United States v. E.I. DuPont De Nemours & Co. ( 2005 )

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 04-4546
UNITED STATES OF AMERICA,
Appellant
v.
E.I. DUPONT DE NEMOURS AND COMPANY
INCORPORATED; CIBA SPECIALTY CHEMICALS
CORPORATION
On Appeal from the United States District Court
for the District of Delaware
D.C. Civil Action No. 02-cv-01469
(Honorable Sue L. Robinson)
Argued En Banc September 8, 2005
Before: SCIRICA, Chief Judge, SLOVITER, ALITO,
ROTH, RENDELL, AMBRO, FUENTES, SMITH, FISHER
and NYGAARD, Circuit Judges
(Filed December 22, 2005)
KATHERINE J. BARTON, ESQUIRE (ARGUED)
United States Department of Justice
Environment & Natural Resources Division, Appellate Section
P.O. Box 23795, L'Enfant Plaza Station
Washington, D.C. 20026
Attorney for Appellant
PETER BUSCEMI, ESQUIRE (ARGUED)
MICHAEL W. STEINBERG, ESQUIRE
Morgan, Lewis & Bockius LLP
1111 Pennsylvania Avenue, N.W.
Washington, D.C. 20004
RAYMOND M. RIPPLE, ESQUIRE
E.I. DuPont de Nemours and Company
Legal Department
1007 Market Street, Suite D-7012
Wilmington, Delaware 19898
Attorneys for Appellees,
E.I. DuPont de Nemours and Company and
Ciba Specialty Chemicals Corporation
LOIS J. SCHIFFER, ESQUIRE
Baach Robinson & Lewis PLLC
1201 F Street, N.W., Suite 500
Washington, D.C. 20004
Attorney for Amici Curiae-Appellees,
American Chemistry Council
2
American Petroleum Institute
Chamber of Commerce of the United States of America
Corporate Environmental Enforcement Council
National Association of Manufacturers
National Petrochemical and Refiners Association
Superfund Settlements Project
OPINION OF THE COURT
SCIRICA, Chief Judge.
At issue is whether the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 (CERCLA),
42 U.S.C. § 9601 et seq., authorizes the United States to recover
costs incurred in the course of supervising a hazardous waste
cleanup conducted by responsible private parties. We hold
CERCLA provides for such recovery. Accordingly, we will
overrule United States v. Rohm & Haas Co., 2 F.3d 1265 (3d
Cir. 1993), and reverse the order of the District Court.
I.
The material facts are undisputed. The DuPont Newport
Superfund Site is an industrial site in Delaware, owned and
operated at various times by appellees E.I. DuPont de Nemours
3
and Company and Ciba Specialty Chemicals Corporation.1
Because of severe contamination to the property and its
groundwater, the site was identified in the early 1980s as a
potential threat to human health. In February 1990, it was
placed on CERCLA’s National Priorities List. See 42 U.S.C. §
9605(a)(8)(B) (establishing the National Priorities List).
The EPA developed a remedial action plan, which called
for various measures, including excavating and dredging
contaminated soil, monitoring contaminated groundwater, and
constructing treatment facilities. Because the parties could not
agree on implementation, the EPA issued a unilateral
administrative order directing DuPont to remediate the site in
the manner set forth in the remedial action plan, subject to EPA
oversight and approval. See § 9606 (authorizing administrative
orders “as may be necessary to protect public health and welfare
and the environment”).
DuPont complied with the EPA’s administrative order
and executed a two-stage “private party cleanup action.” The
first stage—a “removal action” under CERCLA § 101(23), 42
U.S.C. § 9601(23)—consisted of developing project
specifications and schedules tailored to the EPA’s stated
objectives. The second stage—a “remedial action” under
CERCLA § 101(24), 42 U.S.C. § 9601(24)—consisted of the
actual cleanup work, including soil excavation, remedial “cap”
1
Following the convention of the parties, we refer to the
appellees collectively as “DuPont.”
4
construction, groundwater barrier installation, groundwater
monitoring and treatment, and wetland restoration. DuPont
completed the project under budget, ahead of schedule, and to
the EPA’s satisfaction.
The EPA supervised both stages of the cleanup.
Oversight of the first stage entailed reviewing and approving (1)
project specifications, (2) treatment technologies, (3) testing and
sampling methods, and (4) construction schedules. Oversight of
the second stage entailed monitoring, reviewing, and approving
(1) design plan implementation, (2) construction schedules, (3)
health and safety issues, (4) field work, and (5) field change
requests. The parties stipulate that, in supervising the first
stage’s removal action, the government incurred oversight costs
of $746,279.77. They also stipulate that, in supervising the
second stage’s remedial action, the government incurred costs
of $648,517.17. The total cost to the government was
$1,394,796.94.
The government concedes Rohm & Haas, 2 F.3d 1265,
bars recovery of oversight costs of a removal action, but asks
that we reconsider that decision and allow the EPA to recover
oversight costs incurred in supervising both the removal and
remedial actions of DuPont’s cleanup. Alternatively, the
government contends Rohm & Haas does not control recovery
of remedial action oversight costs and asks that we allow for
recovery of its costs in supervising the remedial action
component of DuPont’s cleanup.
5
In a memorandum order and opinion, the District Court
held the government’s recovery of both “removal” and
“remedial” action oversight costs is barred under Rohm & Haas.
See United States v. E.I. du Pont de Nemours & Co., No. 02-
1469, 2004 WL 1812704, at *6-9 (D. Del. Aug. 5, 2004).
Accordingly, the District Court granted summary judgment for
Dupont on all relevant claims.
The government appealed and petitioned for initial
hearing en banc. Because of the importance of the issue and
several intervening decisions from our sister courts of appeals
questioning or rejecting our analysis in Rohm & Haas, see, e.g.,
United States v. Lowe, 118 F.3d 399 (5th Cir. 1997) (holding
such costs recoverable), we granted the petition. See Fed. R.
App. P. 35(b)(1)(B).
II.
The District Court exercised jurisdiction under 28 U.S.C.
§ 1331. We have jurisdiction under § 1291. Our review on
summary judgment of this interpretation of federal statutory law
is plenary. See Wheeling & Lake Erie Ry. Co. v. Pub. Util.
Comm’n, 141 F.3d 88, 94 (3d Cir. 1998).
III.
CERCLA is a broad remedial statute, enacted in 1980 to
ensure that parties responsible for hazardous waste
contamination “may be tagged with the cost of their actions.”
United States v. Bestfoods, 524 U.S. 51, 56 (1998) (quoting S.
6
Rep. No. 96-848, at 13 (1980), as reprinted in 1980
U.S.C.C.A.N. 6119). CERCLA is a product of Congress’s
judgment that “those responsible for problems caused by the
disposal of chemical poisons [must] bear the costs and
responsibility for remedying the harmful conditions they
created.” In re TuTu Water Wells CERCLA Litig., 326 F.3d 201,
206 (3d Cir. 2003) (quoting FMC Corp. v. Dept. of Commerce,
29 F.3d 833, 843 (3d Cir. 1994) (en banc)).
CERCLA grants the executive branch, acting primarily
through the EPA, “broad power to command government
agencies and private parties to clean up hazardous waste sites.”
Key Tronic Corp. v. United States, 511 U.S. 809, 814 (1994).
This “broad power” may be exercised through a government-
conducted cleanup, 42 U.S.C. § 9604(a)(1),2 followed by a cost
2
CERCLA § 104(a)(1), 42 U.S.C. § 9604(a)(1), provides in
part:
Whenever (A) any hazardous substance is
released or there is a substantial threat of such a
release into the environment, or (B) there is a
release or substantial threat of release into the
environment of any pollutant or contaminant
which may present an imminent and substantial
danger to the public health or welfare, the
President is authorized to act, consistent with the
national contingency plan, to remove or arrange
for the removal of, and provide for remedial
7
recovery action, § 9607(a),3 or through a private party cleanup,
action relating to such hazardous substance,
pollutant, or contaminant at any time (including
its removal from any contaminated natural
resource), or take any other response measure
consistent with the national contingency plan
which the President deems necessary to protect
the public health or welfare or the environment.
3
CERCLA § 107(a), 42 U.S.C. § 9607(a), provides in part:
(1) the owner and operator of a vessel or a
facility,
(2) any person who at the time of disposal of any
hazardous substance owned or operated any
facility at which such hazardous substances were
disposed of,
(3) 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,
and
(4) any person who accepts or accepted any
hazardous substances for transport to disposal or
8
§ 9606.4 A private party cleanup typically begins with a cleanup
treatment facilities, incineration vessels or sites
selected by such person, from which there is a
release, or a threatened release which causes the
incurrence of response costs, of a hazardous
substance, shall be liable for–
(A) all costs of removal or remedial
action incurred by the United States
Government or a State or an Indian
tribe not inconsistent with the
national contingency plan;
(B) any other necessary costs of
response incurred by any other
person consistent with the national
contingency plan;
(C) damages for injury to,
destruction of, or loss of natural
resources, including the reasonable
costs of assessing such injury,
destruction, or loss resulting from
such a release; and
(D) the costs of any health
assessment or health effects study
carried out under section 9604(i) of
this title.
9
plan developed by the EPA. §§ 9604(c)(4),5 9621(a).6 The plan
4
CERCLA § 106(a), 42 U.S.C. § 9606(a), provides:
In addition to any other action taken by a State or
local government, when the President determines
that there may be an imminent and substantial
endangerment to the public health or welfare or
the environment because of an actual or
threatened release of a hazardous substance from
a facility, he may require the Attorney General of
the United States to secure such relief as may be
necessary to abate such danger or threat, and the
district court of the United States in the district in
which the threat occurs shall have jurisdiction to
grant such relief as the public interest and the
equities of the case may require. The President
may also, after notice to the affected State, take
other action under this section including, but not
limited to, issuing such orders as may be
necessary to protect public health and welfare and
the environment.
5
CERCLA § 104(c)(4), 42 U.S.C. § 9604(c)(4), provides:
The President shall select remedial actions to
carry out this section in accordance with section
9621 of this title (relating to cleanup standards).
10
is implemented by responsible private parties, under either a
consent agreement, § 9622,7 or a unilateral administrative order,
6
CERCLA § 121(a), 42 U.S.C. § 9621(a), provides:
The President shall select appropriate remedial
actions determined to be necessary to be carried
out under section 9604 of this title or secured
under section 9606 of this title which are in
accordance with this section and, to the extent
practicable, the national contingency plan, and
which provide for cost-effective response. In
evaluating the cost effectiveness of proposed
alternative remedial actions, the President shall
take into account the total short- and long-term
costs of such actions, including the costs of
operation and maintenance for the entire period
during which such activities will be required.
7
CERCLA § 122(a), 42 U.S.C. § 9622(a), provides in part:
The President, in his discretion, may enter into an
agreement with any person (including the owner
or operator of the facility from which a release or
substantial threat of release emanates, or any other
potentially responsible person), to perform any
response action (including any action described in
section 9604(b) of this title) if the President
determines that such action will be done properly
by such person. Whenever practicable and in the
11
§ 9606(a).8 Throughout the cleanup, the EPA maintains
responsibility for oversight and certification. See 40 C.F.R. §
300.400(h) (2005) (“EPA will provide oversight when the
response is pursuant to an EPA order or federal consent
decree”); see also §§ 9622(a), (f)(3), (f)(5) (contemplating EPA
review and certification of private party cleanups). According
to the EPA, private party cleanups comprise a significant
percentage of all CERCLA removal and remedial actions. See
U.S. EPA, Superfund: Building on the Past, Looking to the
Future 72-74 (April 22, 2004) (reporting that private parties
performed 49% of removal actions and 88% of remedial actions
commenced in 2003).
In Rohm & Haas, we held the United States cannot
recover “removal action” oversight costs incurred while
supervising a private party cleanup. 2 F.3d at 1278. We
reasoned that National Cable Television Ass’n, Inc. v. United
States, 415 U.S. 336 (1974), bars recovery of such costs “unless
the statutory language clearly and explicitly requires that result.”
public interest, as determined by the President, the
President shall act to facilitate agreements under
this section that are in the public interest and
consistent with the National Contingency Plan in
order to expedite effective remedial actions and
minimize litigation.
8
See supra note 4 for text of 42 U.S.C. § 9606(a).
12
Rohm & Haas, 2 F.3d at 1274. Emphasizing the lack of any
“explicit reference to oversight of activities conducted and paid
for by a private party,” id. at 1275, and “the dramatic and
unusual effect of requiring regulated parties to pay a large share
of the administrative costs incurred by the overseeing agency,”
id. at 1274, we held CERCLA lacked the requisite “clear
statement.” Id.
After we decided Rohm & Haas, every other court of
appeals that addressed the issue either questioned or rejected our
holding. See United States v. Lowe, 118 F.3d 399, 401, 404 (5th
Cir. 1997) (rejecting applicability of National Cable and holding
CERCLA authorizes EPA recovery of private party response
action oversight costs); United States v. Dico, Inc., 266 F.3d
864, 877-78 (8th Cir. 2001) (same); Atl. Richfield Co. v. Am.
Airlines, Inc., 98 F.3d 564, 568-69 (10th Cir. 1996) (questioning
applicability of National Cable and holding CERCLA provides
for recovery of remedial action oversight costs).9
9
Without reference to Rohm & Haas, other courts of appeals
have rejected the reasoning upon which we relied. See United
States v. Hyundai Merch. Marine Co., 172 F.3d 1187, 1190-91
(9th Cir. 1999) (declining to apply National Cable in similar
cost recovery action under the Oil Pollution Act); New York v.
Shore Realty Corp., 759 F.2d 1032, 1043 (2d Cir. 1985) (noting
EPA oversight costs “squarely fall within CERCLA’s definition
of response costs”).
13
IV.
A.
We begin our analysis with the clear statement doctrine,
established in National Cable, 415 U.S. 336, and applied in
Rohm & Haas, 2 F.3d at 1273-74. Under the clear statement
doctrine, “Congress must indicate clearly its intention to
delegate to the Executive the discretionary authority to recover
administrative costs not inuring directly to the benefit of
regulated parties by imposing additional financial burdens,
whether characterized as ‘fees’ or ‘taxes,’ on those parties.”
Skinner v. Mid-Am. Pipeline Co., 490 U.S. 212, 224 (1989)
(explaining National Cable). Furthermore, when Congress
intends to delegate this type of discretionary authority to a
federal agency, it must set forth “an intelligible principle” to
constrain the agency. National Cable, 415 U.S. at 342
(quotation omitted).
National Cable addressed the Independent Offices
Appropriation Act, 1952, Pub. L. No. 137, 65 Stat. 290 (1952),
which allowed federal agencies to prescribe any “such fee,
charge or price, if any, as [the agency] shall determine . . . to be
fair and equitable taking into consideration direct and indirect
cost to the Government, value to the recipient, public policy or
interest served, and other pertinent facts.” National Cable, 415
U.S. at 337. This open-ended congressional delegation was
intended to encourage self sufficiency among the agencies. Id.
The Court found that in light of Congress’s constitutionally
14
vested taxing power, see U.S. Const. art. I, § 8, and the
apparently unbridled taxing discretion granted to the agencies
under the terms of the statute, the Act approached the outer
boundaries of Congress’s power to delegate. In the absence of
a clear statement of Congress’s intent to delegate its taxing
power to federal agencies, and an intelligible principle
constraining the agency’s exercise of such power, the Court read
the Act “narrowly to avoid constitutional problems,” finding the
phrase “value to the recipient” to be “the measure of the
authorized fee.” National Cable, 415 U.S. at 342-43.
After National Cable was decided, the Court clarified
that the nondelegation principle is implicated only when
Congress fails to provide “an administrative agency with
standards guiding its actions such that a court could ascertain
whether the will of Congress has been obeyed.” Skinner, 490
U.S. at 218 (quotation omitted). In applying the “intelligible
principle” test to particular statutory delegations, the Court’s
“jurisprudence has been driven by a practical understanding that
in our increasingly complex society, replete with ever changing
and more technical problems, Congress simply cannot do its job
absent an ability to delegate power under broad general
directives.” Mistretta v. United States, 488 U.S. 361, 372
(1989). The Court has “found the requisite ‘intelligible
principle’ lacking in only two statutes,” one which provided “no
guidance for the exercise of discretion,” and the other which
“conferred authority to regulate the entire economy on the basis
of no more precise a standard than stimulating the economy by
15
assuring ‘fair competition.’” Whitman v. Am. Trucking Ass’n,
531 U.S. 457, 474 (2001) (citing Panama Refining Co. v. Ryan,
299 U.S. 388 (1935), and A.L.A. Schecter Poultry Corp. v.
United States, 295 U.S. 495 (1935)). “In short,” the Court has
“‘almost never felt qualified to second-guess Congress
regarding the permissible degree of policy judgment that can be
left to those executing or applying the law.’” Whitman, 531
U.S. at 474-75 (quoting Mistretta, 488 U.S. at 416 (Scalia, J.,
dissenting)).
B.
DuPont contends CERCLA lacks both a clear statement
delegating to the EPA the authority to recover oversight costs
and an intelligible principle constraining the EPA’s actions in
exercising such authority. For these reasons, DuPont contends
reading CERCLA to allow recovery of oversight costs is barred
under National Cable.
After reconsideration, we cannot agree. Because of
significant distinctions between the statutory framework at issue
in National Cable and the one at issue here, we no longer
believe National Cable governs our analysis of CERCLA. See
Dico, 266 F.3d at 877; Lowe, 118 F.3d at 401; Atl. Richfield Co.,
98 F.3d at 568. National Cable addressed the imposition of user
fees by the Federal Communications Commission on parties it
was authorized to regulate. 415 U.S. at 337-38; see Skinner, 490
U.S. at 224 (explaining National Cable struck down “agencies’
efforts to receive from regulated parties costs for benefits
16
inuring to the public generally”). CERCLA neither imposes
user fees or taxes, nor imposes them on a regulated industry.
CERCLA response costs are restitutionary payments, imposed
on those responsible for contamination to cover costs of the
contamination’s cleanup. See Dico, 266 F.3d at 877
(“[P]rovisions allowing the EPA to recover costs are meant to
make the guilty parties pay and thus are not like the user fees at
issue in National Cable.”); Lowe, 118 F.3d at 401 (CERCLA
response costs “are neither fees nor taxes, but rather, payments
by liable parties in the nature of restitution for the costs of
cleaning up a contamination or a threatened contamination for
which they are responsible.”); Atl. Richfield Co., 98 F.3d at 568
(“EPA oversight costs are not fees or taxes levied against
innocent members of a regulated industry to pay the EPA’s
general administrative costs, but part of the damages caused or
contributed to by specific persons.”). Nor does CERCLA target
regulated industries, but rather “responsible parties,” see 42
U.S.C. § 9607(a); United States v. Alcan Aluminum Corp., 964
F.2d 252, 257 n.4 (3d Cir. 1992), who are held strictly liable for
the costs of cleaning up contamination for which they are
responsible. See United States v. Chromalloy Am. Corp., 158
F.3d 345, 351 (5th Cir. 1998) (“CERCLA establishes ‘a federal
cause of action in strict liability.’”) (quoting H.R. Rep. No. 96-
1016(I), 96th Cong., 2d Sess. 22 (1980)).
Additional distinctions between CERCLA and the
statutory scheme in National Cable strengthen our conclusion
that CERCLA’s cost recovery provisions do not implicate
17
National Cable. CERLCA liability is judicially determined
under a federal cause of action—it is not determined by
administrative levy. Nor does CERCLA divorce an agency from
the appropriations process, implicating agency accountability.
Compare 26 U.S.C. § 9507(c)(1) (requiring congressional
appropriation of Superfund accruals), with Rohm & Haas, 2
F.3d at 1274 (applying National Cable to ensure EPA
accountability via the appropriations process).
Even if CERCLA were to implicate National Cable, its
cost recovery provision, 42 U.S.C. § 9607, provides a clear
statement of the power conferred and an intelligible principle
governing the exercise of such power. See Skinner, 490 U.S. at
219 (“It is ‘constitutionally sufficient if Congress clearly
delineates the general policy, the public agency which is to
apply it, and the boundaries of this delegated authority.’”)
(quoting Am. Power & Light Co. v. SEC, 329 U.S. 90, 105
(1946)). The government is authorized to recover, inter alia,
“all costs of removal or remedial action incurred by the United
States government . . . not inconsistent with the National
Contingency Plan.” 42 U.S.C. § 9607(a)(1)–(4)(A).
Government recovery of oversight costs is specifically
authorized, but limited by the detailed statutory definitions of
“removal action” and “remedial action,” id. § 9601(23)–(25),
and by the provisions of the National Contingency Plan. See 40
C.F.R. pt. 300 (2005). The National Contingency Plan sets
forth, inter alia, “methods and criteria for determining the
appropriate extent of removal, remedy, and other measures,” 42
18
U.S.C. § 9605(a)(3), and “means of assuring that remedial
action measures are cost-effective.” § 9605(a)(7). The plan also
requires documentation of all costs that are to be recovered. See
40 C.F.R. § 300.160(a)(1) (2005).
A responsible party may challenge oversight costs as
inconsistent with the plan. See United States v. Hardage, 982
F.2d 1436, 1445 (10th Cir. 1992) (“[A] defendant who is
declared liable for future response costs may still challenge
those costs as unrecoverable because the underlying response
actions giving rise to the costs are inconsistent with the NCP.”).
Where the government’s costs are inconsistent with the plan,
they should not be allowed. See United States v. USX Corp., 68
F.3d 811, 817 (3d Cir. 1995) (noting that the district court
“declined to grant summary judgment in favor of the United
States on its damage claim . . . finding that there were genuine
issues of material fact ‘regarding the reasonableness of the
[Remedial Investigation and Feasability Study] and whether the
United States’ response costs were incurred due to a ‘needless
and expensive monitoring study’”); Dico, 266 F.3d at 879;
Wash. State Dep’t of Transp. v. Wash. Natural Gas Co., 59 F.3d
793, 805 (9th Cir. 1995). The National Contingency Plan
therefore sets forth an intelligible principle limiting the
government’s authority to recover CERCLA costs.
EPA recovery is further limited, and its discretion further
constrained, by the statutory definition of “responsible parties.”
See 42 U.S.C. § 9607(a)(1)–(4); United States v. Alcan
Aluminum Corp., 964 F.2d 252, 257 n.4 (3d Cir. 1992). Under
19
CERCLA’s cost recovery provisions, 42 U.S.C. § 9607(a), the
EPA can recover costs only after making the requisite showing
of liability under the comprehensive “responsible party”
framework. These statutory standards guide the EPA and the
courts, see Skinner, 490 U.S. at 218, and serve as constraints on
the agency’s cost recovery.
In sum, CERCLA represents Congress’s effort to address
a complex environmental problem under a comprehensive
remedial statute. Congress’s decision to hold responsible parties
strictly liable for the government’s costs of responding to
hazardous waste contamination is both a reasonable exercise of
legislative authority and different in kind from the unbounded
delegation of taxing power at issue in National Cable.
Furthermore, CERCLA § 107 contains a clear statement of the
power conferred and “intelligible principles” to guide and
constrain the agency in exercising such power. We see no
constitutional delegation problem and hold National Cable’s
narrow rule of statutory construction does not apply.
V.
Because National Cable is inapposite, ordinary principles
of statutory construction govern the recovery of CERCLA
oversight costs. The starting point is the language of the statute.
If the meaning of the text is clear, “there is no need to . . .
consult the purpose of CERCLA at all.” Cooper Indus., Inc. v.
Aviall Services, Inc., 125 S. Ct. 577, 584 (2004); see id. (“As we
have said: ‘[I]t is ultimately the provisions of our laws rather
20
than the principal concerns of our legislators by which we are
governed.’”) (quoting Oncale v. Sundowner Offshore Servs.,
Inc., 523 U.S. 75, 79 (1998)). We note at the outset, however,
that “CERCLA is not . . . ‘a model of legislative
draftsmanship’.” United States v. Gen. Battery Corp., 423 F.3d
294, 298 (3d Cir. 2005) (quoting Exxon Corp. v. Hunt, 475 U.S.
355, 363 (1986)). Where a statute’s text is ambiguous, relevant
legislative history, along with consideration of the statutory
objectives, can be useful in illuminating its meaning. Gen.
Dynamics Land Sys. v. Cline, 540 U.S. 581, 600 (2004)
(examining “the text, structure, purpose and history” of the
relevant statute).
By its terms, CERCLA’s cost-recovery provision holds
responsible parties liable for, inter alia, “all costs of removal or
remedial action incurred by the United States government or a
State or an Indian tribe not inconsistent with the national
contingency plan,” and “any other necessary costs of response
incurred by any other person consistent with the national
contingency plan.” 42 U.S.C. § 9607(a)(1)–(4)(A), (B)
(emphasis added).
“Removal action” comprises:
the cleanup or removal of released hazardous
substances from the environment, such actions as
may be necessary taken in the event of a threat of
release of hazardous substances into the
environment, such actions as may be necessary to
21
monitor, assess and evaluate the release or threat
of release of hazardous substances, the disposal of
removed material, or the taking of such other
actions as may be necessary to prevent, minimize,
or mitigate damage to the public health or welfare
or to the environment, which may otherwise result
from a release or threat of release.
§ 9601(23).
“Remedial action” comprises:
those actions consistent with permanent remedy
taken instead of or in addition to removal actions
in the event of a release or threatened release of
hazardous substances so that they do not migrate
to cause substantial danger to present or future
public health or welfare or the environment. The
term includes, but is not limited to, such actions at
the location of the release as storage,
confinement, perimeter protection using dikes,
trenches, or ditches, clay cover, neutralization,
cleanup of released hazardous substances and
associated contaminated materials, recycling or
reuse, diversion, destruction, segregation of
reactive wastes, degrading or excavations, repair
or replacement of leaking containers, collections
of leachate and runoff, onsite treatment or
incineration, provision of alternative water
22
supplies, and any monitoring reasonably required
to assure that such actions protect the public
health and welfare and the environment.
§ 9601(24). CERCLA also provides that “removal action” and
“remedial action” shall include “enforcement activities related
thereto.” § 9601(25).
The government contends its oversight of removal and
remedial actions falls within the plain meaning of these
provisions, and its costs are recoverable under CERCLA § 107,
which holds responsible parties liable for “all” removal,
remedial, or other response costs necessarily incurred by the
United States.10 See CERCLA § 107(a), 42 U.S.C. §
10
DuPont contends the government’s position conflicts with
the position the government advanced, and the Supreme Court
accepted, in Cooper Industries, Inc. v. Aviall Services, Inc., 125
S. Ct. 577 (2004). Cooper addressed whether a potentially
responsible party who undertakes a cleanup without having been
sued under CERCLA may seek contribution from other jointly
responsible parties under CERCLA § 113(f)(1), 42 U.S.C. §
9613(f)(1). The government urged the Supreme Court not to
extend the statutory text of CERCLA, which authorizes
contribution claims “during or following” a civil action under
CERCLA § 106 or § 107(a), §§ 9606, 9607(a). See 42 U.S.C.
§ 9613(f)(1). The conflict, DuPont contends, is that the
government in this case “asserts that CERCLA should be
construed broadly to further certain policy concerns, so as to
23
9607(a)(1)–(4)(A) (Responsible parties shall be liable for “all
costs of removal or remedial action incurred by the United
States Government or a State or an Indian tribe not inconsistent
with the national contingency plan.”). For the following
reasons, we agree that EPA oversight falls comfortably within
the definitions of “removal action” and “remedial action.”
A.
“Removal action” entails containing and cleaning up
hazardous waste substances and includes monitoring, assessing,
and evaluating “the release or threat of release of hazardous
substances, the disposal of removed material, or the taking of
such other actions as may be necessary to prevent, minimize, or
mitigate damage to the public health or welfare or to the
environment.” 42 U.S.C. § 9601(23). The term “monitor” in
this definition is most reasonably read to encompass agency
oversight. Lowe, 118 F.3d at 403. We construe a term not
defined in a statute in accordance with its ordinary and natural
meaning. United States v. Alvarez-Sanchez, 511 U.S. 350, 357
(1994); Lowe, 118 F.3d at 402. The court in Lowe surveyed
dictionary and thesaurus meanings of “monitor” and explained:
read ‘oversight’ into the statutory text in provisions in which it
is not present.” We disagree with DuPont’s characterization of
the government’s position. The government asserts, and we
agree, that the text of CERLCA authorizes recovery of oversight
costs. Policy concerns may support this conclusion, but they do
not constitute the foundation of our holding.
24
“The verb ‘monitor’ is generally synonymous with audit, check,
control, inspect, investigate, observe, oversee, regulate, review,
scrutinize, study, survey, test and watch.” Lowe, 118 F.3d at
403; see also Atl. Richfield Co., 98 F.3d at 569 (same).
EPA oversight actions—reviewing, approving, and
supervising project specifications, treatment technologies,
testing and sampling methods, and construction schedules—fall
squarely within the “monitoring” of a “removal action.” These
oversight actions involve inspecting and supervising both the
release of hazardous substances, and the subsequent removal
and disposal of released substances, and are necessary to ensure
a private party cleanup is adequate to protect public health,
public welfare, and the environment. Accordingly, “the term
removal action includes the monitoring conducted by the EPA
via its oversight activities.” Lowe, 118 F.3d at 403.
DuPont contends the term “monitor” refers only to
monitoring the “release or threat of release of hazardous
substances,” 42 U.S.C. § 9601(23), and does not refer to
monitoring the conduct of all removal actions. We disagree.
We believe “monitor” is meant to extend to the phrases that
follow the phrase “release or threat of release of hazardous
substances,” and to include all aspects of preventing hazardous
releases from adversely affecting public health, public welfare,
and the environment, including EPA oversight. See § 9601(23).
Just as EPA oversight is a necessary part of the
monitoring entailed in a “removal action,” so too is it necessary
25
to the monitoring of a permanent “remedial action.” The
definition of “remedial action” focuses on permanent solutions,
comprising those agency actions “consistent with [a] permanent
remedy taken” to clean up and prevent the migration of
hazardous substances. See § 9601(24). This includes, “but is
not limited to . . . any monitoring reasonably required to assure
that such actions protect the public health and welfare and the
environment.” Id. (emphasis added). We believe oversight of
a remedial action—including reviewing, approving and
supervising design plan implementation, water sampling and
treatment activities, and health and safety issues—is monitoring
“reasonably required to assure” a private party remedial action
will “protect the public health and welfare and the environment”
under § 9601(24). See Dico, 266 F.3d at 878 (finding a “clear
statement” in the statutory language authorizing recovery of the
government’s remedial action oversight costs); see also Lowe,
118 F.3d at 403; Atl. Richfield Co., 98 F.3d at 569. Government
oversight ensures a private party remedial action will be
effective in preventing, minimizing, and mitigating current or
threatened releases.
DuPont contends the term “monitoring” used in
“remedial action” refers only to “testing and sampling the
physical environment.” We note no such language appears in
the definition of “remedial action.” But DuPont contends
because the terms preceding “monitoring” describe specific
actions taken to address the physical environment affected by
the release of a hazardous substance, “monitoring” should be
26
similarly limited.11 The government contends the statutory rule
11
DuPont also contrasts CERCLA’s use of “monitoring” with
use of the same term in the Oil Pollution Act of 1990, Pub. L.
No. 101-380, § 1001, 104 Stat. 486 (1990), as discussed in
United States v. Hyundai Merch. Marine Co., 172 F.3d 1187
(9th Cir. 1999). DuPont notes that the Oil Pollution Act
includes an explicit provision authorizing the EPA to recover
costs to “monitor all Federal, State and private actions to remove
a discharge,” see Hyundai, 172 F.3d at 1189-90 (quoting 33
U.S.C. § 1321(c)(1)(B)(ii)), and contends Congress would have
included similar language in CERCLA had it intended to
authorize recovery of EPA oversight costs. We note that the
language DuPont quotes does not appear in the Oil Pollution Act
itself, but is rather cross-referenced from the Federal Water
Pollution Control Act. See §§ 1321(c)-(e). More significantly,
in interpreting the Oil Pollution Act to allow for recovery of
monitoring costs, Hyundai relies not only on the quoted
language above, but also on language providing for recovery of
“costs to prevent, minimize, or mitigate” oil pollution. Hyundai,
172 F.3d at 1190 (quoting 42 U.S.C. § 2701(31)). This
language is identical to the language in CERCLA’s definition of
removal action, which we interpret to encompass oversight
costs. See § 9601(23) (defining removal action to include
actions necessary “to prevent, minimize, or mitigate” damage to
the public health, welfare or the environment). In any event, the
Oil Pollution Act was enacted ten years after CERCLA and
cannot provide guidance for Congress’s intent when it enacted
27
of construction on which DuPont relies—requiring that a
general word associated with or following a series of specific
words must be read in light of the specific terms, see Jarecki v.
G.D. Searle & Co., 367 U.S. 303, 307 (1961)—is inapplicable
here. We agree. The term monitoring in the definition of
“remedial action” is not intended as one of the enumerated
specific actions immediately preceding, but rather as an action
distinct in and of itself, which includes supervising the actions
taken at the location of the release. One such action is the
“cleanup of released hazardous substances and associated
contaminated materials.” 42 U.S.C. § 9601(24). Because
monitoring a cleanup necessarily entails oversight of the activity
that constitutes the cleanup, we conclude EPA oversight is a part
of the monitoring activities referred to in the definition of
“remedial action.”
In a statute designed to impose the costs of cleanup on
those responsible for contamination, the term “monitor” is most
naturally read in the definitions of both “removal action” and
“remedial action” as encompassing agency oversight. But in
reaching this conclusion, we do not imply the term encompasses
only agency oversight. Based on the language of the statute, we
believe the monitoring of removal and remedial actions includes
the inspection and supervision of all stages of a response action,
from risk assessment, to response planning, to execution of the
removal and remedial actions. We recognize monitoring the
CERCLA.
28
physical environment at the site of a release is crucial to
defining the risk and designing an appropriate response, and our
interpretation in no way undermines the EPA’s authority to do
so.
B.
The definitions of both “removal action” and “remedial
action” include actions taken to prevent or minimize danger to
the public and to the environment resulting from a release of
hazardous substances. See § 9601(23) (“[R]emoval action”
includes “such other actions as may be necessary to prevent,
minimize, or mitigate damage to the public health or welfare or
to the environment, which may otherwise result from a release
or threat of release.”); § 9601(24) (“[R]emedial action” includes
actions “to prevent or minimize the release of hazardous
substances so that they do not migrate to cause substantial
danger to present or future public health or welfare or the
environment.”). The government contends EPA oversight fits
within this aspect of both definitions because the very purpose
of EPA oversight is to prevent, minimize, and mitigate damage
that could otherwise result from a release of hazardous
substances by ensuring private party cleanups meet CERCLA
standards. We agree. Mindful that CERCLA delegates
significant authority to the executive branch, acting through the
EPA, to facilitate cleanups and to enforce statutory
requirements, we believe EPA oversight of cleanup activities is
necessary to ensure “compliance with standards aimed at the
public health,” Lowe, 118 F.3d at 403, and is accordingly
29
necessary to protect the public health and welfare under
CERCLA § 101(23) and § (24), §§ 9601(23), (24).
C.
“Remedial action” and “removal actions” are expressly
defined in CERCLA to include “enforcement activities.” 42
U.S.C. § 9601(25).12 A private party cleanup is implemented by
responsible private parties, but is supervised throughout by the
EPA. See 40 C.F.R. § 300.400(h) (2005) (“EPA will provide
oversight when the response is pursuant to an EPA order or
federal consent decree.”); see also 42 U.S.C. §§ 9622(f)(3), (5)
(requiring review and certification of private party cleanups); §
9611(c)(8) (contemplating oversight of remedial activities
resulting from consent orders or settlement agreements). EPA
oversight of cleanup actions constitutes “enforcement
activities,” designed to ensure private party compliance with a
consent agreement or a unilateral administrative order. See
Lowe, 118 F.3d at 403 (finding EPA oversight is an “inherent
and necessary enforcement element of private party response
action”); Atl. Richfield Co., 98 F.3d at 570 (“[M]onitoring or
oversight of a private party remedial action to determine
12
CERCLA § 101(25), 42 U.S.C. § 9601(25), provides:
The terms “respond” or “response” means
remove, removal, remedy, and remedial action;[]
all such terms (including the terms “removal” and
“remedial action”) include enforcement activities
related thereto.
30
whether the action complies with a consent decree and the
provisions of CERCLA is enforcement activity related to a
remedial action, and therefore, is a response under § 101(25).”).
DuPont argues “enforcement activities” refers only to
specific enforcement actions taken to compel compliance when
a private party fails to perform a response action satisfactorily.
But the government contends the term encompasses activities
designed to evaluate compliance, and therefore includes EPA
oversight.13 We believe “enforcement activities” include all
aspects of ensuring CERCLA compliance, from monitoring
whether a private party is in compliance with CERCLA
standards to bringing a specific enforcement action where
compliance is lacking. See Office of Solid Waste and
Emergency Response, U.S. EPA, Guidance on EPA Oversight
of Remedial Designs and Remedial Actions Performed by
Potentially Responsible Parties, EPA/540/G-90/001, OSWER
13
The government contends Congress was well aware the
EPA viewed oversight of responsible party cleanups as an
“enforcement activity” when it added this term to the definitions
of “removal action” and “remedial action.” During Congress’s
consideration of the 1986 amendments to CERCLA, the EPA
submitted information to the hearing record that plainly
identified responsible party oversight as an enforcement activity
and cost. See Reauthorization of Superfund: Hearings before
the House Subcommittee on Water Resources of the Committee
on Public Works, 99th Cong. 667 (1985).
31
Directive 9355.5-01 (Apr. 1, 1990) (characterizing private party
cleanups as “enforcement lead cleanups” and providing for
enforcement activities to both evaluate and compel compliance).
We conclude EPA oversight is an “enforcement activity”
encompassed by the definitions of “remedial action” and
“removal action.”
D.
CERCLA § 107’s authorization to recover “all”
government costs of “monitoring,” “enforcement activities,” and
any other action “necessary to prevent, minimize, or mitigate
damage to the public health or welfare or to the environment,”
42 U.S.C. § 9607(a) (CERCLA’s general cost recovery
provision), demonstrates that Congress intended the government
to recover costs incurred in overseeing and monitoring the
cleanup actions of responsible private parties. This conclusion
comports with the overall structure of CERCLA and the EPA’s
central role in CERCLA’s enforcement. The EPA is required to
manage CERCLA cleanups from beginning to end, and has
authorization to recover the costs of doing so. Id. DuPont’s
narrow construction of § 107 might discourage the EPA from
supervising a critical step in the cleanup process—the actual
removal and remedial activity conducted by responsible private
parties. A more natural reading of CERCLA § 107 permits the
EPA to recover the costs associated with overseeing every stage
of a cleanup action, including that of the site cleanup itself,
whether that action is performed by the government or by
responsible private parties. See Lowe, 118 F.3d at 403
32
(“Government monitoring or oversight is an inherent and
necessary enforcement element of private party response
action.”).
E.
Relying on Rohm & Haas, 2 F.3d at 1277-78, DuPont
contends allowing oversight cost recovery under CERCLA §
107 renders other statutory provisions superfluous. In
14
particular, DuPont cites CERCLA § 104(a)(1) and §
14
CERCLA § 104(a)(1), 42 U.S.C. § 9604(a)(1), provides in
part:
Whenever (A) any hazardous substance is
released or there is a substantial threat of such a
release into the environment, or (B) there is a
release or substantial threat of release into the
environment of any pollutant or contaminant
which may present an imminent and substantial
danger to the public health or welfare, the
President is authorized to act, consistent with the
national contingency plan, to remove or arrange
for the removal of, and provide for remedial
action relating to such hazardous substance,
pollutant, or contaminant at any time (including
its removal from any contaminated natural
resource), or take any other response measure
consistent with the national contingency plan
which the President deems necessary to protect
33
111(c)(8).15 Section 104 addresses government cleanup actions
the public health or welfare or the environment.
When the President determines that such action
will be done properly and promptly by the owner
or operator of the facility or vessel or by any other
responsible party, the President may allow such
person to carry out the action, conduct the
remedial investigation, or conduct the feasibility
study in accordance with section 9622 of this title.
No remedial investigation or feasibility study
(RI/FS) shall be authorized except on a
determination by the President that the party is
qualified to conduct the RI/FS and only if the
President contracts with or arranges for a
qualified person to assist the President in
overseeing and reviewing the conduct of such
RI/FS and if the responsible party agrees to
reimburse the Fund for any cost incurred by the
President under, or in connection with, the
oversight contract or arrangement. . . .
15
CERCLA § 111(c)(8), 42 U.S.C. § 9611(c)(8), provides:
Uses of the Fund under subsection (a) of this
section include—
. . .The costs of contracts or arrangements entered
into under section 9604(a)(1) of this title to
oversee and review the conduct of remedial
34
and settlements, while § 111 addresses Superfund
disbursements. §§ 9604(a)(1), 9611(c)(8). We believe our
interpretation does not render these provisions superfluous or
redundant but rather evidences Congress’s intent to authorize
reimbursement for all cleanup costs, including oversight.
Nonetheless, we address DuPont’s claims and conclude
CERCLA § 104 and § 111 only strengthen our interpretation of
§ 107.
Congress amended § 104 in 1986 to authorize the EPA to
enter into settlements with private parties for private cleanup
actions. See 42 U.S.C. § 9604(a)(1).16 Section 104(a)(1) in part
provides that any settlement agreement or consent order
authorizing a private party remedial investigation or feasibility
study must include reimbursement of government expenses
incurred in overseeing that study. Specifically, § 104 allows a
responsible private party to conduct a remedial investigation or
feasibility study (RI/FS) in accordance with § 122 (pertaining to
settlements) if, but only if, “the President contracts with or
investigations and feasibility studies undertaken
by persons other than the President and the costs
of appropriate Federal and State oversight of
remedial activities at National Priorities List sites
resulting from consent orders or settlement
agreements.
16
See supra note 14 for text of 42 U.S.C. § 9604(a)(1).
35
arranges for a qualified person to assist the President in
overseeing and reviewing the conduct of such RI/FS,” and “if
the responsible party agrees to reimburse the Fund for any cost
incurred by the President under, or in connection with, the
oversight contract or arrangement.” DuPont contends this
directive would be unnecessary if oversight costs were
recoverable as “response costs” in a liability action under § 107.
The government responds that the two sections authorize
distinct forms of cost recovery—§ 104 does not render § 107(a)
superfluous because the former compels an agreement to pay
oversight costs in advance of a settlement, while the latter
merely imposes general liability on all responsible parties, who
will have to pay those costs if the government or another party
pursues a cost recovery action after the cleanup.
We agree with the government. Use of the term
“oversight” in § 104 neither compels nor implies the conclusion
that Congress intended to exclude that term from the cost
recovery provision of § 107. Our reading of § 107 makes a
party liable for oversight costs but does not compel the party to
agree in advance to pay such costs. This is the function of §
104, which requires that as part of a settlement agreement or
consent order, a responsible party must agree in advance to pay
costs incurred in overseeing an RI/FS.
Congress enacted the 1986 amendments, which added §
104(a)’s oversight language, to further CERCLA’s general
policy of encouraging settlement. See Alcan Aluminum Corp.,
25 F.3d at 1184 (“Congress amended CERCLA because it
36
wanted to encourage early settlement.”). Legislative history
suggests Congress was concerned the EPA might not pursue its
oversight costs in settlement negotiations, leading to fiscal strain
on the Superfund. See S. Rep. No. 99-11 at 39 (1985). In this
context, inclusion of the term “oversight” in § 104 suggests
Congress intended to guard the solvency of the Superfund by
easing the EPA’s recovery of oversight costs, already authorized
by § 107, in settlement contexts. By requiring an express, prior
agreement for payment of certain oversight costs where private
parties have negotiated to undertake cleanup activities, § 104
alleviates the EPA’s burden in litigating cost recovery after the
fact.
The government contends DuPont’s contrary
interpretation creates a disincentive for settlement, conflicting
with fundamental CERCLA policy. See 42 U.S.C. § 9622(a)
(encouraging settlements “in order to expedite effective
remedial actions and minimize litigation”). We agree. Were the
EPA required to recover oversight costs from settling parties
under § 104, but prohibited from recovering costs from non-
settling parties, responsible parties might avoid settlement so as
to avoid paying such costs. Absent textual support, we decline
to accept an interpretation contrary to CERCLA’s statutory
language and objectives.
DuPont also cites CERCLA § 111 as evidence that
oversight costs are not encompassed by the term “response
costs.” Section 111 governs Superfund disbursements to state
and federal governments. Under the introductory heading “In
37
general,” § 111(a) broadly authorizes Superfund payment of
certain “governmental response costs.” § 9611(a)(1). Section
111(c), in turn, provides that acceptable “uses of the Fund under
subsection (a) of this section include” a host of specific
government actions, many of which are encompassed by the
preceding and more general definition of “response costs.” See
§ 9611(c)(1)–(14). Section 111(c)(8) allows disbursement from
the Superfund of “the costs of appropriate Federal and State
oversight of remedial activities . . . resulting from consent
orders or settlement agreements.” § 9611(c)(8). DuPont
contends Congress would not have expressly provided for
Superfund payment of “oversight” costs in § 111(c)(8) if such
costs were considered “response costs” under the preceding and
more general language of § 111(a).
We find this argument unconvincing. As the government
explains, subsection 111(c)(8) was not added to allow for
recovery of costs not otherwise recoverable as “response costs.”
Rather, it was added to ensure that the states, in addition to the
EPA, could recover oversight costs. See 130 Cong. Rec.
H23556 (1984). Moreover, subsection 111(c)(8) is not alone in
overlapping with the more general provisions of subsection (a).
Other provisions of subsection 111(c), clearly encompassed by
the term “response cost,” overlap as well. See, e.g., 42 U.S.C.
§ 9611(c)(3) (authorizing use of the Superfund to “identify,
investigate, and take enforcement and abatement action against
releases of hazardous substances,” actions clearly embraced by
“response costs”). In each of these cases, the overlay does not
38
demonstrate that the specified actions are outside of the scope
of otherwise recoverable “response costs.” Rather, it
demonstrates that the function of subsections (c)(1)–(14) is to
illustrate and explain the more general terms of subsection (a).
We are not convinced § 111 bears on our interpretation
of the cost recovery provision of § 107. To the extent it does,
the section strengthens our reading that government oversight
costs are recoverable. The section provides, on its face, that the
“response costs” recoverable from the Superfund “include” the
“costs of appropriate Federal and state oversight.” §§
9611(c)(1), (8).
That § 104 and § 111 specify recovery of oversight costs
does not mean the government is unable to recover those costs
under § 107. Rather, it demonstrates Congress’s intent in
amending CERCLA to particularize the general cost recovery
provisions of § 107 by specifying that the EPA should recover
costs beforehand in settlement actions, and to ensure that states,
in addition to the EPA, recover oversight costs.17 With this in
17
We reach our conclusion based on the language of the
statute. But the government contends, and we agree, the EPA’s
reasonable construction of § 104(a)(1) and § 111(c)(8) is
entitled to some measure of Skidmore deference. See United
States v. Mead Corp., 533 U.S. 218, 234-35 (2001) (explaining
Skidmore v. Swift & Co., 323 U.S. 134 (1944)). Although the
more deferential doctrine of Chevron, U.S.A., Inc. v. NRDC,
Inc., 467 U.S. 837 (1984), is inapplicable, the “well-reasoned
39
mind, we believe the specific references to recovery costs in §
104 and § 111 reflect Congress’s intent to authorize broadly the
recovery of government oversight costs incurred in connection
with a cleanup action. Rather than evidencing an intent to
foreclose recovery of these costs, the statute appears designed to
guarantee it.
F.
Finally, we note recovery of the EPA’s oversight costs
comports with CERCLA’s functional objectives. The structure
and purposes of CERCLA lend support to our reading of the
plain meaning of the statute’s text. The cleanup of the Newport
Superfund site was a massive undertaking, involving a
comprehensive design phase, a technically challenging
construction phase, and upward of $35 million in cleanup
expenditures by DuPont. Working cooperatively with DuPont
and Delaware state authorities, the EPA provided design input
and technical oversight on matters as disparate as selecting
groundwater barrier technologies, evaluating sonar data,
views of the agencies implementing a statute constitute a body
of experience and informed judgment to which courts and
litigants may properly resort for guidance.” Mead, 533 U.S. at
227 (citations omitted). With respect to the purposes of §
104(a)(1) and § 111(c)(8), the persuasiveness of the
government’s position rests on the “specialized experience” the
EPA brings to bear on the issue of CERCLA enforcement. Id.
at 235.
40
specifying seed mixtures for landfill cover, designing remedial
caps for installation on steep landfill slopes, restoring wetlands,
and reviewing project health and safety protocols. In the
cleanup phase, the agency’s activities included coordinating and
monitoring certain dredging operations, collecting soil samples,
supervising landfill excavation, inspecting wetland remediation,
monitoring a permeable reactive barrier wall, and approving
DuPont’s requests to modify the cleanup plan in response to
unforseen conditions. The EPA also coordinated the assistance
of the U.S. Army Corps of Engineers and the U.S. Fish and
Wildlife Service, among others, in project matters implicating
their areas of expertise. The EPA’s technical and supervisory
expertise was a key element in the successful cleanup of the
Newport Superfund site, showing agency oversight is central to
effective remedial action under CERCLA.
DuPont and its amicus supporters respond that allowing
the government to recover oversight costs encourages
inefficiency in CERCLA enforcement, citing the EPA’s
allegedly excessive oversight expenditures and its “dismal track
record of Superfund mismanagement.” If valid, these arguments
are better directed toward Congress. In any event, CERCLA
itself addresses the purported problem. The statute limits the
recovery of response costs, including oversight costs, to those
that are “necessary” and “not inconsistent with the national
contingency plan.” See 42 U.S.C. § 9607(a)(4)(A)–(B).
41
VI.
Citing the EPA’s “excessive costs and lack of
accountability to Congress,” DuPont’s amici contend that if
oversight costs are recoverable, responsible parties will be held
unfairly liable for the “waste and inefficiency” of EPA practices.
We address this argument by reviewing the limits on cost
recovery provided by the National Contingency Plan and by
detailing the burden of proof and standard of review applicable
to a claim that costs are inconsistent with the plan and
accordingly, unrecoverable.
The National Contingency Plan limits the scope and
nature of activities the EPA is authorized to charge to
responsible parties. As discussed in Part IV. B. supra, the plan
sets forth, inter alia, “methods and criteria for determining the
appropriate extent of removal, remedy, and other measures,” 42
U.S.C. § 9605(a)(3), and “means of assuring that remedial
action measures are cost-effective,” § 9605(a)(7). The plan also
requires all recoverable costs to be documented. See 40 C.F.R.
§ 300.160(a)(1) (2005). CERCLA’s cost recovery provision, §
9607(a)(4)(A)–(B), requires responsible parties to pay all costs
that are not inconsistent with the plan. This standard ensures
that costs will only be recoverable if they result from
compliance with the plan’s methods and criteria for determining
appropriate, cost-effective response actions. Accordingly, the
requirement that responsible parties pay only those costs that are
not inconsistent with the National Contingency Plan limits the
EPA’s discretion in recovering oversight costs.
42
In United States v. Northeast Pharmaceutical &
Chemical Co., the Court of Appeals for the Eighth Circuit held
response costs not inconsistent with the National Contingency
Plan are conclusively presumed reasonable and therefore
recoverable, and responsible parties have the burden of proving
certain costs are inconsistent and not recoverable. See 810 F.2d
726, 747-48 (8th Cir. 1986). The court further held the arbitrary
and capricious standard is the proper measure of review for the
EPA’s actions in incurring response costs, including oversight
costs. Id.; see also Minnesota v. Kalman W. Abrams Metals,
Inc., 155 F.3d 1019, 1024 (8th Cir. 1998). Other courts of
appeals have adopted this burden of proof and standard of
review. See Wash. State Dep’t of Transp. v. Wash. Natural Gas
Co., 59 F.3d 793, 802 (9th Cir. 1995); United States v. Hardage,
982 F.2d 1436, 1442 (10th Cir. 1992); United States v. Azko
Coatings of Am., Inc., 949 F.2d 1409, 1424 (6th Cir. 1991).
We agree EPA response costs are presumed consistent
with the National Contingency Plan unless a responsible party
overcomes this presumption by establishing the EPA’s response
action giving rise to the costs is inconsistent with the National
Contingency Plan. See Ne. Pharm., 810 F.2d at 747. By
authorizing the government’s recovery of all response costs not
inconsistent with the National Contingency Plan, CERCLA
creates an exception for costs that are inconsistent. See 42
U.S.C. § 9607(a)(4)(A)–(B). Responsible parties—the parties
claiming the benefit of this statutory exception—carry the
burden of proving that certain costs fall within the exception.
43
See Ne. Pharm., 810 F.2d at 747; see also United States v. First
City Nat. Bank, 386 U.S. 361, 366 (1967).
To establish an EPA response action is inconsistent with
the National Contingency Plan, a responsible party must show
the EPA acted arbitrarily and capriciously in choosing the
response action. As the statute itself provides, a “court shall
uphold the [EPA’s] decision in selecting the response action
unless the objecting party can demonstrate, on the administrative
record, that the decision was arbitrary and capricious or
otherwise not in accordance with law.” 42 U.S.C. § 9613(j)(2).
We believe “determining the appropriate removal and remedial
action involves specialized knowledge and expertise,” and “the
choice of a particular cleanup method is a matter within the
discretion of the EPA.” Ne. Pharm., 810 F.2d at 748. DuPont
has not established arbitrary or capricious government action in
taking response actions that led to oversight costs. Accordingly,
we “give deference to the EPA’s choice of response action and
will not substitute our own judgment for that of the EPA.”
Hardage, 982 F.2d at 1442.
Our dissenting colleagues contend there will be “no
natural limit to the type and scope of activities that the EPA can
charge to a responsible party,” in part because the arbitrary and
capricious standard “is a difficult one for responsible parties to
meet.” Dissent at 76. We cannot agree. Set forth in the
Administrative Procedure Act, 5 U.S.C. § 706(2)(A), the
arbitrary and capricious standard is well established as the
appropriate standard for most agency action. See Citizens to
44
Preserve Overton Park v. Volpe, 401 U.S. 402, 413-14 (1971).
While deferential to agency decision making, “the arbitrary and
capricious standard . . . contemplates a searching ‘inquiry into
the facts’ in order to determine ‘whether the decision was based
on a consideration of the relevant factors and whether there has
been a clear error of judgment.’” Indus. Union Dep't v. API, 448
U.S. 607, 705 (1980) (citing Citizens to Preserve Overton Park,
401 U.S. at 416). We see no merit in the argument that judicial
review under this standard provides no check on the EPA’s
recovery of oversight costs. Nor do we understand our
dissenting colleagues’ concern that the EPA will be able “to
routinely bill responsible parties for costs that are unnecessary
or excessive, but do not rise to the level of ‘arbitrary and
capricious.’” Dissent at 76 n.25. Costs that are unnecessary and
excessive in light of the National Contingency Plan are arbitrary
and capricious and should be disallowed under this standard of
review. See Kalman W. Abrams Metals, Inc., 155 F.3d at 1025
(holding certain response costs inconsistent with the National
Contingency Plan under the arbitrary and capricious standard of
review); Wash. Natural Gas Co., 59 F.3d at 805 (same).
VII.
In light of the plain meaning of the relevant CERCLA
provisions, the overall statutory framework, the functional
benefits of agency oversight, and the overarching statutory
objective of ensuring that those responsible for environmental
harm are “tagged” with “the cost of their actions,” Bestfoods,
524 U.S. at 56 (quoting legislative history), we conclude
45
CERCLA § 107 authorizes the United States to recover costs
incurred in overseeing private party removal and remedial
actions that are not inconsistent with the National Contingency
Plan.
We will overrule Rohm & Haas, reverse the order of the
District Court, and remand for entry of judgment in favor of the
United States.
ROTH, Circuit Judge, concurring in part:
I join the majority in the result it reaches and, for the
most part, in the reasons for which it does so. I write separately
for the limited purpose of expressing my concern with its
application of the ordinary principles of statutory construction
found throughout Section V, particularly in Subsection A. In
this part of the opinion, the majority argues that the term
“monitor” in the definition of removal and remedial action is
most reasonably read to encompass agency oversight. Although
not the full extent of the majority’s argument, the monitoring
provision is an important hook upon which the opinion locates
agency oversight within CERCLA’s mandate. I disagree with
the majority’s reliance on the “monitoring” provision. Instead,
I agree with the government’s position that the oversight aspect
of removal and remedial activities falls within the description of
the various activities as they are defined in “Removal action”
and “Remedial action” in CERCLA §§ 101(23) and (24), and
46
that therefore the cost of the oversight aspect of remedial and
recovery activities is recoverable under CERCLA § 107(a).
First, I conclude that the reliance on the “monitoring”
provision is unnecessary. Agency oversight should naturally be
included as an inherent part of any removal or remedial action
taken pursuant to CERCLA. That the removal or remediation
be done properly and effectively is a vital part of its being done
in the first place. I find that the need to separate out the
oversight portion of the performance of the enumerated removal
and remedial activities is superfluous.18
Second, not only is the majority’s reliance on
“monitoring” not necessary, but it risks conflating two distinct
concepts: the oversight required to make sure that a project is
done properly and effectively versus the taking of water, soil, or
air samples to determine the level of pollutants at a site. The
interpretation of monitoring as simply the taking of samples is
supported by case law. See Black Horse Lane Assoc. v. Dow
Chem. Corp., 228 F.3d 275, 298 n.13 (3d Cir. 2000) (“this
language plainly refers to actual monitoring, assessment or
evaluation ‘of a release or a threat of release.’”) (emphasis
added). I would not want our decision here, equating
18
By analogy, when one contracts to have a house built, the
contract includes costs for the contractor to oversee his workers
and subcontractors. Generally, there is no need to include a
separate fee for oversight since it is naturally included in the
larger endeavor.
47
monitoring with oversight of every aspect of a removal or
remedial action, to preclude the term “monitoring” as used in
CERCLA from being interpreted in its more particular sampling
sense. The monitoring provision, once meant to describe one
aspect of a project, should not now be confined to encompassing
only general “oversight” of the entirety of a removal or remedial
action.
RENDELL, Circuit Judge, dissenting, with whom Judge
SMITH joins.
While I agree with the majority that the analysis of the
issue before us should proceed along lines distinct from those
employed in the Supreme Court’s opinion in National Cable
Television Ass’n v. United States, 415 U.S. 336 (1974), and,
accordingly, our opinion in United States v. Rohm & Haas, 2
F.3d 1265 (3d Cir. 1993), I disagree that the proper reading of
the relevant statutory provisions leads to the conclusion that
oversight costs are recoverable by the government in this
setting. I suggest, further, that National Cable still offers
valuable lessons that are helpful to us here.
I.
The last thought–that National Cable retains some
relevance–is worthy of discussion at the outset. The concern
animating that opinion was that the government was passing off
onto private parties certain expenses that government agencies
48
incurred as part of their normal operations. The Court felt that
the power to recover administrative costs should not be
unbridled, especially when that power was exercised at the
discretion of the Executive. See id. at 341 (expressing concern
that the Federal Communications Commission’s fee structure
might force broadcasters to pay “not only for the benefits they
received but for the protective services rendered the public by
the Commission”); see also Skinner v. Mid-America Pipeline
Co., 490 U.S. 212, 224 (1989) (“National Cable Television . .
. stand[s] . . . for the proposition that Congress must indicate
clearly its intention to delegate to the Executive discretionary
authority to recover administrative costs not inuring directly to
the benefit of regulated parties by imposing additional financial
burdens.” (emphasis added)). These same concerns formed the
basis for our opinion in United States v. Rohm & Haas Co, 2
F.3d 1265 (3d Cir. 1993). There, we applied National Cable
because we concluded that EPA oversight costs were
“‘administrative costs not inuring directly to the benefit of
regulated parties’ but rather to the public at large.” Id. at 1273
(quoting Skinner, 490 U.S. at 224).
Today we reject our reasoning in Rohm & Haas that
equated the CERCLA scheme with the improper delegation of
power to assess fees in National Cable. In so doing, we also
reject the notion that we need to find a “clear statement” of
Congress’s intent to impose the agency’s costs of removal or
remedial action onto private parties. However, we should not
reject out of hand Judge Stapleton’s well-crafted discussion and
49
study of CERCLA, his well-supported thesis regarding the
language of the relevant provisions, or his conclusion that they
do not reflect an intent to foist onto private parties the
government’s oversight costs. I suggest that Judge Stapleton’s
analysis, if measured under a “plain meaning,” rather than a
“clear statement,” standard, would have reached the same
conclusion. And we should reach the same conclusion today.
The other aspect of National Cable and Rohm & Haas
that we should reflect upon–even if we do not endorse the
“clear statement” rule–is the healthy aversion voiced in those
opinions to permitting agencies to“bill” private parties for a
portion of their cost of doing business. Cf. id. at 1274
(construing CERCLA to allow recovery of EPA oversight costs
“create[s] the dramatic and unusual effect of requiring regulated
parties to pay a large share of the administrative costs incurred
by the overseeing agency”). In this case, the bill amounts to
almost $1.4 million, a significant portion of which will go
towards EPA payroll expenses, in addition to the nearly $35
million that DuPont has already expended to clean up the
Newport site.
While it is easy to say, as the majority does, that
“oversight” performed by an agency as part of its statutory duty
equates to necessary monitoring activity, query whether we
should construe a statutory provision to allow a wholesale
transfer of the expenses of operating government to private
parties where no intent to do so–and certainly no clear
statement–appears on the face of the statute. In CERCLA,
50
Congress undertook to specifically delineate the boundaries of
private party liability to the EPA. Certain provisions authorized
the recovery of oversight costs. Others are silent. Judge
Stapleton believed that, “[g]iven the context in which CERCLA
was enacted,” it was “highly significant that Congress omitted
any mention of oversight, or of government activities conducted
under [CERCLA] § 106, in the definition of removal.” Rohm
& Haas, 2 F.3d at 1276. Given this, and given the Supreme
Court’s reluctance to shift government operating costs to private
parties as expressed in National Cable, we should not stretch
the meaning of the statute to impose monetary obligations that
are not referenced within the four corners of CERCLA. Rather,
we should focus our inquiry on what the provisions of the
statute actually say. Cf. United States v. Olson, 125 S. Ct. 510,
511 (2005) (interpreting words in the Federal Tort Claims Act
to “mean what they say”). Analyzing CERCLA under this
framework, I cannot agree with the majority that CERCLA
reflects any intent on the part of Congress, clear or otherwise,
to allow the EPA to recover the costs of overseeing removal or
remedial actions.
II.
CERCLA section 107 provides that a responsible party
“shall be liable for–all costs of removal or remedial action
incurred by the United States Government . . . not inconsistent
with the national contingency plan.” 42 U.S.C. §
9607(a)(4)(A). Neither section 107 nor any of the other
provisions of the statute that define the terms used in section
51
107 uses the term “oversight.” The majority’s reasoning
involves two textual leaps that I cannot endorse. The first
involves equating the word “monitoring” in the sections
defining “removal” and “remedial action” with “government
oversight of private party activity.” This is simply not a
permissible meaning of the word “monitoring” as it is used in
the statute. The second leap is in saying that the authority for
recovering the costs of overseeing the cleanup can be found
within the definitions of “removal” and “remedial action” while
at the same time contending that these costs are recoverable as
“oversight of removal or remedial action.” This interpretation
is clearly at odds with the precise language of the definitions,
which include “monitoring” within the activities that make up
a cleanup. As a textual matter, oversight of removal and
remedial actions is not subsumed within the definitions of
“removal” and “remedial action.”
I suggest that in Rohm & Haas we were appropriately
skeptical of the reading the majority adopts here. We stated that
“[t]he government’s role in overseeing a private cleanup effort
is far removed from any sort of government ‘removal’ or
activity peripherally connected to such removal.” 2 F.3d at
1278. This observation is confirmed by contrasting the
activities for which the EPA seeks to recover its costs here with
those that DuPont undertook in actually performing the removal
and remedial action. While DuPont excavated contaminated
soil, capped landfills, installed groundwater barrier walls,
recovered, treated and monitored groundwater, and restored and
52
monitored wetlands and the Christina River, the EPA reviewed
DuPont’s remedial designs, reviewed and approved DuPont’s
proposed changes to the remedial plan, oversaw DuPont’s
activities, coordinated DuPont’s activities, supervised DuPont’s
response, monitored DuPont, reviewed the results of one of
DuPont’s treatability studies, and oversaw DuPont’s ground
water studies.
The EPA itself considers its oversight of private party
removal and remedial action to be separate from the actual
performance of the removal and remedial action. In a 50-page
manual detailing its oversight policy, Guidance on EPA
Oversight of Remedial Designs and Remedial Actions
Performed By Potentially Responsible Parties, OSWER
Directive 9355.5-01 (April 1990), the EPA takes great pains to
clarify that the private party, not the EPA, bears responsibility
for the cleanup action. See, e.g., id. at 1-1 (“PRPs and their
agents are responsible for the adequacy of the design and the
implementation of remedies [i.e., removal and remedial
action].”; id. at 1-2 (“[EPA] oversight must always be structured
so the PRPs, not EPA, remain legally responsible and
accountable for the success of the response action.”); id. at 2-2
(“All work is done under the PRP’s control and they [sic] are
responsible for the long term performance of the remedy.”).
The agency’s role, by contrast, is both limited and removed
from the direct response. See, e.g., id. at 5-1 (“It is
inappropriate for the Oversight Official to direct or determine
the means and methods of construction. Clearly defining these
53
roles, and adhering to them, ensures that the responsibility and
accountability of the construction project remains with the
PRP.” (emphasis added)); id. 2-2 (“EPA’s primary goal is to
confirm the PRPs [sic] meet all performance standards specified
in the Settlement Agreement.”); id. at x (“The ultimate goal of
PRP oversight is to hold PRPs responsible and accountable for
the remedial actions.”). In light of the EPA’s own distinction
between the conduct of removal or remedial actions and the
oversight of such actions, I find its arguments to the contrary
here to be disingenuous.
As we said in Rohm & Haas, I “think it far more likely
that Congress viewed EPA’s overseeing of a private party’s
removal activities as qualitatively different from EPA’s actually
performing removal activities and intended for EPA to recover
the costs of the latter but not the costs of the former.” 2 F.3d at
1277. A review of the statute confirms this theory. The
definitions of “removal” and “remedial action” are concerned
only with actions taken directly to address a release or threat of
release of a hazardous substance, not with the type of second-
tier review for which the EPA seeks to recover its costs here.
And other sections of the statute indicate that Congress knew
how to authorize recovery for the EPA’s “oversight” functions
when it wanted to. In the absence of such authorization in
section 107, I conclude that the EPA’s oversight costs are not
recoverable.
54
A.
The majority concludes that the EPA’s “oversight”
activities fall within the definitions of “removal” and “remedial
action” because both definitions include the word “monitoring.”
It assumes that, because “oversee” is one of the possible
meanings of “monitor,” the statute can, and should, be read to
encompass “monitoring” in the sense of “oversight.” Like other
courts that have found that oversight costs are recoverable
under CERCLA, the majority analyzes the meaning of the word
“monitor” in a vacuum. But the Supreme Court has directed
that “the meaning of a word cannot be determined in isolation,
but must be drawn from the context in which it is used.” Deal
v. United States, 508 U.S. 129, 132 (1993). “[W]here a word
is capable of many meanings,” it should be construed in the
context of the provision as a whole “in order to avoid giving
unintended breadth to the Acts of Congress.” Jarecki v. G.D.
Searle & Co., 367 U.S. 303, 307 (1961); see also Cooper
Indus., Inc. v. Aviall Servs., Inc., 543 U.S. 157, 125 S. Ct. 577,
583 (2004) (rejecting permissive construction of the word
“may” in section 9613(f)(1) of CERCLA in favor of “the
natural meaning of ‘may’ in the context” of the broader
statutory provision). Reading the definitions of “removal” and
“remedial action” carefully, and in their entireties, it is clear to
me that Congress was concerned with monitoring the actual
release, or threat of release, of hazardous substances, not
monitoring the party performing the removal or remedial action.
55
The definition of a “removal” is specifically limited to
“such actions as may be necessary to monitor . . . the release or
threat of release of hazardous substances.” 42 U.S.C. §
9601(23). The other actions listed in the definition–the cleanup
or removal of hazardous materials, “necessary” responses to
threatened releases, the disposal of removed materials, security
fencing and other measures to limit access to contaminated
sites–are similarly directed towards the release or threatened
release. Id. As we have previously explained, the definition is
concerned with “actions taken to define,” and contain, “the
scope of the risk created by a release or threatened release,” not
with “actions taken to evaluate the performance of others to
determine whether they are meeting their legal obligations.”
Rohm & Haas, 2 F.3d at 1276. See also United States v. Lowe,
118 F.3d 399, 403 (5th Cir. 1997) (“Under a plain language
statutory reading with an eye to context, the monitoring
provided under the removal definition relates to an evaluation
of the extent of a ‘release or threat of release of hazardous
substances.’”).
Like the definition of “removal,” the definition of
“remedial action” includes some “monitoring” activities. At the
end of a laundry list of activities that make up a “remedial
action,” the definition adds “any monitoring reasonably required
to assure that such actions [i.e., the actions specified in the
preceding list] protect the public health and welfare and the
environment.” 42 U.S.C. § 4601(24). As in the definition of
“removal,” all of the specific actions listed in the definition
56
would typically be undertaken by a first party responder
addressing a release or threatened release directly. Moreover,
the definition specifies that these actions all take place “at the
location of the release.” No text suggests that the phrase “any
monitoring reasonably required,” coming as it does at the end
of a long list of actions “at the location of the release” that
encompass the scope of a typical remedial action, somehow
implicates a third party overseer of another’s remedial action.
Construing “monitoring” here “by the company it keeps,”
Jarecki, 367 U.S. at 307, I therefore conclude that
“monitoring,” in the overall context of the definition, is best
understood to mean direct monitoring of the contaminated site,
not monitoring of the party who is performing the cleanup of
the site.
B.
The majority also points to language in the definitions of
these phrases that includes actions taken to prevent or minimize
danger to the public and the environment from a release or
threat of release in support of its broad reading of those
provisions. See 42 U.S.C. §§ 9601(23)-(24). Of course, in the
abstract, EPA oversight, and, indeed, other types of EPA
activity, could prevent damage that might otherwise result from
a release or threat of release, just as EPA oversight might
generally be described as “monitoring.” But the definitions’
emphases on direct responses to releases or threats of release
belies this interpretation. Read in context, the “other action”
language means such other actions taken by the direct
57
responder, not actions taken to oversee the direct response;
there is no indication in the text that Congress intended
otherwise. Similarly, the fact that CERCLA delegates authority
to the EPA to “facilitate cleanups and to enforce statutory
requirements,” does not imply that it authorizes the EPA to
recover the costs of those activities in actions under section
107.19 Congress specifically defined the parameters of
permissible recovery in removal actions in sections 107 and
101(23) & (24). As discussed above, the plain language of the
definitions includes actions taken to contain and clean up
releases of hazardous waste, but not actions taken to oversee
another’s containment and cleaning up of those sites.
C.
The majority’s final textual argument is that its oversight
activities qualify as “enforcement activities,” which section
101(25) (the definition of “respond” or “response”) adds to the
definition of “removal” and “remedial activities.” See Maj. Op.
at 31 (“We believe ‘enforcement activities’ include all aspects
19
The majority’s attempt to bolster its reading of the statute
by reviewing the conduct of the Newport cleanup and
concluding that it demonstrates that “agency oversight is central
to effective remedial action under CERCLA,” Maj. Op. at 40-
41, is to no avail. The facts of the Newport cleanup have no
bearing on what costs CERCLA authorizes the EPA to recover.
That EPA oversight contributes to a remedial action does not
mean that it is a remedial action under the terms of the statute.
58
of ensuring CERCLA compliance . . . .”) The majority here
follows the lead of other courts that have addressed the issue of
oversight costs and have construed “enforcement activities” in
Section 101(25) broadly to comport with CERCLA’s remedial
objectives. In Atlantic Richfield Co. v. American Airlines, Inc.,
98 F.3d 564 (10th Cir. 1996), the Court of Appeals for the
Tenth Circuit acknowledged that the Supreme Court, in Key
Tronic Corp. v. United States, 511 U.S. 809 (1994), had
construed the term “enforcement activities” narrowly, but
nevertheless concluded:
it does not stretch or distort the meaning of the
phrase to conclude that monitoring or oversight
of a private party remedial action to determine
whether the action complies with a consent
decree and the provisions of CERCLA is
enforcement activity related to a remedial action,
and therefore, is a response under § 101(25). We
note that because CERCLA is remedial
legislation, it should be construed liberally to
carry out its purpose.
98 F.3d at 570 (citations omitted). The Court of Appeals for the
Fifth Circuit reached the same conclusion because it
determined, based on other provisions of the statute, that
“[g]overnment monitoring or oversight is an inherent and
necessary enforcement element of private party response
action.” Lowe, 118 F.3d at 403.
59
The question is not whether it would “stretch or distort
the meaning of the phrase” “enforcement activities” to include
EPA oversight costs; nor is it whether the statute requires the
EPA to oversee private party response actions. The question is
whether, in adding the phrase “enforcement actions” to the
definitions of “removal” and “remedial action,” Congress
intended to authorize the EPA to recover from private parties
the cost of overseeing their removal and remedial actions. I
conclude that it did not. The common sense definition of an
enforcement activity is an action taken to compel a responsible
party to perform a removal or remedial action. Because I do not
think that the “remedial purposes” of the statute are relevant to
this inquiry, I see no need to read “enforcement activities”
broadly, as the majority does, to encompass the full spectrum of
the EPA’s CERCLA-related activities.
D.
Had Congress intended to include EPA oversight within
the scope of activities for which the EPA can recover, it could
have very easily included the word “oversight” in section
107(a)(1)(A) or the statutory definitions of “removal” or
“remedial action.” As we have seen, it chose not to do so. An
inspection of other provisions of CERCLA indicates that
Congress knows how to authorize recovery for “oversight”
expenses when it wants to; it amended two provisions to
explicitly include recovery of EPA “oversight” costs in the 1986
SARA Amendments. These amended provisions set forth
limited circumstances in which Congress intended the EPA to
60
recover its oversight expenses from a private party and obtain
payment of such expenses from the Superfund. To construe the
definitions of removal and remedial action to authorize recovery
of oversight costs in all cases renders these provisions
superfluous, which we are “loath to do.” Cooper Industries,
125 S. Ct. at 583.
SARA amended CERCLA section 104(a)(1), which
authorizes the EPA to conduct the cleanup of a hazardous waste
site itself, to authorize the EPA to allow responsible parties to
conduct the remedial investigation and feasibility study
(“RI/FS”) for potentially contaminated sites in some cases. The
RI/FS is a distinct, preliminary phase of removal. The section,
as amended, requires the EPA to retain outside consultants to
“oversee[ ] and review[ ]” a responsible party RI/FS, and
provides that the responsible party must agree to reimburse
Superfund for costs incurred under such an “oversight”
contract. 42 U.S.C. § 9604(a)(1). Our observation regarding
this section in Rohm & Haas applies with equal force today:
“[a]n RI/FS is . . . clearly a removal action. If Congress
considered governmental oversight of a private removal action
to be a removal action in itself, the provision of § 104(a)
requiring reimbursement of costs incurred by the government
overseeing the private RI/FS would be unnecessary as § 107(a)
would authorize the recovery of such oversight costs.” 2 F.3d
at 1277.
The majority proffers a complicated explanation as to
what section 104 means, reasoning that it performs a function
61
in addition to section 107 because it compels a responsible party
to agree in advance to pay oversight costs, whereas section 107
allows recovery of such costs only after the fact.20 This is
incorrect. All section 104 says is that, if a private party is going
to conduct the remedial investigation or the feasibility study,
and the government will be expending money to oversee that
preliminary activity, then the private party must agree to pay for
that. If, as the majority contends, the “plain language” of
20
The majority’s argument that the reading of section 104 that
I propose above creates a disincentive for private parties to settle
with the EPA, see Maj. Op. at 37, is based on a
misunderstanding of what section 104 actually says. That
section requires the EPA to recover oversight costs from settling
party only from the RI/FS stage of the cleanup and applies to
settling and non-settling parties alike. It does not, as the
majority suggests, require settling parties to agree to pay for all
of the EPA’s oversight costs. For example, although it did not
settle with the EPA, DuPont agreed to pay, and did pay, the
costs of oversight for the RI/FS portion of the cleanup,
according to the terms of the statute. See Appellees’ Br. at 13.
Whether a settling party is required to pay non-RI/FS oversight
costs depends on our decision today. The majority’s fears that
parties will decline to settle to avoid paying such costs under my
reading are thus unfounded. Under my reading, neither settling
nor non-settling parties would pay the EPA’s non-RI/FS
oversight costs because CERCLA does not authorize EPA
recovery for such costs.
62
CERCLA section 107 authorizes the EPA to recover its
oversight costs in all cases, there would certainly be no need to
amend the statute to state that the EPA should recover its
oversight costs for this specific aspect of a removal. Indeed, a
private party would have no choice but to “agree” to reimburse
the EPA for its costs of overseeing the RI/FS work in light of
the fact that the EPA would have a right to recover all of its
oversight costs as a matter of law, and could sue to recover
those costs under section 107. Furthermore, if Congress’s
intent was to ensure that the EPA recovers its oversight costs
from settling parties, one would think that it would have
amended the statute to specify that such parties must agree up
front to pay all of the EPA’s oversight costs. But the
amendment to section 104 requires settling parties to agree to
pay the costs of overseeing only the preliminary assessment
work. It is therefore more naturally read as an exception to the
statute’s general rule that recovery of EPA oversight costs is not
otherwise authorized.
SARA also amended CERCLA to allow the EPA to seek
reimbursement from the Superfund for its oversight costs in
particular situations. Section 111 defines the types of expenses
for which the Superfund can be used. Before SARA, section
111(a) specifically provided that the EPA could use the
Superfund to pay for removal or remedial actions that the EPA
conducted itself under section 104. 42 U.S.C. § 9611(a)(1). To
the extent that the definitions of “removal” or “remedial action”
include overseeing removal or remedial actions, as the EPA
63
contends, this section would presumably authorize the EPA to
fund the costs of overseeing private party actions out of the
Superfund. But the SARA amendments specified that, in
addition to the governmental response costs provided for in
section 111(a), the Superfund could also be used to pay for the
costs of contracts to oversee private party RI/FS’s pursuant to
section 104(a)(1) and the costs of overseeing remedial activities
conducted by a private party through a consent order or
settlement agreement. 42 U.S.C. § 9611(c)(8). If oversight
costs were already included as governmental response costs
under section 111(a)(1), there would have been no need for
Congress to specifically authorize reimbursement from
Superfund for the EPA’s expenses in overseeing private RI/FS
actions in section 111(c)(8). Applying the “settled rule” that
“we must, if possible, construe a statute to give every word
some operative effect,” Cooper Industries, 125 S. Ct. at 584, I
must once again conclude that the costs of overseeing private
party cleanup efforts are not included in the “governmental
response costs” that section 111(a) authorized the EPA to
recover from the Superfund.
Finally, although it purports to base its conclusion on
CERCLA’s language, the majority inexplicably adds that the
EPA’s construction of sections 104(a)(1) and 111(c)(8) is
entitled to Skidmore deference.21 Maj. Op. at 39 n.17. I
21
Of course, given the majority’s disclaimer that Skidmore
deference is not the basis for its decision, its comments on this
64
disagree. An agency is entitled to Skidmore deference where its
policy is “made in pursuance of official duty, based upon more
specialized experience and broader investigations and
information than is likely to come to a judge in a particular
case.” Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944).
Although the EPA may have more “specialized experience”
than we do in the day-to-day conduct of CERCLA enforcement,
the determination of the meaning of statutory language in order
to decide what costs the EPA can recover under a statutory
provision has always been a question for the courts. Indeed, no
other court to consider the issue of the recoverability of
oversight costs under CERCLA has deferred to the EPA’s view
as a basis for its decision. See United States v. Dico, Inc., 266
F.3d 864, 877-78 (8th Cir. 2001); United States v. Lowe, 118
F.3d 399, 401-04 (5th Cir. 1997); Atl. Richfield Co. v. Am.
Airlines, Inc., 98 F.3d 564, 570 (10th Cir. 1996). The EPA’s
position is entitled to no deference here.
III.
In my mind, the only way to reach the majority’s
conclusion that CERCLA authorizes the EPA to recover its
oversight costs is to conduct the analysis backwards–beginning
with the premise that CERCLA authorizes cost recovery
broadly and scouring the statute to find a place to shoehorn
oversight costs into its text. In adopting this approach, the
majority follows other Courts of Appeals that have, I suggest,
point are essentially dicta.
65
been less than precise in reasoning that CERCLA is a
“remedial” statute that should be broadly construed, and
allowing this to influence their analysis of the statute, while
purporting to apply “plain language” and other textual
principles of statutory interpretation. Four other Courts of
Appeals have addressed the issue of whether EPA oversight
costs are recoverable under CERCLA. As the EPA and the
majority point out, in each case the courts have held that such
costs are recoverable. The rationale for those findings, where
it is discussed,22 appears to be based (although not always
22
The Second Circuit Court of Appeals remarked, in New
York v. Shore Realty Corp., 759 F.2d 1032, 1042-43 (2d Cir.
1985), that “[t]he State’s costs in . . . supervising the removal of
the drums of hazardous waste squarely fall within CERCLA’s
definition of response costs, even though the State is not
undertaking to do the removal.” This case is of little
precedential value here, however. This statement was made in
the course of evaluating the defendant’s claims that he was not
liable for any costs under CERCLA; the recoverability of the
costs themselves does not appear to have been raised or argued
as an issue in either the district court or the court of appeals.
See id. at 1042-49. For these reasons, and because Shore Realty
does not explain why it concludes that supervising costs are
recoverable (although it does cite to sections 101(23), (24) and
(25), the definitions of “removal,” “remedial action” and
“response action”), I do not discuss it.
66
explicitly) at least in part on the notion that CERCLA, as a
remedial statute, should be construed broadly.
The Court of Appeals for the Tenth Circuit declined to
adopt Rohm & Haas’s analysis because it concluded that “Rohm
& Haas departed significantly from prior case law that had
construed the cost recovery provisions of CERCLA broadly.”
Atl. Richfield Co. v. Am. Airlines, Inc., 98 F.3d 564, 568 (10th
Cir. 1996). It characterized our use of the National Cable
“clear statement” standard in Rohm & Haas as “questionable,”
id., but ultimately concluded that CERCLA’s definitions of
“remedial action” and “response action,” in sections 101(24)
and (25), satisfy the National Cable standard because they
“unabiguously” allow recovery of EPA oversight costs. Id. at
569-571. As discussed above, the plain language of the statute
does not mention or support recovery of oversight costs; it
certainly does not support such recovery “unambiguously.”
Thus, it is at least reasonable to infer that the Tenth Circuit’s
analysis of the meaning of the statute was influenced by its view
that CERCLA should be construed broadly and its assessment
that the Rohm & Haas result represented a departure from
prevailing CERCLA case law in this regard. See id. at 568
(listing cases that held that the EPA could recover its indirect
and administrative costs under section 107 and district court
cases rejecting Rohm & Haas).
The Courts of Appeals for the Fifth and Eighth Circuits
echoed the Tenth Circuit’s concern that Rohm & Haas marked
a “significant departure” from prior case law that construed
67
CERCLA broadly. United States v. Dico, 266 F.3d 864, 878
(8th Cir. 2001); United States v. Lowe, 118 F.3d 399, 401 n.2
(5th Cir. 1997). The Eighth Circuit expressly “decline[d] to
follow the Third Circuit’s narrow approach” to construing
CERCLA, Dico, 266 F.3d at 878, and the Fifth Circuit noted
that, “[i]n rejecting Rohm & Haas,” it was “in good company.”
Lowe, 118 F.3d at 401 n.2. Like the Atlantic Richfield court,
the courts in Dico and Lowe concluded that the EPA’s oversight
costs were recoverable under CERCLA. The Lowe court
reinforced its interpretation of CERCLA’s text by explicitly
invoking the statute’s remedial purpose, concluding that “any
other reading of the statutory terms under discussion would
produce a result that conflicts with CERCLA’s goal of
compelling private parties to perform clean-up operations.” Id.
at 404. As in Atlantic Richfield, the courts in Dico and Lowe
analyzed the statute’s text, but the result that they reached seems
to have been influenced by the assumed tradition of interpreting
CERCLA broadly in accordance with its remedial purpose.
The majority here falls into the trap set for it by these
other Courts of Appeals. Like the courts in Atlantic Richfield,
Dico and Lowe, the majority proceeds from the assumption that
CERCLA encompasses everything that could conceivably fit
within its terms. As a result, it ignores what the statute says in
favor of a reading that comports with its view of what the
statute should do. For example, the majority reads the term
“monitor” broadly in light of its view of the broad purposes of
the statute: “In a statute designed to impose the costs of cleanup
68
on those responsible for contamination, the term ‘monitor’ is
most naturally read in the definitions of both ‘removal action’
and ‘remedial action’ as encompassing agency oversight.” Maj.
Op. at 28 (emphasis added). Similarly, its conclusion that
oversight falls within the statutory language allowing recovery
for actions directed at the public health and welfare is
influenced by its notion of what CERCLA does: “Mindful that
CERCLA delegates significant authority to the executive
branch, acting through the EPA, to facilitate cleanups and to
enforce statutory requirements, we believe EPA oversight of
cleanup activities is necessary to ensure ‘compliance with
standards aimed at the public health.’” Id. at 29 (emphasis
added; citations omitted).
Although there may be good arguments for construing
remedial statutes, and CERCLA in particular, broadly, see
Blake A. Watson, Liberal Construction of CERCLA Under the
Remedial Purpose Canon: Have the Lower Courts Taken a
Good Thing Too Far?, 20 Harv. Envtl. L. Rev. 199, 294-297
(1996), the Supreme Court has not endorsed this approach. See
id. at 258-61 (“[T]he Supreme Court has not employed the
remedial purpose canon when construing the numerous
environmental statutes [including CERCLA] enacted during the
‘modern’ environmental era.” (emphasis added)). In its most
recent pronouncements on CERCLA, in Cooper Industries, Inc.
v. Aviall Services, Inc., 543 U.S. 157, 125 S. Ct. 577 (2004), the
Court emphasized that CERCLA is subject to the same canons
of statutory construction that govern all other federal statutes
69
and cautioned lower courts against straying too far from the
statute’s text. Cooper Industries is only the latest example in
the Court’s CERCLA jurisprudence to decline to apply special
rules of statutory interpretation that would tilt the scales towards
CERCLA’s remedial purpose.23 I read the Court’s CERCLA
cases, and Cooper Industries in particular, to caution against the
expansive interpretation of CERCLA’s provisions that the
majority espouses here.
Cooper Industries involved section 113(f)(1) of
CERCLA, which authorizes private parties who have cleaned
up properties contaminated by hazardous substances to seek
contribution from other CERCLA “responsible parties.” The
first sentence of section 113(f)(1) allows a party to obtain
contribution “during or following any civil action” under
CERCLA section 106 or 107(a); the last sentence provides that
“[n]othing in this subsection shall diminish the right of any
person to bring an action for contribution in the absence of a
civil action under” CERCLA section 106 or 107(a). 42 U.S.C.
23
See, e.g., Key Tronic Corp. v. United States, 511 U.S. 809,
814, 818-19 (1994) (acknowledging that CERCLA is a
“comprehensive statute” that confers “broad powers” on the
executive branch, but declining to read the term “enforcement
activities” broadly to authorize private parties to recover
attorneys’ fees).
70
§ 9613(f)(1).24 The question for the Court was whether a
private party who has not been sued under section 106 or
107(a), i.e., who conducted a CERCLA cleanup voluntarily, can
obtain contribution under section 113(f)(1). Cooper Industries,
125 S. Ct. at 580. The Court concluded that the “natural
meaning” of the first sentence of section 113(f)(1), the
“enabling clause,” is that “contribution may only be sought
subject to the specified conditions, namely, ‘during or
following’ a specified civil action.” Id. at 583. The last
sentence, which the Court characterized as a “saving clause,”
24
The full text of 42 U.S.C. § 9613(f)(1) reads:
Any person may seek contribution from any other
person who is liable or potentially liable under
section 9607(a) of this title, during or following
any civil action under section 9606 of this title or
under section 9607(a) of this title. Such claims
shall be brought in accordance with this section
and the Federal Rules of Civil Procedure, and
shall be governed by Federal law. In resolving
contribution claims, the court may allocate
response costs among liable parties using such
equitable factors as the court determines are
appropriate. Nothing in this subsection shall
diminish the right of any person to bring an action
for contribution in the absence of a civil action
under section 9606 of this title or section 9607 of
this title.
71
provides only that section 113(f)(1) “does nothing to ‘diminish’
any cause(s) of action for contribution that may exist
independently of § 113(f)(1)”; it does not, on its own, authorize
contribution claims outside the scope of those specified in the
sections’s first sentence. Id. at 583-84.
The Court of Appeals for the Fifth Circuit, sitting en
banc, had reached the opposite conclusion, in part based on its
view that the purposes of CERCLA would be furthered by a
more expansive reading. The majority noted the EPA’s broad
remedial powers under CERCLA and the statute’s broad
definition of a “responsible party.” “These circumstances,” it
concluded, “together with the enormous costs of remediating
hazardous waste sites, make the availability of contribution
among PRPs all the more important for achieving the purposes
of the statute.” Aviall Servs., Inc. v. Cooper Indus., Inc., 312
F.3d 677, 681-82 (5th Cir. 2002) (en banc). The Supreme
Court, however, focused exclusively on the statute’s text. It first
examined the “natural meaning” of the first sentence. The
Court construed the words in the sentence narrowly in light of
the sentence’s “enabling” function: “the natural meaning of
‘may’ in the context of the enabling clause is that it authorizes
certain contribution actions–ones that satisfy the subsequent
specified condition–and no others.” Id. at 583 (emphasis
added). The Court also found that a permissive reading would
“render part of the statute entirely superfluous, something we
are loath to do,” id. (citing Hibbs v. Winn, 124 S. Ct. 2276,
2286 (2004)), in light of limiting language in section 113(f)(1)
72
itself and another section, section 113(f)(3)(B), that permits
contribution actions after settlements. It rejected the argument
that the last sentence of section 113(f)(1) authorized
contribution claims outside of the scope of those authorized in
the first sentence because that interpretation “would again
violate the settled rule that we must, if possible, construe a
statute to give every word some operative effect.” Id. at 584
(citing United States v. Nordic Village, Inc., 503 U.S. 30, 35-36
(1992)). Finally, the Court declined to consider arguments from
both parties to the effect that the purpose of CERCLA
supported its position: “Given the clear meaning of the text,
there is no need to resolve this dispute or to consult the purpose
of CERCLA at all.” Id. at 584.
The Cooper Industries Court also impliedly cautioned
lower courts against applying special rules of statutory
construction in the CERCLA context. The Court noted that the
statute, as originally enacted, did not expressly provide a private
right of action for contribution, but that several district courts
had “nonetheless held” that such a right existed even though
“CERCLA did not mention the word ‘contribution.’” Id. at
581. It characterized the holdings of those opinions as
“debatable” in light of Supreme Court decisions that had
refused to recognize implied or common law rights of
contribution in other statutes. Id. And later in the opinion,
when the Court remanded the case for consideration of whether
CERCLA section 107 creates a private right of action for
contribution, the Court warned that “this Court has visited the
73
subject of implied rights of contribution before.” The Court
further noted that “in enacting § 113(f)(1), Congress explicitly
recognized a particular set of claims . . . of the contribution
rights previously implied by courts from the provisions of
CERCLA and the common law,” id. at 586, and cited a case
that explains that “it is an elementary canon of statutory
construction that where a statute expressly provides a particular
remedy or remedies, a court must be chary of reading others into
it.” Transam. Mortgage Advisors, Inc. v. Lewis, 444 U.S. 11,
19 (1979). The Court thus left little doubt about where it stands
on the specific issue of implied rights of contribution in
CERCLA, and hinted strongly that it disapproves of the practice
of construing CERCLA broadly to “give effect” to its remedial
purpose.
Cooper Industries thus provides several lessons for the
interpretation of CERCLA that apply with equal force here. In
construing CERCLA, courts should pay particular attention to
the text of the provisions at issue. We should construe
CERCLA to avoid rendering provisions, or even individual
words, superfluous, and the statute’s remedial purpose should
not affect the analysis if the meaning of the text is “clear.”
Here, were we to heed this advice by reading CERCLA
according to its terms, I conclude that we would find the EPA’s
oversight costs not to be recoverable as costs of “removal” or
“remedial action.”
74
IV.
My reading of the statute is further bolstered by certain
prudential concerns implicated by the majority’s approach.
First, construing CERCLA to authorize the EPA to recover
oversight costs raises questions of fairness and due process.
Principles of fundamental fairness and due process require that
those who violate the law know of their potential exposure. See
BMW of N.A., Inc. v. Gore, 517 U.S. 559, 574 (1996)
(“Elementary notions of fairness enshrined in our constitutional
jurisprudence dictate that a person receive fair notice not only
of the conduct that will subject him to punishment, but also of
the severity of the penalty that a State may impose.”). In the
CERCLA context, responsible parties can work with the EPA
to develop a remedial action plan, which should provide the
party with a reasonable estimate of its ultimate liability. See 42
U.S.C. § 9604(a) (allowing private parties to conduct
preliminary remedial investigation and feasibility studies); §
9621(a) (requiring the EPA to determine appropriate remedial
action plan “which provide[s] for cost-effective response”).
Under section 106, the responsible party can then undertake to
implement that plan itself. One of the primary benefits of this
arrangement is that the private party can control the cost of the
cleanup operation within the parameters of the plan. See Rohm
& Haas, 2 F.3d at 1270 (“[Section] 106 consent orders appear
to be the favored method of cleaning up waste sites since they
generally are quicker and involve less government expense than
cleanups conducted by the government pursuant to § 104.”).
75
Allowing the EPA to bill the responsible party for its
“oversight” activities after the fact destroys the fairness and
predictability of the statutory arrangement.
Second, I worry that there is no natural limit to the type
and scope of activities that the EPA can charge to a responsible
party under the majority’s rationale. The “arbitrary and
capricious” standard it articulates is a difficult one for
responsible parties to meet.25 And although the majority takes
25
The majority cites Minnesota v. Kalman W. Abrams Metals,
Inc., 155 F.3d 1019 (8th Cir. 1998), to show that courts can and
have applied the “arbitrary and capricious” standard to limit cost
recoveries. Maj. Op. at 45. But that case presented egregious
circumstances and actually demonstrates the rare situation in
which an agency’s costs could be challenged. In Kalman
Metals, the court denied the state agency’s cost recovery action
because the state agency that conducted the cleanup “obstinately
insisted on employing an untried, high-risk, high-cost remedy;
failed to adequately study the nature and extent of the
communication problem in advance; and failed to monitor [its
contractor] and modify the remedy when the unevaluated
problem turned out to be greater than anticipated.” 155 F.3d at
1025. That the court denied cost recovery in that case does
nothing to alleviate my concern that the result that the majority
reaches provides no check on the EPA’s ability to routinely bill
responsible parties for costs that are unnecessary or excessive,
but do not rise to the level of “arbitrary and capricious.”
76
comfort in the statute’s limitation of the EPA’s cost recovery to
those costs that are “necessary” and “not inconsistent with the
national contingency plan,” 42 U.S.C. § 9607(a)(4)(A)-(B), it
has not identified any standards within the national contingency
plan that would appear to limit the EPA’s discretion to spend
money to oversee private party cleanups. Indeed, there are
none.26 By contrast, the plain reading of the statute that I have
outlined above clearly distinguishes between recoverable and
non-recoverable costs. The costs of direct action to investigate
or address a release or threat of release of a hazardous substance
are recoverable. “On the other hand, if what the government is
monitoring is not the release or hazard itself, but rather the
performance of a private party, the costs involved are non-
recoverable oversight costs.” Rohm & Haas, 2 F.3d at 1278-79.
In addition to being more faithful to the statutory text, I believe
that this reading provides responsible parties with a fairer result.
26
The sections of the national contingency plan that deal with
removal and remedial action under CERCLA, 40 C.F.R. §§
300.410, 300.415 (removal); §§ 300.420-300.435 (remedial
action), set forth the criteria, methods and procedures that an
agency must follow in conducting a cleanup. They do not even
mention, let alone provide standards against which a court could
evaluate, an agency’s oversight of a cleanup conducted by a
responsible party.
77
V.
For all of the reasons stated above, I conclude that
CERCLA does not authorize the EPA to recover the costs of
overseeing removal and remedial actions conducted by private
parties. I therefore respectfully dissent.
78