger internal controls over our financial programs. The Office also provided updated training to all attorneys on the use and management of their purchase cards for litigation expenses.
ENRD's Denver Field Office staff was moved into upgraded space in the Rogers Federal Building this spring. The
space includes ergonomic office design, and better security for employees.
Department of Justrice
FOR IMMEDIATE RELEASE
TUESDAY, MAY 8, 2007
WWW.USDOJ.GOV
ENRD
(202) 514-2007
TDD (202) 514-1888
Federal Government, State of Hawaii, and City and County Of Honolulu Agreement Will Address Vulnerabilities
That Led to Waikiki Sewage Spill
WASHINGTON -- The Department of Justice, the U.S. Environmental Protection Agency, the Hawaii Attorney
General's Office, and the Hawaii Department of Health (DOH) have reached an interim agreement with the City and
County of Honolulu (CCH) that will correct the most significant problems in Honolulu's wastewater collection system. This settlement resolves a civil enforcement action that the United States and the state have filed against
CCH.
"Today's settlement shows a commitment by the City and County of Honolulu to protect human health by making
significant improvement to its wastewater system," said Matthew J. McKeown, Acting Assistant Attorney General
for the Justice Department's Environment and Natural Resources Division. "We are pleased to have worked cooperatively with our federal and state partners to reach this important settlement."
"This agreement will result in measures by the city to prevent catastrophic spills from Oahu's most vulnerable
sewage pipes," said Wayne Nastri, the EPA's Administrator for the Pacific Southwest region. "We will continue to
work with the city to improve its wastewater system."
"This settlement is an important step in improving Honolulu's waste water management, and we look forward
to further steps by the city," said Laurence Lau, DOH Deputy Director for Environmental Health. "Improvements will
happen faster when the city, state, and United States agree on the work to be done."
The city's sewage collection system for Oahu contains numerous force mains. Force mains are pressurized
pipes which carry sewage from residences, as well as commercial and industrial sources, to wastewater treatment
plants. The EPA, DOH and the city analyzed these force mains and concluded that force mains at six locations
were most vulnerable to future failure: Beachwalk, Ala Moana, Hart Street, Kaneohe/Kailua, Waimalu and Kahala.
As in other cities, the force mains in Honolulu are a critical link in the network of pipes that convey sewage to
the city's wastewater treatment plants. Because force mains operate under pressure, even a small break can result in a large spill and a lengthy repair job. Unlike gravity flow pipes, force mains cannot carry sewage flow during
the repair process. In the event a break occurs in a large volume force main and no backup is available, there is
often no alternative but to release the untreated sewage to nearby waterways.
On March 24, 2006, Honolulu's Beachwalk force main burst, spilling approximately 50 million gallons of sewage. For five days before repairs could be made, the city pumped raw sewage into the Ala Wai canal, which runs
into the Pacific Ocean. Contamination from this event resulted in high levels of bacteria in coastal waters, and led
to the closure of beaches in Waikiki for one week. This interim settlement is intended to prevent repeated large
force main spills. The settlement requires Honolulu to:
*Construct new replacement force mains at Ala Moana, Beachwalk and Kaneohe/Kailua.
*Assess the condition of six vulnerable force mains, and begin implementation of necessary repairs to prevent future sewage spills.
*Conduct a condition assessment of the Beachwalk pump station to determine whether repairs or replacement of the pump station is necessary.
*Submit within a year, site-specific spill contingency plans for each of the six vulnerable force mains.
*Provide for back-up force mains at four of these force mains at Beachwalk, Ala Moana, Kaneohe/Kailua, and
Hart Street.
The current agreement is an interim settlement because it addresses only some of the problems in CCH's
wastewater collection system. In addition to the force mains addressed in the agreement announced today, CCH's
wastewater collection and treatment system includes many other features which are the subject of other regulatory processes and legal proceedings. As a next step, it will be the intention of the federal and state governments to
attempt to reach a comprehensive resolution to CCH's remaining wastewater collection and treatment challenges.
The settlement, lodged today in U.S. District Court for the District of Hawaii, will be available for a 30-day public comment period before the U.S. seeks court approval of the settlement A copy of the consent decree is available on the Department of Justice Web site at http://www.usdoj.gov/enrd/Consent_Decrees.html.
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EPEC Polymers Agrees to Settlement Worth $ 23.4 Million to Clean Up Texas Superfund Site
WASHINGTON - EPEC Polymers Inc., headquartered in Houston, has reached a settlement worth an estimated
$ 23.4 million regarding the Petro-Chemical Systems Inc. Superfund Site in Liberty County, Texas, the Justice Department and Environmental Protection Agency (EPA) announced today.
The company will perform investigation and cleanup work estimated to cost $ 13.4 million at as part of a settlement lodged today in the U.S. District Court for the Eastern District of Texas. In addition, EPEC will reimburse
EPA for $ 6.9 million of its past costs and approximately $ 3.1 million for costs incurred after July 31, 2004. A portion of the payments will be used to fund EPA's oversight of cleanup activity at the site, which is also known as the
"Turtle Bayou Site." The balance will be paid into the Superfund, a revolving fund established by Congress and
used to pay for cleanups at such sites.
The Justice Department sued EPEC in 2002 to secure cleanup work and recover costs on behalf of EPA under
the Comprehensive Environmental Response Compensation and Liability Act. EPEC's corporate predecessor,
Tenneco Chemicals, disposed of wastes at the site that were generated from its vinyl chloride monomer facility in
Pasadena, Texas. The United States had filed an earlier lawsuit in 1994 in connection with the same site against
other parties including Atlantic Richfield Company (ARCO) and ARCO Chemical Company (ACC). That earlier suit
was resolved in 1998 by a settlement that required those companies to perform substantial cleanup work. The
agreement reached today with EPEC requires the cleanup of virtually all the remaining contamination at the site.
"Vigorous enforcement of the Superfund program should secure the performance of work by responsible parties and reimbursement of cleanup costs expended by the EPA. That is exactly what this settlement accomplishes," said Matthew J. McKeown, Acting Assistant Attorney General for the Justice Department's Environmental and
Natural Resources Division. "This agreement takes an important step towards completing the cleanup of this
longstanding Superfund Site."
"EPA vigorously pursues those that contaminate our environment," said Granta Nakayama, assistant administrator for EPA's Office of Enforcement and Compliance Assurance. "This shows that EPA will make sure that the
polluter pays for Superfund site cleanups."
"The Environmental Protection Agency will continue to vigorously enforce our nation's environmental laws,"
said EPA Regional Administrator Richard E. Greene. "Our enforcement staff works very closely and effectively with
the Department of Justice to ensure a cleaner and healthier environment."
The site is located approximately 15 miles southeast of the city of Liberty and sixty-five miles northeast of
Houston. Land use in the area near the Turtle Bayou site is divided among crop-land, pasture, range, forest, and
small rural communities. In the late 1960s, the past owners of the Turtle Bayou Site, Donald R. Lang and Wallis W.
Smith, allowed waste transport companies to use the Turtle Bayou Site for illegal disposal of wastes until about
1979.
EPA and the state of Texas' response actions at the site included cleanup of contamination from 1987 until
1988 along the then unpaved Frontier Park Road which runs through the site. This work included excavation and
on-site containment of 5900 cubic yards of highly contaminated soil. In 1998, EPA selected cleanup remedies for
the other areas of known contamination at the site. Some of those remedies were performed by ARCO and ACC
under the 1998 consent decree. The major components of the remedy for contaminated soil were soil vapor extraction, catalytic thermal destruction of the extracted vapor, and groundwater sparging. When all work is completed and costs fully reimbursed, the total expenditures for the Turtle Bayou Site are likely to exceed $ 59 million.
The proposed consent decree is subject to a 30-day public comment period and final court approval and will
be available on the Justice Department Web site at http://www.usdoj.gov/enrd/Consent_Decrees.html.
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United States Announces Clean Air Act Settlement with PSEG Fossil LLC for Violations of 2002 Consent Decree
Utility Required to Pay Significantly Increased Penalties and Reduce Emissions
WASHINGTON -- The U.S. Environmental Protection Agency (EPA) and the U.S. Department of Justice today announced that they have lodged with federal district court in New Jersey a Clean Air Act (CAA) settlement with PSEG
Fossil LLC related to PSEG's failure to comply with a 2002 consent decree requiring installation of pollution controls at its coal-fired power plants in Jersey City and Hamilton, N.J. This new settlement, which was done in coordination with the state of the New Jersey and which is subject to court approval, secures additional air pollution reductions, tighter controls, valuable environmental projects and a significant penalty.
Under the terms of today's settlement, PSEG will be required to pay a civil penalty of $ 6 million--$ 4.25 million
to the federal government and $ 1.75 million to New Jersey PSEG will also perform environmental mitigation projects valued at $ 3.25 million to reduce particulate matter from diesel engines in New Jersey.
"The new agreement with PSEG will benefit New Jersey's environment," said Alan J. Steinberg, EPA Regional
Administrator. "The agreement contains new, more stringent requirements than those to which we originally
agreed. Failure to comply with a consent decree is serious business, and we will hold the parties accountable until
every obligation is satisfied. These changes will advance our commitment to improving air quality for New Jersey
and its neighbors."
"PSEG failed to live up to its obligations under the 2002 Consent Decree, putting air quality and public health
at risk," said Granta Y. Nakayama, EPA Assistant Administrator for the Office of Enforcement and Compliance Assurance. "This new agreement shows that there are serious consequences to violating court orders like the 2002
Consent Decree, and that EPA will take the necessary steps to enforce its prior agreements to ensure that the public is protected from excessive air pollution."
"This amended settlement provides increased public health benefits over the original settlement," said Sue Ellen Wooldridge, Assistant Attorney General for the Justice Department's Environment and Natural Resources Division. "The new hardware commitments in the Amendment add assurance that toxic mercury emissions will be
dramatically reduced and will also provide important long-term reductions in NOx and SO2 emissions."
The amended agreement, signed by the United States and the state of New Jersey, requires the electric utility
to accelerate the installation of air pollution control equipment at its Mercer plant, to install additional control
equipment that was not previously required and to carry out a host of interim pollution control measures in exchange for delaying the installation of pollution controls required under the original timeline at the Hudson Plant.
Under the 2002 consent decree, PSEG was required to install pollution control equipment at the Mercer and
Hudson plants to reduce sulfur dioxide, nitrogen oxide and particulate matter (PM), and take steps to reduce mercury and carbon dioxide emissions. The utility did install pollution control equipment for nitrogen oxides known as
selective catalytic reduction (SCR) at its Mercer plant. SCR is capable of reducing nitrogen oxides (NOx) by approximately 90%. However, PSEG Fossil has failed to take the necessary steps to install required pollution control
equipment at the Hudson facility as required by the original settlement.
To compensate for the pollution reductions not achieved due to PSEG's noncompliance, PSEG will be required
to install an acid gas scrubber--state-of-the-art technology for removing sulfur dioxide from exhaust gases produced by the power plant -- at one of the Mercer plants by 2010, two years earlier than the previous requirement
to install it by 2012. PSEG will also install an acid gas scrubber at the other Mercer plant in 2010 as required by
the 2002 agreement. PSEG Fossil must also now meet a new NOx emissions limit at the Mercer plant starting Jan.
1, 2007. In addition, the company will install baghouses or dust collection chambers at its Mercer plant, which
were not required under the original agreement, to cut pollution more than a less effective technology it was previously using. Lastly, PSEG is required to use carbon injection systems, not previously required, to reduce mercury
emissions from the Mercer facility.
At the Hudson Power Plant, PSEG will be required to take interim steps to reduce emissions of NOx, sulfur dioxide (SO2) and PM until the required pollution control equipment is installed or the unit is shut down. These interim measures include year-round operation of the existing NOx control equipment utilizing selective non-catalytic
reduction to reduce NOx, use of ultra-low sulfur coal, compliance with annual emission caps for NOx and SO2, and
operation of an electrostatic precipitator and a fly ash conditioning system to control PM. Installation of permanent
controls will be delayed until Dec 31, 2010, unless PSEG chooses to shut down the unit altogether in 2008. If
PSEG does not shut down the Hudson facility and installs permanent controls, PSEG will also be required to install
a more effective baghouse than previously required and use a carbon injection system to reduce mercury emissions from this facility after the pollution control equipment is installed.
As a result of the more stringent emission limits and installation of controls, the new settlement will likely result in ever greater reductions in air pollution than agreed to in the original consent decree. For the period of the
consent decree, PSEG will significantly reduce its emissions of NOx by 534 tons, SO2 by 257 tons and fine particle
emissions by 252 tons.
The utility has also elected to shut down other fossil fuel burning units in Kearny, N.J. These shutdowns will
further reduce air pollution PSEG will be required to install continuous emissions monitoring systems that measure
pollutants emitted into the atmosphere in exhaust gases for soot and mercury at its Hudson and Mercer plants.
These new requirements will enable the company to continuously track these pollutants and enable it to take appropriate steps to address any problems observed. The EPA will use information from these monitors to determine
PSEG's compliance with the emissions limits.
Should PSEG fail to meet the requirements of the amended consent decree, they will be subject to stipulated
penalties, ranging from $ 10,000 per day to $ 32,500 per day contingent on the type and length of the violation.
The amendment also imposes new recordkeeping and reporting obligations to ensure that PSEG stays on schedule with the terms of the agreement.
SO2 and NOx are significant contributors to acid rain; NOx also increases low level ozone, which causes smog;
fine particulate matter causes haze. All of these pollutants cause severe respiratory problems and exacerbate
cases of childhood asthma.
The modified consent decree, which is subject to a 30-day public comment period and final court approval, is
available on the Justice Department Web site at http://www.usdoj.gov/enrd/Consent_Decrees.html. More about
the EPA's efforts in combating air pollution is available at http://www.epa.gov/Region2.