United States v. Lowe

United States Court of Appeals,
Fifth Circuit.
No. 96-20817.
UNITED STATES of America, Plaintiff-Appellee,
v.
Ralph L. LOWE, et al., Defendants,
Dow Chemical Company USA; Merichem Company; Monsanto Company;
Mobil Chemical Company; Arco Chemical Company; Petro-Tex Chemical
Corporation; Rohm & Haas Company, Defendants-Appellants.
July 31, 1997.
Appeal from the United States District Court for the Southern
District of Texas.
Before DAVIS, STEWART and PARKER, Circuit Judges.
PARKER, Circuit Judge:
The appellants present to this court the issue of whether the
government may recover costs expended in overseeing a hazardous
waste cleanup that was conducted by private parties. The district
court granted the government summary judgment on this issue,
finding that such costs are recoverable by the government. For the
following reasons, we affirm.
FACTS AND PROCEEDINGS BELOW
This case arose in conjunction with the Dixie Oil Processors
Superfund site located near Friendswood in Harris County, Texas.
Pursuant to an order issued by the Environmental Protection Agency
("EPA") under § 106 of CERCLA, 42 U.S.C. § 9606, the appellants
conducted a cleanup of the site that was certified as complete by
the EPA in April 1993.
In 1991 the government filed a cost recovery action to recover
1
its response costs pursuant to CERCLA § 107(a), including its
oversight costs, and for a declaratory judgment of liability for
future response costs. The complaint requested all costs incurred
by the government that were related to removal or remedial action.
The government moved for summary judgment in February 1994. The
defendant-appellants responded that CERCLA did not authorize the
government to recover costs for oversight of their performance of
clean-up work. The district court granted summary judgment to the
government. United States v. Lowe, 864 F.Supp. 628 (S.D.Tex.1994).
The appellants now appeal to this court the district court's
judgment relating to EPA oversight costs.1
DISCUSSION
This appeal is taken from the district court's order granting
summary judgment on the basis of its interpretation of a federal
statute. We review such de novo. Estate of Bonner v. United
States, 84 F.3d 196, 197 (5th Cir.1996). The appellants contend
that the district court erred in ruling that the government was
entitled to reimbursement of its costs incurred in oversight of the
private party clean-up of the site. They argue that the oversight
costs are not costs for which they can be held liable under §
107(a) of CERCLA. We disagree.
A.
1
The appellants do not appeal the government's oversight costs
related to a Remedial Investigation/Feasibility Study ("RI/FS")
which is a study conducted in the initial phases of a Superfund
site cleanup to determine the nature and extent of contamination,
evaluate the risk to the public and the environment, and identify
potential methods to clean up or adequately manage the
contamination.
2
The appellants urge that we follow the Third Circuit's
reliance on the "clear statement" doctrine expounded in National
Cable Television Ass'n, Inc. v. United States, 415 U.S. 336, 94
S.Ct. 1146, 39 L.Ed.2d 370 (1974), when that circuit addressed the
very same issue and held that the government could not recover
oversight costs for a private party clean-up. See United States v.
Rohm and Haas Co., 2 F.3d 1265 (3rd Cir.1993). Under National
Cable, Congress must "clearly state" its intent to impose
particular fees on regulated industries in connection with
licensing or permitting in order to exact such fees
constitutionally within its taxing authority. The appellants
contend that National Cable 's "clear statement" requirement should
be applied to CERCLA because the administration of hazardous waste
clean-up benefits the general public, and the assessment of fees on
specific parties for the payment for benefits to the general public
endows that fee with the character of a tax assessment. The
appellants go on to argue that as a de facto tax payment,
reimbursement of government oversight costs for a private party
clean-up is impermissible under National Cable absent language in
the statute indicating a clear intent that the EPA have the
authority to recover such oversight costs.
We agree with the government and find the interjection of the
National Cable doctrine inappropriate to our consideration of this
issue of reimbursement of oversight costs.2 National Cable and its
2
Rohm and Haas, and its reliance on National Cable,
represented a significant departure from prior case law. For
example, when addressing government oversight of a private party
3
progeny concern the imposition of user fees on regulated entities
seeking authorization to do business.3 See Miss. Power & Light Co.
v. U.S. Nuclear Regulatory Comm'n, 601 F.2d 223, 227 (5th
Cir.1979). CERCLA does not assess user charges on a regulated
industry; rather, it is a remedial statute, see United States v.
R.W. Meyer, 889 F.2d 1497, 1504 (6th Cir.1989). 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
cleanup, the Second Circuit had held that the state government's
costs in assessing the conditions of a site and in supervising
removal of the waste by a private party "squarely fall within
CERCLA's definition of response costs, even though the State is not
undertaking to do the removal." New York v. Shore Realty Corp.,
759 F.2d 1032, 1043 (2d Cir.1985). A number of courts had
previously held that under CERCLA § 107, the EPA can recover
administrative and indirect costs associated with a government
cleanup. See, e.g., United States v. Ottati & Goss, Inc., 900 F.2d
429, 444 (1st Cir.1990); United States v. R.W. Meyer, Inc., 889
F.2d 1497, 1504 (6th Cir.1989); Kelley v. Thomas Solvent Co., 790
F.Supp. 719, 729 (W.D.Mich.1990); United States v. Hardage, 733
F.Supp. 1424, 1438-39 (W.D.Okla.1989), aff'd. in part and rev'd in
part on other grounds, 982 F.2d 1436 (10th Cir.1992).
In rejecting Rohm and Haas, we are in good company. See
Atlantic Richfield Co. v. Am. Airlines, Inc., 98 F.3d 564(10th Cir.1996); Pneumo Abex Corp. v. Bessemer and Lake Erie
R.R. Co., Inc., 936 F.Supp. 1250, 1262-63 (E.D.Va.1996); Town
of New Windsor v. Tesa Tuck, Inc., 935 F.Supp. 317, 324-27
(S.D.N.Y.1996); California v. Celtor Chem. Corp., 901 F.Supp.
1481, 1489-90 (N.D.Cal.1995); United States v. Ekotek, Inc.,
1995 WL 580079, at *4-*5 (D.Utah 1995); Cal. Dep't of Toxic
Substances Control v. SnyderGeneral Corp., 876 F.Supp. 222,
225 (E.D.Cal.1994).
3
In National Cable, the Supreme Court held that a federal
executive agency assessment which recoups the costs of overseeing
a regulated industry constitutes a federal tax to the extent that
it exceeds the value of the benefit of regulation to the regulated
group, and that under the separation of powers doctrine, the
federal government cannot collect such a tax unless Congress's
intent to delegate to the executive branch the discretionary
authority to recover such a tax is clearly expressed. 415 U.S.
336, 94 S.Ct. 1146, 39 L.Ed.2d 370.
4
a contamination or a threatened contamination for which they are
responsible. Atlantic Richfield Co. v. Am. Airlines, 98 F.3d 564,
568 (10th Cir.1996); United States v. Monsanto Co., 858 F.2d 160,
174-75 (4th Cir.1988); Continental Ins. Cos. v. Northeastern
Pharm. & Chem. Co., Inc., 842 F.2d 977 (8th Cir.1988); Md. Cas.
Co. v. Armco, Inc., 822 F.2d 1348, 1352 (4th Cir.1987); United
States v. Northeastern Pharm. & Chem. Co., Inc., 810 F.2d 726, 749
(8th Cir.1986); Town of New Windsor v. Tesa Tuck, Inc., 935
F.Supp. 317, 326 (S.D.N.Y.1996). As the Ninth Circuit explained,
the Supreme Court did not announce universal definitions of a "tax"
or "fee" in National Cable, but merely determined the meaning of
the terms of the statute at issue. Union Pacific R.R. Co. v.
Public Utility Comm'n, 899 F.2d 854, 859-61 (9th Cir.1990).
B.
Under CERCLA, the government may either conduct clean-ups
itself or permit or require responsible parties to do so. CERCLA
§§ 104(a) and 106, 42 U.S.C. §§ 9604(a) and 9606. Liability for
costs incurred by the government or a private party in cleaning up
a site is imposed by CERCLA § 107(a)(4), 42 U.S.C. § 9607(a)(4),
which provides that responsible parties are 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" and "any other necessary costs of
response incurred by any other person consistent with the national
contingency plan." In other words, if the government's actions are
response actions in harmony with the national contingency plan,
5
then costs incurred pursuant to those actions are recoverable from
liable parties. United States v. Hardage, 982 F.2d 1436, 1441
(10th Cir.1992). The question presented is whether the
government's oversight costs in a responsible party clean-up are
response costs under CERCLA.
CERCLA § 101 defines the terms "response," "removal," and
"remedial action." Responses consist of removals and remedial
actions and "enforcement activities related thereto." CERCLA §
101(25), 42 U.S.C. § 9601(25). A "removal" is generally understood
to be a short-term response and a "remedial action" is generally
considered a long-term response or permanent solution. See CERCLA
§ 101(23) & (24), 42 U.S.C. § 9601(23) & (24); Daigle v. Shell Oil
Co., 972 F.2d 1527, 1533-34 (10th Cir.1992). Removal is defined
broadly, as follows.
[T]he 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 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.
CERCLA § 101(23), 42 U.S.C. § 9601(23) (emphasis added). "Remedial
action" is also defined broadly and includes
those actions consistent with permanent remedy taken instead
of or in addition to removal actions in the event of a release
of 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 and
6
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
supplies, and any monitoring reasonably required to assure
that such actions protect the public health and welfare and
the environment.
CERCLA § 101(24), 42 U.S.C. § 9601(24) (emphasis added).
C.
"Monitoring" is a term used in the definitions of both
removal and remedial action. It is not defined in CERCLA. A term
not defined in a statute must be construed in accordance with its
ordinary and natural meaning, United States v. Alvarez-Sanchez, 511
U.S. 350, 357, 114 S.Ct. 1599, 1603, 128 L.Ed.2d 319 (1994), as
well as the overall policies and objectives of the statute, Brown
v. Gardner, 513 U.S. 115, 117-19, 115 S.Ct. 552, 555, 130 L.Ed.2d
462 (1994). In re Locklin, 101 F.3d 435, 439 (5th Cir.1996).
Unless an application of the traditional principles of statutory
construction reveals the plain language to be ambiguous, i.e.,
susceptible to more than one reasonable interpretation, our inquiry
ends as we must give effect to Congress's unambiguously expressed
intent. Reich v. Arcadian Corp., 110 F.3d 1192, 1195 (5th
Cir.1997). As suggested above, the plain meaning of a word cannot
be determined in isolation, but must be drawn from the context in
which it is used. Id. at 1195-96. Given such a rule of statutory
construction, a term is not considered ambiguous even though it may
be susceptible to different interpretations when the context
eliminates all but one of the meanings. Id. at 1196.
The verb "monitor" is generally synonymous with audit, check,
7
control, inspect, investigate, observe, oversee, regulate, review,
scrutinize, study, survey, test and watch. See William C. Burton,
Legal Thesaurus 337 cited in Atlantic Richfield Co., 98 F.3d at
569; Webster's Third Internat'l Dictionary 1460 (Philip B. Gove,
ed.1993) cited in Atlantic Richfield Co., 98 F.3d at 569; see also
Am. Heritage Dictionary 848 (William Morris, ed.1970) ("to
scrutinize or check systematically with a view to collecting
certain specified categories of data" and "to keep watch over;
supervise").
The term removal is aimed at containing and cleaning up
hazardous substance releases. See United States v. Hardage, 982
F.2d 1436, 1448 (10th Cir.1992). Under a plain language statutory
reading with an eye to context, the monitoring provided for under
the "removal" definition relates to an evaluation of the extent of
a "release or threat of a release of hazardous substances." 42
U.S.C. § 9601(23); Daigle, 972 F.2d at 1535. "Removal" action
also includes those activities that are deemed necessary to prevent
hazardous releases from adversely affecting the public health. See
Hanford Downwinders Coalition, Inc. v. Dowdle, 71 F.3d 1469, 1477
(9th Cir.1995). It is unquestioned that EPA oversight is a
necessary part of the removal process and ensuring compliance with
standards aimed at the public health. Thus, the term removal
action includes the monitoring conducted by the EPA via its
oversight activities.
The "remedial action" definition expressly focuses on actions
necessary to "prevent or minimize the release of hazardous
8
substances so that they do not migrate to cause substantial danger
to present or future public health or welfare or the environment,"
42 U.S.C. § 9601(24); Price v. U.S. Navy, 39 F.3d 1011 (9th
Cir.1994), and so we read the term's inclusion of "such actions as
may be necessary to monitor, assess, and evaluate the release or
threat of release of hazardous substances," with such in mind. EPA
oversight, or monitoring, is certainly part and parcel of
preventing and minimizing the release of hazardous substances.
Government oversight of private party remedial actions ensures that
remedial actions will be effective in preventing or minimizing past
or threatened releases, the essence of the definition of remedial
action. See CERCLA § 101(24); Atlantic Richfield Co., 98 F.3d at
569; cf. Daigle v. Shell Oil Co., 972 F.2d 1527, 1535 (10th
Cir.1992) (holding that CERCLA § 101(24)'s "monitoring" does not
include medical monitoring of persons exposed to hazardous
substances because that monitoring did not prevent or minimize a
release or threatened release per CERCLA's definition of "remedial
action").
In addition, response actions, which include both remedial and
response actions, are defined to include "enforcement activities
related thereto." CERCLA § 101(25), 42 U.S.C. § 9601(25). EPA
oversight of removal and remedial actions that are conducted by
responsible parties easily falls within this definition of
response. As the district court explained, the EPA must evaluate
all stages of the cleanup process, from the preliminary
investigation through the final disposition of hazardous substances
9
at a site. Lowe, 864 F.Supp. at 631. Government monitoring or
oversight is an inherent and necessary enforcement element of
private party response action. CERCLA § 111(c)(8) clearly
contemplates that the government must monitor private party
remedial actions and CERCLA § 122(f)(3) and (5) require government
monitoring of private party remedial actions. In the same vein,
CERCLA § 122(a), 42 U.S.C. 9622(a), authorizes the EPA to settle
with liable parties to perform response actions "if [EPA]
determines that such action will be done properly." To meet those
obligations, § 106(a) orders and consent decrees typically require
that responsible parties meet performance standards, that the EPA
conduct periodic reviews to determine that work meets the
standards, that the EPA determine whether additional response
actions are necessary, and that the EPA certify that a clean-up has
been performed as required. See 42 U.S.C. § 9621; 40 C.F.R. §
1.47. Thus, government monitoring or oversight reasonably required
to assure that private party actions protect the public health and
welfare and the environment also qualifies as response activity
under the "enforcement activities" component of the response
definition. Atlantic Richfield Co., 98 F.3d at 570 ("determin[ing]
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)"); see also,
e.g., 56 Fed.Reg. 30,996, 30,998 (July 8, 1991) (model consent
decree for § 122 settlements requiring settling defendants to pay
all response costs incurred by government including "reviewing or
10
developing plans, reports and other items" and "verifying the work,
or otherwise implementing, overseeing, or enforcing this consent
decree").
Finally, we note 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. See Ekotek, 1995 WL 580079, at *8. In addition, an
absurd incongruity would result if we were to permit the government
to recover its costs for oversight of its own contractors, but not
recover the costs of oversight of private party contractors. There
is no basis in the statute for making such a distinction. Under
CERCLA, response actions may be taken either by private parties or
the government, neither § 101(24) nor § 101(23) distinguishes
between private party and government actions, and the EPA has the
authority under CERCLA § 104(a) to conduct removal and remedial
actions if it determines that responsible parties have failed to
complete necessary steps.
The enforcement activities of § 101(25)'s definition of
response actions, the monitoring referred to in § 101(24)'s
definition of removal action and the monitoring and necessary
actions of § 101(23)'s remedial action all clearly include
government oversight.4 EPA oversight is an integral and critical
4
Costs involved in the oversight of a private party clean-up
are most assuredly not general administrative costs incurred by an
administrative agency, as the appellants attempt to characterize
them, but costs incurred in relation to the oversight of remedial
or removal action at a specific site. "EPA oversight costs are not
... to pay the EPA's general administrative costs, but part of the
damages caused or contributed to by specific persons." Atlantic
11
part of removal and remedial actions and of enforcing the terms of
a governing order or consent decree. We join the Tenth Circuit and
find that CERCLA's plain language and liability scheme authorize
the EPA's cost recovery for the oversight of private party response
actions.5 See Atlantic Richfield Co., 98 F.3d 564.
CONCLUSION
We conclude that government monitoring or oversight of a
private party remedial or removal action is a response under CERCLA
§ 101(25). Consequently, under CERCLA § 107(a)(4)(A), the
responsible parties are liable for the costs of EPA oversight. For
the foregoing reasons, we AFFIRM the district court.
Richfield Co., 98 F.3d at 568.
5
While the Rohm & Haas court analyzed only the definition of
removal and did not specifically discuss the definition of remedial
action, and the Atlantic Richfield court focused its analysis on
remedial action in deciding that oversight costs are response
costs, there is no meaningful distinction between remedial and
removal actions in the context of the issue of reimbursement of EPA
oversight costs for private party clean-ups. Accordingly, our
holding encompasses both scenarios.
12