vvEPA
OFFICE OF ENFORCEMENT
CERCLA
NOTEBOOK
VOLUME I
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
MEMORANDUM
WASHINGTON. DC 20460
«JG 2 6 1983
SUBJECT: Guidance on Pursuing Cost Recovery
Actions Under CERCLA
FROM: Courtney M. Price _
~* Counsel for Enforcement
M. Thomas
Assistant Administrator for
Solid Waste and Emergency Response
TO: Enforcement Counsel
Regional Administrators
Regional Counsels
Associate Enforcement Counsel-Waste Division
Regional Superfund Coordinators
Air and Hazardous Substance Division Directors,
Environmental Services Directors
I. INTRODUCTION . '
Section 107 of the Comprehensive Environmental Response,
Compensation and Liability Act (CERCLA) provides generally that
past anr? preser.t owners and operators of a site, er.d ger.eratcrs
and transporters who_ contjributed hazardous substances to a site,
shall be liable (with certain limitations to be discussed herein)
for all costs of removal jar _remejiial ^c.£i^.n jindertaJcejT^by__^he U.S.
government, a State, or anyother . _p,ers_on*-...and.-for-damages—fee-or
loss of natural resources.
While it is highly desirable to obtain removal and remedial
action in the fJLrs.t.,.instance by jresponsible parties, rather
than by the Environmental Protection Agency (EPA) or a State,
there are and will continue to be jnany cases in which_the Agency
will authorize the use of CERCLA funds from the Hazardous Substance
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Response Trust Fund (the Fund) established by. CERCLA for these
actions, and thereafter attempt to recover those costs from the
party or parties who are liable under Section 107 of the Act and
other authorities.
Due to the possibility of cost recovery efforts in any case
in which CERCLA funds are expended, the observation, documentation ,
and preservation of critical facts and response costs is important-;'.,,.
to assure that:
* potential evidence concerning the site I/ and responsible
parties is noted_ and docyjijeiLted before response activity •
or the passage of time obscures or eliminates it;
* physical evidence essential at trial is collectedvand. .
preserved appropriately? and . .",-
* sufficient evidence of total costs and claims. pa^M, 'f-rcr.. th'e '
Fund has been maintained and is available to support-, recovery
by the government.
This memorandum describes essential elements which the. -•
government will probably be called upon to prove in a cost
recovery action; the assembly and maintenance of a file; some
examples of appropriate documentation for each element of the
cause of action; procedures for processing and negotiating cost
recovery claims; and the mechanics of repayment of any recovery 'to
the Fund. This guidance must be observed by EPA employees, con- -,
tractors, and, where appropriate, employees of State agencies^
i
working on a site on which CERCLA funds are expended underf,.an
I/ The word "site" as used herein applies to any location where;a
release or spill has occurred, and maybe used interchangeably with -
"facility" as defined in Cf.RCLA $101(9).
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EPA-State cooperative agreement, in every situation in which CERCLA
funds are expended for site clean up, since each of these sites is
the subject of a potential cost recovery action. The Office of
.Waste Programs Enforcement is preparing an additional cost docu-
mentation guidance; please contact Libby Scopino (382-4482) fop
assistance.
II. ASSEMBLING A COST.RECOVERY ACTION
The assembly of evidence for a cost recovery action begins
with the first response action taken under SectionJL04 of CERCLA.
The filing of a cost - recovery action should be presumed; accordingly
the collection of relevant documentation is important. Generallyf
the government will pursue a cost recovery action when there is a
solvent responsible party.2/ Where other government action against
the responsible party is contemplated or. pending, such as a judi-
cial action under Section 7003 of RCRA or Section 106 of CERCLA to
compel remedial measures at a site, a cost recovery count.under
Section 107 of CERCLA for removal or remedial costs can be added
to the ongoing litigation.
The Regional Program office has the responsibility of
collecting and maintaining the documents used as evidence in
cost recovery actions. In matters which require legal opinions
(such as the legal right of the Agency to enter a facility) or the
preparation of legal documents, the program office should consult
with and obtain the assistance of the Regional attorney or the
appropriate Headquarters attorney.
2/ For a discussion of thg_JLg£tgrs..-to be considered in determining
whether to file a cost recovery action, see Part IV.F.
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III.. ELEMENTS OF A COST RECOVERY ACTION
Under Section 104 of CERCLA, the U.S. or its authorized
f '*
representative may take removal or remedial action at a site'
when, inter alia, any hazardous substance is released or there'
is a substantial threat of such a release ,into the environment, "•
unless..EPA determines that such action will be done properly
by the owner or operator or by any other responsible..party. ;f
The government may pursue an action under $107(a) for (1)
costs of removal or remedial action incurred by the U.S.i not:; •
' '
inconsistent with the National Contingency Plan (NCP), or ;'",
(2) claims paid by th^ Fund for costs of response incurred' :".-.,
by a state not inconsistent with the NCP,, or by other parties : =
not inconsistent with the NCP.j}/ Section 104(b) also authorizes
the recovery of costs of sampling, analysis, monitoring and
surveying programs, and certain other costs, including those
V There may also be a claim made by trustees under Section .
107(a)(4)(c) of CERCLA for damage .to or loss ,of natural resources.
However, until regulations for assessment of natural resource
damages or destruction'are promulgated pursuant to Section 301(c)
of the Act, claims for such: damages will be assessed on a case-by-case
basis. The best records available on those damages should be -..
maintained until specific guidance is developed on that subject.
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for planning, legal and engineering services.4/
Therefore, to^successfully pursue a cost recovery action, EPA
should be prepared to introduce evidence demonstrating:
1. release of a hazardous substance or the substantial threat
of such a release; and
2. the responsibility of the defendant(s)j and
3(a>. removal or remedial actions taken by the U.S. or the
State which were not inconsistent with the NCP V; and/or
4. the costs of actipn taken by the U.5.,_ a State, or
any other person.
The financial condition of a responsible party is not an
essential element of proof of the cause of action.£/ Even so, the
financial condition of the responsible parties may be considered
in determinTng" the feasibility of a cost recovery action.
T7 For a list of costs whichTare recoverable under CERCLA, see
Appendix 'A.
5/ Although Agency policy is to maintain evidence that its
response activities are not inconsistent with the NCP, the Agency takes
the. _pos it ion 'that the defendant. Jias. the_i-urd.enl.of.;.p.rppf.. -on _ this., .issue.
^/ While we do "not believe that it is necessary to introduce
evidence that removal and remedial action would not have been
done properly by the owner or operator of a facility .or by any
other responsible party, it would be prudent to have available
evidence of efforts by the Agency to obtain private party response
action at the site. The notice letters forwarded by the Agency
to potentially responsible parties and their responses are
examples of such evidence.
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The chief/elements of a cost recovery action(and the
nature of evidence required to sustain them are discussed below.
A. Evidence of Release or Substantial Threat of Release
of a Hazardous Substance ' •'
A release of a hazardous substance or the substantial threat
of such release from a facility roust be shown. The term "hazardous
substance" includes inter alia, any material designated as hazardous
or toxic under the Clean Water Act, Toxic Substance Control ActV
or the Clean Air Act or designated as a hazardous waste", under RCRA
(see 40 CFR 302). The definition should be consulted since it ,::,'-:>,
does not include every pollutant or contaminant."]_/ ' ,
Appropriate documentation of evidence of a release or sub-.-y. •;
stantial threat of release includes field notes, photographs of: .
the scene, statements from witnesses, statements from owners' or
operators, follow-up narrative reports or memoranda describing"-the
scene or observations first hand, samples of air, soil, water or :
leachate discharge and laboratory analyses of the samples.'.- .Evi
2/ Section 104(a) of the Act authorizes the President (or. his::r
designer) to take response action whenever there is a release or.v .::
threat thereof of a hazardous substance, or whenever there is a -.".,..
release or substantial threat of a release of "any pollutant or :
contaminant which may present an imminent and substantial endanger-
ment to the public health or welfare...". However, Section 107 ":
refers only to liability of owners, operators, transporters and :.
generators for costs incurred in responding to releases or .threats .-vS
of releases of "hazardous substances". It is not clear whether •• -
those persons may also be liable under $107 for costs incurred- .in
responding to releases or threats of releases of any pollutant" or
contaminant which is not a defined hazardous substance, but which
may present an imminent and substantial endangerment. The government
intends to hold such persons liable for those costs under both sect"'-
1C7 cf CERCLA and the common law theory of restitution..
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collected must be sufficient to demonstrate this aspect of. the
case.
There are three important considerations here;.
First,, samples^ -records-of—tfee-owner./operator, or_ other
evidence sufficient to establish the identity of hazardous sub-
stances involved should be collected.
Procedures similar or identical to those used by the National
Enforcement Investigations Center (NEIC) 8/ should be followed, as
should the requirements of Section 104(e)(1)(B), which provides.
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for furnishing a receipt to the owner/operator for any samples;;
ITTTT ** ........ ., ^ . ^,..j»* r;
taken (and a split sample, if requested). Observance of chain-ofr
custody procedures is necessary to demonstrate at trial that
samples analyzed as hazardous .substances did, in fact, originate -. .
at the site.
Collecting more data and documentation about sites than is
reasonably necessary may increase total response costs to an
" '.»,
unduly high level and delay clean-up activities and cost reco.very.:. ;
The number of samples collected is primarily a matter within the :
judgment of the Regional and Headquarters Superfund Offices, and;-:
will necessarily depend to a great extent on the site and the : ..:'
affected areas of the environment. These Offices should consult.
[ • •
with the Regional Counsel prior to collecting samples. However,'
the Agency should generally collect only enough samples to determine
(!) that a hazardous substance is present on the site; (2) th'at .a
£/ NEIC Policies and Procedures Manual, Mav, 1978 (rev,., De.c.
1981), EPA Document NO. 330-9-78-OOi-R.
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release of the hazardous substance_jls_sjj bs .ta_n tia 11 y threatened or
has occurred? and (3) what response is appropr ia tg. Only unusual
circumstances (e.g., to satisfy doubts over validity of previous
samples, to determine whether concentrations of hazardous substances
are increasing, etc.) would justify incurring significant additional
costs for any additional sampling and analysis.
Samples should be taken in accordance with EPA-approved
protocols and procedures developed by NEIC and contained in its
Policies and Procedures Manual referred to above or similar
procedures.
Second, collection of this evidence should begin immediately
upon the start of any investigation into whether some response
activity (including sampling and surveying) may be needed at the
site in response to a release or threat of release. Passage cf
time or deliberate interference by other parties may literally
destroy the evidence. Similarly, a long delay between the initial
observation and the trial, or the initial observation and the
recordation of that observation, will make testimony by witnesses
about the site more difficult. Photographs of the scene before,
during and after the response action are frequently helpful in
preparing witnesses to testify, and in providing a visual record
to the Court of conditions that prompted the response activity.
Field notebooks and the results of laboratory analysis are
critical in show ing. ..the .conditions thjat existed at the site and
establishing a potential link to the defendant. Sampling and
analysis should be conducted with particular concern for accuracy,
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the activities of operators of a site may require a license or
permit under State or local laws and regulations. The appropriate
agencies should be consulted to determine whether they have any
record of activities by an operator of the site.
The problem of linking a transporter or generator of a hazardous
substance to a site is frequently a more difficult undertaking.
The following detection sources may prove fruitful. Often, operators,
generators, and transporters have recoxd^_J>/^u_s_ines_s_Jtrjinsactions.
Drums located on-site may bear labels or markings with the name of
a generator; these drums or labels should be preserved, if possible,
or photographed, and the photographs labeled for identification
and future use as possible evidence. Under certain circumstances
the case development team may decide to perform a chemical analysis
of the waste to assist in establishing the similarity between the
wastes and a particular company's process'.J9/ (Information regarding
parties and sites may also be obtained by use of letters issued
under authority of RCRA Section 3007 and CERCLA Section 104(eM.
Again, local residents, law enforcement officials or compe-
titors may be sources of information on transporters of material
to the site or in the general vicinity. ^Employees or former
•s '
employees of a generator or transporter may be willing to discuss
the disposal practices of their employers, and if so, signed
statements or affidavits, if possible, should be obtained from
them.
2/ Information on the composition""of waste streams associated
with various industrial processes may be obtained from the Hazardous
and Industrial Waste Division (WH-565), Office of Solid Waste, U.S.
Environmental protection Agency, 401 M Street, S.W., Washington, D.C.
20460.
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detail, completeness and quality, since these documents are likely
to be subject to close scrutiny by responsible parties and the
court. The NEIC has developed inspection and analysis procedures
to assure high quality evidence and documentation for trial.
Observance of NEIC procedures assures a consistently high quality
of evidence, and should be followed by EPA employees, other federal
agencies, contractors, and State agencies which have entered into
an EPA cooperative agreement for response using CERCLA funds.
Third, for ease of assembling the case and presenting :~it for;- ..
trial, the following people should be identified by name, relevant
qualifications or connection to the case, _ and jnfjormat iqnjabou t
how to contact them in the future: 1) persons who participated -
in the site inspection, sampling, analysis or photography;. 2) : -
persons who may have historic or current information from personal .
observation, 3} people who gave or refused to give statements.
B. Evidence of Responsibility of Defendants) • • •
In most cases, the liability of defendants will be demonstrated
by establishing the elements'in subsections (l)-(4) of $107(a).
EPA personnel have a variety of techniques to gather evidence
connecting the hazardous substance with the potentially responsible,
party or parties. For example, a -deed or lease evidences the
responsibility of owner or operator of the site. ness formal'" ' .
evidence can also be helpful in tracing rosponsiblity. The operator's
presence at the site over a period of time will usually be noted
by employees, neighbors, law enforcement officers, competitors .or-,
others close to or interested in such activities. Those, observations
should be recorded -in signed statements..or ..affidavits. -In-addition,
. » — •- • •
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C. Evidence That Removal or Remedial Action Taken By the U.S.: or _
State Is Not Inconsistent With The National Contingency Plan,
Pursuant to Section 104 of CERCLA, after information is-'.. .
gathered that a release has occurred or is threatened, a variety
of actions may be taken by EPA or a State. Among those actions... '•
are:
(i) Investigations, monitoring, surveys, testing and other
information gathering as may be necessary and appropriate to identify
the existence and exte:t of the release or threat thereof, the
amount, source and nature of the hazardous substances, and the",- , ,
C * ;'., .'-
extent of danger to public health, welfare or the environment-. In
addition, such planning, legal, fiscal, economic, engineering;.' , ;
architectural and other studies or investigations may be undertaken "
as necessary and appropriate to plan and direct response .action; -_• "
(ii) "Removal actions", as the term is defined, in Section .-•'•
101(23) of CERCLA, and which includes, without limitation, security-
fencing, provision of alternative temporary water supplies, anrf :
temporary evacuation and housing of threatened individuals. In '.
addition, EPA may take such other action as may be necessary ; .-
to prevent, minimize or mitigate damage to public health, welfare .
or the environment, such as removal of materials, temporary diki:ngV"
and other easily.accomplished actions? and
(iii) "Remedial actions", as the term is defined in>Section./•"'
101(24) of CERCLA, including installation of a clay cover,-.dredging ;
or excavations, collection of leachate and runoff, on-site storage,, .:-
treatment or incineration, provision of alternative water, supply
and clean-up of released hazardous substances. Subject to some• :•-
restrictions, it may also include permanent relocation of residents..
and business and community facilities, and off-site transportation,
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storage, treatment or disposal of hazardous substances. »
In a cost recovery action, two factors are important in the
development and preservation of evidence regarding the appropriate-
ness of the action taken by EPA or the state. These factors are:
A. The action was not outside what CERCLA allows.
B. The action taken must be "not inconsistent" with the NCP.
Therefore, the NCP should be referred to and all persons involved in
the decision-making process should be familiar with its requirements
and limitations before decisions regarding actions are made 10/.
Those decisions should be documented by notes, memoranda, letters
and other written records maintained in the appropriate files.
Under the NCP, remedial actions must also be shown to provide
a cost-effective response. A cost-effective remedy is one which,
among the alternatives examined, is least costly but technologically
fe_asible, reliable and adequately protects public health and the
environment. In addition, under the Section 104 (c){4) balancing
test, the Agency should document remedial actions to refute any
claims that the remedy was not cost-effective. Measures of cost-
effectiveness includes the protection afforded public health,
welfare and the environment by the remedy. In "immediate removal"
actions it will be especially important to document the circumstances
which justify the need for immediate action. As provided in section
300.65 of the National Contingency Plan, an immediate removal is
**"" ' •
^'appropriate when the lead Agency determines that the initi-ation •
M
| o£ immediate removal action will prevent or mitigate immediate
Ur1 sk of harm to human life or health.
10/ The National Contingency Plan is published in 40 CFR Part 300;
47 Fed. Reg. 31180 (July 16, 1982). — .. —
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Immed..ia.te_remoyals are appropriat,e JLn such situations as: 1)
human, animal, or food chain exposure to acutely toxic substances;
2) contamination of a drinking water supply; 3) fire and/or
explosion; or 4) similarly acute situations.
-. Evidence of the, cost-effectiveness of a particular remedial
action may be demonstrated by^the following evidence which is ,
.contained in summary form in the record of decision:
0 studies showing the technical feasibility and probable- -:,~
cost of alternative remedial actions on the particular. .
site;
0 information that shows the degree of risk to publicl,h'eaTth,
welfare arid environment presented by the particular site
(i.e., population threatened, media affected, toxicrty of
the hazardous substance involved, etc.);
0 other documentation generated in consideration of the;
various factors required by Section 300.68 of the NC?.
All s_uch evidence should be documented by written studies,
reports, letters, memoranda, notes, minutes of meetings and:any
other record of the relevant bases for taking a particular remedial
action.
D. Proof of Costs of Removal or Remedial Action by the U.S.*-
or a State . "...
Collecting evidence of costs of removal or remedial action ,
taken on a site is likely to"be a time consuming task. Documents.
must be obtained from a variety- of participants in the cleanup-
activity: agencies, contractors, and others. The success of
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government cost recovery actions depends upon the use of good
bookkeeping and record collection techniques.
Certain costs expended on removal and remedial action are not
recoverable. For example, no recovery -under CERCLA is permitted
,
where response costs resulted from application of a 'FIFRA-registered
product (see Section 107(i>), or from a. Federally-permitted release
(see Section 107(j)). In borderline cases, it should be assumed
that removal and remedial action costs are recoverable and records
developed and maintained with this expectation.
A variety of mechanisms are available for tracking costs.
While EPA prefers the uniformity of a single accounting system,
the particular method of accounting may vary if it ensures accurate
record keeping and preservation of all costs attributable to a
particular site. To further this objective, cooperative agree-
r.ents between EPA and a State, or contracts between EPA and a
contractor for performance of response activity on a site, should
specifically require that -account inc.. procedures, used by the State
or contractor be approved by EPA.
An accounting and expense-tracking system is already in
place at EPA, and should be followed closely by all EPA .personnel,
>
contractors and State agency personnel working on CERCLA-funded
sites. This system generally involves the assignment of a 'unique
accounting number to each specific site,, and the charging of time,
material and other expenditures to that account number. -Th e_js i te
number is assigned by Headquarters based on a request from the
Regional Office and confirmation of an 'approved Federal response.
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In addition, activity codes have been devised under which different
activities and phases of site clean-up and remedial action may be
described. Questions regarding the specifics of these accounting
.procedures should be directed to the Financial Management Center
iin the Office of Emergency and Remedial Response (FTS 382-2208).
u.*~ "" • •' • - - . . .
Evidence_of the cleanup costs should be preserved and avail-
able for introduction into evidence. This could include such
documentation's receipts for money paid for goods or services?
cancelled checks; contracts and any amendments thereof; purchase
orders; invoices; records of time spent, where the claim includes
the value of such time; travel records and vouchers; and records
of all correspondence or other communication regarding the actual
costs, as well as progress reports on the work performed. The
names, addresses and telephone numbers of all persons maintaining
the regular business records of contractors, agencies or persons
v
outside EPA should also be maintained for ready reference^ll/
jj./ The Emergency Response Division of the Office of Solid Waste
and Emergency Response of EPA is developing a field manual entitled
"Cost Control Management for Superfund Removal" for immediate and
planned removal actions. This manual presents a management system .
for On-Scene Coordinators for controlling, verifying, and documenting
all costs incurred in a removal action.
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IV. PROCEDURAL ISSUES
A. Timingof the Cost Recovery Proceeding
While the Office of Waste Programs Enforcement will work with
the Regional Program Office in setting priorities for cost recovery,
the following^basic t^mijig guidelines are offered. Cost recovery
actions for expenses incurred in immediate or plannedremovals
will normally not be initiated until _after_ such .response activity
has ..been completed, since the time required for those activities
is relatively short. However, a cost recovery action.need not-be
delayed where the Agency establishes a multiphase response action
(e.g., surface clean up, groundwater clean up). Accost recovery
action can begin before completion of the last phase of response
activity for costs expended to date and also for calculable .future
costs.
Where one stage of cleanup follows another in fairly rapid suc-
cession, cost recovery actions should be initiated after the cleanup
is fully completed. In situations where there are substantial^delays
between phases, however, the Agency may decide to commence a recovery
action at an intermediate stage. In these instances, negotiations
regarding recovery of expenditures may be combined with discussions
with responsibile parties over, prospective cleanup activities.
A •> S
Generally, an -action will not be filed for recovery of a remedial
investigation/feasibility study or the cost of design prior to the
filing of an action for recovery of construction costs.
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B. Statute of Limitations
CERCLA does not contain a time limitation provision within
which a cost recovery action must be brought. In the absence of
a specific statutory provision, theJFederal .statute ojE limitation
would^apply. There is some doubt at this time as to precisely -
which limitation period will be applied to a cost recovery action.
Limitations for actions brought by the United States for money
damages are contained in 28 USC Section 2415, which distinguishes
between actions based in tort QJ: .in^contract. Because^ cost •
recovery actions are essentially quasi-contractual actions-in...;.'"'
the nature of restitution, a six year statute of limitations .if:.' ..
any, should apply. However, since it is possible that a court :.: ,
may see CERCLA actions arising out of the tortious conduct .of:
others, cost recovery actions should be brought within three
years after the right of action accrues.
The date the cause of action accrues is also subject.
to debate. In United States v. The Barge Shamrock et al, 635. .,;.-
^Ul^^M^^^^_^^wvwwv^_^^^BWMHHH_k^^^^Bp_^^B^^^^v^l^B^^^v>^^^^_^_^^^_^^UMBB^B|M^^^^^^^B^_w. „.,, ,,^ |
F.2d 1102, 1110 (4th Cir., 1980), cert, den. 102 S.Ct. 125 (1981),
the Fourth Circuit held that a cost recovery action under :the .;••.
Federal Water Pollution Control Act arising out of an oil.spill;: ,
*' -~. ?-*J. '
first accrued when the government completed the cleanup operation. ,
On_the other hand, a defendant might well be expected to. argue.
that the cause of action accrues at the time funds are first-
expended on the site. In order to avoid argument on this pointy..-
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and to eliminate a potential bar to recovery, the Agency should
attempt to commence all cost recovery action within three years of
the date dollars are first expended. ~
^C. Extent of Liability of Responsible Parties
-*. ' •
While CERCLA Section 107(a) identifies parties who are
responsible for the costs of response actions at a site, the
statute does not expressly.set forth the the nature of that
liability. Language which imposed "strict, joint and several"
liability on the responsible parties was dropped from earlier
drafts in the.final, compromise bill, and replaced with a definition
in Section 101 of "liable" or "liability" which refers to the standard
of liability which obtains under Section 311 of the Federal Water
Pollution Control Act. Section 311 is a strict liability statute.
City of Philadelphia v. Stepan Cherc. Co., 5*4 F. Supp. 1135, 1140.
n.4 (E.D. Pa. 1982). Moreover, section 311 imposes joint an^
several liability, U.S. v. M/V Big Sam, 681 F.2d 432,439 (5th Cir.),
on pet. for reh., 693 F.2d 451 (5th Cir. 1982).
The position of EPA is that in appropriate circumstances, joint
and several liability is applicable under CERCLA. This position is
supported by reference to section 311, by the legislative history of
CERCLA 12/, and by Section 107(e)(2) of CERCLA, which provides that
nothing in CERCLA "shall bar a cause of action that an owner or
operator or any other person subject to liability under this section...
has or would have by reason of subrogation or otherwise against any
person."
12/ 126 Cong. Rec., S.19964 (daily ed. Nov. 24, 1980);
T26 Cong. Rec., H.11787 (daily ed. Dec. 3, 1980).
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The Department of Justice has interpreted this section as confirm-
ing a defendant's right of contribution against other responsible
parties, which is only of value to a defendant who has been
held jointly and severally liable 13/. -•-
Joint and several liability is traditionally imposed when
the__a_ctj.ons_of -two-or~more-defendants cause a single, indivisible
Kg_sult, (Prosser, Law of Torts, (4th ed. 1971), Sec. 52.) That
determination may involve factual issues. Therefore, where
two or more parties in the categories of responsible parties listed
in Section 10?(a) contribute hazardous substances to a facility
which are being released, threaten to be released, or are contributing
to the release or threat, the Agency may argue that those .parties-4 ••
are jointly and severally liable for the costs of responding'to ;'•
that release or threat. : '
This of course does not foreclose the Agency from entering
into consent decrees or other appropriate agreements with multiple ;
responsible parties in which they agree to allocate the Agency's :•••••
response costs among themselves. The Agency is primarily con-..,
cerned with achieving cleanup of hazardous sites, preferably by "_
private action, and there are many reasons why responsible parties.
may wish to share the costs. However, this is primarily, a matter.. ..,
for the responsible parties, and if they cannot agree among-;
themselves on an appropriate allocation of responsibility, EPA
should proceed with legal action on a theory of joint and_sieveralv.-.
liability.
137 Letter dated~ December 17T980, from 'Alan AV Parker, Assistant
Attorney General, Office of Legislative Affairs, to Hon. .
James J. Florio, 126 Cong. Rec. H11788 (daily ed. Dec. 3:, 1980').
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D. The Demand Letter
The first formal.step in the commencement of a cost recovery
proceeding will be the issuance of a letter of demand from EPA to
the potentially respons-ible party or parties for payment of
costs expended on the site. A demand letter should be sent to
all parties in a case who have been identified as potentially
responsible (i.e., past and present owners/operators of a site
and generators and transporters who contributed hazardous sub-
stances to a site)/ and should be issued after all response
activity has been completed, or at the completion of one phase
of a multi-phase response where the entire process will require
an extended period of time.
Before a demand letter is sent, the potential case should
be analyzed for the elements in part III above, including ident-
ification of all potentially responsible parties (including
responsible individuals in corporations where appropriate) and
t'
assembly of cost information. At the time the demand letter is .
sent, the Agency should be able to answer reasonable questions
posed by a recipient of the letter. Regional personnel should
have referred the case to Headquarters (or recommended against
an action) and Headquarters staff should have resolved their
position on a referral so that the Government is prepared to
file a complaint if the response to the demand letter is unsat-
isfactory ..-
The letter should be issued where response costs have been
incurred under CERCLA, regardless of whether a decision has been
-------
-21-
made to initiate a judicial proceeding for cost recovery.
The demand letter should contain the.following points:
0 reference to EPA's authority to administer CERCLA and- .
the Fund established thereunder (or reference to
authority to recover costs where the response activities
for which reimbursement is sought occurred prior to -
CERCLA); .
0 the location of the site;
0 the presence of a hazardous substance which was re.-
leased or threatened to be released;
0 in general terms, the dates and types of response, activity
undertaken by EPA at the site; '
'* any notice given to the recipient prior to or during the
response activity, allowing the recipient the opportunity •
to undertake the work or pay the expense of response.;
0 the total cost.of the response activity 14/ broken.down into
general categories;
14/ The amount stated in., the..demand..,.!ejtter should be_ jt he__to£a 1
obligated"~by the Agency to be expended on th¥ site," "rather than
the" amount shown by Agency records to have been expended,pn—the
site at the time the letter is. prepared. This is to avoid problems
caused by delays in payment of response costs after a demand letter
has been forwarded to the responsible party. Even so, available
records—should -be assembled as j5ppn__as_j>os.sible. Where it
is expected that tuture costs will be_ paid (e.g., in the
next phase~"of response activity), the~letter jhould—a-lso
clearly state that in addition to the "sums alreaUy obligated
ancT spent, the Agency expects to expend additional sums on.
ttve -site for which claim will be made against" the responsible
p.ar.ty. Of course, in a judicial proceeding in the cost
recovery action, the Agency will be required to prove the
actual amounts spent from the Fund.
-------
-22-
0 a general statement that the Agency believes that the
recipient is a responsible party and liable for the sum
set forth;
0 a demand for payment;
0 a statement that the recipient of the letter should conta"ct
EPA within a specified period (normally thirty days) to
discuss the account and the recipient's liability therefor;
c a warning that if recipient fails to contact the Agency
within the specified time, a suit may be filed in the
appropriate U.S. District Court for recovery of the
claim: and
0 the name, address and telephone number of a representative
of the Agency who the recipient should contact. A sample
demand letter is attached to this memorandum as Appendix B.
The primary responsibility for preparation of the demand
letter will be in the Regional Program Office. The Regional
Program Office should consult with the representatives from
OWPE, Regional Counsel, and Office of Enforcement Counsel-Waste.
The demand letter will be sent through the Office of Waste Programs
Enforcement for the signature of the Director of OWPE unless
that requirement is specifically waived. If a case is referred
to DOJ, the DOJ case attorney should sign the demand letter.
E. Procedure.In Event- of Response From Potential Defendant
In many cases., the recipients of demand letters will contact
the Agency and express interest in discussing their status as a
responsible party. The Agency encourages such negotiations.
-------
-23- . '
CERCLA money is limited; Agency cleanup activities deplete the
fund and money must be recovered from the parties responsible
for the release or threat of release. Therefore cost recovery •-
through negotiation or litigation is necessary to clean up the .:
greatest number of sites. Cost recovery should involve the
coordinated efforts of knowledgeable legal and technical personnel
at both the Regional and Headquarters offices as explained below.
1 • Negotiating Teams and Procedures -~,, ., ..
Upon receipt of a response to the demand letter from a ,::,.,
potentially responsible party, the contact person named In the r
demand letter will notify the Associate Enforcement Counsel for" •. v,
Waste, the Regional Counsel, the Director of OWPE and the Regional ,
Superfund office. Each of those offices will, upon notification,
/ " .."*'.;
identify the person who will represent it on the negotiating - ,.
team, (The Department of Justice may participate in cas.es which;
are likely to result in consent decrees or litigation.) . .
The formulation of the Agency's position results from -the. ::
collaboration of the Team. In some policy decisions the/entire
t
Tea:r, has relevant background to participate in the decision making
process. However the specialized legal or technical talent on . .
the Team should be efficiently used.
The Team has the responsibility for developing^ proposed . '
negotiating schedule. The proposed schedule should have- the.- -
concurrence of the Associate Enforcement Counsel for Waste and .; ••
the Director, OWPE in cases of national significance.
-------
-24-
Some factors which should be considered in the development
of this schedule are the number of potentially responsible parties
who will take part in the negotiations; the nature of the potential
defenses; the amount of available data linking particular parties
to the site; the amount of the claim, and other related matters.
Sufficient time should be allowed for the negotiation process to
take place, but it is important that a deadline be established as
a goal for achieving a settlement, and beyond which the negotia-
tions will not continue, absent clear indications that a settlement
is imminent. A reasonable period of time for most negotiations is
60-90 days; negotiations should not be extended without Headquarters
approval. A referral should be submitted by the Region and approved
by Headquarters, and a complaint should be prepared and approved
by the Department of Justice, prior to the conclusion of negotiations
so that an action may be .filed if negotiations are not resolved by
the deadline.
a. Case Team Leader. Contemporaneous with the formation of
the Negotiating Team, Regional and Headquarters program managers,
in consultation with OLEC, will select a program official to serve
/ •
as the Case Team Leader. The Case Team Leader's function will be
to:
• focus efforts to develop, in advance of negotiations, the
Agency's negotiating strategy and position on issues that
may arise during the"course of the case;
* ensure the coordination of legal and technical staff par-
ticipation .on t"he~team by scheduling and chairing regular
case review sessions; and
0 define the Agency's objectives in accordance with applicable
Agency guidances and policies.
-------
-25-
On occasion, the Team may be unable to develop a consensus
on a cost recovery issue. When this occurs, the Case Team Leader
will prepare a written explanation of the issue for resolution
by the appropriate supervisory staff.
b. Lead Negotiator. Regional Counsel and Headquarters Enforce-
ment Counsel managers, in consultation with the Director of OWPE,
will select the lead Agency attorney for the case.
Although a Regional Counsel attorney will usually be designated
as the lead Agency attorney, in cases of national significance or
which may be precedent-setting an attorney_from OEC-Waste may :be
selected. The extent of Headquarters involvement will be decided, •
on a case-by-case basis by the Assistant Administrator for Enforce-:1 :'-\-
ment, (or the Special Counsel for Enforcement until the Assistant. :,.'','
Administrator position is established). The Department of Justice
should also be consulted and invited to participate in negotiations -
of cases which are likely to result in a consent decree or litigation,
particularly in multiparty and complex cases.
The Team's lead attorney will be responsible for conducxing '
cost recovery negotiations. Although the attorney is primarily;,... ?
responsible for explaining and defending the Team's position'during^
negotiations, he or she may request other Team members1 assistance... ,
in articulating the Team's position to opposing parties.
At the initial negotiation session, the lead attorney should
inform opposing parties that while the Team has authority to negotiate,
any agreements are subject to the approval of Enforcement Counsel and
OSWER. The opposing parties should also be advised that the Agency
has established a deadline for settlement. The deadline should be
disclosed to the responsible parties. After the deadline, the
Agency will take judicial action.
-------
• 26-
2. Form of Settlement Agreement
CERCLA allows the Agency several ways the Agency could
settle a cost recovery action:
* a consent decree
0 an admin1stratiye_prder
9 a^memorandum of agreement.
However, as a matter of policy, the Agency has decided that a
consent decree is required in most cases. A forthcoming policy
will set out the requirements for using consent decrees and another
one will address administrative orders.
Again, it should be pointed out that the negotiating Team
is not authorized to enter into a binding agreement of any type
with the responsible parties in the absence of specific authori-
zation from the Enforcement Counsel and OSWER. Consent decrees
must also be approved by the Department of Justice and the reviewing
I
court (after a thirty day public comment period). A draft of any
document which is to be the subject of negotiation should, of
course, be reviewed before commencement of negotiations by appropriate
supervisors of the negotiating Team at the Region and Headquarters,
and any document which the negotiating Team and their supervisors
believe to be acceptable for settlement should be forwarded to the
Assistant Administrator for Enforcement, the Director of OWPE and
the Department of Justice at the earliest possible time to allow for
adequate review.
The Agency may allow some settlements in which the responsible
party agrees to pay the claim in periodic payments where the party
is unable to pay in a lump sum, or where there is. other legitimate
reason for delayed payment. Before considering installment payments,
-------
— 27 —
however, the Economic Analysis Division of the Office of Policy
and Resource Management (FTS 382-2764) and the Financial Management
Division of the Office of Administration (FTS 382-5135) should be
consulted in order to obtain a review of the financial condition
of the responsible party and to determine any applicable interest
"*^ • *
charges.
Payment of cost recovery claims should be made payable to the
U. S. Environmental Protection Agency and should be mailed to: ..
U.S. Environmental Protection Agency
Accounting Operations Office
P.O. Box 2971 ,.
Washington, D.C. 20013
Attn: Collection Officer for Superfund . .
The check or other form of payment should specify the name, of
the site at which the activity took place. The lead attorney;.: is . '
responsible for furnishing copies of judgments» decrees or agrcemen
for payment cf cost recovery claims as early as possible to Financial
Reports and Analysis, Room 3617M, U.S. EPA, 401 M Street,. Washington,:
D.C. 20460, for establishment of a proper account. . . . .<.
F. Procedure in Event of No Response to Demand Letter
If no response is received to the demand letter, a final
determination must be made of whether the facts of the case justify
the Agency taking further steps to pursue the cost recovery claim.
A decision whether the case should be referred to DOJ should be
made by the Region as well as staff at Headquarters at the. time
the demand letter is drafted. This decision will initially be •
made by the Regional Administrator, based on the recommendation: of
the Regional Superfund Office and the Regional Counsel.
-------
-28-
Relevant factors to consider include:
(a) the strength of evidence connecting the potential defen-
dant (s);
(b) the availablility and merit of any defense. Possible
defenses under Section 107 of CERCLA are generally that
the release and consequent response action was the result
of:
(1) an act of God;
(2) an act of war; or
(3) an act or omission by an unrelated third party as
to whom the owner/operator had no contractual relations
and did not fail to exercise appropriate care against
the foreseeable acts and omissions of that third party.
(c) the quality of release, remedy and expenditure documentation
by the Agency, a state or third party;
(d) the financial ability of the potential defendant(s) to
satisfy a judgment for the amount of the claim or to pay
a substantial portion of the claim in settlement; and
(e) the statute of limitations.
In considering the ability of the potentially responsible
party or parties to pay, the Regional Offices should make use of
the Financial Assessment System, developed by the Economic Analysis
Division of the Office of Policy and Resource Management and
managed by NEIC, to assess the financial condition of most
potentially responsible parties.
The determination of the Regional Administrator to initiate
a cost recovery action shall be forwarded by a memorandum from
the Regional Administrator to the Assistant Administrator for
,> • '
Enforcement for concurrence in the same manner as the referral of
other matters for litigation. A decision not to initiate a cost
recovery action must be reflected in a memorandum to OWPE. An
-------
-29-
affirmative decision roust be made by the Regional Administrator in
each case in which CERCLA funds are expended, whether that decision .
be to proceed or not to proceed. This is necessary because of the
Agency's accountability for management of the Fund.
After OEC concurs on pursuing the cost; recovery action,
DEC refers the case to the Department of Justice, together with: .
the names of the appropriate Headquarters and Regional personnel:
who will be involved in the case. If the Department of Justice -
fails to concur, the originating Regional office is advised of suchl, r
non-concurrence, together with the reasons therefor, and,recommend-; .
ations as to whether additional information should be provided for.."
DOJ's reconsideration. Even though a Region may recommend against "•:.;..
pursuing a cost recovery action, the Assistant Administrator for:; :/
OSWER may decide on his own initiative that such an action is . .-.:. •••':.
warranted. This recommendation would then be sent to OEC "for..: .•„„.
consideration. • ...
G* Maintenance and Coordination of Evidence in Event of Referral
There will inevitably be logistical difficulties in maintaining
and coordinating the production of the mass of data, contracts,:' .-_./• •
cost records, and other evidence generated in a response activity..//,,
It is very important to provide for an orderly method of expeditiously
providing that information during the course of a cost recovery:%
action for use during case development, discovery, and trial. .
-------
-30-
Each Agency, office, contractor or other person participating
in a CERCLA response activity should maintain documents related to
jihe activity for a period of not less than six (6) years after
all response activities are. finished (consult Appendix C for a
list of these necessary documents?.15/
The Agency's Financial Management Division will maintain
and periodically update the cost expenditure.tracking system for
each site referred to above, so that an itemization of all costs
attributable to a particular site can be quickly obtained. When
a determination is made that a case should be referred to .the
Department of. Justice for filing (or, if necessary, during the
time that the demand letter is being prepared or the case is being
considered for referral), a. request can be made of the persons,
firms or agencies involved in a response activity for copies of
its records. At that time, a complete file of all records involved
in .the particular case can be compiled and delivered to DOJ, with
copies of the complete file made available to appropriate Regional
and Headquarters legal and technical personnel.
IS/ The period of six years is necess?ry because of the pos-
sibility that the claim may not accrue upon the first expenditure.
Additionally the litigation may be protracted; documents must
be kept for the term of the litigation.
-------
Appendix A
-ii-
necessary or appropriate to plan
and direct response .actions.
S107{a)(4){A)
3. Planning, legal, fiscal, economic, same
engineering, architectural and
other services necessary to recover
the cost of response actions.
4. Planning, legal, fiscal, economic, same
engineering, architectural and
other services necessary to enforce
the provisions of the Act (CERCLA).
(This could include costs incurred
in prosecuting an immiment endanger-
ment action under §106).
5. All costs of (A) removal and (B)
remedial action incurred by the U.S.
Government or a State not inconsis-
tent with the NCP. Actions for which
such costs may be incurred are -
(A) Removal Actions ($101(23) ):
(1) the clean-up or removal of
released hazardous substances.
from the environment;
(2) such. actions as may be
necessary taken in the event
of the threat of release of
hazardous substances into the
environment;
(3) such actions as may be necessary
to monitor, assess or evaluate
the release or threat of release;
(4) the disposal of removed material;
(5) such other actions as may be
necessary to prevent, minimize or
mitigate damage to public health,
welfare or the environment which
may otherwise result from a
release;
(6) any monitoring to assure actions performed
by other parties adquately protect public
health, welfare and the environment/ and
meet EPA criteria;
-------
-31-
V. Note on Purposes and Use of This Memorandum
The policy and procedures set forth herein, and internal
office procedures adopted pursuant hereto/ are intended solely.
•N .
for the guidance of attorneys and other employees of the U.S.
Environmental Protection Agency. They are not intended to nor
do they constitute rule-making by the Agency, and may not be
relied upon to create & right or benefit, substantive or pro-
cedural, enforceable at law or in equity, by any person. The
Agency may take any action at variance with the policies or
procedures* contained in this memorandum, or which are not in
compliance with internal office procedures that may be adopted
pursuant to these materials.
We trust that this memorandum generally covers the subject
of procedures to be involved in cost recovery actions under
CERCLA, but if you have any questions or problems involving this
subject matter, please call Russell B. Selman, Office of Legal
and Enforcement Policy, at FTS 426-7503.
-------
Appendix A
-iv-
(h) diversion;
(i> destruction; .
(j) segregation of reactive wastes
(k) dredging or excavation;
(1) repair or replacement of
leaking containers;
(m) collection of leachate and runoff;
(n) on-site treatment or incineration;
(o) provision of alternative water
supplies;
(p) any monitoring reasonably required
to assure that such actions protect
public health, welfare and the
environment;
(q) costs of permanent relocation of
residents, businesses and community
facilities (where relocation, alone
or in combination with other factors,
is more cost-effective than and
environmentally preferably to trans-
portation, storage, treatment or
disposal off-site of the hazardous
substances).
(3) Remedial actions do not include:
(a) off-site transportation of hazardous
substances;
(b) off-site storage, treatment or '
disposal of hazardous substances;
unle_ss it is determined that such actions are
TAT~more cost-effective than other remedial
actions? (B) will create new capacity to manage
(in compliance with Subtitle C of RCRA) hazardous
substances in addition to those at the affected
site; or (C) are necessary to protect public
health, welfare or the environment from a present
or potential risk which may be created by further
exposure to the continued presence of the
hazardous substances.
-------
Appendix A
CostsRecoverable Under CERCLA
In order to identify records which must be developed and
maintained for a cost recovery action, it is essential to know
those costs which may be recovered from a responsible party.
Various sections of CERCLA provide for recovery of certain elements
of costs expended for site clean-up. We have attempted below to
compile a list of those costs which are recoverable, and the
sections of CERCLA which authorize recovery of those costs.
This list is very general and not exclusive.
The listed costs are in general categories, using language.
directly from CERCLA, and a determination will necessarily have
to be made in each case whether a particular expenditure is
within the categories of recoverable costs. In this regard, EPA's
position is that the intent of Congress was to authorize recovery
of all costs directly related to clean-up of a site, and therefore
the costs should be broadly construed to fall__ within these cate-
gories.
Cost CERCLA Section
1. Investigations, monitoring, surveys, 5$104(b), 107(a)(1)(4)(A!
testing, and other information-gathering (providing 'for recovery
necessary or appropriate to identify the of costs for removal :
existence and extent of the release or actions, which, as
threat thereof, the source and nature defined in $101.(23)
of the hazardous substances, pollutants include actions, taken
or contaminants involved, and the extent under $104{b)).
of danger to the public health, welfare
or the environment.
2. Planning, legal, fiscal, economic Same
engineering, architectural, and
other studies or investigations
-------
Appendix A
$107(a)(4)(B)
$107(a)(4)(C)
-v-
6. Any other necessary costs of response
incurred by any other person consis-
tent with the NCP. "Response" actions
include both "removal" and "remedial"
actions (5101(25). (See list of
removal and remedial actions above.)
7. Damages for injury to, destruction of,
or loss of natural resources, including
the reasonable cost of assessing such
injury destruction or loss. (See note,
below)
"Natural resources* include ($101(16)):
(a) land;
(b) fish;
(c) wildlife?
(d) biota;
(e) air;
(f) water;
-------
Appendix A
-iii-
(7) specific examples contained in
$101(23) (without limitation):
a. security fencing or other
measures to limit access;
b. provision of alternative
water supplies;
c. temporary evacuation and housing
of .threatened individuals
d. action taken under $104(b) of
CERCLA; '
e. any emergency assistance provided
under the Disaster Relief Act of
1974.
(B) Remedial Actions ($101(24)):
•• v • '
(1) actions consistent with permanent
remedy taken"instead of or in
addition to removal actions, to ,:
prevent or minimize the release
of hazardous substances into the
environment so that they do not
migrate to cause substantial danger
to present or furure public health,
welfare or the environment.
(2) Specific examples contained in $101(24) (without
limitation):
(a) storage;
(b) confinement
(c) perimeter protection using
dikes, trenches or ditches;
(d) clay cover;
(e) neutralization;
(f) cleanup of released hazardous
substances or contaminated
materials;
(g) recycling or reuse;
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Appendix B
(Model Demand Letter)
XYZ Corp. . .
Someplace, State 00000
Re: Name, location of site
Dear Sir or Madam:
On or about . , 198 , there were
_ _
releases and threatened releases into the environment of
hazardous substances [and pollutants and contaminants] from ,
the facility located at or about .
{In addition, there were releases and threatened releases of- .
pollutants and contaminants that may present an imminent and .
substantial danger to the public health or welfare.]
[On or about , 19 , EPA gave [oral] notice
to you [which was confirmed] by letter of
, 19 , advising you regarding the referenced
facility and that you are a party who may be liable for money
expended by the government to take corrective action at :the
facility. EPA offered you the opportunity to discuss, with EPA
your voluntarily taking action necessary to abate any releases
or threats of releases of hazardous substances [and polluants
and contaminants} from the facility. You did not undertake
the necessary actions.]
In accordance with the Comprehensive Environmental
Response, Compensation and Liability Act (CERCLA), 42 U.S.C.
§9601 g_t sea. , [and other authorities (insert where pre CFRCLA
or noh CERCLA expenditures)] the [State of , pursuant
to an agreement with and funding by the (insert if State lead)!
United States Environmental Protection Agency (EPA undertook
response action using funds provided 'for such actions. The
action began on or about and continued to on
or about . EPA's response action entailed
the (describe generally what was done). - •
The cost of the response action [performed] [caused
to be performed by EPA at the facility] [was] [is currently]
approximately S . (Insert the amount obligated
by the Agency to be expended oh the site, not the amount
actually expended according to Agency records.) [The Agency
anticipates expending additional funds in the future under
authority of CERCLA for additional response activity which the
Agency deems appropriate to be performed at the site.]. Enclosed
is a statement: summarizing the expenditures to date.
-------
- 2 -
\ Information available to EPA indicates among other
things that you (choose one or more, of the bracketed clauses
as appropriate:) (are/were at the time of the response
action the owner/operator of the facility] [were the owner/
operator of the facility at the time of disposal of hazardous
substances at the facility] [did, by contract, agreement or
otherwise, arrange for disposal or treatment, or arranged for
transport for disposal or treatment of hazardous substances •
land pollutants and contareinantsjat the facility [accepted
hazardous substances [and pollutants and contaminants] for
transport to the facility which was selected by you). Pursuant
to the provisions of Section 107(a) of CERCLA [and other author-
ities (insert where pollutants or contaminants involved and
where other law involved)], we believe that you are liable for
the payment of all costs expended on the site to the Hazardous
Substance Response Trust Fund established pursuant to Section
221 of CERCLA, which is administered by EPA.
We hereby request .that you [or a group of parties
potentially responsible for the site] make restitution by pay-
ment of the herein stated amount plus interest [together with
any sums hereafter expended by the Agency on the site pursuant
to authority of CERCLA]. [The names of other potentially
responsible parties receiving this request for payment are
enclosed with this letter to facilitate organization among
the identified parties concerning payment.] If you [or an
organized group of potentially responsible parties] desire to
discuss your liability with EPA, please contact the person
named below in writing not later than thirty (30) days after
the date of this letter. We will otherwise assume that you
have declined to reimburse the Fund for the -site expenditures
and will subsequently pursue civil litigation against you..
Sincerely,"
Contact Person:
[Name]
[Title]
[Address]
cc:: Enforcement Counsel
Regional Counsel
State Agency
-------
-2-
I. Evidence of a Release or the Threat of a Release (continued)
Docunent
Originator
EPA Contact
Ptobable File location
0 Notes fion phone
calls, correspondence,
photographs, or other
form of tandem or
incidental observation
Signed witness state-
ments (describing the
conditions leading
to the release
ard the release)
0 Gov»t. Officials
(l£>cal. State,
Federal)
"Public
• Owner/Operator
Facility
* Employees or
Contractors assoc.
w/ facility
• Federal/State
Invest igators
• local Officials
* Public
• EPA-Region, Enf./
Compliance project
Manager
• State Bit./
Compliance Agency
• Municipal Government
Offece (e.g.. Public
Health or Police Dept.)
0 EPA-Region, Waste Hgt.
Division proj. Manager
0 State Agency
Remedial Responses
Discovery/ Hazard
Ranking File
Remedial Response:
Discovery/ Hazard
Ranking File
-------
Appendix C
The following pages constitute a search guide that may be used by the
*
Regional enforcement program in gathering documentation to support a cost
recovery action. The search guide format is a chart with four columns, headed
as follows: "Document", "Originator*, "EPA Contact* and "Regional File
Location'.* All of the documents listed will probably not be available in all
cases/ nor will each one necessarily enhance the body of evidence in every case.
It must be decided on a case-by-case basis exactly which pieces of documentation
should be used as supporting evidence. The search guide was meant to be an
exhaustive list of documents that should be considered. It is suggested that
the persons conducting the file search for supporting documentation pull out .
each document on the list if it is available. It can be decided at a later tune
which of the documents are useful as evidence given the facts of the particular
case.
Please note that the search guide covers only documents that would be
useful in supporting the first three elements of proof discussed in this
guidance: proof of the release, link between the party and the site and
consistency with the NOP. Cost documentation will be the subject of another
guidance document that is currently under development.
* The fourth column, "Regional File Location*, has meaning only if the Region
uses the filing system described in Appendix E.
-------
-4-
I. Evidence of a Release or the Ttiteat of a Release (continued)
Document
Originator
0 Documents relating to * EPA-OSC/Resp. Team
test results (e.g., Clash * State-OfiC/Respons«i
Team
* RBI/FIT Contractor
0 Laboratory
point) and multi-media
environmental sampling
and analysis
•• Documentation of
information used
. to determine
sampling locations,
frequency and types
(water, soil, air,
wildlife, leachate,
hazardous wastes
fton containers
•• Summary charts or
interpretive reports
regarding the analy-
tical data.
00 Affidavits prepared
by field and labor-
atory staff indica-
ting all procedures
and protocols fol-
lowed (including
health and safety
consideration)
0 EPA-OSC/Resp. Team
0 State-OSC/Response
learn
• RBI/FIT Contractor
0 Laboratory
EPAContact
EPA-Region. Waste
Mgt. Division/'Env.
Services Division
Project Manager
EPA-Region. Waste
Mgt. Division/Env.
Services Division
Project Manager
Probable pile Location
0 Remedial Response:
Discovery/ Hazard
Ranking Pile
Remedial Response:
Discovery/ Hazard
Ranking Pile
• Same as above
0 EPA-Regional Tech.
0 Staff
0 State Agency Tech.
Staff
0 Same as above
0 Same as above
0 Sane as above
0 Same as above
0 Same as above
-------
I. Evidence of a Release or the Threat of a Release
Document
Notification Record
pursuant to Sec.
103(a) of CERCLA
0 Notification Record
pursuant to Sec. 103(c)
of CERCLA
0 Recotd of notification
of EPA-HO-Brergency
Response Division,
EPA Regional
Administrator or
other EPA official
• Conpl lance
Investigation
Report pursuant to
Section 104(e) of
CERCLA
0 Other Compliance
Investigation or
Inspection/Audit
Reports pursuant)
to statutoiy
authority (e.g.,
sec. 3013 of RCRA)
Originator
• Owner/Operator
of facility
0 Gov't. officials
responding to the
problem (Local,
State or Federal)
* Owner/operator of
facility
0 Appropriate Fed.
officials
* Federal/State
investigator
Federal/State
investigator
EPAOontact
0 National Response
Center (NRC)
EPA-Regions
EPA-HQ-Hazaixtous
Site Control Division
EPA-Region, CSC
EPA-R.A.
Responsible Division
* EPA-R3glon, CERCLA
Enf./Compliance
Project Manager
0 State Enfotxsement/
Compliance Agency
• EPA-Region, Apptop.
En f./Conpl iance
Section
• State Enforcement/
Compliance Agency
Ptobable rile location*
0 NCR (see page 21, II,
bullet II)
0 Remedial Response:
Discovery/Hazard
Ranking Pile/Regions/
HO
• NRC
0 EPA-HQ-FMergency Response
Division Removal Response
Pile
0 Remedial Responses
Discovery/Hazard
Ranking Pile
0 Remedial Response)
Di scovery/Hazard
Ranking Pile
*Unless otherwise noted, this assumes the documents are located in the Regional files
and ^s the Regions art? using the file structure outli Appendix E.
-------
-6-
I. Evidence of a Release or the Threat of a Release (continued)
KPA Contact
Document
Documentation of
physical character-
lsties of each
geological strata
thtouyh fiels ot
Documentation
of physical
characteristics
of ea. geological
sttata through
field or lab
testing (e.g.,
permeability, head
measurements
Documentation
supporting ground-
water and surface
water flow estimates
dates and directions)
Dcxfumentation of
-drilling
jstigative
in\e
techniques
(e
ot
g., resistivity
seismic surveys)
Well logs and descrip-
tions of geological
strata
Ot iginator
Same as above
0 Same as previous
page
0 Same as above
Sams as above
0 Same.as above
0 Same as previous
page
Same as above
Same as above
0 EPA-OSC/Respohse ° EPA-Ragion, Waste
Team Mgt. Div. or Env.
0 State-OSC Response Services Div.
Tteam project Manager
* RHVFIT CXinttactor ° State Agency
Probable File Location
0 Same as above
Sane as previous
page
Same as above
0 Same as above
* Remedial Response:
Discovery/Hazard
Ranking Pile
-------
—3-"
I. Evidence of a Release or the Ttireat of a Release (continued)
Document
Photographs, drawings
depicting site condi-
tions.
0 Maps and photographs
(including aerial
imagery and other
remote sensing
techniques)
0 Documents relating to
the physical lay-out
of the facility (e.g.,
blueprints, pipe loca-
tion diagrams, security
provisions, monitoring
well locations, etc.)
Documents relating
to procedures, man- •'
agement practices used
at the facility..
Originator
0 Owner/Operator or
Employee of Facility
• EPA-OSC/Response Team
0 State-OSC/Response
Team
• RQi/FIT Contractors
0 Local Officials
• public
• EPA-NEIC
0 EPA Environmental
Photographic Inter-
pee tat ion Center -
Karrenton, Va.
0 Owner/Operator of
the Facility
EPA Contact
• EPA-Region, Waste
Mgt. Division
project Manager-
State Agency
Owner/Operator
of the Facility
Bnployees of the
Facility
* EPA-Region, Haste
Mgt. Division or
Env. Services Div.
project Manager
* State Agency .
• EPA-Region, Waste
Mgt. Division or
Env. Services Div.
Project Manager
0 State Agency
EPA-Region, Waste
Mgt. Div. Project
Manager-
State Agency
Probable File Location
0 Remedial Responsei
Imagery or Discovery/
Hazard Ranking File
* Remedial Response:
Imagery File
• Remedial Response:
Discovery/Hazard
Ranking File
• Remedial Response!
Discovery/Hazard
Ranking File
-------
-8-
I. Evidence of a Release or the Threat of a Release (continued)
Document
Originator
EPA Contact
Probable Pile location
0 Routine sampling and
analysis data (e.g.
performed to analyze
wastes, to assure •
statutory oompliance
such as NPDES permit).
Data should include
all field notes,
chain of custody
documents, laboratory
procedures/protocols,
taw data and summar ies
of or interpretative
reports about the
taw data.
0 Documentation of
potential health
or environmental
effects resulting
ft on release (e.g.,
interviews, physicians'
statements
• Biological Inventory
of the Affected area
0 Owner/Operator of
the facility
* Generator
0 Transporter
0 Contract Laboratory
•Public
• physicians
0 local Health
Officials
• local Environmental
Officials
• EPA-OSC/Response
Team
• State-OSC/Response
Team
• REM/FIT Contractor
* EPA-Region, Approp.
En f ./Ccfflpl lance
Section
• State Enf./
Compliance Agency
• Remedial Response:
Discovery/Hazard
Ranking File
0 EPA-Region, Waste
Mgt. Div. Project
Manager
0 State Agency
• EPA-Ragion, Waste
Mgt. Div. on Env.
Services Div.
Project Manager
* State Agency
0 Remedial Responset
Discovery/Hazard
Ranking File
0 Remedial Response:
Di scovery/Hazatd
Ranking File
-------
-5-
I. Evidence ot a Release or the Threat of a Release (continued)
Document
00 Documents relating
to Evidence Audits
by Contractor
evidence Audit "teams
(CEAT)
00 Chain of custody
•Documents
Documents relating
to topographic,
hydtgeolog i ca 1,
ecological or
demographic
information in
the vicinity of
the facility
(e.g., studies,
reports, articles,
field observation
notes)
Originator
•NEIC
0 Regional Office
Files
0 Owner/Operator of
the Facility
• Local/State Agencies
(e.g., Housing or
Transportation Auth-
ority, Planning
Coimission)
• Federal Agencies
(e.g., Weather
Bureau, USGS,
Soil Conservation
Service, NOAA, DOT,
Army Corps of
Engineers, Coast
Guard, etc.)
0 Local librariees
• Local Universities/
Colleges .
" Public
• Federal/State/Local
Officials" or Investi-
gators .'.:•••
" RFJWlT Zone
Contractor
• EPA or State OSC
EPA Contact
0 Same as above
Probable Pile Location
* FPA-Region, Waste
Mgt. Division or
Env. Services Div.
Project Manager
0 State Agency
• Remedial Response:
Discovery/Hazard
Ranking File
-------
-10-
I. Evidence of a Release or the Threat of a Release (continued)
Document
0 Documents relating
to any insurance
coverage carried
by facility
0 Documents relating
to any prior legal
actionsfe.g.,
complaints, discovery
documents, court
order, settlement
agreements,
negotiation records)
0 Documents relating
to prior accidents
Ke.g., fires,
explosions) or
hedical problems
experienced by
employees
Originator
0 Owner/Opera tot of
a Facility
" Insurance Agent
0 Counsel Cor Owner/
Operator of Facility
* Regional Counsel
0 EPA-HO, OU3C
• U.S. Department of.
Justice
• State Attorney Gene-
ral's Office or
State Agency Counsel's
Office
0 Owner/Operator of
a Facility •
0 txxal Public Health
Agency
* Local Police or Fire
Departments
0 Employees of a
Facility
EPA Contact
0 EPft-Region, Waste
Mgt. Division
Project Manager
0 State Agency
0 EPA-IO, OfJEC
0 ttegional Enf.
Counsel
• state Attorney
General's Office
ProbableFile Location
0 Remedial Response:
Discovery/Hazard
Ranking File
Remedial Response:
Di scovery/Hazard
Ranking File or
Enforcement File
0 EPA-Region, Waste
Mgt. Division
Project Manager
0 State Agency,
* Remedial Responses
DiscoveryAa^ardd
Ranking File
-------
-7-
I. Evidence of a Release or the Threat of a Release (continued)
ixxnroent
Originator
EPA Contact
Probable Pile Location
liydrogeolog ica 1
Data and Reports
* EPA-OSC/Response
Team
0 State-OSC/Rcsponse
Tteam
0 RHVFIT Contractor
0 EPA-Regicn, Waste Manage-
ment Division or environ-
mental Setvice Division
project Manager
0 State Agency
0 Remedial Response:
Discovery/Hazard
Ranking File
00 Documentation of
information used
to determine types
of data needed
Notification Record
pursuant to 'permit
requirements or
other statutory'
authority
0 EPA-OGC/Response
Team
0 State-OSC/Rssponse
learn
Contractor
0 Owner/Operator of
facility
* EPA-Reglon, Haste Manage-
'ment Division or Environ-
mental Service Division
Project Manager
• State Agency
0 EPA-Region, Appropriate
Bnforoeraent/Ccfflpliance
Section
0 State Permitting Agency
' Remedial Response:
Discovery/Hazard
Ranking Pile
• Remedial Response:
0 Discovery/Hazard
Ranking Pile
* EPA-Regions
-------
-12-
II. Evidence Linking Responsible Parties to the Site (continued)
A. Owners and Operators (continued)
Document:
0 Corporate structure
records (e.g., annual
reports, Dun & Biad-
stieet reports, in-
corporation docu-
ments)
Originator
0 NEIC Computer Files
(SBC and Dun 6
Bradstteet Reports
0 owner/operator of
Facility
0 Industrial director-
ies, manuals, etc.
0 Cotpotate Divisions
of State Secretary
of State offices
9 Small Business
Administration
Vehicle identification
information or
equipment rental
documents (e.g.,
license or registration
records, contracts or
lease agreements)
* Records or other
documents found
at the facility
during an
investigation
(e.g., utility
records, tax
receipts or
certificates,
real estate
records, labels
on containers)
Motor Vehicle Bureau
Rental businesses
Vehicle Owner/nans-
potter
Local t tuck stops
Owner/Operator or
Employees of a
Facility
0 EPA-OSC/Response Tteam
State-OSC/Response
Team
0 Federal or State
Investigators
RWl/FIT Contractors
EPA Contact
EPA-Region. Waste Manage-
ment Division Project
Manager
State Agency
EP/V-Regional Counsel
Probable File location
Remedial Responses Discov
Hazatd Ranking File or
Enforcement File
• EPA-Region, Haste Manage
ment Division Ptoject
Manager
• State Agency
• EPA-Regional Counsel
EPA-Reg ion, Waste Manage-
ment Division Ptoject Manager
State Agency
EPA-Regional Counsel
Remedial Responses
Discovery/Hazard
Ranking File or
Enforcement File
Remedial Response:
Discovery/Hazard Ranking
File or Enforcement File
-------
-9-
I. FAfidence of a Release or theThreat of a Release (continued)
Dgctment Originator EPA Contact
* Literature searches
and periodicals
regarding
the toxicology
and chemical
properties
of the
Hazardous
substances
(e.g., Toxicology
Data Bank (TDB)
or Chemical
Information
System (CIS)
" List of. hazardous
substances.(e.g.,
, CERCLA Sec. '102, OR
Sec. 311, RCRA Sec.
3001, OA Sec. 307,
CAA Sec. 112, TSCA
Sec. 7)
Hazard Ranking
Form and
supporting
documents
Public crmnents
or record of
public hearing
regarding
Hazard Ranking
0 EPA-Research
Labs
0 NEIC
0 NIH/COC
* EPA-IO Library
0 State Agencies
or Libraries
" universities
0 Research
or Consulting
Firms
• EPA-HQ, OWPE
or OEHR
* State Agency
Probable File Location
• EPA-HQ-Management
Information and Data
Systems Division
Nay 25, 1983
or 40 CFR 302.
0 BPA-HQ-Bnergency
Response Division
* EPA-HD-Docket 102 RQ.
* EPA-Region, Regional
Site Project Officer
0 EPA-Region, Waste
Management Division
Project Manager
• Public
* EPA-Region, RSPO
0 EPA-IIO-OERR
•EPA-Region, RSPO
0 Remedial Response:
Di scovery/Hazard
Ranking File
0 Remedial Response:
Discovery/Hazard
Ranking File
-------
-14-
II. Evidence Linking Responsible Patties to the Site (continued)
B. Generators (continued)
Document originator EPA Contact
0 Shipping documents,
manifests or other
business records
(e.g., bills of
lading, vouchers,
contracts with
haulers) which
provide
infot iiiation
on responsible
patties
• Affidavits or
signed statements
by persons
with knowledge
regarding past
activities at
the site
0 Records or other
documents found
at the facility
during an
investigation
(e.g., utility
records, taix
receipts or
certificates, teal
estate records,
labels on
containers)
0 owner/Operator of
Facility
• Generator
0 Transporter
Past Employees of
Facility
local Officials or
Residents
Other persons
0 EPA-oSC/Response Team
0 State-OSC/Response
learn
• Federal or State
Investigators
0 REM/FIT Contractors
0 EPA-FI9, OSW
0 EPA-Region, Haste Manage-
ment Division pioject
Manager
0 State Office responsible
for manifests
0 EPA-Regional Counsel
Probable File location
* Remdial Response: Discovery/
Hazard Ranking File or
Enforcement
EPA-Region, Waste Manage-
ment Division project
Manager
EPA-Regional Counsel
State Agency
° EPA-Region, Waste Manage-
ment Division Project Manager
* State Agency
0 EPA-Regional Counsel
Remedial Response: Discovery/
Hazard Ranking File or
Enforcement File
• Remedial Response: Discovery/
Hazard Ranking File or
Enforcement File
-------
-li-
lt. Evidence Linking Responsible Patties to the Site
A. Owners and Operators
Docunent Originator
Deed, Title History,
Mortgage or Lien
InCot mation on
Property
Permits held by a
facility (e.g.,
NPDES, RCRA,
building constttiction)
0 Manifests or other
business records
(e.g., bills of
lading, contract
documents with
haulers. Inventory
records) which
provide information
on quantity and
type of substance
* tease
0 Owner/Operator of
Facility
0 Title Search Company
0 City or County Record
Office
0 Bank of I/ending
Institution
0 Owner/Operator of
facility
0 EPA-Region Enforce-
ment/Compliance
Section
0 State Permitting
Agency
0 Owner /Operator of
the Facility
• Transporter
p Generator
* owner of Property
0 Operator of Facility
ETA Contact
* EPA-Region, Waste Manage-
ment Division Project
Manager
0 State Agency
* EPA Regional Counsel
0 EPA Regional Counsel
* EPA-Region, Appropriate
Enforcement/Ccmpliance
Section
0 State Permitting Agency
EPA-HQ, OSW
EPA-Region, Haste Management
Division Project
Manager
State office responsible
for manifests
9 EPA-Region, Waste Management
Division project Manager
* State Agency
0 EPA Regional Counsel
Probable File Location
Remedial Response:
Discovery/Hazard
Ranking File or
Enforcement File
• Remedial Response:
Discovery/Hazard Ranking
File or Enforcement File
•Remedial Responset
Discovery/Hazard Ranking
File or Enforcement File
Remedial Response;
Discovery/Hazard
Ranking File or
Enforcement File
-------
•16-
II. Evidence Linking Responsible Patties to the SHe (continued)
B. Genetatots (continued)
Document Originator EPAContact
Probable Pile Location
Documents relating
to sampling and analysis
which indicate wastes
found at a facility ate
of the same natute as
responsible patty's
wastes
Documents found
during remedial
activities
relating to the
identification
of responsible
parties
(e.g., labels,
cartons, records)
0 EPA-OSC/Response Team
0 RBI/FIT Contractor
* Ptoject Contractor
EPA-RegI on, RSPO
Remedial Response:
Remedial implementation
File
-------
-13-
II. Evidence LinkingResponsible parties to the Site (continued)
A. Ownersand Operators (continued)
Document
0 Incident Reports
(e.g.. Cites,
explosions)
Originator
9 Local police or fite
departments
0 Owner/Operator or
Employee of a Facility
0 Interviews, affidavits
or signed statements
by peisons with know-
ledge regarding past
activities at the
site
0 Interview notes from
discussions with
persons who are
knowledgeable
about past site "
activities
such as employees,
local officials,
residents of
the atea, local
industries, etc.
0 .Historical'information -i,
"documenting period of '••.-,
activities at the site
• Administrative infor-
: mation requests'and
responses under
$300?; and CERCLA
0 Past Employees of
Facility
0 Local Officials or
Residents
0 Other Peisons
* BPA-OSC/Response Team
• Other Federal or
State investigators
* State-OSC/Response Team
" REM/FIT Contractors
EPA Contact
0 EPA-Region, Waste Manage-
ment Division Project
Manager
0 State Agency
0 EPA-Regional Counsel
• EPA-HQ-Bnetgency Response
Division
0 EPA-lQ-Bneigency Response
Division
0 EPA-Regional Haste Manage-
ment Division Project
Manager
0 EPA-regional Counsel
0 State Agency
EPA-Region, Haste Manage-
ment Division Ptoject
Manager
State Agency
EPA-Regional Counsel
Probable File Location
* GPA-HO-Bnergency Response
Division/Removal
Response File
• NCR
0 Remedial Response:
Discovery/Hazard
Ranking File or
Enforcement Pile
0 Remedial Response:
Discovery/tiazatd
Ranking or Enforce-
ment File
-------
-18-
II. iVidence Linking Responsible Patties to the site (continued)
C. Transporters (continued)
Document
Originator
EPA Contact
Probable Pile location
0 Affidavits or
signed statements
by persons with
knowledge regarding
past activities at
the site
0 Past Employees of
Facility
0 Local Officials or
Residents
• Other Persons
EPA-Region. Waste Manage-
ment Division Project Manager
State Agency
EPA-Regional Counsel
• Remedial Response: Discov-
ery/Hazard Ranking or
Enforcement File
• Vehicle
identification
information or
equipment rental
documents (e.g.,
license of
registration
records,
contracts
or lease
agreements)
0 Photographs
documenting
activities at
the site '
• Motor vehicle
Bureau
0 Rental businesses
0 Vehicle Owner
0 Local truckstops
0 Owner/Operator or
Employees of a
Facility
9 EPA Region, Haste Manage-
* ment Division Project
Manager-
State Oftice responsible
0 for manifests
EPA-Regional Counsel
Remedial Response: Discov-
ery/Hazard Ranking or
Enforcement File
-------
-15-
II. Evidence Linking Responsible Patties to thejsite (continued)
B. Generators (continued)
Document
Interview notes
from discussions
with persons
who are knowlegeable
about past site
activities
such as employees,
local officials,
residents of the
area, local
industries, etc.
Originator
EPA-OSC/Response Team
Otlier Federal or
State Investigators
State-OSC/Response
Team
RBI/FIT Contractors
EPA Contact
0 EPA-Region, Waste Manage-
ment Division Project
manager
0 State Agency
0 EPA-Regional Counsel
Probable File location
Remedial Response} Discovery/
Hazard Ranking File or
Enforcement File
0 Photographs
documenting
activities at
the site
* Corporate structure
records (e.g.,
annual reports, SBC
reports, Dun &
Btadstreet reports,
incorporation
documents)
0 NEIC Computer Files
(SBC and Dun &
Bradstreet Reports)
0 Owner/Operator of
Facility
* Industrial director-
ies, manuals, etc.
• Coporate Divisions
of State Secreetary
of State Offices
0 Small Business
Arlministration
EPA-Reglon, Waste Manage-
ment Division project
Manager
State Agency
EPA-Regional Counsel
Remedial Responsej Discovery
Hazard Ranking File or
Enforcement File
-------
-20-
III. Se^ience of Events^ Including Consistency with NCP
A. General
Originator EPA Contact
Document
0 List of Patties
issued Notice
Letter(s),
. dates on which
letters were
issued and copies
of letters
0 Response to Notice
Letter(s)
0 EPA-Regional Counsel
0 EPA-Rcgion, Waste
Management Division
Project Manager
Potential Responsible
Patty
EPA-Regional Counsel
0 Potential Responsible
Patty
EPA-Regional Counsel
EPA-Regional Counsel
0 Correspondence
and notes from
oral ocmnun lea t ions ° EPA-Regional Counsel
with potential
responsible patty
regarding
negotia- •
t ions/settlement
• Settlement proposals • EPA-Regional Counsel * EPA-Reglonal Counsel
EPA-HQ-OLEC and OWPE
Potential Responsible
Party ,
and supporting
documents (e.g., •
technical studies
conducted by
potential responsible
party)
Settlement Agreements * EPA-HCH3LBC and OWPE
and supporting doc. • EPA-Regional Counsel
(include internal EPA ° Potential Responsible
approval memos, press Patty
releases, etc.)
0 EPA-Regional Counsel
Probable File Location
• Remedial Responset Enforce-
ment File
0 Remedial Response: Enforce-
ment File
0 Remedial Response: Enfor
ment File
0 Remedial Response: Enfor
ment File
0 Remedial Response: Enfor
went File
* Ini those cases where partial settlements are reached with the parties or only some of the
parties negotiate a settlement.
-------
•17-
II. Evidence Linking Responsible Patties to the Site (continued)
C. Transpottens
Dog rent Originator EPA Contact
Probable Pile Location
0 Manifests, shipping
documents or other
business documents
(e.g., bills of.
lading, vouchers,
contracts with haulers)
which piovide info.
on responsible parties
• Owner/Operator
Facility
* Generator
0 Transporter
0 EPA-IQ, OSW '
0 EPA-Region, Waste Manage-
ment Division Project
•Manager
0 State Office responsible
Cor manifests
EPA-Reglonal Counsel
Remedial Response: Discov-
ery/Hazard Ranking or
aiforcenent File
Records or other
documents found
at the faciullty
during an
investigation
(e.g., bills
utility records,
tax receipts or
certificates, teal
estate record,
labels on
containers)
Interview notes
from discussions
with persons, who
are knowlegeable
about past site
activities such
as employees,
local officials,
residents of
the area)
0 EPA-OSC/Response Team
0 State-OSC/Response
Team
* Federal or State
Investigators
• REM/FIT Contractors
EPA-OSC/Response Team
Other Federal or
State Investigators
State-OSC/Response
Taam .
RElVFIT Contractors
EPA-Region, Waste Manage-
ment Division Project Manager
State Agency
EPA-Regional Counsel
0 Remedial Response: Discov-
ery/Hazard Ranking or
Enforcement File
EPA-Region, Waste Manage-
ment Division project Manager-
State Agency
EPA-Regional Counsel
0 Remedial Response: Discov-
ery/Hazard Ranking or
Enforcement File ,
-------
-22-
III. Sequence of Events, Including Consistency with NCP (continued)
B. Immediate Removals (continued)
1. Response Initiation (continued)
Document , Originator
Record of Preliminary
assessment and initial
inspection of site (e.g.,
field notes,'sampling
data, responsible patty
information
EPA-06C
U.S. Coast Guatd
State-OSC
TAT Contractor
Documentation concerning the
site conditions that necessitated
an immediate removal and the basis
for choosing a particular response
Documentation of approval * EPA Regional Administrator
by EPA-Region and "U.S. Coast Guard-
subsequent EPA-HQ-ERD district director
notification (when HO
approval is not
required)
ntat ion of approval ° EPA-HQ-Assistant
EPA-HO-OSWER (when Administrator for 06WER
approval is requited) * U.S. Coast Guard district
director
0 A»cord of RRT or NRT
notification, if
appropriate
0 EPA-OSC
0 USOG-ORC
EPA Contact
0 EPA-Region, OSC
0 EPA-Rfigton, OSC
0 EPA-UQ-ERD
•EPA-H&-OSWBR
• EPA-Region, OSC
Probable File Location
Removal Response File
• Removal Response File
0 Removal Response File
0 Regional Response Team • Removal Response File
(RRT)
0 National Response Team
(NRT)
-------
-19-
II. Evidence Linking Responsible Patties to the Site (continued)
C. Transporters
Document
Corporate
structure
records (e.g.,
annual reports,
SBC leports.
Dun and
. Bradstreet
. teports,
incorporation
documents
Originator
0 NEIC Computer
Files (SEC and
Dun & Bradstteet
Reports)
• Owner/Operator of
Facility
0 Industrial
directories, manuals,
etc.
0 Corporate Divisions
of State Secretary
of State Offices
0 Small Business
Administration
EPA Contact
EPA-Region, Waste Manage-
ment Division project Manager
State Agency
EPA-Regiohal Counsel
Probable rile Location
Remedial Response: Discover
Hazard Ranking File or
Enforcement File
Permits held by
a facility (e.g.,
building or
construction permit
or NPDES) which
contain responsible
party information
9 Owner/operator of
Facility
0 permitting Agency
{Local, State or
Federal)
EPA-Region, Waste Manage-
ment Division Project Manager-
State Agency
EPA-Regional Counsel
Ranedial Responset Discovery
Hazard Ranking File or
Enforcement File
-------
-24-
III. Sequence of Events, Including Consistencywith NCP (continued)
D. Immediate Removals (continued)
1. Response Init iat ion (continued)
Document Originator
0 Record of notification • EPA-OSC
of. federal agencies (e.g.,
FFWA, HHS)
0 Initial POLREP (also
known as a 10 Point
document)
2. Contractor Selection
0 EPA-OSC
0 USOG-OSC
• State-OSC
0 TAT Contractor
EPA Contact
0 EPA-Region, OSC
• Appropriate federal
agency
• EPA-Ragion, OSC
0 EPA-Region, RSPO
Probable File Location
' Removal Response Pile
0 Removal Response File
* For removals requiring
less than $2500
•• EPA Fbrm 1900-48, Order
for Services-Emergency
Response to Hazardous
Substance Release
*-v
"EPA Form 1900-50,
Justification for
Nonormpetitive
Piocutement '
(JNCP)
00 EPA flotm 1900-51,
Detetmination of Price
Reasonableness
0 EPA-OSC/Response Team
0 TAT Contractor
* EPA-OSC/Response Team
TAT Contractor
* EPA-OSC/Response Team
TAT Contractor
EPA-Region, OSC
0 EPA-Rsgion, OSC
• KPA-Rngton, OSC
4 Immediate Removal
Response Pile
Immediate Removal
Response Pile
0 Immediate Removal
Response File
-------
-21-
III. Sequence of Events, Including Consistency with HCP (continued)
A. general' (continued)
0 Stannary of negotiation
sessions, offers and
responses and copies of
all documents and cor-
respondence.
0 Documentation of the
use of expert witnesses
during negotiations
(expense and time reports)
B. Imnedlate Removals*
1. Response initiation
Document
0 Notification Record
pursuant to Sec. 103(a)
or (c) of CERCLA
0 EPA-HO-OWPE
0 EPA-Reg. Counsel
0 lecord of notification
c f EPA-HQ-ERD or other
appropriate federal
office (e.g., EPA
regional Administrator,
.S. Coast Guard)
Originator
• Owner/Operator of facility
0 Carrier or other transporter
0 Government officials
respond ing to the problem
(Local, State or Federal
0 Appropriate federal official
EPA-Heg. Counsel
EPA Contact
0 National Response
Center (NRC)
* EPA-H0-ERD
* EPA-Region, OSC
0 Remedial Response:
Enforcement File
Probable rile Location
0 NRC
0 EPA-Ragion, Removal
Response File
• U.S. Coast Guard
district
• Removal Response File
Under certain circumstances, the removal response may be led by the U.S. Coast Guard. Therefore,
the source of the evidence and where it is available fton will vary, depending on which entity,
EPA or USOG, has the lead.
-------
-23-
Itl. Sequence of Events, Including Consistencywith NCP (continued)
B. immediate Removals (continued)
1. Response Initiation (continued)
Document
9 Record of the decision
that the immediate
removal action was
completed
•- Record of the decision
to exceed the $1 MM
or 6-month cutoff, if
applicable
0 Record of the decision
as to whether further
action is requited at
the site
• Record of US Coast
Guard National Strike
Force (USCG-NSP
notification and
request for
assistance
• Record of ERT '
notification and
request for assistance
(e.g., the Environ-
mental Biieigency
Response Unit.(KERU)
Originator
0 EPA-OSC
EPA Contact
'EPA-OSC
EPA-OSC
'EPA-OGC
EPA-OSC
EPA-OSC
EPA-OSC
EPA-OSC
Probable rile Location
9 Removal Response Pile
0 Removal Response Pile
0 Removal Response Pile
0 Removal Response File
EPA representative of
RRT -
USCG-OSC
* Emergency Response Tea
(ERT)
0 Regional Response Team
(RRT)
0 Removal Response Tile
-------
-26-
III. Sequence of Events, Including Consistencyyrith NCP (continued)
B. Ironediate Removalg (continued)
2. Contractor Selection (continued)
Originator
0 EPA-OSC/Response Team
• TAT Contractor
Document
EPA Form 1900-53,
Authority to Use
a Time and Materials
Contract
00 EPA Form 1900-54, Memo-
randum to the File-
Synopsis Exemption
0 For procurement of services
from state and local
governments
0 EPA-OSC/Response Team
TAT Contractor
0 EPA-OSC/Responso Team
TAT Contractor
EPA Contact
* EPA-Region, OSC
* EPA-Region, OSC
EPA-Region, OSC
Ptobable File tocation
limed fate Removal
Response File
Immediate Removal
Response File
Immediate Removal
Response File
00 EPA Form 1900-56, Letter
Contract for State or
[heal Government Response
to Rnctxjency Hazardous
Substance Release
00 EPA Form 1900-50 (see
list above)
EPA Form 1900-52 (see
list above)
EPA Form 1900-54 (see
list above)
• EPA-OSC/Response Team
Project Contractor
* EPA-OSC/Response Team
TAT Contractor
0 EPA-Region, OSC
EPA-Rsgion, OSC
• BPA-OSC/Response Team • EPA-Region, OSC
TAT Conttactot
• EPA-OSC/Response Team ° EPA-Region, OSC
TAT Contractor1
0 Immediate Removal
Response File
0 Immediate Removal
Response File
0 Immediate Removal
0 Response File
0 Immediate Removal
-------
-25-
j
III. Sequence of Events, Including Consistency with NCP (continued)
B. Immediate Removals (continued)
2. Contractor Selection (continued)
Originator
Document
" Scope of Work (SOW)
and cost projections
0 For removals requiting mote
than $2500
• EPA-OSC
0 USOG-OSC
0 State-OKC
* TAT Contractor
EPA Contact
Probable File location
0 EPA-Region, OSC • Removal Response Pile
00 EPA Ft>rm 1900-49, Notice * EPA-OSC/Response Team
to Proceed with Bnergency .Project Contractor
Response to Hazardous
Substance Release
** EPA Form 1900-50, Justi- * EPA-OSC/Response Team
fication for Nonoompetitive TAT Contractor
procurement (JNCP)
•• EPA form 1900-52, Author- • EPA-OSC/Response Team
ity to Negotiate an TAT Contractor
Individual Contract
EPA-Region, OSC ° Immediate Removal
Response Pile
0 EPA-Reg ion, OSC * fiimedi ate Removal
Response Pile
* EPA-Rcgion, OSC
• Immediate Removal
Response Pile
-------
-28-
III. .Sequence of Events, Including Consistency with NCP (continued)
B. Imnrediate Removals (continued)
3. Response implementation
Document Originator EPA Contact
Probable pile Location
0 Inter-Agency
Agreements
Memoranda of
Understanding
(for reimbursement
of Super fund
related activities
by federal
response agencies
such as Department
of Justice,
Army Corps of
Engineers)
• Health and Safety
Plan
' Coimunity Relations
Plan
* Entry and exit logs
(for personnel, vehicles,
equipment am) materials.
• Daily OSC logs
0 EPA-HQ-OSWER
0 Appropriate Federal
* EPA-Region, OSC
agency
EPA-Region, OSC
0 EPA-Region,
Project Officer
Project Contractor
EPA-OSC/Response Team
TAT Contractor
EPA-OSC
EPA-tegion/Ht>Publ ic
Affairs office
" EPA-Region, Regional
project Officers
0 State Agency
• EPA-OSC/Rosponse Team ° EPA-Region, OSC
• TAT Contractor
EPA-OSC
EPA-Region, OSC
0 Immediate Removal
Response File
Immediate Removal
Response File
Immediate Removal
Response Pile
Immediate Removal
Response File
0 finnediate Removal
Response File
-------
-27-
III. Sequence of Events, Including Consistency with NCP {continued}
B. Bimedlate Removals (continued)
2. Contractor Selection (continued)
Docimcnt Originator
EPA Contact
Probable Pile Location
00 EPA Form 1900-57, Deter-
mination and Findings
Methods of Contracting
0 EPA-OSC/Response Team
TAT Contractor
• EPA-Reglon, OSC
0 Immediate Removal
0 Response File
0 EPA Form 1900-8, Procure-
ment Request/Requisition
(for additional funds)
•• EPA Form 1900-30, Modi-
fication of Contracts
0 Anendnent of Solicitation-
Modification of Contract,
Standard Fotm 30
* EPA Form 1900-58, Mot ice
fjtegatding Work Stoppage
EPA-HQ-Contracts
EPA-06C/Response Team
TAT Conttactots
EPA-HCj-Contt acts
EPA-»K>-OERR Dit«ctot
0 EPA-HO-Contracts
Operations Office
0 EPA-OSC/Response Team
0 TAT Contractor
0 EPA-Region, OSC
p EPA-Reglon, OSC
0 EPA-Reglon, OSC
• EPA-Region, OSC
0 immediate Removal
Response File
0 Dmediate Removal
Response File
• Dirnediate Removal
Response File
• Dnrediate Removal
Response File
-------
-30-
III. Sequence of Events, Including Consistency with NCP (continued)
B. Immediate Removals (continued)
Document
0 Documentation
regarding use
of the EPA-EERU
• EPA Form 1900-55,
Contractor Cost
Report (Completed
daily)
0 Daily Verification
of work by OSC
Originator
0 EPA-OBC
0 EPA-EKF
0 Project Conttactot
EPA-OSC
EPA Contact
0 EPA-Region, OSC
* EPA»Regton, OSC
0 EPA-Ragion, OSC
Probable File location
0 Immediate Removal
Response File
0 Immediate Removal
Response Pile
0 Immediate Removal
Response File
9 Documents tegatding
operation and
maintenance of the
site following
•he removal
>hotographs, movies,
video tape taken
removal activities
jocuments relating to
,ill sampling and analysis
conducted during removal
See pages 3 and 4 under
'Evidence of a Release
or Ttiteat of a Release"
'• Reponsible patty
0 EPA-OSC/Peam
0 TAT Cqntrator
• State Agency
• Other contractor
• EPA-OSC/Response Team
0 TAT Contractor
• Ptoject Contractor
• EPA-OSC/Response Team
0 TAT Contractor
* Ptoject Contractor
• State Agency
• EPA-tegion, OSC ° Immediate Removal
0 EPA-Region, RSPO Response File
Site
0 EPA-Reg ion, OSC ° Immediate Removal
Response File
9 EPA-Region, OSC ° Inmediate Removal
Response File
See Technical Assistance Team (TAT) Contract User's Manual, Draft, USEPA - Emergency Response Division, October 14,
1982. This section applies to both immediate and planned removals.
-------
-29-
III. Sequence of Events, Including Consistency with NCP (continued)
B. Immediate Removals (continued)
3. Response Implementation (continued)
Dociroent Originator
EPA Contact
Probable File Location
• Incident obligation logs • EPA OSC/Response Team ° EPA-Region, OSC * Immediate Removal
TAT Contractor Response File
0 Daily Suimary of CERCtA
cleanup
0 EPA OSC/Response Team °- EPA-Region, OSC
TAT Contractor
0 immediate Removal
Response File
POLREPS
• Daily work orders
0 EPA OSC/Kesponse Team
TAT Contractor
EPA-OBC
0 EPA-Region, OSC
* EPA-Region,
Project Officer
0 EPA-Region, OSC
Immediate Removal
Response Pile
Immediate Removal
Response File
0 Daily work plans
• Record of all
comnunications in
and out of the
command post
0 All progress /
reports
submitted by
other federal
agencies pursuant
to an MUU or IAG'
* Project Contractor
• EPA-Region, OSC
0 EPA-OSC/Response Team • EPA-Region, OSC
• TAT Contractor
0 Appropriate Federal • EPA-Region, OSC
agency
limed late Removal
Response File
Immediate Removal
Response File
0 Immediate Removal
Response File
-------
-32-
III. Sequence of Events, Including Consistency with NCP (continued)
C. Planned Removals
1. ResponseInitiation
Document
Originator
EPA Contact
Probable File Location
• Record of notification or
discovery
0 Documentation supporting
EPA-OSC request to EPA-
HQ-ERD that an immediate
removal be followed by a
planned removal, including
any statements by experts
• Record of preliminary
assessments and initial
inspection of site (e.g.,
field notes, sampling
data, responsible party
information)
• State request and cost
share -assurances
0 EPA-OSC
• EPA-HQ-ERD
(same as page 121, II, bullet 11)
' EPA-HQ-ERD
• EPA-Region, OSC
• EPA-OSC
• State-OSC
* TAT Contractor
• Governor or disignee
EPA-Region, OSC
0 EPA-Reglonal
Administrator and
Project Officer
° Planned Removal
Response File
0 Planned Removal
Response File
• Planned Removal
Response File
0 Initial POLREP
Draft Action Memorandum,
cover letter and
final action memorandum
with concurrences
• EPA-OSC
* TAT Contractor
0 EPA-OSC
0 EPA-Region, Regional
Project Officer
0 EPA-Region, OSC
0 EPA-Region, Regional
Project Officer
* EPA-HQ-ERD
• EPA-HQ-ERD
* EPA-Region, Regional
Project Officer
planned Removal
Response File
0 Planned Removal
Response File
-------
-31-
III. Sequencie of Events, Including Consistency with NCP (continued)
B. tinnediate Removals (continued)
4. TAT Contractual Documents For Removals
Document
0 TAT Emergency Response
Removal and prevention-
Technical Direction Doc-
ument (TDD) and
modifications
0 Contractor Work Plans
(for special projects)
Originator
0 EPA-Region, Deputy
(DPO)
• EPA-IIQ,
0 TAT-Leader
EPA Contact
Probable Pile location
0 EPA-Region, DPO • Contracts File
0 EPA-RegIon, DPO ° Contracts File
TAT Bnergency Response,
Removal and Prevention -
TDD Acknowledgement of
Completion
Monthly Status Reports
(tasks and activities
Cor a TAT)
TAT-leader
• TAT-Leader
EPA-Reg ion, DPO • Contracts File
• EPA-Heglon, DPO • Contracts File
Special project
Reports
i
Overall TAT Contract
Reports 1C appropriate
to the site (e.g., Program
Management Information
Systems, Financial
Management, Status, or
Summar progress Reports)
* TAT Contractor -
National Program Manager
•' TAT Contractor - National
Program Manager
• EPA-Region, DPO • Contracts File
* EPA-Region, DPO
Contracts File
-------
-34-
III. Sequence of Events, Including Oonsistency with NCP (continued)
C. Planned Removals (continued)
3. State Involvement (continued)
Document Originator
EPA Contact
Probable Pile location
00 Communications, memo-
randa and other
documents relevant
to the contract
00 Documentation of cost
ceiling Cot state
services
* Daily documentation
of State costs
(daily log and
EPA Form 1900-55
or equivalent)
00 Request for payment
of cost share not
met through
services
•• Documentation of
state payment
>0 Contract Amendments
(ROT)
0 EPA-H0-ERD (GOT)
EPA-OSC
0 EPA-OSC
0 state project
Coordinator
• EPA-HP-FMD
• EPA-HQ- FMD
• State Department
of Treasury
EPA-HQ-Gtants
Administration
State Agency
0 EPA-Region-ERD (ROT) * Planned Removal
0 EPA-Region-ERD (GOT) Response File
0 EPA-Region, Regional
Project Officer
0 EPA-Region, Regional
Project Officer
0 EPA-Region, Regional
Project officer
0 EPA-Region, Regional
Project Officer
0 Planned Removal
Response File
Planned Removal
Response File
* EPA-Region, Regional ' Planned Removal
Project officer Response File
• Planned Removal
Response File
Planned Removal
Response File
-------
-33-
III. Sequence of Events, Including Consistency withNCP (continued)
C. Planned Removals (continued)
2. Contractor Selection
Document
Originator
EPA Contact
Probable Pile Location
* EPA-OSC
* TAT Contractor
14-Point document with
Justification for Non-
ocmpetitive Procurement
or Justification for
Limited Competition,
if appropriate
Request for Proposal
(RFP) to contractors
listed in 14 Point
document
Documentation regarding
the bidding and proposal
evaluation process
3. State Involvement
State Super fund Contract
•• Not ice., of Award and ,
documentation '"'•'*'
•'• Draft SSC and Caiments • EPA-Region-OSC
* EPA-HO-Ptocur
-------
-36-
III. Sequence of Events, Including Consistency with NCP (continued)
C. Planned Removals (continued)
- State jnvolvqnent (continued)
ppcunent Originator
EPA Contact
Probable Pile Location
00 Deviation from 40
CFR 30
00 Amendments (EPA Form
5700-20A and /or 20 B)
•• State approval of
Cooperative Agreement
(it tequited)
0 EPA-HQ-ERD (GOT)
0 EPA-HO-GAD (GOB)
c EPA-HQ-GAD
0 State entity that must
vote to apptove
0 EPA-Region, Regional
Project Officet
* EPA-Reglon, Regional
Project Officer
0 EPA-Region, Regional
Project Officer
0 Planned Removal
Response File
0 Planned Removal
Response File
0 Planned Removal
Response File
4. Response Implementation - See pages 28-30 under "Immediate Removals*.
5. TAT Contractual Documents for Removals - See page 31 under "Immediate Removals".
-------
-35-
11 !* Sequence of Events, Including__pon«ist.ericy with NCP (continued)
C. Planned Removals (continued)
Document Originator EPA Contact
Ptobable File location
0 State cooperative
agreement
0 EPA-HQ-ERD (GITT)
0 EPA-HQ-GAD (GOB)
Application (draft
aixl accompanying
documentation EPA
Form 5700-33; State
programatic Assurances;
EPA Potm 5700-48;
Community Relations Plan)
• EPA-Region, Regional
Project officer
0 State Project Officer
Decision Memorandum
0 EPA-Region, Regional
.Administrator
•• Region and Headquarters ° EPA-Region, Program
review ccmnents
and En Cot cement staff
EPA-HO-ERD (ROT), OWPE,
HSCD, OGC, DEC, OERR
with final approval by
AA, OSWER.
0 EPA-Region, Regional
Project Officer
EPA-Region, Regional
Project Officer
EPA-Region, Regional
Project Offleer
0 Planned Removal
Response File
* Planned Removal
Response Pile
0 Planned Removal
Response Pile
•• Grant funding prder • EPA-HO-ERD (GOT)
00 Comnittment Notice
(EPA Form 2550-9)
* EPA-HQ-OERR (FTiC)
0 EPA-Regioh, Regional
Project officer.
0 Cooperative Agreement * EPA~HQ-CAD (GOB)
'A Form 5700-20A) ;
0 EPA-Rogion, Regional
, Project Officer
0 EPA-Region, Regional
Project Officer
• EPA-Region, Regional
oject Officer
' Planned Removal
Response Pile
* Planned Removal
Response Pile
°. planned Removal
Response Pile
-------
-38-
III. Sequence of Events, Including Consistency with NCP (continued)
D. Remedial Actions (continued)
2. State Involvement (continued)
Originator
Document
• rotmal verification of
ctedit notification
0 Superfund Contracts and
documents supporting
State Assurances
0 EPA-HO- Hazardous Site
Control Division
* EPA-Region RSPO
State Attorney General
State Agency
EPA-Region-Superfund
coordinator and RSPO
Con t to I Division
EPA-Ho-AA for OSWER
EPA Contact
0 EPA-Region, RSPO
0 EPA-Region, Fin.
Mgt. Officer
0 EPA-Itegion, RSPO
Probable File fixation
• Remedial Response:
State Coordination
File
0 Remedial Responses
State Coordination
File
Contract Decision
Memo
Copy of check fron
State to EPA and
certified mail
receipt (for
St^te share
of
wot* done
under Supetfund
Contract
Cojperative Agreement
pn ^-application
notification
pa rkage (includes
EPA Potm 5700-30
0 EPA-Region, RSPO
0 EPA-Region, RSPO
0 State Agency • EPA-Region, Fin.
0 EPA-HOrFinancial Manage- Mgt. Officer
ment Division
0 State Agency
0 EPA-Region, RSPO
0 EPA-Regional Counsel
0 BPA-Ragion, RSPO
9 Remedial Response!
State Coord. File
0 Remedial Response:
State Coord. File
0 Remedial Response:
State Coord. File
-------
-37-
* Sequence ofEvents, Including Consistency with NCP
D. Honedial Actions
1. Remedial Action planning and Decision Making
Document
0 Remedial Action
Master Plan
"Documents relating to
the initiation of
RI/PS
0 Documents relating to
the need for Initial
Remedial Measures
0 Documents relating to
source control remedial
actions and off-site
remedial actions
Originator
0 REM/FIT Contractor
? EPA-Regton,
Project Officer
0 EPA Regional
Project Officer
0 EPA Regional
Project Officer
0 EPA Regional
Project Officer
EPA Contact
0 EPA-H0, OERR
0 EPA-HQ,
EPA-HQ, OERR
EPA-HQ, OERR
Probable File Location
Remedial Planning
File
• Remedial Planning
File
0 Remedial Planning
File
0 Remedial Planning
File
2. State Involvement
Credit identification
Letter
EPA Inspector General's
Audit Report of
state accounting of
expenditures during
credit period
• State Agency
EPA Office of
Inspector General
0 EPA-Region,
Financial Mgt.
Officer
* EPA-Region-
RSPO
0 EPA-Reglon, RSPO
9 Remedial Response:
State Coordination
File
' Remedial Responses
State Coordination
File
-------
III. Sequence of Events, Including Consistency^ with NCP
D. Ranedial Action (continued)
2. State Involvement (continued)
-40-
(continued)
Document
* Cooperative Agreement
State Quarterly Progress
Reports, EPA reviews of
tlte Reports, and related
documents
* Documents Supporting
an expenditure
deviation for
Pre-award costs
0 State/EPA Correspondence
regarding Contracts/Coop-
erative Agreements
• EPA internal contents
on draft and final
versions of Contract/
Cooperative Agreements
Originator
• State
0 EPA-HD-GAD (GOB)
0 Appropriate staff at
EPA Region/HO
and State Agency
0 Appropriate Staff at
EPA Reglon/HQ
EPA Contact
0 EPA-Region, RSPO
0 EPA-Region, RSPO
0 EPA-Region, Fin.
Mgt. Officer
0 EPA-Reglon, RSPO
0 EPA-Region, RSPO
Probable File Location
• Remedial Response:
State Coord. File
0 Ranedial Response:
State Cooed. File
0 Remedial Response:
State Coord. File
Remedial Responset
State Coord. File
• Sujimar les of all
meetings held to
negotiate Contract
/Cooperative Agreement
0 State legislation
or regulations
authorizing States
to enter into
Contract/Cooperative
Agreement
* EPA-Region RSPO
• State Statutes/Cotte
of Regulations
EPA-Region, RSPO * Remedial Response t
State Coord* Pile
EPA-Region, RSPO ° Remedial Response:
State Coord. File
-------
-39-
III. Sep^nce of jvents, Including Consistency with NCP (continued)
D. Ranedial Action (continued)
2. State Involvement (continued)
Document
0 Documents Relating to
EPA Grants Administration
Division review for
Cooperative
Agreement
Otigjnator
• EPA-HQ, Giants Admin-
stration Division
* Cooperative Agreement
application package
(includes EPA Form 5700-33 ° EPA-Regional Counsel
0 State Agency
* EPA-rRegion, RSFO
0 Cooperative Agreement
Decision Memo
0 Cooperative Agreement
Giant Funding Order (EPA
Form 5700-14
inoperative Agreement
ifcnmittment Notice
EPA Form 2550-9)
Cooperative Agreement,
Codifications, and
elated documents
includes EPA Forms
»700-20A and B
0 EPA-Region, RSPO
0 EPA-HQ, Hazardous Site
Control Division
0 EPA-HQ, Grants Admin-
istration Division .
* EPA-HQ> Hazardous Site
Control Division
0 EPA-HO, Grants Admin-
stration Division
EPA Contact
* EPA-Region, RSPO
* EPA-tegion, RSPO
0 EPA-Region, RSPO
0 EPA-Region, RSPO
• EPA-Region, RSPO
EPA Awatd Official * EPA-Region, RSPO
Probable File location
• Remedial Response:
State Coord. Pile
• Remedial Responses
State Coord. File
0 Remedial Responses
State Coord. File
0 Remedial Responset
State Coord. File
0 Remedial Responset
State Coord. File
Remedial Response:
State Coord. File
-------
-42-
III. Sequencej?f Events,IncludingJtonsistency with NCP (continued)
D. Remedial Art ion (continued)
3. Response Implementation (continued)
Document Originator
Ings, notes, reports,
manifests, work plans,
health and safety
plans and other
documents relating
to construction
activities
Permits and Manifests
(e.g.. Dredge and
Fill Material
Discharges-Sec. 404
of Oft; RCRA-SEC.
;6925)
Photographs or video
tape taken of work
in progress
Final EPA-OSC Report
EPA-OSC/Response Team
State-OSC/Response Team
Project Contractor*
Corps of Engineers
0 Appropriate Federal or
State Permitting Agency
* Corps of. Engineers
Project Contractor
EPA-OSC/Response Team
State-QSC/Respense Team
REM/FIT Contractor
Corps of Engineers
EPA-OSC
Corps of Engineers
EPA Contact
0 EPA-Region, RSPO
0 Corps of Engineers
Site project
Officer
* EPA-Reg ion, RSPO
• EPA-Region, RSPO
0 EPA-Region-OSC
EPA-Reg.-RSPO
Probable File location
0 Remedial Response:
Remedial Implement.
File
Remedial Responset
Remedial Implement.
File
Remedial Response t
Imagery File or Rem.
Implementation File
Remedial Response
Remedial Implement.
File
-------
-41-
III. Sequence of Events, Including Consistency with NCP (continued)
D. Remedial Action (continued)
2. State Involvement (continued)
Pocitnent . Originator
EPA Contact
Probable File location
".State approval (if
necessary by state
law) of Cooperative
Agreement/Coot t act
State entity granting
approval
0 EPA-Region, RSPO ° Remedial Response t
State Oootd. Pile
3. Response implementation (continued)
Investigation reports and
supporting documents
Feasibility Study and
supporting documents
• Review of design
plans and
specificationsi
0 Appropriate Agency/
Contractor
0 EPA-OSC/Response Team
0 State-OSC/Response Team
• RBVPIT Contractor
0 EPA-Regional or HQ
Technical Staff
0 State Agency Technical
Staff
0 EPA-OSC/Response Tteam
0 State-OSC/Response Team
Contkactor
" EPA-Regional at HQ
Ttechnical Staff
* State Agency 'Hechnlcal
Staff ;.
• Aimy Corps of Engineers
a EPA-Region, RSPO * Remedial Response:
Remedial Planning
0 EPA-Region, RSPO ° Remedial Response:
State Coord. Pile
* EPA-Region, RSPO ° Remedial Response:
Remedial Planning
File
-------
-44-
III. Sequence of Events, Including Consistency^*! thi NCP (continued)
D. Remedial Action (continued)
4. Contractual Documents for Itemedial Work {continued)
Docunent
Originator
EPA Contact
Probable File Location
0 REfVFIT Zone Contract
Regional Woik Plan
Remedial Planning
and Support Activity
Projection - Work
Assignments
* EPA Regional REM/FIT
Coordinator
0 EPA-Rfigion, RSPO
• Contracts File
0 REH/FIT Zone
0 FIT Regional Project
0 EPA-Rcgion, RSPO
Contracts File
Contract - Technical
Directive
Document (TOD)
• Wbtk Assignment Package
0 Contractor Wbtk Plan
0 Management Plans (Zone
and Regional)
0 Piogtess Reports-technical/
Financial (Zone and
Regional)
Officer
0 EPA-Rogion, RSPO
0 State Ptoj. Officer
• REJVFIT Contractor
• RBI/FIT Contractor
Contractor
• EPA-Region, RSPO
• EPA-Region, RSPO
0 EPA-Regional
Cotdinator
• EPA-Regional MM/FIT
Cotdinator
0 Contracts File
• Contracts File
« Contracts File
• Contracts File
-------
-43-
III. Sequence of Events, Including Consistency with NCP (continued)
D. Remed ial Act ion (continued)
3. Response Implementation (continued)
Document
* Documentation relating
to all sampling and
analysis conducted
during constitution
and with respect
to post-closure
monitoring (e.g.,
sanpling and
analysis data
reports from
monitoring wells)
Originator
0 H»A-C8C/Resp. Team
• State-OSC/Resp. Team
0 RO1/FIT Contractor
* Project Contractor
EPA Contact
• EPA-Region, RSPO
Probable rile Location
0 Remedial Response
Remedial Implement.
File
4. Contractual Documents For Remedial Work
Zone Contract
Technical Directive
documents/ Work Assignments
EPA Regional
Coordinator
EPA-Ftegion, RSPO * Contracts File
-------
-46-
MI. Sequence of Events, Including Consistency with NCP (continued)
E. implementation of post Recovery Plan
Document
0 List of patties
issued
Demand letter(s)
and dates of issuance
0 Response to Demand
Letter (s)
0 Formal cost recovery
referral memns
to EPA-HD-OLBC and
Department of Justice
(if response to
demand letters was
negative)
0 CoHespondence and notes
from oral ccmmunicatlons
with potential responsible
patties regard ing
negot iat ions/settlement
Settlement proposals and
supporting documents
Settlement agreements and
supporting documents**
Originator
0 EPA-Regional Counsel
0 EPA-HQ-OLEC and OWPB
• U.S. Department of
Justice
0 Potential Responsible
Party
0 EPA-Regional Counsel
0 Potential Responsible
Party
0 EPA-Regional Counsel
• EPA-HO-OLBC and OWPE
0 Potential Responsible
Patty
• EPA-Regional Counsel
" EFA-.HQ-OLBC and OWE
0 Potential Responsible
patty
* EPA-Regional Counsel
0 EPA-HQ-OLEC and OWE
EPA Contact
EPA-Regional Counsel
EPA-Regional Counsel
EPA-Regional Counsel
0 EPA-Regional Counsel
EPA-Regional Counsel
Probable File location
• Remedial Response:
Enforcement Pile
• Remedial Responses
Enforcement Pile
• Ramedial Response:
Enforcement Pile
* Remedial Response:
Enforcement File
• Remedial Response:
Enforcement File
• Remedial Response:
Enforcement File
in cases where partial settlements ate reached the patties or only some of the patties settle
-------
-45-
0 Sequence of Events, Including Consistency with NCP (continued)
D. Remedial Action (continued)
4. Contractual Documents for Remedial Wbtk (continued)
Document
* Activity Completion
Reports (TDD Acknowl.
and Wbtk Assignment)
0 Award Pee performance
Event Reports
List of contact
persons in the
coimjnity
Ctmnunity Relations
Plan
Press releases or
information released
the public
S jranai ies/t r anscr Ipts
public meetings
Originator
0 REM/FIT Contractor
0 EPA Regional REH/FIT
Coordinator
0 RBVFIT Regional Project
Officer
* BPA-Rsglonal Staff
0 Staff of State and
Local Agencies
• EPA-Reg Ion/HP-Public
Affairs Office
• EPA-Regton, RSPO
• Federal, State or Local
officials
EPA/State officials
Stenographer
EPA Contact
0 EPA-Reglonal.REH/
FIT Coordinator
0 EPA- Regional
FIT Cordinator
0 EPA-Region, RSPO
0 EPA-Region, RSPO
• EPA-Region, RSPO
0 EPA-Region, RSPO
Probable File Location
0 Contracts Pile
0 Contracts File
Remedial Response:
Community Relations
File
Remedial Response:
Community Relations
File
Remedial Response:
Community Relations
File
Remedial Response:
Community Relations
File
-------
Appendix D
The following pages.constitute a sample cost recovery plan that may be
used by the Regions to facilitate the development and gathering of documents,
assess the evidence, issue demand letters and prepare for negotiations and
litigation The use of a cost recovery plan is purely optional. If a Region
chooses to use the cost recovery plan as a management and enforcement tool, it
may use any format it chooses. The plan included in this Appendix is intended
only as a sample.
-------
-2-
IV.
Event
SUMMARY OP BACKGROUND EVENTS
Apptopriate StafE
Contact Pelson
OunpLet ion
Date 01 Status
1. Responsible Patty Seaich and
Assessment of Financial Status
2. Notice letters issued
3. 10-pt. ot 14-pt. Documents
Piepaied '
4. RAMP Piepaied
5. Headquarters Review and Appioval
of Cooperative Agreement/Superfund
Contract
-------
COST RraXJVERY PLAN
1. SITE NAME_
ADDRESS
(State)
II. FUND ACTIVITIES AT SITE
(city of tovm)
Activity
Date Scheduled
Date Begun Date Completed to Begin
Dollars Spent
to Date
Inmediate Removal
Planned Removal
Remedial Investigation 6
Feasibility Stud (ri/fs)
Initial Remedial Measuies
Remedial Design
Remedial Constiuction
•
III. FUND FINANCED ACTIVITIES TO BE COVERED BY THIS COST RECOVERY EFFORT
-------
-4-
Assigned To
Couplet ion Hate
j>rojected Actual
3. Review Regional Superfund files and obtain
copies of any documents that can be used
to prove the occurrence or thieat of a
release and the liability of the poten-
tially responsible parties
PHASE II - Collect ion of Documents
1. Review Regional Supeifund files and
obtain copies of any documents that can
be used as evidence to ptove consistency
with the National Contingency Plan and
to document expenditui.es and decision-
making.
2. Obtain necessary documentation from
Headquarters, contractors, State and
other Federal agencies that were in-
volved in the clean-up.
-------
V. DESIGNATION OF STAFF RESPONSIBILITIES AND TARGPT DATES FOR STEPS IN COST
RBCOVERY PROCESS
Step
Assigned To
Qcmplet ion Date
Projected Actual
PHASE I - Initial Steps
1.
2.
Monitor On-Going Fund Activity
Assess Responsible Patty Infoimation:
Identification of Responsible
patties
Financial Capability Assessment
of Responsible Patties
-------
-6-
Step
Assigned
Completion Date
PLejected Actual
PHASE V - Litigation
1. prepare Case Re f fetal Memo
Report for DOJ
2. Assess Evidence to Support
Release Occurred
Party was Responsible
Response was Consistent
Tabulation of Costs and
Documentation
and Litigation
the Following:
with NCP
Support
3. Prepare Briefings for Headquarters and DOJ
4. provide Legal Support to DQJ During Trial
Preparation
5. Provide Technical Support
Trial Preparation .
to DQJ During
-
-------
—5—
Step
Assigned it*
Ccjipletion Date
Ptojected Actual
PHASE III - Demand Letters
1. Draft Demand Letters
2. Obtain Signature of Director, OWPE on
Demand Letters
PHASE IV - Negotiations
1. Establish Negotiation Team and Select
Team leader and Lead Negotiator
2. Assess Evidence and Strength of Case.
Identify and Attempt to Rectify Data Gaps.
3. Search for and Select Experts, as
Appropriate.
4. Develop Negotiation Schedule
5. Coordinate with State and tocal Officials
6. Prepare Infotmation package for Respon-
sible Patties.
-------
-7-
VI - MiscellaneousIssuesAssociated with the Site
It is tecognized that there may he special technical, legal and policy issues
for a site which need to be addressed. Some examples ate: handling laige
multi-generator cases; piercing corporate'veils; policies and procedures regarding
federal facility involvements; and State crests and consistency with the NCP.
These issues should be listed in this section of the plan and a staff member and
due date for a response to the issue should be assigned.
-------
Appendix E
*
It is suggested that central files be set up in each Region to facilitate
the cost recovery data gathering effort. Each Region oust of course decide for
itself whether a central filing system would be beneficial and whether it is
logistically feasible. Appendix E contains a sample file structure that the
Regions might consider if central files are to be set up.
-------
Site Overview --Includes site summary, chronological list
of events and dates, and selected computer system reports.
Congressional Inquiries/Hearings - Includes correspondence,
documents released in response to Congressional requests,
testimony presented at hearings, hearing transcripts,
Congressional committee reports and surveys regarding the
site. -
Remedial Response
Discovery/Hazard Ranking - Includes all documents
relating to the initial discovery or notification of a
site, documents regarding the preliminary assessment
of the site (e.g., information about site operation,
site investigations, sampling and analysis,
hydrogeology and biological inventory of surrounding
area), and hazard ranking forms.
Remedial Planning - Includes documents relating to
preparation of the RAMP, action memo, any remedial
investigation reports, feasibility studies, plans and
specifications; and design reports.
Remedial Implementation - Includes all permits, sampling
and data analysis, daily logs recorded at the
site, OSC reports, health and safety plan, documents
regarding monitoring or maintenance activities.
State and Other AgencyCoordination - Includes all
Inter-Agency Agreements, Memoranda of Understanding,
and all documents relating to the negotiation of a
Cooperative Agreement.
Community Relations - Includes all communications with
community organizations or individuals, minutes or
transcripts of public meetings, documents relating to
the Community Relations Plan, documents relating to
the health and safety plan, public comments on EPA
proposals and responses, press releases, and newspaper
articles and TV transcripts.
Removal Response* - Includes all documents relating to
response initiation, development of scope of work, and
response implementation for immediate and planned removals.
This file may not be located in the central file as the OSC
may need to retain all of the documents prepared in
connection with the removal. If possible, an index of the
documents contained in the. removal file should be included
in the central file and the name and phone number of the
CSC or other responsible persons should be .noted.
-------
APPENDIX E
PROPOSED FILE STRUCTURE
To adequately document activities taken at a Superfund
site, an organized filing system is essential. A well defined
and maintained filing system will minimize duplication of files
as well as the time and effort required to locate documents,
facilitate the transition to the negotiation or litigation
phases of the cost recovery process, and allow Agency staff to
obtain status information about a site for management purposes.
The details regarding such a filing system are discussed in
a guidance paper entitled, "Regional Paper Pile Structure,"
Final Draft, U.S. EPA, Office of Emergency and Remedial
Response, Office of Policy and Program Management (OPPM),
December 1, 1982. The file structure which is presented in
Exhibit E-l is based on the one outlined in that guidance paper.
As appropriate, subsets of the files listed in Exhibit B-l
or additional files could be established for those sites which
have extensive documentation requirements. It is important to
note that the "Enforcement" file is defined narrowly (see
description below) for purposes of this filing system. A
filing system organized for an enforcement action would
necessitate the use of information contained in many differen
files.
EXHIBIT E-1
FILE STRUCTURE FOR SUPERFUND SITES
Site Overview
Congressional Inquiries/Hearings
Remedial Response '
Discovery/Hazard Ranking ;
Remedial Planning '•'•'"
Remedial Implementation
State and Other Agency Coordination
Community Relations
Removal Response
Imagery
Enforcement
Contracts -
Financial Transactions
Exhibit e-1 specifically suggests a file location for each
document listed. Generally however, the files listed in
Exhibit E-l should'include the following types of information:--.
-------
-3-
rmaqcry - Includes all current and historical photographs,
infra-red, thermal or other remote sensing of the site, and
any photographs or video tapes taken during a response
action.
Enforcement* - Includes information directly related to the
enforcement aspects of response actions taken at a site.
It includes data on prior legal actions (Federal, State and
Local)r.information relating to potential responsible
parties such as manifests, notice letters and responses,
negotiation documents, and demand letters and responses.
As noted above, additional information necessary to support
a cost recovery action will be included in other files.
Contracts - Includes all documents relating to the
development of the scope of work, request for proposals,
review of bids, contractor work plans and reports, EPA
reviews of contractor performance, and all summary reports
regarding the TAT or REM/PIT Contracts.
FinancialTjransactions** - Includes all documents relating
to allocation and commitment of Superfund monies (e.g..
Action Memo)r planned cost documents (e.g., RAMP
projections), estimated cost documents, obligation
documents (e.g., OSC obligation log), OSC-certified
invoices submitted by contractors, records of payment by
EPA, all internal (EPA), external (Treasury or OMB) and
trust fund reports relating to the site. State
letter-of-credit drawdown vouchers, State Quarterly
Reports, and other federal agency reports.
* This file or portions of this file may be located in the
Regional Counsel's office due to the confidential nature of
the material.
** See Regional Financial Procedures Manual, Draft, U.S. EPA,
August 29, 1982 for additional information regarding the
site financial file.
-------
- /
AUG 2 6 IS23
COST RECOVERY ACTIONS
UNDER THE
COMPREHENSIVE ENVIRONMENTAL RESPONSE,
COMPENSATION, AND LIABILITY ACT OF 1980
(CERCLA)
-------
COST RECOVERY ACTIONS UNDER CERCLA
TABLE OF CONTENTS
I. Introduction 1
II. Assembling A Cost Recovery Action 3
III. Elements of a Cost Recovery Action 4
A. Evidence of Release or Substantial Threat
of Release of a Hazardous Substance 6
B. Evidence of Responsibility of Defendant(s) ... 9
C. Evidence that Removal or Remedial Action
Taken by U.S. or State is Not Inconsistent
With the National Contingency Plan .' 11
D. Proof of Costs of Removal or Remedial
Action by the U.S. or a State 13
IV. Procedural Issues . 16
A. Timing of the Cost Recovery Action 16
B. Statute of Limitations .17
C. Extent of Liability of Responsible Action ... 18
D. The Demand Letter . 20
E. Procedure in Event of Response
To Demand Letter 22
1. Negotiating Teams and Procedures 23
2. Form of Settlement Agreement 26
F. Procedure In Event of
No Response to Demand Letter . 27
G. Maintenance and Coordination of
Evidence In Event of Referral 29
V. Note on Purposes and Use of This Memorandum ..... 31
Appendix A (Costs Recoverable Under CERCLA)
Appendix B (Model Demand Letter)
-------
Appendix C (List of Documents)
Appendix D (Model Cost Recovery Plan)
Appendix E (Regional Superfund File Structure)
-------
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON DC 204*3
Sir 5 •"•
of
CBUM»C.
SUBJECT: Cost Recovery Referrals
FROM: Kirt/F. QSniff
Act.ln^>ffsscciate Enforcement "Counsel for Waste
TO: OEC-W Staff
On August 3, 1983, I issued a memorandum stating several *
general policies regarding the processir.g 91 referrals ur.cer'
SI07 of CERCLA. Since that time, a number of YJSU have raised
cues-.icr.s regarding sy oesorancus. This is intended to provide
further clarification.
' 1. The seacrar.duz states that if, for soce reascn.
the Regions have not included copies of supporting documentation
in the. referral pac«..:;e, the-referral should clearly identify
the specific documents which support the claias. This
identification should be in the fora of a specific inventory
of the supporting documents, indicating the identity, location
and custodian of the documents. A general averment that
docc^sentaticn is "available" will not-suffice.
2. The meaorancua states that DCJ will only file
those cost recovery claias for which there—is adequate docu- .
mentation. However, there aay be cases where those claims
which can be prosecuted immediately are not substantial when
compare*,with the total potential action. For example, if the
~~ lers a case seeking recovery of $200,000 but can only
)8,000. the Headquarters attorney should seriously
[declining the referral until further documentation
,"»d. This decision is case-specific. However, as a
foide, you should consider whether the documented case
is sufficient to stand on its own. Of course, in making your
recommendation you should also consider other important factors
such as the Statute of Limitations, or the need to make a
I hope this answers some of your questions. If you. have
Other questions please feel free to raise then.
-------
te.-ZF. « 9B22.C
PARTIAL LIST OF DOCUMENTS NEEDED TO SUPPORT COST RECOVERY
1. Total Payroll expenditures for attorneys, with supporting
tine cards and tine sheets
2. Total payroll expenditures for ttchnieal personnel.
with supporting time cards and time sheets
3. Total expenditures for travel for attorneys, with
supporting authorizations and vouchers.
4. Total expenditures for travel,for technical personnel, * .
with supporting authorizations and vouchers.
5. For FIT contract expenditures: affidavit by contractor
describing work done, hours spent, hourly cost, overhead
calculations and total cost; vouchers from contractor to
E?A req-es:.;.-.; j a yr.e r. •„; A;er,cy reccris *.fc.~winj authorization
for Treasury to pay contractor
6. For National Lab Contract expenditures: contractor
sunwary of samples taken at site and distributed to labs
for analysis, individual and total cost of sample analyses,
contractor overhead costs, name of lab conducting analyses,
sample numbers, invoice numbers, total costs, copies of
all invoices (types I and XX), copies of bills from lab
to contractor and from contractor to EPA if *SA£* samples;
affidavit from EPA official verifying contents of contractor
summary; copy of Agency's authorisation for Treasury to
pay contractor; vouchers from contractor to Agency
requesting payment.
xpenditures by Regional Lao or ORO (e.g., aerial
hy)t affidavit showing nature of work and total
ices, record of payment. ' . _ •
f. For Immediate removals: contractor invoices certified
by OSCt record of authorisation for Treasury to pay
contractor; daily contractor cost reports (rough and final);
daily verification of work and costs by OSC.
9. Documentation of expenditures by TAT end any ether
contractors used, expenditures by other agencies,
expenditures by State under Superfund contract or
cooperative agreement. •
-------
.-•— i rc-2.0
^IT'Vr
(&
I UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
/ - WASHINGTON. PC 19440
AUG 1983
SUBJECT: Cost Recovery Referrals
FROM: Kirk F. Sniff
Acting Associajre Enforcement Counsel
70: . Regional Counsels,
Regions I-X
Recently, you provided! sy office with projections of .
hazardous vaste civil referrals to Headquarters through the
ressinder of FY 1983. Included in the projected total of 27
referrals vere 19 cost recovery referrals. Nearly all of
these actions vould involve recovery of costs Associated
with isrecisre ress
On July 27, 1983, ve act with the Department of Justice to
discuss the most appropriate aeans for managing these expected
referrals. In light of our continuing difficulties vith cost
documentation for existing referrals and actions, ve agreed to
two basic rules for handling the anticipated §10?
referrals:
1 . DEC -Waste vill only accept referrals which include
appropriate cost documentation. If documentation is
inadequate, the referrals will be returned to the
Regions for further development. To assist you in
assessing the adequacy of your referral, I refer you
to the draft guidance, "Cost Recovery Actions Under
CERCLA," which waa distributed to Che Regional Division
Directors at their national meeting on May 11 and 12,
1983, and to Che attached document entitled "Partial
List of Documents Reeded to Support Coat Recovery." I
strongly recommend that you include copies of the sup-
porting documents la the referral package. If for
some reason this is not possible, the referral package
should clearly identify the specific documents which
support your claims. Ultimately, this documentation
will have to be provided to DOJ. If you have questions
regarding documentation in your specific eases, please
contact the appropriate Regional coordinator in my
office.
-------
9832,7
| UNITED STATES ENVIRONMENTAL PROTECTION AUENCY
(
WASHINGTON. O.C. 20460 1
MAY 24 1984
MEMORANDUM
SUBJECT: Guidance Regarding CERCLA Enforcemen^Against
Bankrupt Parties f\ . —.
FROM: Courtney M. Price\-4.t.*JL>-^ » '•
Assistant Administrator for Enforcement
and Compliance Monitoring •
TO: Regional Adainistrators, I-X
Regional Counsels, I-X
Lee M. Thomas, Assistant-Administrator for
. Solid Waste and Emergency Response •
The attached guidance has been developed to assist the \
Regions in developing CERCLA enforcement actions against bankrupt
parties. The guidance is intended to encourage aggressive
enforcement against insolvent parties and insure national
consistency in current and future bankruptcy cases brought by
the Agency.
•"The guidance provides: 1) an overview and summary of the
Bankruptcy Reform Act and existing bankruptcy case law; 2) a
discussion of enforcement theories available to the Agency to
pursue inaolvant parties under CERCLA: and 3) references to
current bankruptcy pleadings and appeals,filed by the Agency.
Pages 24 and 25 of the attached guidance describe referral'
procedures for a proof of claim in bankruptcy. A bankruptcy
referral vill ordinarily be processed In the same way as other
hazardous waste referrals. * However, expedited,.Headquarters and
DOJ concurrence and abbreviated referral packages may be neccs-
aary and acceptable if required to meet deadlines in bankruptcy
eases. • • • ' .
If you or your staff have any further questions regarding
CERCLA enforcement against bankrupt parties, please contact
Kirk Sniff at (FTS) 382-3050 or Heidi Hughes,at CFTS) 382*3109.
Attachment
-------
9832,7
TABLE OF CONTENTS
PACE
*
I. -INTRODUCTION. , .... 1 .
A. Seept and Duration of tht Problem, 1
B. When to Proettd Against A Bankrupt
Party 2
1. Probability of Recovering tht Cost
Litigation 2
2. Deterrence of Frivolout or Fraudulent
Bankruptcy Filings. 3
11. THE BANKRUPTCY CODE: An Overview 4
A. Organization of the Code 4
B. Voluntary vt. Involuncary Bankruptcy 5
111. CERCLA AND BANKRUPTCY ACTIONS 6
A. Proceedings in District Court or
Bankruptcy Court... 6
B. Cost Recovery Under Section 107 of CERCLA..... 11
1. Distribution of Assets 12
(a) Secured Creditors 12
fb) Priority Structure 13
2. Theories of Recovery Beneficial to
the United States 15
(a) Administrative Costs 15
(b) Recovery Under Section 506CO
of the Code........... •...•...*. 17
(b) Equitable Liens 18
(d) Restitution ?-. 18
C. Other Matters in Bankruptcy and
Insolvency Cases. ••* 19
1. Abandonment of Property*. 19
2. State-Involvency Lavs ....' 23
-------
- 2 - 9832*7
• •»* •
XV. PROCEDURES.. 24
* , • -
A. Rules of Bankruptcy Procedure. 24
B. Filing Proof of Claias 25
. C. Pleading 27 •
* *
D. Appeals 27
£. Federal Bankruptcy Court
Jurisdiction 28 .
V. THEORIES OF INDIVIDUAL LIABILITY :...:,; 30
A. Ptrional Involveacnt In Acts
and Onissions 31
*"• - *
B. Pitrcing the Corporate Veil 33
C. Personal Jurisdiction In Cases Involving
Corporate Offictrt or Shareholders.......... 35
VI. INDEX OF RESOURCES 36
PLEADINGS 1. 36 :
Proofs of Claim 36
Other Briefs and Motions.... 36
ORDERS 37
* • V" • * '. *
.RESOURCES 38
RULES.. 38
-------
• * *
9832.7
INFORMATION,REGARDING CERCLA
ENFORCEMENT AGAINST BANKRUPT PARTIES
-------
9832,
1. ISTKOBUcries
• *
and Duration of the Problem
"the U.S. E.?.A. is charged vith cht duty of aanaging and,,
replenishing the limited Suptrfund to tht greatest extent .posiibli
While our enforceaent activities under the Comprehensive Environ-
vental Response, Coapensation. end Liability Act (CERCLA) will
generally be directed against; solvent parties, there have been
and will, continue to be, tints when a responsible party declares
bankruptcy. . . : >/
This aeaorandua sets forth enforcement options, for dealing
• ' ; • ' • I . ' "ft
vith bankrupt parties. It includes guidance on when to procee
against bankrupt parties; It also discusses the theories and
: . ' '. ' : ' '"
procedures for recovering cleanup costs froa bankrupt parties
under both federal, bankruptcy lav and comaon lav theories ot \
recovery. Finally, it is intended to serve as a bankruptcy infer-
• j '\ fc
aation'clearinghouse, listing aaterials available froa OECM*Vasc%
* <•
on bankruptcy and related subjects.
- ... la the long run, the requirements of the Resource Coaservatio
» """ • :' ! (- * v ;
and Recovery Act (RCRA), particularly the closure and financial
* ; • f- ;•••'-..
requirements, should, insure the .orderly closure of storage or
disposal facilities:. Nonetheless, this vill not always occur.
thus, while the purpose of this aeaorandua is to aid the EPA offIc
* • '..;••- : • ' •• " ." *
enforcing CERCLA, auch of it vill be relevant to future efforts; by
;,; \- {!''"'.'
EPA to require bankrupt owner-operators ot storage or dispossl
». * •-' • • i. * -
facilities, generators, and transporters to contribute as auch ;
-------
-2.
9832.7
possible co tht cleanup of th« hazardous conditions they have
created.
B. Vhen to Proceed atainst i Bankrupt Party
• •. «
In Baking tht .determination of whtn to proettd Again*t
bankrupt parties the Region* should balance tht likelihood of
rtcovtring asstts from the estate of the insolvent party against
the extent of Agency resources required to prosecute bankrupt
parties. The Regions should also evaluate the effect that j>ui-suing
parties who have filed bankruptcy will have in deterring future
frivolous or fraudulent bankruptcy claims.
1. Probability of Recovering the Cost Litigation
Two1 questions should be answered by the Regions to dectrail
Che efficient use.of enforcement resources and the extent to which
che Agtncy should pursue bankrupt parties in CERCLA actions.
The first question to answer in determining whether to
proceed against a bankrupt party is related to che scope of the
c«*e: Are there other solvent parties in the ease? If so, CERCLA'*
purposes may be served by proceeding against Chen alone. In general
actions against bankrupt parties such as generators lacking assets
*
should not be undertaken when there are other solvent parties.
The second question Chat Bust be answered byjthe Regions
relates co the value of the cast: Art chert asstcs in the tstatt
of the bankrupt party? Tht Assistant United States Attorney in
che District where che iankrupty Court tics may bt able co send
-------
... . 9832,7 )
' ' -3- .';.'_ ]
• '•*'•
copies of tht cut docktt to an EPA attorney J/ Depending on the
*
atage of proceedings, cht doektc Bay include an limitation of
assets. It say bt pointltst to proceed if,thart art few assets.
Tha position of tha othar creditors should also bt considered;.;
In general, EPA and tha Dapartmant of Jus t ice i should ;,aax is iz
its use of attorney resources by pursuing bankrupt responsible
parties when there appear to be assets in the estate, and ih.n-e
art either few secured creditors with relatively limited claira? or ,
soot basis exists for recovering funds fron the esctct dtipice the
presence of secured creditors ,2/ ••
2. Deterrence of frivolous or Fraudulent Bankruptcy Fl. . js
On occasion. EPA nay elect to pursue a bankrupt responsi )
party even when it appears unlikely that we will recover sizeable
anounts froa the lankruptcy Court. The Regions should pursued bankrupti
»
actions where tha ease aay serve as a deterrent to otheW parties .
• * ^ •
who would otherwise consider escaping liability through s declaration
1 / . Tha »ost conon for* of bankruptcy ia liquidation under
~ Chapter 7 of the Bankruptcy It fora Act of 1971 (11 U.S.C. .
1101 at feo.) (hereinafter cited aa "the gankruptcy Code1*).
However, aeveral CEXCLA eases have Involved responsible parties
in Chapter It reorganisation (see On1ted States, et al. v. Johns
Kanvllie Sales Corporation. et~al.. civil no. •i-l»f»p;. The
distinctiona between a cnaptar i liquidation and a* Chapter 11
reorganisation are discussed Infra. Unless otherwise stated the
discussion in this aeaorandua concerns Chapter 7 liquidation/
proceedings. . - *v' . , ,'*:•"' -..*
2/ This evaluation should be doeuaented in the case referral
package prepared by the Region. The Oepartaent of Justice
has requested that all bankruptcy referrals include a "quick look" A
financial assessaent of the potential defendant's assets (i.e. a /'
auaaary of assets listed in the bankruptcy papera. a Dunn and
Bradstraet report, etc.)
-------
. .... 9832.7
.*•
• " * '
of insolvency. For instance, through the prottcution of bankrupt
parties*the Agency could provide an effective deterrent to under-
financed "fly-by-night" companies who aee bankruptcy at a v«y to
** • •
•void their liablltiet to the federal governaent. Similarly, it
is important that responsible parties are treated equitably. For
exasple. in a case involving a bankrupt site owner/operator
whose actions contributed significantly to the waste condition,
EPA could pursue the bankrupt site owner to further the enfoiceaent
policy goal of treating responsible parties even-handcdly and
equitably.
11. THE BANKRUPTCY CODE: An Overview
• t
A. Organisation of the Code
^**f**i~*mmm^~^m^^mmmmmii^m^^mmmmm**l^^^ I ,
The Bankruptcy Reform Act of 1978 (11 U.S.C. I 101 et see.
(1978)) replaced and liberalised the Act of 1898 (11 U.S.C. I 1 et
*
»«q. (1898)). The new act, commonly called the Bankruptcy*Code,
consists of eight chapters. Those relevant to EPA claims are:
Chapters X, General Provisions; 3. Case Administration; 5, Creditors.
and Debtor, and the tstate; 7, Liquidation: and 11, Keortaniiation.
t
• Chapters X, 3, and 3 set forth definitions and procedures
common to «11 bankruptcies. The provisions of Chapters 7 and 11
•et forth the specific procedures for liquidation* and reorganize-
tions. Onder • Chapttr 7 "straight bankruptcy" or "liquidation,**
• debtor is granted a discharge of all debts but must liquidate'
all assets. A Chapter 7 bankruptcy is administered by a trustee
V
appointed by the Bankruptcy Court. Under Chapter 11, there is no
'" -t
liquidation of Assets. Rather the goal of this chapter is to i
-------
. 9832. x
« . • •
-5-
•
reorganize the obligations of the debtor in order to give the
debtor a "fresh start" in carrying out his business. The debtor
and his creditors Bust arrive at a reorganization plan whereby a
share of the debts is paid to the different classes of creditors
on.a schedule. The debtor noraally adainisters the reorganization,
B* Voluntary vs. Involuntary Bankruptcy *'„
Under either Chapter 7 or 11, the debtor biaself say
initiate a voluntary action.^/ The debtor does not have to b«
insolvent^/ and no foroal adjudication of bankruptcy, is required
ir. voluntary eases. An order for relief is automatically entered
by the Bankruptcy Court in a voluntary case.
An involuntary petition under Chapter 7 or 11 Bay.be filed
against aost debtors by certain creditors. The debtor may contest
the petition, however, and the issue of whether the debtor is or is
not insolvent will then be adjudicated. The Bankruptcy Court will
only enter an order for relief if the debtor is not generally, paying
*.«p. a.v.. ... »K»y becoae due, or'if a custodian, within the last 120
days before the filing of the petition, has taken possession of or
has'been Appointed by the Court to take charge of substantially all
of the debtor'a property.*/
11 U.S.C. I 109(b). . .
4/ Insolvency ia bankruptcy'law is a tern of art derived from
* cooaon law. If a corporation or individual claias insolvency
under the coaaon law of a State (as opposed to filing under the
federal .Bankruptcy Cede), he Is generally only deeatd insolvent
he ia net paying his debts as they becoae due and if a receiver
other custodian has been appointed by the Court, to take charge or
his property. _^
11 U.S.C. I303(h)
-------
•6- 9832.7
III. . CERCLA AMD BANKRUPTCY ACTIONS
Section 101 of the Bankruptcy Cod* defines "creditor" as:
(A) (an] entity chat has a claim against
tha dtbtor that arose at tht tia* of or btfort
th« order for relief [dismissal decision -of
Bankruptcy Court which follows the Approval of
the trustee's Final Report] concerning the
debtor ...
**
Under section 101 of the 1978 Act, * "claim" is a:
(A) right to payment whether or not such
right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured,
unoatured, disputed, undisputed, legal.
equitable, secured, or
(B) right 'to an equitable remedy for breach . '-
of performance if such breach gives rise to
a right to payment, whether or not such
right ..* is reduced to judgment, fixed,
contingent, matured, unmatured, disputed, .'
secured, or unsecured.
The statute clearly states that a claim need not be premiieo
on a civil action or a final judgment; it is sufficient if the
claim is based on a simple right to payment as a result of work
completed and cost Incurred. Thus, the United States need not
have received a judgment under CCICLA before making a claim against
A bankrupt party. It is enough that the United States has a right
to payment or an injunctive claim. The United States' right to
payment can be based upon CIRCLA Sections 10? and/or 104, or other
authorities. Thus, the United States can proceed* to file a claim
la Bankruptcy Court. ' .
t ' ~ ~
A* Proceedin»s in District Court or Bankruptcy Court.
An important question that must be resolved in each case is
whether to Initiate proceedings in District Court or Bankruptcy
-------
.... 9832,7
.7-
Court. An ordinary creditor must proceed in Bankruptcy Court
because under the automatic stay provision (Section 342 of the
Bankruptcy Code, 11 U.S.C. I362(a)>, the filing of a ,Chapter 7 or
Chapter 11 petition operates as an automatic stay of any proceedings
againat the debtor. The stay halts the following:
• . *
(1) the commencement or continuation ... of a
judicial, administrative, or other proceeding
against the debtor that was or could have been
commenced before the commencement of the c*ss
under this title;
(2) the enforcement, against the debtor or against ;
property of the estate, of a judgment obtaineox .
before the commencement of the case ... •
(3) Any act to obtain possession of property oi '
.. the estate or of property from the estate; .
(4) any act to create, or'enforce any lien
Against property of the estate;
(S) *ny act to create, perfect. or enforce against
* property of the debtor Any lien to the extent
that such lien secures a claim that arose
before the commencement of the case .«.; .
- (6) any Act to collect. Assess, or recover A claim
against the debtor that Arose before the
commencement of the case ...; And,
(?) the) setoff of Any debt owing to the debtor ....;
••**
In A number of situations, however, the filing of A petition
does not operate AS A stay, including (Section 363(b)):
V ' :.}
(4) ... the commencement or continuation'of
An Action ... by A governmental unit to
enforce such governmental unit's policy or ,
regulatory power; •„$•'.'.,
! f.-
(5) ... the enforcement of a Judgment tfther than *
A money Judgment, obtained in An Action or
proceeding by a governmental unit to enforce
auch governmental unit's police or regulatory .
power. 3
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9832.7
. ,- • •&•
Tht purpose of these exceptions, AS articulated in tht House
Report accompanying tht Bankruptcy Coat, is to permit governmental
authorities to pursue actions to protect public health and -safety^/
*nd to allow governmental unit* to sue or continue suit against a
debtor to abate violations of environmental protection lavi.7/
The exception in Section 361(b)(4), AS interpreted by the
government, is broad. Zt Batters not what is sought: The government
may eomaence or continue any police or regulatory action. ?tu*
includes actions for money (CERCLA S107) and actions for injunctive
relief (CERCLA I106).£/ At the stage of seeking to execute any
6/ H.R. Rep. No. 95-595 95th Cong.. 2d seas. 343 (1978); 95
Cong. Rec. H 11092 (Sept. 28, 1978) -
7/ H.R. Rep. No. 95-595. at 343. See also; In re Bay Bridge
7i H.K. nep. wo. 99*595. at 3*9. see also; in re Bay Bridge
Inn..Inc. v. New York State Liquor Authority. 94 F.2o 555
(2d Cir. 1938;; In re colonial Tavern v. cnarleTT. Byrne. 420 F.
Supp. 44 (D. Mass* 1976j and in re Polly nadison. 504 f.2d. 499
(3d. Cir. 1974) [held; a-bankruptcy court should not interfere with
governmental regulatory programs]: Aaron, Bankruptcy Stays tor
al t
introduction to a Clash ot policies. 12 tnvfi. Law i. 5-6
T****^
t"-p
FTOViS
Environmental Regulation! Harvest of Commerieal Timber as an
n to a Clash ot policies. 12 Envfi. Law l. 5-6 (J
Law * wnen is a Governmental Unit's Action to Enforce
ts Policy or Regulatory Power Exempt trom the Automatic stay
ovisions ot Section 3627. 9 Fla. Univ. L. Rev. 369. 380 (1961).
~~ U.S.C. SJo2(c;*(g; for tot condition* under which the
automatic stay remains in tffeet And other rules Applicable to
obtaining relief from the stay.
t/ A motion to overcome the stay fthould generally be filed in
~ Bankruptcy Court before proceeding in District Court. (See
Pleadinn section, infra.) A rtctnt opinion in which a Bankruptcy
Judge discussed •• and rejected •• holding A citUene1 group in
contempt for failing to overcome -*h« stay is In Ke Revere Copper
And Brass. Inc.. 29 B.R. 584 (Bkrtcy.H.W., 19137. When tne govern-
ment proceeds in District Court. A, timely proof of claim should
Also be filed in Bankruptcy Court (tee pagt 24 infra) When a
Regional Attorney wishes to pursue in District Court A cost recovery
Judgment againt a bankrupt party, it is particularly important that
this strategy be discussed with appropriate EPA H/Q and DOJ attorneys
before referral of A case. 1
-------
9832,7
-9-
• . '••
judgment that nay be obtained, tht governaent should bt prepared
to argue that enforceaent of tht judgaent is a continuation of the
governaental unit's enforcement of its regulatory power. Thus, tht
" e
Bankruptcy Codt read in conjunction with CERCLA *nd other author it its
allows the United Statas Co aatk an order froa Federal District
Court requiring tha Bankruptcy Court to ordar tha debtor in posses-
sion or trustee to usa assats of tha bankrupt to abate s hazardous
condition or to reimburse tha governaent for its expenditures,
>••...
In tvo racant cases, tha courts rajactad the government's' •
viav of tha exceptions. In United States'v. Johns Manvilfle-'U.
tha District Court in Kew Hanpshire daniad EPA's motion to vacs
§ , - • . .
an Ordar issuad by tha Bankruptcy Court in New York staying all
proceedings in an EPA anforcaaant action against Hanviiie. The
opinion characterized tha government's action for injunctivc relief'
as tantaaount to.an action for a »onay judgment. Since Section
362(b)(S) of tha Coda prohibit! anforcaaant of a aoney judgment,
tha Court held that tha injunctive relief sought by tha government
did not fall within tha paraaatars of .tha bankruptcy stay exemption.
Tha Court noted that If tba governaent bad instaad sought an
injunction to pravant active, on-going disposal rather than cleanup
of an existing hassrd. such an action would not have been ataycd
by tha bankruptcy filing. In our viev, the District Court
9/ Mo. 81-229-D (D.M.H. decided Hov. 15. 19«2>.
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9832.7
'.•••'• -io-
•
erred JJ/ The Agency has proceeded with CERCLA response activities
*t the Johns Msnville sites.
In In Ke Koviei.L1/ Ohio was stayed froa proceeding in
• *
State Court in its efforts to enforce an injunction requiring
Xoyacs to clean up * hazardous waste site. Kovaea. a corporate
officer and operator of the Chea*Dyne sice, had declared bankruptcy.
The Sixth Circuit, affirming the District Court and Bankruptcy
Court decisions, held that Ohio, in proceeding to enforce the
injunction in State Court was actually aeeking a aoney Judgment.
*
The Supreae Court granted* the State of Ohio's petition for a
writ of certiorari on January 24, 1963. The Supreoe Court vacated
the judgment and remanded the case to the Sixth Circuit to consider
the issue of aootness. The Supreae Court has accepted certiorari
for a second tiae in the Kovacs II casej*/ The issue presented
in Kovaes II is whether a bankrupt defendants Bay rely on the
discharge provisions of the Bankruptcy code to void an injunction
which requires hia to cleanup a hazardous waste facility*. In
January 1984, the United States filed'an aaieua curiae Ifrief in
10/ The govern «nt took the position that the Johns Manvillt
District Court erred, in a action to ditaitt^in Art lnt«7-
national v. United States. Case No. 82-B04922 .(N.D. Hi. Bfcrccy
Ct.; (CERCLA I1Q6 Action;.. - . • > •
H/ »«1 r.2d 4S4 (6th Cir. 1982).
*
State of Ohio v. Kovaes (Kovaes II). 717 F.2d 984 (6th Cir,
(cert, granted, sp. Ct. No. 83-1020).
-------
9832,7
. ,. • •
•XI-
*
tht Kovict II cast stating that tht east h«f national iaplicatiot
for environment*! enforcement und«r cht Cltan Water, ftCRA, and
ClftCLA and furthtr cht states that tht 6th Circuit decision
• •
"obvicu»ly tncouragts polluters to abuse tht Bankruptcy Code
and defy atatt and ftdtraX environmental protection." 1_3/
,' j
B. Coat Recovery under Section XO? of CERCIA t•''
The United States should be prtpartd at the time or filing
of a proof of eXaia in Bankruptcy Court to provt that its e/*ia
should be allowed by tht court. That is. if tht agtncy has.spent
Cor will aptnd) I*/ money at a aitt under tht provisions of CERC]
104. and wishes to rtcoup such expenditures under CERCLA Section
f
X07. tht United States viXX havt to daaonatratt to the.Bankrupt
Court that tht tstata is in fact Xiablt for such txpthses under.
Stetion. 107 .W
*. Therefore, when tht Cnittd Statts filas a proof of claim
* * .!, . 1'
with tht Bankruptcy Court, Depart*ent of Justict and EPA attorn*)
13/ Id.. Memorandum for the United Statts as aaicus curi«*
aupporting pttitiontr (January. 19ft4).
14/ In tht east whtrt tht Agency has not spent Superfund money
~~ at tht site but whtrt wt inctnd to conduct a fund-tinmnced
response action, tht United Statta can fiXt a proof or claia for
an *optn account.* Tht proof of claia would inditatt that the
claia ii founded on an optn account which will become due upon
tht completion of tht abateaent actions by EPA.
157 A usual eoaatrcial claia of a creditor is established by thi
tsiattnct of a receipt or invoict indicating that tht dcbtoi
received geoda or services which ht contracted to receive. When
EPA haa performed work on a aitt, however, there- has been no a§r
ment to perform such work bttwttn EPA and tht bankrupt party.
Therefore, wt must be prepared to provt Section 107 liability in
order to provt our claim.
-------
.12-
. .»
should bt prtpartd to prove til alratnts of a Station 107 cost
recovery action. Tht east Bust be rtftrrtd to tht Dtpartatnt
of Justice in the norail way. although there Bay be situations
when, a rtftrral by telephone say be necessary. See Procedure!.
Infra.
1. Distribution of Asstts
(«) Stcurtd Crtditors
Tht clalas of stcurtd creditor* arc sstisti*p
fully before assets art distributed to any unsteurtd creditors,
including crtditors claiaing adainittrativa expenses. Tht
Justification for this traatatnt of atcurtd crtditors is statutory
• ' "
(11 U.S.C. IS507, 726). A valid litn_is a right to repayment,
eraattd by agrttatnt. vhich txists indtpandtntly of bankruptcy
lavs. As such, it is a charge against asstts which Bust be met
btfort distribution to unsteurtd crtditors.J^/ For txaopie, a
bank that has aadt a loan to tht owner of a facility that is
stcurtd by a lian on tht htavy tquipatnt vill receive "off tht
top" tht aaount rtprtstnting tht valua of tht htavy tquipaent or
tht tquipatnt itstlf btfort distribution of asstts to unsteurtd -
crtditors ia erdar of thtir priority undar Stction 507 of tht
Coda. '•
U/ 3 Colliar on Bankruptcy. Para 307.02 507-12.6 (15th Ed.
-.
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9832*7
• - • .13- --
In Chapter 7 proceedings, itcurtd creditors will rtcover
before unsecured creditors, including EPA. units* the Bankruptcy
Court is persuaded by pur arguments to jump our claims ahead of
All others.^/ In Chapter 11 proceedings, the government should
bt prepared to play an aetivt rolt in working out th« tarns of a
reorganization plan vith tht various classes of creditors which
provides for eventual repayoent of our cleanup expenditures.
The classes of creditors that have secured interests will have
> • -
the greatest leverage in negotiation of a plan.
» * *
(b) Priority Structure
Section 507 of the Code sets up the priority .
structure for satisfaction of unsecured cUi»i.J_£/ Payments to
the unsecured creditors are generally made on a pro rata basis'.,
Ten, fifteen or tventy cents to the dollar is common, depending
on the assets remaining in the estate. The following expenses
%
and claims have priority in the following order under Section
307(a):
. 1. first, administrative expenses «.. and any fees
*•• •- ' * *
and charges assessed against the .estate ...
17 / I307(b) establishes a "Super Priority** which'would require
the Agency to have priority over every other claim allowable. ,
Under 1307(b) EPA would have co prove (1) that EPA has a claim
(for adainistrative expenses) and (2) that this claim is protected
by a lien on the debtor's property (mechanics lien or prejudgment
lien) and (3) that the stay has prevented use of the property
(clean up). See Motion for Allowance of Administrative Expense
In He TriangleThemicals Inc.. Case Ho. 80-00993-HS-7.
11 U.S.C. 307(a) *
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.u. $832,7
.... ^
2. Second, unsecured claims allowed under
' Section 502(f) of this title, (regarding
certain claims ariaing in involuntary cases]
3. Third, allowed unaecured claims .for wages.
salaries, or commissions, including vacation,
aeverance and sick leave pay.
4. Fourth, allowed unaecured claims for contributions
to employee benefit plans.
5. Fifth, allowed unaecured claiaa of individuals. .
to the extent of $900...
6. Sixth, allowed (certain] unaecured (tax or
penalty fee] claims of governmental units .«.
Claims by the United States are claaaified aa sixth priority
claims'or general unsecured creditors. Because government claims
are so low in the priority line, attorneys for the government should
"be prepared to argue that our claims should be given greater
preference, baaed on one of the theories described below.
Congress is currently considering a' bill ]2J intended to
give claimants undet HCRA or Superfund a priority in bankruptcy
proceedings •uperier to sill other creditors, whether their claims
are secured or unsecured. Four states have already enacted
H.1U 2767 sponsored by Kep. Florio.
-------
.... ; 9832-7.
-15-
J
•
siailar provisions in thtir own environmental laws.20V
2. Thcoriti of Recovery Beneficial to the United States
(a) Adttinistrstive Costs
« •
The proof of claias filed so far by the United States have
asserted that cleanup expenditure! should be contidered adoinlt-
trative expenses of preserving the estate of the bankrupt, thus
deserving to be satisfied as top priority claims. While there"**
' V
is little esselav on point, one ease provides support for this
theory. In Ottenheiaer v. Vhitsker 2V, the Court upheld the .::
decision of the Bankruptcy Court which required the trustee to'^
expend SUDS of aonty as administrative costs in order to retrov*
" • t *
hazardous nuisance. The condition vas crtattd when the bankrup.
party abandoned several barges in Baltimore Harbor. The Court
Massachusetts oil. and Hazardous Materials Release Prevention ,
and Response Act, Mass. Cen. Laws. Co. 21E; Hew Hampshire
Solid and Hazardous Vast* Manages en t Act, U.K. lev. S tat. Ann.
Ch. 147*S: 10; Hew Jersey Spill Coapensation and Control Act, 58
N.J. Stat. Ann. 110*23.1 If (1981). Colorado has also enacted
superlien legislation, for a dismissal of these statutes and the ,
pending federal legis1stion see "Superlien 'Solutions' to Hazardous
Wastet Bankruptcy Conflicts"~AlA Cnvironaental Lav Newsletter,
winter 83/84.
2J./ Ottenheiaer v. Whitaker. 198 F. 2d 289 (3rd Cir. 1952} was
decided under the Bankruptcy Act of 1898. 30,.Stat. 544. which
has been replaced by the current Bankruptcy Refora' Act of 1978,
92 Stat. 2549 (codified at 11 O.S.C.). See also. In re Lewis ,
Jones. Inc. I Bankr. Ct. Dec. 277 (Bk. Ct. C.O. Fa. 1974; tot
the proposition that the bankruptcy court is under a duty to
protect the public interest and Bay order a Trustee to take
action to protect such interest. Various aeaoranda supporting
filed proofs of elaia contain further caselaw and arguaents.
These are available trea 0ECU-Waste.
-------
9832.7
• - ' -16-
reasoned that obstruction of tht Harbor would conflict vith th*
purposes of tht Rivers and Harbor Act.
In it* opinion th« court stated, "The judge-Bade rult
• •
(allowing abandonaent] aust give way whan it coaes into conflict
vith * statute enacted in order to tnaurt tha safety et navigation;
for va ara not daaling with a burden iapoaad upon tha bankrupt or
hit property by contract, but a duty and a burdan iaposto upon an
ovnar of vassals by an Act of Congrass in tha public interact. "£27
The United States has argued, by analogy, that expenditures
aade by EPA in the public interest under the authority of CERCLA
•hould be reimbursed as adainistrative expenses. This public
interest argument should stress the iaportance of recovering
aoney to replenish the fund to clean up additional sites. There*
fore, in a CERCLA ease, as in Ottenheiaer. an Act of Congress
anacted for the public health and welfare ahould take priority
ever the.usual bankruptcy distribution order.
In a recent ruling froa the bench in a ease entitled In re
• * •
T.?. Long, in tht C.S. Bankruptcy Court for the Northern District
of Ohio, held that tha trustee is liable to EPA for cleanup
eeata at a haxardous waste aite.29/ While tha Judge did not
.•
epecifically atate that the Covemeant*a cleanup expenses were
*
"adainistrative expenses" for bankruptcy purposes, the written
order ia expected to elaborate en the ruling froa tha bench.
221 Id. *t 290.
En He T.>.
)hlo, Ikrtcy. Eastern District, April 5. 1984).
23 / In He T.P. Long Cheaical Co.. Inc.. Case Mo. 5S1-906 (N.D.
^^^W __,% ^ AJkM«%
-------
Tht Unitad States Is-axpeced to filt briefs on thetquestion of
priority for reiaburseaent as between th* secured interest holder
ir.i the i:vsrsseat.
>
(b) Keeeverv Under Stccion 506(c) of the 'Code.*
^••^^^^^^^^^^^^^^•"^^^•^^^^^^^^^••^•^^^^^^^^^•^•i****^"^^^^^^^^^™^^^^^^^^^^™*"* *j _ .-.
This •ubtoecion sc«c«s: "Tht trusti* •«£ rtcovtr
froa property ateuring an allowed secured clain the-reasonable,
ntetaaary costs and expenses of preserving, or disposing of. «uch
property to the extent of any benefit to the holder of iuc,» L^is.
(11 U.S.C. f S06(e)). In a aituation involving real property
securing a loan aade by a bank or savings and loan, cleanup, costs
that preserved the property would presumably benefit the lender
and vould be .recoverable. This vould allow the Agency to obje
* *"
to any liquidation of the real property.
The language of Section 506(c) states, however, that the
* *
trustee rather than the governaent can recover. The government
cuuld deal with this by specifically requesting the trustee's
ratification of EPA cleanup plans or obtaining froa the trustee an
agreeaent to seek reiaburseaent under 506(b).2*/
24/ See lobinson v. Picker. 36 f. 2d 147 (lienholder* did not
""" oo7«ct to water being puaped out of Bines for .safety reasons
and were liable for expenditures). First Western Savings t Loan
i v, Anderson. 252 F. 2d $
Pa. v. Joyce. 97 F.2d 973.
-------
.7
(c) louitable Liens
Ic has also bttn suggested by the Civil Division of
the pepartaent of Ju»tlc« that, depending en tht facts of the
» »
Situation, the United State* could argue that expenditure* of
fundi for cleanup create an equitable lien en the property. Such
a lien would create an implied contract for reiaburseaent of EPA
as a secured creditor. State law en equitable liens should t>?
researched if this theory is atteapted. It aay be of limited
use since State law Bay only allow for iaposition- of an equitable
lien in situations involving a fraudulent conveyance of real
property. State law may also require the trustee to havt re-
quested cleanup of the property, or at least agreed to..it.£->/
(d) Restitution
Equitable restitution of the United States has been
approved by the court In cases in which the United States acted to
alleviate a potential health hazard* In Vyandotte Transportation
Co. v. United States ££/-, the Coast Cuarc unloaded a barge loaded
with liquid chlorine gas that the defendant had refused to unload
proaptly. The Supreae Court required reiaburseaent of costs
incurred by the United States. The Court noted that denial .of
»
* • •
reiaburseaent would have financially penalised the United States
For a discussion of State Law on "Mechanics Lien Statutes as
an Enforcement Tool in CCRCLA Cost Recovery Act ions." See aeao
froa R. Schaefer to A.J. Barnes and C.M. Price dated January vT. 196
26/ Wvendotte Transportation Co^v. United States. 389 U.S. 191
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•19-
9832,
for *cting expeditiously to prottec public health and aafety,
while unjustly enriching the defendant.
The Vvandotte case has been invoked in proof of claias filed
by the United States as e bails for recovery of CERCLA costs; that
Che governaent has incurred. In a recent order issued in United
States v. Kortheaitern Pharaaceutical and Cheaical Co.. Inc.. et al.
(NEPACCO) £7/, the court stated that restitution vas available under
$7003 of RCRA because the bankruptcy action vas an action inrequity.
United States v. Reserve Mining £8/ »iie lends support to a claio
oaseo on restitution. In that case, the Court held that when the
United States is seeking reiaburseaent for alleviating a potent
public health hazard caused by one who is in violation-of a fedei )
statute, reiaburseaent aay bt granted, under the Court's equitable
powers. . •*•-..•
C. Other Matters In Bankruptcy and Insolvency Cases.
'»
1... Abandonaent of Property • !
A*. *ny bankruptcy ease, the trustee aay choose to petition
the Court to allow abandonment of sea* or all of the assets of the
,^
•state on the grounds that care of the assets by the trustee would
be excessively burdensoae to the estate. £9/ The rationale; for
277 United States v. Northeastern Pharaaceutical and Cheaical Co..
TnT.. et al. (NEPACCQJ (September 30. 1863, **. Disc. Missouri
S.W. StvTTI
United States v.' Reserve Minini. 408 F. Supp. 1212. (D.-Min
29/ 11 U.S.C. I 554.
-------
9832.7
-20-
*
permitting abandonaent was articulated in In re Ira Haupt & Co.:
...[T]h« courts have always recognized that
a Trustee Is under no duty to retain cht Title
to -a pitet of property or * cause os* action
that is so haavily encuabered, or so costly,
in preserving or securing, that it does not
proaise rny benefit to the funds available
for distribution.*]*'
The United States will oppose abandonaent In certain circus-
stances because the procedure aay allow the estate to avoid
liability for en-going environaental obligations and aay all«w the
trustee to rid the estate of an asset in which the United States
nay ultimately have an interest, (based on equitable lien, resti-
tution or adainistrative expenses). For example, if contaaitjated
property is abandoned by the trustee, the property reverts back to
the secured creditor and the Agency Bay have no claia against the
nenbankrupt'party after clean up. Accordingly, the United States
should normally take the position that abandonaent is only pereis
%
sible when public health and safety obligations (statutory or
•••tervise) are aet. and when a third party will not recover a
windfall froa EPA't clean up actions. Abandonaent aa.y be prefer
prior to clean up'ff tat property vill revert to a viable party
whoa IPA say pursue for contribution to the clean up.
The petition of the United State* it supported by the rear
* i
ef the Ottenheiaer v. Vhitaker case, 31/ and by In Re ievis Jc
207 In rt Ira Maupt & Co.. 398 F.2d 607 (2d Cir. 1968).
31/ Suora. note 13.
-------
9832.?
•21-
Inc. 327 in the Ottenheimer e«it, tht Court refused to «llow tht
trustee to. abandon assets that created a hazardous condition.
Rather, the Court required the trusttt to .ust assets of th« estate
to remove fron Baltimore Harbor several barges belonging to the
debtor that might have otherwise obstructed the Harbor. . .
In In Re Lewis Jones. Inc.. the Court reiterated the Otten-
heiaer position and held that the bankruptcy trustee could not
•
simply abandon the property. Instead, the trustee was required to
repair various steam pipes and manhole covers to protectrpublie,
* ' ;
health and safety. The Court in Ottenheimer had held that abandon-
ment of the debtor's barges by the trustee would conflict with the
i ' '.'*-•
Rivers and Harbors Act. The Court in In He Lewis .Jones went a
step further, stating that "even absent the violation of a state
or federal act, the public interest must be protected by the Bank-
ruptcy Court." 337
. .•••"'•/. ;,
The law on 'abandonment under the Code la unsettled; In the
_ :
recent"bankruptcy case. In He Quanta Resources. 3*7 the New Jersey
District Court affirmed the Bankruptcy Court's ruling allowing
abandonment of a hazardous vast* site over the objection of the
City of Hew York and the State of Maw York. The Court allowed the
company to abandon a hazardous wast* site on grounds that the
aW In R« Lewis Jones, supra at 280.
347 In Re Quanta Resources Corp.. F. Supp.
No. 42-3524 (D.N.J. Jan 24, 1963} Appeal Pending.
Mo. 83-5142 (3d Cir.).
-------
„ 9832.7
- •• -22«
property was burdensome to tht estate. At the site, there vtrt
500.000 gallont of waste ell, sludge and hazardous waste.stored in
52 tanks and about 70,000 gallons of vast* oil eontaainactd by
Kls.*33/ While Quanta had prtviouily signed a consent ordtr
with tht H.Y. Department of Environmental Constrvation to clean up
tht site, the Bankruptcy Court's favorable ruling on abandonaent
effectively nullified the order.
Nev York City,and State had asserted thet the holding, n-
Ottenhetmer and Lewis Jone» required that the Court deny the
trustee's petition, to abandon and allocate assets in the estate'to
be used for site .cleanup rather than distribution to creditors.
The Court rejected this argument, pointing out that the two cases
* **
were decided before passage of the 1978 Bankruptcy Act. Before the
Act, che Court noted, abandonment was allowable under judge-Bade
rule. Section 554 of the Bankruptcy Code, however, provided specific
* ' »
statutory authority for the abandonment of burdensome property.
This authority, tht Court stated, was not conditioned by Congress
upon * finding that abandonment dots not ham tht public interest.36/
Tht Court was similarly unpereuaded by Mew York's argument
that I959(b) of tht Unittd Statta Judicial Codt. (28 U.S.C. Section
Hazardous Vastt Litigation Xtporttr, (July 6. 1912) at 2,646.
2*7 id. at 3,671 and 3,672.
-------
959(b» prohibited abandonment. Stctlon 959(b) provides that che
trustee shall "manage and operate" proptrcy in hit possess ion
•*»*»Ui*<» ;o ««lid lavs. The Court found that this provision dia
not apply to the trustee in * Chapter 7 context, but* only to
receivers and trustees involved in business operations rather than
in distribution of an estate.
2. State Insolvency Lavs
States can enact insolvency laws that affect bankruj c
parties as long at the substance of chose laws does not overlap
with the Ftderal Bankruptcy Refora Act's jurisdiction. The United
•*
States Constitution fives Congrest the power to establish uniform'
• *•»/ : N
laws on bankruptcy 37/ but does not prevent states from passing
• **
valid laws on intolvency. To the txtent there it no conflict . ,
between a state's intolvency law and the federal .bankruptcy law,
the ttate lav remains in operation.38/ *
.*•••
The United Statet Bay benefit froa being a creditor in ttate
* f
insolvency proceedings in appropriate situations. Under 31 U.S.C.
• . > ,
1191 (1979). debts to the United Statet are given top priority in
stata intolvency proceedings. The top priority for government
!
debts does not create a lien en the debtor's property, in favor of
the federal government. At a minimum, however., it gives the
*". •:* •
government a right of priority over all unsecured creditors to
U.S. CONST art 1. 18 cl 4. , ,
V
38/ In re Wisconsin Builders Supply Co.. 2\39 F.2d i49 (7th Cir.
. Cert, denied 353 U.S. 963 U958).
-------
• - • .:*. 9832.7
payment out of the property in the hands of the debtor'a assignees
or othtr representatives undtr tht condition! «pteifitd in tht
atatuta.39/
IV. PROCEDURES
A. Rules of Bankruptcy Procedure
Tha Supreme Court, adviaad by tha Judicial Conference of tha
Unicad States, has tha authority to promulgate rulaa governing
easas undar tha nav Bankruptcy Coda.*£/ Tha Advisory Committee on
Bankruptcy Rules was duly appointed by Chiaf Juatice Burgar to
draft rulas. The Committee was ncaring completion of vork on tha
Proposad Rulaa whan tha dads ion in North am Pipeline Construction
Co. v. Marathon Pipalina Co, east doubt on tha Coda' and^tha Proposad
*
Rulaa. Thus, no naw rulas have yat baah promulgated.
• * ' *
Tha existing rulaa were suamad up in a Bankruptcy Monograph
drafted by the Office of the Attorney General:
•>
"Until ... rules of practice and procedure are
.. approved, at leaat two different aeta of rules
swat be consulted. First, there are the "Suggeatad
Interim Bankruptcy Rules" prepared by the Adviaory •
Comaittea on Bankruptcy Rulas of the Judicial
Conference of the United States which were published
Bramvall v. United States Fidelity 4 Co.. 269 U.S. 483
U926>. The united Statas couid also argue that aatiafaction
of CERCLA*baaad claima precedea consensual liana, rueh as mortgages.
The question appears to be open. Collier, at any rate, expresses
the view that whether consensual liana come ahead of the Government's
1191 priority has not been finally and authoritatively determined.
Vol. 6A Collier, 1913(2] p. 246.
40/ Under Public Law 95-598 1248. Congress conferred this power
~~ on the Supreme Court, amandint the grant of rule-making power
a«t forth in 28 U.S.C. 12075 to include the new Title 11 Bankruptcy
Code.
-------
: 9.832,7
... , -25- I
•
in August*1979 aa 'guidelines' that could be adopted
.at ".ocal rules. Tht interia rults havt been adopttd
In sany districts, albtit with occasional variations....
Local district court rults apply in some jurisdictions.
Sooa bankruptcy courts havt adopttd numerous local
rulta in addition to, or in litu of. thtst intaria
rults. Stcond, if a point of proctdurt "is not covered
by tht applicablt local rults, consult tht Bankruptcy
, Rults in effect undtr tha Bankruptcy Act of 1889."iy
Covtrnmtnt attorneys.involved in bankruptcy caaas will find
rults and all forms (such aa proof of claim forms) in Collier on
Bankruptcy (13th td. 1981).
B. Filing Proofs of Claim
To have standing as a creditor, the United States must :f ile a
proof of claim fora which states the name of the claimant; the anounc
of the debt or claim; the ground of liability; the date the cla
" ' \
became due or will become due under an open account theory-pact ')
footnote 10 supra; and, the nature of the claia (secured or general,
unsecured).**/ ' :
• •
The filing of proofs of claias or interests is explained.in'
Section 501 of tht Bankruptcy Cod«.*3/ in a liquidation case under
Chapter 7. a claim ordinarily must be filed within aix.months after
tht first date aet for tht first matting of creditors.**/ Claims bas
41 / Bankruptcy Monograph dated Novtmotr 22. 1982. prepared by the
"~ Office" of tht Assistant Attorney General, Ctwil Division, tor
list of U.S. Attorneys, at pp. 6. 7.
*2/ See, Bankruptcy Rules, Proof of Claim official forma. Proof
~~ o!~clatmj filed so far have included brief affidavits from
tht On-Sctnt Coordinator stating Mounts spent end describing the
nature of tht work done aa well aa copies of bills submitted to
SPA by contractors. . v
11 U.S.C. 1, 501. ' .
44/ 3 Collier on Bankruptcy Para. -501.02 [2 ) (15th td. 1979)
-------
.... - 9832.7
•26-
on adainistrative expenses can be filtd any ciae before che Court
has granted che debtor a discharge, of dtbti. It it »ort difficult
CO decernine when eo filt a proof of claia in a Chapetr 11 reorgan-
isatlon bteautt vhilt cht filing ia required prior to cht Court's
aeetptanea of tht reorganisation plan, there ia no aechaniso tor
dtttraining when that..aeetptanet will take plaet. A proof of
elaia ahould bt filtd iaacdiattly. vith celephone eeneurranec by
*
EPA HQ (OECM and OWPE) and DOJ, if thtra ia any raaion to believe
i
chat a reorganisation aay be about co be concluded.
Section 502 of the Code governs the allowance of claims or -
interests; a claim is deemed allowed "unless a party in interest
.'.. objects.H£3/ In aost cases, the proof of clain ahould be
included in the litigation referral package ienC~tB OECM which
vill chen be aent co che Department of Justice and aigned by the
Assistant Attorney General for Land and Natural Resources or his
» • «
delegate. The Departaent of Juscice ausc be involved in che
filing of a proof of elaia in Bankruptcy Court.**/ As stated
above, special procedures aay be available in emergency situations
in which che government would otherwise aiss filing*"deadlines.
Headquarters and DOJ ahould be contacted.
AJ5/ 11 U.S.C. I 306(a).See also (b)-(J) [Procedure after objection],
, •
46/ See, fn 1, page 3 supra for referral docuaencacion chat the
Uepartaenc of Justice baa requested regarding the:.- financial
status of responsible parties.
-------
-27. 9832*
. . • •
C, Pleadints .
See the attached Index of Resources for a listing of proofs of
claia and other pleadings that EPA has filed so far.
One problea area involves the issue of whether, or not the
•
United States should file a aotion to overcoae the atay in Bankruptcy
Court before proceeding to seek injunctive relief in District Court,
Arguably, the statute is clear on its face and no special aotion
is necessary for continued exercise of our regulatory powers.
•
Nonetheless, Bankruptcy Courts have held attorneys in conteapt
for failing to overcome the stay. It is recommended, therefore,
i
that a aotion to overcoae the stay be filed with Bankruptcy Court
when the government seeks injunctive relief from a,bankrupt part
in District Court. . * ; j
D. Appeals .
Bankruptcy appeals are heard by appellate panels of three
*
bankruptcy judges appointed to the circuit counsel, on election of
the circuit.*j[/ ** this procedure is not available...appeals are
to the District Courts.**/ EPA and the Land and Natural Resources
Division of DOJ will involve the Appellate Staff of the Land and
Natural lesources Division in appeals fro* decisions of a Bankruptcy
Court and in filing of aaicus briefs on bankruptcy issues related
•
to hasardoua waste aite cleanup. *. ,.
•,
477 28 U.S.C. I 160
4f_/ 28 U.S.C. I 1334 . v
-------
.«. 9832.7
E. Tedtral Bankruptcy Court Jurisdiction
Tht jurisdiction of Bankruptcy Court* has bttn in * confused
•tact sine* tht Suprtat Court'§ dtcision in Northern Pipeline
Con struct ion Co. v. Marathon Plot Ltn« Co. W Tht Court held
unconstitutional tht grant of powtr in tht Bankruptcy fttforo Act
(28 O.S.C. 1471(b)(c» chat gavt Bankruptcy Courts Jurisdiction
ovtr all "civil proceedings arising undtr titlt 11 lof tht U.S.
Codt, Bankruptcy] or Arising in or rtlattd to .casts undtr titlt
H.wl£/ This broad Jurisdictional grant to tht Bankruptcy Courts
was dttatd unconstitutional btcaust bankruptcy Judges do not hav«
tht> prottction conftrrtd by Articlt III of tht U.S. Constitution
(i.t. lifttiat ttnurt subjtct co rtaoval only by iaptaenatnt and
irrtduciblt compensation). It is unclear what tfftct tht dtcision
ID Horthtrn Pipeline will have on tht type of easts chat can be
brought in Bankruptcy Court until Congrtss legislates a solution.
At tht least, hovever, it it eltar that the traditional state
cottBon-law actions (coroonly called "Marathon claIBS" by bankruptcy
practitioners) «ay no longer bt litigated in Bankruptcy Court absent
the conatnt of tht litigants.^ ' .
49/ JO-S. _. 102 S. CC. 2858 (W82).
10/ 2B U.S.C. U71(b)(c).
31/ Cook, Ntv Bankruptcy Qu«nd«ry Cauld Bt lasilT Solvtd.
"" Legal Timts, Sept. o. \Wl AC 10 Col. I. r
-------
•
In reaction ce Congress' failure to tnaet legislation that,
would rectify the constitutional infirmity of the Code, the
trative office of the United States Courts, Washington, D.C.. fors-
ulattd model rules to be used as inttria measures by the Unittd
.States Circuit Courts.**' The cover explanation circulated with
the rules summarised the main points as follows:
Under the model rule, ell bankruptcy setters are
initially referred to a bankruptcy judge. [Section b(l)
of the Rule]. In proceedings not involving a final
judgment on a Marathon claia, the bankruptcy judge way
enter orders and Judgacnts that become effective imsed-
iately. aubject to district court review if requesttd by
s party. (Section
-------
9832.7
-30-
• •
•uch a eotion vtrt granted, tht District Court could retain the
• »
entire aatter, r*ftr part of it back to th« bankruptcy judge or
refer tht entire Batter back to tht bankruptcy judge. Tht govern-
• ™
•tnt should also aake a siaultantous action to overcoat tht stay.
If, however, an action in Bankruptcy Court haa already been initiatta
tht govtrnatnt aay file a aotion to etay the bankruptcy aatttr in
order to proceed in District Court.££/
V. THEORIES OF INDIVIDUAL LIABILITY
•
The governaent anticipates situations in which individuals
*
responsible for the creation of hazardous waste sice conditions are
financially solvent even though the corporate owners and operators
are bankrupt*. liTauch a case, the United States aay choose to
ignore the estate in bankruptcy and pursue the responsible individ-
uals ** as individuals *• directly, or the United States could
pursue -both the assets of the bankrupt corporation and tht appro-
priate Ihdividuals.36/
These procedural reeoaatndations were aade informally in
conversations with staff atabtrs of tht U.S. Adainistrativt
Courts <|p Perhaps reflecting the current confusion in the bankruptcy
court s?»tea, one staff attorney stated that CERCLA actions appeared
to preseat unusual subject aatttr that * District ^Court would wish
to hear itself in light of Northern Pipeline; the other staff
attorney discouraged IPA froa attrapting to be heard by District
Court, stating that business was proceeding as usual in bankruptcy
courts*
56J Tor a general discussion of individual liability, see Guidance
MCBO "Liability, of Corporate Shareholders and Successor Corpo-
rations for Abandoned Sites Under the Coaprehensive Environatntal
Response Coapensation. and Liability Act (CERCLA)" froa Courtnty M.
Fries to Regional Counsels due to be issued June 1984.
-------
•31-
9832.
A. Personal Involveaent in Acts and Oaissions
Tht »oopt of personal liability of corporate officers is broac
A corporate officer, director, or agent if liable for cores he
*•.
coamit* regardless of whether he acted on hit own b'ehalf or to
benefit tht corporation, regardless of whtthtr ht personally bene-
fit td froo tht coaaission of th* core and regardless or whether
cht corporation is also liablt. He is also liable for the torts
of the corporation and of other directors, ofzicers or agents if
he failed to exercise reasonable care.3^/ /... , "^
The liability of corporate officers is generally li-icec to. ,
situations in which the corporate defendant has knowledge or
responsibility for tortious acts btlng coaaitted within his arc
•'
of responsibility. A general duty of supervision aay; bt-an .ins'u.
ficient basis for liability.££/
Th* United States plans to «ake use of this theory of liability
in pursuing, in certain cases. Che assets of individuals involved .
with coroorationa that have declared bankruptcy. The fact patterns
of these particular cases sees well-suited to the law. They involvi
situations in whie> hasardous waste treataent or disposal operations
577 $«•: 19 C.J.S. Corporations 11845. 850 (194p). Accord;
""*. v. Bess, 41 F. Supp. 197. (S.O. M.Y. 19*3). 5tt also:
7 MuscarelU. 1970 A. 2d (H.J. Super.. 1961); Donseo Inc.
Corp.. SAT F. 2d. 609 (3d Cit. 1978); Patvaan v. Howev.
-TToO S.tf. 2d. 851. 856 (1963). Sintltton v. Araor
Velvet Corp.. 4 P. 2d 223 (cal. App). $+• «ito irief 4n U*S. v.
Mahler (HTpT Pa.) drafted by Michael Steinberg. ACComeyiEfviron-
iencaT Defense Section. 00J. (April 1, 1983) for a discussion or
personal-liability. .
li/ Martin v. Wood. 400 F. 2d 310 (3d. Cir. 1968).
-------
9832.7
. ..- ? -32-
vere directed by taployees of corporation! that Uttr declared
•*3Jk.'J?V: —
corporate bankruptcy and abandontd the faeilittts. leaving public
nuisance condition* ••••nttally of thtir own creation.
In fact, EPA and tht Department of Juiciet have" alrtady used
thia legal theory auecaaafully. In ona RCRA Stccion 7003 cast, the
United Statts arfuad that thia Saetion iapoaes paraonal liability
on corporate officara. Tha Court dani«d defendant's aotion to
disaiss, atating:
"In Missouri, a corporate officer who participates
in the coaaission of a tort Bay be bald personally
liable for any resulting daaage. Patyaan v, Howey,
100 S.W. 2d 031. 856 (Ho. 1936). *A contrary rule
would enable a director or officer of a corporation
to perpetrate flagrant injuries and escape liability
behind the ahiald of his representative character,
aven though the corporation Bight ba insolvent or
irresponsible.1 19 As. Jur. 2d I 1382 at 77.5J/
In addition to theories of individual tort liability, CERCLA
explicitly allows individuals to be held liable for cleaning up
.•
hazardous vaata aitaa. Section 107 of CERCLA clearly peraits iopo-
sition of strict liability upon broad classes of persons including
an individual owner or operator, any parson who at the tiae of
disposal of any hasardoua aubstance owned or operated any facility.
peraonajjfcfe. arranged for disposal and paraoaa who accepted for
transpofflafardous aubataacaa.*£/ Tha Act defines "person"
*** inter alia, "an individual.***/ Ona purpoae of the corporate
59 / Q.S. v. Horth tastern Pharaaeeutical ft Cheaieal Co.. Inc.
aT7l.. (NEPACCO> NO. «oo066-cv-sw (western Disc. HO.
A ItterHCTACCO decision baaed a determination or liability on 1107
of CERCLA. (see discussion infra)
£07 CERCLA I 107 (a) (1)(2), <3)(4)
CE1CLA I 101(21).
-------
9832.
03- j
• **
•tructurt if to insulate shareholders froo liability. The** is.
howtvtr. no insulation from liability •- no corperatt vtil to
pierce — when officers or agents of a corporation comait tortious
* . ;- ,-i-V
acts or participate personally in the comaitiion of torts. :>
B. Pitrcini tht Corporate Vtil ' . :
.By piercing the corporate vail, tha Unitad States aay be
ablt to establish tht individual liability of ahartholdtrs for
torts coaaitttd by tht corporation. Tht cast law tends to uphold
• »
prottctioh of tht corporatt fora. Courts will, howtvtr, vakt
txetptions to this rult vhtn ahartholdtrs havt coooingltd indlvi'a'uai
and corporatt affairs so that tht corporation apptars to bt no
* •
•ort than tht "altar tgo" of tha individual shareholder^. .
federal courts havt rtlitd on tht.tollowing factual ttses in
dtttraining vhtn to pitret tht corporate veil: 1) It the corporation
undercapitalised for its purposes? 2) Does the corporation observe
corporate'fonalities? 3) Does the .corporation pay dividends?
A) Is the corporation solvent? 5) Havt the dominant ahartholdtrs
siphoned corporate funds? 6) Does the situation present an eleaent
of "fundamental unfairness"t££/ Courts have refused to pierce the
• *«.
veil absent a showing of fundaaental unfairness.£3' However,
United States v. Pisani. 646 F.2d. 83, U (3d. Cir. 19S1)
DeVitt Trucking Brokers v. tf. tar Flatting, fruit Coaoany.
540 F. 2d 681, 6fl7 (6tn CirTTf/67.
-------
-34. 9832.7
fraud need net be sh'ovn if federal lav governs a case.**/ Th*
general rule applitd by ftdtral court* to cases involving federal
•catutes is that tht individuals aay b* held *lUbU in the interest
of public convenience, fairntta and tqulty. Tht specific statutory
dirtetivts of CCRCLA support * federal lav. In addition, tht
language of CEXCLA establishes liability for individuals who owned,
operated or otherwise controlled activities at hazardous watte
sites.«/
Fact situations faced by the United States involving -hazardous
waste disposal or treataent operations should prove appropriate.
for piercing the veil. In aany cases, the United States is finding
that CERCLA probleas have been created by corporations that have
been aisaanaged and undercapitalised for the purpose of handling
* . *
hazardous vasts. Moreover, in soae eases, the saae individual
shareholder/directors have dissolved and reforaed essentially the
saae hazardous waste operations several times, an indication that
the corporate fora is being used as a ahield and "alter ego"* for
individuals*
f4/ Pttitajd States v. goraandy House Hurting Boat. 42S F.Supp.42i,
+jt>H9* Mass. 1977;. The goveraaent will want .to argue that
federaXlav applies to piercing the veil. U.S. v. Kiabell Foods.
440 oTfims (1979). holds that application oI~St*t« law should
not frustrate the objectives of federal statutes. * In the Fisani
ease, supra, at 17, the Third Circuit stated, "Ve believe it it
undesirable to let the rights of the United States change whenever
State courta iasue new decisions on piercing the corporate veil.**
*
See, pages 7-9. Guidance Heao "liability of• Corporate Officers'
fn 49 supra. - v
-------
-35-
C» Personal Jurisdiction in Cases Involving Corporate
Officers orShareholders
If the United States procaada to initiate action agains't
individual corporate officers or shareholders, the-government should
anticipate that dafandanta aay raise tha defense of inproptr juris-
diction or service of procass if thay reside outside the state:
vhere tha CIRCLA aita ia. For axaapla, in U.S. v. North Eastern
Pharmaceutical & Cheaical Co.. Inc.. at al. (NEPACCO)**/, defendants
alleged that, as Connecticut residents, thay vara not subject to
extraterritorial aervice of process under Missouri rules of civil
procedure. They arguad that since their acts in directing the
disposal of hazardous waste in Missouri occurrad not as their
individual acts but as the corporate acts of NEPACCO, they could )
net ba subject to axtratarritorial aarvica of procass a*s defined u,
the Missouri rules. .
The Court raj acted this arguvant as ovarly technical and
affirmed*that it had valid personal jurisdiction over the defendants.
..... .......«, uovever, points to tha need for attorneys to research
state lav regarding personal juriadietion and service* of process.
taferrala to tha Departaent of Justice ahould include anticipated
defenses relatad to perapnal Jurisdiction.
66/ Order No. 5066-CV-SV, (June 11, 1981, W. Dist. Missouri,
""" SU Div.l
-------
-36- 9832>7
*VI. INDEX OF RESOURCES
' '^1 - ' ' • •
These materials can be acne to EPA Regional attorneys on
requast. Because OECM-Vastt dots not .havt tht resource capability
to reproduce and send numerous copies, mailings wtll be limited to
ont copy ptr region of taeh document listed.
PLEADINGS
Proofs ef Claia
In the Matter of Aidex Corp.. Case No. 79-0-111, APPLICATION
FOR PAYMENT OF FUNDS HELD IN TRUST BY THE CLERK OF THE COURT
FOR CLEAN UP Of HAZARDOUS WASTE SITE CONDITION.
U.S. v. Jack L. Ntsl and Ceraldine fayt Heal (Globe). Case No.
13-00198, COMPLAINT FOR DECLARATORY JUDGMENT AND APPLICATION
FOR ORDER FOR REIMBURSEMENT Of COSTS INCURRED BY THE U.S.
IN RESPONSE TO A HAZARDOUS SITE CONDITION.
In r* Liquid Disposal Inc.. Cast No 82-01866. APPLICATION FOR
6KBER F0R R£IKBURSL4£KT Of COSTS INCURRED BY THE UNITED STATES
TO CLEAN UP A HAZARDOUS SITE CONDITION and accompanying
affidavit and invoices. (Eastern Dist., MI)
*
In re Trianile Chemicals. Inc.. Case No. «-OOi93-HS-7,
plus APPLICATION KR 6RDU FOR REIMBURSEMENT etc. and affidavit.
(Southern Dlst.. TX) . '
Sn re Crystal Cheaical Coaoanv. Cast No. 81-02901-HB-4. plus
N"It£D 5TAT£5 HEHdRAl^DUU III SUPPORT Of PROOF Of CLAIM.
.. (Southern Dist.. TX)
. ,"
ns *
InftH» Matter of Aidex Corp.. Cast Ho. 7,9-0-111. MOTION TO
VACATE AUTOMATIC STAY, and accompanying MEMORANDUM IN SUPPORT
OF MOTION TO VACATE AUTOMATIC STAY and accompanying court
order granting motion. (West Dist.. RE)
itaieal Company/Debtor. Case-No. S1-02901-HB-4.
JPOSE5 CRANT OT REPLACEMENT LIEN AND TO PROPOSED
DISCHARGE Of LIEN and accompanying, court order granting motion.
(Southern Dist., TX) '
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9832.7
• " ' -37-
Statt of Ohio. Pttitiontr v. Villiia Ltt Kevaea. ON PETITION
FOR A WHIT OF CtRliORARI TO THE UNITED STATES "COURT OF APPEALS
FOR THE SIXTH CIRCUIT, Britf for tht Unittd Statt* as Aaicus
Cur tat. (Britf aMpporting apptal of Ohio to tht Suprt«t"Court ) ,
In r« Trianala ChCTicali .Inc . . Cast Ho. 80-00993 KS-7 WOTIOK
FOR ALLOWANCE OF AOMIN I STRATI V£ EXPENSES AND PROPOSED ORDER
REQUIRING TRUSTEE TO PAY EPA's EXPENSES. Flltd Auf. 22, 1983.
In tht Matttr of Quanta Rtsourcts Corp.. Dtb tor. Statt
City ot Mtv York. Apptil
o tv
anc ticy or ntv Tor*. Apptlianca. v. Thoaai
J. O'Ntill. «• Tru»ttt. APPtlitt. (QUANTA har«*fear) Aaoaal
froa cht Ditcriec court tor tht District of Ntv Jtrsty,
Britf of App«ll*nc§. (U.S. Court of Appttls for tht Third
Circuit, No. 83-5142).
§UAKTA. Britf of tht Comoonwtalth of Ptnntylvania and
tatt of Ntw Jtrity, Aalci Curiat. (U.S. Court or Appt*l§ •
for tht Third Circuit, No. 83-5142).
In Rt A.M. Inttrnational. Inc.. Cast Mo. I2-B-04922, Dtftndant'
(Unittd.Stattt'} Rtply Memorandun is Support of Dtftndant'§
Motion to DUttiti. • '
Statt of Ohio v. Kovaei (Kovacs II), 717 F.2d 984 Uth Cir.v
1S83)
)RDER
Unittd Statti of Aatrlca
. tt al» v. Johnt Manvillt Salti
tl Mo. el-29»-D. Ordtr of tht
Corporation, tt al.. Civj
District court dtnving Unittd Statts and Mow Haspthirt
-w**«u «,w vaeatt tht automatic stay. (Nov. 15, 1982;
U.S. District Ct., N.H) "
Statt of Ohio v. Williaa Ltt Kovact. No. f 1-3120. DtcUion
•ilir»td District court and Bankruptcy Court dtciilont that .
Kovact was tntitltd to protection of automatic atay. (Junt 16.
1982. U.S. Court of Apptala, Sixth Circuit) .
Onittd Stattt of Aatrica v. Borth latttm Fhagaactutical
and cntaicai Co.. inc.. tt ai.. Ho. •o«-506b*cv-sw. DtcTaion
dtnying dtftndaata1 aotion to oiraiaa for lack of ptraonal
jurisdiction. (Juno 11, 19«1; Vostarn District of Missouri,
S. Wttttm Division)
• •
Pnivtrsal Mttal Staapina. Inc. v. Pttmco Machintrr. Inc..
Bankruptcy Mo. 41-6114JR. Bankruptcy court-ntid that autoaatic
stay dots not stay a stparatt suit atainst tht bankrupt's (
"•iittr" corporation. (Dtcaabtr 7, 1981; Easttrn District, j
Hnnsylvania)
-------
9832.7
XEsouRcts
Bankruptcy Monotraph convayao to U.S. Attornaya Offieat
Novtaotr 22, 1982. Summary of bankruptcy lav and procadura.
PA Cuidanea Manual; Pur«ulni RCRA Subpart H Intaratta
CF. (Fa&ruary, 1983 ;
Briaf in O.S. v. Mahlar (M.D. Pa.) draftad by Michaal Stainbarg.
Attomay,TnvironiantaT Oafanaa Saction. OOJ (April 1, 1983).
Diacuaaaa parsonal liability of eorporata officars.
RULES
Mitnortnduo frons Williaa C. Folty, Diraetor of tha Adoinistrativt
Off lea of tha Unit ad Statai Court a on CONTINUED OPERATION OF
THE BANKRUPTCY COURT SYSTEM AFTER DECEMBER 24, 19*2, IN TH£
ABSENCE OF CONGRESSIONAL ACTION (tha "Eaargancy Rulaa" or '
"InctrU Rultt"), (Daerabar 3, 1982).
-------
STATES ENVIRONMENTAL PROTECTJON AGENCY
WASHINGTON, D.C. 204CO
JUL I 2 1985
MEMORANDUM
SUBJECT: Small Cost Recovery Referrala
FROM: Frederick F. Stiehl
Associate Enforcement Counsel for Waste
Office of Enforcement and Compliance Monitoring
Gene A. l.yeero. Direr tor (7>vK-L **• ^*/v\^/i/*w>
Office oi Waste Programs Enforcement
Office of Solid Waste and Emergency Response
TO: Regional Counsels, Regions l-X
Regional Waste Management Diviaion Directors,
Regions l-X
Based on discussions among our staff and Regional
enforcement personnel, it appears that confusion exists
regarding Agency policy on referring CERCLA cost recovery
cases valued at less than $200,000. Apparently, a few of the
Regions believe that Headquarters will not accept these cases
because the December 5. 1984, Interim CERCLA Settlement Policy
(1) places a high priority on large dollar amount cases (see
the section on targets for litigation (p. 17), which discusses
referring cases involving a "significant" amount of money),
end (2) references the possibility that cases under .5200,000
could be handled administratively.
Although the Agency has placed a higher priority on .
referring cost recovery cases with expenditures in excess of
$200,000, there are situations where referring •mall cost
recovery actions is entirely appropriate. For example, where
we have initiated settlement discussions which have failed to
produce a settlement because of the recalcitrance of the
responsible parties, referral would generally be appropriate to
demonstrate the Agency'a commitment toward enforcement aa a
vehicle to compel private party response at CERCLA sites. In
addition, where a Region has no caaea for aore than $200.000,
where an enforcement presence would serve a deterrent effect.
where a Region's other enforcement priorities allow for the
expenditure of resources to aupport a avail cost recovery case,
or where the circumstances are ripe for testing some important
aspect of law, referral of such a ease would be appropriate.
-------
- 2 -
As you know, the Agency is working toward providing the .
Regions vith both the tools and the authority to settle email
cost recovery cases (up to $500,000) administratively. To
ensure that such administrative resolutions are attractive
options .for responsible parties, however, the Agency must be
prepared to take judicial action against those who do not
settle on terms acceptable to the Agency. Under such circum-
stances, email cost recovery actions will take on an even
greater importance, since it will be necessary to show the "
regulated community that the Agency is serious about pursuing
small cost recovery cases in the judicial, as well as the
administrative, forum. In furtherance of that effort, our
offices and the Department of Justice are prepared to fully
support s&£ll cost recovery cases referred by the Regions which
further program goals end ere otherwise consistent vitr, A^c-ricy
' ' ' " ~" " ' ' " "
For most of you this memorandum simply confirms operating
guidance which you are already following. We wanted to ensure,
however, that the Settlement Policy did not create any undue
reluctance on .the part of the Regions to develop small cost :
recovery cases for referral.
cc: David T. Buente, Department of Justice
-------
*'. «:-
.j-i AL / .-,. . »v..w.>
•ASHI.NGTO.N,D.C.2fr4'6G
5" 7 "1
c3^
KAY 2 3 1985
*i re <
SUBJECT: Re^is-ed Ha-za^dou* Waste Bankruptcy Guidance
'^Acting Assistan^ Acrinistrator for
£nfcr.cerr.ent arTd Compliance Monitoring-
TO: Regional Counsels, Regions I-X
•The irf-ry's recer.t experience in CERCLA and RCRA bankruptcy
actions has identified the need for updated and revised guidance
or. the scope cf EFA's enforcerr.er.t actions against bankrupt parties,
This r«e-crandu!r. is intended to update the Kay'24, 1984 guidance
"CERC'lA E-.fcrcerr,er.t Against Bankrupt Parties" and the guidelines
or. fcar.'srjptcy contained in the Cost Recovery Handbook 'Procec.res
fcr Documenting Costs fcr'CERCIA $107 Actions," January 30, l?c;..
The r.e-c-ra-.d-r, defines specific criteria for evaluating the
rerits cf e potential bankruptcy referral; elaborates on the
policy regarding sett-lerr.ent with bankrupt parties; reviews tr.e
recent judicial decisions in the areas of the autonatic stay,
abandor.raer.t, discharge, and clairs of adr.inistrative expenses
and briefly describes new enforcement theories which have bee-
asserted by the Agency in recent pleadings.
-------
98
E?A has referred 22 hazardous sjfcstar.ee cases to tr.e
Department of Justice for filing in bankruptcy actions.: After
several years of litigation or.ly two of these cases have, resulted
in recovery of funds from the debtor. The current docket of
bankruptcy cases has consumed a disproportionate amount ;of
attorney resources based on the expected recovery of "-'.'funds to
•..".* Agency.
Additional scrutiny will be used in evaluating future
referrals frorr. the Regions which include bankruptcy claims.-
In ail referrals regarding bankrupt parties, the Reg-iions;rsr.c.ld
include a justification for filing in the bankruptcy action. • ,
The referral justification should be based on at least ^one cfi. :..."
t^e following five criteria:
1' E?A is likely to recover at least SS,COO..
try filing a sirple procf of cla;r as a.
ce'.eral _uns.er,re: creditor :
Filing a proof of claim is a relatively sir.ple and st r ;-. ':•'•'<-
fcrward natter which r.ay be appropriate when the Agency Iras :
clair. as a general unsecured creditor, for example in cases . .
where the Agency has completed a response action before: the -
bankruptcy is filed. Where there appears to be suf f icie.nt,., s
in the debtor's estate */ for a small distribution to the: _
I/ Determining the extent of the assets in the estate.ca-
"" based on the schedule of assets set out in the bankrupt
petition, the extent of assets and claims published folio.
the initial meeting of creditors, the court's bankruptcy. :
and periodic filings available through the court clex.k. ,
-------
govsrr.-er.t on an unsecured claitr, the trustee, debtor, or ether
creditors r,£y well no: undertake the trouble and exper.se to
challenge a dais that does not otherwise threaten the estate.
The char.ces cf such an objection are particularly srrall where
EPA's clair: is liquidated and CERCLA liability is clear £/. As
a general rule, a proof of clain should be filed in cases where
EPA does not anticipate that «n objection will be raised by the
creditors or the estate and where the filing of a proof of clai:
will lead to a recovery of at least 55,000 J/. In these cases,
the Region should prepare an abbreviated referral package con-
lair.ir.g the proof cf clein, supporting affidavits er.d ccst
documentation and a brief description of the assets in the
debtor's estate.
2. EPA is likelv to recover at least 520,000 cf
resror.se costs through e sere complex bar.K.rurrcy
til ing
As a general rule, prospective referrals of coaplex
bankruptcy actions (such as a request for an adainistrative
expense priority) that nay lead to recovery of less than ?::.""
are discouraged.
2f Ur.der Section 502(a) of the Bankruptcy Act a clais is •-•
~ allowed unless objected to. Thus, filing a proof of ;.i
Itself, will often not lead to the type of extensive lit:;-,-
that has characterized nany of the Agency't bankruptcy ca<->
3/ If costly obstacles or significant challenges *t scr-^
"" do in fact looc over EPA's proof of claitc, the Agen; •
always withdraw its claia as a natter of right prior to •
filing cf an objection (Bankruptcy Rule 3006). Even aft-
filing cf an objection to the proof of claire, EPA can w:-
its clais, subject to court approval. As long as the c'.«
filer! in good faith, a court will be unlikely to deny t-- .
drawal cf a clais where the government indicates that i-
in its best interests to pursue the clais.'
-------
* A - >632,6
Asi_-i-.g a recovery c: S20.CC: or sore, 'the Region should
set out the exter.t of the assets in the debtor's estate, the
nur.rer ar.f extent of other claias, the status of other creditors
(i.e., secured or unsecured), and the theories of recovery which
will be asserted in the bankruptcy litigation. The Region should
also evaluate the r.erits of EPA's claims, Including the ability •
c-f the Acercy to prove its CERC1A §107 claims based cr. eysilarle
cost dccu-er.tet ion.
3. The bankruptcy action has significant deterrence
v slue ' "• : ' :
Under this justification, the Regions should establish
that'the bankrupt party cay be seeking to avoid liability
for Superfund cleanup through an unlawful declaration of insol-
vency. The referral should include a discussion of the past
finarclal practices of the potential defendant and any indication
cf risrepresev.tat ion cr fraudulent transfer of funds. A bar.V.-
ruptcv case cay also be an appropriate candidate for referral if
the case is trade highly visible to the regulated cor.sunity a-:
will serve as a deterrent to other defendants who nay ccr.teTzla:?
using the bankruptcy courts as an obvious shield frcz peter::-".
Superfund liability to the governaent ^J, In these cases, :~~
-Ll. The Rovernitent has been successful in disaissing bankr_: •
actions where the governcent was able to show under Rule 7"" *
or 3^5(3) that the dismissal vas in the public interest. .:-
re Cor=ercial Oil (No, 85-01951 Bankr. K.O. Ohio) the BanV.r
Court under rule 707(a> disttissed the petition- in bankrupt:
citing In re Charles George Land Reclamation Trust, 30 B.?. - -
(Bankr. C.D. Kass. 19S3) which involved a shas bankruptcy r.
in an attempt to avoi^ Superfund liability.
-------
- r ', ^ ' * C "C ? * ^
9
*€|l2r, should atterpt tc estimate the exter.t tc which the cc =
cf litigaticr. -ay be recoverable.
'£• Ecuitable trestrer.t of all responsible parties '
In so-e circumstances .the Region cay wish to refer a cas.e
against a bankrupt party in the interest of equity-a-.d fair .
treatrent of all parties. For example, it nay be appropriate1
to pursue the bankrupt owner or operator of a facility: who-
contributed significantly to the creation of the hazard;,!"
particularly in connection with a settlensent wlth%o.ther viable
responsible parties. In most cases, the Region should not
consider a referral against bankrupt generators or.transporters
unless the case r.eets the criteria set out in justifications
1 or 2. . - .
5- Favorable rrecedert or tactical litieatier; corsid'er-a-"' "r
In rare casps there cay be an overriding interest ir.
pursuing a bsr.Vrvr: rsrty fc-r rke purposes of obtaining ar.
important and favorable precedent $J or where there are ta::ti:-£l
litigation issues relating to other actions in which the. Ager. :y
is involved ^•/.
_5/ There may be cases where even though the potential, rec.-,-.••?
is soall, there is good opportunity to develop the, law .-
the area of environmental bankruptcy litigation. Moreover
cases where the Agency's claim is anal] nay present the'bts;-.: '
factual situations for developing our 'legal arguments. F:-~ -
example, courts cay be core willing to grant an ad!tir.istr = - . -.-
expense priority when the size of EPA's claiic is sr^all a- •:•: —
not keep other administrative clai.as from being paid.
6/ For example, filing a proof of claire may be a useful ,v
"• to insure that the United States receives copies of '-
pleadings filed in the bankruptcy and has access to part;-
in whatever discovery is conducted in the bankruptcy prc:- .
-------
9832,3
In several cases, the Regions have referred bankruptcy
cases which address one claio against a debtor, but which do nc;t
mention other, soretirres unrelated, potential claics that cay
involve the sare debtor. For exarple, referrals for the. recovery
of funds spent in an ircnediate removal nay also have potential
clairs for CtHCLA remedial action or RCRA corrective actionv
There can be conflicts i-. hcv the Agency' would var.t to prcreed
on the various claims. Accordingly, It is essential .that the
full extent of all potential EPA claitcs against a debtor be
.". > . , *
disclosed to the Departrent of Justice before any forrral -"a'c.ti.on
is taken in the bankruptcy. All litigation report s:_p.re-?.ar.ei/:b.y''
- , 1 *
the Regions fcr bankruptcy cases should suirsarize all kn ?vr/; an ±
potential clairs that ZPA cay have against the debtor.
?rT7L~y.rN'T WITH SAKV.?.'.'?? PAF.TIES UNDER CERCLA
The Agency's settlement policy 2J states that it cay be
appropriate for the Regions to enter into negotiations witr ba-r--
rupt PRPs even though an offer nay not represent a substa-tial;
pcrtic- of the costs of cleanup. The policy further state? -.--.•;
the Regions should avoid becor.ing involved in bankruptcy •„•„; r,: : :- - : .
II "Interin Hazardous Waste Settlement Policy" Vol. 50." v.
Federal Register (February 5. 1985) 5034-5044. See c.-
at II. Mar.age-cnt Guidelines for Negotiation, claics. in -,
Id. at 5C36.
-------
~ C. ^ c. e
if there is little likelihood of recovery, and s-.ould rerc-zr.ire
the risks of negotiating without creditor status. In general,
the Region* have been given broad authority to settle with
bankrupt parties.
When a Region elects to settle with a bankrupt party the
.following five options should be considered:
1. Cor f e ? g i en c f • Ju d g~ en t
In r-ited States v. Hetste A.sbest-es Ccrr . er el., Nc. £ 2-
309-CLO-RMB (Order of July 12, 1985) the court approved the
entry of a consent decree and civil judgment against certain of
the defendants in bankruptcy for 57,085,000. The order granted
;udfcrent iointly and severally In the District Court proceeding
*
in settle-rent of claims.against the bankrupt parties. In this
case, due to the extremely lir.ited assets of the bankrupt
individuals, i: is doubtful that the United States will recc.-er
a substantial portion of the S7 Trillion. This form of settle-*
(i.e., a confession of liability and judg-ent) is only encr.ri.-
in a Chapter U reorganization action where a specific prc-.^. •
for er.forcerent of the judgrent is set out in the ccnfimt :
of reorganization. £/
Ji/ Unless otherwise provided for in the plan of reorgar.::.
the confircation of the plan discharges the debtor fr
all debts arising before the date of confiraation. li U.
Sn^1(d)(l). In addi.tion, U U.S.C. S52^(a) provides tr s
a discharge voids judgoents on discharged debts and en;c.
any legal action to collect such debts from the debtor c-
property of the debtor.
-------
-e- 5 6 3 2,
i. '-'ritten aeree-.sr.t vlth trustee e~f ether creditrj
rggcrJ'.rg' sat i_5_fecti'or. of claim vith &:_: r:rr:£t =
reservat ions
It Is" also possible for the Agency to enter into an agree-
ment witr. the trustee for the debtor regarding a future pa/rent
of funds upon dissolution of the estate. For example, in one
case in the Northern District of Florida the Agency is contem-
plating er.reri-g ,ir.tc & stipulation with the trustee and the
mortgage,holder on the contaminated property. As a concitic:. cf
settle-er.t, E?A will agree to release the debtor froa liability
and allow the cleaned u? prcperty to be sold or leased. EPA and
the rcrtgage holder vould split the proceeds fron the sale cr
lease of the property thereby recovering a substantial pc-rtior
*
cf tve Agency's cleanup costs.
!-, a second case, in the Eastern District of Kcrth Car;".:-.i
the Agency is considering entering, into a similar arrangeren:.
The c^btcr-.in-possession has submitted a liquidation plan c:
reorganization in which the debtor. agrees to retain title :: :••
contaminated property during the EPA cleanup. When the cl*s-.
is completed, the debtor will sell the property. The prcrr-•
vill go first to cover administrative expenses involved in -
sale and then to EPA for rei=burse-ent of response costs.
has requested that language be included in the plan which
tects the right of EPA to recover against the debtor's ir-
coapanies.
-------
r_e_ggr_dir.£ :ro rata
gssj-
Fencing a final accounting, E?A ray agree with the trustee
to a pr?--rat£ pay-rent cf cur clair in bankruptcy. In !- r_e
Crystal Cherical Corranv. No. 81-02901-KB-4 (Bankr. .S'.D.. Texas^ .
EPA entered into a stipulation with the trustee for ;a-.pro rata
payrent of cleanup costs after liquidation. The stipulation was
reached after a four day presentation of evidence to the bank-
ruptcy court where ErA vas seeking an irtrediate payrent cf funds
for the ongoing cleanup.
i* . gettlerents contained in the reorganization zlsn
A Chapter 1" reorganization plan is a type of. setflerent
document. Reorganization pla-.s can be used to set forth. • .
various settle=pnt-type provisions that are in the-. Ag.en-cy;'s;-:"
interest. For exa-rle, in In re Thoras Solvent Co_... .NK •--!.':-2
' (Bankr. V.D. Xich.), the Second Arended Plan of Reorgani-:st::-.
which was confirr.ed by the court, included, at the gcver-.re -: ;
insistence, provisions relating to preserving d'alrs aga:--.:
liability insurers ar.d provisions relating to r e.s.t r i c:t i c -. -
transfer of contaminated property. Other appropriate pr:.-.-.-
in such plans eight be provisions on access to prope.rty «;• - ;i
retention of records. The Agency should insist on- this ••-..
provision in cases where a plan cannot be conf iraed:wit^.... .„
concurrence.
-------
;rt;L*~r?""t v i t h c
IT. s;-e cases, other crecitrrs will be a party to a setrU-r:
between ??A and the debtor. For example, in In rc__T_hosas Solvent
Co. . ::•: :--::--3 (Sankr. V.D. Mich.), there is approximately
S35n,OCO available for distribution to creditors. The Bigr.ifUsr.
creditcrs are EPA, the State of Michigan and two residents groups
with health clairs. F?A, the State and the two groups have
filed rult i-rri llicr drllsr claims. Ve are presently finalizing
a settlement among these creditors and the debtor which will
provide for the distribution of the 5350,000. One primary
benefit of such a settlement is that it avoids the need for tire
censuring anr. expensive litigation in bankruptcy court among
creditors damaged by the same activities, end will allow us to
devote our full resources to pursuing a cost recovery acti'rr. -
a*air. .< t c t h e r r e s i o r. si ble parties.
T'-ere are n-^rerous other options for settlement, a-.d
fcr documentation of settlement, with a bankrupt party,
inc'.udirg those used to resolve non-bankruptcy proceedings
under CIrTLA, Althoush Headquarters will be flexible in
reviewing these settlements, it is icportant that the Reg1.:-;
consult with Headquarters and the Department of Justice be: -
entering into final negotiations with a bankrupt party. --
abbreviated referral of the bankruptcy aettlesent agreere
acceptable.
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9832,8
-' V ! T ~~ -'- _ E '•' 11 ~. P * IS 75
Since the Kay 24, ^1954 --jiiar.ee was iss_ei re-ariir.:; CE?::,;
er.f crcer.en.t ajair.t bankrupt parties, there has been an increase
ir. .judicial activity in the area cf environmental bankruptcy
actions, particularly in cases involving hazardous waste sites.
In addition to several significant District Court and Appellate
Cocrt derisions, the Surre-e Court has issued two signif icart
ru lines ir this area i-. Oh 1 s v. y overs, 105 S. Ct. 705 (1?5!5 ,
ar.d Kidlar-tic Satic'-a'l Bark v. Kew Jersey Departr.ent of
E -. v i r er.r e -. t a 1 P r c t e r t i gr., 54 U.S.L.w. 4138 (U.S. Jan. 27, 19E£.
("Quanta Resources").
1. Aot: y » t i c gtay.s
Several courts have adopted the Agency's interpret.at i r-
that the auLcr.atic stay prcr/isicr. cf section 362 of the
5ar>.ruptry Code does net apply tc actions taker, by a gcverr.-
r.ental urit tc prevent environmental harrr.. In P_enn Terra
-1 d. v. Department cf Envircr.re-.tal -Resources, 733 F.2d 26",
2"4 (3d.Cir. 1964), the court held that acticr.s taken tc
"rectify harrful environr.ental hazards" were an cbvious
exercise cf the State's authority under the police power a-:
therefore' were exer.pt it or. the automatic stay. The Suprer^-
Court, in a footnote to the Kevacs decision, suggested tha-.
Per". Terra ir.ay be applicable to hazardous waste cleanup ar-
1C5 S.Ct. 705, 718, n. 11.
A recent CERCLA decision regarding the Filrr. Recovery
site in Illinois was, also favorable to the Agency on the :
cf the autor.atic stay, United S *. a •. -es v. B.R. ^acKay & Sr-
-------
Jar.. .17, <9rr' .
decision the court held that CE?C1A cost recovery ec'ticrs. fell
squarely_w:thir. the governmental enforcement except ion:'t.o'; ;.th;e:'
autc-st'ic stay. _!_d. at 7.
Other recent decisions indicate a split of authority on the
is«jr of whether t!"e autotatic stay applies to enforcement*. a;c't-:irr
brought pursuant to CERCLA. In United States v., .ILCO, i^B'xR.
ir*f (V.*:. /Is. '?c!!>. E?A asserted c!sirs pursuant to PC-.-. ' •
$3008, CWA SS301 and 3^9, and CF.RCLA 5106. TherCourt's decision
in the ILCD csse stated clearly that the CERCLA S136-claims were
exerpt fror: the autcratic stay because the gove.rnaentu's cc-rpVair.t
which sought a- c^urt order compelling ILCD to r^e-edy env-'ir-c-.nrer.ti
har-, ccnstitutpd an equitable action to prevent future vanV
rather than an action to enforce a money ludgsent. Reoc|--> ;
that the debtor would have to expend funds in order?..to si:.:*'.-
the requester rendatory relief, the Court indic.£re.'d.'-t;ha.:
cc-plrance vith environrer.tal laws is of greater"- irrortr.- - •
the rights of the creditors. The ILCQ decision cites, ]_r~— •'.-••
733 ?.2d 277 and Kcvacs in support. See a.so. Ir the ^ .--.••
Hilde-an Indus. . Inc. (Ear.Vr. N.t. N.J. Dec. 17, 198-s •-'-• -'
sampling taVen pursuant to an adainistrative order fal.
the enforcecent of the police or regulatory powers of •
governmental unit). But see. Ir, re Thc^as Solvent Co '...
-------
- 13
9 2 3
*_. r-r;. ::: I".'-' rar./.r. *.::. r.ich. '.;:-; (aut;-::-. :c 5:5
heir :;:".i:c:le tr y.ichigar.'s atte-pt to er.frrce a pre-rer.-r-
clear up in/, u~. cticn).
I-frrce-er.t actions brought pursuant to the Resource
Corservation end ?,eccv«?ry Act end its applicable regulaticrs
have also been found to be exerpt frotc the autooatic stay ir.
rr?r cf the r?ce-.t dec: Piers. The Bankruptcy Ccurt ir. _I_r r e
"'"" e?!f~~ citt.c^yrc f * * *! Crrr. et fi1. v. f-ited ?"£*"es
Ervlrrr^ertal Prctecticr, Agency and Ralph W. Slskind,
Nc. R3-T93 (?GH) Nr. 5;-::25 (Barkr. V.D. Penn.'Oct. 3<, 19E:
gra-rec* the I'riced Stares' a-otion to disciss the cosplaint
tc er.fcrce the au:cra:ic stay. In that decision, the-court
relc? that the United States can: 1) proceed to enforce RC?--.
2} seeV. to determine the existence of any violations of RC?_-
2^ speV tc rectify thrs-e vie lat icr.s ; and ^} seek the entry ;:
rcney j.urgrer.t or. any' per.clnes assesses (tut carir.ci feet-"?: :
er.frrct* su.ch --udErer.t without an. order frcs the court).
Sirilarly, on appeal to the U.S. District Court for :--
Western district cf Texas fret: the Bankruptcy Court, ir, _!_^
the y = tter cf CcrTnvealth Oil Pefiring Co^. . Inc., Office'.
Crrrittee-cf Unsecured Creditors end the Indentured Trust-
United gt.ates Frvircnrer'tal Protection Agency. No. SA 85-"
(W.D. Texas. Nov. 5, 1985), t-he court held that an EPA e-
cer.t action to require a debtor to comply with RCRA1 s Par
recr.irererts was an exercise cf the Afency's regulatory :
-------
- . ! 2
= : r i -. f '. : r cr" t". ~ s - *- 3- a *.. : s: s .• .. -\~ - ' ' c
:;. ;-r.r tc ccrply with env: r onrsntal laws d=*s net -c-. ,-*r
ntr a" e--f ;rce-er,t cf a r.cney judj-.ent which would be auto-
= ;ir = ..v stayed, si i^ _^_,_ at 3. See alsc, V-itef Sta-.es v.
;•::-, 43 B.F. icio, 1021, 1:24 (N.D. AU. i5S5)r :-. re =3yr-
orrel a>d Tr.r Cc. . Ir.s. , Nc. 82--?4*4T, slip c?. at i (2'. S
* 5
_i~~2iic stay prcr.'isic-.s, ',' ~ : *. e . States v . E-.erty Ir.t 5 r~ st : ~.~
;' i 1 » - t i c Nati2~.il r2~«. v. sew J e r s e y Z.'c p t . cf'.u
E " v •. r r -.~ e - 1 a 1 F r ct e r t : ;-. , (";»2~ta Seso-rres") 54 V . 5 .;1..^.' - . -
fJs-.. 2", 15 = £;, the S-prerr.e Cc-rt heii that "a trustee r-i; - •'
ara-.irr. prcperty in ccr.trave--.ti en cf a state statute cr re ....--
-iiety frcr. identified hazaris." The Co-rt qualified th: •
cy statin; that this exception tc the a.banior.r.«r.t po»-er -
apply if the state statute did not address an 'ijr.-.inent 2
identifiable harr," cr if the vitiations alle;ed were "sp-""
cr indeterr.inate future" events. Id. at n.9. The C'ourr.t..-; .
-------
:.-. = Crur: ,-; d s;ve some clue when it described security £;-:;-£.
dr Ei-s?* *«-.- dikirg repairs, sealing deteriorating tanks, s-.j
r-=-.r.-;r=. -v;l:sive sgerts as "relatively zir.cr steps.'" V: it
r.3.
Frier to the Sup.rere Court's ruling, abandonment de:is::r.3
:r. tr.tr ".ewer courts were rixed. Compare , In. ?_f_ ">•?•''--" "'"f'...-: ='-
I"c. . No. 5*1-?-f (Eankr. N.D. Ohio. Jan. 31, 1965) (the trustee
was e'er.ied permission to use abandonment to avoid CEKCLA liabil-
ities: with, "atarrurt Dyers, 13 B.C.D. 321 (Bankr. D. Vt. '-5:
'aha- --r-er.t cf contaminated, property .allowed) ; !n rg '>:.--
?:rsr !rr- ^""' y*te! . 13 ?.:.:. 29 (?anV.r. D. Mir.r... ' =;: :-£-*
*
2. ^ls:var_ee
The Su;rf-~r Crurt rfrertly addresser the issue cf v-?;-rr -.
bar-:rurt:v discharge relieves the debtor frcr fulfillir.2
envirrnr*ntal duties that cay have arisen prior to f;l:-* :;-
petition in bankruptcy. In Chio v. Koy;acs . 1C3 S. Ct. "":
''-:5' the Court.stated that a pre-petition injunction f:r
:f the Chez E'vT.e hazardous waste site is a dischargeeble •--•
where the debtor had been dispossessed of the property E--
the State was seeking nothing rrre than payr.ent of r:n?v
tne cleanup. .However, the Tovacs decision noted that &-
affir-ative injunction not to bring waste to a site (w- .
not involve an expenditure cf rcney) was not a discharsr
debt. The Agency has taken the position that the Kcvacc
-------
s" c*-If ce £C"~ ". i-e 1 c" !•'•' * - *.". ~ s e s '. t e s »~.e re the
An sr_2".l/ narrc--« : - :*rpr-tat: en car. r-e race ci tr.s c'scisic.n
in :-. re rcr:~sr~, Sc. £4- 4:-4-BK-J-3? (3an%<.r. H.D. Fla.
Fer. 4, :>•: , r e^.;' j« .A pr*--ei it: on ir.ju-.cti cr, ts rastcre- .
r.arshiar.i wr.ich tw.e dei-t;r r.a- illegally excavated was1 alsr r.eli
tc te ?jisck.ar-e3i:le ever, tr.-_;h t^= iebtcr was net dispossessed,
rr:.;.se t.-.e resr era t i c~. ?rr;ert • wr.-li' have re^uirei/ar.' expe.-.:.*..:
ci r.cr.ey a~i *. = £ r.z; £~ affirr.ative ir.^ur.ction. In :cor.-.rast,
EPA er.f crce-.er.t a.cticr.s cr rl'ea*^p ccrpliar.ce orders', ecu Id re -.
characterized as ar. affirmative ir. junctior>.).
A ? e c c*1-' er'«' rf P^srr^ST Crs"s ~ A - ** i r*. i E t r s t i %* e ~
Exr 5" ses •' . ,
The Agency has successfully a'r;.ei that the EPA's resp :- ?:-,
costs are necessary tc preserve tne estate c£ the (iet.tcr a-:
should r-e acccrded the pricri:y allowed fcr administ-r.ative
Cc.rt neld that the estate was-a 1-iacle party under CERCLA,~, ,-
§10" and that the CERCLA liati'. i-ties cf the estate were- •-.:<••.••
entitled tc priority treatment as an administrative 'exp.ervs*..- ,
•rvacs 1C5 S.Ct. at 711-712.
Tne Supreme Court's decision in Midlantlc Bank rr.ay ••£•=
to sjppcrt the hcldinc in T. ?. L r-; that CE3CLA liKb:i-.l-i't.:ve..-
cf the estate are administrative expenses. Alth-ou-h -the;. :.• -
attempted to reserve tne administrative expenses
-------
:-- Cr-rt'-s nrldin; t.-.at :r.=:e?s -.5:
"act.al, necessary cost and expense cf preserving the estate."
11 ..5.C. 5~5:3's'f 1 ) (A) . See also. In the Matter of ThVss
. Sclve--: Cc. , S3. S?:-H 4-CC543 (Sankr. s,D. Mich, Jan. 2, 15 = -;
(court crier requiring construction of a fence on cor.tarr.i rated
property owned by the debtor stated that cost of construct! in
ar, ai-ir.istrative exper.se pjri.ar.t tc SiCS;;, ci the E£-. .r.i . -
Code); Ir re Ge,r'er Paesche t Frey Co. , (Bankr. E.D. Wise.)
(clear/jp ccsts are administrative expenses); I", re Laurinhere
C' * '"— '~~ >c— c — si — r^"** fvirv tor1 c a ^ »• ^a i o o * >
« - >../»> ...».. r r>v-, s-.^~ •»._.* i .T . u. !S.L. sept. 1 < > 19 s
-------
.• i '.-. . •- •: i :: re .1-1 nary inunction is properly an ai-.inis-
-•--•- -. . ; - .3 - T .1
rrsts t'-'r-x:'-. property liens. In :*. re £er; "helical' 'Cc. , :-r..
rase Sc. 52-5-i::=52 Oar>'
-------
There rave reer. severs! -ew er.forcerer.t theories iev.el:;*:
by the E?A Kegicnal Offices, the Department of Justice and the
.Office cf Irfcrcer.ent and Ccrpliance Monitoring in the area
•of environmental enforcement against bankrupt parties. Two of
.these legal theories tray be particularly useful in the cases
involving insolvent hazardous waste handlers.
i . V't^^rsva! of Ppferercf to District Covrt
In deciding whether a bankruptcy court is the appropriate
forum there are two issues which are relevant: whether the
proceeding is a core proceeding under Section 157(b) and,. if
so, whether Section 157(d) applies.
The bankruptcy courts have the .authority to render final*
decisions on all core proceedings listed under the bankruptcy
code, However, both cor? and non-core proceedings, such s;
:"c;:_i? : ; : r rrf r.s: i:~ £ cf liability fcr environrental dizzm
itay be referred to the federal district court. Pursuant t:
11 U.S.C. !T57(d) the district court is required to withers-
a carter from bankruptcy court when its resolution will i-. .
consideration cf the bankruptcy code and other federal .&'•• -
regulating organizations or activities affecting -inters: -.-
coxserce.
.In United States v. TICC. Inc.. A8 Bankr. Rep. 10lt
Ala., 1985), the district court held that 'Section 157(c
to, and required withdrawal fro= the bankruptcy court c:
asserted by FPA under CERCLA end other environzental s:-»-
-------
•relied cr. vere ''dearly.. .recced in the cc~zerce clause - ar.i
.are the t.ype cf laws Congress had In cind wher. it enacted the
rar.dattry withdrawal prevision." rd. at 1021. The ccurt i-r. JJ
clearly stated that withdrawal was only appropriate if th.e'res;
tion of the c la its required substantial and caterial considers:
rf rrRriA: rot tvst the Cr?TLA issues were "cerely incidents!"
for resclut-trc-f'he Better. ?ef t'.t~, briefs filt-r r.v'"the
governrent in In re Jchns Varville Corp,. Ko. 85-6828(A) (S.D.
v v t> g ^ 1 n i o g ^ •> ;
.^•^^^^^•^•'•(TC^.'* _ ; .
Seeking withdrawal frsi the bankr-jptcy court to .the: ;,
district court will allow the Agency a nore .favorable. :feruz>.'
*
which is experienced in hearing cocplex issues of. fact, and.
will allow the Agency to obtain a judgaent enforceable in tr.
bar.kruptcy court.
2 . I.' i s : !* erg e _c f 1. e b : s
All pre-petition debts are autocatically disrissed wr.e-
the debtrr is granted a discharge in bankruptcy, 11' U.S.C.
5727(b), 11 U.S.C. S502, 11 U.S.C. «1U1(d)(1)(A). The def:-;
"cf a pre-petition debt includes any action where a clai=:c,,r
where a potential clair. existed before th-e debtor;, filed f,v:
bankruptcy (1.e, where a creditor could have •ued~..or..:coul•:.
file;4, a proof of claic) . Discharges are available in. ir-.
bankruptcies (?727(b)) and in Chapter 11 reorganizations
(51 U1(d) (1) (A)1. They are not available in corporate or
-------
.e
proceedings. or. ir; Crspter'i' lic^:;;-. -
his raises three ;--esrirrs f;r tr.e Agsr.cy
} what type of bankruptcy proceeding is involved? 2} wher. cii
the debt "arise? and 3) is the debt subject to discharge?
'Firs:, if the Agency did not incur response costs at & B:~
prier to the bankruptcy filing, the Agency cay wish to argue
that the debt (or potential debt) did not arise until after
cc~zer.cer.er.t cf the b.ar.krupLcy edicr.. The A^sr-cy ray then
preserve its right to pursue an action against the pdr^y after
discharge. However, a discharge in a Chapter 11 proceeding ^tay
be read broadly to include all claias that arose pre-cor.f irzatii
«11£l(d). The issue of the proper treataent of post-petition.
pre-cor.f irration cla.irs is currently being litigated by the
Aeency in the actior. against Johns Manville at the Iron Hzrse
Park site in North Bill erica. Massachusetts, In re Johr.s ygrvil
N=. Bf-f =28rAs. (S,r. N.V. Dec. 30, 19B5).
It tray be advantageous in a Chapter 7 liquidation case ::r
the Aeency to argue that the CERCLA cost-recovery claia "sr;>-
pre-pe: i tion , when the environmental hare first occurred cr •--.
discovered, even though response costs were not incurred u-::.
after the petition. This is due to the fact that the der:
does not survive the bankruptcy and therefore recovery d . •
liquidation of the estate, as a pre-petition creditor, if
only chance for recovery.
Second. If the debtor is ar. .individual , or corpora:
partnership urder Chapter 11 Reorganization, the Agency -
to take the position that eve- if the debt is a pre-?et
-------
Cr'rt. I?A:S els;- is r.;t su:;ect tr discharge 3*: = -_s? 1: :-
under cr.e cf the stater exceptions to discharge set cu.t in '•
I'.S.C. I523(a). The exceptions that would be applicable are
these which' apply to fines cr per.alties payable to and f:r :-•?
benefit of a governmental unit, 11 U.S.C. 5523Ca)(7), cr frri:
willful or r.alicious injury to property, 11 U.E.C. 5523(a')(V;.
Tn cases of n:srepresentatien by the debtor, the discw£rge'c=-
&lsc be tlcc'r-.tc by: proof that the debtor c.aie ir&ucuier.t
staterrents rc-gardirg its financial condition; failure by the
debtor to produce bccV.s and records; or failure ,by' the debtor
to explain losses, 11 U.S.C. S523(a). -
v »•:'..:''
CONCLUSION • •
^^^^^"~ , »
Future CEr.CLA bankruptcy referrals will be carefullvt- v
revieved by Headquarters to detercine if the action rreriti
referral to the Department cf .Justic-e under the five cr;:-rr.-.
Sst cut in this guidance. Settlement with benkrup.t: res: : - •
parties is encouraged and, consistent with the Agency,'s,;;-, :/•---
< ' ','' • ' *" •v>
settler.ent policy, the Region is given greater flexibi.li,"
aut'-rrity to settle claitts against bankrupt parties, f*-
4udicial decisions and enforcement theories developed .!::•-
the Department of Justice will strengthen the Agency's .
position In those cases where the Agency has decided-1.?,-
an enforcement action against a bankrupt party.
-------
- :3 • 95:2,5-
• vi ~ • T > • r » • — i — * - *;
This £-jidar,re updates the procedures contained ir. the
existing. banXruprcy and cost recovery policies. All future
hazsrc'cus vaste bar.kr'jptcy referrels a-d settlements should
follow this guidance. If you have arw questions concerning
these procedures please contact Heidi Hughes of tty. office
ccr F. Kerry K*t :cw.t I
David T. Buente
Gene A . Lucero
-------
CSV."!?. rirective Kc. 5-32.12
THT SUPrRFlTND CC?T RirOVEPY gT
Office cf Solid Waste and Emergency Response
U.S. Environmental Protection Agency
July 29, 1588
-------
Table of Contents
Purpose of this Guidance ......... < ....... . ................ .1
I. Program Priorities and Kar.ager.ent ........................ .2
II. Case Selection Guidelines. ........................ .......... 7
III. The Cost Recovery Process for Removal Actions .......... ..12
A . Pre-Removal Cost Recovery Activities .................. 12
1; The 7cter.ti5.lly Responsible Party Search
2. Development of the Administrative Record
3. Notice, Negotiation and the Issuance of ,,
Administrative Orders :
B. Cost Recovery Activities during the Removal Action.... 17
1. Documentation of Activities and Cost Accounting
2. Supplemental PR? Search
C. Fcst-Rer.cval Cost Recovery Activities .............. ...19
1. -Evaluation and Completion of the Potentially
Responsible Party Search
2. Cost Documentation
2 . Demand Letters
4. .Negotiation
5. Settlements
6. Consideration of Referral in the Event of No
Settlement
Cost Recovery Process for Remedial Sites ................. 30
A. Pre-Remedial Cost Recovery Activities... ............. 31
1. The Potentially Responsible Party Search
2. General and Special Notice Letters and
Negotiations for a PRP Remedial Investigation :-.. . • '
and Feasibility Study "•?•'.
3. Settlement for PRP Remedial Investigation/
Feasibility Study
B. Cost Recovery Activities during the Remedial
Investigation/Feasibility Study ............ • ......... 35
1. Documentation of Activities and Cost Accounting
2. Supplemental PRP Search
-------
UNITED STATES ENVIRONMENTAL PROTECTION
WASHINGTON. D.C. 20460
OFFICE Of
JUi ?Q '-" SOLID WAST8 AND
OSWER Directive No. 9832.13
MEMORANDUM
SUBJECT: Transmittal of the Su,perfund Cost Recovery Strategy
// "*>"; /- f^
rrz-y.: ' :. .r.rrcr. rcrvsr v/;Li^ttir'
c/M - *.s*-stant Administrator; ii r\\
u . v
TO: Regional Administrators, Regions I-X
Attached is the final Superfuns Cost Recovery Strategy. The
Strategy sets forth the Agency's priorities and case selection
guidelines, emphasizes the advance planning necessary to initiate
cost recovery actions within the Agency's preferred tine frames,
and describes the cost recovery process for removal and remedial
actions.
Cost recovery is one of the highest priorities of the
Superfund program. This document should assist you in advancing
the Agency's objectives.-
Attachment
cc: Directors, Waste Kanaoenent Divisions
• Regions I, IV, V, VII, VIII
Director, Emergency and Remedial Response Division
Region II
Directors, Hazardous V.'aste Kanaoc-mar.t Divisions
Regions III, VI ' ". .
Director, Toxics and Waste Management Division
Region IX
Director, Hazardous Waste Division
Region X
Directors, Environmental Services Divisions
Regions I, VI, VII
Regional Counsel, Regions I-X
Thomas L. Adams, Assistant Administrator for Enforcement and
Compliance Monitoring
Charles Grizzle, Assistant Administrator for Administration
and Resources Management
Roger J. Marzulla, Assistant Attorr.-jy General, Land and
Natural Resources Division, DepLirtment of Justice
-------
OSWER Directive No. 983*
THE SUPERFUKD COST RECOVERY STRATEGY
-e of Solid Waste and Emergency Response
S. Environmental Protection Agency
July 29, 1988
-------
Table of Contents . ,
Purpose of this Guidance 1
I. Program Priorities and Management 2
II. Case Selection Guidelines .: ..7
III. The Cost Recovery Process for .Removal Actions....'.. 12
•»' .
A. Pre-Reinoval Cost Recovery Activities. ."'... 12
1. The Potentially Responsible Party Search" '.:
2. Development of the Administrative Record'"
3. Notice, Negotiation and the Issuance of
Administrative Orders
B. Cost Recovery Activities during the Removal Action....17
1. Documentation of Activities and Cost Accounting
2. Supplemental PR? Search
C. Post-Removal Cost Recovery Activities .19
1. Evaluation and Completion of the Potentially i
Responsible Party Search
2. Cost Documentation
3. Demand Letters
4. Negotiation
5.. Settlements
6. Consideration of Referral in the Event of-'No ;.;. ••
Settlement
IV. Cost Recovery Process for Remedial Sites ......30
A. Pre-Remedial Cost Recovery Activities .31"
1. The Potentially Responsible Party Search:;.;.
2. General and Special Notice Letters and
Negotiations for a PRP Remedial Investigation •
and Feasibility Study ' '
3. Settlement for PRP Remedial Investigation/
Feasibility Study
B. Cost Recovery Activities during the Remedial
Investigation/Feasibility Study. 35
1. Documentation of Activities and Cost Accounting
2. Supplemental PRP Search
-------
3. Development cf the J.dr.ir.iEti-st _ve Record
4. Special Notice Letters and Negotiation for PRP
Rer.edial .Design and Remedial Action
C. Settlenent for PRP Remedial Design and Remedial
Action 38
1. Full Settlenent.
2. Partial Settlement
3. No Settlenent
D; Cost Recovery Activities during the Remedial Design
and Remedial Action 41
1. PRP RD/RA
I . ~ *.r.~ - T ir.cT.z&~ F.r/r.ft
a; Ccst D=C'-r*.e.r.*..i'.icr.
b) Demand Letters
c) Consideration of a Referral in the Event of
No Settlement
v. Existing Ccst Recovery Guidance .47
ii
-------
, . . OSWER Directive No. 9832.1
Purpose of this Guidance
This guidance document is intended to provide a framework
for planning and initiating actions to recover Federal funds .
expended by E?A or a State1 in CERCLA response actions. Part I
discusses 'general cost recovery program priorities. Part II
identifies case selection guidelines to aid managers in setting
priorities for case referrals for.the most efficient use of cost
recovery resources. Parts III and IV identify activities
required to support the development of cost recovery actions for
each site where the Agency spends Fund monies in response
actions: Part III sets out the cost recovery process"..for removal
actions; Part IV sets out the cost recovery process for remedial
actions. Part V is a bibliography of guidance documents related
to cost recovery.
V While a State may be the lead agency for response actions
taken at a site, EPA retains responsibility for pursuing recovery
of Federal funds expended.
-------
GSWER Directive No. 9832.13
Part I. Program Priorities and Management
The policy of the CERCLA Enforcement program is to obtain
response actions in the first instance by responsible parties,
rather than by the Environmental Protection Agency (EPA) or a
State.. However, there have been and will continue to be cases in
which the Agency will respond to releases using funds from the
Ks.2a.r=.--* Suistar.cfcs superiund (the Fund) for site response
actions. The recovery of Fund expenditures through the cost
recovery prcgrar. i« cr.e cf the highest priorities cf the
Superfund program. The costs associated with such Fund-financed
response actions are recoverable from''the party or parties who
are liable under section 107 of the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended
{CERCLA, or the Act).2 CERCLA provides for the recovery of costs
through judicial actions under section 107 of the Act, as
ccr.ponents cf settlements for prospective work under section 106,
or 122, and in administrative settlements under section 122.
The priorities and objectives of the cost recovery program
are to: l) maximize return of revenue to the Fund; 2) initiate
2/ Section 107 provides generally that past and present
owners and operators of a site, and persons (e.g., generators)
who arranged for disposal or treatment of, end transporters who
contributed, hazardous substances to a site, shall be liable for
all costs incurred in response to a release or threat of release
undertaken by the United States government, a State, an Indian
tribe, or any other person, for damages to or loss of natural
resources and the costs of assessing such damages or loss, and
for costs of any health assessment or health effects study
carried out under 11.04 (i) .
-------
OSWER Directive No. 9832.1
necessary litigation or resolve ripe cases for cost recovery . >••;
within strategic time frames but no later than the time provided
under the statute of limitations; 3) encourage PRP settlement by
implementing-an effective cost recovery program against .non-
settlers (i.e., recalcitrants),- and, 4) use administrative";;.
authorities and dispute resolution procedures effectively, to
resolve cases without unnecessary recourse to litigation../ ''"'?./
In managing the program and achieving these objectives,.; EPA ;
must ensure that each response action (and supporting .case ,
development activities) undertaken using Fund monies ^proceeds in
a manner that will optimize its cost recovery potential. . (See
Part III, Cost Recovery Process for Removal Actions, and'Part IV,
Cost Recovery Process for Remedial Sites.) In addition, .-EPA must
evaluate, each ripe response action in a manner consistent with
this strategy to determine when, whether and how to proceed with
cost recovery.
The stage at which a case becomes ripe for cost recovery is;
an important concept. A conventional removal is ripe when-/it is:
completed.3 A remedial is ripe concurrent with the initiation of
en-site construction of the remedial action. (See footnote 5,
page 5.) • !.V";
3/ Although a RI/FS way be considered to be a removaT, cost
recovery generally is pursued as part of remedial action cost. {^
recovery. •' " •'''-'?" .'•
-------
CSWER Directive No. 9822.13
Since resources available to the cost recovery program are
limited, EPA roust set priorities and select and plan actions in a
manner and at a tine which will provide for the r.iximum return to
the Fund. A major factor in setting priorities is the amount of
funds involved. However, statute of limitations may warrant the
pursuit of a case of lower dollar value before one of higher
value. Priorities are discussed in Part II, Case Selection
Guidelines.
vr.cre r.^i.-.tle, an attempt shculd be raie tr "settle ccst
recovery cases administratively under the authority provided in
CZPCLA §122{h). Use of this authority should result in cost
recovery case resolution fcr spr
-------
OSWER Directive No. 9832.1
below, within the Agency's preferred tine frames5 will ensure
that the best cases will be filed well within the required
statute cf limitations. • *
Finally, the reali2ation of the program's objectives depends
on the effective management of all aspects of the cost recovery ,••
program. .Each Region must have a well-defined process in place
to ensure coordination among the Superfund program/enforcement
office, the financial management office, and the Office of
Regional Counsel (and Headquarters, where appropriate}. The
process should also foster the efficient management of the
elements of the cost recovery, program including systems to cover
the following:
i
a) the on-going review, selection, and referral of ripe
cases; ' ;, -=. ... •
b) the asser.tly of cost documentation and the issuance ..
of der.ar.d letters;
c) tracking and collection of oversight cost recovery
in settlements?
d) the review and documentation to close-out cases for
5/ Cost recovery actions for removals should be referred to
the Department of Justice as soon as possible after the action
has been completed but in most cases, not later than one year
after the completion date. Cost recovery actions for remedials
should be referred to the Department of Justice at the tiae of
initiation of physical on-site construction of the remedial
action. See the June 12, 1967, Memorandum entitled Cost Recovery
Actions/Statute of Limitations. OSWER t.r«Ctiv« No. 9832.3-1A. , .,
-------
OSWER Directive No. 5832.13
which cost*recovery will not be pursued;
e) the effective use of adninistrative settlement
authority;
f) the tracking and follow-through of active cases
{those in litigation); and,
g) the establishment and collection of accounts
r sc.ti.vailc..
Effective information management on the status of each ripe case,
ccvrled vith forward planr.ir.g, is essential. Timely and accurate
reporting in information management systems, especially CERCLIS,
is essential for management of the above processes and the entire
cost recovery program.
The Agency must continue to utilize cost recovery
enforcement authorities to create an incentive for settlement and
disincer.ti%'e for refusal tc settle. Ar. atmosphere of risk of
cost recovery litigation will promote settlement for PRP response
actions as well as settlements for cost recovery.
-------
OSWER Directive No. 9832.1
Part II. Case selection Guidelines
As the Superfund program natures, an increasing number of
sites are r.oving beyond the early stages of the Superfund process
and into the remedial design and action phases, where greater '
amounts of money are spent. The vast majority of potential''
reimbursement to the Fund in future years depend on recovery of
funds associated with these sites.
Regions must make management decisions regarding which sites
to refer for judicial action under 107. The following case i '
selection guidelines, when applied to candidates for referral',
help ensure that resources are mainly directed towards those '
cases which have the highest potential for replenishing the i
Fund. The guidelines are generally, based on the amounf of money
:-
expended at a site and take into account its recoverabili.ty •• '••
(i.e., strength of the case, financial viability of--PRP(s-)'.)'-- '•'
Generally, the sites that will generate the largest returns
to the Fund are ripe remedials, defined as those where the-..
remedial action has been initiated-. T: These sites should be •'
considered high priority for referral. A cost recovery referral
should be scheduled for every site where a federally funded
remedial action is planned and there are viable PRPs. The action
should be filed no later than the initiation of physical on-site
\ - • !'
construction of the remedial action. (Note that in order to^meet
\ .
this timing requirement, case preparation activities-should begin
early. See Part IV, cost Recovery Process for Remedial.Portion
7
-------
CSWER Directive No. 9832.13
of NPL Sites, for further information.) The Agency will defer
the filing of a remedial action beyond this date only in limited
circumstances fcr technical cr strategic reasons,6
The second category of sites to which resources should be
directed are. those NPL or non-NPL sites where EPA has completed a
removal acticn (including an expanded removal action or ERA),
remedial Investigation/feasibility study (RI/FS), or an initial
remedial measure (IRM), where the total costs of response are two
hundred thousand dcllars or greater, and the possible statute ci
limitations deadline is approaching. Although the Agency's
position is that the SARA statute of limitations applies only to
these response actions initiated after the effective date of SARA
(October 17, 1S86), the Regions should refer all cases well
within the SARA statute of limitations time frames, whether or
not the action was initiated prior to the effective date of SARA.
where a conflict exists between referring a case in the first
category and referring a case in the second category, the
referral of cases with approaching statute of limitations
deadlines and costs greater than two hundred thousand dollars
<•
should normally take precedence over the referral of ripe
remedial sites. Pre-SARA cases in the second category that are
6/ For example, a Region may desire to delay the initiation
of a cost recovery case until after evaluation of the success of
implementation of an unproven remedial technology.
-------
OSWER Directive No. 9832'.!
beyond the time frame of the SARA statute of limitations should
be referred as socr. as possible.
A related category of sites to which resources should be ' '
•> * .-
directed are those NFL or non-NPL sites where EPA has*" completed a
removal action and the total costs of response are two hundred
thousand dollars or greater. Sites in this category are ...-....,
distinguished from the above category because they are not
nearing a potential statute of limitations deadline. These cost
recovery referrals should be made no later than twelve ..months
after completion of the removal action. In some instances,
strategic reasons r.ay warrant that EPA defer filing for cost
recovery of a removal action until the remedial action is
initiated.
- '"•*,
The fourth category of sites are those where there has .been
a partial settlement providing the government less than full
relief and there are viable non-settlers. These actions should
be pursued promptly as a disincentive to non-settlers.
, i * *L
( * ""
The fifth category^cf'.isites" are those where total -costs of
response are less than twof hundred thousand dollars. 'Consistent;
with available resources, cost recovery referrals should be
considered for these sites where evidence linking the PRPs: to -the
site is good/ and PRPs are recalcitrant, or the case may be used
to create good precedent or an example that EPA is willing to
pursue costs when the merits1 of the case warrant it. Each1. Region
>-
should plan to bring some small cost recovery actions each year, ..•
9
-------
OSKER Directive No. 9832.13
primarily to maintain an atmosphere of risk to PRPs associated
with sites with total costs of response less than two hundred
thousand dollars.
Within each category above, decisions' should generally be
made on the basis of an evaluation of the factors identified on
pages 26 and 43, below, which will provide an indication of the"
strength of the case. This recognizes that cos:* recovery nay not
be pursued for PRP viability and evidentiary reasons as well as
t:*.e -sr'< cf A~6~cy resources fcr scr;fe szali ceses ar.i
bankruptcies.
The guidelines above do not relate directly to bankruptcy
referrals because they often present particularly difficult case
selection ar.d rr.anager.er.t issues. The Agency is frequently
cperarir.c under time constraints with imperfect information.
Nonetheless, it is important in bankruptcy cases to make reasoned
and inferred judgments on whether a bankruptcy action is worth
pursuing, given other demands on Agency resources. This
requires, at a minimum, an evaluation of the following factors:
the amount ofKfunds to be recovered; the case against the FRP and
the possibility of full recovery from other PRPs; the likelihood
of significant recovery given the assets and liabilities of the
PRP (e.g.! bankruptcies at multi-generator site's where viable
PRPs remain as compared to bankruptcy cases at sites where the
owner/operator is bankrupt and no other viable PRPs exist); the
claims of secured and unsecured creditors; and, the likely Agency
10
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OSWER Directive No. 9832.13
resources involved. When the likelihood of significant recovery
cor.pared to resource utilization in pursuit of the recovery is
high, bankruptcy referrals should be prioritized in accordance .,.
with the categories above. The Revised Hazardous Waste
Bankruptcy Guidance. May 23, 1986, OECM, contains additional ~ ,•
information regarding the pursuit of bankrupt parties in
hazardous waste cases.
11
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OSKER Directive No. 9832.13
Part III. XHE COST RECOVERY PROCESS FOR REMOVAL ACTIONS
Before, during, and following a removal action there are
specific steps that the Agency7 Bust take to facilitate
settlement or maximize the potential for recovery of funds in any
future cost recovery action. The extent of each of the steps nay
vary depending upon the cost, size and duration of the removal
action. The tiring may vary depending upon the exigencies of the
situation. This section identifies and explains each of the
stc-^ -£:•:£.-. i- '.'--• rer-val process ",z facilitate =cst re^cvery.^
A. pre-Removal Cost Recovery "Activities
Pre-rer.oval activities that nay be carried out in
preparation for future cost recovery actions include the
initiation of the potentially responsible party search, the
development of the administrative record, notice to identified
FRPS and negotiations with those PRPs who are interested, and the
issuance of administrative orders. While each of these
'/Throughout Parts III and IV, the terms "Agency" and
"Regions" are used frequently in discussions of activities to be
conducted. When a State has entered or will enter into a
cooperative agreement with EPA to conduct any activities on a
site, the Region must ensure that activities identified in Parts
III and IV are conducted by either EPA or the State, as
appropriate. Refer to the Interim Fiqal Guidance Package on
Funding gERC^ State Enforcement Actions at NPL Sites, OSWER
Directive No. 9831.6 for additional information on activities
that can be undertaken by States.
8/ See, also, Chapter 5 of the Superfund Removal Procedurfs
Revision Number Three. OSWER Directive No. 9360.0-03B.
12
-------
OSWER Directive No. 9832.1'*
activities is an integral part of the broader Superfund program, '
each has a special significance in light of potential cost •: - '
•'recovery actions.
* • ,-t
A.I. The Potentially P.escsr.sible Party Search. The , : •
•identification of potentially responsible parties (PRPs) in the:. :.
potentially responsible party search is central to all cost •,
recovery actions. The search should uncover potentially liable^ "
parries with whom EPA may negotiate and from whom EPA may seek
recovery of costs in the future, as well as develop the evidence •
of liability that ir>ay be used in a judicial action. While the
FRP search initiated following site discovery may continue
throughout the Superfund process certain PRP search activities •
should be conducted prior to the initiation of a removal action.
The extent of further activities nay depend on the expected costs
cf the rerr.ovai.
At the tine of discovery of a problem site, a preliminary"
FRP search is conducted by the Agency to identify the
cvner/operatcr of a site and other readily identifiable PRPs.
The completed PRP search for a removal action should include the:
following tasks, as appropriate: history of operations- atrthe; :
site,* a title search of the site property; Agency record . . " •
collection and file review; interviews with government officials;;
PRP status/PRP history; records compilation; issuance of CERCLA
104(e) letters/RCRA 3007 letters; financial status; PRP name and
address updates; appropriate identification of generators and -. :
13
-------
OSWER Directive No. 9832.13
transporters; and, report preparation. Any or all of these tasks
may and should be initiated prior to the initiation of a removal
action where tine permits. However, since many removals are of
an emergency nature, and there is often little time prior to
initiation of the action, all PRP search activities will not
commonly be initiated prior to the removal. Each PRP search task
shc-Jld be -initiated at the earliest pcssirlt yir.i
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OSWER Directive No. 9832.13
additional PRP search activities. At a minimum, a title search
of the property should be conducted. If total costs of the
completed removal exceed two hundred thousand dollars, additional
PR? search tasks should be conducted in anticipation of further
enforcement activities.9 '»
A.2. Development of the Adrir.istrative Record. The development !
•- * '• is
of the administrative record supporting the selection 'of .a'--:'
response action is central to the Agency's ability to' recover
costs. If after completion of a removal action, a decision.is:•
made to file a §107 judicial action, the administrative record .-
will serve as the basis for judicial review of issues concerning^*'*%?
the selection of the response action. See section 113(j) of
CERCLA. Prior to the initiation of a removal action, Regions
should develop the administrative record consistent with the -
• ' '*'' '*-t\ 'i
applicable procedures set forth in the Kay 29, 1987 memorandum j/>-" .'"
entitled Adrir.istrative Records fcr Decisions or Selection of . .
CERCLA Response Actions (OSWER Directive No. 9833.3).
A.. 3. Notice. Negotiations and the Issuance of Administrative-. ' :"h'''-
Orders. Notice, negotiations, and the issuance of administrative
orders are activities that should tee conducted to obtain
9/ Where the removal exceeds two hundred thousand dollars,
the property is marketable and of value and it nay be sold, the
Agency should evaluate, during the PRP Search, the value of ;
filing notice of a lien on the property affected by the removal
action. OECM's Guidance on Federal Superfund Liens.
September 22, 1987, (OSWER Directive No. 9832.12), provides
guidance on the use of Federal liens.
15
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OSKER Directive No. 9832.13
agreement from the PRP(s) to implement a response action, thus
elir.ir.ating the need for cost recovery of response action costs.
There are important cost recovery aspects to each of these
activities.
The Interim Guidance on Notice Letters. Negotiations, and
Information Exchange. October 19, 1987 (OSWER Directive
Nc. ?£2-i. 1C) provides information on the content and timing of
notice letters fcr removal actions.
If r.rtire tc FP.Fs leers t= negotiations fcr a PR? remcvil
acticr., Regions should obtain an agreement from the PRPs for the
reimbursement cf EPA's oversight costs.10 This is particularly
important for large removals that will involve extensive
contractor oversight costs. The administrative order on consent
should certain a prevision which describes the manner of
determining the amcunt, the documentation to be furnished by EPA,
the schedule fcr billing by EPA, and payment by the PRP of the
I
oversight costs incurred by EPA. Where a consent order for a
removal action contains a provision for the reimbursement of
EFA's oversight costs, the Regional program office should provide
a copy of the order to the Regional Financial Management Officer
with a request to establish an account receivable and track
receipt of the oversight costs. The Office of Waste Programs
10/ CERCLA §104(a), as amended, requires reimbursement for
oversight costs for the.RI/FS. See Part IV, page 30.
16
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CSWER Directive No. 9832.13
Enforcement is developing further guidance en collection of
oversight reir.fcurser.ent frcn PRPs.
Where negotiations for a PRP response action are
unsuccessful, or the exigencies of the situation at the site do
not allow for extended negotiations, there is a presumption,
rebuttable for documented good cause, that Regions should issue a
1106 unilateral administrative order to viable PRPs.11 A
unilateral order may encourage PRP response and has the added
advantage of setting up treble damages12 and penalties13.
\ •'• . - •'
B. Cost Recovery Activities During tfre Removal Action '
Cost recovery activities that occur during a removal action
deperfd upon whether the removal is conducted by the Agency (or '•
11/ See the Jssuarce cf Adrinis.^rative Orders for Irr.r.ediate
Per.gva 1 Act icr.s. {CSWER Directive No. SB33.1).
12/ Section 107{c)(3) of CERCLA establishes the authority
of the United States to collect treble damages for non-compliance
with an administrative order: "If any person who is liable for a
release or threat of release of a hazardous substance fails
without sufficient cause to properly provide removal or remedial
action upon order of the President pursuant to section 104 or 106
of this Act, such person may be liable to the United States for/
punitive damages in an amount at least equal to, and not more ""
than three times, the amount of any costs incurred by the Fund as
a result of much failure to take proper action."
13/ Section I06(b) provides that "any person who, without
sufficient cause, willfully violates, or fails or refuses to
comply with, any order of the President under subsection (a) may,,
in an action brought in the appropriate United States district
court to enforce such order, be fined not more than $25,000 for
each day in which such violation occurs or such failure to comply
continues."
17
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OSWER Directive No. 9832.13
its contractors) or a potentially responsible party, or both.14
During a fund-financed removal action, all EPA and contractor
activities and costs ir.ust be carefully recorded and the PRP'
search should be reviewed and supplemented, as necessary. During
a PRP removal action, the Agency roust keep track of its oversight
costs.
B.I. rrr'-T-g.."tati.e..n of Activities ar.d Test ACCC.W.-V .-.>... During a
removal conducted by EPA or PRPs, the Agency must maintain an
a; = :••-.-.-ir.g of activities ar.d ccsts associated with the respc-.se
action. These ccsts may include: EPA in-house expenditures;
contracts; r.oney paid to other federal agencies through
interagency agreements (lAG's); ar.d, money paid to States through
cooperative agreements. EPA personnel must take care to charge
all time and travel associated with a removal action using the
site-specific account number (site/spill identifier number,
SSID). Contracts, lAG's and cooperative agreements should
provide that charges are made site-specifically, also.
B.2. S~scler.er.tal PP.P Search. During the removal action, the
search for potentially responsible parties should continue.
Newly identified PRPs should be issued notice letters and
administrative orders as appropriate.. The Region should consider
14/ In some, instances, the EPA conducts initial site
stabilization work and then negotiates with PRPs for them to
conduct the remainder of the removal action under a consent
order. Activities conducted in preparation for potential cost
recovery actions would necessarily include those for both fund*
financed removal actions and PRP removal actions.
18
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OSWIR Directive No. 98.32.13
the total expected response costs at a site when conducting*a\
supplemental FRP search. Generally, the higher the total cost of
removal, the greater the effort the Agency should make .to,' •**
identify FRPs and develop the information that links then to 'the
site. For all removal actions over two hundred thousand dollars,
the tasks identified in Section A.I must be completed in advance
of a final decision to proceed or not with litigation for. cost:
recovery. -v t ' .
C. post-Repoval Cost Recovery Activities
After the completion of a fund-financed removal action, the;,
majcr components of the potential cost recovery case are . .•
collected (administrative record, the PRP search, .total costs;,.-of
response at the site, the demand letter and response to. it, .and
other pertinent information) and the likely success of cost " v
recovery efforts is evaluated. Based on the evaluation, the
Region must make a final decision to proceed or not to proceed-' "•
with further efforts at cost recovery. ? -: v ...-.
C.I. Evaluation_ard Cor.pl et;er. cf the,Potentially Responsible ::
Party geareh. After the removal has been completed, the FRP
search should be evaluated for completeness. The Regional
Counsel assigned to the case should review the PRP search for v •:.
evidentiary sufficiency. The decision to conduct any additional
PRF search activities not yet initiated should be made on the :
basis of the sufficiency of the evidence and consistent with the>
total costs of response and the likelihood of identifying
19
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OSWER Directive No. 9832.13
additional PRPs. The higher the costs of response, the stronger
the effort should be to locate PRPs and link them to the site.
Some cases with total costs of response less than two hundred
thousand dollars will not be litigated. Extensive PRP searches ..
should not be conducted for such smaller cases without prior
evaluation of the site expenditures, costs of additiorsl PP.?.
search activities, lixelihccc of identifying viacle FRPs, and
likelihood of litigation if PRPs fail to respond satisfactorily
to a demand letter.
If the PRP Search has not identified any PRP, the case
should be closed out by way of a cost recovery close-out
memorandum. *s This will provide documentation that the cost
recovery potential has been evaluated and remove' the case from
further consideration. The execution of a Cost Recovery Close-
Out Memorandum on a site r.ust be reported in the CERCLIS system.
C.2. Cast pecur.er.tatier.._ Following the conclusion of the
removal, and sometimes earlier, the Region should begin gathering
f
the records which serve to support a demand letter. The
threshold of two hundred .thousand dollars should be used to
determine the initial extent of cost documentation. Initially,
documentation for cases less than two hundred, thousand dollars
should include the total costs of the response activity broken
15/ See the "Guidance of Documenting Decisions not to Take
Cost Recovery Actions", (OSWER Directive No. 9832.11).
20
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OSWER.Directive No. 9832.13
down by general categories. These categories include EPA in'-'v
house expenditures, contracts, other federal agency costs
(through interagency agreements) and Fund monies expended by
States through cooperative agreements. Additional documentation-.^
may be required later to respond to a Freedom of Information1'Act
request, to respond to PRPs in negotiation, or to prepared for
litigation.
For those viable cases with costs greater than two hundred
thousand dollars, full cost documentation, including the, :
sufcr.ittal of the Cost Recovery Checklist to Headquarters should.
proceed prior to issuance of the demand letter. The checklist,
once completed, must be sent to OWPE allowing adequate time.:
(typically twelve weeks or more) for document collection. EPA
Headquarters, the Region, the Department of Justice, other
federal agencies, and States, each have certain responsibilities-
in the collection and packaging of cost documentation. The '"••
- -i
Procedures fey Documenting/Costs for CERCLA S107 Actions. January
30, 1985 (OSWER Directive. No.; 9832.0-la) describes roles and.,;-1"
\ v
* I
responsibilities of each office in preparing cost documentation
for litigation. v ; ,v v.:-..;
C.3. Demand Letters. As soon as the Region has documented costs
consistent with the level of expenditures and likelihood of
litigation, the Region should issue a demand for payment of all
21
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CSWER Directive No. 9832.13
4
past costs to PRPs.16 The demand letter should be sent.to all
PRPs as soon as practicable after the completion of the removal.
A der.ar.d letter should be issued in all cases where response
costs have been incurred under CERCLA regardless of whether,a
decision has been made to initiate a judicial proceeding for cost
recovery.
Guidance on the c-r.^ent of a demand letter, and a oodel
demand letter can be found in the Cost Recovery Actions under the
Corprehersive Er.vlror.rer.tal. Response^ Compensation, and
Liability Act cf 1980. August 26, 1983 (OSWER Directive No.
9832.1). In addition to the items listed in the 1983 Cost
Recovery Guidance to be included in a demand letter, all demand
letters shall reflect the revisions cf the SARA amendments to
section 107(a) which provides that the "amounts recoverable in an
action under this section shall include interest on all (costs
incurred by EPA not inconsistent with the national contingency
plan]. Such interest shall accrue from the later of (i) the date
payment cf a specified ar.cunt is demanded in writing, or (ii) the
date cf the expenditure concerned."
\
C.4. Negotiation. When the PRP(s) responds to a demand letter
expressing interest in meeting with the Agency to discuss the
16/ The authority to issue demand letters under SARA has
been delegated to Regional Administrators. Program and-legal
personnel should consult with their supervisors to determine who
has redelegated responsibility for preparing and issuing demand
letters in their Region.
22
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OSWER Directive No. 9832.13
s
Agency's claim, negotiations should be initiated and carried out
within a limited period of tine. The time period should be
determined by the Region on the basis of factors affecting the
complexity of the negotiations (e.g., the number of potentially*i-
responsible parties that will participate, the amount of the -: '%
claim). Further information on the development of a negotiating
team and related issues can be found in 1983 Cost Recovery :=•
Guidance.
The Region may also decide to utilize alternative dispute '
resolution techniques to achieve settlement. Arbitration, for - *
example, is specifically addressed in section 122(h)(2) of
CERCIA. Arbitration may be utilized for cases where total
response costs (excluding interest) do not exceed $500,000. (A't '
the time of issuance of this guidance, the Office of Enforcement
and Compliance Mor.itoring is drafting a regulation on procedures
for resolving small cases through arbitration.) Additional :
•information may be found in Guidance en the Use of Alternative
Dispute Pesolutier. in EPA Er.fcrcer.ent Cases. August 14,. 1987, . \
issued by the Office of the Administrator.
In those cases where the Region receives no response or an
unsatisfactory response to a demand letter, the Region must
decide whether to pursue cost recovery efforts further. See
section C.6, Consideration of Referral in the Event of No
Settlement, below.
23
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CSWER Directive No. 9832.13
C.5. Settlements. If negotiations are successful, agreements
will be formalized in an administrative document or a judicial
consent decree. The Region nay enter a partial settlement with
some PRPs and seek to recover unreimbursed costs from non-
settlors. Where the Agency does enter into a partial settlement,
viable recalcitrant PRPs should be pursued as soon ss rrarticitli
icr the reir.airiser of the costs.
Administrative settlements17 may be entered into by the
Ager-cy fcr cost recovery pursuant to Section 122 (h) of SARA18.
Administrative settlements in cases where total costs of response
at a facility, excluding interest but including all future costs,
do not exceed five' hundred- thousand dollars may be signed by the
Regional Administrator without Department of Justice concurrence.
Pursuant to $l'22(i}, the Agency must solicit public comment on
proposed 122 (h) administrative settlements' by. placing a notice of
the settlement in the Federal Register. The comment period is
thirty days. Administrative settlements for cost recovery for
Ceases where the total cost of response on a site are expected to
exceed five hundred thousand dollars may only be entered into
17/ The Office of Enforcement and Compliance Monitoring is
drafting guidance on the procedures to be followed for
administrative cost recovery settlements.
18/ Section 122(h) of CERCLA gives the Agency the authority
to settle cost claims administratively. Such settlements require
the prior written approval'of the Department of Justice if total
costs of. response at a facility exceed five hundred thousand
dollars (excluding interest).
24
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OSV;IR Directive No. 9832.13
the case. 'The relevant factors to be considered include:
(a) the amount cf costs at issuer
(t) the strength of evidence connecting the potential
defendant(s) to the site;
(c) the availability and merit of any defense, (See'
CERCLA §107); ' " .
(d) the quality cf release, remedy, and expenditure '
;
documentation by the Agency, a State or third "~
party; . . ".
(e) the financial ability of the potential
defendant(s) to satisfy a judgment for-the amount
.
of the claim' or to pay a substantial portion of - '.• •
the da in in settlement; . "'
(f) the statute cf limitations; and
(g) other cases ccr.peting for resources.
If upon review cf the case on the basis of the above • ; -
factors, the Region decides not to pursue a cost recovery action,
the decision Bust be documented in a cost recovery close-out -s
memorandum.20 £ close-out memorandum will provide documentation'
for why EPA has not pursued cost recovery in a particular case/
and provide the Agency with information necessary for selecting
referrals and predicting revenues to the Fund in future years. ".
2°/ See the Guidance on Documenting Decisions net to Tafre.
Cost Recovery Actions. (OSKER Directive No. 9832.11).
• - . ' 26
-------
CSWIK Directive No. 9622.13
with the advance concurrence of EPA Headquarters and the
Departr.ent of Justice. Adr.inistrative settlements are fully
enforceable pursuant to CERCIA §122{h)(3).19
Judicial consent decrees may require consultation or
concurrence with EPA's Office of Waste Programs Enforcement and
Office of Enforcement and Compliance Monitoring in addition to
tr.e apprcv*! cf the Departr.er.t cf Justice. See-the Revision cf
CERCLA Civil judicial Settlement Authorities-Under Delegations
14-::-= ar.d :--14.rZ. June 17, 1988, (OSWER Directive No. 5012.10-
a), for information on settlement authorities and their
requirements.
C.7, Consideration cf Referral in the Ever.t cf No Settlement.
In'.each case where the Agency has conducted a response action
under the authority of section 1C4 of CERCLA, the Agency must
r.ake an af f irr.ative decision' to proceed or not to proceed with a
judicial cost recovery action. This applies to those sites where
no response or an unsatisfactory response to a demand letter was
received as well as to those sites for which negotiations
occurred but were unsuccessful. The Region should have gathered
all the information necessary to decide the final disposition of
19/ CERCLA section I22(h)(3), Recovery of Claims, states
"If any person fails to pay a claim that has been settled under
this subsection, the department or agency head shall request the
Attorney General to bring a civil action in an appropriate
district court to recover the amount of such claim, plus costs,
attorneys' fees, and interest from the date of settlement. In
such actions, the terms of the settlement shall not be subject to
review."
25
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OSWER Directive No. 9832..13-
Generally, the Regions should anticipate developing cases'
for litigation for all sites where total costs of response exceed
two hundred thousand dollars and negotiations for settlement were''
unsuccessful. Sites where total costs of response do not exceed <
two hundred thousand dollars, and negotiations were unsuccessful,
i * '
are also candidates for: referral consistent with the case
;
selection criteria discussed in Part II, above. The cases
selected for litigation involving sites where total costsvof
response are less than two hundred thousand dollars should be ,{;:-
those where PRPs are recalcitrant, evidence linking PRPs tOi.the-vC'
site is good, the case nay be used to create good precedent,(such
as a site where EPA issued a unilateral order, PRPs did not,,
cor.piy, and EPA is likely 'to obtain a favorable ruling for'treble
damages or penalties), or the case is otherwise meritorious.
.A decision to proceed with a judicial action for cost .. .
recovery requires the assembly of all documents associated with -
the case including those necessary to substantiate that:
• I) there is a release-cr the threat of a release'of a
hazardous substance; ' : 4,V. '
2) th« release or threat of release is from a
facility;
3) the release or threat* of release caused the United ,. „
States to incur response costs;
4) the Defendant is in one or more of those categories;: '
of liable parties in CERCLA section 107(a).
27
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OSWER Directive No. 9832.13
These elements are discussed in Cost Recovery Actions under
" the Comprehensive Environmental P.esccr.se. Compensation, and
Liability Act of 1980. (OSWER Directive No. 9832.1) and
Procedures for Documenting Costs for CERCIA S107 Actions. (OSWER
Directive No. 9832.0-la). In addition, the referral should
anticipate the defense that the response was inconsistent with
the naticr.il contingency plan. The referral should comrcrt with
the applicable guidance and include or reference the
adr-.ir.ist.rative reccri, ??.? se=.r;r., ar.d activity and cc-s"
documentation. Evidence substantiating each element of proof
r.ust be discussed in a referral package submitted to the
Department cf Justice when proceeding with a judicial action.
Generally, referrals seeking the recovery of costs expended
in a removal action should occur no later than twelve months
after completion of the removal, whether or not the site is on
the National -Priorities List21 and regardless of whether further
respcr.se action is to be taken. Exceptions to this policy nay be
possible in certain instances for legitimate litigation strategy
reasons. For instance, where a remedial action is to be
initiated within three years of the completion of the removal, it
2V Although sites'on the National Priorities List will
have further costs, e.g.. costs of a remedial investigation and
feasibility study, the action for the recovery of removal costs
should be brought within a year of completion of the removal to
assure that we litigate the case while the evidence is most
readily available. See Cost Recovery Actions/Statute of
Limitations. June 12, 1987 (OSWER Directive No. 9832.3-1A).
28
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OSWER Directive No. 9832.1
may be appropriate to combine an action for the recovery of the
removal costs with the action for the recovery-of RD/RA costs.22
However, in no event should filing be delayed beyond the statute1.,
of 1 imitations. . • ' /
22/ fhere further response action is contemplated, the
Agency ordinarily seeks a declaratory judgment for future
response costs. See CERCLA section 113(g)(2),
29
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CSWER Directive No. 9832.13
Part IV. COST RECOVERY PROCESS FOR REMEDIAL SITES
The remedial process in the Superfund program, includes the
remedial investigation and feasibility study, remedial design,
and remedial action. Activities related to cost recovery must be
conducted in each phase of the remedial process in order to
maxirize the potential frr rercvery of funds.
The cost recovery process for remedial sites23 includes the
following elements: the search for potentially responsible
parties (??.?£); tr.t opportunity fcr ?7.?s tc ccndurt tr.e work; the
develcpment of the administrative record; cost documentation; and
the timely issuance of demand letters. While the process for
remedial sites is similar to the previously described process for
remcval sites, the level.cf effcrt cf each element must be
increased over that for removal actions because of the greater
amount cf money involved. Sites that proceed through a remedial
investigation and feasibility study and remedial design and
action will generally exceed the threshold level of two hundred
thousand dollars used in the removal cost recovery process.
Described below are the activities required for each cf the
elements in the remedial cost recovery process and the timing of
each of th« activities.
23/ Where a site has more than one operable unit, cost
recovery activities described in the remedial process should be
conducted for each operable unit, where appropriate, since
operable units nay be held to be separate actions for purposes of
cost recovery statute of limitations.
30
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OSWER Directive No. 9832.13
A. Pre-Reaedial Cost Recovery Activities . '
Activities that may be carried out in preparation for future
cost recovery actions prior.to the initiation of a remedial'
investigation and feasibility study (RI/FS) include the ;
potentially responsible party search, general notice, special ..
notice, negotiations, and the issuance of an administrative order
on consent for a PRP RI/FS. While each of these activities is an
integral part of the broader Superfund program, each has a
special significance in light of potential cost recovery, actions.
A.I. The Pstertially Responsible Party Search The • ;• „- -
identification and location of potentially responsible rparties i'sr
central to all future enforcement activities, including cost '
recovery actions. The PRP search will generate names of
potentially responsible parties as well as the information to v -.- :
link the PRPs to the site. This information is likely to serve
as evidence in future judicial actions to prove the liability of
the defendants.
Concurrent with the NPL listing process, the Region should
initiate a PRP search in accordance with the guidelines.,.set out
in the Potentially Responsible Party Search Manual. ;:;•»,..
August 27, 1987, (OSWER Directive No. 9834.6). Fund-lead:/:.
enforcement, civil investigators, and Office of Regional Counsel
? ,
staff should work closely together in the development of the PRP
search from the initial planning stages through the production.of-
the PRP search report. Ideally, the following activities should-,-
• /
31 .
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OSWER Directive No. 9832.13
be.conducted prior to the initiation of the RI/FS to ensure that
all PRPs nay be given general.notice of their potential liability
well before they are given special notice of. the opportunity to
conduct the RI/FS: history of operations at the sit*;.a title
search of the site property; Agency record collection and file
review; interviews with government officials; F~? status./rr*"'
history; records compilation; issuance of CERCLA 104(e)
letters/RCRA 3007(c) letters; financial status; PR? name and
aiiress updates : i: er.tif icaticr. cf csr.Eri" rrr-. ar.d trsr.spcr-.ers;
report preparation; 'and, an evaluation of the value"of filing
notice of a lien on the site property. (The Guidance or. Federal
S'jrerf-jr.d lier.s. Septe-her 22, 1987, (OSWER Directive No.
9832.12), provides guidance on the use of Federal liens to
enhance Superfund ccsr recovery.) The Region should rely on the
expertise of the civil invest.ga-^cr and the Office of Regional
Counsel and utilize available contract resources to conduct the
PR? search and prepare the PRP search report.
Sufficient information should be collected on all PRPs to
satisfy the special notice requirements of section 1,22 of
CERCLA.24 If possible, the PRP search should be completed prior
to the initiation of the RI/FS. In some instances, completion of
24/ CERCLA jl22(e)(l) identifies information that should be
included,, to the extent it is available, in a special notice
letter. This information includes the names and addresses of
other PRPs,. the volume and nature of the hazardous substances
contributed by each PRP, and a ranking by volume of the
substances at the facility.
32 •
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OSKER Directive No. 9832.1
all PRP search activities prior to the initiation of the RI/FS
will not be possible. For example, it may be necessary to
undertake an RI to determine the source of contamination. In ,.' ':
other instances, the search for generators may be complicated or
"new" information may be discovered late in the process.
A.2. General and Special Notice Letters and Negotiations for a
PRP Remedial Investigation apd Feasibility Study. Once PRPs have
been identified, the Region should issue General Notice Letters
to apprise PRPs of their potential liability. This should be;. >\. :
done as soon as possible after they have been identified. ,'In
addition, information relating to names and addresses of..other
•• *.
PRPs, volumetric rankings and nature of substances should.-be
provided as soon as possible. . ' "•>/,-.
Special notice letters w id 1'v ^provide PRPs with a specific: VC;.
'' jr
opportunity to negotiate terr.s cf a'gr.eer.ent concerning their '.,.-
participation in the conduct of the RI/FS. Special notice
letters should also include a demand for payment of past costs if
\
a Fund-financed removal action was conducted at the site and a
demand letter has not already been sent. Information regarding
the content and timing of general notice letters, special notice
letters, and negotiations for PRP RI/FS can be found in~ theM/x,V*'
Interim Guidance en Notice Letters. Negotiation, and Information/
Exchange. October 19, 1987 (OSWER Directive No. 9834.10).
33
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OSWER Directive No. 9832.13
A. 3. settlement for FRP Remedial Investigation/Feasibility
Study. A settlement for PRP conduct of the RI/FS roust include
the requirement that PRPs pay for cost incurred by EPA in
obtaining assistance from third parties in the oversight-of the
RI/FS and may also involve the recovery of past costs incurred by
the Agency.
v.^ere reset: cticr.s result in a settlement fcr a FRF RI/FS,
EPA will require the settling PRPs to commit in the settlement
agreement to pay the costs of oversight of the RI/FS including
extramural costs (contracts and interagency agreements) and
intramural costs (EPA payroll, travel, and other costs)" on a
specified schedule. The Region should track reimbursement in
CIRCUS and contact the Regional Financial Management Officer to
set up an accounts receivable in.the Financial Management System
(FMS; fcr the rereipt of cverr. :r:-.t rests.
In the case cf these sites where removal actions have
occurred prior to the negotiation, and the cost recovery is not
being pursued on a separate track, additional provisions for
recovery of past costs or a reservation of EPA's rights to pursue
.those costs should be included in the administrative order. If
some but net all past costs are recovered in the settlement, and
a reservation of the Agency's right to pursue all-of the
remaining costs is included, the advance concurrence of the
Department of Justice under section 122(h)(1) of CERCLA will not
be necessary. Of course, if the settling PRPs agree to pay all
34
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OSWER Directive No. 9832.13
past costs, a claim is not being compromised and DOJ's prior
concurrence is not necessary.
Where negotiations do net result in settlement, the Agency
will proceed with a Fund-financed RI/FS.
. B. Cost Recovery Activities Purina the Remedial Investigation/
Feasibility Study
The activities that occur during the remedial investigation
and feasibility study in support of future cost recovery actions
may include a supplemental PRP search, the development of the
administrative record, the documentation of activities/and costs,
notice and demand letters, and negotiation for PRP remedial
design and action.
B.I. Dccurer.taticn of Activities and Cost, Accounting. The'-. :X*
documentation of activities and accounting of costs must occur;"-:--
whether the remedial investigation and feasibility study are
being conducted by the Agency, a state, or the PRPs. ;
During a Fund-financed RI/FS, each organization involved "•
(e.g., EPA, a State, ether Federal agencies, EPA's contractors)
is responsible for keeping an accounting of its activities and
the costs corresponding to those activities/items. Cooperative
•»
agreements with States for State-lead, Fund-financed RI/FS's oust
include requirements that States maintain documentation according
to standard EPA procedures for cost recovery. These records will
be assembled later during the RI/FS in preparation for
negotiations with PRPs for private-party remedial design and
35
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OSWZR Directive No. 9322.13
action and nay serve as evidence of costs incurred in future
judicial actions to substantiate cost recovery claims.25
When the RI/FS is being conducted by the PRP{s), the lead
agency roust carefully record the costs of all Fund-financed
activities associated with the oversight of that action. The
settlement agreement should specify the schedule for payment' of
oversight costs thrcurhr-ut tr.t :,I/T£. Normally, the Agency will
issue a demand for payment at the end of a one year period
throughout the course of the PR? RI/FS for all costs incurred
during that year. Quality record keeping using CERCLIS is
essential since the Agency must be able to substantiate the
amount of money demanded ar.d what activities were performed for
that amount. The Recicr.al Financial Management Officer should
set up an accounts receivable in FXS for the receipt of oversight
ccsts.
B.2. Surclemental PP.? Search. As the RI/FS proceeds, the Agency
should continue to develop the PRP search as necessary.
Additional PRPs found since the start of the RI/FS who did not
receive .notice letters should be issued general notice letters as
soon as they are identified. This will give them an opportunity
to participate, to the extent feasible, in on-going work. The
evidence linking each PRP to the site should be fully reviewed by
the Office of Regional Counsel in anticipation of pursuing
, / Cost documents are not part of the administrative
record for a site.
36
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OSWER Directive No. 9832.13
litigation against the PRP, and supplemented as necessary.
Again, the Region should ensure that all activities identified'in
•the Potentially Responsible Party'Search Manual. (OSWER"'Directive
No. 9834.3) have been conducted or are planned. All sources of
information identified by the Region's civil investigator should
be thoroughly pursued.
If the PRP search indicates that there are no PRPs'at;the'
site, the Region should prepare a close-out memorandum to •
document the basis for a decision not to proceed with cost.
recovery. If the PRPs are not financially viable, the Region ; .
should review the merits of proceeding with cost recovery. See
the discussion of bankruptcy referrals in the Case Selection
Guidelines section for factors to consider in such cases. "-
B.3. Develcpr.ert of the Adr.iristrativeRecoyd. As .in removal"
actions, the development of an administrative record which wrll
support the selection of e of the remedial alternatives is-
critical to the cost recovery potential of a case. Section
113 (j) of CERCLA limits judicial review of issues concerning,theV
adequacy of a response action to the administrative record. An -
accurate and complete record, therefore, should simplify; future ;
cost recovery actions. Section 113(k) requires that interested;
persons be given the opportunity to participate in the
development of the administrative record. During the RX/FS,
whether conducted by a PRP, a State, or EPA, Regions should > .-•
develop the administrative record consistent with the applicable.
37
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^SWIK Directive No. S832.13-
procedures. • (See Administrative Records for Decisions on •
Selecticr. of CERCLA Bespcr.se Actions. Kay 29, 1987, OSWER
Directive »5S33.3.)
B. 4. Special Notice Letters ar.d Kegotiatipn for PRP Remedial
, Design and Remedial Action. As the proposed plan and draft RI/FS
are made available for public comment, the Regions should again
E = r.d rrfci.al nctirs letters to all identified PRPs to provide
them with an opportunity to negotiate regarding conduct of the
remedial design and remedial action (RD/RA).
The special notice letters for RO/RA should include a demand
for payment of past costs not yet reimbursed, e.g., the costs of
a Fund-financed RI/FS. The Region should determine total past
costs (to the extent possible), and subtract from those costs any
costs already reimbursed. The Region must"ensure that the amount
cf past costs demanded is qualified to account for costs incurred
but not yet paid by the Agency. Interest which has accrued on
amounts previously demanded should be included in the demand as
appropriate (see page 22).
C. Settlement for PRP Remedial Design and Action.
As mentioned above, past costs will be one of the subjects
of negotiation for PRP remedial design and action. The
negotiations will result in one of three outcomes: full . .
settlement, partial settlement, or* no settlement. See the
Interim CERCLA Settlement Policy. OSWER Directive No. 9835.0. for
a complete discussion of the factors to consider when settling an
38
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, - OSWER Directive No. 9832.13
action under CERCLA. The cost recovery consequences of each of;
these are discussed below.
C.I. Full .Settlement. Where negotiations result in a full
f,
settlement, the settling PRPs agree to conduct the work and
reimburse the Agency for past costs. In addition, the settling
,' '( '
FRPs will have agreed to reimburse EPA for future oversight
costs. The agreement will be formalized in a consent decree
which roust specify the manner and timing of billings and payments
and- be filed in the appropriate United States District Court.
V5
For future oversight costs, EFA may be required to send demand
letters at regular intervals according to the schedule set forth'
in the consent decree. The schedule for payment should. be-V-,
recorded in the appropriate CERCLIS file. The Regional '.Financial
Management Officer must be advised that an account for receipt of
the reccvered money should be established.
C.2. Partial Settler.er.t. Where negotiations result in..a partial
V-'K
settlement, unrecovere'd costs should be sought from non-settlors*;
in a §107 judicial action. The referral of a case against non-
settlors should occur concurrent with referral of the consent:. s' >'?
i. • . .I?''-,'''
decree with settlors, or as soon as possible thereafter. This'1 "
will serve to highlight enforcement against the non-settling
FRPs.26 If the Region will not pursue the costs waived in the
settlement with the PRPs, the ten point analysis justifying the.
26/ Of course, this .should take into account accrual,of a
cause of action. '•,
39
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CSWER Directive No. 9832.13
settlement for less than one hundred per cent.should document the
basis for not pursuing the unrecovered costs. If a decision not
to pursue the unrecovered costs is made after the settlement
analysis has been prepared in final form, a close-out memorandum
should be prepared to document the basis for that decision.27
C.?. ?*~ Cc*'tr*'~ = ~t. v'her? r.err^i t". ic~s rn nc* rsrvilt ir, >r."
'settlement, the site classification will determine the next step.
For Fund-lead sites, unless a statute of limitations problem
is anticipated for the recovery of RI/FS costs, the Region should
proceed with Fund-financed remedial design and remedial action
before initiating an action for.the recovery of RI/FS costs.
Consistent with applicable and relevant guidance, consideration
should be giver, to issuing unilateral §106(a) orders to
recalcitrant parties in order to encourage PRP response and set
up clair.s fcr treble damages and penalties.
For Federal enforcement-lead sites, where .the remedial
action is not funded and the case is not settled, the Region
generally should issue a unilateral section 106 administrative
order and, where compliance is not forthcoming, immediately
thereafter (taking into account whether there is a funded RD)
refer the case for injunctive relief and past costs (combined
CERCLA $1106/107 judicial actions). The cost documentation must
be completed by the time of the referral to support the section
27/ See footnote 15, page 20.
40
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OSKER Directive No. 9832.13
107 claim. Again, see the 1983 Cost Recovery Guidance and the
1985 Cost Documentation Procedures Manual for details of
preparing the cost recovery portions of a case.
0. Cost Recovery Activities during the Rettedla1 Designand
Remedial Action ;
By the time a site has reached the remedial design and
remedial action phases, much of the work for assembling a cost
recovery case has already been completed. Additional activities,
which will mainly consist of updating information collected' •
earlier, will depend upon the outcor.e of settlement negotiations,
and the viability of the remaining case. Where the Agency hasv
agreed to a partial settlement, cost recovery activities to be
conducted r.ay include those necessary in overseeing the PRP work
as well as these necessary fcr pursuing a judicial action against
non-settlors.- •
D.l. PR? RD/RA. Cost recovery activities required during a PRP
RD/RA depend upon the type of settlement (i.e., full or partial)
and the specific provisions included in the settlement for -
reimbursement of past costs and oversight costs. Any settlement' -
that.includes reimbursement of EPA's oversight costs throughout
the course of the remedial design and action will require the
Agency to regularly document all costs associated with the
oversight function. Demand letters for oversight costs should be
sent according to the schedule set forth in the consent decree
and tracked in CERCLIS. The Regional Financial Management..
41 :
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OSWER Directive No. 9832.13
Officer must be provided with a copy of the consent decree so
that an accounts receivable can be established in FMS and .
payments tracked.
The Agency should continue to account separately for all.
other EPA site-specific costs not attributable to oversight
/e. r. , crsts asscciatef vith a separate cjeri-zl.e ur..t "vr.ic."i the
PRPs are not implementing) in the event that a judicial action
against non-settlors (or settlors) occurs.
0.2. Fund-Financed RD/RA.- Fund-financed remedial design and
action will normally account for the largest site-specific
expenditures attributable to a site. Therefore, remedial design
and action costs provide the largest potential for return of
site-specific expenditures. This fact makes it essential that
the Agency devote significant resources to the prompt development
of cost recovery actions for remedial design and action costs.
a)Cost Documentation. There is a presumption that absent
full resolution, the Agency will proceed with judicial cost
recovery actions for all Fund-financed remedial actions and/or
unreimbursed costs unless a decision has been made not to pursue
cost recovery. In preparation for a referral, the Agency must
continue maintaining an accounting of all costs incurred on the
site, including costs incurred by Agency personnel and
contractors, and costs incurred through cooperative agreements
with States and interagency agreements with other Federal
agencies. The Cost Documentation Procedures Manual (1985)
42
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OSWER Directive No. 9832.13
provides details on cost documentation -preparation for section
107 actions. ' . %
b) Demand Letters. As soon as practicable after the
completion of the remedial design, the Region should send -deaand
letters to all identified PRPs. The amount of money demanded
should include total past costs not yet recovered, and applicable.•
interest, plus a projection of the costs expected to be spent in ;.
remedial action. While the demand letter should include the - : -
projected costs, it should also state that the amount is .an *
estimate and is subject to change. Demand letters at this point
should not invite discussion on any subject but costs/ i.e..
negotiation on the selected remedial action will not be reopened
at this point.
c) Consideration of Referral in the Event of No Settlement.
Assuring that attempts at negotiation at this point are
fruitless, the Region r.ust make a final determination-of .the . . '•
disposition of the case. The relevant factors to be considered'.
are the same as those for removal action cases:
(a) the strength of evidence connecting the potential'-. „•;
d«fendant(s) to the site?28
(b) the availability and merit of any defense. (See
CERCIA §107);
28/ In the case of large remedial actions with PRP searches
done early in the program, the PRP search should be reviewed and,
as appropriate, upgraded, before a decision is made to close-out-
the case.
43
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CSWER Directive No. 9832.13
(c) the quality of release, remedy, and expenditure
documentation by the Agency, a State or third
party;
(d) the financial ability of the potential
defendant(s) to satisfy a judgment for the amount
of the claim or to pay a.substantial portion of
the claim in settlement; and
(e) the statute of limitations.
If upon review of the above factors, the Region believes
that a judicial cost recovery action will not be fruitful, a cost
recovery close-out memorandum should be prepared and its issuance
documented in the appropriate CERCLIS field.
A decision to proceed with a judicial action for cost
recovery requires the assembly of all documents associated with
the case including those necessary to substantiate that:
1) there is a release or the threat of-a release of a
hazardous substance;
2) the release or, threat of release is from a
facility?
3} th« release or threat of release caused the United
States to incur response costs. • •
4) the Defendant is in one of those, categories of
liable parties in CERCLA section 107(a).
These elements are discussed in Cost Recovery Actions under
44
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OSWER Directive.No. 9832.,13
the Comprehensive Environmental Response. Cor.pensation. and' -
Liability Act of 1980. (OSKER Directive No. 9832.1) and'
Procedures for Documenting Costs fcr CE7.CIA $107 Actions. '.,(OSKER
Directive No. 9832.0-la). -In addition, the referral'should '-
anticipate the defense that the response was inconsistent with
the national contingency plan. The referral should comport with
the applicable guidance and include or reference the-
administrative record, PRP search, and activity and cost
documentation. Evidence substantiating each element of .proof :
'•--• ->.•.•': :
must be discussed in a litigation report included in the referral
package submitted to the Department of Justice when proceeding ."
with a judicial action. At this point, the assembly of .evidence {
should merely require'updating information previously assembled,
e^g.. the administrative record, cost documentation, the. PRP
search report.
Referrals seeking the recovery of costs expended in a"> >"'
remedial design and remedial action should occur concurrently .
with the initiation of on-site construction of the remedial ,
action. RD/RA referrals should not affect the schedule of design
or construction. Where remedial design and remedial action are
divided into operable units, referrals should occur concurrent ,>•
with the initiation of each remedial action operable unit.29 The
29/ Section 113(g) of CERCLA provides that in coat recovery
actions under section 10? "the court shall enter a declaratory .
judgment on liability for response costs or damages that will be:
binding on any subsequent action or actions to recover further -
45
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OSWER Directive No. 9832.13
Agency will defer beyond this date the filing of a remedial case
cnly in limited circumstances for technical or strategic reasons.
Once a case for the recovery of remedial.action costs has
been referred to the Department of Justice, the Region must
periodically document on-going costs incurred and submit these
costs to DOJ. The litigation tean should Si SCUFF t*« frrrve-.r-/
ar.r *.iz-incj cf the periodic cost up-dates.
response costs or damages."
46
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s
J
OSWER Directive No. 9832.13
Part V. Existing Cos^: Recovery Guidance
Administrative Records for Decisions on Selection of CERCLA
Response Actions. May 29, 1987, OSWER Directive No. 9833.3.
Coordination ef EPA and State Actions iti Cost Recovery:. ;
August 29, 1983, OSWER Directive No. 9832.2. ; ; -
Cost Recovery Actions/Statute of Limitations , June 12 ,'i 1987 ,.''
OSWER Directive No. 9832. 3-1A. '
Recovery Actions under the Comprehensive Environmental :
Response. Compensation, and Inability Act of 1980 ( CERCLA .1 .
August 26, 1983, OSWER Directive No. 9832.1. Also known as the?
1983 Cost Recovery Guidance.
Cost Recovery Referrals. August 3, 1983, OSWER Directive No.
9832.0.
Guidance- of Docur.entjjig Decisions not to. Take _cosfr
Actions. June 7, 1986, OSWER Directive No. 9832.11.
on Federal. Super fund Lier.s. September 22, 1987, OSWER
Directive No. 9832.12,
Interim CERCLA Settlement Pclicv. December 5, 1984, OSKER
Directive No. 9835.0.
•Inter ir. Final Guidar.ce Package en^funding CERCLA. State
Enforcement Actions ar NP1 S;tes. April 7, 1988, OSWER Directive
NO. 9831.6.
Interim Guidance or. Notice Letters. Negotiations, and Infor?atj.en
Exchange. November 19, 1987, OSKER Directive No. .9834. 10.
Interim Guidance on Settlements vith de Minimis Waste
Contributors under Section 122 (a} of SARA. June 19, 1987, OSWER V
Directive No. 9834.7.
Inter ipt Guidanea; Streamlining the CESCIA Settlement Deeisipn
Process. February 12, 1987, OSWER Directive No. 9635.4.
Poliqy en Recovering Indirect Co^tf >n CERCLA i^.07 Cost Recovery
Actions. June 27, 1986, OSWER Directive No. 9832.5.
Potentially Responsible Party Search Manual. August 27, 1987,
OSWER Directive No. 9834. 3-iA. .
47
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OSWER Directive No. 9832.13
Procedures for Documenting Costs for C^RC^A *«i.-)7 *e«.i -,.,«.
January 30, 1985, OSWER Directive No. 9832. O-IA — AitrT?
the cost Documentation Procedures Manual. Als° )c
Revised Hazardous Waste Bankruptcy Guida^ra Kay 23 ^ 1935, OECM.
Small Cost Recovery Referrals, Julv 12 iaoe ~_,,,.~ ... ._.
No" 9B32 6 r«r4*Ei°A*» Juj.y i*:, 1985, OSWER Directive
State Suoerfund^Finaneial Kanaoenent and Reg?rrtv«epina cuidang*
£jiVi£lC~. ' ' - ; -~. -
gypgrfynd PeTf-Oval Procedures Revieie^ Number TH^^
iJSJJJf.iJj'i.S^hnii.l!?: ""-s-"»• •« ch.p«.» 5,
48
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} UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
/ • WASHINGTON. D C 20460
JUN 2 I 19BS
SUBJECT: Model Litigation Report for CERCLA Sections ids
and 107 and RCRA Section 7003
. — -^ a <»" -* . ^ ** £ «L """"*
TO: Regional Administrators
Regional Counsel
I havej; attached the Model Litigation Report for •
CERCLA Sections 1C6 and 107 and RCRA Section 7003. This node!
supplements previous Agency guidance entitled "Model Litigation
Report Outline and Guidance" (OECM, August 23, 1984), which
addressed the preparation ef a lifrigatLiori paefcace .under r.-s-
•statutes, _ but ^excluded,.among .others, packages uto be prepare j_
•';"sr~c"rc_s'ecut.ic'n__o.f~ givil ludlcial ._a.c.t_ion8_..._under CERCLA
feecicr.s 106 and 107 and RCRA Section 7003.
The r.cdel is intended for use in ail civil judicial cases
referred to the Department of Justice for prosecution under
CERCLA Sections 106 and 107 and RCRA Section 7003. For these
actions referred in conjunction with a settlement, a full
litigation report is not required. Rather, the Regions should
fellow soon-to-be-issued guidance on pre-referral negotiations
and current policy governing the preparation of 'settlement
>-»iyses accompanying the referral of consent decrees. See. = 2
Jez. -eg. 2034 ("Interim" CERCLA Settlement Policy"). This
dccurrent also docs not specifically address preparation cf_
litigation'reports for prosecution of penalty'actions" under
^"RtlLA" Sections 106(b), 109 or 122(1), although many sections cf
this document jBay be ap~i-i_~*te|f ro tihe preFa^at-i n" r.f 5t-.:cK.-
litigation-reports.
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I would like to express ray appreciation to you and to the
rr.enfcers of your staffs that have reviewed and cessaented on.the
drafts of the document. If you have any questions regarding this
cuidance, olease call Glenn Unterierger or David Van Slyke of r.y
staff at 332-30SO.
Attachment •
c=: Jonathan Z. Cannon, Acting Assistant Administrator,. OSWER
Donald A. Carr, Acting Assistant Attorney General, Land ar.d
Natural Resources Division, Department of Justice
David T. Buente, Chief, EES, Department of Justice
Bruce K. Diamond, Director, OWPE •- .,••;. ,
Waste Management Division Directors, Regions I-X. .. -'•'•-",•
Regional Counsel Waste Branch Chiefs, Regions I-X
CERC1A Program Branch Chiefs, Regions I-X
OECM-Waste Attorneys
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MODEL LITIGATION REPORT
craciA Si'.10.6 and 107 and RCRA S 7003 Actions
This guidance and any intern,
implementation are intended sole
the U.S. Environmental Protect:
procedures do not constitute rul<
be relied uson to create a r:
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MODEL LITIGATION RZPORT
CERCLA §S 106 and 107 and RCRA i 7003 Actions
7A3LE CF CONTENTS
I. Cover Pace 1
II. Table cf Contents 1
III. Synopsis cf the Case (Executive Sur-mary) 1
IV. Significance cf Referral ...... . 2
Statutory Bases of Referral/Legal Theory cf Case ...... 2
VI. Description and History of the Site >'. .. 2
VII. Status of Cleanup Process .=' 4
vili. National Resource Damage claims . 7
IX. ?rir,a Facie Case, Liability and Description of .
Proposed Defendant(s) and Miscellaneous
Issues Regarding Liability and Cost Recovery ....'. B
X. Enforcement History/Contacts with Potential
Defendants •
XI. Ccst Recovery
XII. Penalties and Punitive Dar.ages
XIII. Injunctive Relief
XIV. Other Legal Issues
xv. Litigation/Settlement Strategy
xvi. other Imainent Hazard Provisions
xvii. witnesses/Litigation Support
APPENDIX I - RCP.A § 7C03 Prir.a Facie Case
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MODEL LITIGATION REPORT
CERCLA S5 106 and 107 and RCRA 8 7003 Actions
I. Cover
A. Region, statute(s) involved and judicial district.
:: cef = -~?.rt fs) by c"_£~rry :.£.c., owr.tri, operators,
-•_;.i^^~i-i , transporters).
Include names, addresses and telephone numbers cf all
proposed defendants in an. appendix tr- the lit i :.•-----"•
r~rcrt. The list cf all other potential defendants, with
addresses and telephone numbers (where available) also
should be attached as an addendum,
C. Nar.e, address and EPA ID Number of facility or facilities.
Include name, address and telephone -number of all
facilities/sites subject to the referral.
D. Regional contacts.
Include names, addresses and telephone numbers cf
regional program (technical) and legal contacts who
prepared the -report.
£. star.p date of referral on cover page.
II. Table of Contents
Include headings, subheadings and .page numbers.
ill. Svnopsi.9 of the Case (Executive S^^ff'arvl
This should be a concise narrative summary stateaer.t
briefly describing the site, the environmental problem,
cleanup/enforcement to date, projected -&itu--'-e resoval/
1 The. cover page should be in addition to the "Data Forr."
prepared as a one to tvo page fact sheet en the case.
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remedial efforts, past/future response costs, the (
proposed defendants and the relief sought. v
IV. significance of ReferrajL
Indicate if the case is part of a special Agency "
initiative or may present issues of*national
significance.
V. Statutory Bases of Referral/Legal Theory of Case
A. Applicable statutes.
Reference briefly all applicable Federal statutes by
United States Code (U.S.C.) citation,and by section of ••."'
the-Act.
s -
3. Enforcement authority; jurisdiction and venue. - '
Summarize briefly the enforcement authority and'- the , '
jurisdiction and venue provisions of applicable statutes.'
If there is reason to file the action in a district other
than where the site is located, note each available
district and indicate the reasons for filing there.
(Note that CERCIA .§§ 106 and 113(b) contain specific
statements of available venues for CERCLA actions, but
that RCRA | 7003 and other imminent and substantial
endangerment causes of action typically do not. Venue
fcr cases involving such counts may need to depend .upon
the general Federal venue provisions of 28 U.S.C. " -• ,;--'>
§ 1391.) . - -..'"'
C. Bankruptcy petitions." •.--'•'¥•-..;
If the referral is for the filing of a bankruptcy claim,;
describe the status of bankruptcy petition, including (1)
whether Chapter 7, 11, or 13, (2) whether reorganization
plan filed, and (3) bar date for proof of claim. See.
"Guidance Regarding CERCLA Enforcement Against Bankrupt
Parties" (OECM, Kay 24, 1987); "Revised Hazardous Waste-
Bankruptcy Guidance" (OECM, May 23, 1986). If the case ' :
involves a PRP that has filed for bankruptcy, obtain, and
attach schedule and any other court documents previously
filed. Discuss the significance of the bankruptcy to the
overall enforcement or cost recovery action and the ..
likelihood of obtaining the relief sought.
It is important to inform DOJ of a bankruptcy
filing or a pending bankruptcy action ^s soon asv the
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;. x?L status
Include status of NPL listing. If not on the N?L, state
status of HRS scoring, whether the site has been nrccosed
'for the NPL and, if so, the date-the site made (or is
expected to make) the final NPL. Include appropriate
Federal Register cite(s). Also indicate whether state,
. ?R?s or citizens object to the proposed listing.
E. General description of environmental problem posed by the
site.
VII. Status of Cleanup Process
t
A. .Cleanup activities by parties other thar. r?A pricr to cr
contemporaneous vith ~?r. ir.vclvsr.fr::'..
Describe, chronologically, all response efforts
'undertaken at the site by PRPs, or state or local
governments, that have occurred prior to EPA involvement
cr .cutsidc the sccpe of I?A oversight.
3. EPA cleanup actions.
The.referral must clearly identify each of the Agency
responses undertaken at the site, including each removal
and remedial operable unit, and, if the action seeks to
compel PHP response under § 106, the proposed response
action. If the site involves multiple operable units
(and multiple RI/FSs and RO/RAs), discuss those operable
units that are the subject of the referral and generally
describe any planned investigations and studies. The
action must have been sanctioned (e.g., action memo or
record of decision), there must be an adequate
administrative record for each response action decision,
and the actual action must be documented.
1. Removals
a. Identify and include the authorizing document
(Action Memo). -
•b. D«scribe the status of the Administrative Record
supporting the removal decision. See Section
VII.c., below.
c. Describe the major community relations activities
relating to the removal, including any public
comment periods held (how long and what for) and
public meetings held. Identify and describe any
particular portion of the response action in which
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.-._„.,ion beeches avare cf such actic_n._ See. "Coordinatid, /
of Agency Ir.volver.ent in Bankruptcy Proceedings Affect in?'-
RCRA or CERCLA Enforcement". (CECM, June 10, 1988)
D. Cross-media coordination
* ,
State whether coordination across media has occurred.'
Cross-media regional review should ensure that
consideration has been given to including all available -
causes of action pertaining to that particular
owner/operator and site.2 Discuss reasons for including-'
or omitting cross-media claims. Where the secondary *
cause of action is minor, or where the case development
will take an inordinate amount of time, the case should..,, *
be referred with the excluded secondary cause of acticn
clearly identified. However, if the secondary cause of
action is major, and if development will not unreasonably
delay the referral, all such causes of action that are
appropriate for filing should 'generally be referred
together. This is particularly true for endar.geraer.t
cases that may be brought under several environmental
statutes simultaneously, if considerations such as
defenses, scope of liability and record review warrant "
it. See discussion regarding other imminent and .- •
substantial endangerment provisions of Federal statutes--
in Section XVI, below.
VI. Description and History of the Site ' x
A. Site location (include here, or as attachments to Litigation
Report (e.g., in ROD), appropriate maps).. See
Section IX.A.2. (Page 10, i,nfra) . : ""
- * ; ',"*
3. Facility processes - Describe the manufacturing5^^recycling
or disposal processes that are pertinent. See :v>
Section IX.A.2. (Page 10, infra). . •""•'. . .
C. Site description (photographs, diagrams, etc., as.
appropriate). See Section IX.A.2. (Page 10, ir.fraV.
2 Review of other potential causes of action is ? ''•":-- .
particularly important in cases involving RCRA>" •
facilities that were in operation after November 19, 1980 a'nd_
.facTTTties _myolving"" PC3 contamination' tnat may oe^reguiatee under
T5CA. In addition, review and coordination is critical uj^oer. "- \
*T::osT'exceptional circumstances where the Agency might
coTrre'r.piate ~a "release from liability under_.severar~statute_s/r.esis.
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• Identify any E?A/State enforcement issues, such as
'whether the State has indicated interest in inter-
vening in any potential Federal action/settlement.
Attach pertinent correspondence.
g. .A risk assessment/ endangerment assessment, tyeicaliv
part of an RI/FS, is generally performed to support"
•remedial action selection'decisions. Such an
assessment will be the vehicle normally used to
establish the imminent hazard portion of a CERCLA
§ 106 or RCRA § 7003 claim. Such an assessment '
should be undertaken pursuant to the Superfund
Public Health Evaluation Manual (OSWER, October
1986) . See also, "Risk Assessment Guidance for
Superfund — Environmental Evaluation Manual"
(Interim Final, OSWER March l~''-'t . 'Discuss.:.-, cf
the risk assessnent/endar.r«rr.er.t ssseisr.sr.t sr.iuLi
ti-:e rlcice ir. cc-r.jun-tion with Sections IX and -XIII,
below.-
. Appendix Two of the RCRA/CERCLA Case Management
Handbook (August 1984) contains a checklist cf facts
.necessary for CERCLA izainent anc/substantial
endangemtent cases. Appendix I hereto discusses the
RCRA Section- 7003 gr^ma facie case.
h. Discuss and include any CERCLA $ lll.(k) Inspector
General audits of the RI/FS.
3 . Remee! la 1 Act i on I sj_
a. Identify and describe each operable unit RD/RA,3
when those activities vere started and (if
appropriate) completed, and the status of activities
underway or planned. Include a discussion of the
entity that performed each operable unit RD/RA
(e.g., name of contractor (U.S. Army Corps of
Engineers, XY.Z Environmental-Removal, etc.)),
important subcontractors and primary contractor
contacts) or the Agency personnel or office that
undertook the activity. Also identify each R?M that
worked on each operable unit.
b. Describe the major community relations activities
during the RD/RA, notices of significant differences
3 While remedial design (RD) is technically a "removal"
action under the terms of the statute (See CERC1A
Sections 101(23) and 101(24)), it is appropriate to discuss "RD ir.
conjunction with remedial action, given the nature of the rer-ediai
design and remedial action process.
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the public (including PRPs) has expressed ir.terest;
.. . Include responsiveness summaries published f = :icvir.~ v
any public comment period. * )
d. Identify and describe each activity ccr.pieted, vher.
those activities were completed and the"status cf
activities underway or planned. Include a
discussion of the entity that performed the activity;
(e.g., name of contractor and primary cor.tractcr
contact) or the Agency personnel or office that
undertook the activity. Also identify each CSC that.
worked on the project.
2. Remedial Investigation/Feasibility Study through-'. Record ? .''«•
of Decision
a. Identify and describe each RI/FS completed, when
those activities were completed and the status cf
activities underway or planned. Include a
discussion of the entity that performed the RI/FS
(e.g., name of contractor .(and any major
subcontractors) and primary contractor contact) or
the Agency personnel or office that undertook the - ,
activity. Also identify each R?M that worked on the
project.
b. Describe the major community relations activities "
relating to the each RI/FS, including public ccr.r.er.t
periods held (how long and what for) and public
meetings held. Identify and describe any particular
portion of the RI/FS in which the public (including
PRPs) has expressed interest. Include
responsiveness summaries published following ar.y
public comment period. - : •'
c. Discuss and include the authorizing document (Record "-
of Decision (ROD)). Discuss any significant issues
likely to be raised by defendants regarding adequacy
of the ROD.'
d. Describe the status of the Administrative Record
supporting the remedial decision. See Section
VII.C., below.
e. ATSDR Evaluation - Discuss ATSDR evaluation and
any potential litigation problems raised by
differences between EPA and ATSDR evaluations.-
Identify who at ATSDR did the evaluation.
f. Posture of State regarding ROD and Participation ir.
Settlement -. Describe any contacts with the state - ••
regarding concurrence in the remedy selected.
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(§ 117 ^c)),. revisions to the ROD including cuclic
comment periods held (how long and what for') ar.d
public meetings held. Identify and describe ar.v
particular portion of the response action in-which
the public (including PRPs) has expressed interest.
Include responsiveness summaries published following
any public comment period.
C. Administrative Record For Each Removal/Operable Unit
Judicial review of the adequacy of response action
selection decisions in the context of CERCLA Section ice
and 107 actions will be based upon the administrative
record supporting the decision. Thus, it is essential
that the administrative record in support of all
pertinent Agency response decisions be completed prior to
referral. See. "National Oil and Hazardous Sutstar.ces
Crr.ti.-.ser.cy rlan: Proposed Rule." 53 Fed. Reer. 51394
(December 21, 1988); "Interim Guidance on Administrative
Records for Selection of CERCLA Response Actions"
-(Porter, March 1, 1989); "Guidance on CERCLA Section 106
Judicial Actions (Reich/Porter 2/24/89). A list (index)
of all documents in the record must ba included in.the
referral package. The record itself must be compiled,
collated and stored in a secure location in the Region by
the time of the referral.4 Any outstanding issues
regarding compilation of the administrative record should
be noted and the plan for.resolution of those issues
should be identified.
vili. Natural Resource pamage Chains
A. Identify potentially interested Federal and/or State
natural resource trustees. See. Memoranda of
Understanding with NOAA and Department of Interior,5 and
40 C.F.R. 300.72 - 300.74 (Trustees for Natural
Resources).
4 In those exceptional circumstances where statute of
limitations concerns indicate it may be appropriate
(consistent with Agency guidance) to file as soon as possible, a
case can be referred without an index to or final, compilation of
the administrative record. . • ' -
5 These Memoranda of Understanding have been transmitted
to the Regional Counsel Branch Chief's under
separate cover.
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Sunur.arize contacts, if any, with each trustee, ar.i
identify lead trustee representatives -and telechcr.e
numbers.
3. Briefly describe natural resources that may have beer.
affected by contamination at or from the site as
identified by the trustee agency.
C. Status cf site survey'damage assessment by trustee(s).
Briefly describe status of trustees1 efforts to
determine.whether significant injury to natural
resources has occurred at the site and, if
applicable, to evaluate measures to restore cr
replace injured resources and assess damages
resulting from the injury.
D. Participation by trustee(s) in selection of remedy or
negotiations.
Briefly describe the role, if any, natural resources
trustees have played in the RI/FS process,
consideration given to trustee comments in the -RCD,
and the trustee's participation or expressed level
of interest in participating in negotiations with
?R?S. ' •
IX. Prima Facie Case. Liability and Description of Proposed
Defendantls), and Miscellaneous Issues Regarding Liability
and Cost Recovery
A. Prira Facie Case
There are three core elements® to the pr.i.Ka facie case fc:
cost recovery or injunctive relief under CERCLA:
b There .is a release or threat of release cf a
hazardous substance;
o the release or threat of release is from _a
facility;
6 To complete a CERCLA prista facie case, additional.'
elements include: an imminent and substantial
endar.germer.t (for CIRCLA section 106 injunctive relief), cr that"
the government incurred response costs (for CERCLA Section 10.7,
recovery). See. Sections XI and XIII,
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o the Defendant: is in one -of these categories cf
liable parries in CERCLA § 107(a).7"
This section of the litigation report should focus or. the
first two elements0 of the core of the.CERCLA prir.a facie
case:
1. Release or threat of release of a hazardous
substance.
Often, this element will be established by
on/off~site sampling shoving that there has beer, an
actual release.Such sampling results may need to
be supplemented by an evaluation of the physical
conditions on or around the site that suggest the
threat of release. A surjnary of each different
sar.pling program undertaker; vith re~2.ri tc the site
shculi r*. ir.clucec. here {along with a discussion cf
any chain of custody or QA/QC issues/problems) and
any witnesses that may be needed to testify about
these procedures should be identified.
It is critical that all materials justifying the
response activity be identified and that each is
shown to be a hazardous substance.9 Much of this
evidence should be gathered as .part of the
• Preliminary Assessment and Site Inspection (See 43
7 It should be noted that, under particular
circumstances, a CZRCLA Section 106 action may lie
against parties other .than those identified in Section 107. Fcr
exar.ple, a Section 106 action may be available to compel a state
or local entity to remove unwarranted procedural barriers to site
cleanup. 'See, e.g., United S t a t e s v. Town Q{ Hereau. No. 88-CV-
934 (N'.D.N.Y. sept, e, issa). "
8 As noted in Section XI, infra fSee. footnote 11 ar.d .
accor.panyir.T text) , the evidence .to establish tnese
first tvo elements should be based on documents in the
ainir.istrativ*. record.
9 A list of substances that are hazardous substances
under CERCLA is contained in 40 C.F.R. Part 302. That
regulation designates under CERCLA § 102(a) those substances in
the statutes referred to in CERCLA Section 101(14). It should
also be'noted that a RCRA solid waste, as defined'in 40 C.F.R.
251.2, which is not excluded from regulation as a hazardous waste
under '40 C.F.R. 261.4(b),'is a hazardous substance, under CERCLA
§ 101(14) (as well as a hazardous waste under RCRA) if it exhibits
any of the characteristics identified in 40 C.F.R. 261.20 through
261.24.
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10
C.F.R. § 300.64, 40 C.F.R. § 300.66 and CESCIA
104(fa)) and in the RI/FS (40 c.F.R. § 300.63).
2. From a facility.
CERCLA § 101(9) 'describes in broad terms what is =•.
. included in the definition of a "facility." ..
Describe the evidence indicating that a "facility."'.
exists. _ "/:/
When the site is on or proposed for NPL listing, one"
must be conscious of the manner the facility is
defined in the litigation vis-a-vis the parallel
discussion of the "facility" in the NPL listing.
Any deviation from the NPL listing should be
discussed.
If the proposed litigation involves multiple sites
or a remote sites theory, discuss each site/facility
and the theory of liability with regard to each
site. In those discussions, describe, as
appropriate, the impact of multiple sites on the' '"V"
allocation of costs and the allocation of ham.
$<.;
The next section of the litigation report should focus on the
third core element of the prirr.a facie case — liability of the
proposed defendants.
3. Liability and Descrlption, of Proposed Defendants
Much of the basis for the liability case against all:VFR?s
will be established during the EPA PRP search. Procedures for
conducting PRP searches and the type of information that
should be obtained are included in "Potentially Responsible
Party Search Manual" (OSWER Directive 9834.6, August 1987).
Pertinent information also may be contained in responses to
CERCLA $ 104(e)/RCPvA § 3007 letters and CERCLA § 122 (e) * f
subpoenas. • •*
As a general matter, the litigation report should
describe the basis for asserting liability against each-.
proposed defendant and explain why EPA does not propose to sue
certain potentially responsible parties at this time. .
However, the complete package of information described below
in Sections B.I., B.2. and 5.3. is not required at this tine
for those PRPs EPA does not propose to sue as a result of this
referral. In addition, some of the Information required belcv
may be available in the PR? Search Report for the Site, which.
should be included as an attachment to the litigation report./.
if available. If the PR? Search Report covers the material
needed in particular sections of the litigation report,
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attaching the PR? search ?.epcrt and citing to the appropriate
pages nay be appropriate.
. The report should include r.ar.es of all ??.?s, the. vclur.e
a.-d nature of substances contributed by each ?H? and a ranking
by volume, to the extent available, as done under
j 122(e)(l) cf CIRCLE. Especially difficult issues of
liability, such as individual corporate officer liability,
corporate parent/subsidiary liability and successor
corporation liability, should be highlighted in this section
of the litigation report.
Information regarding liability of P?.?s generally is net
included in the administrative record for selection cf the
response action except to the extent that ?R?-specifir
(typically, substance-specific) ir.frr-=.ti:n. is r.±*±c.- iz:
r€r;r-.-€ = £l e "-.en ct-r;i icr.s. I-Ic-ever, all ?R? liability
^ccu.-r.cnts r.ust be collated, separated by PRP to the extent
possible, and available in the Regional office at the tiae cf
referral. The format for discussing PRP liability and
describing the proposed defendants is noted belcv.
1. Cv-.er or .Operator and _Fo.r?ner Qvner or Oeeratcr.
(CiaCLA §§ 107(a)(1) and (2))
a. Tescripticn of facility and activities.undertaken at
facility during period of ownership.
Briefly discuss .the business of the defendant,
providing details, about the facility in
ooiestion. When the defendant is a
manufacturer, describe what is produced.
Describe' the plant and processes used.
Emphasis should be on the source of the
release/threatened release that necessitates
the response action. Legal description cf the
property must be in the title search done
• during the PRP search.
Past owners are responsible if they owned the
property when hazardous substances were
disposed cf. Title search will establish
ownership; documents (business records,
permits,'manifests, etc.) and witnesses (nar.es
cf employees, neighbors should be included)
will establish disposal at time of ownership.
. b. State of incorporation/principal place of business.
If there is a question whether the corporation
has'been dissolved or subsumed into a differen
entity, discuss the issue, ascertain status cf
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12
corporation ar.d attach a Dun ar.d Bradstreet
report and corporation papers ' from the
Secretary of State's office (if not tec
voiur. incus) .
Give a brief synopsis of any name changes and
changes in corporate form of the proposed :;'
defendant(s) . Include dates during which the ••
corporation managed the business- responsible " "•
for the problem. " • '
c. Agent for service of process.
Include name, address, and telephone number, if- "
known. .
d. Legal counsel. . '-•'
Include name, address and telephone number. ' '•
Note if there are liaison counsel, separate
negotiation and litigation counsel or a
steering committee involved and include
pertinent names and affiliations.
e. Identity of any parent or successor corporation(s).
Discuss evidence available or needed to shcv
corporate control or assumption of liabilities.
Merger, acquisition and divestiture papers ':
should be attached, if available and not tec
voluminous.-
f. Deed/purchase agreement with former owner.
This may be part .of the title search completed
during the PRP search.
g. Lease Agreements.
If the property is or has been leased, include
a copy of the lease agreement(s), if net too
voluminous.
h. Financial viability/insurance information.
Where financial viability of a potential
defendant is an issue, financial and insurance
information will be important. Discuss the
issue and attach prior 10K, 10Q or other SEC
filings, Dun and Bradstreet or other similar
report, and recent bank loan applications, if
not too voluminous. See. "PR? Search Manual"
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13
and "Guidance on Use and Enforcement of
Information.Requests.and Administrative
Subpoenas" (OECM, 08/25/88).
Where insurance coverage may be available,
describe and attach, if available, any current
or previous potentially applicable insurance
policies. If the case is a multi-generator
case, insurance information is not needed in
the referral package itself. See, "Guidance cr.
• Use and Enforcement of Information Requests ar.d
Administrative Subpoenas" and "Procedural-
Guidance on Treatment of Insurers Under CERCLA"
{OECM, 11/21/85).
Personal liability issues.
Lf proposed defendants include corporate
officers or managers, discuss facts surrounding
corporate officers'/managers' personal
involvement ir. the activities resulting in
liability and the degree of their personal
direction of corporate affairs.
Potential CERCLA § 107(b) defenses.
The only defenses available to liability under
CERCLA § 107(a) for owner/operators are set
forth in § 107(b). The defendant must
demonstrate by a preponderance of the evidence
that the release was caused solely by (1) an
act of God, (2) an act of war, (3) a third
party (under certain conditions), or (4) any
combination of the above. Discuss any
potential § 107(b) defenses associated with the
potential actions and include documents that
may tend to support or negate such defenses.
In general, the third-party'defense in CERCLA §
107(b)(3) is available if the PRP can
establish, by a preponderance of the evidence,
that an entity, not related to the PRP by
contract, agency or otherwise, was solely
responsible for the release, and the PRP
exercised due care concerning disposal at the
site in light of the circumstar .-* s and took
precautions against foreseeabl- rts or
omissions of such third parties.
The litigation report should identify and
address any events or circumstances that may
show "sole cause," "due care" or
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"foreseeability." Discussion of the
availability of the third-party defense ir.
light cf those facts should also be included ir.
the report.
Discuss'fully whether the "innocent landowner"
defense may be available based upon the
parameters set forth in CERCLA Section 101(35} .
Review "Guidance on Landowner Liability under
Section 107{a)(l) of CERCLA, fig Hiniais
Settlements Under Section 122(g)(l)(b) cf
CERCLA and Settlements with Prospective
Purchasers of Contaminated Property" (OECX/CSKI3"
6/6/89) and SARA Conference Report. Discuss
how factors relating to the landowner fit
within the guidance. . Include all
administrative discovery and documents froa the
landowner which may tend to support or negate
this defense. The referral should also assess
the nature and weight of available evidence'
regarding the defense as it may apply toV'eachVr
owner/operator. "• k.
2. Generators and Other Persons Who Arranged for Disjects a 1
(CERCLA | 107(a)(3))
The following information should be provided for
those parties that the Region recommends as defendants.
A lesser amount of information regarding other potential
generator-type PRPs that are not proposed defendants at
this time should be provided as well, along with a short
explanation of the determination not to include these
parties as proposed defendants in this referral package*. "'
See Section IX.B., page 10, supra.
a. As a starting point, the referral must contain a*
list of amount and types of wastes generated by and ;
contributed to the site by each generator, to the
extent known, ranked by volume. The list should
include an indication of whether the material is a
RCRA hazardous waste or other CERCLA hazardous
substance and the source of that determination
(«.g., it is a listed waste, it fails the Extraction
Procedure (EP) Toxicity Test, etc.). See. Section*
IX.A.l., below. If ATSDR is or will be writing a.
report, so note (and attach copy if appropriate and "•
not too voluminous). • .•
b. Identification of generator's facility and
description of and evidence documenting amount and
type of hazardous substances sent to the site (e.g.,
manifests, § 104(e)/§ 3007 letter responses,
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subpoenas, interviews,, ere.). Such ir.fcrr.aticr.
should be organized, sur.r.arized and' cellared
separately fcr each defendant, if such documentary
information is not available or is sor.evr.az
equivocal (assur.ir.g, of-cour.se, a gocd faith basis
to proceed) ,' the litigation report'aust ider.ti-fy the
reasons fcr including the party as a proposed
defendant and the strategy"fcr*linking the defendant
to the site (e.g., proposed disccvery'strategy cr
use of'process chemistry).
c. Indication of the current level(s) at the site of
each contaminant sent to the site by the proposed
defendant(s), if available. It is important that
the hazardous substances at the site be identifisi,
to the extent possible, vith etch potential
•— L . &r.i.?»nt,.
d. Description of the transporter of and the nethcd of
transporting the material for disposal.
Facts should be included detailing whether the
ccnpany used' an .independent contractor, c crip any
owned vehicles, etc. for delivering the waste
material.
e. State of incorporation.
See. Section IX.S.l.b. above.
f. Agent for service of process.
See. Section IX.B.I.e., above.
g. Legal counsel.
See. Section IX.B.l.b., above.
h. identity of any parent or successor corporation's;.
Where financial viability of a subsidiary is
questionable or when a PRP has been acquired by
another entity subsequent to disposal of the
hazardous substances, discuss evidence
available cr needed to show corporate centre 1
or assumptions of liability. Merger,
acquisition and divestiture papers should be
attached, if available and net too volur.ir.cus.
i. Description and evidence of financial viability.
See. Section IX.B.l.h., above.
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16
j. Potential CEP.CLA § 107 (b) defenses.
• See. • Section 1X.3.1.J., above.
Trar.sscrtsrs - CERCLA § 107(a)(4)
a. ' Description of transporter's business.
-b. list of generators each transporter worked fsr. •
c. List of amount and types of waste transported and : "
destination. " •„ -
d. Description of evidence documenting pickup point and
destination point, and amount and type of*hazardous
. wastes or hazardous substances transported.
e. Discussion of evidence to be used in showing that
the transporter selected the site. See. "Policy for
Enforcement Actions against Transporters under
CERCLA" (CECM/OWPE, December 23, 1985).
f. Description of any potential trans-shipments beyond
disposal facility in question. See also, discussion;-
at Section IX.3.2.J., above. **-'':\
.g. State of incorporation.
See, Section IX.B.l.b., above. -. .'V!:. ..;;
h. Agent for service of process.
See. Section IX.3.I.e., above.
i. Legal counsel.
See. Section IX.B.l.d., above.
~. Identity of any parent or successor corporation.
/
See. Section IX.3.2.h.,y above.
Jc. Description and evidence of financial viability..1:''";"
gee. Section IX.B.I.h., above. .
1. Potential CERCLA § 107(b) defenses.
See. Section IX.3.2.J-, above. Also note "IC.C!1
defenses in CEHCLA § 101(20).
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17
'Miguel lar.eeus Issues Regarding Liability
and. Cost. Recovery
Special Defendants
Identify. .and discuss any issues regarding special
defendants (e.g., municipal or State agency"
defendants). Include here any discussion of Federal
?R?s involved with the site.
Divisibility of Harm
Discuss any divisibility issues presented by
separate sites or potentially segregable harms
presented at a single site. Discuss any rrrrrsei
allocation cf rests that ~i ii,__ •_•. ~_.~. sucr.
2. Exemption from Liability Issues - Discuss if applicable:
a. Federally permitted release .(Crr.CLA § i:i(13)}.
gee , "F.ercrting Extr.ptions for Federally Permitted
Releases of Hazardous Substances; Proposed Rule" 53
Fed. Rea. 27263 (July 19, 1988) .
b. Petroleua, natural gas, synthetic gas, and crude oil
exclusions (CERCLA §§ 101(10), 101(14), 101(33)).
For cases involving waste oil, used oil or
other petroleum based materials, set forth a
preliminary determination of why the parties
dealing with such materials should be sued and
the bases for this determination." .
Review "Scope of the CERCLA Petroleum
Exclusion" (OGC, July 31, 1987) and state hew
analysis in this case complies with that
guidance. Once promulgated, RCRA § 3014
regulations should be discussed, if relevant.
c. Nuclear -materials (CERCLA 5 101(22)).
d. Fertilizers - Normal application is not a "release"
(CERCLA 5 101(22) ) .
e. Pesticides - Cost recovery* may not be available
for response to releases of pesticides registered
' ' under FIFRA. See CERCLA Section 107 ((i). Discuss
any "pesticide reformulation facility"- issues that
nay be relevant.
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• *. Consumer products'- Products for consumer use r.ct
included in definition of "facility" in CERCLA
§ 101(9).
4. . Equitable Considerations10 r'
t
In certain circunstances, the Region may be able to
anticipate additional arguments that will be asserted by
certain FR?s. .Such arguments inay include equitable
defenses, negligent permitting of a site by a State or
Federal agency, etc. Any srch potential issues known to -
the Region should be identified and addressed in the
litigation report.
5. Ability to Recover Costs/NCP Issues ..
Discuss any potential arguments that may be asserted by '•'"•
defendants regarding costs, including such things as " '<*'
gross errors in implementing the remedy and inconsistency"
of the response with statutory or NC? provisions. This "
. discussion may be-deferred to Section XI.D., belew, if
appropriate,
6. Potential Criminal Liability
The referral memo should briefly describe if there is a" "'
State or Federal criminal investigation ongoing,
contemplated -or completed and relationship to current: "'•'**•.
Agency guidance on parallel proceedings.
X. Enforcement History; Contacts with tt|e Potential Defendants.'.".:
To ensure that the Department of Justice has a complete
history of SPA's course of dealings with the site and the
potential defendants, the following information should be
discussed if applicable.
A. Pertinent contacts'with potential defendants. Indicate
dates, duration, nature of contact and any conclusions
drawn, including evidence of recalcitrance or ~ ".
cooperation. Initial contact may be made during the PR?'.
search. The following is a partial list of the types of.
10 The government has consistently taken the position
that, aside from proving that they are -not one of the
parties that may be held liable under CERCLA Section 107 (a),.a
??.?'s only possible defenses in a CZRCLA action are those
delineated in CSRCLA Section 107(b). It should be noted, however,
that certain courts have held that equitable defenses are
available under CERCLA.
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19
• contacts that should "be -discussed in the litigation
report^ _ • ' ~~~ —a
I. Information requests, subpoenaed documents/ •
testimony.
t
See. "Guidance on Use and Enforcement of CERCLA
Information Requests and Administrative
Subpoenas" (OECM 03/25/88).
'• 2. Interviews with site or. generator employees, truck
drivers, etc.
3. FOIA requests.
4. DeTr.ar.i letters (rrrru. . ;v
1. Xem.M-, ai^tii orders or agreements.
6. Administrative order(s) , -
Describe any state or Federal AOs that have
been issued to anyone involved at the site and
the current status of the order(s). If the
case involves enforcement of a Federal AO under
RCRA or CERCLA, the AO should be attached to
the report and the basis for and the facts
surrounding any claim for penalties or treble
damages (CERCLA only) need to be discussed.
7. Permit(s) (State or Federal) and permit applications
relevant to the referral.
List all permits issued to the facility or site
and discuss those that are relevant to this
referral and any actions required to enforce
the conditions of the permit.
8. Federal lien -.See. "Guidance on Federal Superfur.d
Liens" (OECM 9/22/87}.
3. Involvement of State*, local agencies and citizens.
Identify pertinent contacts or actions taken or
anticipated by State or local'agencies and citizens. In
particular, discuss local or State civil or criminal
enforcement actions taken or pending anc describe any
role the State anticipates playing in an ongoing action.
Any notable positions* that the State has taken regarding
this site or other CERCLA sites in the area of State
involvement in remedy selection or implementation
decisions, or ARAR selection should specifically be
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20
noted. Media coverage regarding the site should also be
noted and print media articles should be attached, -f
available.
c. Citizen suits filed.
Identify any relevant citizen suits. Identify plaintiffs
and defendants. Summarize claims asserted. Indicate date
case was filed and in what court. Describe case status-
S. Administrative or judicial actions (regarding the site ' ' -
only) filed by State or filed or referred by Federal
government under environmental statutes other than RCRA,-- ~
CERCLA or State counterparts thereof should be discussed. :
Include recent actions in all media and under all
statutes. Include any related or pending administrative
enforcement proceedings (e.g., CAA § 113/120, TSCA §
16(a}, RCRA § 3003, FIFRA §§ 13 or 14(a), CWA I 309, and
KPRSA § 105(a) proceedings). Generally discuss ,
defendant's responses. Also indicate recent contacts
by/with program office permits staff.
E. RCRA facilities.
Where the site/facility is a RCRA facility or former RCRA
facility (e.g., LOIS,. WOIS, or protective filers cf a
RCRA Part A perait), the rationale must be given fcr the
decision to pursue § 7003 or § 106 injunctive relief for •
site remediation, instead of corrective action or closure
pursuant to RCRA § 3008(h) or, if appropriate, §5 3004(u}!
or (v), where permitted. IMPORTANTt gee. N?L deferred
listing policy for RCRA sites, as described at 51 Fed.
Sec. 21D57 (June 10, 1986) and 53 Fed. Sea. 30002
(August 9, 1988). ?ee ajlso. "National Oil and Hazardous
Substances Contingency Plan; Proposed Rule." 53 ged. Reg.
51394, 51415 (December 21, 1988).
F. Prior Orders or Consent Decree(s)
"Certain facilities or sites may have been subject'to
prior administrative orders or consent decrees addressing
oth«r cleanup actions or access. The litigation report
should include a general description of the terms 'of the'.'-
decree, whether the facility or site owner complied with
the terms of the decree and what statute and claims'were
involved.
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21
XI. Cost Recovery
There are four elements to the prirr.a facie case for
ccsr recovery relief under CERCUU
i o There is a release or threat of release cf a
• hazardous substance:
1, o The release or threat of release is frcn a
facility;
3 o The release or threat of release caused the
United States to incur response costs,
1
The Defendant is in one of these csterrries cf
lieblt sorties ir.' CIMLA § '.Z~ (i, .
Iler.er.rs 1, 2, and 4 have been discussed in Section IX,
aeove.11 The third element (expenditure of response costs),
as described below, has several facets to it.12
There are tvo general types of evidence that must be
available to prove costs: "wory." evidence and "cost" evidence.
the ""work" evidence typically will be in the form cf documents
ar.d testimony detailing the activities undertaken. The "cost"
evidence will primarily involve documents detailing the cost
of those activities. The major guidance documents
discussing CERCLA costs and cost documentation requirements
are:
o "Procedures for Documenting Costs for CERCLA
§ 107 Actions" (OWPE January 30, 15S5)
11 These three elements are typically part of the
government's "liability" case and should be
established, 'in most eases , Os&T-augh summary ^uccner.t. > The
evidence to establish the "release/threat" and "tacility" eler.er.ts
should be based on documents in the adainistrative_ record for the
5.ejl e ct'icn of thjt-X&apense act ioru ' "
12 To the extent that this element of the Section
107 prima facie case involves review of remedy
selection decisions, Section 113 (j). requires that review be on the
administrative record. It is EPA's view that under Section 1C"
cf CERCLA, judicial review of costs incurred by EPA is confined to
proof that the implemented cleanup was consistent with the
response action selected by EPA, that the response action was
perfcrr-ed and that the clair.ed costs were actually incurred.
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• o "Financial Mar.ager.ent Procedures for Document'-=
Superfund Costs" (FMD Septenxer 1986)
o "Cost Documentation Requirements for Superfur.d
Cooperative Agreements, Appendix U" (OSW£R~Di'-ective "
9375.14u)
o "Resource Management Directive 2550D - Financial
Management of the Superfund Program" (Conptrol'er
July 25, 1988)
o "Surerfund Cost Recovery Strategy" (OSWER Directive-,.
No. 9832.13, July 25, 1988) '<*
Work and cost documents must be available for each of.'the^
cost areas in a cost recovery case. In addition, official .;;;
determinations regarding expenditures of money should be >.,;'
discussed in the litigation report and the corresponding '"'
documents included in the appendices (e.g., approval memo for
removals exceeding S2.0H). The referral should also indicate
whether the Region has redacted the cost documents for
confidential business information (CBI) and, if not, a date'by,
which it will do so.
A. Past cost summary (by category of costs}.
As noted in prior guidance, the cost summary, (but not the
entire cost documentation package) must be included in
the litigation report. Nonetheless, the complete cost
documentation package must be compiled in the Region at
the time of the referral and supplemented thereafter cr. a
timely basis.
3. Response action cost elements and documentation.
The referral aust clearly identify each of the Agency .
responses undertaken at the site (i.e., Removal(s),
RI/FS, RD, and RA) and each operable unit of each
response.
Each phase of a response action will have certain types
of documentation required for proof of the costs for th'at
phase of response. Seme of the documentation may be * :
similar to that used in proof of other phases of an
overall response to a site, for, each of^ the response
actions at a site, the following information and document:
must be gathered, organized and available in the Region a1
the time of referral. Definitive guidance on-the
documents necessary for cost recovery is contained in the
manuals noted above.
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23
Each Federal contractor used and tasks cerfcrr.ed.
a. Work done (e.g., contracts, subcontracts,
letter resorts, Technical Directive Documents
(TDDs), work assignments, scopes of work, work
progress reports, TDD Acknowledgement of
Completion);
b. cost of that work (e.g., invoices, vouchers).;
and
c. that payment was made (e.g., paid/processed
invoices, contract status notifications, and
Treasury Schedules).
~;.-'~ :: t-rra^c.-.cy Agreement (IAG) employed and tasks
performed.
a. Work done (e.g., each IAG, contracts entered
into by the other Agency, work assignments,
scope of work, work progress reports, and ack-
nowledgements of completion);
b. cost of that work (e.g., invoices, vouchers,
drawdown vouchers and the pertinent reports to
the agency);
c. that payment was made (e.g., paid/processed
invoices).
Each cooperative agreement signed, tasks performed
and contractors hired by the State.13
a. Work done (e.g., each cooperative agreement and
all amendments thereto, contracts entered into
by the State, work assignments, scope of work,
work progress reports, and acknowledgements of
completion);
13 CtRCLA Section lll(k) requires an Inspector General
audit of the Hazardous Substances Superfund and rar.dcr.
audits cf cooperative agreements and State Superfund contracts.
E=A's Inspector General also does periodic site-specific general
audits. The results of any site-specific audits pertinent to t.-.e
referral should be described and, if not too voluminous, attached.
Ccpies cf audit reports may be obtained from the Inspector Ger.era:
Division of the Office of General Counsel.
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24
b. cost of that work (e.g., invoices, vouchers,
drawdown vouchers ar.d the pertir.er.t resorts to
the Agency);
c'. that payment was made (e.g., paid/prccessed
invoices).,
- 4. Agency personnel activities performed at the site.
a. Work done (e.g., tisesheets, travel
authorizations);
b. cost of that work (e.g., Agency financial-
management (SPUR) report, Travel vouchers,
etc.);
c. that payment was made (Treasury Schedules). -
5. EPA indirect costs - Indirect cost calculation
worksheets and summary sheet should be included
in the litigation report. See. "Superfund
Indirect Cost Manual for Cost Recovery
Purposes: FY 1983 through FY 1986" (OAJLM March:
1986) ; "Superfund Indirect Cost Rates for
Fiscal Years 1985 and 1986M (OARM 12/17/87).
6. Interest .:"'•"
ft
a. Identify date of demand and include copy of
demand letter or other document indicating
initiation .date used for calculation of
prejudgment interest.
b. Include spreadsheet or other documents showing
prejudgment interest calculations.
See. CERCLA Section 107(a); Comptroller Policy. ••'
Announcement 87-17: "Interest Rates for Debts
Recoverable Under the Superfund Amendments and
Reauthorization Act of 1986" (09/30/87); "Interest
Rates for Superfund Related Debts" (Comptroller
6/15/88)
C. Projected future costs.
1. An estimate of the types, amounts and basis of
future expenditures, if they are planned!or can :
reasonably be projected, should be included.
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- 2. Future costs (or ever, a declaratory judsrer.t
concerr.ir.g liability for future costs-4) are, for
tactical reasons, not always sought in each case.'
I* they are net sought (i.e.., r.o potential statute
of limitations problem, an explanation vhy not
should be included.
2. Potential problems with costs. (s_sa also, ix.c.5., arov.e;
1. The referral should describe and include any
documents discussing or criticizing any cost figures
or. activities undertaken, including the On-Scene
Coordinator's Report (40 C.F.R. 300.40) or any
Congressional investigations .or Inspector General
audits not described previously that refer ~z cr
• -. • ' directly discuss the site c.sanup activities cr
costs.
2, Any potential problems regarding consistency
with the National Contingency Plan should also be
discussed.
£. Statute of Limitations (CERCLA Section H3(g)(2))
Discuss any potential statute of limitations issues.
See, "Timing of Cost Recovery Actions" (OWPE,
October 7, 1985). See also. "Cost Recovery Actions/
Statute of Limitations11 (OWPE, June 12, '1987) . Indicate
relevant dates.
F. Identify any prior proceeds received.
1. Ten percent state share
2. Prior settlement proceeds (received and expected)
3. Bankruptcy proceeds
XII. Penalties and Punitive Damages
A. Section 106rbi - State whether defendant has violated an
order issued under Section 106". The referral must
describe all evidence showing that defendant
willfully violated or failed or refused to ccr.ply
with the order, without sufficient cause. Discuss
all arguments that defendant may raise justifying
failure to comply with the order (e.g., not a
responsible party, terms of order were arbitrary).
14 See. CI3CLA Section 113(g)(2).
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26
Set forth calculation of penalties. Discuss a-11
'opportunities defendant had to"meet with Agency
prior to issuance of the order. Note the
possibility that, under Tull v. United states.- 43T
U.S. , 107 S,.Ct. , 95 L.Ed. 2d 365 (1537),' the--
case may involve a jury trial.15 Any referral that
proposes civil penalties must contain seme analysis
cf the penalty aspects of the case in light of Tull.
Se.ct.iQn. 1C7 - Defendant may be liable for punitive
damages in an amount equal to and not more than
three times the amount of costs incurred by the
Hazardous Substances Superfund if defendant failed
without sufficient cause--to properly carry out
removal or remedial action under a CERCLA §§ 104 or
106 order. Discuss the nature of and evidence
supporting proof of defendants' violations, the
' amount and basis for damages sought under this"/••''
authority, and any justifications defendant may have-
for failing to :erform the action.
Inj unctive %q 1 lit.g
Under this section of the litigation report, the substantive
requirements of the relevant portions of the applicable statute
should be presented. Applicable case law should be cited and
analyzed. "If a novel theory is proposed, support for that theory
should be included. In addition, any determinations that are '• -
required by statute or regulation (e.g., that an imminent and "•' >
substantial endangerment exists at the site) should be described1 *.
and documented in the administrative record.
A. CERCLA Section 10616
CERCLA Section 113 (j) clearly provides that CERCLA remedy
- - selection decisions are entitled to review based upon.the
lo Under Tull. the Supreme Court held that the Seventh' -
Amendment to the Constitution may guarantee a jury :-, '-••
trial to determine liability in Clean Water Act civil enforcement.-
cases seeking civil penalties. Under that ruling, however, a jury
does not assess the amount of penalties, nor is a jury required in'
an action brought solely for injunctive relief. The government's
position is that a jury trial is not available to decide liability
issues where a court can decide the case through summary judgment
{e.g., where no issues of material fact are present).
16 See. "Guidance on CERCLA Section 106 Judicial Actions?.'
(Reich/Porter, 2/29/89) for factors considered -in -
selecting and initiating Section 106 actions.
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27
administrative record.17 That decision will be based or..
among other things, evidence of two of .the three core eler.er.ts
cf the CERCLA prir.a facie case (noted in detail in Section
IX.A., above): (i) the release or threat of release cf
hazardous substances, (2) from a facility.
The key additional element for a Section 106 action,
aside frcn liability, is that there be a condition which
presents or say present an imminent and substantial
er.dangerment to public health or welfare, or the environment.
Evidence on this subject generally will be available through
the results of activities undertaken pursuant to Subpart F -
Hazardous Substance Response of the NCP (40 C.F.R. Part 300 et
seq.). The endangerment assessment/risk assessment typically
contained in the RI, or as a separate document, is the
critical piece of information.
The evidence to support these three elements of the
Section 106 prima facie case should be addressed in and be
cart cf the RI and FS and will be documented in the ROD as
part cf the Agency's remedy selection decision. The remedy
selection decision in the ROD itself should define the
ir.jur.ctive relief EPA will seek and should be upheld if it is
supported by the administrative record and is not arbitrary
ar.d capricious.18
Of course, to complete the CERCLA Section 106 pr..i?.a facie
case, the United States will still have to present evidence cr.
liability (i.e., that the party is a responsible party
(including but not limited to these classes of persons liable
under CERCLA Section 107(a))} and may have to present evidence
showing that any alleged affirmative defenses under Section
l"(b) are inapplicable,19 both of which might be reviewed by
the court de r.ovo. See. Section IX., above.
17 To assist in ensuring record review of the remedy
selection decision, the Region also should typically
issue a unilateral administrative order under CERCLA § 106 after
tr.e ROD is signed.
13 The ease law on the standard of review for remedy
selection decisions in the context of CERCLA Section
105 actions that were filed pre-SARA has been split. However, it
is the Agency's position that record review with an arbitrary and
capricious standard is applicable.
19 The Section 107(b) defenses to liability typically are
available in Section 106 (a) actions for ir.jur.ctive relief
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identified as a hazardous waste cr a solid waste.
Sjge, RCRA II 1004(5) ar.d i:C4(27}, respective!-.-.
• See a'.so. ,0 C.F.R. 251.3-and 40 C.F.?." 251.2,"
which, while r.ct directly gcverr.ing Secticr. 7CC2
actions, also delineate materials as hazardous-
wastes due to their characteristics or because they
are specifically listed as such in the regulations"
2. May present an imminent and substantial encar.gerr.ent to
health or the environment..
Although we will argue for record review in these
cases, additional evidence may need to be adduced.
A discussion of the types of evidence that may be
needed to support this element of the RCRA -
I 7C03 case"is included in Appendix I.
4. The party has contributed or is contributing to such
handling, storage, treatment, transportation or disposal.
This aspect of the RCRA §7003 prima facie case nay
be an additional, different burden than faced ur.i&r
CIRCLA. The referral must discuss the available
" documentary and testimonial evidence that will be
used to show that a particular generator's waste (or
at least the same type of waste when the wastes have
commingled), or an owner/operator's actions "has
contributed or is contributing to" a situation that
may present an imminent and substantial
endangerment..
XIV. Other Legal Issues
A. Potential defenses/exclusions (other than those noted
in Sections IX.B.l.j., IX.S.2.J. and IX.C., above).
3. Statute of limitations
See, Section XI.E., above, regarding the CIP.C1A
statute of limitations. Since-RCRA contains r.o
•- • specific statute of limitations, underlying facts
relating to the timing of any action under RCRA,
including any potential limitations, should be
included.
c. Applicability of pricr consent decree or A.c. entered
for this site. See. Section X.F., above.
D. .Res j.udicata/collateral estoppel/equitable estoppel.
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30
• Litigation/Settlement Strategy
A. Case Management Planning
1. A preliminary draft case management plan should be ..
prepared. See "Case Management Plans" (Adams/
Marzulla 3/11/83). Availability of and proposed
assignments for Regional legal and technical
personnel should be noted in the draft plan.
3. Settlement Negotiations - .'
i. Prior efforts to settle. . ; • -:
Describe history or attempts to settle by way of
notice/demand/special notice letters, PR? meeting,*
etc.
2. Special notice
Discuss whether special notice was sent and the .
results. See. "Interim Guidance on Notice Letters?,
Negotiations, and Information Exchange" (CW?£,
10/19/87)
3. . History of negotiations.
Describe nature> extent and duration of prior or
ongoing settlement discussions regarding subject cf
this referral, or negotiations concerning other
pending environmental civil or administrative
actions. (When available, include discussions ar.d
attempts to settle by State.) Describe.attempts ar
compromise and why process failed. Attach a eery c:
latest version of AO or CD discussed with PRPs
before negotiations were terminated.
4. Planned Future Negotiations
If additional negotiations are to be pursued
. immediately after filing, include a brief set.tlemer.1
•valuation (See. Interim CERCLA Settlement Policy,
50 Fed. Reg. 5034), recommending a bottom line arc .
suggested negotiation strategy. See also. "DRAFT
CERCLA RD/RA Settlement Negotiations Checklist"
(OECM, 01/26/88). '. '
a. State whether this case may be appropriate
for mixed funding. See. "Evaluating Mixed
Funding Settlements under CERCLA" (OECM/OSWI?,,
10/20/57).'
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31
• • b. State, whether this case has the potential fcr
de minimis settlements. See, "Interim Guidance
On Settlements, with De Mir, is is Waste Con-
tributors under SAJIA Section 122 (g)"
(OECM/OSWER 06/19/87)(52 Fed. Reg. 24333,
06/30/87).
5. Include discussion of and a ccpy of any Ncn-3indir.s
•Preliminary Allocation of Responsibility (NBAS) and
responses by PRPs.
See. "Interim Guidelines for Preparing
Preliminary Non-Binding Allocations of
Responsibility" (OSWEH, 5/16/87)(52 Fed. Re=.
19919, 5/28/87) .
C. liti'criticr. Strategy
-1. Discovery22
Indicate general need for obtaining evidence
(especially for critical facts) by discovery
(interrogatories, depositions and requests far
admissions) on issues of liability and, in certain
instances, response costs. (Include names and
addresses, if available, of potential witnesses and
the evidence to be sought from such persons.)
discuss the approach to be taken in managing
discovery and document production if the action
involves multiple parties or massive nunJsers of
documents.
2. Summary Judgment - .
Indicate if case has potential for summary judgment
or partial summary judgment and on what issues.
Explain briefly.
XVI. other Igpjnent Hazard Provisions
The referral should carefully consider whether claims exist
under th« imminent hazard provisions of the other Federal
statutes listed below. The Appendices to the RCRA/CERCLA Case
Management Handbook describe and discuss each element of
22 Despite the availability of record.review for
issues regarding the adequacy of remedy selection,
discovery will be available for certain other aspects of CERC1A
cases, such as for issues regarding liability.
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32
proof, listed below, for these other statures ar.d should be
consulted, •
A. Clean Air Act S 303". 42 U.S.C. 6 76Q1
1. A pollution sour'ce or combination of sources
(including moving sources) [See. 42 U.S.C.
§§ 7521-7574; 42 U.S.C. § 7602(3)]-,
2. is presenting an imaine-t and substantial
er.dangerment to the health of persons. •'
3. state and local authorities have not acted to
abate such sources.
4. Defendant is a person causing or contributing-to the
alleged pollution.
5. E?A has confirmed the correctness of its
information. .-.;.. ":,
3. Clean Water Act S 504. 33 U.S.C. S 1364
The Administrator may seek injunctive action to stop
the discharge of pollutants or take such other action as
may be necessary (See, CWA §§ 504(a), 502(12), (6), (7),
'(9), (10), (14)) where the Administrator receives
evidence that:
1. A pollution source or combination of sources [See.,. • '
CWA § 504(a), 502(19), (12), (6), (7), (14), (S),
(10), 306(a)(3)],
2. is presenting an imminent and substantial
endangerment to (1) the health, of persons or (2)
to the welfare of persons where such endangerment is
to the livelihood of such persons, such as
inability to market shellfish (504(a)].
3. Defendant is a person causing or contributing to *
the alleged pollution (504 (a), 502(19)]. See, 'alss,
discussion on RCRA § 7003, Section XIII.B., above.
C. safe Prinking Water Act's 1431. 42 U.S.C. S 300i
The Administrator may seek appropriate relief.to protect
health of affected persons, including injunctive relief,
when the Administrator is in receipt of evidence that:.
1. A contaminant or contaminants (§ 300i(a)>
§ 300f(6)J,
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33
. 2. present in.or likely to enter [§ 3CCi(a);,
i '
3. a Public water System [§ 3COi(a), §3CCf (4)] or
an underground source of drinking-water,
4. nay present an iaminent and substantial
er.dar.gement to. the health of persons, and
=. appropriate state and local authorities have net
acted to protect the health of such persons.
6. Where practicable, EPA consulted with State and
local authorities.
7. Information en State cr local acticn taken, if . •
any. (Note: This prevision is silent as to
definition of responsible parties.)
XVII. Witnesses/Litigation Support
A. Witnesses
1. For fact witnesses identified in the litigation
report that have potentially relevant information,
the-following should be referenced in the referral
package:
o Present place of employment
o Home and business phone
o Substance of testimony
o Whether statement is on file.
2. For potential expert witnesses, the following are
required in addition:
o Field of expertise (include resurse and any
reports generated by expert regarding this site
cr facility)
o Whether individual is under EPA contract, and
if so through what contracting ir-echanisn.
o Other cases where the expert has testified,
been deposed or otherwise been retained in the
past.
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• - 3. Potential adverse witnesses (fact or expert) sr.culi
also be identified, to the extent kr.cwr.", and the
• substance cf .their potentially adverse testirr.cr.v •
should be indicated.,
3. litigation Support . - .
1. Identify any contractor resources necessary and
present plans for procuring such resources.
2. Provide an estimate of the relative resource demands
that the Region anticipates will be required for the
proposed litigation and indicate any specific ";
workload model projections attributed to this case.
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PRIMA FACIZ CASE
RCRA § 7003;
(42 U.S.C. § 6973)
This document was prepare
as suggestion ar.d guidar.z-.
only.
FACTS TO 3£ PROVEN STATUTORY BASIS
I. Administrator must .
present evidence of:
A. 1. Handling,
2. Storage,
3. Treatment,
4. Transportation,
cr •
5. 'Disposal
1004(33)1/
1004(34}
1004(3)2/
S. Of either:
1. Sslid Waste,
or
1004(27)
40 C.F.R.
261.2
2. Hazardous waste
1004(5)
40 C.F.R.
261.3
Disposal includes when waste is
first deposited, dumped, spilled,
or placed onto the ground a.-.a als:
when wastes later migrate. It
includes leaking (i.e.,
discharging and "repositioning")
as well as "reposing" wastes.
S«S, U.S. V. CCC. 619 F. Supp.
162, 199-200.
Very broad definition of solid
waste, but note specific
exceptions. See also. American
Mining Congress v. EPA. 824 F.2d
1177 (D.C. Cir. 1987) holding that
EPA exceeded its authority -under
HCRA in seeking to regulate as
"solid wastes" secondary materials
reused in an ongoing manufacturing
process. See also. 53 Fed. Reg.
519 (January 8, 1988), for EPA's
interpretation of that decision,
The definition states that a waste
is hazardous if it "may...cause.
or significantly contribute • to ar.
increase in illness or mortality,
or if it "aay...pose a substantial
present or .potential hazard tc
huaan health or environment" vr.er.
managed. These terms indicate >
scope broader than the strict,
conventional "causation."
Listing in RCRA regulations
jj 42 U.S.C. § 6903 is the definitions section of RCRA.
2/ See also Hazardous Materials Transportation Act,
49 U.S.C. §§ 1801, 1802(6), 1809, 1810.
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- 2 -
FACTS TO SS PROVEN STATUTORY BASIS
COMMENTS
C. May present
C.F.R. Part 261) or evidence that
it is a "characteristic" waste. , .
under Part 261 is suf f rcient^tbN,'
establish that a material' is?*.. "'"'
"hazardous waste." .
D. An iauninent and
Imminence applies to nature.-c;f ,,"
threat rather than'the .. . "-.'.J'V
identification of the time vherf .
the endangerment actually
materialized.2/ An er.dar.gerxer.t
is iaiainent if factors givi.-.g' rise
to it are present, even though the
hann may not be realized for
years. U.S. v. ccc. 619 F.,'Suet,
162, 193 (W.D. MO. 1985). "f
substantial endangenaent
An endangerment is not necessaril
an actual harm but may also ar.ise
from threatened or potential h;arr.:
no actual injury need even occur.
Evidence must show only riisk of •
harm. See. £C£ at 192; S'thvl :. •
Coro. v.. EPA. 541, F.2d 1 (D.C.
Cir. 1976), cert. den. 426 U.S.,
941 (1976); qnited States v.
Reserve Mining. 514 F.2d 4S2 (8th-
Cir., 1975); United states v.
Vertac. 489 F. Supp. 870, 885
(E.D. Ark. 1980). Similarly, the
U.S. need not quantify the harr. t:
establish endangerment. An
endangerment is substantial if
there is reasonable cause, fcr •. -
I/ K..R. Consaittee Print {96-IFC 31, 96th Cong. 1st Sess. 32 (1979)).
-------
'ACTS -0 3£ PROVEN STATUTORY BASIS
£. To
I. Health, or
2. The environaent
concern that someone or sonethir.g
may be exposed to risk of ham by a
release or threat of release if
response action is not taker.. CC"
at 191-197.
See also legislative history ar.d
case law interpreting other
"endangenaent" provisions of Federal
law, including §§ 504(a) and 311(e)
of the Clean Water Act, § 1431 cf
the Safe Drinking Water Act, §
3D3(a) of the Clean Air Act, § 7 of
the Tcxic Substances Control Act; §
6(c) of the Federal Insecticide,
Fungicide and Rodenticide Act; §
2601 of the Consumer Product Safety
Act; § 662 of the Occupational
Safety and Health Act; § 1810(b) of
Hazardous Materials Transportation
Act; $ 15ll(b) of the Deep Water
Ports Act; $ 1415 of the Marine
Protection, Research and
Sanctuaries Act, and 9 355(e) of the
Federal Food, Drug and Cossetic Act.
The tern incorporates surface water,
groundwater, soil, and air, and
probably includes fish, aannais,
biota, and plant life.
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FACTS 7.0 .3Z»?acVEN STATUTORY. BASIS
liable Persons
III. Relief:
A. To restrain liable ,;
persons from:
1. Handling
2. Storage 1004(33)
3. Treatment. 1004(34)
4. Transportation
5. Disposal 1004(3}
Any person (including any cast cr
present generator, past cr preser.i
transporter, or past or present
owner or operator of a treatment,
storage or disposal facility) who
has contributed or who is V
contributing to the alleged".
handling, storage, treatment,;'*
transporation or disposal of a
solid or hazardous waste that-nay
present an imminent and substar.ti
endangennent to health and .
environment. Such liable persons
may include owners or operators;5 c
the site, former owners' or "'"•
operators, (both of which may't'? 7
include landowners cr lessors'JV'-
corporate officers and directors
(in their official and,; in
appropriate circumstances,
individual capacities) 'waste
generators, and (unless exempted
§ 7003) vasts transporters, gee.
e.o._. U.S. v. Acete Agricultural
Chemicals Cora.. No. 88-1580 (3th
Cir. April 25, 1989), >U.S. v.
KZFACCO, 810 F.2d at 7<0, 745 (3t-
Cir. 1986), cert, denied 108 S.Ct,
146 (1987) ; U.S. v. CCC. 619 F.
Supp. at 198. <.-.':,
Included in relief granted by- ;
courts in § 7003 actions are:
restraint of continued leaking,
requirement to undertake
investigative activities - (Price'
688 F.2d 204 (3rd Cir. 1982)),'
preparation and implementation
plans for .removal of wastes. • ,
(Midwest Solvents Recoverv'.?4'B*-.
Supp. 138 (K.D. Ind. 1980):) ;
injunction against further "
activities on site, formulation
plans for security and removal
a I '
bv
of
:* «
cf
of
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FACTS TQ
PROVEN STATUTORY 5A5.5
3. To order such other
action as may be
necessary
wastes (Ottati and Goss. Civil So
C80-225-L (D. N.H.)(Memorandum
opinion December 2, 1980)). See
also, U.S. v. Diamond shamrock,
Civil No. C80-1857 (N.D.
Ohio)(Memorandum Opinion, Kay 25,
1981).
Authorizes affirmative equitable
relief to extent necessary to
clean up site, gee, Price, €58
r.2d at 213-14; rrr, €i? r. s_zc.
lii, 201.
C. To recover U.S.
expenditures
A right to recovery Federal funds
has been implied sirce f-sr-tien
"-C3 does not contain any express
authority to seek cost recovery.
See. U.S. v. HEPACCO. 810 F.2d at
7<7; U.S. v. Price. 688 F.2d 214;
U.S. v. CCC. 619 T. Supp. at 201.
See also, Wyandotte Trans. Co. v.
U.S.' 389 U.S. 191 (1967) (Clean
Water Act) ; U.S. v. Her an Tcvir.s
and Transportation Co.. 409 ?.2d
961 (4th Cir. .1969)(Clean Water
Act); Restatement,_Torts § 919(1).
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•
- UNITED ST/7ES S^V'*?^':-.-.:,. «-?-: :- : ,- • -•..-
* WASHINGTON. D.C. 2M6&
OSWER Directive No. 9832.
JUN 7 -ar-
KEMORAKDIJM
SUBJECT: Guidance on Documenting decisions not .to Take Cost
Recovery Actions
FROM: Jonathan Z r nBt&tr.on, Acting Director
C-fiice cf Wasie Frccrazs Ir.fcrceaer*. (CV?I}
TO: Addressees
PURPOSE •
This document is intended to provide information on the
content of close-out nenoranda which should be written fcr each
site where the Agency does not intend, on the basis of certain
infcnr.at.icn, to pursue an action fcr recovery of unreizJbursed
Hazardous Substances Superfund (Fund) monies.
5ACKGROUK5
v.
Pursuant to the Conprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended by the
Superfund Amendments and Reauthorization Act of X986 (CERCL&),
the Agency is charged with management of the Fund.. Fund Eor.ies
expended in response to releases or threatened releases of
hazardous substances are fully recoverable pursuant to §107 of
CERCLA as long as response actions conducted were not
inconsistent with the national contingency plan (NCP).
Because of the Ac^.tcy's accountability for management of the
Fund, an affirmative decision whether or not to pursue a cost
recovery action must be made for each removal action and remedial
action in which CERCLA funds are expended. Decisions to pursue
-------
OSVTJ. D-rs^ivt i»c. iE-32.11
cost recovery are reflected in referrals and settlements.
Decisions not to proceed with cost recovery efforts are to be
documented in close-out memoranda. Determinations not to pursue
cost recovery are important for satisfying EPA management's
accountability fcr cost recovery on a site by site basis.
Additionally, by documenting which cases will not be pursued, the
close-out memoranda will aid in planning referrals and projecting
revenues to the Fund in future years.
PRE-p^CTSIONAL ACTIVITIES
In removal actions where time permits and in remedial
actions, the Fe-ri'cns e»rnFr»r*- vi~. ?. r:-i•„•-.• t .- *'.'- .<;-:':• -r.~: -.-.•. .
T.3 have :.;„& iXis undertake the clean-up prior to funiins &
response action. PRP searches that are not essentially complete
when the response starts are completed during or after the
federally-funded action. While.the primary purposes of a PRP
search are to identify PRPs who may be induced to perfora work
tnd to provide evidence for cost recovery lawsuits, fF.? searches
also form a basis for determining not to pursue a cost recovery
action, for example, it may form a basis for not filing where
PRPs cannot be identified, where the evidence linking possible
PRPs to a site is very tenuous, or where PRPs are not viable.
TIMING CF THE MEMORANDUM
CERCLA §113 establishes the statute of limitations for
recovery of post-SARA response costs.1 The statute of
limitations provision, which was added by SARA, applies only to
those response actions initiated after the effective date of
SARA. To minimize opportunities for challenges in litigation,
however, the Regions should operate as though the SARA statute of
limitations applies to all removal and remedial actions, and plan
the referral of viable cases consistent with that assumption.
V CERCLA |113 states "An initial action for recovery of
costs referred to in section 107 must be commenced—(A) for a
removal action, within 3 years after completion of the removal
action, except that such cost recovery action uust be brought
within 6 years after a determination to grant a waiver under
section 104(c)(i)(C) for continued response action: and (B) for a
remedial action , within 6 years after initiation of physical on-
site construction of the remedial action, except that, if the
remedial action is initiated within 3 years after completion of
the removal action, costs incurred in the removal action may be
recovered in the cost recovery action brought under this
subparagraph."
-------
3 CSVT?; Directive i-c. --:;i
When to prepare a cost recovery close-out memorandum vill
depend upon the specifics of the case. Normally, the decision
not to pursue cost recovery should be Bade soae time after the
case vould be "ripe" for referral of a judicial action for cost
recovery.2 The close-out memorandum nay be prepared and signed
as soon as the Region is reasonably sure that information
developed later will have no bearing on viability of a cost
recovery action. For example, if a thorough PRP search is
conducted prior to the commencement of a federally funded
remedial design but no viable PRPs are found, a cost recovery
close-out memorandum may be prepared while the remedial design is
underway. If there is a settlement for less than all costs and
the Region does not intend to recover the remaining costs /e.g. .
waere there are no viable PRPs), this must be addressed in the
ten point settlement analysis (if known at that time) or a
separate close-out memorandum. Of course, signing of a close-out
memorandum does not extinguish or compromise any cost recovery
rights of EPA and does nst fcre:lcse tne Agency frcr re-ore-.iT-
the case in t.^e event additior.ei parties art c^sicvtrea, nt«
evidence is developed, or any other reason. Moreover, to
facilitate planning of referrals and projections of revenues, it
is advantageous to close out cases as soon as possible. ,. In any
event,-the memorandum must be prepared prior to the relevant real
or potential statute of limitations date.
CONTENT OF THE MTMORA.S'Pt.'H' DOCUMENT ING A DECISION HOT TO PURSUE
COST RECOVERY
If all available enforcement information on a site points to
a recommendation not to pursue cost recovery, a close-out
memorandum should be written by the staff program person assigned
to the case and, where legal issues are involved, in consultation
with the Office of Regional Counsel. The memorandum must be
signed by the program division director (in most regions this is
the Waste Management Division Director). The Memorandum and its
supporting documents (e.g., the PRP Search Report, the Action
Memorandum) should be placed in the permanent site file but
should remain confidential since enforcement discretion is
involved. Jks an enforcement confidential document, the
memorandum is not available under the Freedom of Information Act.
The memorandum should not be included in the administrative
record.
2/ As noted in the June 12, 1987 guidance "Cost Recovery
Actions/Statute of Limitations", OSWER Directive No. 9832.3-1A,
removal actions are ripe for referral of a judicial action
immediately following completion of the action. Remedial sites
become ripe for referral of a judicial action concurrent with the
start of the remedial action.
-------
4 ' csvrrr. Directive Ns. F£i
The ••aorandum should include four sections: A. Site
Description; B. Work Conducted and Associated Costs;
c. Discussion of Basis not to Pursue Cost Recovery; and D.
Conclusion.
A. Site Description. This section should briefly identify the
site and its location, and the EPA identification number (12*
digit EPA ID i). It should very briefly describe the
environmental condition of the site. References to an Action
Memorandum or Remedial Investigation/ Feasibility Study Report
should be utilized to keep the memo brief.
B. Work Authorized and Conducted and Associated Costs. This
section should briefly describe tne action(s) taken by EPA (or a
state under a cooperative agreement or a contractor) on the site
and the initiation and completion date of the response action(s)
taken. In addition, this section should provide an estimate cf
the ar.ruht c f ezney spent cr expected to te spent for ell -11*1
i.-.i t'-~-'~-s. lirspc.-.sfe trzions.
This section should also note any previous settlement(s)
(whether for work or cost recovery) and the dollar value of the
settlement(s).
C. pjiseussion of Basis net to Pursue Cost Recovery. This
section should include the information that leads the Division
Director to the conclusion that further cost recovery efforts
should not occur. The memorandum must clearly state the reason
that the decision was made net to pursue cost recovery at the
site. Possible reasons include:
1) No PRPs were identified for the site. The potentially
responsible party search report or other documentation of the
completed PRP search effort should be referenced.
2) The PRPs identified in the PRP search are not financially
viable. A written evaluation of the ability of any identified
PRPs to satisfy a judgment for the amount of the claim or to pay
a substantial portion of the claim in settlement should be
conducted during the PRP search.3 The close-out memorandum
should reference the results of the evaluation.
3) The available evidence does not support one or more essential
elements of a prospective case and there is no reason to believe
that such evidence can be discovered or developed in the future.
3/ The Potentially Responsible Search Manual, (OSWTR
Directive No. 9834.6) provides information on how to go about
collecting information on the financial status of companies and
individuals.
-------
5 C£vr£?. Directive Kc. 5H2I
See the August 26, 1983 guidance document on Cost Recovery
Actions Under the Comprehensive Environmental Response.
Compensation, and Liability Act of 19BQ (OSWER Directive No.
9832.1) for a further discussion of the essential elements of a
cost recovery action.
4) The legal case is so questionable that cost recovery should
not be pursued. The close-out memorandum should identify what
legal issues fe.o.. statute of limitations) would impair
successful cost recovery efforts.
5) The Agency lacks resources to pursue the case. This reason
may only be used for those sites where total costs of response at
the site do not exceed two hundred thousand dollars and
settlement efforts have been exhausted. Some actions will be
filed where expenditures are less than $200,000. While such
small cases should not automatically be closed out for this
reason, some may have to be. Fcr example, resources for vc—>
srill cases fcr cost recovery effcrts beyor.d the issuar.ee cf
demand letters may not be available prior to tne expiration of
the statute of limitations. Sites closed out solely on this
basis should not be closed out until it has been determined that
there will not be resources to pursue an action prior to the
expiration of the statute of limitations.
6) Other reasons. There may be reasons, not identified above,
that form the basis for making a decision not to pursue cost
recovery (or further cost recovery) at a particular site. One
exar.ple is the existence of an agreement by the PRP(s) (in the
form of a consent order or decree) to conduct the response
action (s) approved by EPA. While the Agency may not have waived
explicitly in the settlement some or all of oversight costs
incurred, the Agency may decide later not to pursue those costs
because the PRP(s) has been cooperative in agreeing to conduct
work.4 In this example, if there are non-settlors, the close-out
memorandum must analyze the case against them based upon the
factors delineated above. A low dollar threshold does not
necessarily apply to a case where there are recalcitrant non-
settlors.
Each uio^e-out memorandum prepared must contain at lt-^-. one
of the above reasons but should contain all the reasons .that
exist. -
D. Conclusion. The conclusion should restate the amount of the
total response costs expended or projected for the site not
4/ See the Interim CERC|A Settlement Policy.
December 5, 1984, 'SWER Directive No. 9835.0.
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6 C£*•"?. T-r
previously recovered. It should also restate the basis for not
pursuing cost recovery at the site. ,
NEW INFORMATION In the event that a Cost Recovery Close-Out
Memorandum has been signed and new relevant information coses to
light, the case should be re-examined to determine whether the
decision not to proceed with cost recovery efforts is still .
valid. Factors to be reviewed included the total dollar amount
of funds expended or to be expended; the relevant statute of
limitations date; and the changes to the strength of the case
resulting from the new information.
vr?>'?'&•*Tvr. r 7'***?wr'•"•e-
OWPE is incorporating reporting requirements for cost
recovery close-out memoranda into the CERCLIS system. Guidance
on using the system to report the information contained in the
close-out memoranda will be issued in the future.
cos cms is?;
Close-out memoranda are necessary for EPA to effectively
manage the Hazardous Substance Superfund. In order to
effectively budget future Fund actions, EPA must know which sites
have unrecoverable costs associated with'them. The close-out
memorandum discussed in this guidance will provide the Agency
with a means of tracking those sites with no potential for return
and allow then to be removed from consideration for further cost
recovery action. If you have any questions concerning this
guidance please contact Carolyn Me Avoy of the Guidance and
Oversight Branch, OWPE, at FTS 475-8723.
Addressees: Directors, Waste Management Divisions
.Regions I, IV, V, VII, VIII
Director, Emergency and Remedial Response Division
Region II
Directors, Hazardous Waste Management Divisions
Regions III, VI
Director, Toxics and Waste Management Division <
Region IX
Director, Hazardous Waste Division
Region X
Directors, Environmental Services Divisions
Regions I, VI, VII
cc: Regional Counsel, Regions I-X
Regional Counsel Waste Branch Chiefs, Regions I-X
Superfund (Enforcement) Branch Chiefs, Regions I-X
Superfund (Enforcement) Section Chiefs, Regions I-X
-------
PRIVILEGED ATTORNEY WORK PRODUCT: DO NOT DISCLOSE
INTRODUCTION TO COST RECOVERY:
What Do You Need To Know To Prepare a Cost Recovery Case?
Staff Meeting: 3/28/90
Joanne Marchetta
633-5476
Keep the coal of the case in mind: Compile sufficient
evidence and information to link an accurate statement of
the monies spent to the work performed at the site (i.e., we
are entitled to recover 'all costs of removal and remedial
action not inconsistent with the NCP).
I. Where to Start
A. EPA's CDMS Summary: In all cost recovery cases, the
place to start and the point of reference to which all
litigation decisions and actions should be traced is
the EPA cost summary generated from the Cost
Documentation Monitoring System ("CDMS") automated
program. SEE SAMPLE CDMS SUMMARY FOR STRINGFELLOW.
1. What is CDMS: It is a computer software program
designed to support CERCLA § 107 case referrals.
The system is used to rearrange information
entered into EPA's financial accounting system in
an easy-to-read format summarizing site-specific
or allocable CERCLA expenditures.
v
a. Bow EPA Tracks CERCLA Costs: EPA tracks
CERCLA payments in its financial accounting
system known as the Financial Management
System ("PMS") and can report suir-naries of
payments made using SPUR Reports ("Special
Program for Unique Reports'). A SPUR Report
provides an ESTIMATE of costs incurred and
should be used only as an initial tool to aid
negotiation and case development.
b. The CDMS Summary is derived from accounting
data entered into FMS. Like all SPUR
reports, the CDMS Summary is at best an
ESTIMATE of costs incurred at a specific
CERCLA site. The summary must be reconciled
to available backup documentation. .
c. Bow TO Get A CDMS Cost Summary:
You should receive the CDMS Summary AND all
available backup documentation to support the
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PRIVILEGED ATTORNEY WORK PRODUCT: DO MOT DISCLOSE
summary as part of the EPA referral package,
but don't be surprised if both are missing.
To obtain one, you neec to request in writing
a summary of all costs incurred at your site.
Prior to January l, 1990, requests were
made to, and processed by, cost recovery
staff in the Office of Haste Programs
Enforcement (OWPE) at HQ.
As of January 1, 1990, the cost
summarization function has been
delegated to EPA regional staff. Now
requests for Cost summaries are made to
N the regional Cost Recovery Coordinator
("CRC*). This person is generally found
in the regional Financial Management
Division. At the same time, you must
request that the Region compile all
backup documentation to support the
summary and reconcile the costs to the
documents. This compilation and
reconciliation process will take at best
4-6 weeks (At worst, as in the
Stringfellow case, we are at 11 months
and counting).
Note: To obtain the computerized summary
alone should take only a few days. So, you
can request the cost summaries prior to
obtaining the backup documents if you need an
idea of what costs are at issue.
d. Limitations/Warnings re: use of CDKS
Summaries --
The CDKS summary is only an ESTIMATE. Do not
assume it is accurate. Do not represent to
PRPs that it is the final statement of all
costs incurred at the site. If possible, do
not turn it over to the PRPs until it has
been reconciled against backup documents and
other cost related issues have been resolved.
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PRIVILEGED ATTORNEY SORK PRODDCT: DO KOT DISCLOSE
Costs are always Biasing and frequently
inaccurate. For example, on the Stringfellow
summary —
Pre-judgment interest is missing.
DOJ cost are missing, and must be
compiled and summarized by DOJ.
Cooperative Agreement costs reflect
either obligations or drawdowns on the
existing Letter of Credit, but the State
r»y r.ot hive actually incurred c.11 *.:.-.
costs drawn-down.
$500,000 in NEIC intramural costs were
dropped between the earlier summary and
this one.
Certain cost items are reported at
"SO.OO* but on prior cost summaries
.these same cost items include reported
costs.
Total amount is usually (if not always)
low.
Problems on the cost-specific summary
pages as well:
dates of service do not correlate
with dates of performance;
summary of service not accurate;
list of supporting documents not
accurate;
the 'site* amount is listed as
*$0.00»
Summaries must be cheeked for accuracy and
verified against a complete collection of
backup documentation and then revised to
reflect accuarate accounting of costs.
Additional cost sun&aries should be created
by you or your expert to support costs not
adequately summarized such as those under
cooperative agreements or interagency
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PRIVILEGED ATTORNEY WORK PRODUCT: DO NOT DISCLOSE
agreements. If you cannot get the CRC to do
this, or do not have confidence in the work-
product of the CRC, hire an expert
accountant.
NOTE: Because it takes time and resources to
compile backup documents, EPA's policy is to
provide a CDM5 summary only for referred cases.
But for cases not referred (RDRAs, settlement \
negotiations), try requesting the summary report
alone without the backup rather than a SPUR report
from FMD (because the CDHS summary is easier to
read than the SPUR; backup documents can never be
reconciled to the SPUR; and the SPUR contains
information that the PRPs need not see that
frequently opens up unneeded problems.
B. What to Do With The CDMS Summary Once You Get It
1. Costs incurred should be analyzed and
developed by category of cost.
EPA tracks CERCLA costs by WHO spends the
money, not by the activity for which the
money was spent. EPA spends the money
available in the Fund in only three ways and
you should begin to think about and group
costs on the summary according to these
categories.
Intramural Costs — EPA spends $$ internally
within rhe agency to administer the CERCLA
program.
Direct Costs — e.g., costs of EPA employee
payroll and travel at both HQ and Region;
xeroxing costs
Indirect Coats — all the costs incurred by
EPA on Superfund activities that are not
accounted for site specifically.
Grant Monies — EPA gives $$ to another government
entity to be spent on Superfund activities.
Cooperative Agreements — EPA "grants* $$ to
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PRIVILEGED ATTORNEY WORK PRODUCT: DO HOT DISCLOSE
a state to spend on response activities to
. clean up the site within the state.
*•
interageney Agreements — EPA "grants* $$ to
another federal agency to spend on response
activities to clean up the site.
Contract Costs -- EPA enters into agreements with
private companies or persons to perform clean up
activities or related support work at Superfund
sites.
2. Collect and compile documents to rut-pert «ac'r.
ci-,i = c-ry of cc.v.i..
NOTE: You, as tbe litigating attorney, will most
liXely have to arrange for tbe collection of
missing documents and information needed to fully
develop the § 107 cost ease. Four types of
documents must be collected to support a complete
and accuarte cost summary (see matrix below). The
current CDMS document compilation process collects
ONLY FINANCIAL DOCUMENTS that Show that costs were
incurred — only the first of two elements of
proof. There is, however, a critical missing link
— the agency has no institutionalized system to
link the monies spent to specific work or phases
of work.
NOTE: You will need to understand and become
familiar with new parts of EPA's bureaucracy in
order locate, or direct others in locating, a
complete set of cost-related documents to support
your case. 8EE HANDOUT, ORGANIZATIONAL CHARTS.
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PRIVILEGED ATTORNEY WORK PRODUCT: DO NOT DISCLOSE
Financial
iuments and
Program
Contracts
Audit
Contracts
lAGs
RTF
Cincinnati
each CO, PO
PCMD
IG
DCAA
OLA
Reg. Grants
each IAG ag'y HQ
K'or itself GAD,
COA
Intramural
Direct
Indirect
Las Vegas
Region FKD
Gr&r/c
Specialist
HQ GAD
Reg. Grants
RPM/PO
HQ GAD
HQ FMD
Reg CRC
FKD HQ
state files
GAD
HQ,R9
State
IG
HQ
FKD
HQ
FKD
EPA CONTRACT COSTS
(See HANDOUT, Stringfellow Proof of Costs at 22-34).
A. The TYPE AND TERMS OF THE CONTRACT control the nature and
location of documents and witnesses that exist to support
the contract costs.
1. Determine whether the contract at issue is site-
specific or not. If the contract is not site-specific
(and most are not), many of the documents you are
collecting also will not be site-specific.
— National and Son* contracting strategies.
Because competitive bidding procedures on a site-
by-site basis would have delayed implementation of
work at sites, EPA primarily relies upon a system
of national and zone wide contracts to perform
work at CERCLA sites. These are not site-
specific.
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PRIVILEGED ATTORNEY WORK PRODUCT: DO NOT DISCLOSE
— Thar* are multiple generations of the national
and zone contracts, when the allowed number of
hours and money under a cost-reimbursable time and
level of effort contract runs out, EPA procures
the next generation of the contract type. Very
few substantive changes are made from generation
to generation. For example, there are four
generations of the nationwide TES contract (TES I,
TES II, TES III, and TES IV). The contractor may
or may not differ between generations (e.g. Camp,
Dresser and KcKee was the TES III contractor while
Jacobs Engineering was the TES IV contractor) .
— tier*, performed under etch el t&es* c&
strategies was designed to implement a specific
phase of work needed at sites:
?.£-cval Actions:
TAT -- Technical Assistance Team Contracts
ERGS — Emergency Response Cleanup Services
Contract
Site Specific Removal Contracts
Remedial Response:
FIT -- Field Investigation Team Contracts
REM — Remedial Engineering Management
Contracts
ARCS — Alternative Remedial Contracts
Strategy
Support Services:
CLP — Contract Lab Program
ESAT — Environmental Services Assistance
Teams
REAC — Response Engineering and Analytical
Contract
ERT (ERU) — Environmental Response- Team
(Unit) Contracts
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EMSL — Aerial Survey and mapping is
performed under contracts out of EPA's
Environmental Monitoring Systems Labs.
Enforcement Support:
TES — Technical Enforcement Support
Contracts
— Work at sites under National/cone contracting
strategies is authorised site-specifically. It is
these site-specific documents that will help you
to !:'r.V. t?-.- costs incurred tr tM. vcrV. prrftr-c.v.
hisi c^r;t:-ct.£ art cc=ii-rem;urskii..e, .«. t_ ci
effort contracts. A single region wide contractor
is *on call* to perform work wherever the
contractor's services are needed. Under these
contracts, EPA sets a limit on the number of hours
the contractor may work and on the rates the
contractor may charge. EPA "draws down* against
the overall limits by authorizing work at specific
sites when needed. Contract types and terms are
dictated by the federal contracting law and
regulations.
NOTE: PAYMENTS ARE PROVISIONAL. Under cost-
reimbursable contracts (most EPA contracts),
contractors bill the agency at PROVISIONAL
RATES (and EPA pays based upon these rates)
subject to adjustment after final audit
resolution. Contractor invoices are stamped
"Provisional." Audits of each contractor are
required annually, but currently these audits
are approximately 4-5 years behind schedule
and may never occur.
2. Determine whether "historic costs" are at issue.
(Novick/McNulty)
— Prior to October 1, 1985, EPA contractors vere
not required to bill EPA site-specifically.
Consequently, EPA received cumulative invoices
.that included charges related to many sites.
Based upon these multi-site invoices,' EPA had no
means of determining the contractor costs
attributable to a specific site. EPA requested
that the contractors submit in the form of letter
reports estimates of all costs incurred under
CERCLA prior to FY 1986 by site. Rather than
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PRIVILEGED ATTORNEY WORK JPRODDCT: DO NOT DISCLOSE
relying upon the contractor letter reports
(incidentally, the contractors billed EPA to
prepare these reports and we attempt to recover
these charges), EPA designed an allocation system
that assigns pre-FV 1986 contract costs to sites.
For national and zone contracts, no site
specific invoices exist for the period prior
to October 1, 1985.
All contract costs in this category are part
Of EPA's HISTORIC COST ALLOCATION SYSTEM.
Novick/McNulty to describe.
•j. Determine what role sub-contractors played in the work.
under the contract. If the prime contractor
subcontracted most of the work, then the documents
available in EPA's files may not describe the acv-s!
nature of the work performed at tne site. There is &
litigation decision to be made whether to go directly
to the subcontractor to collect documents that more
fully describe the work performed.
4. Determine how, if at all, award fees or fixed fees were
billed to, er allocated to, your site; and determine
whether your summary should be adjusted to reflect
payment or non-payment for fee awards. As an incentive
to high quality of performance under a cost
reimbursable fixed level of effort contract, the
contract terms allow for payment to the contractor of
an award fee. This is essentially the contractor's
profit. Contractors are generally evaluated quarterly,
and final determinations about the amount to pay are
made. The Fi.nal award fee-determination letter and
performance evaluation board's (PEB) report is sent to
RTP for payment and there should be a journal voucher
indicating payment of the fee.
5. Consider bow to deal with confidential business
information (*CBI") contained in the documents if you
intend to release them or use aa proof.
B. Bow and Where to Locate Relevant Contract Documents
1. RESEARCH TRIANGLE PARK, NORTH CAROLINA
— Financial documents showing that contract payments
were made are located at RTP.
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PRIVILEGED ATTORNEY WORK PRODUCT: DO NOT DISCLOSE
see stringfellow meeting notes describing function
of RTF. Available upon request.
RTF's files are set up by contract and are accessed
by contract number. In addition to contract files,
there is a BITE FILE for each site that contains only
the contract invoices and journal vouchers that relate
to the specific site, contained in the site file is a
SPUR REPORT against which the contract payment
technician reconciles all contract payments related to
the site. This SPUR report is a good source document
to look to double check that your cost summary includes
ell contracts ur'er whicb co?t« vere ircvrrcf. pr.-* t"
aijustcents to vne coavract p&y&fcnts (s-ii at crei»v»
after audit or disallowances).
— Documents in RTF's files:
The Contract itself and the original
"obligating document*
All Contract Modifications (i.e changing the
hours and level of effort available under the
contract)
Ail documents showing adjustments to contract
invoices and payments. Journal Vouchers.
FOIA Requests
Invoices - the original approved, signed, and
paid stamped copies.
Treasury Schedules and payment Confirmation
Reports
— Contact at RTF • Joe Safadi. FTS 629-2304
2. EPA's official contract files are maintained primarily .
at HQ within the Procurement and Contracts Management
Division ("PCHD").
— There is some overlap between the documents in
RTF files and those at PCMD: the contracts and
all modifications are found in both places.
— Contract numbers xx-01-xxxx are managed out of
HQ at PCMD and .this is where the official contract
file is found. .Contract numbers xx-03-xxxx are
10 .
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PRIVILEGED ATTORNEY WORK PRODUCT: DO NOT DISCLOSE
managed out of Cincinnati and the official
contract files are in the Contracts Management
Division there.
— See stringfellow Memo dated January 25, 1990
for a list of documents found within PCMD's files.
Memo available upon request. Most critically,
PCMD's files contain the site specific documents
that authorise and describe the nature and scope
of work at your site such as vorfc assignments
("VA") (for REM and TBS contracts); Technical
Directive Documents ("TDD") (for PIT and TAT
eortrarts) ? and Delivery OrSers f«r!>D/r) (f?r
rcsov&i ctnvraczs li*.t LRCcj. PCMD i^es &j.so
contain.all modifactions to the WAs, TDDs, DOs;
financial and technical progress reports
describing the work performed? and work completion
repcrts (W;.C?0 .
CONTRACT PRE-AWARD DOCUMENTS: Considered by
the agency to be extremely sensitive, chock
full of CBI, privileged and NOT .to be
released.
Contacts at PCMD:
Mark Walker is the Associate Director of
PCKD. 382-5020
The individual Contracting Officer (CO) and
Project Officer (PO) for each particular
contract. See me for current lists of names
and phone numbers. (Not all COs and POs are
in PCMD. Some are in Cincinnati and a few
are in Las Vegas or Denver.)
Ika Joiner 382-7966
3. Locating Historic cost Documents
— Because FMD receives repeated and similar requests
to compile historic cost documents, all documents
supporting contracts with completed allocation
methodologies have been microfilmed and are available
to any DOJ attorney by request to the DOJ litigation
support staff.
Historic Cost Allocations have been finalized for
27 of EPA major national and zone contracts.
11
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ATTORNEY WORK PRODUCT: DO NOT DISCLOSE
All documents were collected from FMD's files.
The document custodian is Neil Gordon.
Contacts at FMD concerning Historic costs: Bill
Cook, Neil Young, both at 382-2268.
IKTERAGENCY AGREEMENT COSTS
(See HANDOUT, Stringfellow Proof of Costs at p. 9-18)
A. Most documents relevant to proof of XAG coats ar« maintained
r^ -hf trirs-fc-** erer— es-i c-jst be obtained by requesting
thti. ii-^_ ;.:.&•„ t^ti.Cj•; ~z±y tn«» interagency agreement itself
and some of the financial documents evidencing transfers of
funds between EPA and the.transferee agency are maintained
by EPA.
— Other agencies are required to maintain
documentation sufficient to support EPA cost recovery.
As with EPA, the other agency's organizational
structure must be mastered so that you know where to
look for relevant documents. As with EPA, you are
trying to prove the other agency's Intramural Costs
(time, travel, indirect costs) and all contract costs.
B. Relevant Documents and Where to Locate Them
1. Cincinnati Financial Management Office: This office
maintains only financial documents that show that
payments were transferred between EPA and the
transferee agency.
— this office processes payment of all IAG costs.
— see Rubino & McGeehin memo dated February 19, 1990
describing financial processes at Cincinnati FMO and
the documents generated and maintained there.
Available upon request.
— Files in Cincinnati related to IAGs are maintained
and accessed by IAG number.
— Contacts at the Cincinnati FMO: Jim Wood, 684-7831
Pat Newman *
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• 2. Regional Grants office including Grants Specialist
files; RFM files; HQ Grants Administration Division
:?ly to TT.£:T- =:.r. ?.
file including documents describing the scope and
progress of work and any modifications to the scope of
work. The Grants Division of the region may also
maintain an IAG file (if so, there is likely to be a
Grants Specialist assigned to administer and maintain
the file), but for older lAGs, these files may have
been transferred to the Grants Administration Division
-(GAD) at HQ.
— Contact at GAD at .HQ: Scott KcMoran 475-8270.
3. Contract related documents must be collected from the
transferee agency.
EPA is instituting a new IAG payment system called
the "Direct Site Payment Program''' where contractor
invoices from Corps of Engineers contractors will be
sent to EPA and be paid directly by EPA to the
contractor. The advantage of the system is that EPA
will have possession of the contractor invoices so that
the cost documentation files will be more complete.
Despite the new -payment system, contract costs
incurred under most old lAGs can be explained and
supported only by obtaining documents from the
transferee agency's official contract files or by going
directly to the contractor.
COOPERATIVE AGRBEKEKT COSTS
(See HANDOUT, Stringfellow Proof of CERCLA Costs at p. 18-
21)
1. Virtually all documents seeded to prove costs- incurred
under a cooperative agreement between EPA and a state
will be in the state's files.
13
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PRIVILEGED ATTORNEY WORK PRODUCT: DO NOT DISCLOSE
-- See HANDOUT of sample state cost summaries for
Stringfellow.
— Collect documents to support the state's intramural
expenses (direct costs such as payroll, travel) and
indirect costs.
— Collect documents to support any contracts the
state entered into to perform site-related work.
Collect financial documents that tie payments made
to the site- c.-.f the vcr>. perfcrre-. ?.-.- 10 t>-.-.-
financial -statements relied upon by EPA to autnorize
Fund transfers.
2. Some documents are maintained by EPA.
— GAD at RQ maintains primarily policy documents,
manuals and guidance related to grants. These
documents are not generally needed for the cost
summary, but can be relevant to discovery. The contact
at HQ GAD is Richard Johnson, 382-5296.
— The regional Grants Policy Division is likely to
maintain an "official grants file" on the Cooperative
Agreement and assign a Grants Specialist to administer
the agreement and maintain the file. This file is
likely to contain
the COA Award Document;
the COA itself and all amendments;
•
quarterly progress reports, both financial and
technical
performance reports
state/EPA correspondence
— The RPK at the site may function as the Grants
Project Officer responsible for oversight of the
technical work under the COA, approval of the state's
requests for payment, and modifications to the scope of
work or authorized grant funds under the COA.
Accordingly, the RPM or other Project Officer is likely
to maintain a file relating to the COA.
14
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rr.IVILIGLI AIIOKKLY WORK PRODUCT: DO NOT DISCLOSE
— The regional Financial Management Division is
responsible for processing the state's requests for
drawdown against its Letter of Credit. Therefore, the
regional FMD Grants Accounting Section maintains files
to support the financial payments under the COA.
Specifically, FMD in the region should maintain files
including
the Letter(s) of Credit
Financial status Reports - a quarterly, and since
1985, annual, report showing total expenditures
under the COA.
Federal Cash Transaction Reports - showing the
drawdowns under the letter of Credit
Audits related to the COA — Certain audits may be
fru-d £rrrsfic?.:iy ir. the files of the r-.ericnal
Audit Coordinator (usually the head of the
regional Grants Policy Division.
— All payments pursuant to state COAs are processed
through the Financial Management Office in Las Vegas.
The Financial Officer and contact at that office is
Allen Lewis, FTS 545-2485. Money transfers to states
are accomplished electronically; therefore, very few
documents are found at or maintained in the Las Vegas
FMO.
EPA IKTRAMURAL COSTS
(See HANDOUT, Stringfellow Proof of CERCLA Costs at p. 3-8.)
l. Direct Costs
a. Headquarters
— Time Sheets and time cards are collected at
FMD at HQ.
— Travel authorizations, travel vouchers with
supporting invoices, payment vouchers, and
treasury schedules are collected at FMD at HQ.
~ Contact Bob Coombs in FMD.
f
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b. Region
-- same documents as above for payroll and travel
costs are collected and compiled by the CRC in the
regional office, usually someone within the
regional FMD.
2. indirect Costs (McNulty)
a. All documents relevant to proof of EPA's indirect
cost system are maintained within FMD at HQ.
b. Bill CooX is the FMD guru oh indirect costs end
has testified (tur^si.ef^ily) seve.r&i tirnes.
16
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J
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
**"** MAR IS*;.-,
MEMORANDUM
SUBJECT: Tactics for Removal Cost Recovery Actions
FROM: Glenn L. Urterbergsr, .'.s. = ~ciate Enforcement Ccur.n^l frr
Waste, OECM .,.>_:__
Bruce M. Diamond, Directoi
Office of Waste Programs Enforcement
TO: ••Rssicr.al Counsels, Regions I-X
Waste Management Division Directors, Regions I-X
David Buente, Chief, Environmental Enforcement Section,
Department of Justice
Attached is a draft memorandum setting forth a number of
previously untried techniques for use in resolving removal .cost
recovery actions. A group composed of representatives from OECM,
OKPE, DOJ and the Regions developed these ideas. After .their
development, we identified a number of regional individuals with
experience in the removal cost recovery area who reviewed the
ideas. We then produced the attached draft after incorporating
their comments.
The project is in response to the implementation plan for the
Administrator's 90-day review. As such, it is on a time schedule
to which we rust adhere. Therefore, we ask-that you send your
comments on the document to Richard Robinson, OWPE, by three weeks
from the date of this memorandum {Mail Code: OS-510, FTS: 475-
9804).
The last section of the attached draft memorandum delineates
Headquarters and Regional responsibilities. We would appreciate
your comments on adding another part to this section describing
DOJ responsibilities to include submission of a plan to use ADR to
resolve some .of these cases, such as the large group of recently
referred cases for statute of limitation reasons. Further, this
.section of the memorandum describes four alternative approaches to.
the Regional responsibilities. We would like your comments as to
which approach, if any, your office prefers.
Attachment
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_ 2 -
cc: Sandra Connors, OECM
Emil Knutti., OWPE
George Alapas, OARM
Bill Cook, OARM
Mary Dever, Enforcement & Preparedness Section,
EP & RB, Region I
Lee MacMichael, Waste Management Division/ Region I
Paul Simon, ORC, Region II
Joe Donovan, ORC, Region III
Leslie Vassallo, Hazardous waste Management Division,
Peri en III
Rosalind Brown, ORC, Region IV
Leonardo Robinson, ORC, Region V
Pam Phillips, ORC, Region VI
Dan Shiel, ORC, Region VII
Barbara Lither, OF.C, Perir- X
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DRAFT,
MEMORANDUM
SUBJECT: Tactics for Removal Cost Recovery Actions
rf.OK: Glenn L. Unterberger, Associate Enforcement Ccur.sel for
Bruce M. Diamond, Director, office of Waste Programs
Enforcement
TO: Regional Counsels, Regions I-X
Waste Management Division Directors, Regions I-X
Introduction arsd Background
The Administrator's implementation plan for the 90-day review
effort makes the following recommendation regarding removal cost
recoveries:
- EPA will develop an improved approach for recovery of
costs for removal actions. This approach will include
a standard Alternative Dispute Resolution opportunity,
a real threat of litigation against recalcitrant parties,
and increased efforts to have PRPs conduct future removal
actions, to reduce the need for subsequent cost'recovery
actions by the government.
This document describes several techniques which have been little
used to date, but which hold promise for resolving removal cost
recoveries more effectively. ...
The ideas contained in this document were suggested by a group
consisting of individuals with removal cost recovery experience
from the Department of Justice, OECM-Waste, OWPE, and almost every
Region.
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- 2 -
In this strategy paper, we will: (1) define the goal *f this
effort, (2) explain the recommended techniques for solution, and
(3) assign tasks to the Regions and to our offices to ensure the
use of these techniques by a date certain.
Project Goal
The goal of this effort is to maximize the return to the Fund
while minimizing government (EPA and DOJ) resources in cost
recovery removal actions. Because these cases tend to be smaller,
the return on government efforts for removal actions is likely to
be s-alisr t.har; for remedial actions.
The PRPs and their attorneys in most removal actions at
present tend to be unsophisticated about Superfund, and do not
communicate among each other. 'Therefore, there is little or no
"regulated community" which exchanges information that the Agency
csr. use to establish a isterrent effect on other P?.?E I :.-"•• Is ::r
removal actions when EPA takes an enforcement action against one
such PRP.
Cost Recovery Removal Techniques
1. Existing Efforts
While having PRPs do removals in the first instance, thus
saving EPA the time and expense of an enforcement action, is most
desirable, this is often not possible given the emergency nature
of some removals and past budgeting limits on removal enforcement.
Therefore, in this document we only address cases where EPA has
done the removal, and is attempting to collect reimbursement from
the PRPs. There are other efforts such as the CERCLA § 106
initiative which are designed to encourage PRPs to do removals
themselves.
It is important to note that the Regions should continue to
use the authority granted under CERCLA § 122(h)(l) to seek
administrative settlements, where possible. This authority is
certainly one of the best time and resource saving devices the
Agency presently has for removal cost recovery cases.
2. More Effective Negotiation
Honing our negotiation skills is one of the seemingly obvious,
but often ignored ways we can achieve better settlements in cost
recovery actions. While improved negotiation has many aspects, a
few deserve mention in the context of this document.
-------
First, to a substantial degree, these cases are simplified
because they involve money, which is the most readily negotiable
item in our legal system. Regardless of whether a case appears to
involve only the payment of money, there are always other issues
in every action. The challenge often is to find out what they are,
and how to use them in negotiations. The necessity of discovering
these issues cannot be overemphasized. Early and effective
meetings with PRPs and with steering committees, if they exist, to
familiarize EPA personnel with the PRPs' concerns is an excellent
way of discovering these non-monetary issues.
While these issues ers ?i:-.----r r*s* sr-?rif:c, some examples
might include a- press release commending a PRP's efforts instead
of attacking the PRP as a "polluter," securing some payment from
or pursuing additional PRPs, etc. Not included in these issues are
those that cannot be bargained away such as certain requirements
regarding public notice, covenants not to sue, etc.
Second, all enforcement personnel should take EPA's in-house
Negotiation Skills Training Course offered in each Region and at
Headquarters every year. This course is specifically designed to
teach how EPA' negotiates its enforcement actions.
Third, begin the negotiation process as early as possible,
set reasonable but short time periods for completing negotiations,
and prepare to act consistent with those timetables. Having a
clear understanding of the sequencing of cost recovery events is
essential to this approach. It is necessary to set the timing of
the gathering of cost data, the issuance of demand letters, and the
coTRir.encement of negotiations.
Finally, EPA must be prepared to vigorously litigate at least
some of those cases where negotiations fail to produce settlement.
3. Additional Negotiation Tools
There are two additional settlement tools to consider in
appropriate circumstances. First, we are presently exploring
preparing a simple pamphlet explaining the law of cost recovery
which emphasizes the concepts of strict liability, and joint and
several liability contained in CERCLA. We believe that conveying
such a primer to certain, unsophisticated PRPs and their attorneys
could greatly speed the negotiation process.
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Second, the Agency may choose to "write off" a portion of its
claim where the PRPs execute a settlement agreement within a
specified period, such as 120 days. For example, we might notify
a group of PRPs that we will consider our $150,000 cost recovery
claim satisfied if, but only if, they sign a settlement document
for $130,000 within a specified period. This idea can only work,
however, if it is coupled with vigorous pursuit of claims against
those parties where discounts are offered and refused.
Such offers of early settlement discounts must be made as a
one time, first offer and not as a counteroffer. Further, we
should only make such offers when our case is basically sound and
we will have little problems of proof. Such an offer could be made
at the beginning of the demand letter period or some other time
prior to preparation of a referral package. The discount must be
substantial enough, but not too large, to induce PRPs to settle
ir.-edietely, i.e., bezveen 5% sr.f 15% as Expropriate.
4. Alternative Dispute Resolution (ADR)
Nonbindina ADR
Nonbinding ADR includes such processes as mediation,
minitrials, nonbinding factfinding.and nonbinding arbitration (see
"Final Guidance on Use of Alternative Dispute Resolution Techniques
in Enforcement Actions," signed by former Administrator Lee Thomas,
dated August 14, 1987). These ADR techniques provide negotiators
of enforcement disputes additional means of resolving these actions
as explained more fully in the guidance. To further encourage the
use of ADR, we are exploring the modification of appropriate
accountability systems. We also plan to provide continued funding
of ADR in the Agency budget cycle.
To date, the Agency has used mediation successfully in several
Superfund cost recovery actions in Region V and one Safe Drinking
Water Act case in Region VIII. Additionally, seven Superfund
consent agreements and RCRA corrective action orders in various
Regions provide for mediation of future disputes-*involving certain,
specified issues. Region V has established mediation as a
prescribed technique to resolve certain of its small cost recovery
cases, and has recently expanded its ADR effort to cases which do
not involve cost recovery.
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- 5 -
Our experience has shown us that ADR is a less costly way of
resolving appropriate small cost recovery actions. Like any case
which we fail to resolve by traditional negotiation techniques,
however, the Agency must be prepared to litigate at least some
cases where ADR does not result in speedy resolution so that ADR
remains a viable option. Region V, for instance, has decided to
litigate cases where mediation efforts fail to resolve a case.
This concept holds much promise for cases where the parties
have reached or anticipate reaching an impasse in negotiating their
differences, but still would like to reach a compromise.
Any case at any stage, which is not moving at an acceptable pace
toward resolution may be considered for ADR. In addition, we
should specifically consider disputes which fall into one or more
of the following categories:
o Both a^r.iristrrtive and TV.35rial matters;
o Disputes which are over a certain age, such as two years;
o Disputes involving other governmental units such as cities?
o Cases where .the statute of limitations is at least six
months away,
o Cases where the PRPs are solvent and able to co-fund ADR;
and,
o Regional cases which are initially for smaller anounts
such as under $500,000.
EPA contractor funding is available to support both nonbinding
ADR and arbitration. Please contact Richard Robinson, (Kail Code:
OS-510, FTS: 475-9804) or David Batson, OECM (Mail Code: LE-134S,
FTS: 475-8173) for details.
Arbitration
Pursuant to CERCLA § 122(h)(2) and regulations which became
effective on August 28, 1989 (54 FR 23174), binding arbitration of
cost recovery actions where the total of past and future costs is
under $500,000 is now available. Under these regulations, an
arbitrator chosen jointly by a PRP and the Agency would make a
binding determination as to the costs in a case. The regulations
provide for a streamlined process which can greatly expedite
decisions in these cases. While we contract for an organization
to run the arbitration program, as provided in the regulations,
the rules permit case-by-case selection of arbitrators.
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The relevant delegation provides that the Regional
Administrator may determine which cases to arbitrate, and that this
determination is redelegable to the Division Director and Regional
Counsel, jointly.
Financial Accounting
In appropriate cases, an accounting procedure, which is less
rigorous than a formal audit, to "verify" costs in Section 107
cases may be very helpful in reaching resolution. Such financial
accountings would be conducted as part of a binding or nonbinding
ADR process. In the latter case, the opinion of the independent
accountant with experience in Superfund would be a "reality check"
prior to further negotiations. Our offices are available to help
the Regions locate appropriate independent financial experts. Use
of such an accounting would, in no case, indicate that response
costs are legally challengeable on any grounds other than those set
fr-rih ir. triefs filsi tc cate ar*d the upcoming ruleisahir.g on cost
recoveries.
Additionally, it is useful to make our cost documents
available to PRPs as early as possible so that they can perform
their own accounting procedures if they wish. In exchange for such
early review of our documents, the PRPs could share the results of
their accounting procedures or audit.
5. Regional Percentage
We are interested in the suggestion from one of the Regions
to return a percentage of the moneys collected in these actions to
the Regions for- their use. We are now exploring the possibility
of setting aside a percentage of the extramural funds in the budget
for award to Regions that collect money.
These funds could be allocated by means of the SCA? process
and the Regions' extramural budget, and could be based on the
Region's prior year performance in initiating removal cost recovery
cases above the threshold set by the SCAP process. The funds
allocated to the Regions could be used: (1) toward funding remedies
in mixed funding settlements, and (2) for additional contractor
support to aid case teams in resolving actions, i.e., PRP searches,
investigators, etc.
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- 7 -
.6. Contractors
In the preparation stage of cost recovery cases, we should
consider more extensive use of contractor resources while being
careful to provide protection for confidential business
information. Demands should be included in special notices sent
to PRPs. Contractors, under the supervision of EPA staff, could
prepare demands. Where appropriate, contractors could also
assemble cost documentation and aid Regional enforcement personnel
in preparing for referral, negotiation and litigation.
We believe that, on a case-by-case basis, the use of
contractors to support cost recoveries should be considered. In
routine removal actions such assistance can be very helpful.
7. Consent Decrees and Orders
Scrr.e cf *-he ideas explainer in this paper are also useful as
provisions in consent decrees or orders for resolving future
disputes. Such a provision could include financial accounting,
nonbinding ADR, or arbitration.
8. Collection Services
EPA has published claims collection standards at 40 CFR Part
13 to implement the Debt Collection Act of 1982, and the Federal
guidelines for Agency debt collection issued by DOJ and GAO. 40
CFR 13.13 provides that agencies may use private collection
services to collect debts, and GSA has obtained government-wide
contracts with certain companies to collect government debts. As
long as EPA provides written notice to a debtor, the Agency may
use private collection services to collect the debt. The
requirements of such notice are at 40 CFR 13.9, and include
informing the debtor: of the amount, nature and basis of the debt;
that payment is due immediately upon receipt of the notice; that
interest may be assessed against a delinquent debtor; of his rights
to dispute the debt; that the debt may be referred to a collection
agency; etc.
Under these procedures, EPA must first inform the PRPs of the
Agency's claim. If the PRPs fail to pay the amount due, EPA has
the options set forth in the regulations including turning the debt
over to a collection service. For cost recovery removals actions
where the Agency intends to invest little if any resources, using
a collection service may be an efficient way to proceed.
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Implementation and Follow-up
To ensure the use of the techniques listed above, it is
necessary to assign dates and responsible parties for their use.
If we are to improve the effectiveness of our removal cost recovery
program, we must pilot the techniques we have developed together.
Therefore, we are assigning the following responsibilities:
1. Regional Responsibilities
[Alternative No. 1: By August l, 1990, we are asking each
Region to submit a plan for handling removal cost recoveries which
contains the use of the techniques set forth in this document. The
plan should be no more than two or three pages, and should include:
(1) how the Region plans to use ADR, and (2) how it intends to use
the other techniques described above.]
;.M-amative No 2: By June 1, 1950, after consultation with
t^e Regions, our offices will select one or more Regions to pilot.
the techniques described above. After an evaluation of the pilot,
we will decide which techniques to pursue, and will issue a
memorandum to that effect.]
[Alternative No. 3: No Regional responsibilities; instead,
a statement that we will be setting appropriate accountability
targets for these techniques.]
[Alternative No. 4: No Regional responsibilities; instead,
a statement that these techniques are now available for Regional
use. ]
2. Headquarters Responsibilities
First, by August 1, 1990, our offices will evaluate changes
in the accountability systens designed to encourage and reward the
Regions for the use of ADR. Such changes could include tracking
of ADR in CERCLIS and making ADR a SCAP target. Second, by
December 1, 1990, we will: .(1) produce a pamphlet for those
unfamiliar with the Superfund program as described above in the
section on additional negotiation tools, (2) evaluate the
establishment of a mechanism by which we can allow the Regions to
receive credit for some proportion of the moneys collected in
removal cases, and (3) report on the plans for removal cost
recoveries submitted by the Regions.
cc: David Ryan, Office of the Comptroller
Craig Annear, Office of General Counsel
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 204GQ
OSWFj; £ 9832. 18
ori-ici. or
SOLID WASH: AMI) tMCMCtNCV
MEMORANDUM
SUBJECT: Written Demand for Recovery of Costs Incurred Under the
Comprehensive Environmental Response, Compensation, and
Liability Act (CERCLA)
FROM: Bruce Diamond, Director
Office of Waste Program
William A. White
Acting Associate Enforcem
for Superfund
TO: Regional Administrators, Regions I - X
To maximize cost recovery under the Comprehensive
Environmental Response, Compensation, and Liability Act (CERCLA),
Regions are responsible for documenting costs, issuing written
demands1 for those costs, and pursuing parties that do not
reimburse the Environmental Protection Agency (EPA).
V The term "written demand" is used throughout this document
in reference to CERCLA § 107(a). A "demand letter" is the form of
written demand which is issued where response costs have been
incurred under CERCLA but are not contained in a special notice
letter. Thus, demand letters as referenced in the "Superfund Cost
Recovery Strategy" (July 29, 1988, OSWER Directive No. 9832.13),
or any other CERCLA policy or guidance, are considered a type of '•
written demand. Although EPA is not required by CERCLA to issue
written demands to accrue interest, use of these written demands,
in accordance with this guidance, will help maximize interest
recovery. See U.S. v. Bell Petroleum Services. Inc.. MO-88-CA-05
(W.D. Texas March 8, 1990) where prior written demand was held not
to be strictly required for recovery of prejudgment interest. The
court stated that the language in CERCLA 107(a) regarding written
demands essentially is a guideline for courts to follow fcr
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OSWER # 9832.18
I. AUTHORITY TO INCUR INTEREST
CERCLA § 107(a) provides, among other things, that specified
classes of responsible parties are liable for all costs incurred
by the United States government in response to a release or threat
of release of hazardous substances. In addition, PRPs are liable
for damages for injury to, destruction of or loss of natural
resources, including the costs of assessing such injury, loss, or
destruction, and for costs of any health assessment or health
effects study carried out under CERCLA § 104(i).
The Superfund Amendments and Reauthorization Act of 1986
(SARA) extends responsible party liability under CERCLA to include
interest on recoverable costs. CERCLA § 107(a) states:
[t]he amounts recoverable in an action under this section
shall include interest on the amounts recoverable.... Such
interest shall accrue from the later of (i) the date payment
of a specified amount is demanded in writing, or (ii) the date
of the expenditure concerned. The rate of interest on the
outstanding unpaid balance of the amounts recoverable under
this section shall be the same rate as is specified for
interest on investments of the Hazardous Substance Superfund
established under subchapter A of chapter 98, of Title 26 [of
the Internal Revenue Code of 1954, as modified in 1986].
EPA3 intends to use this authority and demand interest on all costs
as appropriate.
II. TYPES OF WRITTEN DEMAND
A. Special Notice Letter Containing Demand for Payment
Special notice letters should contain written demand for
reimbursement of past and future costs. For example, if a special
notice letter includes a demand for payment, interest may begin to
2/ For pre-SARA expenditures, various courts have held that
EPA may collect prejudgment interest on recoverable costs. U.S.
v. Northernaire Plating Co. 685 F. Supp. 1410 (W.D. Mich. 1988),
aff'd. 889 F.2d 1497 (6th Cir. 1989); U.S. v. Northeastern
Pharmaceutical & Chemical Co.. 579 F. Supp. 823 (W.D. Mo. 1984),
aff'd in part, rev'd in part, and remanded. 810 F.2d 726 (8th Cir.
1986), cert, denied. 108 S. Ct. 146 (1987).
5/ This document refers to "EPA" rather than "lead-agency."
As discussed in part IV E of this guidance, EPA is responsible for
issuing a written demand in situations where a state has the lead
for enforcement actions.
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OSWER # 9832.18
o to non-settlers when less than 100% of EPA's costs
are, or will be, obtained under a settlement, and
o prior to referral to the Department of Justice
(DOJ).
Depending on how a PRP responds to a demand letter, including
whether it settles and how it complies with settlement terms, a PRP
may receive more than one demand letter for the same costs.
To promote cost recovery and maximize recovery of interest,
EPA will transmit written demand as .early as practicable following
expenditures associated with a response action. The letter should
also indicate that the Agency anticipates that additional funds may
be expended on activities covered by this notice and other
specified future actions.
1. Following Removal or Remedial Activities: Demand letters
should be issued after:
o completion of a removal action,
o completion of a Remedial Investigation/Feasibility Study
(RI/FS) (i.e., at issuance of a ROD) for a site or, if
applicable, an individual operable unit, and
o an award of a contract for a Remedial Action (RA) for a
site or, if applicable, an individual operable unit.
(The demand should include Remedial Design (RD) costs and
estimated RA costs).
To expedite cost recovery, demand letters should be issued as
soon as possible following an appropriate response action, but
generally no later than twelve months after completion of each
distinct phase of a response action. For example, for a non-CERCLA
104(b) removal, when removal activities are done; for a funded
RI/FS, at the time the Region issues a S 122(a) letter related to
RD/RA negotiations. (If the Region does not issue a § 122 (a)
letter, but issues a special notice letter, the special notice
should contain a demand for RI/FS costs and a separate demand
letter is not necessary.) In accordance with the "Superfund Cost
Recovery strategy" (OSWER Directive No. 9832.13), written demand
for RD and RA should be made no later than the initiation of
physical on-site construction of the remedial action.
Regions should periodically review disbursements of costs and
estimates of future costs and issue a subsequent demand for payment
of costs to PRPs when these costs or estimates have significantly
accumulated or increased. Demand letters should always reflect
EPA's most current costs. An updated accounting of costs in a
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OSWER f 9832.18
3. Partial Settlement: If a settlement has been reached with
fewer than 100% of the PRPs for only a portion of costs incurred
by EPA,'a demand letter may be issued to the remaining non-settling
responsible parties, if sufficient liability evidence is available
to the Region. This may be followed by appropriate enforcement
action seeking recovery of remaining costs. The demand letter
should request reimbursement of the total cost of remediation,
oversight, and operation and maintenance, less the amount settled,
plus interest. If appropriate, the demand letter should indicate
that a portion of the response and/or costs have already been
settled and note the settled amount. For purposes of negotiations
and subsequent litigation with non-settling PRPs, when pursued, the
Region may wish to attribute specific costs to the appropriate
operable unit. If there are no remaining PRPs, the remaining PRPs
are not financially viable, or the evidence of their liability is
too weak, the Region should close-out costs in accordance with
OSWER Directive No. 9832.11.
A. Prior to Referral to DOJ; Demand letters should be issued
to all defendants prior to referral of a cost recovery case to the
Department of Justice (DOJ). in limited instances, however, EPA
may choose to issue the demand letter concurrently with referring
the cost recovery case to DOJ. This latter approach may be taken,
for example, where the statute of limitations deadline is rapidly
approaching and when negotiations have broken off and it is
apparent to the Region that the PRP will not reimburse EPA after
follow-up contact has been attempted. Regions should take
particular care that demand letters issued prior to CERCLA §107
cost recovery referral should reflect EPA's most current costs.
III. CONTENT OF WRITTEN DEMAND
Many of the following items (except numbers 7-10) are included
in a special notice letter regardless of whether the letter
includes a written demand. However, when a special notice letter
includes a written demand, numbers 7-10 will need to be included
in the special notice letter. In addition to the items on the
following list, Regions nay also choose to include $ 104(e)
information request letters with the special notice and demand
letters. Model written demands are provided in Appendix A. At a
minimum, demand letters should include:
1. The name, location and spill identification number, if
appropriate, of the site.
2. Reference to EPA's authority to administer CERCLA and the Fund
established under CERCLA (or reference to authority to recover
costs where the response activities for which reimbursement
is sought occurred prior to CERCLA).
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OSWER f 9832.18
Administrative Expenses against the bankrupt's estate. [This
is also included in special notice demand.] .
11. A general statement giving the names of other PRPs to which
the written demand is sent. If a PRP steering committee has
been formed by previously identified PRPs, the steering
committee's contact should be provided. [This information
will already be in special notice letters but will be needed
in demand letters that follow special notice.]
12. A statement that the recipient of the demand letter should
contact EPA within a specified period (normally thirty days)
to discuss the recipient's liability.
13. The name, address, and telephone number of a representative
of EPA whom the recipient should contact.
14. A warning that if the recipient fails to contact EPA within
the specified time, a suit may be filed in the appropriate
U.S. District court for recovery of the costs incurred.
15. For small administrative cost recovery actions, a draft of
EPA's proposed consent order for the cost recovery claim
should be enclosed with the demand for payment.
IV. ROLES AND RESPONSIBILITIES OF REGIONS
A. Pre-Demand Activities
When Regions are planning enforcement work at a site, full
consideration should be given to ensuring that activities
supporting the cost recovery action be incorporated in the
litigation strategy. This includes consideration of sufficiency
of resources, timing of written demands, compilation of
documentation and cost summaries on a periodic basis, etc. Regions
are expected to incorporate issuance of written demand into CERCLIS
or other case tracking systems a Region uses for cost recovery
purposes. For timing of issuance of demand, Regional Branch Chiefs
should track the sites for which they are responsible.
B. Documentation/Interest Calculation
1. Documentation; EPA Headquarters, the Region, DOJ, other
federal agencies, and states each have certain responsibilities in
organizing cost documentation information. Cost documentation
responsibilities have been delegated to the Regions such that
Regions now document all costs for sites in their respective areas.
The "Procedures for Documenting Costs for CERCLA S 107 Actions"
(January 30, 1985, OSWER Directive No. 9832.4) describes the roles
and responsibilities of each office in preparing cost documentation
10
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OSWER t 9832.18
approximation of costs incurred by EPA to date, and therefore,
should not be assumed to be the final statement of incurred costs
for reasons explained above.
If an Administrative Record7 file is available to the public,
the location of the file may be included in the demand. PRPs may
be interested in the specific breakout of costs that may be
available in the file. Quick and easy access to the file may help
expedite negotiations.
2. Interest: The interest rate is tied to 52-week U.S.
Treasury MK-Bills (MK-bills) that mature in early September of each
year. Like the securities from which the interest rate is derived,
interest will be compounded annually. On October 1 of each year,
outstanding receivables, which include interest accrued during the
previous fiscal year, will begin accruing interest at the new rate.
For additional information about interest rates and calculating
interest, see:
o "Interest Rates for Debts Recoverable Under the Superfund
Amendments and Reauthorization Act of 1986" (September
30, 1987, Comptroller Policy Announcement 87-17) or
o Comptroller Directive "Financial Management of the
Superfund Program" (July 25, 1988, Directive No. 2550.D);
or contact your Financial Management Office.
C. Preparing and Issuing the Demand
Roles and responsibilities • for developing demand letters
involve full coordination among all Regional offices with
responsibilities for cost recovery, including the Waste Management
Division, Financial Management Office, and Office of Regional
Counsel. Regions may develop an internal written agreement to
assure implementation of roles and responsibilities for cost
recovery, including issuance of demands.
The demand should be sent certified mail, return receipt
requested. The return receipt should be included with a copy of
the demand in the site file.
71 The Administrative Record is the body of documents upon
which the Agency based its selection of a response action. For
additional information about administrative records, see the
"Guidance on Administrative Records for Selecting CERCLA Response
Actions," December 3, 1990, OSWER Directive No. 9833.3A-1.
12
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OSWER # 9832.18
be found on pages 22-25, 33-35, and 38-41, in "Superfund Cost
Recovery Strategy" (July 29, 1988, OSWER Directive No. 9832.13) and
pages 23-27 in "Cost Recovery Actions Under CERCLA" (August 26,
1983, OSWER Directive No. 9832.1).
H. Procedure in Event of No Response or No Settlement
When settlement negotiations fail, Regional management must
decide which sites to refer for judicial action under CERCLA 5 107.
The "Superfund Cost Recovery Strategy" (July 29, 1988, OSWER
Directive No. 9832.13) lists the relevant factors to be considered
in determining whether to refer a case for cost recovery. If the
Region decides not to pursue a cost recovery action, the decision
must be documented in a cost recovery close-out memorandum.8
If no response is received to a demand letter, a follow-up
phone call or letter should be sent. If there is still no
response, a determination must be made whether the facts of the
case justify EPA's taking further steps to pursue the cost recovery
claim. As stated in the "Superfund Cost Recovery Strategy,11
Regions should generally anticipate developing cases for litigation
for all sites in which total costs of response exceeded two hundred
thousand dollars and negotiations for settlement were unsuccessful.
Sites in which total costs of response do not exceed two hundred
thousand dollars are also candidates for referral consistent with
the case selection criteria. The "Superfund Cost Recovery
Strategy" and the "Guidance on Documenting Decisions not to Take
Cost Recovery Actions" (June 7, 1988, OSWER Directive No. 9832.11)
further describe the case selection criteria.
When reimbursement of oversight costs is not made upon demand
or issuance of a bill (under a consent order or decree), the
enforcement approach is dependent upon the underlying enforcement
document, if one exists. If a consent decree provides for
reimbursement, a demand for stipulated penalties should be made in
accordance with the terms of the consent decree, and a motion
should be filed to enforce the decree. If work was performed
pursuant to a decree that did not provide for and did not release
defendants from oversight and other costs (past, for example), the
original action should be amended or a new action should be filed.
Stipulated penalties and, if necessary, a judicial referral should
be pursued in the case of non-payment for EPA costs, including
those for oversight activities, under an administrative order.
*/ "Guidance on Documenting Decisions not to Take Cost
Recovery Actions," (June 7, 1988, OSWER Directive number 9832.11).
14
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OSWER # 9832.18
APPENDIX A
MODEL DEMAND LETTER
Date]
SRTIFIED MAIL
STURN RECEIPT REQUESTED
Sdressee Name
Idressee Title and Corporation
Idress
Idress
si [insert site name and nailing address]
»,
sar [insert name]:
Pursuant to authority contained in $ 104 of the Comprehensive
ivironmental Response, Compensation, and Liability Act of 1980, as
aended by the Superfund Amendments and Reauthorization Act of 1986
'CERCLA"), 42 U.S.C. $ 9604, [insert "in cooperation with" State
fency if appropriate] the United States Environmental Protection
jency ("EPA") determined on [insert date, if available] that there
is a release or substantial threat of a release of hazardous
ibstances (as defined by § 101(14} of CERCLA) from a facility known
;: [insert facility name and address] ("facility").
Beginning on [insert date], EPA undertook response actions pursuant
> § 104 of CERCLA, 42 U.S.C. S 9604. The response actions taken
jclude the following: [Insert brief description including dates of
:tivities as lettered items below.]
a.
b.
[If notice has not been previously provided, insert the following
ro paragraphs.] Under S 107(a) of CERCLA, 42 U.S.C. S 9607(a),
jsponsible parties may be held liable for all costs incurred by the
>vernment (including interest) in responding to any release or
ireatened release of hazardous substances at the facility. Such
>sts may include, but are not limited to, expenditures for
ivestigation, planning, response, enforcement activities, oversight
: response actions that are performed by parties other than EPA or
.s contractors, and operation and maintenance of monitoring systems.
Responsible parties under CERCLA include current and former owners
: operators of the facility, persons who arranged for treatment
id/or disposal of any hazardous substances found at the facility, and
16
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OSWER / 9832.18
Hazardous Substance Superfund which is determined by the Department
of the Treasury. The current annual rate of interest on unpaid costs
is [
.
EPA is not required by CERCLA to issue a written demand for
recovery of pre judgment interest. However, the date a written demand
is made nay be used by a court in determining the date from which
pre judgment interest begins to accrue.
For your information, we have enclosed a list of persons who are
receiving a letter seeking reimbursement of the costs identified
herein. While your liability is joint and several, you and other
parties may allocate among yourselves the costs to be paid to EPA.
Remittance must be made payable to the "U.S. EPA Hazardous
Substance Superfund" established pursuant to CERCLA in Title 26,
Chapter 98 of the Internal Revenue Code, and oust reference the
[insert name] facility. Please send your remittance to:
EPA - Region _ .
Attn: Superfund Accounting
P.O. Box [insert Superfund Lock Box]
Pittsburgh, PA 15251
[Note: for Region 4 and 5 the mailing address is slightly
different.]
If you desire to discuss your liability9 with EPA, please contact
[insert name and title] in writing, not later than thirty (30)
calendar days after the date of this letter. [Insert name] may be
contacted at [insert phone number],
In the event that you file for protection in the Bankruptcy Court,
EPA reserves its right to file a proof of Claim or application for
Reimbursement of Administrative Expenses against the bankrupt's
estate.
If you fail to respond to this demand within thirty (30) calendar
days, EPA will conclude that you have declined to reimburse the
Hazardous Substance Superfund for site expenditures. Consequently,
EPA may pursue civil litigation against you, pursuant to CERCLA
SS 106(a) and 107 (a), 42 U.S.C. SS 9606(a) and 9607(a).
For small administrative cost recovery actions, a draft of
the proposed settlement document should be enclosed with the demand
for payment.
18
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OSWER f 9832.18
Attachment
List of Other Potentially Responsible Parties
1. Steering Committee Chairman
Name of the Committee
Corporation
Address
2. Name
Address
3. Name
Address
4. Name
Address
20
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OSWER f 9832.18
the Internal Revenue Code, and must reference the [insert name]
facility. Please send your remittance to:
EPA - Region
Attn: Superfund Accounting
P.O. Box [insert superfund Lock Box]
Pittsburgh, PA 15251
[Note: for Region 4 and 5 the nailing address is slightly
different.]
* Excerpted with modifications from "Interim Guidance on Notice
Letters, Negotiations, and Information Exchange," Appendix C (October
17, 1987, OSWER Directive No. 9834.10)
22
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OSWER / 9832.18
* Excerpted with modifications from "Interim Guidance on Notice
Letters, Negotiations, and Information Exchange," Appendix C (October
17, 1987, OSWER Directive No. 9834.10).
24
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OSWER f 9832.18
the Internal Revenue Code, and must reference the [insert name]
facility. Please send your remittance to:
EPA - Region
Attn: Superfund Accounting
P.O. Box [insert Superfund Lock Box]
Pittsburgh, PA 15251
[Note: for Region 4 and 5 the nailing address is slightly
different.]
* Excerpted with modifications from "Interim Guidance on Notice
Letters, Negotiations, and Information Exchange, "Appendix C (October
17, 1987, OSWER Directive No. 9834.10).
26
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A A.Sn|NiTS«. ZZ IS
18DEC1S82
orwte* or
MEMORANDUM u*e*fc A«O ewrowcsuwT cay
SUBJECT: Superfund Time Accounting Procedures
FROM: Robert M. Perry
Associate Administrator and GeAer&l Counsel
TO: " Acting Deputy General Counsel
Enforcement Counsel
Associate Enforcement Counsels
Associate General Counsels
Regional Counsels
Director, National Enforcement Investigations
Director, Office Management Operations
This memorandum provides instructions to be followed by all
employees of the Office of Legal and Enforcement Counsel, including
Regional Counsels and the NEIC, to' account . for hours worked oh
' 'uperfund activities. These instructions supersede all previous .
. irectives on this subject issued by this office, including the
memorandum of November 24, 1981, to Associate General Counsels for
water and for Grants and Contracts from Gerald A. Bryan. These
procedures are consistent with Agency policy, issued by the Office
cf Policy and Resource Management, the Assistant Ac-ir.istratcr for
Administration, and the Assistant Administrator for -Solid waste and
Emergency .Response.
more per day must
. Requirements for keeping daily time sheets vary according to
how much, time an employee works on Superfunc and whether ah employee
is a member of the bargaining unit:
- Employees who spend 100% cf therr " '-ae on Superfund, as
certified by their supervisors, keep daily time sheets only for
those- pay periods in which they do work related to a specific
Superfunc site, or in which, they occasionally do non-Super fund wcrk.
therwise, tr.ey keep no daily sheets.
-------
- 2 -
- Employees who spend 50% or more of their time, but less
an 100%, on Superfund work keep daily time sheets for all pay
riods reflecting both their Superfund and non-Superfunl"~Eours.
- Employees who spend less than 50% of their time on Superfund
11 out daily time sheets only for those pay periods when they
' Superfund work. .
All employees, including supervisors and managers, must
How these procedures when they perform Superfund work.
Distort -'.rrr.5
-------
Office -of Legal and Enforcement Counsel
Steps to Implement
Superfund Time Accounting System
1. Managers determine the percentage of time each employee will ,
spend on Super-fund for each fiscal year. .
2. Managers fill out a 100% Superfund Employee Certification Form
fcr those employees who will spend 100% of their time on Superfund
activities during- the coming, fiscal year. The original is to be
sent to the Office of Management Operations/ 3oom 3600 -
Attention: william 'Stewart. A cow is to.be maintained in the
rz.r.2?er's files. Managers are to review chess certifications 'in
six months to ensure they are still valid. Again, the original of
the recertificatior. is to be sent to Hoom 2600 ,- Attention: .
i-Jilliam Stewart and a copy maintained tor the supervisor's ;i-es.
/3. Managers assign Superfund fixed account rv-.toers to all
i employees who spend 50 - 100% of their time on Superfund work (in
•. Headquarters r contact William Stewart). • •
. 4. Managers inform employees of the requirements and implement the
^ system.
-------
Office of Legal and Enforcenent- Counsel
Instructions for Completing
Superfund Daily Time Sheet
General Instructions
0 The Superfund- Daily Time Sheet (see attached) is used on a daily
.basis by employees who spend 50% or more of their time, but less
, than 100%, on Superfund work and who have Superfund fixed
account numbers. For these employees, it reflects all 'time
worked or taken off in each day in the pay period— regular,
overtime, Superfund, 'and non-Superfund.•
10n% Superfunc ersployees use the Daily Time Sheet only in those
r»y reriocs in v-icr. they vcrk rn sit^-srecific Superfuna
activities or when they occasionally co nop.-Suoerfund work. It
is ncr used by 'l"QtX% ^employees in those" pay "periods in wr.icr. all_
tney GO is generic, non-site-specific 'Superfund work.
* Sraplcyees who spend less than 50% of their tine on Superfund use
the Daily Time Sheet only when they do Superfund wcrk. In such
cases, they must fill out Daily Time Sheets for the entire pay
period. '
* For site-specific wcrk, the name and account nusber of the site
are entered in the spaces prsvicec.
* Supervisors prepare Daily 'Time Sheets for their bargaining unit
employees.
0 Tise is charged in hcxir increments.
* Overtime hours are recorder only when payment- for overtime is
authorized, using'EPA form 2560-7.
Fillirijr evt. the Daily .Tir.e S.^set (See sttacnedi -ssr.rles)
0 Enter name and pay period in upper lefr-hanc corner.
8 Ir. upper right, check if employee, has a Superfund or a
r.cn-Superfund fixed account numoer.
«
"° Er.ter the appropriate number of regular and approved overtime
hours wcrkec in each day of the pay period under the appropriate
category. ' .
* ?cr site-specific wcrk, enter the name of the site and the site
account-number uncer "Superfund Site-Specific." - ' .
-------
. • - - 2 - .
•To construct site-specific account numbers. Enforcement Counsel
nd NEIC personnel should complete the appropriate account number
(3TJB78_T_ ^ for OEC and 3TF250_T_. _ for NEIC) by entering the
number o"f""tKe Region where the "si"te"is located (Region X is 0) in
the seventh digit and the site number in the ninth and tenth digits
Regional Counsel and Criminal Enforcement Division (CID) personnel
duty stationed in the regional offices should fill in the following
basic structure.•
\ • •
Regional Enforcement 3TJB ST
Regional Legal 3£YY~ ~ BT^ "
Criminal Investigations . 3TJB""" ""• ' T~ •""
The fifth and sixth gicit_vrillalways be the appropriate allowance
-- i s
stationed. Only CID personnel will enter the number of the Region
where the site is located in the seventh digit (Region x is 0).
For other regional personnel the seventh digit is always B. In
the ninth and tenth digits , enter the site code from the site/
spill identifier list.
^ * Enter the total number of "release time" hours under Bother ,_^
'I identifying then as annual or si ex leave , compensatory" time, or
'' holiday. ; ! ' \
^- • Total hours' for each day must be at least 8 a,nd for each pay
period, 80.
0 Employee or supervisor (for bargaining unit members) signs form.
•-Turn in Daily 'Time Sheets to timekeeper, .who will retain them.
Timekeeper instructions (See attached .sample time cards)
0 ?oc employees with Super fund fixeJ account numbers:
- Charge all regular time and approved overtime to the Superfund
fixed account number unless there is an entry under " Superfund
Site-Specific" or "Non-Superfund" .
- Charge Superfund site-specific hours on the back of the time
card using the account number listed on the Daily Sheet.
- Charge non-Superf und time on the back of the time card .to the
appropriate account number.
- .Charge all time in the "Other* category to the fixed account
number.
-------
- 3 -
For employees.with non-Superfund fixed i
- Charge ail regular and approved overt:
fixed account number unless there is i
Non-Site Specific" or "Superfund Site
- Charge "Superfund Non-Site Specific" I
time card to your "Non-Site Specific"
-.'Charge "Superfund Site-Specific* hours
listed on the Daily Sheet.
mil time i- r_r.e "3ther" cateaoj
-------
Office of. Legal and Enforcement Counsel
Supervisor's Certification of 100% Superfund Exsployees
I .hereby certify that the esplbyees listed below will spend
10.0% of their.tiae on Superfund-related work for fiscal year FY
. I wi-il
r one-year tiae period .beginning today)
view this certification on March 31, 1583 or
. to ensure- continued cert if.:
'(six mentis rr or. wcay )
caticr. is appropriate.
Types name o; supervisor
(Send original to Cffice of Management Operationsf actenzion
Williaa Stewart. Maintain a easy.in-Supervisor's file.)
-------
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
\ - ..? WASHINGTON; DC 20460
" /%MJ-?r>cMTl M
C*s\ii iUC^i I IML.
ATI* 0 1«JOJ ENFORCEMENT COUNSEL,
MEMORANDUM
SUBJECT: Evidence Needed To Support CERCLA Cost Recovery Actions
FROM: Mary E. Bielefeld
Attorney /Advisor
Acting Associate Enforcement Counsel for Waste
This memorandum provides instructions and guidance that I
recommend be followed by all employees of the Waste Programs
Enforcement Office in gathering the documentation deemed necessary
to account for .all expenditures made by EPA in CERCLA cases. Since
the majority of actions filed or to be filed in federal courts
under CERCLA seek to recover EPA's expenditures (as well as those
of the United States Department of Justice), it is imperative that
steps to collect, reliable evidence supporting the allegations of
U.S. costs be undertaken immediately. This memorandum sets forth
generic categories of costs and then elaborates on the types of
documents required by the federal rules of evidence and procedure
to support those costs. The location of all documents is noted as
well. This memorandum should be read in conjunction with the
Memorandum entitled, "Superfund Time Accounting Procedures," of
December 16, 1982, from Robert M. Perry to Acting Deputy General
Counsel, et al. The Department of Justice has been consulted in
the preparation of this memorandum. •
GENERIC CATEGORIES
A. SUMMARIES
1. SITE SPECIFIC SUPERFUND SUMMARY
The Financial Management Division (FMD) of EPA can provide
a computer printout for each Superfund site which summarizes the
agency's travel and payroll costs. The information is stored in
.EPA's accounting system using a site specific Superfund accounting
number. In requesting these summaries, OWPE must provide the FMD
with the site name, number and the date up to which you would like
the costs totaled. .For summaries which are to be submitted to the
court or to persons outside the agency, ask the FMD to delete EPA
-------
employees' social security numbers from the printout. See Attach-
ment I.
The FMD can separate the costs of emergency removal activities
from enforcement costs on request. Additionally, the FMD can
provide a figure representing the agency's total expenditures for
Payroll and travel costs, or the FMD can break down these costs by
ndividual employee name and individual employee travel authorization.
Since the Superfund computer printout is nigh impossible to decipher,
it is very optimistic to expect that such summaries will be accepted
by either the courts or opposing counsel as accurate and fair repre-
sentations of the agency's costs. For these reasons, the courts
;-rJ rTT.csing ccur.se? are entitled to and will rrcbsbly der.=.r-..' rhe
su.pporz.ing Gocuaentaticn ior che coses.
I have orchestrated the gathering of.the necessary cost
documentation to support these summaries in three CERCLA cases.
.My experiences lead me to the inevitable conclusion that the summary
printout format must be changed. One glance at Attachment I amply
demonstrates why. The printout is simply undecipherable (to all but
accountants and statisticians armed with the activity code manual
and the latest site/spill identifier numbers list). Enough quizzical
looks and requests for explanations have been directed at me already
to prompt me to state unequivocally that the agency's summary format
must be overhauled.
Specifically, the travel summary should provide the following
information: site account number and site name at the top, name of
traveler, where they traveled, dates of travel and total cost of
travel. The court and opposing counsel have little interest in the
majority of information now contained in the summary: the doc
control no., the acct. no. restated each line, the oblig. document
number, object class, cum. obligations, unpaid obligations, and the
original action dates. This information is both irrelevant and
confusing. Further, the Department has expressed to me its total
dissatisfaction with the existing summary format and joins me in
suggesting that it be changed so that it becomes understandable
and requires a minimum of manual work to verify.
2.( SUMMARY OF CONTRACT SERVICE
Some of the work done with respect to Superfund sites is
performed under contracts whose costs are not reflected in the
summary described under paragraph A. 1. above. Such contracts may
be managed by a contractor/ who can provide, on timely request,
a summary of the services^provided pursuant to the contract for a
specific Superfund site. See for example, paragraph 3.a.ii.
below which describes the National Lab Contract. See Attachment
II. :
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-3-
B. SUPPORTING DOCUMENTS
1. PAYROLL
The FHD of EPA Headquarters is the repository for all agency
timecards. On request, they will retrieve and copy timecards for
individual employees who have worked on a specific Superfund site.
They will also cross-reference the computer printout time totals
with the timecards* It is possible to correct data put into the
Superfund ^accounting system for the current fiscal year, but it is
not possible to add data for prior fiscal years. Incorrect data .
can be deleted from the summary on request. In the event the FMD
OWPE and added to the- total time provided in the summary. If
these supporting documents are to be given to either the court or
to outside counsel, the employees' social security numbers must
be blacked out.
The Superfund accounting system currently does not separate
the payroll costs for attorneys from those of the technical staff.
I and the Department anticipate that the courts will carefully
scrutinize and make inquiry into the nature and bases for the
attorneys' costs. Additional supporting documentation will no'
doubt be required to enable the United States to recover attorneys'
fees. For these reasons, OWPE must separate payroll costs for'
attorneys from those of the technical personnel. Separate cost
totals must also be made.
The additional documentation necessary to support attorneys'
costs consists of the daily timesheets and biweekly summaries kept
by the respective attorney. There is great variation among .the
EPA offices respecting timesheets. Some ^off ices keep only biweekly
totals with no description of work performed, while others keep
daily timesheets with descriptions of work done in fifteen minute
or hourly intervals. Regardless of these variations, whatever
documentation is kept must be gathered. Timesheets and summaries
must be requested by OWPE from the individual attorneys. I recommend
that steps be tak*>n immediately to establish consistency among the
EPA Regional offices and Headquarters. The Department has indicated
that attorney's fees for legal work which describes the work and
is recorded in fifteen minute intervals by the attorney will more
likely be recovered than those fees for legal work described and
recorded in hourly intervals.
The additional documentation necessary to support technical
personnel costs generally consists of the biweekly summaries kept
by them. In the case of on-scene coordinators, daily timesheets
may be available.
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-4-
2. TRAVEL
Supporting documentation for the travel cost total reflected
in the summary provided by the FMD includes travel vouchers and
authorizations, and vouchers for miscellaneous expenditures. The
latter includes items such as car rental vouchers, costs of photo-
graphic duplication, costs of preparing exhibits etc. Travel vouchers
and authorizations are kept by the respective FMD office located
in either the Region or Headquarters depending on where the employee
incurring the costs is located. On request to the FMD Headquarters
office, they will gather vouchers for Headquarters employees and
will ask the Regional office's FMD officer to gather vouchers for
summary printout. In the event the vouchers reflect costs incurred
in a prior fiscal year, and that data is not entered into the system
under the site specific account number, the vouchers will be totaled
separately. If the vouchers reflect costs for the current fiscal
year which have not been entered into the system, the FMD can put
them into the site specific Superfund system so that they will be
reflected in the summary. If the documents are to be submitted
to. the court or to outside counsel, the employees' social security
numbers must be blacked out.
In compiling the supporting documentation for travel, there may
be several problems. When an employee has traveled to a Regional
office for a task force meeting to discuss two or more cases, the
travel voucher costs have been attributed to the general Superfund
accounting number rather than the site specific Superfund accounting
number. Since the travel is incurred for only the sites listed on
the travel authorization, those costs should be assigned to the
specific site and recovered. The current methodolgy results in
the loss of these costs because they are attributed to the general
Superfund account. I suggest that all employees be advised to
allocate a portion of these costs to each site and that such
allocation reflect the percentage of time an employee spent discus-
sing the site. In addition, I suggest that the support staff be ,
advised of this as well.
I and the Department anticipate that the attorneys' travel
costs will also be more carefully scrutinized by the courts.
Accordingly, we request that OWPE separate attorneys' costs from
those of the technical personnel and make separate totals as well.
Needless to say, the supporting documentation should be similarly^
separated.
An affidavit reflecting EPA's total travel, payroll and
miscellaneous costs is attached (Attachment III). An affidavit of
this type should be drafted for FMD personnel for each site to support
agency costs.
-------
-5-
3. CONTRACT COSTS
Work conducted with respect to Superfund sites may be contracted
out and paid for under a wide variety of agency contracts. Which
contracts are involved depends on the site, the nature of the work
and the dates the work was "tasked" by the agency. Superfund
sites listed on the interim priority list may have had work done
prior to the initiation of the site specific Superfund accounting
system. These contract costs, therefore, are not entered under the
site specific number and will not be reflected in the FMD summary
described earlier. Work done on Superfund sites after the site
specific Superfund tracking system was in place will be reflected
a. Costs incurred before the site specific Superfund
tracking system was in place.
In one of the earliest identified Superfund sites, work was
conducted at the site under the existing Field Investigation Team
contract (FIT) and the National Lab contract. In addition, work
was done by the agency's Research and Development Division and by
the agency's regional laboratories. Since these costs were not
put into the site specific Superfund accounting system, the
information was gathered from the respective entities. The
documentation necessary to support these expenditures is described
below. For work done by entities not described here, it is suggested
that OWPE contact the Project .'Officer for the contract to discuss
how the contract works and the type of affidavit and documentation
needed to reflect accurately the agency's expenditures.
i. Field Investigation Team Contract
Ecology and Environment (E St E) was asked to draft an affidavit
reflecting the total cost of the work they did at the specific
site including overhead costs. The affidavit described the work
done, the hours spent, the hourly cost, and the overhead calculations.
In order to show that E & E was paid by the agency, the Research
Triangle Park (RTF) office of EPA was asked to provide copies of
E & E's vouchers to the agency and the agency's records showing
that they were paid by the Treasury. See Attachment IV.
ii. National Lab Contract
This contract is managed by Mr. Stanley Kovell, Chief of the
Special Services Branch, Hazardous Response Support Division,
Office of Solid Waste and Emergency Response. On request;
Mr. Kovell will ask Viar, Inc., a contractor, to provide OWPE with
a summary of the samples taken at a site and received by Viar for
distribution to labs for analysis. The summary reflects the
-------
-6-
individual and total cost of the sample analyses, the amount paid
for the analyses to date, the overhead costs of Viar, Inc., the
invoice numbers, the sample numbers, and the name of the lab doing
the analyses. The summary also contains the total cost of all the
work done by the labs and Viar for the site. Viar will provide
copies of all the invoices listed on the summary for the site.
Verification of the summary's contents and authenticity is
to be made by obtaining an affidavit from the Project Officer for
the contract, Mr. Stanley Kovell. See Attachment V.
The invoices provided by Viar will consist of two types: type
?r' €nd t-">~ tv;c. .-'. t;-"t- —e inv-I:-£ rsfl-ccs the. - sycv.r.r r~ ". / .-
*.- -,/Je oz C"i6 i
-------
-7-
iii. Work done by the agency's Research and Development
Division
A request for an affidavit must be made to the relevant
regional office. It should reflect the nature of the work done
at the site and its cost. OWPE should also request copies of all
invoices for this work, and if they were paid by RTF, request copies
showing payment from RTF. (Ex. of a cost in this category: aerial
.photographs taken for a site.) See Attachment VI.
iv. Work done by the agency's Regional laboratories
T ._^a rei^ecc the nature of the work done, the number of samples
analyzed, and the total cost including overhead. Supporting document-
ation should also be requested from the lab. See Attachment VII.
b. Costs incurred after the site specific Superfund tracking
system was in place.
Ordinarily these costs will be reflected in the FMD summary
of expenditures made for the site. They include the cost of the
emergency removal work and the cost of the remedial investigation
and feasibility studies if the work was identified by the site
specific Superfund accounting system number. If work on the site
has progressed to the design and construction phase, these expendi-
tures will also be summarized.
The agency's Regional financial management officers are able
to provide OWPE on request, with copies of the contracts let by
the on-scehe coordinator and paid for by the agency with respect
to an emergency removal. In addition, the RTF can provide on request,
copies of their authorization to the Treasury to pay the bills. An
affidavit should be requested from the on-scene coordinator which
elaborates his work and the costs incurred. See Attachment VIII.
There may be work done at a Superfund site using the. current
REM/FIT contract. The FIT part of this contract does not require
the contractor to keep site specific documentation for the cost of
the work done for a specific site. For this reason, these costs
will not be in the FMD summary and must be compiled in a manner
identical to that described earlier for the FIT costs incurred
before the site specific Superfund tracking system was in place.
I suggest that subsequent contracts include a term requiring the
contractor to keep site specific documentation.
In another cost recovery action regarding a site where there
was an emergency removal, the Inspector General's Office audited
the Region's emergency response activities. The draft audit report
that followed stated the Superfund "statutory background" incorrectly
-------
-8-
and contained a conclusion in the "Pvesults of Review: Cost Recovery"
section, that the cost documentation did not- support an enforcement
action. Whether there is sufficient documentation to support a
cost recovery action is a conclusion to be made by agency and
Department attorneys. If this draft document is discovered pursuant
to the discovery rules, the agency's case may be seriously harmed.
Audit reports should reflect the financial facts and figures and
should not state enforcement conclusions.
SUMMARY
&bcve, your o-iice srioul.i Li^uxiCs. tocaia icr tne loiio^ing
gories of costs:
INSIDE COSTS*
Total Agency Payroll Costs for Attorneys
Total Agency Payroll Costs for Technical Personnel
Total Agency Payroll Costs
Total Agency Travel Costs for Attorneys .
Total Agency Travel Costs for Technical Personnel
Total Agency Travel Costs
OUTSIDE COSTS
Total Agency Contract Costs
Total Agency Miscellaneous Costs
TOTAL AGE!s7CY COST
*/ The costs of agency overhead are currently not included in the
FMD summaries. Apparently, the FMD has not yet agreed how these
costs should be computed.
Attachments
-------
JT% '\ - .-
| •' UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, DC 20460
of net or
CNFOffCEMCNT COUNSSl
21 APR 1983
MEMORANDUM
SUBJECT: Superfund Cost Recovery Actions
FROM: KirkUfSV S&if f
Actiagr&ssociate Enforcement Counsel for Waste (LE-134S)
T?: Regional Counsels, I-X
Attached for your information is a memorandum entitled
"Evidence Needed to Support CERCLA Cost Recovery Actions" drafted
by Mary Bielefeld of my staff. It summarizes her experiences in
developing the cost recovery documentation for U,S. v. Royal N.
Hardage and In Re Crysta1 Chemica1 Company.,and then presents and
discusses her recommendations. Representative attachments are also
included. Since guidance is not yet available regarding this
subject, I suggest you advise your client offices to pursue the
development of evidence for cost recovery actions along lines
similar to those outlined in the attached memorandum.
An inter-office Superfund Cost Recovery Coordinating Group has
recently been established in Headquarters chaired by the Office of
Solid Waste and Emergency Response. The purpose of the coordinating
group is 1) to identify and resolve cost recovery issues and 2) to
coordinate all Agency activities. Specific office roles, responsi-
bilities, and priorities will be established, so thfit an effective
coftt recovery program is assured &nd implemented.. Representatives
from the following offices will participate: Enforcement; Counsel,
General Counsel, Inspector General, Administration, Policy and
Resource Management. Gene A. Lucero, Director of Waste Programs
Enforcement is responsible for ensuring Regional Office participation,
Attachments
-------
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0001549008
0001549008
0001549008
OIHI54900V
0001549009
000I54V009
0001549009
1061)1 OH
01MI830H4J
VOU02I
OObfHJOIIAJ
2IM
2117
2113
2111
2117
2111
2111
2114
2117
2111
101AL
f
2114
2llf
2IIJ
2IU
2Mf
?IM
2111
2114
2117
2111
2111
2114
2117
2111
MAJ
IOIAL f
22I|
fMAJ
2111
2114
10.00 ,
11.25
4.84
28.60
0.00
O.OO
0.00
0.00
61.00
I*.25
v./o
19.15
0.00
a. oo
o.oo
0.00
6J.OQ
If »2SS'
*.?0 (
s.oo c
TJ.34^
50.00
J.80
18.00
IJ.14
4.00
IS. 50
V.20
16.SO
10.00
0*00
0.00
21.00
70.00
0.00
n.ifO
O.oo
61.00
19.f»
0.WO
o.oo
61.00
9.
-------
PMOTECIIOM AUENCV
SOttSTANcE RESPONSE SHE HAROAGE.tM,
HONlfuttlNG Hfl'OMf il* AtLOWANcE MOlrtEM. SHE NIMBEM AND AMI VIIV CODE
FHU OHJECl Ct.A$«jt*
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W ~*
01-
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srsiieMO nfl
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AGENCY
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i MM>»Hl •*» ALLOhANcf 1101 OKI, S|It NIlMHEH AW *C!|V|
OM.ieci CL«ssts UArnmiNo UBJ CLASSES «n* *•««) m*
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: ci*s OBLIGATIONS
CUHMCNf *|>ll|U(t ^
CUH PAVMENfS
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AJVANCESl
' • .
rv CODE
UNPAID OMIGIMAL
OBLIGATIONS ACT|IPN
OA1E
«• *HRC lt*6».«S 1. ?«».«•, IB?. 00
-------
HONl
AMMC t\f>
SFSI1ENO Oft
HA/AMnfHI-j StlltSTAferE IIESPOMSE SI IE IIANOAtiE.QKt
uv Ai.LUWAiirE inKorn. SHE NMHUEII AND AAT IONS
ClJHRENT*PlliOrt
CUM PAVMEHlS
lEKCLUOItiG
ADVANCES I
UNPAID
OBLIGATIONS
OMIGlHAt
ACTION
DATE
.112012
.112105
2lO'f06
2TG'l06.ir08
2KM06JI04
«OOl5^0',|J
ooois^nsii
uooi«>?osii
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2TGH06JIOB
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IOTAL OCMAJ
TOTAL SFJATV
T01«L SFSHlFNO
70.00
IS.00
12.IS
I0h.
-------
-
oi-zr-
MA
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A DOC account oni io HAJ (
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r MiiHiiin NUMBER
Y
TOIAL A
tMV|MIINHt.Ni ,<0IEC?ION AGENCY
AltiiOUS si'OStANcE HESPONSE SHE M AWAKE, OK,
(lll| MY ALLOWANCE HOI.oCII, SHE NUMllEH AMU *«'IVllY CODE
Cl CLASSES lEAcLUDtNO (IriJ CLASSES *ll' ANO 'IZ*
fit uv ivtRY J*COHS FINANCIAL MEPIS i AUALYM**
M.Jl CUHULAtlVE CUM PAYHENlb UNPAID
LAS OilLK'AflONS (ENCLUOlNG OBLIGATIONS
CUMMIN T«PM| OR ADVANCE S|
RC SS2.49 S52.49 0.00
OMIGINAL
AC l| ON
UAIE
PA«
-------
HA 7
HONIlMllNO Mil'
OIMC
AHIIC n6L A|K I WAS IE MGMI 01V
srsitrNii OB
fHOIECriON AGENCY
SMIiSlANcE IIESPONSE SUE HARDAGE.OK.
IHf at AlLOWANfE iHILDfHt SHE NUHREH AMU AC'IVIIV CODE
:l CLASSES INCLUDING OIIJ CLASSES •!!• AND »!<••
' >LAH|FS 4 FM|NGE IHRM OFr. j|. |9H2|
tir IVtRV JACOB1- F. ..v... HEP1S 4 ANALYSIS
A
C
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i
H
HOC
TON 1 H|
NIlMMFM
F0004*
F0004*
F00046
F00046
ACCOUNT
NUHflEH
3fF«06LHOii
3lF.t06l.hOil
3fF»06|.H08
3IF«06LHQ8
OHLIH MAJ
DUCUmrif (1C
NMMMElt
1
OTlMfl
0.00
0.00
an. wo
UNPAID
OBLlOAf IONS
0.00
64.00
20.00
20.00
104.00
UHIGINAL
AC | |ON
UAIE
I2-H-82
U-|l-«2
I2-I7-H2
I2-|7-B2
SOOOIQ
soooin
soooto
2IQH06L10U
2|QilOf>LfO)l
PlQlOM Itttt
10TAL
5IBACSAP09 1 21
H1MI83IOI9 - * •• •
0001831019
00011131019
000183)019
snoop?
SOOO??
S00027
SOOO??
so;ooi?
SOOO)?
SOOOl?
SflOO}?
S0004?
2K1MOM.TOH
2fni06LfO>l
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SOOO*?
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S00044.
SOOH44
3IOJ06LIOB
3IOIOALI08
3f 0.1061. tOB
3fQii06|. 1UH
ZIOI06LIOM
oooia?dn4«
~i r
rlj
I U
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OOOTO/R140
OliU86fl?eS*1
OOOtattH?2S 1
s
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210-1061. Ion
SltpO«4
sowoso
2IUI06I fUU
2ICM06I. loa
SOM050
sojooso
SO
SOtlllA
SO
SOMH6
.
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2lC<06LfOtt
?IO'«06LlOtt
?IUI06LlOH
^
/
oootaburjol
OOOfar>M?JO 1
OOOTObHMOj
oooiabiisM
OUUfdtrl'ibl
00.oo
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>.oo
1.00
1.00
1.00
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70.00
I'AOE
04-29-82
02-08-82
02-08-82
02-08-82
02-08-82
03-15-82
03-|S-82
03-15-82
03-15-82
03-15-82
12-17-82
12-17-82
U-1 7-82
12-17-82
03-31-82
03-31-82
03-31-82
03-11-82
03-31-82
03-31-82
04-01-82
0«-0|-82
04-01-82
04-01-82
07-15-82
01-15-82
07-15-82
07-|5-82
-------
01-27
MA
li MF
FHII OtlJ
f'HEI'A
H6L A|H i llASIf. MGHI IIIV
on
HO(ECfIUN AGENCY
SlUlSlANc MESPONSE SIIC
HHtf dT ALLOWANCE HUl.OEHt SI IE NUMMEH AND * MVlfV CODE
Ft! CLrtSSLS l€»r(l'IHNO 00.1 CLASSES •!!• AND
SM AM|fS k H«|NGE IrlllU lire. Jit 19621
ItO M IVEHV JACOOS fINANCIAt HEP IS i ANAD IS
A
C
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HOC
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(EXCLUDING
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SOOlTI
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SOOI7I
SOOI71
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-------
HOTECMON AGENCY
t»-»pir^»-»r» +r -- -- — • •-- -^, •» MC *IMIrf 51 5 I I C. H"ll|| --*, • —
HOMlTtiTIINO MtftMlT ••' ALLOWANCE HOLDER. SITE NUHftCH AN!)
(Mil UltJCCT CLflSSt* It^rlUl'INO OHJ CLASSES *ll* AND
I SALAHIF.S i rHINGE limn ore. Ji» ivnai
iir ivEtir jAf.ows FINANCIAL RCPTS i ANAL*?
COOE
Aline 06L AIM & HASTE MOM! DIV j
STSIfENU nfl |
1
A I»«»C ACCOllNI OHLIO MAJ (
C CO^lRI NCHIIill DOCUMENT OC C
T NUHIlEl) NUMIItR
V
TOTAL Al
•
i.
i
O.*T
LAS
i
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HC
1
CUHOiATIVti
OULlliAllONS
CUilMENltplllUrt
2*091.23
CUM PAVHENl!*
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ADVANCES)
|t9l7.U
UNPAID
OBLIGATIONS
174.00
OHlOINAL
ACTION
UATC
-------
01-21-'
J
MOM |IUM I NO ttt
•IlUC |B6 HE01 ON 06-IHJ/V9
SFSIfE'lO OB
trtVIHUNHEN KOfECIlON AGENCY
SUBStANt RESPONSE SHE HAflOAGE.OK,
0«i d» ALLIUiANr.C MULUCH. SHE NUrttiEH AND A" MVIIY CODE
CLASSES IEACLIWIHG OHJ CLASSES Hit AND
Mn>«l£S I FK|NOE ' IHHU OEC. 31 » 19821
u* IVCH* jAcitiis FINANCIAL nE»»is 4 ANALYSIS
A
C
T
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HOC
AtCUIIHI
NUHlltH
UHL 10
nCilHHNI
NUM|l£R
HAJ
OC
LAS
CltMULATIVt
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CMH
lEXCLimiNQ
AOVANCESI
UNPAID
OBLIOAIIONS
OlllGINAL
AC 1 |ON
OAIE
2IJ-I7RAI08
2lJ0
3ft.bO
28|.00
111.90
3q.OO
?8|.00
|*2lQ.99
1*219.99
1*219*99
0.00
.00
.00
.00
.00
.00
.00
.00
.00
.00
.00
0.00
0.00
09-20-82
09-20-82
I0-|2>82
09-20-82
11-05-82
IO-H-82
|0-|*-B2
10-18-82
10-18-82
II-OI-B2
-------
tu
MIlMl fl'MlM'i Hf
* t MO MM,
I'lM P*
AMMC ?B6 REGION 06-110/99
SFSMENO 08
A DOC ACCOIiNf Ortt 10 MA!
C r.ONlMi. NOHftEH DOCUMENT OC
T NUMBFil HUMllER
V
IOIAL I
tl«V|HUNHtN <*MI)?ECf |ON AGENCY
lAllnOi'b SUHBlAHcE HCSPONSE SHE HAMOAOE.On,
IHIMI «»» ALLOWANCE HOLOEHi SHE HUHIIEM A NO ACUVlfV COOE
KCI CLASSES (EKCLUIHNO (IffJ CLASifS »ll* AN|I »|^«
SALAMIFS i F»«JN<»E Innu DEC. 31 » I9H2I
RED ii t ivtHir jMcOtis FINANCIAL MEPIS 4 ANALYSIS
URJf CUHULAIIVb Cdl PAYMENlS UNPAID
CLAS UBLIb^riONS IEHCLUUINO OBLIOAriONS
CUmiCN|«|>illUi) AflVANCES|
OMIOINAL
AC t ION
OAfC
HHC |»2|9.49 1*219. V* 0.00
-------
I-2MU
HUH
|IA/ SiWSUNcl' ('ES SE SITE HAH|)AUE*OK»
nil'iiuj .Jf AllOtfANfE HULUEH* SHE NMHMEII AM) ACIIVUf CODE
F*M) UlUF.«.l tCA55ES (LXrl.llDlNG OflJ CLASSES Ml* ANU •!«?'
AOE
SM
PHI I'M! til I!
HEOION 06-HQ/99
i
IVEHY
FM|NGt
ItlHU DEC.
FINANCIAL
31
19021
4
FSIIF.'MI n8
DOC ACCOM**! OtMIO
COHtlU. NUMPfM OOCUMcMT
NIJrtttrM NUMMEM
MAJ
DC
OH, If
CL*5
t
j CtHU| AMVt CUM PAYMEMlS
I MHL 10 (\||l)NS (ENCLIMIlNd
1 CUHIIENT«Pn|UH ADVANCES I
4
UNPAID
OBLIGATIONS
OHI0INAI.
AC! |ON
DA |C
niLSfi
l\
•» 1 1 2*1
ooorrri4no
OAOT7MUHO
0|f
Oil 169
000 1 9 1] 490
AltlJ'*
OOOI9IU90
OMI9II403
0001911403
0»00
14.00
310400
230.21
165.52
281.00
109.10
46*05
261*00
95*04
10*00
31.50
1.431.52
58*50
58.50
248.00
6J.66
48.00
359,66
1,849.6ft
1*649*60
254.00
129.2
Sfl.bO
241.00
61.66
41.00
354.66
3*175.60
3*175.69
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35 .00
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31 .00
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0*00
•74.00
0*00
0.00
0.00
0.00
0.00
0.00
07-02-02
05-10-02
05-10-02
03-01-02
03-01-02
03-01-02
07-14-02
06-20-02
07-09-02
07-09-02
10-10-02
10-19-02
10-15-02
10-10-02
09-20-02
09-20-02
09-20-02
09-20-02
09-20-02
09-20-82
09-27-02
12-15-82
09-27-02
05-07-02
01-10-82
01-10-02
02-17-02
614.00
-------
tt|-2|
M
HONlfoniNG H
f«l> Oil
CHIP
Anne qi6 REGION 06 -no/99
srsin.no nn
A 0«C ACCOMNI OHLIG MAJ
C f SUBSIANCE HESPONSE SHE HAH|IAGE,OK,
POMf •!» ALLUMANcf MOLOCH* S|fE NUHIIEH A»|0 Ar.flVUf CODE
IFCI CLA<,stS (EAcLUOlHQ OHJ CLASSES •!!• A»:< »U'"
SALMKIfS t rntNH|»M AOVANCESl
niRC H*A«9*6fl 3(|7
-------
OI-Z?
MA
M «I
-------
SAMPLE MANAGEMENT
SUMMARY OF INVOICES
For Sample Analysis At Royal Hardage She
February «, 1983
SAS or
Case
r»«. o?r
SAS No.
•»
136-F
Case 1223*
SAS No.
Total
241-F
MT
4,
2,
lt
$26,
-------
—
CONTRACT LABORATORY-PROGRAM
tADUKATOKY - MEAD COMFU/CHEM /-". * v"
EPA Contract No. 68-01-6076 < ,-1.' ' .; v
Case Sample
Number Number
920 FJ4341''
CF1460:
61 S
62 v'
63 ;
64 *•
65,
F146SV
x f\ S
69VTC
70V
71^'
72 * ••'
73-.-'
74 -.'
75v'"
76 •/
77;-
78^
Subtotal
Type 1 Type 2 v- Sample
Inv. No. Inv. No. ' Price
205340«^ EAR 1 106.25
0049 • »
205790 X
1
I
1
- -
525.00
n
n
n
M
H
M
It
11
M
VI
Adjust-
IllCllt
-0-
ti
R
n
n
n
n
26.25
-0-
n
2fc.l5
R
R
M
n
n
R
n
Total
Price^
$ 106.25
M
It
n
n
n
n
498.75
v>* on
P •
498.75
n
w
n
n
«
M
n
6,282.50
EPA Contract No. 68-01-6432 •-/'•'
F1430V-'
31»/
32-
33---'
35.-
36^
37^-
38^-
39 s
40 w
48 /
r I466i- ;
67-
..- */
205800^ 2182461 U 494.00
| and • B
| 216280") "
! . "
• . n
1
1 ' "
205360 *V ! "
205800 A ! «
|
' >'
n
n
205360. \ ! •
1 ! n
24.70
n
n
R
n
9.88
24.70
R
II.
R
19.76
24.70
R
518.70
n
n
it
n
503.88
518.70
n
n
n
513.76
518.70
n
-------
Case
Number
Subtotal
Estimated
Sample Ma
Sample Type 1 Typi
Number Inv. No. Inv.
F1441 / 205360A'
42^ |
43 V j
44 V •
45 v i •
46,'
F1447./ I
F1447-M:.' 204850 1/ . •
F1447-D s \
Cost of Organics Analysis
inagement Costs (§ 16.5%
6 2 Sample Adjust-
No. Price mem
1 22.33
i n
I
«
n n
» n
• ' * " 19.76
" n
TataJ
Price
516.33
n
it
n
n
n
n
513.76
n
11, .365. 17
17,647.67
2.911.S7
Total
$20,559.54
-------
CONTRACT LABORATORY PROGRAM
LABORATORY - ROCKY MOUNTAIN ANALYTICAL LABORATORY
EPAContract No. 6S-01-6430
Case
Number
920
Sample Type 1 Type 2 Sample
Number Inv. No. Inv. No. Price
MF9043 ^ 2751^ 3137^ 133.00
MF9043-D „•
MF9044 b.
MF9044-M ,.
45
46
47
4S
49
50
51
52
53
54
MF9054-D
55
MF9055-M
56 |
! ' fl
.
.
57 i
55
59
60
n
n
n
n
it
n
H
it
it
n
n
it
n
MF9073 ' «
7ti i ii
» :
V
Adjust-
ment
6.65
H
B
n
n
n
it
n
n
it
n
ti
n
5.32
n
n
n
n
n
n
n
w
6.65
ri
Total Cost of Inorganics Analysis
Sample
Total
Management Cost Q 16.5%
Total
Price
139.65
n
n
n
B
n
n
n
n
n
n
w
n
13S.32
n
n
n
n
n
w
n
ti
139.65
t'
3,339.63
551.03
$3 , 890. 66
-------
C SERVICES (SAS)
LABORATORY - MEAD COMPU/CHEM
Analysis 01 nine \7j low concenira
turnaround.
SAS Sample invoice .
No. Number Numbers
SAS F1441 205570v
136-F 42 !
Rei. 43 i
Case 44
920 45
46
47 ~
F1447-M! 217290 »/
Fiwtf-iw
Estimated Total Cost for Organic;
Sample Management Cost <§ 16.5%
Total
uon setumem orga
Sample
Price
50.00
n
n
ft
n
ti
n
n
n •
Analysis
Analysis of thirteen (13) low concentration sediment
data turnaround.
SAS Sample Invoice
No. Number Numbers
SAS F1430 205570
136-F 31
Rel. 32
Case 33
920 35
36
37
. 38 ;
39 !
40
48
66
67 / ;
Total Cost for Organics Analysis
•
Sample
. Price
' 126.00
M
n
n
n
n
n
ti
n
n
n
n
n
imc samples, wim
Adjust-
ment
-o. $
$
$
organics samples,
Adjust-
ment
2.52 $
. H
n
ti
«
n
R
R
R
n
R
-0-
w
1
Sample Management Costs (5 16*5%
Total
$1
^i-oay aax&
Total
Price
50.00
n'
fi
n
n
n
R
H
H ,
452.00 '
74.25
524.25
with 14-day
Total
Price
123. 48
n
H
n
R
R
n
R
R
M
n
126.00
N
,610.28
265.70
,875.98
4.
-------
SPECIAL ANALYTICAL SERVICES CSAS)
COMPU/CHEM
Analysis of seven (7) low concentration aqueous samples, with 14-day data
Turnaround.
SAS Sample
No. Number 1
SAS F1434
136-F 60
Ref. 61
Case 62
920 63
64 .
65 •/ •
Total Cost for Oreanics
Invoice
slumbers.
205570-'
i
Analysis
Sample
Price
75.00
Adjust-
ment
-0-
"
Total
Price
$ 75.00
n
n
w .
M ' ' '
It
It •.'•'•
* *?* nn
Sample Management Cost (3 16*5%
Total
86.63
$ 611.63
Analysis of eleven (11} low concentration aqueous, samples, with 7-day data
turnaround.
SAS
No.
Sample
Number
Invoice
Numbers
SAS F1468 205570 *'
136-F 69 1
Ref. 70
Case 71
920 72
73 i
75 i
76 !
77 i
78 i
Total Cost for Organic Analysis
Sample Management Costs @ 16.5%
Sample
Price
200.00
n
it
n
n
n
n
n
n
it
n
Adjust-
ment
16.00
n
n
n
n
n
it
N
it
n
n
Total
Price
4MMMMMMMMM*
$ 1S4.00
n
n
n
n
n
n
n
n
n
2,024.00
333.96
Total
$2,357.96
5.
-------
SPECIAL ANALYTICAL SERVICES (SASJ
LABORATORY - ROCKY MOUNTAIN ANALYTICAL LABS
Analysis of nine (9) low concentration sediment samples, with 21-day data
turnaround. •
SAS Sample Invoice Sample Adjust-
No. Number Numbers Price ment
SAS MF905* «/ 2710t/ 36.00 .36
136-F 55
Rei. 56
Case 57
920 58
59
£0 '
MF9055-kl
MF905*£>
** n
n n
n H
« n
' -• * "
n n
» n
" .37
Total Cost tor Inorganics Analysis
Sample Management Cost @ 16.5%
Total
Total
Price
^^^•^^^»
$ 35.64
«
n
n
n
*
« '
n
35.63
$320.75
52.92
$373.67
Analysis of fifteen (15) low concentration sediment inorganics samples, with 14-day
data turnaround.
SAS
No.
SAS
i3c~r
Rei.
Case
920
Sample
Number
MF9043
f
H5
Invoice
.Numbers
271* 'S
Sample
Price
Adjust-
ment
mmmmmmm
•c-
50
51
52
53
73
70
MF9044-M
MF9043-D
Total Cost for Inorganics Analysis
Sample Management Costs @ 16.5%
Total
n
n
n
R
n
n
n
n
n
n
n
ft
n
n
n
n
it
n
n
n
n
n
n
n
it
$690.00
113.85
$803.85
-------
SPECIAL ANALYTICAL SERVICES (SAS)
LABORATORY - VERSAR, INC.
Analysis of thirteen (13) low concentration aqueous inorganics samples, with 7-day
data turnaround. . . '
SAS
No.
Sample
Number
Invoice
Numbers
Sample
Price
Adjust-
ment
Total Cost lor Inorganics Analysis
Sample Management Costs @ 16.5%
Total
Total
Price
SAS
136-F
Rei.
Case
920
MF9075 3*38 v/ 250.00 -0- $ 250.00
76 ( "•- » *
77
78
79
en
... »•:— ^
12
83
S4
85
MF9079-M
MF9079-D
i
i
i
^«
. i
i
i
t
t
t .1
•
» « w
* w n
* n n
1 M J.
^ _. .^
' ' ' » n *,
' n H
t n n
' MB
' it «
$3,250.00
536.25
$3,786.25
-------
CONTRACT LABORATORY PROGRAM
LABORATORY - MEAD COMPU/CHEM
EPA Contract No. 6&-OI-6076
- , . '•" - ' v
Case Sample Typel Type 2 Sample Adjust- Total
No. Number Inv. No. Inv. No. Price mem Price
1223 F12<£ i 212
50 -
51v
57
FH57-M*
r---«r~ -H
720 i\ *25,00 -0- $ 425.00
~- •• .'.«• «''
. K ' W • M
n « ,*
n : « «'
n n n
r ti •' *
Estimated Cost of Organics Analysis $2,975.00
Sample Management Cost (g 16.5% _
Total $3
*To date, an invoice has not been received for this sample.
-------
SPECIAL ANALYTICAL SERVICES (SAS)
LABORATORY - MEAD COMFU/CHEH
•»
Analysis of seven (7) low concentration aqueous samples for priority pollutant
organic* compounds, with 5-day data turnaround.
SAS Sample Invoice
No. Number Numbers
SAS F1248- 214610.
241-F 49 '
Rei. 50 | '
Case 51 •. \
1223 57/ 1
F1257-M- 300550 /
F1257-DJ/ !
T;t^J Ccst for OrgarJcs Analysis
Sample Management Cost @ 16.5%
Total
LABORATORY - VERSAR, INC.
Analysis of seven (7) low concentration
15-day data turnaround.
SAS Sample Invoice
No. Number Numbers
SAS MF9036 3666 1/"
241-F 69
Rei. 70 ;
Case 71
1223 S6 l
MF9036-M
MF9036-D
Total Cost for Inorganics Analysis
Sample Management Costs (3 16.5%
Total
Sample
Price
174.00
n
n
"
n
n
it
aqueous
Sample
Price
200.00
n
n
n
n
n
.n
Adjust-
mem
-0-
'
samples for Tasks
Adjust-
ment
-G-
N
n
n
H
II
*
Total
Price
$ 174.00
$lf!i£.00
200.97
$1,41*. 97
1, 2 and 3, with
Total
Price
$ .200.00
11
"
R
» •
n
n
$1,400.00
231.00
$1,631.00
9.
-------
IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF OKLAHOMA
UNITED STATES OF AMERICA )
Plaintiff,' )
vs. ) CIV-80-1031-W
ROYAL N. HARDAGE )
Defendant. )
County of McClain )
: - - • _y _ ... :- -
State of Oklahoma )
AFFIDAVIT OF THOMAS 0. HAMMOND
I, THOMAS O. HAMMOND, being duly sworn, depose and say:
X
1. that I am employed by the United States Environmental Pro-
tection Agency, (EPA), 401 M Street, S.W., Washington, D.C.
20460 as a Systems Accountant in the Fiscal Policies and Procedures
Branch of the Financial Management Division in the Office of
Fiscal and Contracts Management.
2. In my capacity as a Systems Accountant, I have personal
knowledge of EPA's accounting system for Superfund sites. I
have a thorough knowledge of this system .and can provide the
documentation supporting all expenditures at each site on request.
I'am also a Project Officer at EPA responsible for having
the EPA Accounting Manual and the Financial Management Manual
-------
-2-
updated to include all the CERCLA accounting information
and CEPCLA information gathering processes.
3. Approximately one year before the Comprehensive Environmental
Response, Compensation, and Liability Act (CERCLA or Superfund) was
enacted, I assisted in developing accounting procedures for tracking
the anticipated Superfund costs. Since CERCLA mandated that EPA
be capable of identifying and segregating costs for each of the
Superfund sites, the existing EPA financial management system
i — ..-,_
account number structure was refined so that costs could be
tracked by specific Superfund sites.
4. With the enactment.of the Superfund Act on December 11,
\ 1980, the Hazardous Substance Response Trust Fund was established.
t
42 U.S.C. 9631. This fund consists of 1.6 billion dollars to be
appropriated to EPA over a period of five years. For the Har-
dage site, the fund has been used to pay governmental response
costs, costs of identifying, investigating and taking enforcement
action against releases and threatened releases.
5. I was asked to pull the costs contained in EPA's account-
ing system for tne Royal Hardage site and to provide supporting
documentation. I obtained the supporting documents from the
respective Regional and Headquarters Financial Management Offices,
Contract Project Officers, and the program Offices. These records
are kept in the course of these offices regularly conducted activi-
-------
-•J-
ties. The records set forth their respective activities and are
kept pursuant to the agency's duty under CERCLA. Pursuant to the
above request, I compiled the following information for the Hardage
site:
TAB A; a CERCLA accounting report which summarizes costs for
travel and miscellaneous expenses and supporting documents (copies
of travel authorizations, travel vouchers and invoices),
TAB S; a CERCLA accounting report which summarizes costs for
payroll expenses and supporting documents (copies of payroll time-
cards, daily and biweekly timesheets),
TAB C; a summary of travel vouchers related to the Hardage site
for EPA personnel but not charged to the Hardage site account and
supporting documents (travel vouchers and authorizations),
•TABL_D; a summary of payroll costs for the Hardage site not charged
to the Hardage site account and supporting documents (payroll
zi-szar=s),
TAB E; copies of vouchers paid to tne Ecology and Environment,
Inc. for contract * 68-01-605* for work performed for EPA, Sorae of
tnese contract costs pertain to the'-Hardage site.
6. As of December 31, 1982, EPA has paid a total of S31,*41.47 for
travel, payroll and miscellaneous costs incurred with respect to
the Hardage site.
7. As of December 31, 1982, EPA's Superfund accounting system
reflects a total expenditure by EPA of 527,491.46 for costs incurred
with respect to the Hardage site which were entered into the system
under the site specific Superfund account number for the Hardage site.
-------
-4-
This total-reflects the agency costs of travel (37,846.79), payroll
(519,338.62) and miscellaneous purchases (S306.05) and is reflected
in the accounting printout.
8. As of December 31, 19R2, the travel costs not charged to
the Hardage account but which are for work done with respect.to
the Hardage site are 53,022.39.
• \
9. As of December 31, 1Q82, the payroll costs not charged to
t.he Hardage account _b|lt_y.hi 1h ***** fQE WOJlk_donfi_wJLt.h-r es peCt tO .
the Hardage site are 51,327.62.
10. Data is entered into the Superfund accounting system on a
daily basis since costs continue to accrue for the Hardage site.
Data for costs incurred for the Hardage site, but not yet
entered into the system as of January 20, 19^3, as well as unpaid
obligations {i.e. costs obligated but net psif ir cash) are not
reflected in the system's total expenditures. Certain expenditures
have been paid and are in the accounting system '•ut were not charged
to the Hardage site specific account number. (See No. 12 below)
11. In February, 1980, EPA and Ecology and Environment, Inc.
(S & E) entered into a contract entitled "Field Investigations of
Uncontrolled Hazardous Waste Sites", Contract No. 68-01-6056.
The purpose of this contract was to provide EPA with engineering
services to help identify, investigate e. d medy existing uncon-
trolled hazardous waste sites. EPA Regional offices and Read-
quarter's Offices were entitled to use E & E's services. Periodic
payments to E & E were made by the Financial Management Division
-------
of EPA for work performed under the contract.
12. The costs incurred by EPA for work done by E & E with respect
to the Hardage site are entered into the EPA Superfund accounting
system under a non-site specific Superfund account number. E 6 E
was paid a total of approximately 35 million dollars during
the two year life of contract No. 68-01-6056. The money paid
to E & E for the work they did with respect to the Rardage site
is included in the 35 million dollars paid to E & E under
contract *68-01-6056.
13. Copies of all vouchers, travel authorizations, timecards,
accounting report printouts, and timesheets related to the above.
expenditures are attached and incorporated by this reference.
14. The accounting printout in TAB A is for the Hardage site
miscellaneous and travel costs. Travel voucher numbers charged to
trie Hardare site are ir. tne "otlir document number." Cash payments
made are in the "cum payments" column. The travel voucners are
for EPA Pegion VI and. Headquarters personnel. The total agency
travel costs entered under the site specific accounting number
equal 57,846.79 as set forth in paragraph seven above. The miscel-
laneous costs total S306.05. The grand total of these costs put
into the system and paid is 28,152.84 as reflected in the accounting
printout.
15. The accounting printout in TAB B is for the Hardage site
payroll costs. The employees' names are in the "empl name" column.
The hours spend by the respective employee are in the "empl hours
-------
-6-
actual" column. The "cum payments" column includes hourly wages
and benefits. Overhead costs for EPA employees are not included
in this report.
Ifi. Both EPA Region VI and Headquarters personnel keep biweekly
summaries of time spent on Superfund sites and for work done under
the Resource Conservation and Recovery Act.
17. The agency uses the following payroll cost formula to
determine the hourly cost charged for the respective employees'
work. The employee's annual salary (as determined by the general
schedule or other payroll plan) is divided by 2030 hours (40 hours •
per week times 52 week per year).
18. TAB C contains travel vouchers which are not charged to
the Hardage'account. These vouchers were charged to the regular
program account because that account number was written in the
obligation code Dlock instead of the Hardage site number. The .
purpose of the travel was for tne Hardage site. (See for example
T<326424 with account ft 2A2X06DOOn.)
19. TAB D contains payroll costs which should have been charged
to the Hardage site account but were charged to another number.
20. In the EPA Regional Offices, timecards .are signed by the
office supervisor. The payroll information is entered into the
automated payroll system. The original Regional tiraecards are
tnen forwarded to the Financial Management Office in Washington,
D.C. and retained. Headquarters timecards are also signed by the
-------
office supervisor and are sent to the Department of Interior's
payroll office in Washington, D.C. where the data is entered
5nto the system. The interior Department returns the original
timecards to the Financial Management Office of EPA in Washington,
D.C. where they retained.
21. All spending documents are kept in the agency's finan-
cial management offices in the Regions, Headquarters, and in the
four Field Offices.
22. The Superfund accounting system has built-in edits to
insure that all data entering the system is valid. EPA's Office
of the Inspector General continually performs audits and reviews
of the various phases of the accounting system. EPA has numerous
internal control systems to insure and protect the agency's money.
I ceclsre, under penalty cf perjury that, the fcrercir.g
is true and correct to the best of my knowledge.
•Dated: April , 19R3. •
THOMAS O. HAMMOND
Systems Accountant
U.S. Environmental Protection
-------
IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF OKLAHOMA
UNITED STATES OF AMERICA, §
§
Plaintiff, §
§
vs. § CIV-80-1031-W
§
ROYAL N. HARDAGE, §
§
Defendant. §
AFFIDAVIT OF FIT CONTRACT COSTS
THE STATE OF TEXAS
COUNTY OF DALLAS
Personally, before me, the undersigned authority, on this
day appeared LEWIS A,. WELZEL, who being duly sworn, on oath,
says that he is an employee of Ecology and Environment,
Inc., Rosslyn Center, 1700 North Moore Street, Arlington,
Virginia Z2209, in the capacity of Assistant National Program
M* ni r£ r , Field I rs vest" :: 3t * zr, ? of Ur, :cr,t"o 1 1 ed Hazardous Waste
Sites. Ecology and Environment, Inc. (E & E) entered into a
Field Investigation Team C"TT) national contract with the
U.S. Environmental Protection Agency (EPA) which number is
68-01-6056. Pursuant to FIT contract number 68-01-6056 we
have rendered certain services to EPA for Investigations and
related efforts for the Royal Hardage site at Criner, Oklahoma,
Within the scope of my employment and duties, I have responsi-
bility for and knowledge of the costs under FIT contract
number 68-01-6056 with EPA.
Under the terms of E & E's prime national contract with
EPA, we are not obligated to track on a "site by site" basis,
-------
the costs for each of the several thousand Investigations
performed. Therefore, our costs as related to each site are
derived 1n the following way. The net program costs are
derived by subtracting all subcontracting costs from the overall
cost of the contract. This net cost 1s then divided by the total
number of level of effort manhours to arrive at an average cost
per manhour of technical personnel. Based on our contract costs
through December 25, 1982, this parametric cost is $40.24 per
".eve'i of effort hour. This figure incorporates all contractor
incurred direct and indirect charges associated with the
administration, management, and performance under the FIT contract,
to include all wages, fringe, overhead, fees, clerical support,
travel, office rental and supplies, field equipment and expendable
materials, but does not include subcontracting costs for site
specific tasks such as well drilling, surveying, engineering
consultants, expert witnesses, etc. (Please take note that the
*•>••= ritec ;"ij .-c-£s ~. :• t i.iress EPA internal cost; i:sociatec
with the administration and management of our prime contract,
f.or the cost of sample analysis performed by EPA cent-act
laboratories.)
Before application of this parametric cost rate to determine
cost, another point must be considered. Our experience on the
FIT contract has shown that at least 25% of all available level
of effort hours are expended on essential investigation
activities that cannot be identified or tabulated to specific
hazardous waste sites. Some examples are equipment cleaning,
repair, and maintenance; instrument calibration; technical
.literature research; refresher training; planning and coordi-
nation of multi-site projects; and, field team management. In
-------
3
recognition of this fact, the number of technical personnel
hours that have been charged to a specific site must be
multiplied by a factor of 1.333 in order to legitimately
distribute al1 costs at the $40.24 per hour rate derived
above. After the prorata costs are calculated, the value of
the site specific subcontracts can then be added to obtain
the total cost of the field investigation effort.
"Tr.e computation for the Royal Hariage Site is as follows:
FIT Region VI
Level of Effort Hours
Recorded for all TDOs
Issued on Royal Hardage Site,
Criner, OK * 1748 hours
Apply Factor for Non TDD
Technical Effort . x 1.333 hours
2330
Multiply by Cost per Level
of Effort Hour-Program
Wide Average x $40.24
$93,759.20 $93,759.20
Add Cost of Subcontracting ' * 19.443.91
(Details below)
TOTAL FIT COST = 5113,203.11
Issue
TDD No. Subcontactor/Effort Month Cost
F6-8203-01 Snepard Engr & Testing Inc. Mar 82 $7,708.00
Install 10 Monitoring Wells
HQ-8204-06 Dr. J. Garriott - May 82 2,544.14
Evaluate Toxicology of
Contami nants
HQ-8204-05 Dr. D. Kent - May 82 8,941.77
Hydrogeological Investigation
F6-8204-20 Kapco Engineering Co. - May 82 7,900.00
Survey of Monitoring Wells
F6-82Q4-30 Guarantee Abstract Co. Sep 32 250.00
Purcel , Okla. Abstract Services
-------
The above analyzed costs were incurred by the U.S. Environmental
Protection Agency for work performed by E&E under FIT contract number
68-01-6056 at the Royal Hardage site through December 25, 1982.
To the best of my knowledge and belief, the above costs are
true and correct.
S i g na-ttj r e
Assistant National Program Manager
1 i 1 i e *"~ "
Sworn to and subscribed before me this "7 day of
1983. o
Notary Pub. ic in and. for Dallas County, Texas
My commission expires ^-
-------
IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF OKLAHOMA
UNITED STATES OF AMERICA
Plaintiff, .
vs.
ROYAL N. HARDAGE
Defendant.
COUNTY OF McCLAIN
Civ.-80-1031-W
STATE OF OKLAHOMA
AFFIDAVIT OF STANLEY KOVELL
I, STANLEY KOVELL, being duly sworn, depose and say:
1. Since July 1979, I have been employed in the Washington,
D.C. office of the United States Environmental Protection Agency
as the Chief, Special Services Branch, Hazardous Response Support
Division, office o-f Solid Waste and Emergency Response. My duties
in this position are to manage the EPA program that provides chemical
analysis services through contracts with a number of laboratories.
EPA uses viar, Inc. as a contractor to manage the flow of samples
between EPA field operations and the contract analytical laboratories.
I manage the performance of both Viar and the contract analytical
laboratories.
In this capacity, I performed work on the case of U.S. vs.
aoyal N. Hardage. My work on this case has included review and
-------
-2-
approval of vouchers for the analyses of samples taken in this case,
in addition to general management of the entire program.
3. The attached documents detail the costs incurred under
contracts with MeadCompuChem, Versar Laboratories, Inc. and Rocky
i
Mountain Analytical Labs, under the assigned case numbers 920 and
1223 and the listed sample numbers. The chart labelled "Attachment
1" lists the case anc sample nuiaoers assignee to the samples at ~.~e
time they were taken. The chart also lists the invoice numbers for
these samples.A Type 1 invoice is an invoice paying 85% of the
costs of analysis pending review of the file for accomplishment of
contractural responsibilities. A Type 2 invoice is an invoice
paying the remaining 15% of the costs minus penalties for late
reporting. The adjustment column lists the late report penalty
substracted from the original invoiced amount. Total sample price
is the total amount paid for the analysis of the sanple. The
"TOTAL" includes the analytical costs plus the sample management
costs to Viar, Inc. "GRAND TOTAL" is the total of all costs to the
government for the analyses of these samples. Attachment 2 includes
the invoices for the samples listed in Attachment 1. Attachment 3
includes copies of paid invoices.
4. The total expense to the government for the work described
in item 3 above as of January 31, 1983 is $41,299.64.
I declare, under penalty of perjury that the foregoing is true
and correct to the best of my knowledge.
Dated April , 1983.
-------
J7AT£_CF NEVADA
CCUSTY OF CLARK
Clayton t. Lake, Sting ouly sworn, disposes and says:
THAT tit serves as a Project Officer for the U.S. Environment*I Protection
Agency's (EPA) Advanced Monitoring Systems Division it the Environmental
Menitoring Systems laboratory in Las Vegas, Nevada.
THAT the Advanced Monitoring Systems Division provided cPA's Region VI
office with aerial photography of the Royal Hardage Hazardous Waste Site
located near Crlner, Oklahoma. The site is also known it the Criner Landfill.
THAT to «y Seat information and fcettef the expenditures for this support
are as follows:.
'»pe sf Support
Photographic Labor
Cartographic Laoor
Photo Interpretation
Sensor Operator
Aircraft
Materials
Further Affiant sa>$ naugnt.
Hours
Cojl
27.0
6.5
3.0
1.5
S Z7S.S7
53.62
120.69
43.69
1. 533. 13
284.57
52.317.27
tTiywn tTs.4
/>
Subscribed and sworn to Before me, a Notary ?
-------
IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF OKLAHOMA
UNITED STATES OF AMERICA,
Plaintiff,
vs.
ROYAL N. HARDA6E,
Defendant.
CIV-80-1Q31.TH
AFFIDAVIT OF EPA HOUSTON LABORATORY COSTS
THE STATE OF TEXAS )
COUNTY OF DALLAS )
Personally, before me, the undersigned authority, on this day appeared
WILLIAM J. LIBRIZZI, Mho being duly sworn, on oath, says that he 1s the
Director of the Environmental Services Division, Region 6, U. S. Environmental
Protection Agency, which Includes the Houston Branch Laboratory, and that the
following personnel and operating costs were Incurred by the U. S. Environmental
*, , <•
Protection Agency's Houston Branch Laboratory 1n analyzing samples from the
Royal Hardage hazardous waste site {Criner Landfill) In March-April UJ2.
-------
FERF3NNEL C03TS
H. D. Langley
Kelvin L. Ritter
Linda J. Garner
Medardo Garza
Dsvid Stockton
Grace Townsend
Leroy Carter
L. C. Miner
Jerry Caraviotls
80 Regular Hours
17 Overtime Hours
90 Regular Hours
34 Overtime Hours
96 Regular Hours
26.5 Overtime Hours
38 Regular Hours
10 Regular Hours
120 Regular Hours
24 Overtime Hours
60 Regular Hours
28.5 Overtime Hours
80 Regular Hours
26.5 Overtime Hours
3
@
3
3
9
9
$
3
9
9
9
9
9
0
@
$18.89/hr.
13.41/hr.
14.92/hr.
13.41/hr.
14.03/hr.
13.41/hr.
15.31/hr.
14.40/h".
9.36/hr.
13.41/hr.
8.93/hr.
13.41/hr.
7.90/hr.
11.40/hr.
7.60/hr.
- $1,511.20
227.97
- 1,342.80
455.94
- 1,346.88
355.37
581.78
1*4.90
- 1,123.20
321.84
535.80
382.19
608.00
302.10
342.00
* $9,581.97
= $12,546.56
42 Regular Hours
TOTAL SALARY COSTS
Total Salary •«• Benefits * Salary Costs X 1.3
OPERATING COSTS
This includes equipment costs (capital amortization and maintenance); chemical
and expendable supplies, and apportioned laboratory overhead.
Estimated @ $300.00 per day for 15 days
TOTAL COSTS
$4,500.00
$16,956.56
The above costs represent only those samples analyzed between March 25 and
April 18, 1982 with some follow-up work on these samples reported in a subsequent
r»port ef May 21, 1982. There were 21 samples total giving a per sample cost of
$807.46.
-------
In August - October, 1979 we analyzed nine samples frem Criner Landfill
following similar procedures to those used in the more recent analyses of Karen
to April, 1982. Subtracting an inflationary factor of 15% from per sample
costs, we would estimate costs at that time as $686.34 per sample, for a total
cost estimate for that set of nine samples at $6,177.00. The total for both
sampling periods is $23,133.56
. To the best of my knowledge and belief, the above costs are true and correct.
A^teM
WSftK
Signature
?//€
TtTe
•v/ f*.
Sworn to and subscribed before me this o-^y* day of
1983.
Notary ^Public in and for Dallas County, Texas
-------
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
IN RE: )
)
CRYSTAL CHEMICAL COMPANY ) No. 81-02901-HB-4
DEBTOR )
Affidavit
County of Dallas )
State of Texas )
I, EARL WALLACE COOPER, being duly sworn, depose and state:
1. I am employed by the United States Environmental Protection
^ ^ » r* - ,, ' 7 2 * \ * -„-",..,. , " 7 " •] "".»-• . — * -•• - *• " * ", " r ™ , v - « T ^. y 7 -*"
• » ~ -' * w" t*"'/i • * C ^ * w < - *-i <* ^ w * «Bi*4i w»tCCto| wOli&Jty i C /t C ^ / «< 4 / v1 »
as an Environmental Scientist. I currently reside at 2403
Prairie Creek, Richardson, Texas 75080.
2. Pursuant to Sections 104(a) and (b) and 105 of the
Comprehensive Environmental Response, Compensation and Liability
Act (CERCLA), 42 U.S.C. §§ 9604(a) and (b) and 9605, and
Executive Order 12316 of August 20, 1981, 46 Fed. Reg. 42237,
I was designated as On-Scene-Coordinator ("OSC") to direct the
Federal emergency removal action at* the Crystal Chemical Company
("Crystal Chemical") facility on Rogerdale Road, Houston, Harris
County, Texas, on or about September 19, 1981.
fc GOVERNMENT
-------
3. In my capacity as OSC for the Federally financed removal
action at Crystal Chemical, I directed all field activities
performed as part of this response action. My duties Included:
the hiring of contractors; planning and Implementing response
•
efforts; overseeing day-to-day site operations; preparation or
collection, review, maintenance, and submittal of all supporting
documentation (including daily worksheets and job invoices);
and enforcing applicable worker and public safety requirements.
4. The EPA removal action at Crystal Chemical commenced on
or about September 20, 1981. The Crystal Chemical facility was
in a badly deteriorated state at this time. Surface impound-
ments (lagoons) on the site were filled to overflow, and the
dikes around the perimeter of the property were in danger of
failing. Essentially all of the site was covered with arsenic
cort5"inatsd liquids, which were running off site. Heavy rains
had raised the level of wastewater within the dikes. Potential
rainfall threatened to spill large amounts of contaminated water
from the site.
5. EPA directed the initial response effort toward removal
of the contaminated liquids from the surface Impoundments and
the site itself. EPA's contractor hauled and disposed of some
815,000 gallons of comntaminated liquids. After removing most
of the contaminated liquids and thereby mitigating the most
-------
Immediate threat to safety, on or about September 26, 1981,
rk—on the site.
6. On or about October 5, 1981, the second phase of the EPA
removal action commenced at the site. This phase was directed
at.securing the surface Impoundments by filling them and sealing
off as much of the site as possible from exposure to rainfall
and surface water runoff by covering the area with a clay cap.
Preparatory work included removal of large quantities of scrap
iron, broken pipe, scrap equipment and tanks, and spent containers,
as well as the continual liming of the soils to dry them out
in the face of heavy rainfall. When preparations were complete,
the surface impoundments were filled in; and all but the southwest
quarter of the site was "capped" with 6-12 inches of impermeable
clay.
7. At this point work was again suspended, on November 8,
1981, since the area that remained uncovered by clay cap was
the area with process buildings, equipment, storage buildings
and tanks on the surface. Most of this property was contaminated
with arsenic. Accordingly, EPA decided to work with the Trustee
to assure the timely sale and removal of all equipment and tanks
in accordance with all applicable health and safety requirements.
8. During the months of November and December 1981, and
January 1982, the Trustee worked to obtain a suitable bid
-------
for the property in question. On December 15, 1982, EPA
furnished the Trustee with written conditions addressing
environmental, health and safety requirements necessary
prior to any removal of equipment from the Crystal Chemical
*
I
site. The Trustee furnished these conditions to prospective
bidders and later incorporated them into a contract for
purchase of the assets between the Trustee and Ralph Reed of
Kern-Weed Control, Inc. ("Kern-Weed"), Enid, Oklahoma. In
KdMy FebruaTy~t98"2; 'reprifittntdll ves of EPA (Including raymlf)
and Texas Department of Water Resources (TDHR) met with Mr.
Reed to discuss the necessary environmental, health, and
safety requirements governing removal of the contaminated
tanks and equipment from the Crystal Chemical site. Mr. James
Moody, a representative of Voluntary Purchasing Group (VP6)
of Bonham, Texas, also attended the meeting. VPG represented
that it held a proprietary interest in many of the tanks, as
well as some of the equipment oh the Crystal Chemical site.
EPA cautioned VPG representatives that VPG should meet all
applicable environmental, health, and safety requirements in
the removal of Its property from the Crystal site and that
this move should be coordinated with Kern-Weed's move.
9. Kern-Weed suffered apparent financial difficulties
which caused substantial delays in the removal of its property
from the Crystal Chemical site. EPA was unable to continue
-------
Its clean-up pending removal of the Kern-Weed and VPG property.
During this period* EPA continued to haul contaminated water
from the uncapped portion of the site and the buildings,
which were very contaminated and leaked during rainstorms.
EPA also repaired these buildings to lower the expense of.
the liquid removal. In addition, EPA constructed a diversion
berm to contain contaminated water while allowing clean
storm water to run off the site, repaired building gutters
and performed other services.
.10. Kern-Heed began washdown of Its property on or about
i
April 13, 1982, but did not begin serious preparations for
removing Its property until It began cutting pipe on or about
June 2, 1982. Kern-Heed moved its first load of equipment off
site on or about June 28, 1982, and moved its last load on
or about August 28, 1982.
11. VPG began cutting pipe on or about July 16, 1982,
and moved out Its first load of equipment on or about July 23,
1982. VPG moved Its last property, a large product storage
tank, off site on or about September 9, 1982. EPA and the
Trustee had made Intensive efforts to facilitate the sale of
sc«e °°,000 pounds of arsenic trioxlde product that was
contained in the tank. The tank could not feasibly be moved
with the chemical 1n 1t. EPA's contractor, GeoDetox, Inc.,
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placed the arsenic trloxlde in drums and readied it for
shipment, pursuant to an agreement with the Trustee. During
the conduct of the property removal by both VP6 and Kern-Weed,
EPA often provided direct assistance 1n removal efforts.
12. In early September 1982, the Trustee arranged by
contract for the removal of all buildings from the site by
ji & T Erectors, Inc. Following numerous delays, which caused
substantial delays 1n EPA's effort to complete the clay capping
of the site, H & T Erectors completed their work on or about
December 2, 1982. During the conduct of their operations on
site, H & T Erectors caused substantial damage to areas
already capped on site, necessitating further removal expendi-
tures by EPA. Since the completion of H & T Erectors' opera-
tions, actions at the Crystal Chemical
facility have centered on completion of the clay cap cover
and repair of damaged areas. EPA has also repaired damage
to the fence surrounding the site caused by VPG and Kern-Weed
in moving their equipment, at a cost of $3,085.71. The CERCLA
emergency removal action 1s nearing completion as of this date.
During the conduct of the emergency removal action at
Crystal Chemical, EPA has Incurred the following expenses by
contract:•
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Empak. Inc.; Contract No. 68-96-0000.
Status - Open $272,281.24
Geo-Detox. Inc.: Contract No. 68-96-0001.
Status - Closed 234,354.58
Disposal Systems. Inc.t Contract No. 68-96-0002.
status-Closed........ 23,850.00
Disposal Systems. Inc.; Contract No. 68-96-0003.
Status-Open .......... ............................ 52,214.00
Geo-Detox, Inc.; Contract No. 68-96-0004.
Status- Open ••••••• .......... .................... 176 , 379 .60 2
o J
$759.079.42
Total of Invoices:
Copies of all invoices and contracts related to the above
expenditures are attached and incorporated by this reference.
1 This figure includes $6,819.32, which is currently in
dispute.
2 This figure includes a 3% surcharge to cover the cost
of insurance coverage as per contract.
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8
I declare, under penalty of perjury, that the foregoing
is true and correct to the best of my knowledge.
Dated: This 20th day of January 1983.
;ARL WALLACE COOPERv
Environmental Scientist
Environmental Protection Agency
Region VI
Dallas, Texas
Subscribed and sworn to before me this oUJ day of
January 1983.
Notary Public
My Commission expires March 19, 1984
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US. Department of jus-; ic
Washington. D.C. 20530
October 19, 1984
ATTORNEY-CLIENT PRIVILEGE
Gene Lucero. I-irector
Office of Waste Programs
U.S. Environmental Protection Agency
401 M Street, S.W.
Washington, D.C. 20460
Richard Mays
Special Enforcement Counsel
U.S. Environmental Protection Agency
401 M Street, S.W.
Washington, D.C. 20460
Re: Providing Cost Documentation to Support
EPA Hazardous Waste Clean-up Cost Recovery
Claims ; "~ _ •
Dear Gene and Richard:
This letter is written to provide our advice on the
appropriate level of documentation needed to successfully establish
the United States' entitlement to recovery of hazardous waste
clean-up costs. As you know, we now have substantial collective
experience in handling cost recovery cases in the hazardous
waste enforcement program. During the course of this experience
numerous issues have been resolved with the adoption of a number of
EPA positions that art proving quite effective in the successful
prosecution of recovery cases. However, a few issues still persist.
We write pursuant to a number of discussions with you and your
request for our review of these matters. V We have examined the
issues involved in some detail, as set forth in the attached
legal memorandum, which is enclosed for your further information.
In'summary, you requested our views on three issues:
(1) Whether and, if so, when must original cost documentation
be made available by EPA to the Department to support cost recovery
litigation claims; (2) What is the degree of documentation that'
_^^_^____ • , •» .
^7 Our views are set forth as legal advice by the Department in
~~ the course of representing EPA in litigation. Accordingly,
this letter and attachments constitute legal advice to our client
and should be protected as privileged and exempt from public
disclosure.
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- 2 -
must be made available, including whether summaries can be used
in lieu of original documentation; and (3) what witnesses are
needed to support the use of cost- documentation?
In summary, we advise that (1) All original documentation
needed to establish EPA's current "external costs" for which
recovery is sought must be made available when referred. For
EPA's "internal" costs, the Agency may elect to make available at
referral only a summary of the documentation. However, if you
choose to provide only summaries in the referral, then we will
file recovery claitns for "internal" costs on the understanding
that these costs say not ultimately be recovered uT.-_:.i i--*.
documentation is produced.
(2) The degree of documentation that must be made
available will vary with the phase of the litigation process and
the precise type of costs involved:
• «.-. " *
(a) In general, for "external" costs, original
documentation must be made available to us which shows what
work was authorized, what work was done, what charges were made
for the work to EPA, and what payments were, in fact, made for
these charges. The originals must be assembled and collated
at a central location at the time of referral, and detailed,
accurate summaries or copies of the originals provided to us with
the litigation report. .
(b) For "internal" costs, the same relative types
of documentation are needed as for "external" costs, if EPA expects
to recover, "internal" costs in court. Although we will file
cases including claims for recovery of "internal" EPA costs on
the basis of an adequate summary, the original back-up documentation
must be made timely available to us for successful recovery of
internal cost claims.
3. To prove costs, EPA must provide in discovery
responses and for witness testimony, the persons who were
actually responsible for managing and executing and are familiar
with the work for which recovery is sought and (if different from
the former category) those persons who actually were responsible
for executing payment.
We recognize that this level of production will place a
considerable burden on Agency resources. This burden may be
mitigated somewhat by using key witnesses to produce documentation
-------
at trial/ summary judgment stage through the use of summaries
of original documentation. However, the Federal Rules of Civil
Procedure require that original documentation always be made
available to opposing parties if summaries are to be used.
Moreover, a substantial evidentiary foundation is required to
introduce summaries, to show both the admissibility of the underlying
originals and the general accuracy of the compilation of the
summaries. Thus, the full range of witnesses outlined above may
still need to be available to the litigation team.
To minimize the burden on EPA staff to efficiently
manage the cost documentation process in prosecuting these claims,
we recommend that you consider, first, incorporating appropriate
requirements in clean-up contracts. Contracts with third-party
firms (and subcontractors) engaged in clean-up work should include
•conditions which require these entities to systematically compile,
maintain, collate, and produce contract documentation to EPA at
the time a claim is to be referred to the Department. In addition,
the contracts should also include conditions which require the
contractors to produce responsible personnel for discovery responses
and testimony in our cost recovery cases.
To further minimize burdens on EPA staff we also
recommend that you consider development of a fully-computerized
system for documenting response costs. Ideally, such a system
would, to the maximum extent possible, be capable of direct entry
of original response-cost transactions. In such a direct-entry
system, the. computer-stored material would itself constitute
"original documentation." Alternatively, a system could be
capable of relatively constant compilation of costs while response
activity is on-going, although that kind of system would yield a
computer product in the nature of a "summary", rather than original
documentation. In this latter type of system, all of the caveats
otherwise applicable to using summaries would still apply.
Of course, we will be pleased to continue working with
you on ways to structure the process of preparing cost documentation
for efficient litigation of recovery claims, including with
OWPE's Cost. Documentation Work Group.
Sincerely,
F. Henry /flab icht II
Assistant \ Attorney General
. Ramsey
Chief, Environmental Enforcement Section
cc: F. henry Habicht II
James M. Spears
Margaret Strand
Assistant Chiefs, EES
Frederick Stiehl
Lisa K. Friedman
Regional Counsels
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-ii iui
SDR:DTB:psw
90-5-1-0
Subject Providing Cost Documentation to Support
Hazardous Waste Clean-up Cost Recovery
Claims
Date September 14, 1984
V }•' ^\T J y(
TO Stephen D. Ramsey, Chief From ^SDavia ^V Bue'tTte"^
Environmental Enforcement *—Assistant C\iief, EES
Section
SUMMARY
At your request, we have reviewed several issues under the
subject heading. EPA requested our views on three issues: (1)
Whether and, if so, when must original cost documentation be made
available by EPA to the Department to support cost recovery litigation
claims; (2) What is th^e.d.egree of documentation that must be made
available, including whether summaries can be used in lieu of
original documentation; and (3) What witnesses are needed to support
the use of cost documentation? We conclude, in summary, as follows:
1. On the question of timing, all original documentation
needed to establish EPA's current "external costs" for which recovery
is sought must be made available when a claim is referred to the
Department. For EPA's "internal" costs, the Agency may elect to
make available at referral only a summary of the documentation.
However, if they choose to provide only summaries in the referral,
then EPA should be advised that we 'can file recovery claims for
"internal." costs only on the express understanding that these costs
may not ultimately be recovered .unless full documentation is
produced.
2. Given a distinction between external/internal
costs, the degree of documentation that must be made available
will vary with the phase of the litigation process and the precise
type of costs involved:
(a).In general, for "external" costs, the originals
of all documents must be made available to us which shows what
work was authorized, what work was done., what charges were made
for the work to EPA,. and what payment's; were, in fact, made for
these charges. The originals for those costs to be documented by
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- 2 - ' •
both the Region and Headquarters, EPA must be assembled, collated,
and located at a precise central location at the time of referral,
and detailed, accurate summaries or copies of the originals
provided with the litigation report. [There may be one central
repository within EPA, or there may be separate central files at the
Region and Headquarters.] For additional "external" costs incurred
after referral, the original documentation must be periodically
added to EPA's central file, and updated summaries provided to
our case attorneys. We can only, .pursue "external" costs incurred
after referral for which original"documentation is timely provided
for use in litigation.
* *' /
(b) For "internal" costs, the same relative types
.of documentation are needed as for "external" costs, if EPA expects
to recover "internal" costs in court. Although we can'file
claims for recovery of "internal" EPA costs on the basis of an
adequate -summary-, "the original "back-up documentation must be-made
timely available to us if the internal cost claim is to.be prosecuted.
Given that defendants' discovery requests may have to be answered
soon after a complaint is filed, original documentation to support
internal costs claims may be needed shortly after.suit is filed.
3. To prove costs, EPA must provide in discovery
responses and for witness testimony, the person(s) who were
actually responsible for managing and executing and are familiar
with the work for which recovery is sought and (if different from
the former category) those persons who actually were responsible
for executing payment. These persons and their relationship to
the documents involved must be identified, with particularity, in
the. litigation report for "external" costs. For "internal"
costs, similar identifications must be timely made either at
referral or thereafter, if recovery is to be pursued.
We recognize that this level of production will place
a considerable burden on Agency resources. This burden may be
•i-itigated somewhat by using key witnesses to produce documentation
at trial/summary judgment stage through the use of summaries of
original documentation. However, the Federal Rules require that
original documentation always be made available to opposing
parties if summaries are to be used. Moreover, a substantial
evidentiary foundation is required to introduce summaries, to
show both the admissibility. of the underlying originals and
the general accuracy of the compilation of the summaries. Thus,
the full range of witnesses outlined above may still need to be
available to the litigation team.
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BACKGROUND
- 3 -
DISCUSSION
The National Contingency Plan clearly requires tha^: Adequate
cost documentation bt compiled throughout response actions:.
During all phases, documentation shall be
collected and maintained «c support all actions
taken under this Plan, &r.d to form the basis for
cost recovery. In general, documentation should
be sufficient to provide the source and circum-
stances of the condition, the identity of
responsible parties, accurate accounting of
Federal costs incurred, and impacts and potential
impacts to the public health, welfare and environ-
ment.
40 C.F.R. S300.69(a)
In May, 1983, OECM/OWPE circulated a draft "EPA CERCLA Cost
Recovery Action Guidance" for review by"both EPA and DOJ staff,
followed by a series of meetings to discuss the draft. EPA
provided interim formal guidance in an August 3, 1983, memorandum
by Kirk Sniff to the Regional Counsels, reflecting agreements on
"two basic rules" made between EPA and DOJ in these meetings,
viz; (1) OECH-Waste would only accept referrals including "appropriate
cost documentat ion" and (2) DOJ will only file those cost recovery
claims for which there is "adequate" documentation. Id. at 1.
Guidance in assessing "appropriate" documentation was to be
determined according to the May, 1983 draft guidance document
and under a "Partial .List of Documents Needed to Support Cost
Recovery," attached to the Sniff Memorandum.
On August 26, 1983, the final version of the Cost
Recovery Guidance by OECM/OWPE was issued. The Guidance
specifically addressed cost documentation matters at pages 13-15
and 29-30. However, it did not address in detail the issues of
scope and timing of documentation assembly and production
to support litigation, or what kinds of witnesses are needed to
support cost claims.
In May, 1984, afte,r further discussions between EPA and
DOJ staff, OWPE issued the EPA "RCRA/CERCLA Case Management
Handbook." This further refined policy for cost documentation.
First, the pre-referral process described in Chapter II summarized
the contents of a referral package from the Regional Office to
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- A -
Headquarters as including "[s]ummaries and, generally, copies of
cost documentation." Id. at III-1A. Cnapter III detailed the
contents of referral packages according to elements of a cause of
action in cost recovery cases.. For proof of costs, the Handbook
requires these packages to include: a statement of account; with
a description of documentary backup. Original documents must
also be available." Id. at III-7. In Chapter III, -the Handbook
calls for litigation reports to include a "description of the
documentary file," end further explain? (Sectian S, £t. I*"-':"}
A file of all documents in the possession of EPA that
will support the case should be consolidated before
referral. The Department of Justice will not and
is not expected r.o* file a civil action for cost
recovery until complete, original documentation is
in the possession of the litigation team. (Original
documents should be in the file.) In addition, the
location of the file, its caretaker, and size should be
clearly defined in the referral package.
A docket sheet summarizing the contents of the file
should be enclosed with the referral. The docket
sheet assigns a unique number to each document as
the file is compiled, identifying the document and
its length. All docket sheets should be designed
for public disclosure.
The documentary file should be completely consolidated
and include:
Documents required by appropriate Appendices to
this section (emphasis added).
Following the main text of the Handbook at Appendix one, pages
5-16, is a list of categories of documents to be generally available
to support a §107, CERCLA claim. Finfilly*, OWPE is currently
drafting a "cost documentation procedural manual" to supplement
the August, 1983 Cost Recovery Guidance.
The foregoing materials have provided a useful set of
tools for formulating cost recovery cases, especially as the
collective experience of EPA and the Department in this area
increases. However, several important questions persist on cost
documentation. As explained to us, EPA has particularly inquired
as to when cost documentation must be made available to DOJ in
the litigation cycle, the extent of documentation needed to
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- 5 -
prove-up particular categories of costs, and the extent of
witness support needed to prosecute cort recovery claims.
1. Timing of Availability of Documentation.
We have considered at length the question of when cost
documentation needs to be made available in the litigation cycle
for recovery claims, particularly the question of whether it is
permissible to rely upon summary reports from third-party contractor
- - i-L'-lO £^£71 »1 •£ i , !'.".".'„ O'iT.'-- — '. v • - '- — - S-i ill Ci. - £ 3 < iV. ^-UT V 1 c'»; , C. iH-f1 — 6Z- i ,
original cost documentation must be made available to us for EPA
"external costs" at the time of referral, in the manner provided
for" in Chapter III of the Handbook. For EPA "internal" costs,
the Agency may be advised that it has the choice of providing only
summary reports at the time of -referral. However, if summaries
only are used to support "internal" costs claims, then EPA must
be advised that claims will be filed and prosecuted only upon, the
understanding that such "internal costs" may not be collected
unless and until full, original documentation is provided.
Indeed, since litigation may proceed on a quick schedule, "internal"
cost claims supported by summaries may have to be supplemented by
full, original documentation within a matter of weeks after a case
is filed. ' .
As plaint iff /in a cost recovery action, the United
States /bears the burderQof proving the essential elements cf a ,
clai:: for cust. recovery. Accordingly, the United States has the
burden of proving exactly what costs were incurred by its agencies
in a hazardous waste clean-up case. E.g., §107(a)(l)-(4)(A),
CERCLA, 42 U.S.C. §9607(a)(l)-(4)(A). See e.g., Companie de;
de Guiner v. Insurance Co., of N.A. , 551 F1. Supp. 1239, 1243
(E.D. Pa. 1982).To evaluate adequately whether a case for
cost recovery should be filed, it is essential that both DOJ and
EPA case attorneys be informed of the particulars of response
actions and associated costs incurred before a complaint is
filed, i.e., at the time of referral. Moreover, under Rule 11 of
the Fed. R. Civ. Proc., any attorney who signs a complaint is
deemed to have certified that "to the best of his knowledge
information and belief formed after reasonable inquiry [the
allegations in the complaint] are well grounded in fact ...." To
comply with FRCP 11, government attorneys must have access in
some reasonable level of.detail to cost documentation records
before a complaint is filed, to satisfy themselves that allegations
in a complaint of costs incurred are "well-grounded" in fact.
While the circumstances in each case may vary, the
Federal Rules of Civil Procedure allow defendants to compel
production of the government's documentary evidence very quickly.
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- 6 -
Under Rule 34(b) , Fed. R. Civ. P., a defendant may. ordinarily
expect the government to respond to a document production request
within 30 days of notice, and defendants may make such requests
,as soon as they are served with a complaint. A similar time
frame exists for responding to defendant's interrogatories under
Rule 33(a), inquiring as to the government's documentation. Finally,
under Rules 2CKa) and 45 defendants can depose government personnel
merely upon "reasonable notice" as soon as the complaint is
served, and can compel deponents to produce cost documentation at
the depositions. Rule 30(b)(l). Thus, defendants can legitimately
require the government, by subpoena duces tecum, to produce
oririral cost documentation within a week or two of service of
the complaint. ^/
Further, the government cannot ordinarily proceed to file
and litigate only on the basis of summaries, leaving to defendants
the task through their discovery of disproving the validity of
our allegation of costs., incurred. In analogous discovery situations,
courts have frowned on attempts to shift the burden to the opposing
party.
In spite of all the so-called advances
in pleading, we have not yet reached the point
where courts are to completely destroy the funda-
mental principles that the party asserting an
issue has the burden of proving it, and substi-
tuting instead, the proposition that the plaintiff
can, by merely making a "clais for relief" compel
defendant to go out and gather evidence at de-
fendant's, expense to prove plaintiff's claim.
Simplified pleading and discovery does not dis-
card either the proposition that a plaintiff
must have some merit to his case before he
hauls a defendant into court, or that he must
at least know enough about the facts to make
a prima facie case.
^/ The government can, of course, attempt to obtain extensions
~" of these ordinary time limits, but that is not an appropriate
way for the government to routinely respond to legitimate discovery
requests. Moreover, it is tactically unwise for a plaintiff
to'commence a lawsuit when the essential relief is recovery of
money expended on cleanup, and to then immediately attempt to delay
answering defendants' discovery requests about the amount of
costs incurred.
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. 7 -
If a lawsuit is merely to be a game wherein
somebody comes in and makes a complaint, and
compels the defendant to go out and interview
witnesses and persons who are not parties
to the action in order. to prove plaintiff's case,
some other court than this one is going to
have to say so.
proper uo c-oaiuent. trial. li the United Suit
or one of its agencies or any other plaintTff
desire_s r.Q. file suit , they ^bo^Ici make some
preparation on the facts /before filing the . .
suit.
Goldberg^ v. International Testing Corp. , 30 F.R.D.-367, 368
(S.D. Cal. 1$62) . (Emphasis supplied.; Likewise, courts have
rejected cost considerations as a basis for avoiding plaintiff's
responsibilities, "when it elected to commence this lawsuit,
[plaintiff] implicitly assumed the financial burdens which the
action's prosecution requires." Unicure v . Thurman , 97 F.R.D. 7,
12 (W.D.N.Y. 1982). See also, U.S. Fire Insurance Co. v. China
Union Lines, Ltd. , 375 Supp. 652. 654 (.S.D. N.Y.). ail'd, 496
F.2d 1198 (2d Cir. 1973). (Motion for a new trial denied:
"a party cannot reasonably rely on the other side to help
prove its case.")
As the foregoing shows, the government must ultimately
be able to produce cost documentation records itself to sustain
its burden of proof in a recovery case, rather than attempting to
shift to defendants" the burden to ferret out these records from
EPA and other entities' files. Our research also shows that we
cannot merely rely upon summaries of these records. Instead,
originals of the documents must be available for actual prosecution
of a claim, prior to using a summary. Indeed, there is continuing
controversy among the federal courts as to" whether summaries can
be used at all without first introducing into evidence all of the
underlying originals. Finally, even in those courts which allow
summaries to be used generally in lieu of actual introduction of
the originals substantial constraints are still placed on the use
of summaries.
Rule 1006 of the Fed. R. Evid. allows, but does not
compel, a district court to authorize a party "to present"
documentary evidence by way of a "summary:"
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- 8 -
The contents of voluminous writings, recordings,
or photographs which cannot conveniently be examined
in court may be presented in the form of a chart,
summary or calculation. The originals, or duplicates,
shall be made available for examination or copying,
or both, by other parties at [a] reasonable time
and place. The court may order that they be
produced in court.
The admission of a sissaary :'c vithin the diserf-ion of
the trial judge. Needhamy. White Laboratories, Inc., 6ir
F.2d 394 (7th Cir.) cert, denied, 454 U.S. 927, 102 S. Ct.
427, 70 L.Ed.2d 237 (1981).TKe court in exercising that
discretion will consider- a number of factors.
One of those "factors" as the Rule expressly provides, is
that "[t.Jhe originals or duplicates shall be made available for
examination or copying, or both, by other parties at [a] reasonable
time and place." This "availability" provision is mandatory. The
judge may not waive it. */ Moreover, the court will not even
waive this requirement wfiere the opposing party failed to inquire
into the existence of the underlying documents during discovery
before trial. E.g., Square Liner 360°, Inc. v. Chisum, 691 F.2d
362 (8th Cir. 1982); 5 Weinstein's Evidence, supra,~§TQ06 [4].
See also, Canada Dry Corp. v. Nehi Beverage Co., Inc., 723 F.2d
512 (7th Cir. 1983).
Not only must underlying documents be available
before a summary can be used, but some federal courts will not
allow summaries to be presented without the proponent also
placing the underlying document into evidence. The Second
and Fifth Circuits have both held that summaries may only be used
to explain documentary evidence already admitted. U.S. v. Evans,
572 F.2d 455, reh. den., 576 F.2d 931 (5th Cir. 1978); U.S. v.
Con1in, 551 F.2d 5347^38 (2d Cir.), cert, den., 434 U.S. 831
(1977) . Cf. U.S. v. John Bernard Industries. 589 F.2d 1353 (8th
Cir. 1979) (before summary is used, proponent must show it
fairly represents other competent, admitted evidence).
I/ E-8-_» Nichols v. Upjohn• Ct)., 610 F.2d 293' (Cir. 1980);
Colorado CoalFurnace Distributors, Inc. v. Pizill Mfg.Co.,
605 F.2d 499, 505 (10th Cir. 1979); U.S. v. Foley. 598 F.2d
1323 (4th Cir. 1979); U.S. v. Kim. 595 F.2d 755, 764 (D.C. Cir.
1979); S.J. Weinstein & Berger, 5 Weinstein's Evidence §1006
102] (1975).
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- 9 -
A majority of the circuits allow summaries to be used
without necessarily also producing and admitting the underlying
documents into evidence. E.g., R&k Associates, Inc. v. Visual
Scene. Inc. . 726 F.2d 36 (1st Cir. 19b*+; ; U.S. v. Johnson. 594
F.2d 1253, 1255 (Auth Cv. 1979); U.S. v. Scales. 594 F.2d 5&8
.(6th Cir.), £ert_. den., 441 U.S. 946 (1979). However, even then,
the court nay still require that the documents be produced
if there are legitimate disputes over the adequacy of the summary.
Rule 1006, suora; U.S. v. Smyth. 556 F.2d 1179 (5th Cir.), cert.
den., 434 U.S. 862 (1977).
In any case, the Rule and all courts interpreting it
place constraints on when a summary may be used. First,
the underlying documentation must be so "voluminous" as to
warrant the use of a summary. Compare Nichols, supra, 610 F.2d
at 295-6 (summary allowed of a 92,.000 page "new drug" application)
with Javelin Investment S.A. v. Ponce.'645 F.2d 92 (1st Cir.
1981) (summary of 10 pages o*f invoices dubiously "voluminous").
Second, the proponent of the summary must lay a foundation to
show the admissibility of the underlying documents and that the
summary is an accurate compilation of these records. ^/
To meet the foregoing pleading and discovery
requirements, it is critical that case attorneys have access to -
the full range of documentation which supports allegation of
clean-up costs expended by EPA.for response activities performed
by non-EPA entities for "external" costs. These include response
activities performed by and for private contractors, other federal
agencies, and state governments. The basic object of these cases
are the recovery of "external costs." Therefore, it is essential
that full, original documentation of such costs be available at
the referral point, for us to institute a cost recovery suit and
be .able to respond to discovery requests soon after suit is
filed.
In the context of "external" costs, there are several
subsidiary issues. First, "available" at the time of referral
means that original copies of cost documentation papers must be
i/ Ford Motor Co. v. Auto Supply Co.. Inc.. 661 F.2d 1171 (8th Cir,
1981); U.S. v. Foley, 598 F.2d 1323 (4th Cir. 1979); U.S. v.
Johnson. 594 F.2d 1257, 1255 (9th Cir. 1979); U.S. v. Clemens.
588 F.2d 1030 (5th Cir. 1979); U.S. v. Kim. 595 F.2d 775 (D.C.
Cir. 1979); 5 Weinstein's Evidence, supra §1006 [03].
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collated, appropriately indexed and stored in central locations
at the relevant EPA Headquarters or Regional office which is
responsible for cost documentation. Cf. RCRA/CERCLA Case Management
Handbook at 111-16. These originals may be stored in one location
at either the Region or Headquarters, or alternatively split
according to Regional/Headquarters' responsibilities'in a given
case.'
.Second, legible copies of these documents or an accurate
summary must be supplied to DOJ with the litigation report.
In this context, we note that originals must be permanently
retained until the litigation process is entirely over, including
all appeals and judgment execution, i.e., collection, if that is
necessary. It will not be acceptable to microfilm originals and
then to destroy the originals prior to the end of the litigation
process. *_/
Third, where response.costs are continuing to be
incurred, the litigation report must fix a benchmark, with the
central files appropriately segregated, to demark precisely what
amounts of "external costs form the basis of the referral.
Thereafter, for us to secure a judgment of additional "external
costs," the referral must be periodically updated by adding
original documentation to the central files and sending copies
of the original or updated summaries to us on a timely basis for
use in the lawsuit. To the extent that updating is not done, we
will not be able to secure a judgment awarding those additional
costs. Instead, additional costs may have to be prosecuted
through a separate future proceeding.
Fourth, whether "external" response costs are incurred
by or through primary private contractors, state agencies, or other
federal agencies, it is essential that the full original cost
documentation be in EPA's files at the time of referral, to the
extent that we are to allege recovery of these costs in the
complaint.**/
*_/ Where large numbers of documents are to be involved in a
case, the ligiti'gation- team may want to utilize automated
litigation support tools to manipulate the documents. This may
require specialized indexing/marking procedures for use of the
documents with automated retrieval systems. The use of these
techniques should be discussed among the litigation team as early
as possible, preferably prior to referral, to avoid duplicative
indexing and marking.
*_*_/ Except for the Justice Department's cost documentation
which we already have in hand at the Lands Division.
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See, Memorandum, Kirk Sniff, EPA to Gene Lucero, EPA, Hay 16, 1984,
Subject: FIT and TAT Reports, at 1 and attachment 1 thereto
at 6-7. J/ Where States have the lead through §104 CERCLA
cooperative agreements, and in cases involving recovery of cleims
paid out of the Fund, similar procedures must be established.
In contrast to "external" costs, somewhat less exacting
production may be allowed for EPA "internal" costs, up to the
point of cctspiaint filing. "Internal" costs typically represent
only a small fraction of the total amount of a response cost
claitt, and, unlike "external" costs-, are not the primary
objecc of a response claim. As a result, EPA has the option to
request that the Department' file claims for "internal costs"
based merely on accurate summaries of such costs incurred, rather
than providing us with access to original cost documentation at
the time of referral. However, if originals are not made available
routinely at the time of filing, we will r.eed 'to advise EPA that
it will be assuming the" i"i*sk that such claims may not be
recovered, unless full original documentation is ultimately
provided. Given the danger of having to respond to defendants'
discovery requests early in the suit, **/ this risk of recovery
for "internal" cost claims may be substantial even from the
outset of a suit.
2. Scope of Documentat ion.
a. EPA "Internal" Costs.
The basic documentation for EPA in-house costs
are employee time sheets and travel vouchers. This documentation
is typically voluminous. It is our experience that EPA has
the capability to prepare accurate cost summaries of this documentation.
These summaries ordinarily should be prepared after the documents
are gathered in a central location. The categories of EPA "internal"
costs for which accurate summaries will be needed in the referral are:
^_l Thus, EPA will need to rigorously review documentation for
work performed by State agencies under cooperative agreements
and other federal agencies,•such as Corp. of Engineers - conducted
RI/FS work. This review.will have to. include gatheting original
documentation materials from these sources for collation/storage
at central EPA files before referral.
_*_*/ On this score, we should advise the Agency that we cannot
routinely seek to delay such discovery requests merely
because only summaries have.previously been made available.
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(i) Attorney/paralegal hours and overhead;
(ii) Attorney travel expenses;
(iii) Technical personnel hours and overhead;
(iv) Technical personnel^travel expenses;
(v) NEIC personnel costs for investigatory support; . .
(vi) NEIC travel costs for'investigatory support;
(vii) Environmental Photographic Investigatory Center
Costs for aerial photographs; and
(viii) Regional labs hours and overhead.
The degree of detail of lawyers and paralegals'
tine sheets warrants special attention. Under prevailing case
law on.award of attorneys' fees, highly specific detail is needed
to document precisely what lawyers and paralegals did, by function
and sub-divided, ordinarily by quarter/half hour segments.*/ The
United States, including in cases defending EPA, insists tEat
private litigants produce this level of documentation to justify
fee awards against the government. We cannot allow a lower
standard to be applied when the government is plaintiff.
o-. I?A "External" Costs
In general, original documentation must be"located,
assembled, and collated in central Regional/Headquarters' repositorie
to show what "external" work was authorized, what work was done,
and what payment was made. Moreover, if defendants' challenge
the reasonableness of the costs .for lack of consistency with the
National Contingency Plan, then additional documentation to rebut
the challenge must be produced.
y E.g., Wojtowski v. Cade. 725 F.2d 127, 130-1 (1st Cir. 1984
Ramos v. Lamm. 713 F.2d 553. (10th Cir. 1983); New York Ass'n
for Retarded Children v. Carey. 711 F.2d 1136, 147-8 (2d Cir.);
Nat'l Ass'n of Cone. Veterans v. Sec, of Defense, 675 F.2d
1319, 1327 (D.C. Cir. 1982).The formats for DOJ lawyers/paralegals
time sheets forms which the Lands Division uses on CERCLA cases are
sufficient for these purposes.
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We note here that any confidential documents, such as
these required to be protected under the Privacy Act or as
confidential business data under 40 C.F..ft. P«rt;.2?rnmst*be£ *-•*.'•
segregated- from non-confidential «docunmnts '^'."th'ln^he dfntrtl £?JSY
'repository files." ' "Similar "segrSgatiorr and '£r*otfecttoi}'iBust--be;; "- "•
afforded to copies of documents generated for inclusion in the
litigation report, in response to discovery requests and in
submitting documents for use in evidence. *_/
1. Outside Contractors.
To prove outside contractor costs, it is necessary
to have documentation showing; (1) the scope of the work, (2) that
the contractor has performed the work and (3) that the contractor
was paid. Typical external contractor costs include:
- Field Investigation Work (FIT) work for field
sampling, data analysis, and expert witnesses;**/
*_/- Indeed, it would be most effective to isolate confidential
documents continually as response costs are incurred, rather
than waiting until the point of referral.
**/ The basic FIT costs documentation consists of: (i) "TDD's"
which instruct the FIT contractor to perform a task; (ii) Acknow-
ledgement of completion of the TDD by the project officer and
certification that the FIT .contractor has performed the task;
and (iii) An EPA payment voucher which is, in effect, an order
to the Treasury Department to pay the FIT contractor. This
indicates that the contractor has been paid.
There is some question whether an EPA voucher is sufficient for
proof of payment or a Treasury document (e.g., the cancelled
check) is necessary? We understand that Treasury always honors
the payment vouchers., but that obtaining cancelled checks from
Treasury is difficult. For these reasons, EPA payment vouchers
should be used to prove pa.ys&ant, until a court rules to the
contrary. Alternatively, we can use the contractor's own records
showing that it was paid.
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- Remedial Contract Work (REM/FIT and REM
- Technical Assistant Team (TAT)
Evidence Audit Team work managed by NEIC;
- Emergency removal contract work (ERGS and IT) ;
National Laboratory contract delegated work (CLP)
- Technical Enforcement Support Contract (TES/I/I1);
Aerial photo contracts work;
On-scene Coordinator Contracts (OSC) .
Typically, . £I.T- and REM contractors use subcontractors
to perform all or part of the particular task. Other outside
contractors may also use subcontractors. The original -documentation
from the subcontractors should not ordinarily be necessary to
show that the costs were incurred. As EPA deals directly with
its own prime contractor, documents under these contracts can be
used to establish the incurrence "of response costs. Those documents
should set forth response activities and costs in reasonable
detail. Short, cryptic explanations involving substantial costs
are not acceptable.
However, ether docume^rs ^/ uni'eriy^ng subcontractor
costs are also relevant to the reasonableness of EPA costs. Should «
defendant seek to challenge "reasonableness," it would have a
right to discovery of all this documentation. See Rule 34(a) ,
Fed. R. Civ. P. Although detailed subcontractor documentation
need not be sent to the Department with the referral .package, EPA
must be prepared to make these documents available in response to
^_l The basic documentation for remedial contract (REM)
work is: (i) Work assignments which instruct the REM
contractor to perform a task; (ii) Invoices from the contractor
which show that the work was perfo;rwe'dj §nd (iii) EPA voucher
schedules and payments which indicate that the contractor was
paid.
**/ Such as time sheets underlying the prime contractor's
cost documentation identified above, subcontracts, subcontractor
invoices, proof of payment to the subcontractor.
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V
discovery requests. The manner.of production will turn on the
volume of the documents and arrangements that can be made with
opposing counsel. Making the documents available for inspection
at EPA (but not just at a sub-contractor's office) should ordinarily
satisfy discoverv requirements. EPA must be prepared to gather
the documentation and make it available for inspection within 30
days of the discovery request. See Rule 34(b), Fed. R. Civ. P.
The documentation for other kinds of outside contractor
costs will be similar. For each type of cost:, the docunerit-ation
must include a document requesting the work (typically a contract),
documents .indicating the performance of the work (typically
invoices) and., a document showing that payment was made (the EPA
payment voucher).
The final element of "external" costs is work peformed
by either State or other federal agencies. Documentation for
these should be assembled and made available at referral in the same
fashion as for documents showing costs incurred for contractors who
are paid directly by EPA.V This full paper trail needs to be
assembled even if the State or other federal agency also worked
through contractors. Original documentation needs to be made
available including first, cooperative agreements, certification of
execution of the cooperative agreement, and evidence of payment
by EPA to the State/other federal agency, and, second the subsidiary
papers showing the State/other federal agencies"1 prime contractors
work End payment. Thus, for such prime contractor costs,
original documentation is needed to show the contract, the scope
of work, the invoices from the prime contractor to the State/other
federal agency, and evidence that the prime contractor was paid.
Finally, if defendants contest the reasonableness of costs, EPA
will have to provide access to all relevant documentation in the
hands'of other agencies, their prime independent contractors, and
even their subcontractors.
3. Witnesses Needed to Establish Proof of Clean-up Costs Incurred
The last issue we were asked to address is to explain ..
the types of witnesses who -need to be available to prove up the
amount of clean-up costs incurred. By "available," we mean here
a person who supplies evidence by testimony at a trial, or
who, in a pre-trial setting, provides an affidavit to support a
summary judgment motion under Rule 56, Fed. R. Civ. P.
^J Except for Justice Department costs, in which case the Lands
Division lawyer can directly access the relevant documents
in-house.
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Certain general caveats apply in this area. First,
proof of the actual facts of costs incurrence is largely based on
documents to show what contract was' entered into, that this work
was, in fact, done, that invoices were submitted (or payroll items
accrued), and that the invoices/payrolls were actually paid.
In many cases, a witness will describe the response work that was
done and, through that witness, the documentation relating to
costs will be introduced. To the extent that proof of costs rests
upon documents, witnesses do not actually testify to prove what
is said in the documents. The documents are the "best evidence"
of the facts represented in the documents. Under the "best
evidence" rule, the original oocmentation ordinarily must be
produced into.evidence. E.g., Rule 1002, Fed. R. Evid; Cleary,
McCormick's Handbook on" the Law of Evidence S1229-231 (2d Ed.
1972).This rule is subject to a variety of exceptions, but
ordinarily the exceptions go so far in this context only as to
allow either summaries, discussed above, or exact duplicate
copies of the originals, t;o be produced in court. Rules 1003-1005,
Fed. R. Evid. Thus, the original documents still need to be
available as explained above. *
However, witnesses are needed to gain admission of
these documents for several reasons. First, as a matter of case
strategy, witnesses will need to establish the factual foundation
of the response action. . Second, witnesses are needed to establish
the grounds for authentication and identification of cost documents,
a condition of relevancy. ' E.%., Rule 901, Red. R. Evid. and
Notes of Advisory Committee, Subdv.(a). Of course, souje categories
of cost documentation paper n.ay be "self-authenticating" under
Rule 902(l)-(2), (4). However, not all categories of these
documents1 are subject to Rule 902, Moreover, disputes may still
arise as to the authenticity of documents even under Rule 902, or
the process of obtaining "certification" needed to invoke Rule
902(l)-(2) , (4) may be so tedious as to make it simpler'to rely
upon witness testimony to authenticate particular documents.
Witnesses are also needed to lay the foundations required
by the various exceptions to the hearsay rule upon which we
routinely rely to admit documents -into evidence. See Rule 803(5) ,
(6), (8),. Fed. R. Evid. These exceptions depend upon a" s*howing
by the proponent of the general regularity of a course of conduct
in originally preparing the-document, and, thereafter, systematically
holding the document in files. Moreover, if summaries are to be
used, witnesses are needed to show that the summaries were accurately
compiled from the underlying originals.
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Finally, all of the substantive facts needed to prove-
up incurrence of response costs are not necessarily derived
from documents. While it is difficult to generalize, in
any case there will no doubt be some relevant facts in the chain
of the process of cost expenditures that Is not written
down at all, and provable only by-oraX testimony. For example,
witnesses may be needed to explain when the terms of a written
contract were amended by conduct of the parties or that the text
of an ambiguous contract term was resolved by oral understandings.
In addition, witnesses will likely be needed in most cases "to
rebut defendants' contentions that expenditures were • inconsistent
with the National Contingency Plan, i.e^. to refute contentions
that some costs were "unreasonable."
i
By categories of costs, the following kinds of witnesses
will need to be available to us and identified in the litigation
report:
A. External costs:
(i) Independent private contractor work1:
- EPA staff person (usually OSC, RPM and OERR
staff) responsible for determining scope of work, contract execution,
and oversight of contract implementation;
- Contractor project B£.r; = g£.r responsible for
executing contract implementing work and handling sub-contractor
work;
- EPA official(s) responsible for receiving-
and paying invoices and processing payment through to Treasury.
- The contractor official who can show payment
was received.
(ii) Other federal agency work (excepting Justice
Department costs);
- EPA official responsible for determining
scope of work, executing interagency agreement, and-oversight of
work;
- "Other agency" official responsible as
project manager, person in charge of work, person who did the
work;
- EPA and "other agency" officials responsible for
managing and processing inter-agency transfer of funds for work
performed; and
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- If the "other agency" essentially delegated out
the work to independent contractors, then the kinds of contractor
officials as called for above on EPA's own direct contract costs
will also be needed.
(iii) State agency work:
- EPA official responsible for determining
scope of work, execution of cooperative agreement, and oversight .
of work;
- State agency official with responsiblities
corresponding-to those of EPA and with responsibility for executing
contracts with and oversight of work by private independent
contractors;
• Private independent contractor project manager;
and
- EPA, state and independent contractor officials
responsible for payment of work.
b. Internal Costs;
(i) Persons who were responsible for managing the
work;
(ii) EPA official(s) responsible for cocpili-g interr.s]
costs' recovery - tir-* sheens, travel papers,.overhead costs; and
(iii) EPA official(s) responsible for payment of
these costs.
This shows that literally dozens of witnesses might be
needed to testify in many cases, particularly those involving the
full range of removal and remedial action, with substantial work
done by States and/or the Corps, or if defendants rigorously
contest the accuracy and reasonableness of, costs incurred. To a
certain extent, the burden of actually having to call these
people to testify may be mitigated by the use of: (1) obtaining
pre-trial.admissions by defendants as to the authenticity of
documents and even as to the validity of our costs; (2) summary
presentation of documents-in*those Circuits which do not require
admission of the underlying documents; (3) using certification
procedures to "self authenticate" the kinds of documents that are
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subject to Rule 902(1), (2), (4); ,(^)_ r.equ?sting pre-trial rulings
on disputed evidentiary issues; and (5) partial summary judgment
motions* But, as we have discussed, none of these devices can
resolve all documentation problems and none may necessarily apply
in any particular case. Therefore, identifying and making available
the kinds of witnesses listed above in the .litigation report is
essential to the expeditious and successful prosecution of cost
recovery cases. ' ...
cc: F. Henry Habicht
James W. Spears
Margaret Strand
Assistant Chiefs, EES
Regional Counsels
Regional Waste Program Managers
Lisa K. Friedman, Associate General Counsel, EPA
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SB2J
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C. 204CC
JAN1 3 0 1985
MEMORANDUM
SUBJECT: Procedures for Documenting Costs for CERCLA 5107 Actions
FROM: Gene A. Lucero, Director (DfyfJL n-
Office of Waste Programs Enforcement
TO: Directors, Air & Waste Management Divisions, Regions I - X
Regional Counsel, Regions I - X
Director, Administrative Services Divisions, Regions I, IX
Assistant Regional Administrators for Policy Management,
Regions II, III, IV, VII, and VIII
Director, Policy and Management Division, Region V
Director, Management Division, Region X
This memorandum sets forth the procedures for documenting
costs for CERCLA §107 cost recovery actions. These procedures
require the close cooperation and coordination among Headquarters
and Regional program, legal, and financial offices. The attached
procedures should be used in conjunction with the Case Development
Handbook. The Procedures Manual addresses the following
topics:
0 Categories of Expenditures
* Inventory of Site Related Costs
0 Regional and Headquarters Documentation Process
• Privacy Act/Confidential Business Information
0 Bankruptcy Procedures
Additional guidance is being developed for several other
issues associated with cost recovery which are not addressed
in the attached Procedures Manual. These issues include:
providing cost documentation of state and other Federal
agencies' Superfund expenditures, streamlined documentation
procedures for the issuance of demand letters, application of
interest and procedures for small cases.
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-2-
It is the Agency's intention that some type of action is
taken to recover expenses for every site where Fund monies have
been -expended. The Agency plans to have all cases dealt with
in a timely and efficient manner. Guidance is being prepared
that will provide criteria for more streamlined settlement
arrangements for small cost recovery cases.
The Agency recognizes that the attached Procedures Manual
does not necessarily represent the best and final system for
cost recovery documentation. Over the coming months, with the
initiatives outlined above, the Agency will be working to
provide a more efficient cost recovery process. Any suggestions
for improvement to the cost recovery process will be appreciated,
Over the next several months, seminars will be held in
each Regional office on the Procedures Manual and other
issues associated with cost recovery. If you have any
questions regarding the manual, please contact Janet Farella,
382-2016.
cc: William Hedeman, OSRR
Dave Buente, DOJ
Fred Stiehl, OECM
Dave O'Connor, PCMD
Gordon Takeshita, FMD
Peter Cook, OWPE
Jack Stanton, OWPE
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PROCEDURES FOR DOCUMENTING COSTS
FOR
CERCLA §10? ACTIONS
OFFICE OF WASTE PROGRAMS ENFORCEMENT
JANPARY 30, 1985
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TABLE OF CONTENTS
PAGE
INTRODUCTION 1
Z. CATEGORIES OF EXPENDITURES 4
II. CASE SELECTION AND PRIORITIES .9
III. INVENTORY OF SITE RELATED COSTS 11
IV. COST DOCUMENTATION PROCESS .14
N
jg
Regional Responsibilities ...,;...... ; 15
Financial Management Responsibilities 18
Waste Programs Enforcement Responsibilities. . . 21
Department of Justice Responsibilities ..... 27
V. PRIVACY ACT/CONFIDENTIAL BUSINESS INFORMATION . . 29
VI. APPLICATION OF INTEREST 34
VII. BANKRUPTCY PROCEDURES 35
VIII .' UPDATING OF COSTS 38
IX. PAYMENT INTO THF TRUST FUND . . 40
APPENDICES
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APPENDICES
APPENDIX A: FLOW CHART OF COST DOCUMENTATION PROCESS
APPENDIX B: SITE SPECIFIC SPUR CHARGES
APPENDIX C: DESCRIPTION OF SUPERFUND CONTRACTS
APPENDIX D: COST RECOVERY CHECKLIST
APPENDIX E: SAMPLE CASE COST SUMMARY
APPENDIX F: INFORMATION COVERED BY THE PRIVACY ACT
APPENDIX G: SAMPLE STIPULATION/PROTECTIVE ORDER
APPENDIX H: MODEL CONFIDENTIAL BUSINESS INFORMATION LETTER
APPENDIX I: EXAMPLE MOTION FOR PROTECTIVE ORDER
APPENDIX J: DELEGATION OF AUTHORITY FOR DEMAND LETTERS
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PROCEDURE? FOR DOCUMENTING COSTS FOR CERCLA $107 ACTIONS
INTRODUCTION
The Comprehensive Environmental Response, Compensation and
Liability Act of 1980 (CERCLA) authorizes the Federal Government
to seek reimbursement from liable parties of "all costs of
removal or remedial action incurred by the United states
government." One of the Agency's goals in the Superiund prccrarr.
is to maximize, through CERCLA §107 actions, reimbursement of
the Trust Fund. In August 1983, the Office of Enforcement and
Compliance Monitoring, together with the Office of Waste Programs
Enforcement, issued a guidance document entitled "Cost Recovery
Actions under CERCLA." That document, hereafter referred to as
the Cost Recovery Guidance, discusses general policy issues
relating to cost recovery actions under 5107(a)(4)(A) of CERCLA.
The guidance describes the United States burden of proof for cost
recovery actions to consist of three elements:
1. Proof of a release or threat of a release cf a hczsrirus
substance .
2. Proof of the.liability of the responsible parties.
3. Proof of expenditures.
The Cost Recovery Guidance provided assistance for the
compilation of documentation to support the first two elements
-------
of a $107 action. This manual addresses the documentation that
should be collected to support the third element, expenditures,
and the procedures which are to be followed for the collection
and packaging of those documents.
The Assistant Administrator for the Office of Solid Waste
and Emergency Response serves as the primary manager of the Trust
Fund. As the primary Fund manager, the Assistant Administrator
is responsible for authorizing and obligating the majority of
expenditures from the Trust Fund. (Other Assistant Administrators
and other federal agencies are given their own Superfund allowances.)
The actual accounting of all obligations and disbursements of
Fund monies is the responsibility of the Financial Management
Division (FMD). FMD tracks Superfund expenditures through its
computerized Financial Management System (FMS), which tracks
obligations and disbursements. The FMS tracks certain expenditures
site-specifically (See Appendix B). FMS can produce site-
specific cost reports which summarize the FMS site-specific
obligations and disbursements through the use of the Software
Package for Unique Reports (SPUR) (See Appendix B). FMS
also tracks all other charges to CERCLA accounts.
The remainder of these procedures provides the following
information:
0 Lists of categories of expenditures that might be incurred
at a site.
e Lists of categories of site specific costs for review at
particular sites.
-2-
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0 Describes Headquarters and Regional responsibilities
for documenting costs.
e Sets forth procedures for assuring protection of. information
under the Privacy Act and confidential business information
considerations.
c Describes the process for determining the proper amount
of interest on Trust Fund expenditures.
0 Describes arrangements for the collection of payments into
the Trust Fund.
The following procedures are to be used by case development
teams, in cooperation with the Office of Haste Programs'Enforcement
and Financial Management offices, when initiating and prosecuting
a CERCLA 5107{a) (4) (A) cost recovery action. Cor.formance with
these procedures will assure timely and complete documentation
of costs for $107 actions.
-3-
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I. CATEGORIES OT EXPENDITURES
Although the list of possible individual cost categories
under Superfund is a large one, expenditures can be divided
into four broad categories:
EPA In House Expenditures
Contracts
Other Federal Agencies (Interagency agreements)
States (Cooperative Agreements)
The following section will briefly outline how these four
categories of cost are accounted for by FMD.
EPA In-House Expenditures
This category includes all EPA employees whose salaries
(either fully or in part) are paid out of the Superfund account.
Employee time may be charged generically to the program^ or
specifically to a site. Site-specific payroll charges are included
in the site specific SPUR reports. This category also includes
all EPA travel charged to. the Superfund account. Like payroll,
travel may be charged to non-site-specific or site-specific
accounts. Also included in this category of cost are supplies,
I/The Financial Management Division (FMD) is implementing an .
indirect cost allocation system that will allocate appropriate
Agency and program support costs for sites. This system will
be run centrally by the Financial Reports and Analysis Branch
of FKD and will not be reflected in the FMS or SPUR reports.
Amounts to be claimed for cost recovery purposes should be
available during FY 85.
-4-
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equipment, training or. ether miscellaneous charges made by EPA
offices which may be charged site-specifically in certain circum-
stances . All costs charged to site-specific accounts are
identified as direct costs in the site-specific SPUR reports.
Contracts2
• This category includes all contracts which are obligated
against the Superfund appropriation. Contracts can be subdivided
into three groups:
1. Program Support Contracts
These contracts, as thfe name suggests, provide generic, non-
site-specific program management support. Development of program
activity tracking systems is an example of the type of work j
tasked under a program support contract. These contracts are
tracked in FMS under non-site-specific accounts.
2. Site Specific Contracts
This category includes On Scene Coordinator Emergency
Removal Contracts, the Emergency Response Cleanup Services Contracts,
the Remedial portion of the REMEDIAL ACTION/FIELD INVESTIGATION
TEAM (REM/FIT) contracts and the REMEDIAL ACTION II contract.
Work under these contracts is tasked and invoiced site-
specifically and the contract costs are recorded site-specifically
in the FMS.
^/Please see Appendix C for a more detailed desc'riptioi
Superfund contracts.
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3. Direct Site/Non-Site-Specific Contracts
This category includes Superfund contracts which provide
direct site response work but are not accounted for site
specifically in the FMS. This category includes the following
contracts: Technical Assistance Team (TAT) Contract, Technical
Enforcement Support (TES) Contract, FIT portion of the REM/FIT,
Contract Lab Program (CLP) Contracts, Environmental Por.itoring and
Systems -Laboratory (EMSL) Contract, National Enforcement Investigation
Center (NEIC) Contract and the Environmental Emergency Response
Unit (EERU) Contract. These contracts are invoiced monthly
for all work performed under the contract during that month.
The contractors do maintain records of site-specific work
performed under these contracts. For cost recovery actions,
the contractors will be requested (by OWPE through the appropriate
contract project officer) to supply site-specific cost summaries
and documentation.
In general, all three types of contracts are processed and
paid in the following manner. Invoices from the contractor
are reviewed and approved by the project officer. Invoices
are then forwarded to the Financial Management Office in Research
Triangle Park, NC., which processes the payment of all Superfund
contracts. This office prepares a Treasury Schedule which
authorizes payment and indicates the contractor, contract
number and amount of payment for a particular invoice.
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Other Federa1 Ag e n c i e s
Under interagency agreements (IAG), other federal agencies
perform various activities and services in support of the
Superfund program. There are two mechanisms available for IAG
funding: reimbursement and transfer allocations. Through lAGs,
other federal agencies may provide either general program support
c.- site-specific activities.
With reimbursement accounts, other federal agencies will
perform certain services for the Superfund program (general program
or site-specific) and request reimbursement for the services after
they are performed. Money is obligated for these lAGs before
work is performed but disbursed after the work is completed. Site-
specific reimbursable JAGs are accounted for site-specifically
in the FMS. Reimbursable lAGs are processed through the
Financial Management Office in Cincinnati, OH. Vouchers for
reimbursement are approved by the project officer ano forwarded
to Cincinnati for processing. The Cincinnati office directs
the U. S. Treasury to transfer the approved vouchered amounts
from the Superfund account into the other agency's account.
Under transfer allocations, Superfund money is transferee
to another agency before services are rendered. Transfer
allocations, either generic or site-specific, are not accounted
for in the FMS. However, under transfer allocations, the receiving
Federal agency provides a monthly accounting to OERR and FMD
of expenditures to date. These monthly reports serve as the
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basis for cost documentation cf site-specific transfer allocations
Further guidance on the back-up documentation to be supplied by
other Federal agencies will be provided in the near future.
States
This category includes monies spent through Superfund
State Cooperative Agreements. Generally cooperative agreements
are entered into between EPA and a state for site-specific
activity (e.g. removal action, RI/FS, remedial construction
and design). In April 1984, the Regions were delegated the
authority to enter into cooperative agreements with states.
Under a cooperative agreement, the agreed upon amount of money
is set aside for drawdown by the state under a letter of credit.
The state must then report its record of expenditures to EPA when
a drawdown on the account is made. The Regional Financial
Management Offices maintain a record of the drawdown of the
accounts. Further guidance on the procedures to be used with
regard to cost recovery of cooperative agreement monies will be
provided in the near future.
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II- CASE SELECTION AND PRIORITIES
The Cost Recovery Guidance addresses the process o'f
initial selection of a case for cost recovery action. In an
effort to maximize return to the Fund and to promote efficient
use of its resources, the Agency has set as its priority for
new referrals those cases where:
1. Costs incurred exceed $200,0'C" z.r.-~,
• 2. Site response action (either removal or remedial action)
is completed, or, in the case of remedial actions, the
Trust Fund's involvement has been completed.
Particular cases for referral are identified in the
Superfund Comprehensive Accomplishments Plan (SCAF). Because
of the complex and agency-wide nature of. cost documentation
collection, EPA Headquarters (i .e. OKPE) plays a major role.
OWpE will rely on the SCAP for $107(a)(A) case priorities for
cost documentation collection. Since document collection and
packaging is a .time consuming process, the Regions must allow
for at least six weeks between an initial request for dccur-ents
and their receipt. If Regional cost recovery case priorities
change after the submission of the SCAP to Headquarters, the
Region must submit changes to OWPE in writing . Complete collection
of cost documents for those cases involved in priority changes
cannot be guaranteed if the change request is received after
the third week of the quarter in which the Region is planning
to refer the case.
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As indicated in the bankruptcy section below, however,
OWPE will make every effort to ensure that ost documentation
for purposes of submitting a proof of claim is gathered on a
timely basis.
Generally, before a cost recovery case is referred to
Headquarters or DOJ, and certainly before a case is filed,
demand letters are sent to the responsible parties. At the
present time the same cost documentation procedures are to be
used for the issuance of demand letters as for case referrals.
In the interest of maximizing the. timely recovery of funds, the
Agency intends to establish a more streamlined process for
documenting costs for the issuance of demand letters. Demand
letters should be considered for every response action where
there is at least one viable responsible party and should be
sent as soon as practicable after the completion of the response
action. The Agency intends to issue more detailed guidance on
the demand letter process and model demand letters in the near
future.
Another category of cases requiring cost documentation is
those sites where negotiations are projected or underway and
cost recovery provisions are included under a consent decree cr
consent administrative order. These sites are to be identified
on a quarterly basis and indicated under the negotiations or.
administrative enforcement section of the SCAP. Cost document
collection procedures are identical for new referrals and cases
under negotiation.
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in. INVENTORY nr -SITE RELATED COSTS
Since site response activity under CEPCLA can be very
complex and require the assistance of various EPA offices,
contractors, states and other federal agencies, some method of
organizing site activities and expenditures must he utilized.
Therefore, the Regions, which have primary responsibility for
directing site activity, should establish a file that records
all work as it is reouested and conducted. The first step in
documenting site expenditures is to take an inventory of all
activities that have occurred both at the site and in support of
site activity. These site related expenditures may have been
incurred by at least the followinc:
1. EPA Headouarters personnel:
Office cf Emeraency and T?e~edial Pesponse (CEP5')
Office of.Waste Programs Enforcement (oi^pr)
Office of Enforcement and Compliance Monitorina (OFCM)
Office of General Counsel (OGC)
Emergency Response Tear. (FPT)
National Enforcement Investigation Center (NEIC)
Environmental Monitoring Systems Laboratory (EM5L)
Environmental Photographic Interpretation Center (EPIC)
2. FPA Regional Offices:
Air and Waste Management Divisions
Emergency Response Divisions
Office of P.enional Counsel
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Regional Laboratories
Office of Public Affairs, Congressional/Intergovernmental
3. Contractors:
REMEDIAL/FIELD INVESTIGATION TEAM Contract (REM/FIT)
REMEDIAL CONTRACT (REM II)
TECHNICAL ASSISTANCE TEAM CONTRACT (TAT)
EMERGENCY REMOVAL CLEANUP SERVICES CONTRACT (ERCS)
ON SCENE COORDINATOR CONTRACT (OSC)
CONTRACT LABORATORY PROGRAM CONTRACT (CLP)
TECHNICAL ENFORCEMENT SUPPORT CONTRACT (TES I anrl II)
ENVIRONMENTAL EMERGENCY RESPONSE TEAM CONTRACT
NATIONAL ENFORCEMENT INVESTIGATION CENTER CONTRACTS
OVERFLIGHT CONTRACT with LEM.SCO
.CTHEP MISCELLANEOUS CONTRACTS
4. States:
Cooperative Agreements
S. Inter-Aaency Agreements with other Federal Aaencies:
Corps of Engineers (COE)
Coast Guard (USCG)
Der.5rtT.ent of Justice ( r*1^.1)
Department of the Interior (DOI)
Federal Emerqency Management Agency (FE?'A)
National Ocean.ic ar.c^ Atmospheric Aqency (NOAA).
Health and Hunan Services (HHS)
Occupational Health and Safety Administration (OSHA)
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II1' INVENTORY OF SITE RELATED COSTS
Since site response activity under CEPCLA can be very
complex and require the assistance of various EPA offices,
contractors, states and other federal aqencies, some method of .
organizing site activities and expenditures must be utilized.
Therefore, the Regions, which have primary responsibility for
direct inc. si-te activity, should establish & file- that rfeccrrs
all work as it is requested and conducted. The first step in.
documenting site expenditures is to take an inventory of all
activities that have occurred both at the site and in support of
site activity. These site related expenditures may have been
incurred by at least the fcllowinc:
1. SPA Headouarters personnel:
Office of Emercency and remedial Response (OEP^)
Office of Waste Programs Enforcement (O*'PE)
Office o* Enforcement end Compliance Monitorina (OF.CM)
Office of General Counsel (OGC) .
Emeraency Response Tea- (FRT)
National Enforcement Investiaation Center (KEIC)
Environmental Monitorina Systems Laboratory (EMSL-)
Environmental Photographic Interpretation Center (EPIC)
2. EPA Regional Offices:
Air and Waste Management Divisions
Emergency Response Divisions
Office cf Regional Counsel
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It should be noted that site related expenditures may he
incurred by the Criminal Enforcement nivision of OECM as .we^-
as the criminal investiaators associated with NFIC. The costs
incurred by these personnel should not be included in costs tho
Agency is seeking to recover and all reference to these
individuals and their offices should be removed from the spn»
please contact Carroll Wills of NRIC, FTS-234-215R.
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iv. COST P!"vc*'vrtc7 *TJOK PFOCFF?
The case development team's first task in §107 cost •
documentation is to fill out a Cost Pecovery Checklist (See
Appendix D). To assure successful documentation, it is
imperative that the checklist be accurate and complete. The
checklist serves as the basis for all cost document collection.
Incomplete checklists will not be processed and will be returned
: • •: '•••ir~ ':: :: •'•?t;'-. . r'.r -•-. v ?ln~> rsr^ re'ferrals,
the- checklist should be completed and sent to ov:~r allowing
at least six weeks for document collection. The checklist
I
should also be delivered to the appropriate Pecional office
with responsibility for compilino Peoional costs and documents.
This will helo ensure that al_l cost documentation will be completed
on a timely basis. This timing assumes that demand letters
will be sent simultaneously with the referral to Headquarters.
Cost documentation should be complete before issuing a demand
letter^ or referring the case to Headquarters. If the Regions
wish to receive the cost documents earlier, for demand, letter
pjrprses, they must submit the completed checklists earlier.
Completed checklists should be sent to:
Barbara Grimn
Office of Waste Programs Enforcement
WH-52?
U.S. EPA
401 M.. Street
Washington, ri.C. 20460
3/The authority tc- issue demand letters on cases before referral
to the Department of Justice was delecated to the Regional
Adrninistractors in March 1984. Please see Apnendix J for a cony of
the delegation memorandum.. Once a case is referred, Demand letters
are to be sent by the no.7 attorneys.
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Documentation Collection Responsibilities
Successful documentation of costs for §107 cases will*
require the close cooperation and coordination of Superfund
legal, program, enforcement, and financial offices both in the
Regions and in Headquarters and with Justice Department attorneys
Each of these offices will have certain responsibilities in the
: \ . :. lc-r. s:\i p=c.\ai:r.c :i cost documentation.
1 • Regional Responsibilities
A Regional member of the case development team should be
selected to coordinate the Regional and Headauarters cost
documentation. That tean member must work with the Peaiona!
Financial Management Office to successfully complete
Regional cost documentation responsibilities. The case
development team member will be responsible for completino
the checklist and collecting, packaging and summarizing4 the
following categories of costs:
a. State Cooperative Agreement;'
Documentation: SPUR
Copy of Cooperative Agreement
Copy of letter of credit and record of
drawdown.
Appendix E for copy of. a sample summary.
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Suncnary of Cooperative ^areement: Includes date of
agreement, brief description of work,
nane of state, total amount of agreement,
and if not completed at time of
documentation, amount spent to date.
Note: Additional backup documentation will be reouired fro.™ the
states. G-J i~.r, -. re- cr, the appropriate documentation and tn* r-t.''--'
for obtainino it will be issued at a later date.
b. R e c 1 o n a 1 F a y r o 11 ; This includes site-specific payroll
charges by any Regional employed,
including Pecional I.ab employees.
Documentation:
Employee Tinesheets and Timecarrts
Summary of Payroll: Includes employee na^ie, title,
number of hours charoed to site,
The recions nust review the tinesheets apainst the timecar
an.^ the ?P:;D , note and notify F"D to correct any inaccuracies.
The tirneshe^ts are the original record of site-sneci'f ic payroll
charges and should he considered as the basis for payroll
documentation.
5/Criminal investigators performing site-snecific work may
charae their payroll aaainst the Superfund site-specific account
Employee information and amounts charaed to the site should be
deleted from the cost recovery documentation.
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c. Regional Travel; This includes site specific travel
charges by any reqional employee.
Documentation: SPIJ?
Employee travel authorization, paid travel
vouchers and any corresponding treasury
schedules.
^..-nnary of Travel: Includes employee name, title,
dates of travel, collars, cr.arc-^
per trip.
The Regions must review the travel documentation against
the SPVP, and notify FM^> to correct any inaccuracies. The aroroved
and paid travel vouchers serve as the basis for travel riocunentation.
d. Other Pecional Direct Costs; This includes site-specific
supplies or services which
may be purchased by a Peoion
under its individual allowance.
These charges inay appear
on the SPUR.
Documentation: SPUR
Purchase Orders
Sumnary: Includes description of other direct site
expenditures, dates of expenditures and amounts.
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2 . Financial Management Division Responsibilities
'Upon receipt of a completed checklist, OWPE will rea'uest
FMD to provide documentation for site-specific charges included
in the Financial Management System (except for the Regional
documentation listed above). Documentation collected by FMr> will
be submitted to OWPE. The FMP documentation covers the
following categories of costs:
a. Rite-Specific Contracts! This includes OSC contracts,
EPCS contracts, REM portion of the
RF.M/FIT Contracts, REM II Contract
Documentation: SPUR
Copies of paid invoices
Copies of Contract Status Notifications
. • Copies of corresponding treasury schedules
FMD must reconcile the paid invoices against the SPUR and
note and correct any inaccuracies.
b. Inter-Aoency Agreements (IAG); Includes site-specific
reimburseable and transfer
allocations as reauested by
Documentation: SPUP
Cdoy of the TAG
Copy of vouchers and schedule of withdrawals
Copy of monthly status report for transfer
al locations .
Note: Additional backup -docunentat ion may be reauired fror, other
federal agencies. Guidance on documents reauired and procedures
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for collection is currently under development.
c- Contract Laboratory Prop ran Contract (CLP); This- include?'
all standard analytical services provided by
the CLP. It does not include the Contract
Lab Manaqenent Contract (see next section).
Documentation: After receipt of a site-specific invoice
list fror. 0 "..'•'-1, F'O will supply t.hf cc-r:•;:;-.::t.
lab invoices and corresponding Treasure
Schedules ans contract status notifications.
d. Other Sur»erfund Contracts; This includes site-specific work
contracted under Ruperfund that is
not invoiced site-snecifically.
Documentation: On a Quarterly basis, F^D will supply
to 01:"°" an update of copies of the
invoices, contract status notifications
and treasury schedules for the following
contracts:
' TAT
(Current contractor; Roy F. Weston
Contract N?o. 68-01-6669)
FIT portion of EF.V./FIT
(Current Contractors: NHS,
CH2MHill: FIT Subcontractor: E S, E
Contract ?1os. 68-01-6699, 68-01-6^92)
TFS I
(Current Contractor: r,CA
Contract No. 68-01-6769)
TES II
(Current Contractor: PPC
Contract No. 6P-01-703"M
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CLP Management
(Current Contractor; VIAR
Contract No. 6B-01-6702)
Contract
(Current Contractor: IT Corp,
Contract No. 68-03-3069)
FMSL Contract
(Current Contractor: LEMSCO
Contract No. 68-03-3049)
(Current Contractor: TECH LAr
Contract No. 6R-01-6R3R)
e. Headquarters Payroll; This includes site-specific payroll
charaes by any headquarters employee
(OWPE:, OERR, OECM, RRT, etc.)
Dorunentat ion: Spun
Timecards
f. Headc-ar tgrg- .Travel ; This includes site specific travel
charges by any Headauarters employe?.
Documentation:
Copies of travel authorizations
Copies of paid travel vouchers and arv.*
correspond! nc; Treasurv Schedules.
PO ^cst review, the .travel docurentation acsin^t the S^r?
and note and correct any inaccuracies. The approved travel
vouchers serve as the basis for travel documentation .
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3. QWPE Responsibilities
OWPE plays the major role in recuesting case cost
documentation, tracking receipt of documents, and packaging and
summarizing of cost documents. OVJPE will he responsible for
the following cost documentation;
a. FIT Contract Costs; Includes site-specific costs incurred ur.de;
the Field Investicst: ^r. Te;-: rcntrsr*. ? ,
which are pert of the PE'VFIT contracts.
Documentation; OKPH: will request the FIT contractors
to provide a summary of site-specific costs
incurred under the contract. The surc-ary
will include: total costs, break out of
costs by labor, travel, subcontractors,
end materials, TOO numbers and associate-
hours, dates of work and brief summary
of work performed. OvrPE will provide
copies of Tons, invoices, contract status
notifications and correspond:n^ Treasury
Schedules for dates of work.
b. TAT _Ccr.tract_ Costs; Includes all site-specific cost incurred
under the Technical Assistance Team
contracts. '
Documentation: OV'PE will request the TAT contractors
to provide a summary of site-specific
costs incurred under the contract.
Summary will include total costs,
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break out of costs by labor, travel,
subcontractors, equipment, TDD hXimbers
anri associated hours, dates of work
and brief summary of work. OWPE will
provide copies of TDDs, invoices, contract
status notifications and corresponding
~'rei = _iy Scr.ecules fr,r canes c: wri'1-..
c. Re^e:?ia3 Contract Costs; Includes all work done under the
REM portion of the REM/FI7 contracts
and the REM II Contract.
Documentat ion: Althouqh most of the work tasked under
these contracts are recorded site-snecifically
in FVS, there is some site-snecific work
which is not. This work includes: RAM'S,
community relations work, enforcement support
and laboratory work. OVT?: will request
the RFM contractors to supply a summary
of all direct site response wcr-; task-l
under the contract.
Documentation: Summary will include total costs,
breakout of costs by labor, travel, sub-
contractors and eauinment, work assirnnert'
numbers and associated hours, dates of
work and brief summary of work. OWPE
will provide copies of paid invoices,
contract status notifications and
corresponding Treasury Schedules.
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d..Contract Lab Procram Costs; This includes all site-
specific costs incurred under the CLP?
both special analytical services
and standard lab analyses.
Docunentat ion: The operation of the sample management
cf'ice is cortr£cte.J tr v:.J~, T-vr.
DV.'PE will request VIAR to provide a
listinq and summary of all samples
arsd analytical services for a site.
The summary will include total CT.^
costs and break out between special
analytical services and standard services.
The listinc of samples will include
contract name and number, sample number,
invoice number and cost per sample. VIAP
will provide, for special analytical services,
copies of the paid invoices. Ov'rE
will provide copies, reouested fron
FMr;, of the standard services invoices
and VIAR paid invoices, contract status
notifications and Treasury S.chedules.
e. TES Contract Costs; This includes all site-specific costs
•incurred under the TES contracts.
Documentation: OVv?r, will reouest the contractor to
orovide a summary of site-specific work
conducted under the contract. Sumrary will
. -23-
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include total costs, break out of
costs by labor, travel, subcontractors,
equipment, work assignment numbers and
associated hours, dates of work and brief
description of work performed. OWPE
will provide copies of the work assignments ,
psic contract invoices, contract st=.^-:;
notifications and Treasury Schedules.
f. ?ERU Contract ; This includes all site-specific work
provided under F,E?"s contract.
Documentation: ovr^f will request rRT to provide a
summary of site-specific w.ork provided
under the contract. The sugary will
include total site costs, dates of wr-rk,
brief description of work, break out of
costs bv labor, travel and subcontractors.
OWPE will provide copies of paid invoices,
contract status notifications and
Treasury Schedules.
c. NETC 'Costs : This includes site-specific work done three-1-:
, both NEIC employees and contractors
Documentation: OWPE will request N£IC to provide .
site-specific employee timesheets and
travel docunentation and a cost summary
which is to include cost break out by
employee payroll and travel, contractor
-------
costs, contractor and -contract nunber,
brief summary of work and dates-of work.
If contractor was used, OWPE will supply
copy of paid invoices, contract status
notifications and corresponding
Treasury Pche^ules fcr period of * '"'•'.
h. Overflights: Includes site-specific aerial photocraKr,y and
related work done through F.V.$L and r^IO.
Documentation: OWPE will request EMSL. and EPIC to provide
summary of site specific aerisl phctocraphic
costs which is to include break out by labor
and.materials, contractor costs, contract
nunber and dates of work. If contractor
was used, ov-TpE will supply copies of paid
invoices and corresponding Treasury Schedules-
for period of work.
i. Headquarters Payroll: This includes site-specific payroll
charges by any Headquarters employee -
including OV7PE, OFCM, E*T, and
Documentation: SP"'" from F^T;
Employee Tiiresheets (OHPE will request
other headcuarters offices to supply
their employees' timesheets).
Sunwarv of HO Payroll: Includes Employee name, title,
number of hours charqed, total
payroll dollars per employee
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OWPF must review the timesheets against the SPUR note and
have corrected any inaccuracies. The timesheets are the "oricinal
record of site-specific payroll charges and should be considered
the basis for payroll documentation.
j. Headquarters Travel; Includes site-specific travel
charnes by any HO employee.
documentation: To be supplied by FMT.
Summary: Includes employee name, title, dates of travel
dollars charged per trip.
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4. POj Responsi Ml it i e s
This includes all site-specific litigation support costs
incurred by the Department of Justice under Superfund interagency
agreements.
Documentation: The DOJ representative on the Case
Development Team is responsible for
support costs. Documentation should include
employee timesheets, travel authorizations
and vouchers. A copy of the summary for POJ
costs should be sent to OWp£.
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PREPARATION ANP USE OF THE COST PACKAGE
OWPE will prepare a standard summary for each of the
categories of costs for which it is responsible.
After collection and preparation of the cost summary,
will send the cost documents and copy of the summary to the
Fecional cost recovery case coordinator. The regior.sl coordinates
summaries to the package. The regional coordinator is to send
a copy of the regional summaries to OW?E. The case development
team should review the cost oackage and make sure it is complete
and accurate. The actual cost documents are to he retained in
the regional offices. The custodian of the case file will he
the lead regional counsel assigned to the case.
After receipt of the cost documents, the case development
team can complete the referral package and refer the case tc
OECM. The actual cost documents do not need to be sent with
the referral package; the completed cost summary will be
sufficient for case referral. The documents are to be retainer
in the Regional offices to facilitate discovery or production
of documents reouests and reduce possible loss of documents
through multiple shipments between headcuarters, Dnj and the
Regions.
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V. THE PRIVACY ACT, NON DISCLOSURE OF IRRELEVANT INFORMATION AND
CONFIDENTIAL BUSINESS INFORMATION (CBI) ISSUES
1 • Privacy Act
Discovery requests and proof of the prima f a cie case during
CERCLA Section 107 cost recovery actions may require the Agency
tr rrod'jce to respor.? _bl? parties csrtsir c?oc"jrri«r. t ? :.r;vr? vi r.r
LFA payroll and travel costs. Trict, CDCui.'icntsi'. icr. r, <;_. cor.:^..::
information that is covered under the Privacy Act (5 U.S.C.
$522a (1974)) and should not be released until the documents
are reviewed and such information is deleted. The issue
typically arises in documents that couple an employee's name
with his social security number, employee home telephone number
or address, or where the documents are receipts containing
credit carci numbers cr copies cf personal bank checks.
The Regional offices are responsible for the review of EPA
Regional payroll and travel documents for Privacy Act
considerations. OWPE will be responsible for reviewing all
Headquarters employee payroll and travel documents. If any
infonnation covered under the Privacy Act is found, it is to be
redacted.
Appendix F contains a list of the items covered by the
Privacy Act that should be redacted on each type of cost
documentation that may be used during a cost recovery case.
Additional inquiries regarding Privacy Act considerations shculd
be directed to Rose Arnold (OGC) at 382-5460.
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2. Non-Disclosure of IrrelevantInformation
In addition to Privacy Act considerations, any references
to work performed on other CERCLA sites or RCRA facilities
should be redacted. This type of information may appear on
timesheets, timecards, or travel authorizations/vouchers.
This will prevent responsible parties from obtaining information
sr-tvjt ether si*:~« where investicst ier.s or' c-rr.-er ET-A ectivities
are underway.
3 . Conf i dent i aj Bu s i ness Informat ion
Documents needed to support contractor costs may contain
information, such as contractor overhead rates, which is subject
to confidential business information (CBI) considerations.
This is primarily an issue for the FIT, TAT and REM. contracts,
and it will arise during the discovery phase of litigation
when defendants file a request for the production of documents.
The regulations governing confidentiality of business
information are contained in 40 C.F.R. $$2 .201-2 .215 . In
general, those regulations state that CBI is entitled to be
withheld from disclosure. However, $2.209{d) allows CBI to be
disclosed "in a manner and to the extent ordered to be disclosed
by a Federal court" so long -as EPA provides "as much advance
notice as possible to each affected business of the type of
information to be disclosed and to whom it is disclosed. . ."
It is important to know that EPA must respond to defendants1
discovery requests on a timely basis. Ordinarily this is within
thirty days of the request under the Federal Rules of Civil
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Procedure. Thus, expeditious handling of requests concerning CBI
is essential.
Procedurally, once a request for the production of documents
is received that may require CBI to be disclosed, the lead EPA/DOJ
attorney on the litigation team should immediately contact counsel
for the party requesting the documents to determine if an
f.~ r~~rr,ent can be reached in which the documents are released
under the terms of a stimulation and protective crctr (S^e
example stipulation and protective order in Appendix G). If
an agreement can be reached within the time for response
guaranteeing that the documents will only be disclosed to
certain persons or parties for certain limited purposes {and
those persons or parties agree to sign a confidentiality agreement),
the case development team must then identify all contractors
that may have CBI in the cost documentation files. Within
seven days of receipt of the discovery request, the lead EPA
attorney should send each contractor both a letter explaining
the situation (See model letter in Appendix H) and a copy of
the stipulation and protective order previously agreed to by
the parties. The letter should set a date by which the documents
will be produced (i_.e., the discovery response date) and invite
the contractor to make comments on the content of the protective
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order to the author within seven days of receipt,*5
Once mutually satisfactory revisions are included or the
date passes for comment, the proposed stipulation and protective
order should be submitted for signature to the party requesting
'the information and, subsequently, by motion to the court
.requesting entry of the Order. See example motion in Appendix I
Once ihe Crii-r i= entree er.c cru'sel for the party requesting
the information has executed a confidentiality agreement, the
information may be produced.
If the party requesting the information does not agree
to production under the terms of a protective order, the United
States has two options. The case litigation team may decide to
redact all CBI and produce the materials requested or it may
decline to produce the CBI-containing documents altogether
unless under the terms of a protective order.
The decision whether to redact and produce, or simply
decline to produce, will be made on a case by case basis anc
will depend on the strength of the CBI claim made by the
°/It shoulc be noted that the Office of General Counsel has been
requested to notify the major Superfund contractors that certain
types of documents containing CBI will be released in the
context of cost recovery litigation or settlement negotiations.
That notification will indicate that the United States
will attempt to protect the documents from distribution and
will include a copy of the model protective order contained in
Appendix G. The Agency expects to receive general approval of
the model protective order's terms from each of the major
contractors in the near future, thereby speeding case-specific
release of the contractors' documents.
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person requesting confidentiality, on the number of documents
that are involved, the resources required to review and' redact
all CBI and the team's assessment of the possible consequences
of the available options, in particular, the litigation team
should consider whether the defendants would likely accept
redacted material and the amount of resources that would be
required to oppose any motions to compel discovery in the
event all the material is withheld.
For further information on the procedures to be followed
in addressing the issue cf confidential business information,
contact David Van Slyke in the Office of Enforcement and
Compliance Monitoring at (FTS) 382-3082.
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VI • APPLICATION OF INTEREST
The Agency has determined that the United States should
seek interest on monies expended from the Trust Fund for, among
other things, site investigations, studies, cleanup and
enforcement. Cost recovery actions should seek interest
from the date of a demand of a sur. certain at the rate being
earned by the Fund for comparable time periods.7 Applying
interest from the date of a demand is an incentive for responsible
parties to undertake cleanup themselves and will also discourage
responsible parties from engaging in protracted negotiations
and litigation. OWPE and OECM are presently working with the
Financial Management Division to provide site-specific
total monthly expenditures for all costs for interest calculation.
Futher guidance will be provided by DOJ and OECM on the
exact method and procedures of interest.calculation that
is to be used for cost recovery actions.
7/In a Memorandum Opinion in United States v. NEPACCO, No. 6.0-
5066-CV-S-4 (W.D. Mo. Jan. 31, 1984) and the follow-up Order
for Final Judgment (April 16, 1984), the Court allowed pre-
judgtnent interest at the rate of 9% simple interest calculated
from the date the amended complaint (adding CERCLA counts to a
RCRA §7003 case) was filed. The 9% interest rate was set "in
accordance with Missouri's post judgment interest statute.".
January-31 Memorandum Opinion at 44. However, neither the
opinion nor the Government's pre or post-trial briefs indicated
whether the State statute was the applicable law, or if the
Court merely used the Missouri Statute as a guideline in the
absence of Federal law on the issue.
-------
Ordinarily the type of claim made by the United States in a
CERCLA action will be quite unlike a secured lien and will
therefore require the filing of a proof of claim indicating the
nature of the government's claim (See Bankruptcy Form 10).
Unless an extension is moved for and granted, Chapter 7 bankruptcy
claims must be filed 90 days from the first meeting of the
creditors. B,-~k.-;;rt c;.' "?\:" a ?002(c). The deadline for Chapter
11 bankruptcy claims is set by the Court. Bankruptcy Rule 3003(c).
Often it must be filed before the Court approves the debtor's
reorganization plan. In emergency situations, telephone referral
to DOJ with EPA Headquarters concurrence may be appropriate.
After DOJ approval, a proof of claim should be filed
with the Bankruptcy Court which states the amount of the debt
and the basis for the claim. The Region should be prepared at
the time cf filing of £ proof of claim in Bankruptcy Court tc
prove that the estate is liable under $107 of CERCLA. Therefore,
the referral to the Department of Justice should include all
the information necessary for a cost recovery action. OWPE
will try to expedite requests for documents in those late-discovered
bankruptcy cases that require immediate filing cf a proof of
claim. The Regions must, however, clearly articulate the
urgency of the situation to OWPE and request that Headquarters
reorganize the cost documentation collection priorities for that
Region.
Fourth, EPA and the Department of.Justice must determine
which theories of recovery are appropriate, and whether to
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proceed in District Court or Bankruptcy Court. The theories of
recovery may include: claims as administrative expenses of the
estate; recovery under §506(c) of the Bankruptcy code; equitable
leins; and coitimon law restitution. The considerations of
whether to initiate proceedings in District Court or Bankruptcy
Court include: the extent of assets in the estate; the applicability
•:.: -.::- c_: :.^=t:'; f.'.•>•. :..;.: v : = . :. M in the Bankrupt-- .?. -' •
extent of previous litigation; and the facts of the case.
For more discussion on enforcement theories available to
the Agency to pursue insolvent parties, and for more specific
guidance regarding procedures in bankruptcy cases, refer to
"Guidance Regarding CEPCLA Enforcement Against Bankrupt Parties"
issued on May 24, 19S4, by Courtney M. Price, Assistant
Administrator for the Office of Enforcment and Compliance
-------
VIII. UPDATING OF COSTS
The actual litigation of CERCLA $107 cases may be a very
lengthy process. Negotiations may take place before a case is
filed. Once a case is filed, negotiations may continue and the
litigation process itself may be conducted over a period of
while the case is in litigation. And certainly litigation
costs are being incurred by EPA, DOJ, and often, contractors.
During the course of negotiations or litigation, the case
development team may need to update costs for a particular case.
For completed removal actions, with no other site activity
in progress, an update of costs is a relatively easy exercise.
The case development team can update Regional payroll and travel
end OWPE car. update headquarters payroll and travel. DOJ, upon
request frorr, the assigned DOJ or U.S. attorney, can update its
litigation support costs.
There are, however, cases where the government is pursuing
a §107 action but costs are still being incurred for on-site
activity ( e__._Cj . , 5106 cases that also have a €107 count and
remedial action has not yet been completed). Updating costs
for these types of cases may actually be the equivalent of
documenting a new $107 case.
The case development team must allow for at least three
weeks from a request for a cost update and its receipt. The
Region must balance the need for a cost update against the
needs of the other cases in the Region which require documentation.
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The collection of cost documentation is not a process which
can be "turned off- once it has been initiated. Therefore, it
is important that the case development team use discretion
and good judgment when requesting a cost update.
Cost updates may be requested by submitting a written
request to the Cost Recovery Group, OWPE. The memorandum
:':. •>.*,• e£€c.iiy why e~c when ar, update is needed and the cater: r:
of costs which need updating. The case development team must
give OWPE as much lead time as possible to accommodate update
requests. OWPE will collect the requested information and
prepare a summary of updated costs. The summary and documents
will be forwarded to the case development team in,the Region.
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IX. ACTUAL PAYMENT INTO THE TRUST FUND
To accelerate the receipt and investment of monies
recovered from responsible parties under CERCLA, the Department
of the Treasury has provided a separate lockbox for Superfund.
Checks for cost recoveries, penalties and fines should be made
payable to the EPA Hazardous Substance Response Trust Fur.c er.d
sent to the following address:
EPA Superfund
P.O. Box 371003M
Pittsburgh, PA 15251
Checks should be accompanied by transmittal letters that
state the name of the responsible party and the site for which
payment is being rendered. The remittance address and instructions
should be included in all settlement documents (consent decrees,
administrative order, or settlement agreements) and demand letters.
The Regional Counsel representative en the case envelopment
team is responsible for sending a copy of the signed consent/
settlement document (as soon as it is available) to the following
'address:
US EPA
Financial Management Division, PM-226
Financial Reports and Analysis Branch
401 M Street, S .W. .
Washington, D.C .
Attn: Ivery M. Jacobs, Rm 3623M
These documents are necessary to establish an accounts
receivable to assure that funds are ultimately received and to
assure that funds that are received are credited to the
appropriate account and reported to the Hazardous Substance
Response Trust Fund for investing.
-40-
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APPENDIX A
FLOW CHART OF COST DOCUMENTATION PROCESS
-------
CERCLA § 107: cc ,T DOCUMENTATION PROCESS
REGION
PAVROU
1
REGION
TRAVEL
COOPERATIVE
AGREEMENT
1 . 1
DIMES
REGION
COSTS
1
HO
PAYROLL
0
PACKAGE
DOCUMEhfS
1
HEM
f
_
T
PRfP
SUM*
I
1AT
AN
«AI
t
iir
1
its
1
CIP
1
INI ic
1
EHT
I
EMSL
. 1
1 HO
j_PA_
FMO
1 1
'..AV£l
(ACS
i
CONTRACTS
COT - CASI Of VI lOMIMT Tf AM
OHM -BFFICI Of
f MO - IH»*»CI*L MANACiMEMl OIWIIIO*
-------
DEFINITIONS OF ACRONYMS USED IN FLOW CHART
*
IAG: INTER-AGENCY AGREEMENT
REK: REMEDIAL CONTRACT
FIT: FIELD INVESTIGATION TEAM CONTRACT
TAT: TECHNICAL ASSISTANCE TEAM CONTRACT
TES: TECHNICAL ENFORCEMENT SUPPORT CONTRACT
•;::.: .• CONTRA"! LABORATORY FR:>SRA*.
NEIC: NATIONAL ENFORCEMENT INVESTIGATIONS CENTER
ERT: EMERGENCY RESPONSE TEAM
EMSL: ENVIRONMENTAL MONITORING AND SYSTEMS LABORATORY
-------
APPENDIX B
SITE-SPECIFIC SPUR CHARGES
-------
APPENDIX C
DESCRIPTION OF SUPERFUND CONTRACTS
-------
TECHNICAL ASSISTANCE TEAM CONTRACT (TAT)
SCOPE;
This contract is designed to assist EPA in responding to all
reported environmental emergencies, including oil spills
(under $311 of the Clean Water Act) chemical spills and
uncontrolled hazardous waste disposal sites* Response includes
damage assessment field studies, monitoring cleanup operations,
and coordinating with local governments. Other functions
such as conducting spill prevention compliance checks are
also performed. Under this nationwide contract, teams (TAT)
are provided to EPA headquarters, all ten EPA regions, and
both of the Environmental Response Teams (ERT). The TAT
contract does not perform any actual cleanups.
Original Contractors Ecology & Environment, Inc. (E&E)
Contract Number: 68-01-5158
Dates of Contract: February 1979 to October 1982
EPA Project Officer: Jack Jojokian
Current Contractor: Roy F. Weston, Inc.
Contract Number: 68-01-6669
Date of Contract: October 1982 to September 30, 1986
EPA Project Officer: Jack Jojokian
EPA Contract Officer: Paige E. Peck
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ON SCENE COORDINATOR EMERGENCY REMOVAL CONTRACTS
*
SCOPE?
These contracts are designed for emergency or immediate removal
situations initiated by the On Scene Coordinator. These
contracts are entered into on an individual basis as an
emergency situation arises. Contract is usually initiated
with a letter to proceed. All work under these contracts is
site specific.
Emergency Removal Cleanup Service,Contracts (ERCS)
SCOPE;
These contract are designed to respond to environmental
emergencies with resources necessary to contain, cleanup,
remove and dispose of hazardous materials. There are four
ERCS Zone contractors.
ERC Zone I (Regions I, II, and III);
Contractor: 0. H. Materials Co.
Contract No.: 68-01-6893
Dates of Contract: February 1, 1984 to Janueary 31, 1987
EPA Project Officer: James Jowett
EPA Contract Officer: Patrick.Flynn
ERC Zone II (Region IV):
Contractor: Hazardous Waste Technology Services
Contract No.: 68-01-6859
Dates of Contract: December 1, 1983 to November 30, 1986
EPA Project Officer: Jarces Jowett
EPA Contract Officer: Thomas F. Sullivan
-------
ERC Zone III (Region V);
*
Contractor: PEDCo Environmental, Inc.
Contract No.: 68-01-6894
Dates of Contract: February 1, 1984 to January 31, 1987
EPA Project Officer: James Jowett
EPA Contract Officer: Dorothy Brittori
ERC Zone IV (Regions VI, VII, VIII, IX, X)t
Contractor: Environmental Emergency Services
Contract No. 68-01-6860
Dates of Contract: December 1, 1983 to November 30, 1986
EPA Project Officer: James Jowett
EPA Contract Officer: Thomas F. Sullivan
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REMEDIAL ACTION CONTRACTS (REM)
i •
SCOPE;
The Remedial Action contracts primary focus is to investigate
and provide long term corrective action for NPL sites. Tasks
under the REM contracts include the following:
Remdedial Action Master Plans (RAMPS)
R«ir-edial Investigations/Feasibility Studies (RI/FS)
Initial Remedial Measures (IBM)
Enforcement and technical oversight projects
Keneciai Design and Construction
The contractors are tasked through work assignments,
which are generally site-specific. However, some work assignments
are written to cover a number of site for a particular task
such as RAMPS and community relations plans.
The Superfund program originally had three REM contractors:
Camp, Dresser, McKee (CDM)
Contract No. 68-03-1612
Dates of Contract: June 1981 to March 1983
Roy F. Weston
Contract No. 68-03-1613
Dates of Contract; June 1981 to October 1982
Black & Veatch
Contract No. 68-03-1614
Dates of Contract: June 1981 to October 1982
In October 1982, the original REM contracts were replaced
with two zone REM/FIT Contracts. These are three year contracts.
REM Zone I (Region I - IV);
Contractor: NUS Corp.
Contract No. 68-01-6699
Dates of Contract: October 1, 1982 to September 1986
EPA Project Officer; William Kaschak
EPA Contract Officer: Ronald L. Kovach
-------
REK Zone II (Region V - X);
*
Contractor: CJ^MHill Southeast, Inc.
Contract No.: 68-01-6692
Dates of Contract: October 1, 1982 to September 30, 1986
EPA Project Officer: Nancy Willis
EPA Contract Officer: Dorothy Tyler
In June 1984 an additional nationwide REM contract was awarded
under which the contractor is to perform remedial response
activities at uncontrolled hazardous waste sites and prepare
A&E design specifications of the selected remedies.
REM II (Nationwide);
Contractor: Camp, Dresser & McKee; Inc.
Contract No.: 68-01-6939
Dates of Contract: June 1 ,• 1984 to May 30, 1988
EPA Project Officer: William Kaschak
EPA Contract Officer: William R. Topping
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FIELD INVESTIGATION TEAM (FIT) CONTRACT
*
SCOPEt
The Field Investigation Team (PIT) Contracts establish
an investigation team in each EPA Region, comprised of multi-
disciplinary professional and para-professional personnel who
•re capable of providing a breadth of technical activities.
Specifically, the FIT contracts constitute the primary
capability of EPA for investigating hazardous waste sites.
Current FIT operations are part of the REM/FIT Zone Contracts.
i: CATION'S;
Tasks conducted by the FIT contracts are initiated in the
Regions by designated Regional Project Officers (RPO's) using
a work order process called Technical Directive Documents
(TDDs). Kajor functions include the following:
0 Preliminary Assessments and Site Inspections (PA/SI)
to determine the hazard potential at waste sites.
0 Conduct Hazard Ranking System Scoring for sites considered
for inclusion .on the National Priorities List (NPL).
0 General enforcement support for case development,
particularly field oriented technical activities (e.g.,
sampling).
0 Remedial Investigations (RI) for enforcement lead sites.
* Hydrological, geophysical and general field investigatory
work which may be part of or separate from any of the
above activities.
• Provides subcontracting support for activities such as
well drilling, obtaining specialized technical expertise,
and related support services.
* Dioxin strategy implementation support.
• Provide technical experts for compliance monitoring and
oversight functions.
* Help to develop technical manuals, policies and standard
operating procedures..
-------
PIT "Contract:
Original Contractors Ecology and Environment, Inc. (EiE)
Contract No.: 68-01-6056
Dates of Contract: February 1980 to December 1982
EPA Project Officer: Scott Fredericks
MM/FIT Zone I (Reoions I - IV):
Contractor: NUS Corporation
Contract No.: 68-01-6699
Date of Contract: October 1, 1982 to Septeitber 30, 1986
EPA Deputy Project Officer: Scott Fredericks
EPA Contract Officer: Ronald L. Kovach
RF*/FIT 2one II (Regions V - X);
Contractor: C^MKill (Ecology and Environment is FIT subcontractor)
Contract No.: 68-01-6692 . •
Dates of Contract: October 1, 1982 to September 30, 1966
EPA Deputy Project Officer: Scott Fredericks
EPA Contra'ct Officer: Dorothy Tyler
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CONTRACT LABORATORY PROGRAM (CLP)
*
SCOPE;
The Contract Laboratory Program (CLP) was established
to provide laboratory sample analyses for the Superfund program.
The CLP can provide routine and special analytical services for
inorganic, organic and dioxin samples. The CLP is managed
by VIAR, Inc. Approximately 40 different laboratories are
used under the CLP. Each of the laboratories used under the
program will have one or more contracts with the Agency.
Site samples are taken by the Regional offices and tagged
v-:th a se.-.ple numoer. The Sample Managraent Office (SKG),
which is managed by VIAR, will tell the Region which laboratory
the samples should be sent to. The individual laboratories
do not know what sites the samples have been taken from.
VXAR tracks all sample numbers and invoices.
Sample Management Office (SMO) Contract;
Contractor: VIAR and Company
Contract No.; 68-01-6702
Dates of Contract; October 1, 1982 to September 30, 1935
EPA Project Officer: Stan Kovell
EPA Contract Officer: Karian Bernd
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TECHNICAL- ENFORCMENT SUPPORT CONTRACT (TES I S II)
•
SCOPE;
The Technical Enforcement Support (TES) Contract was
awarded in June 1983 to support enforcement actions under
CERCLA. The TES contract can provide the following services:
Responsible Party Searches
Title Searches
Financial Asessments of Responsible Parties
Ks-cords Compilation
Kecith/£r.c--r:5errri€r.t AFs-,• '• n>*nts
Technical Review of Documents
Expert Witnesses
The TES contract is tasked through work assignments
which are generally site-specific.
TES I
Contractor: GCA Corp.
Contract No.: 68-01-6769
Dates of Contract: June 10, 1983 to June 9, 1986
EPA Project Officer: Elwood Martin
EPA Contract Officer: Marian Bernd
TEg II
Contractor: Planning Research Corp. (PRO
Contract NS. : 68-01-7037
Dates of Contract: September 1984 to September 1986
EPA Project Officer: Elwood Martin
EPA Contract Officer: Marian Bernd
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ENVIRONMENTAL .EMERGENCY RESPONSE UNIT (EERU) COKTRACT
SCOPE: EERU is divided into two groups: Operations and Research
OPERATIONS;
Through the Environmental Response Team CERT) , EERU provides'
technical support and assistance to On-Scene Coordinators and
other emergency response personnel on environmental issues
dealing with the cleanup of emergency spills and uncontrolled
hazardous waste sites. Site support services of the contract
Include such activities as sampling, use of specialized
n-onitoring equipment, conducting extent-of-contamination
surveys end procurement of specialized subcontractors for
well drilling, analytical support, etc. Other services
include the conduct of training exercises including demonstrations
of equipment and 'hands on" training under simulated but
realistic field conditions.
RESEARCH;
Through the oil and Hazardous Material Spills Branch (OHMSB),
EERU provides shakedowns and field demonstrations of prototype
equipment during spills and at cleanups of uncontrolled
hazardous waste sites. Evaluation ar.d improvement of government
owned or commercially available cleanup devices and systems
is the primary objective of this side of the contract.
Original Contractor: Mason 6 Hanger-Silas Mason Co., Inc.
Contract No.: 68-03-2647
Dates of Contract: January 23, 1978 to June 28, 1951
EPA Project Officer: J. Stephen Dorrler (ERT) and Ira wilder (R&D)
Current Contractor: IT Corporation
Contract No.: 68-03-3069
Dates of Contract: June 29, 1931 to June 28, 1985
EPA Project Officers: J. Stephen Dorrler (EFT) and Ira wilder (R&D)
EPA Contract Officer:
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ENVIRONMENTAL RESPONSE TEAM (ERT)
•
The Environmental Response Team is located at the EPA facility
in Edison, New Jersey, and also retains a three-member staff
at EPA's A. W. Breidenbach Environmental Research Center in
Cincinnati, Ohio.
The ERT's major functions are to:
* Maintain an around-the-clock activation system.
e Upon request, dispatch Team members to environmental
emergencies to assist Regional and program offices.
e Provide critical consultation in water and air quality
criteria, toxicology, interpretation and evaluation of
analytical data, and engineering and scientific studies.
0 Develop and conduct site-specific safety programs.
* Provide specialized equipment to meet specific requirements
such as monitoring, analytical support, waste treatment,
containment and control.
* Provide technical experts for a Public Affairs Assistance
Team (PAAT).
0 Supervise the work cf contractors.
i
0 Help to develop training manuals, policies, and standard
operating procedures.
0 Assist the Office of Research and Development in developing
new technology for use at environmental emergencies and
uncontrolled hazardous waste sites.
• Train Federal, State and local government officials
and industry representatives in the latest technology
> for environmental emergencies at hazardous waste sites.
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ENVIRONMENTAL MONITORING AND SYSTEMS LABORATORY CONTRACT
SCOPE: The Environmental Monitoring and Systems Laboratory
(EMSL) manages a contract which provides upon request aerial
photography, photographic interpretation and topographic napping
of hazardous waste sites. Requests are generally site specific
and nay be from the regional offices or headquarters.
Zone I (Regions I - IV)
Contractor: Bionetics
Contract No.: . ,
Dates of Contract:
EPA Project Officer: Tom Osberg
EPA Contract Officer: Pong Lem
Zone II (Regions V - X)
Contractor: Lockheed Inc. (LEHSCO)
Contract No. 68-03-3049
EPA Project Officer: Clay Lake
EPA Contract Officer: Pong Lerri
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NATIONAL ENFOCREMENT INVESTIGATIONS CENTER (NEIC) CONTRACT
*
SCOPE: The National Enforcement Investigations Center (NEIC)
provides various types ofenforcement support activities for
CERCLA cases. Activities include site investigations, sample
collection, sample screening for hazardous characteristics
and sample preparation for analyses and compositional lab
analysis. Sample screening and preparation is done under
contract with Fred C. Bart (this contract is oart of the
National Contract Lab Program). NEIC also provides for
security of sensitive samples for enforcement purposes and
chain of custody procedures. NEIC provides evidence audits
through the Contract Evidence Audit Team (CEAT). The current
CEAT contractor is Tech Law, Inc. Evidence audits provide
inventories of case documents and preparation of documents for
use as evidence. Evidence audits also provide sample profiles
and summaries of analytical data.
Contract Evidence Audit Team
Original Contractor: INTERA
Contract No.: 68-01-6215
Dates of Contract: September 1980 to September 1983
EFA Project Officer: Rob Laidiaw
EPA Contract Officer: Pat Murphy
Current Contractor: TECH LAW, Inc.
Contract No. 66-01-6633
Dates of Contract: October 1963 to
*
EPA Project Officer: Rob Laidiaw
EPA Contract Officer: Pat Murphy
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APPENDIX D
COST RECOVERY CHECKLIST
-------
DATE:
COST RECOVERY DOCUMENTATION CHECKLIST
1. SITE NAME: CITY/COUNTY
SITE ACCOUNT NUMBER: ; NPL YES
(OTHER NAMES USED FOR THIS SITE;
2. STATUS: CHECK ONE:
TRIAL DATE (DATE: )
IN DISCOVERY (DEADLINE: )
FILED
REFERRED TO DOJ
REFERRED TO READQUAP.TERS .
IN PREPARATION IN REGION
STATUTE OF LIMITATIONS
PROJECTED/ON GOING NEGOTIATIONS
DEMAND LETTER TO BE SENT
3. NAME AND TELEPHONE NUMBER OF OSC/REGIONAL CONTACT:
4. NAME AND TELEPHONE NUMBER OF REGIONAL COUNSEL CONTACT:
5.WHICH, IF ANY, OF THE FOLLOWING FIT CONTRACTORS WERE USED?
E&E (CONTRACT No. 68-01-6056) DATES OF WORK
NUS (CONTRACT No. 68-01-6699 DATES OF WORK
E&E (FIT SUBCONTRACTOR TO CH2MKILL, CONTRACT No. 68-01-6692}
(ZONE II)
DATES OF WORK
6. WHICH IF ANY OF THE FOLLOWING TAT CONTRACTORS WERE USED?
E&E (CONTRACT No. 68-01-5158) DATES OF WORK_
ROY F. WESTON (CONTRACT No. 68-01-6669)
DATES OF WORK
7. WAS WORK DONE THROUGH THE CONTRACT LAB PROGRAM (VIAR)? YES NO
IF YES, PLEASE PROVIDE ANY SPECIAL ANALYTICAL SERVICES (SAS) CASE
NUMBERS:
-------
COST RECOVERY DOCUMENTATION CHECKLIST, PAGE 2
WAS LAB WORK OTHER THAN THROUGH VIAR USED? YES NO
IF YES, PLEASE GIVE LAB NAME AND CONTRACT NUMBER*:
8. WHICH IF ANY OF THE FOLLOWING REM CONTRACTORS WERE USED?
(DESCRIBE TASKS WITH THE FOLLOWING: RAMP, IRM, RI/FS, DESIGN
CONSTRUCTION, COMMUNITY RELATIONS, ENFORCEMENT, OR OTHER)
BLACK & VEATCH (CONTRACT NO. 68-03-1614)
DATES OF WORK TASK
CAMP DRESSER & MCKEE (COM) (CONTRACT NO. 68-03-1612)
DATES OF WORK TASK
ROY F. WESTON (CONTRACT No. 68-03-1613)
DATES OF WORK TASK__
NUS (ZONE i, CONTRACT'NO. 68-01-6699)
DATES OF WORK TASK
CH2MHILL (ZONE II, CONTRACT No. 68-01-6692)
DATES OF WORK TASK
CAMP DRESSER MCTEE (REM II CONTRACT No. 68-01-6939)
DATES OF WORK TASK
9. PLEASE PROVIDE THE FOLLOWING INFORMATION ABOUT CONTRACTORS
LET BY AS 05C OR EMERGENCY REMOVAL CLEANUP (ERCS) .CONTRACT:
CONTRACTOR:
CONTRACT NO. DELIVERY ORDER No._
DATES OF WORK: '
10. WERE ANY OVERFLIGHTS DONE? YES _NO
DATES OF OVERFLIGHTS:
11. WAS ANY WORK DONE BY NEIC? YES NO
DATES OF WORK TASK
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COST RECOVERY DOCUMENTATION CHECKLIST, PAGE 3
WAS AN EVIDENCE AUDIT OR OTHER WORK DONE THROUGH NEIC CONTRACT
WITH TECH LAW (INTERA)? YES NO DATES OF WORK
12. WAS WORK DONE BY THE EERU CONTRACT WITH IT CORP? YES NO
(CONTRACT No. €8-03-3069)
DATES OF WORK:
WAS WORK DONE BY EMERGENCY RESPONSE TEAM (EDISON LAB) Y£S_
DATES OF WORK: '
13. KAS ANY WORK DONE UNDER THE TES I CONTRACT? YES. __NO
CONTRACT No. 68-01-6769 (PRIME CONTRACTOR: GCAT"
DATES OF WORK: TASKS PERFORMED:
WAS ANY WORK DONE UNDER THE TES II CONTRACT? YES NO
CONTRACT No. 68-01-7037 (PRIME CONTRACTOR: PRCl
DATES OF WORK: TASKS PERFORMED:
14. WAS ANY WORK DONE UNDER THE LIFE SYSTEMS CONTRACT? YES NO
CONTRACT No. 68-03-3136
DATES OF WORK
ANY OTHER CONTRACTOR USED: NAME:
CONTRACT NO. DATES OF WORK:
15. PLEASE PROVIDE THE FOLLOWING INFORMATION ABOUT OTHER FEDERAL
AGENCIES THAT WORKED ON THE SITE:
AGENCY IAG t DATES OF WORK CONTACT PERSON/TELEPHONE
HHS
COE
DSCG ; ___
FEMA
DOJ
DOI ^
-------
COST RECOVER? DOCUMENTATION CHECKLIST, PAGE 4
NOAA
USGS
BRIEF DESCRIPTION OF WORK:
16. WAS THERE A STATE COOPERATIVE AGREEMENT OR CONTRACT? YES NO
STATE: COOPERATIVE AGREEMENT f
CONTRACT No. .
17. WERE ANY OTHER CONTRACTORS (e.g. , R&D CONTRACTS) USED?
IF SO, PLEASE PROVIDE THE FOLLOWING:
CON-TRACTOR:
CONTRACT NO.
DATES OF WORK:
BRIEF DESCRIPTION OF WORK:
18. WERE ANY REGIONAL COUNSEL APPROPRIATIONS FOR LEGAL EXPENSES
USED? YES NO
19. PLEASE LIST THE REGIONAL OFFICES WHICH HAVE BEEN INVOLVED IN
THE CASE:
20. ANY OTHER PERTINENT INFORMATION NOT PROVIDED ABOVE:
-------
APPENDIX E
SAMPLE CASE COST SUMMARY
-------
Prepared: 10/22/84
NARRATIVE SUHMAP.Y/S1A7TMENT OF FACTS — COSTS PCR
1, The United States Er-viromental Protection Agency has incurred costs of
. • at least $188.424.64 for Headquarters and Regional payroll.
2. the United States Environmental Protection Agency has incurred costs of
•t least £51,890.44 for Headquarters and Regional travel.
3. The United States Environmental Protection Agency has incurred costs of
at least 5109,953.36 for remedial contract expenditures. .This fr>tal
represents the amount spent under the
4. The United States Environmental Protection Agency has incurred costs of
at least 515,131.26 for remedial contract exaenditurws. This total
represents the anount spend under the
5. The United States Environmental Protection Agency has incurred costs of
at least 5420,794.22 for remedial contract expenditures. This total
represents the anount spent under the
6. The United States Environmental Protection Agency has incurred costs of
at least 5212,613.16 for field investigation team contract expenditures.
This total represents the arount spent under the
7. The United States Enviromental Protection Agency has incurred costs cf
at least 547,560.11 for technical assistance team contract expenditures.
This total represents the amount spent under the Ecology and Environment
contract.
8. The United States Environmental'Protection Agency has incurred costs cf
at least S11,93E.51 for On-Site Coordinator (06C) Let contract costs.
The eneroencv response art-ion has performed under contract by
9, The United States Environmental Protection Agency has incurred costs of
at least 510,950.00 for aerial photograph and analysis support. This
total represents the amount spent under the EMSL contract.
10. The United States Environmental Protection Agency has incurred costs of
at least 5996,546.98 for Interagency Agreements (IAG) with the Department
of Justice anc the U.S. Coast Guard.
-------
-2-
U. The United States Environmental Protection Agency has incurred costs of
at least $190,661.62 for investigative contract costs under contract •
~ fey the National Enforcement Investigative Center (NEK)..
12 The United States Environmental Protection Agency has incurred costs of
.•t least $10,438.00 for expert witness support under contract with the
13. The United States Environmental Protection Agency has incurred costs of
at least 5342,552.41 for National Lab contract expenditures. This total
represents the costs of generating laboratory analysis of sanples collected.
14. The United States Environmental Protection Agency has incurred costs of
at least S196.153.00 for miscellaneous contract costs under contract
by
-------
COST SUWARY
EPA.EXPENDITURES
tjrV (TViTPWiJT — _ - -
«cv frvkf 1 L> & f*T — __ --
en' fY**1! JL.^T — ______,,^_
BI-U /rTT rrvfTTiM^r _ -
ml T *>*"Ltft^T — - -
fiypL'tt T r*>."x' — n/c* _.. ._,.-. i i
XtfTERAGENCY AGREEMENTS —
UC Pi^Tr*- Pn-»i — * ____-.. . -- . . .
• a. v>uc» v vjua^ w ' - L
MT~T P fTV,'™O fi *"" ___ - 11- -
Mh^TfV?!' T hB rTVi***!1 1^ -"^T - —
^.j-rw— T
-_j i npi i*\
21ftfl £4
__ T*; ill "jc
- A*>n 70rt ^*>
. *}\'> fil"! 1C
UQ1R CL1
- in usn no
.___ lift f\A(L 00
_ oof, "inn on
""""" OOOfJUU.UU
_ 1QD fir,1 CT
_^_ in /lit? nn
__ _, •^ii*i eiri") ji
-^— lofi T;T nn
1OIAL'EPA EXPDD1TURSS S 2,805,837.71
-------
EPA PAYROLL
IMPtCTEE NAME — HEADQUARTERS
NUMBER
OF HOURS /WOUNT
Barclayr Michael 63.0 1,149.12
Burack, Mitchell 1,017.25 16,030.27 .
Barnes, Wanda ' 3.0 22.79 . • - -e:'
Cibulski, Robert 25.0 474.71 '
Clerens, Rob 22.0 440.22
Conti, Susan 1.0 10.39
Delvin, Dennis, J. 441.0 6,163.34
Dick, Mary D. 5.0 91.20
£iku§, Barbara 3.0 63.78
Garrahan, Kevin 609.0 11,590.60
Gilbert, John M. 8.0 • 199.65
Grundler, Christopher 130.0 1,987.18
Farnsworth, Douglas 3.0 70.47
Keplinger, Helen 2.0 31.76
Klaas, Julie A. 3.0 41.18
KOBakowsfci, Michael 8.0 193.05
Laforrkara, Joseph 8.0 206.89
Livolsi, Joseph 30.0 205.80
Mittelman, Abrahar. 12.0 262.95
Murphy, Jack 198.0 3,881.17
Schwartz, Jerry 20.5 390.74
Ifrieeler, John 51.0 815.41
Wrig>.t, John 4.5 61.14
TOTAL n>A HEADQUARTERS PAYROLL $44,383.81
DOCJ^ENTATIOK: • FKD SPUR Report, dated June 9, 1984
Copies of Applicable Tineranis
EMPLOYEE NAKT — RECICK
Adans, Jaraw 43.0 964.08
Allison, Birdie 5.0 41.08
Ashfcanazy, Patricia 14.0 . 118.51
Banasxek, Kenneth 18.0. 267.28
Bartelt, Richard 17.0 416.95
Bolger, Kevin . 119.5 1,732.09
Carter, Barbara 3.0 26.52
-------
?A PAYROLL
1PLOTEF KAKE — REGION
sstle, Charles
3ns*a»ttlos, Basil
ikinis, Jonas
Urn, Michael
lly, Charles
ield, Roger
lynne, Yvonne
rye, Gilbert
ade, Mary
.i;r^er, Caryr.
riraes, Roger
Ail, Robert
sia, Kei
irka, Andrea
ones, Wanda
oseph, Chacko
ire, Sukwha
liin, Thorvas
:ing, Ernest
j^', Janes
Lucharz, Carolyn
:uehlr Marcia
jjlra, Gregory
lush, Beverly
lyte, Lawrence
anger, Mary
lay, Darothy
torgan, Dorothy
terris, Jonn
^arikh, Pankaj
?aruchuri, Baiw
FT,illips, Marsha
Radcliffe, Kictielle
Randall, Sheila
Regan, Gerald
Rekar, Pamela
Ross, Curtis
Rutter, Anthony
Sargent, William
Schaefer, Robert
Sdhnidt, Larry
Schulteis, Jane
SedVick, Helen
Street, Kerry
HJMBER
• OF BOURS
1.0
8.0
33.0
2.0
31.0
30.5
135.0
90.0
134.5
37.0
23.5
7.0
15.0
41.2
4.0
145.0
134.0
78.0
80.0
63.0
17.0
6.0
8.0
2,899.0
2,181.0
1.0
5.5
30.0
37.0
99.6
36.0
60.0
747.8
19.7
1.0
64C.2
1.0
27.0
17
25
182.0
.5
247.5
42.0
• AMOUNT
19.71
231.53
570.52
30.55
729.94
683.01
2,477.02
1,777.22
2,806.89
314.22
4SS.45
125.32
234.36
746.97
32.27
2,496.53
2,726.04
984.70
1,414.78
942.41
200.67
96.35
123.76
50,592.31
39,718.02
11.41
67.42
199.63
669.38
1,141.07
567.57
660.49
5,204.35
151.02
25.06
10,902.58
28.70
472.07
125.57
782.59
2,566,
9,
.00
,59
2,060.80
646.60
-------
iXPLCYEE NAME — REGION
thakkar, Jayinthal
TV»on,»Hary
Ullrich, David
Vanderlaan, Gregory
NesloMki, Dennis
Witcher, Stephanie
Uanack, Belinda
Hong, Gene
Young, Marvin
1UTAL RSGIONAL PAYROLL •
DOCUMEISTATICN: E7A Region V
ItJMBER
Of HOURS
73.0
27.0
10.2
47.0
18.0
4.0
52.0
8.0
7.0
.
Personnel Cost Sirroary
. AMOUNT. '
1,066.81
472.07
312.91
917.59
250.02
34.93
331.24
94.66
138.64
$144, 040. £3
as of August 18, 1984
TOTAL EPA PAYROLL (HEADOUAPTERS AND REGION) 5188,424.64
-------
COST SUMMARY
EPA TRAVEL
NAME — HL
Barclay, Michael
Biros, Francis, J.
Burack, Mitchell
Cibulski, Robert
Grundler, Christopher
Devlin, Dennis J.
Garrahan, Kevin
Lucero, Gene
Murphy, Jack
TRAVEL
NUMBER
970381
970391
838151
911448
747760
974948
974935
974925
575312
764972
754295
993411
639112
965684
969061
961987
827895
778420
730521
829636
829637
830288
911401
838332
911443
970316
829653
829626
9B3121
983119
830226
VUOiER
AMOUNT
296.21
294.20
445.95
543.95
511.60
373.71
208.00
44.00
675.67
363.50
545.09
320.85
262.45
489.05
289.69
350.94
291.75
322.68
274.38
410.69
407.55
222.25
559.70
215.45
461.69
213.00
398.50
689.50
281.93
298.74
251.91
TREASURY NUMBER
AND DATE •
93709
73759
93796
93212
S2275
53892
95728
93507
93086
93386
93087
64548
06262
64361
64363
64665
92648
92387
92303
93247
93247
93359
93125
93449
93167
93502
93253
93126
93694
93698
93482
6/7/83
6/20/83
6/29/83
12/14/82
l/4/i2
7/29/83
6/10/83
4/4/83
11/3/82
2/25/83
11/4/82
1/10/84
4/27/83
11/25/83
12/6/83
4/5/82
8/25/82
5/7/82
4/8/82
12/21/82
12/21/82
2/2/83
11/19/62
3/16/83
12/16/82
4/5/83
12/23/82
11/22/82
6/2/83
6/6/83
3/28/83
-------
£?A TRAVEL
EMPLOYEE KAKE — HEADQUARTERS
Schwartz, Jerry
Nofttl, Deborah
TOTAL H»A HEADQUARTERS TRAVEL
TRAVEL
NIWBER
972197
754314
VOUCHER
AMOUNT
315.25
294.50
TREASURY
AND I
64618
93219
NUMBER
Jftufc
-------
-3-
EPA TRAVEL
EKPIflYEE NAKE — REGION
Rush, Beverly
WAVSt
NUMBER
41559
42098
22571
23171
23214
21343
23401
23493
325 >4
236Si
30309
30573
30639
30818
30973
31024
31051
31194
31462
31548
31626
31709
31BS1
319S5
32112
32262
32521
32631
32702
32730
32893
32997
33109
33200
33230
33451
33658
33678
33851
33890
34001
34054
34200
34226
34323
\CUQfER
AMOUNT
270.07
119.76
304.60
168.90
242.90
149.40
403.63
174.40
264. RO
175.50
160.70
309.29
266.10
182.92
210.44
54.23
273.00
149.62
193.30
230.50
200.10
215.31
3~5.I5
254.30
840.08
303.91
290.45
264.90
275.36
333.55
184.00
337.25
181.50
214.00
389.92
327.72
387.25
164.80
384.05
383.53
321.38
195.75
275.23
393.50
-------
NMC — SESICK
VOUOER
NUMBER
VOU-3ER
AMOUNT
Cuah, Beverly
Kyte, Lawrence
34416
34 SOS
34597
40100
40162
40239
40352
40538
406S1
40707
40926
41C14
41015
41066
41218
41261
41406
41524
41681
42246
42270
42453
42755
42938
44014
44461
44835
12376
20236
20427
20927
22071
22578
22741
22990
23055
23229
23303
23308
23526
23546
23680
23830
23858
'30053
30347
390.97
395.93
182.10
44S.S4
3S0.38
522.49
350.34
279.15
227.00
353.98
361.43
5C,:t-
291.SB
222.29
362.05
353.52
292.61
292.93
273.73
241.48
239.99
371.96
270.68
240.36
143.98
195.70
155.72
207.30
141.75
215.95
2t2.39
196.00
349.65
329.00
117.96
212.10
232.40
323.43
167.50
349.86
523.68
604.81
247.32
466.25
705.38
156.15
-------
D-PLO*EE NAME — REGION
Kyte, Lawrence
• •
f
Qetrodka, Steve
Payne i David
Radcliffe, Michelle
Rekar, Pane la
SAaefer, Revert
Sedwick, Helen
Vender laa_-i, Gregory
TOTAL SPA REGIONAL TRAVEL
DOC19CNTA7ION: Regional Travel
VOUCHER
NUMBER
30551
30637
30760
30806
30966
32511
33908
34569
40087
42527
42953
43675
44876
44015
44438
23433
22073
22740
23246
23307
23525
30636
30833
22574
23247
23430
22475
22749
23215
30308
30525
32150
34558
42756
Sumary as of
VOUCHER
MOUNT
177.88
216.70
304.16
224.35
216.75
190.84
215.30
251.38
278.40
347.09
314.51
89.53
"21.3e
132.00
369.30
336.84
208.30
308.62
354.21
155.75
286.10
184.30
185.90
194.06
336.74
194.50
152.85
335.10
258.50
181.50
248.21
223.96
402.90
269.50
$39,946.11
August 6, 1984
TOTAL EPA TRAVEL
$51,890.44
-------
ODST SMART
KM OOKISACT
_» • ^^^
CONTRACTOR:
OKTRACr NO:
PROJECT OFFICER: Nancy Willis
DATES OF WORK: July 1983 - April 1984
CT VCPJ'.: Psne>3i«! rnfo-csrerrt Sup-pert; Ffr«ii»l Ir
TOTAL COWTRACTOR ODST: $106,171.67
JXXUMQJTATION: FT© SPUR Report Dated Jure 30, 1934;
Copies of Applicable Paid Invoices and Treasury
Schedules
Voucher
Ninber
11
12
13
14
15
16
17
18
19
Voucher
Amount
S?1C,£I2.93 •
$632,019'. 55
5810,491.19
5959,748.51
5736,708.51
$2,267,864.09
$2,675,862.08
$2,562,929.21
52,748,326.71
Voucher
Date
9/9/83
10/12/83
11/14/83
12/15/E3
1/13/84
2/14/84
3/13/84
4/12/84
5/14/84
Treasury Schedule
Nurtfwr and Date
7014
7055
7096
?1?0
7180
7228
7266
7318
7373
- 10/14/83
- 11/14/83
- 12/9/93
- 2/3/84
- 2/16/84
- 3/16/84
- 4/10/84
- 5/8/84
- 6/12/84
-------
COST
EEM OOHTRACT
CONTRACT NUMBER:
PROJECT OFFICER: Nancy Willis
DKTES OF WORK: July 1983 - April 1984
jr.'fn-J^" OT >rR>': Ca!tr.jr.ir.; F-eLTtic1^ ~l»n
TOTAL CDKTWkCIDR CDST: 51,081.15
KCJ>ESTATICK: Copies of Paid Invoices and Treasury Schedules
Voucher Voucher Voucher Treasury Schedule
Nurfcer Artxnt Pete Number and Date
19 52,746,326,71 5/14/84 7373 - 6/12/B4
-------
REM CCfsTRACT
• •
QJNIVACTOR:
CONTRACT .NO:
PROJECT OFFICER: Nancy Willis
DATES OF WORK: January 1983 - September 1983
TOTAL CONTRACTOR COST: $2,700.54
DOCUJtVTATIOK: Copies of Applicable Paid
Schedules
Invoices and Treasury
Voucher
tfjmber
5
6
"7
e
9
10-5
11-5
12-5
Voucher
Amount
$1,390,634.00
$1,400,297.64
$514,696.70
$536,463.25
$595,664.64
$779,789.39
$740,612.93
$632,019.55
Voucher
Date
3/15/83
4/15/83
5/17/83
6/15/B3
7/13/83
8/9/83
9/9/63
10/12/83 .
Treasury Schedule
NjRber arxj Date
7427
7495
7529
7571
7623
7696
7014
7055
- 4/13/83
- 5/18/83
- 6/14/83
- 7/19/83
- 8/10/83
- 9/21/83
- 10/14/83
- 11/14/83
-------
COST
CONTRACT NO:
DATES OP WORK: August 82 - June 63
SJMMAK* Of WORK: Renedial Action Master Plans (RAMPs)
77: S15,131-.2C
INVOICE
NUMBER
14
15
16
17
18
19
20
21
22
23
24
25
INVOICE
/mjsr
155,012.29
132,742.75
227,133.43
179,183.70
209,948.96
61,990.76
47,932.58
27,299.91
9,603.64
9,866.31
52,814.88
716.66
INVOICE
IATE
9/9/82
10/4/82
11/8/82
12/6/62
1/17/83
2/4/83
3/0/83
4/8/83
5/10/83
6/7/83
7/18/83
8/6/83
TREASJKf
NLM5E3
27193
27400
27593
27884
271228
01357
01462
01657
01709
227562
07652
07689
TREASJRX
DATE
10/29/82
11/30/82
12/17/82
1/19/83
2/28/63
4/1/83
4/21/83
6/6/63
6/20/83
7/19/83
8/26/83
9/16/63
DOCUCNTATIQN: Copies of Applicable Paid Vouchers and Treasury Schedules
-------
COST SUMMARY
FIT CONTRACT
CONTRACTOR:
CONTRACT NO:
DATES OF WORK: January 6, 1983 - August 1, 1983
SJMMftRy OF WORK: Provide assistance and oversight in conjunction with • "•'.
and during privately financed clean-up at site,
TC:V~. coNTSArrjF1 CD?:-: • »4 2 :>,7^4.22
DOCUMENTATION: Contractor Cost Sumary
Copies of Applicable Paid Invoices and TreasurySchedules
-------
VOUGiERS
VOUCHER MO.
4
5
6 - •
7
7
7
8
8
8
S
9
9
10
10
11
11
VOUCHER DATE
2/15/83
3/15/83
4/15/83
4/15/83
5/6/83
5/17/83
7/7/83
5/12/83
7/27/83
6/15/8-3
7/13/63
7/13/64
7/13/83
8/9/83
9/9/83
9/9/83
9/9/83
VOUCHER AHOUNT*
1,103,951.00
1,397,056.00
1,400,297.04
215,325.09
100,301.00
514,696.70
326,921.28
41,799.08
301,457.06
536,483.25
1,856,609.69
329,S23.15
595,664.64
320,452.68
806,210.55
510,833.30
744,198.52
TKEASUKf NO. AND DATE
7353
7427
7495
7495
7515
7529
7605
7522
7641
7571
7523
7623
7666
7696
7012
7014
3/15/83
4/13/83
5/18/83
5/18/83
6/6/83
6/14/83
8/4/83
6/8/83
8/22/83
7/19/83
8/10/83
8/10/64
9/8/83
9/21/83
1/13/83
10/14/83
Vouchers are not paid site specific? they are paid lunp sun to
individual contractors for work performed during a certain period of time,
-------
CDST
FIT
OKTRACT NO:
MIES Of WORK: May 30, I960 - December 10, 1982
SUMMARY OF WDHK: Provide assistance to Region in obtaining a complete scope
of work for clean up; perform work originally scheduled for subcontractor;
determine complete cost estimate for clean up; identification of generators
responsible for and the nature and quantity of cnemiccal wastes rcv «t ths
?5te? cTZ&T.ize, collate a.v? r.rre.ri2e it1:*; 5 :'•»•> 4\*l\ti^?.:: brsi/.^^.-. c;
r.:i' revert av generfe^?rs utiiizini tn* site; prepare a ger>erator ccsc
estimate for removal anc disposal of 'waste at the site; compare records
which were found at the ite with those furnished by the generators; review
site files to verify c;u&ntities of material shipped by various generators;
review ground waste study proposals for the site; determine the extent of
soil contamination and location of buried materials by utilizing geophysical
and soil boring techniques; assist in preparation of information being
•ent to generators as part of the enforcement action for the site; perform
winterization of the surface water treatment system.
TOTAL CONTRACTOR COST: 5212,813.16
DOCUJCNTATION: Contractor Cost Surtnary
Copies of Applicable Paid Invoices and Treasury Schedules
-------
FIT CDbTRACT -
— \KUOiERS
VOUCHER ND.
n
12
13
14
15
16
1?
20
19
18
23
25
27
26
28
30
38
37
36
34
33
32
•>_
41
40
39
44
43
46
45
49
48
47
51
SO
54
53
52
Dlflg
6/11/80
6/24/80
7/8/80
7/22/80
7/22/80
8/6/80
8/20/80
9/5/80
9/18/80
30/26/80
;-/2iA5
10/21/80
10/14/80
10/3/80
10/18/BO
11/26/80
12/22/80
12/9/80
1/5/81
2/2/81
3/30/81
3/18/81
3/18/81
3/2/81
3/2/81
3/2/81
-------
FIT QDNIHACT -
) VOJCHEFS CONTINUED
58
57
56
55
59
60
62
61
65
64
66
71
70
69
66
75
74
73
72
76
77
80
79
84
81
£2
83
85
86
91
90
88
89
94
92
97
95
98
99
10/27/81
10/27/81
10/14/81
10/5/81
11/11/81
11/23/81
12/21/81
12/8/81
1/19/82
2/16/E2
2/3/82
3/30/82
3/16/82
3/9/82
3/3/82
4/27/82
4/15/82
4/13/82
4/6/82
5/12/82
5/26/82 .
6/22/B2
6/18/82
7/21/82
7/7/82
7/7/82
7/7/82
8/4/82
8/19/82
9/28/82
9/24/82
9/1/82
9/16/82
10/26/82
10/1/82
11/23/82
11/9/82
12/7/82
12/21/82
438,294.03
61,414.45
396,213.00
567,596.00
454,656.00
341,249.00
549,640.00
465,916.00
529,988.00
237.385.00
458,819.00
454,585.00
529,771.00
163,855.00
526,452.00
623,477.00
71,111.00
566,002.00
148,220.00
509,382.00
444,487.00
586,112.00
15,602.00
446,201.00
34,512.00
148,220.00
550,425.00
673,909.00
469,978.00
598,722.00
141,737.00
508,473.00
425,279.00
472,725.00
148,220.00
467,486.00
722,473.00
373,919.00
640,037.00
7076
7076
7076
7076
7131
7182
7204
7182
7262
•72*0
7290
7457
7338
7336
7320
7445
7426
7414
7387
7467
7515
7553
7553
7624
7586
7586
7586
7651
7662
7051
7051
7700
7042
7139
7051
7212
7188
7222
72SO
11/3/81
11/3/81
11/3/81
11/3/81
12/8/81
1/13/82
2/3/82
1/13/82
3/4/82
3/2/82
3/17/62
6/2/82
4/13/82
4/9/82
4/2/82
5/19/82
5/14/82
5/11/82
5/3/82
6/9/82
6/24/82 .
7/14/82
7/14/62
8/18/82
8/2/82
8/2/82
8/2/82
9/1/82
9/15/82
10/21/82
10/21/82
9/21/82
10/15/82
11/22/82
10/21/82
12/26/82
12/15/82
1/7/83
1/17/83
-------
COST SJWiAKf
TAT CONTRACT
CONTRACTOR:
CONTRACT NO:
CKTES OF WORK: April 1980 to September 1982
SU-MARY OF WORK: Assist in obtaining liquid sanples; identify containers
fcv 1*1*1? maintain Iocs; identify danperous materials; evaluate direction
: -i. -. • :" •• '.•:" '-• '.--;!•• r*'-r•••-*' ?:..»-;•••• *«":>• D>r ii labeling,
~ r^-' m. .^.' p . .-..~ - '.v-~ ,'-"- •-. *,-' t" - ... ». ^ .L-f- ~ . ^ . i L- •' ' "... \ ». -•_ r -*...-"..
- —-••>! *•— t -.,-.. .--- «,..,-.- ... «>,». „..-...«./ C. , ,.^'~ ... ..___. .-.,;
caroon filter on site and return equipment to EDO: acccnpany various
company representatives on site to insure compliance with site safety
plans; determine type and size of treaonent system that will treat
run off fror. site; assist in monitoring the installation of the waste
water treatnent system on site; prepare a conplete listing of generators;
dates wastes were received on site, location of wastes and types of wastes.
TOTAL ODSITiACTOR COST: $47,560.11
Contractor Cost Sirrwry
Copies of Applicable Paid Invoices and Treasury Schedules
-------
TAT
}
ND.
26
25
28
27
29
29
31
33
32
34
35
37
40
41
42
43
45
44
46
46
4?'
49
50
52
53
54
55
56
51
58
57
61
64
63
62
66
65
67
68
69
71
70
VJJCTER DftTE
5/30/80
5/14/80
6/24/80
6/11/80
6/24/80
7/8/80
7/8/80
8/20/80
8/6/80
8/25/80
9/5/80
e .-" -. /" *
10/3/80
10/21/BO
10/28/80
11/11/80
11/26/80
12/9/80
12/2/80
12/22/80
1/19/81
1/5/81
2/2/81
2/17/81
3/2/81
3/2/81
3/18/81
3/30/81
3/27/81
3/2/81
4/27/81
4/13/81
5/26/81
6/22/81
6/8/81
6/8/81
7/20/81
7/9/81
8/5/81
8/19/81
8/21/84
9/16/81
9/1/81
UDUOiER WCUNT* TREASURY NO. AND DWE
108,763.00
159,552.00
133,815.00
164,264.00
36,669.00
131,115.00
262,222.00
132,805.00
214,630.00
32,036.00
117,569.00
99,817.00
10,936.70
166,475.00
166352.00
142,456.00
104,291.00
66,871.00
112,166.00
123,652.00
98,717.00
165,630.00
149,245.00
171,381.00
69,964.00
118,873.00
150,155.00
2,454.00
7,704.00
116,745.00
131,541.00
115,910.00
124,746.00
125,268.00
62,372.00
109,331.00
130,857.00
132,947.00
58,903.00
146,415.00
141,406.00
104,401.00
t
7258
7237
7311
7276
7311
7299
7342
7359
7359
73 S9
7359
7379
7021
7021
7045
7045
7045
7063
7060
7072
7082
7128
7101
7144
7186
7191
7191
7707
7207
7253
7191
7293
7262
7336
7364
7364
7364
7418
7403
7423
7443
7443
7034
7022
k
6/4/80
5/15/80
7/21/80
6/18/80
7/21/80
7/11/80
8/21/80
9/8/30
9/8/80,,.
9/8/80-
9/8/80
f- '23/?n
«•»,*'- if\r
10/24/80
11/18/80
11/18/80
11/18/80
12/12/80
7/12/81
12/24/80
1/13/61
2/81
2/23/81
3/2/81
3/19/81
3/23/81
3/23/81
4/2/81
4/2/81
4/1/61
4/23/81
5/22/81
5/5/81
6/24/81
7/14/81
7/14/84
7/14/81
8/12/81
8/3/81
9/14/81
9/25/81
9/25/81
10/6/81
10/1/81
•NOTE: Vouchers are not paid site specific; they are paid lurp sum
to an individual contractor for wort perfomed during that period of time.
-------
TOUCHERS OOKTINUiD
72
74
76 .
73
78
77
81
79
60
82
83
M
t-
88
87
86
91
92
90
93
94
96
97
98
99
104
9/29/81
10/5/81
10/27/81
10/5/81
11/23/81
11/10/81
12/21/81
12/8/81
12/8/81
1/5/82
1/19/82
2/1/82
3/19/82
3/16/82
3/3/82
4/27/82
4/28/82
4/13/82
5/12/82
5/26/82
6/17/82
6/22/82
7/7/82
7/21/82
9/24/82
128,963.00
344,422.00
203,384.00
22,108.00
235,030.00
257,030.00
232,501.00
€0,773.00
254,402.00
169,172.00
277,092.00
289,555.00
685,342.00
274,258.00
335,501.00
255.00
354,947.00
283,331.00
249,818.00
200,146.00
318,658.00
271,767.00
266,989.00
203,471.00
7076
7076
7076
7076
7182
7131
7204
7182
7182
7252
7231
7270
'250
7362
7338
7336
7442
7414
7414
7467
7506
7544
7553
7586
7610
7062
n/3/81
11/3/81
11/3/81
11/3/81
1/13/82
2/2/82
2/3/82
1/13/82
1/13/82
2/11/82
2/15/82
3/8/82
4/20/62
4/13/82
4/9/82
5/19/82
5/14/82
5A1/B2
6/9/82
6/25/82
7/12/82
7/14/82
8/2/82
8/13/82
10/22/82
-------
CDST SJWARY
osc LET OOKTRACT
CONTRACT NO:
DATES OF WORK: August 1982
SUMMARY OP WORK: Place aggregate in filter tanks; install back flush
and inf fluent lines, sunp pumps; interconnecting pipking, install
cartoon and pea gravel move tank; fabricate and install under drain,
place pea gravel.
INVOICE INVOICE TREASURY NUMBER
NUMBER AMOUNT AND DATE .
8252 $11.999.26 less 5% » 511,399.30 7014 10/K/82
8252 5% returned (final) » 539.21 7197 2/28/82
TOTAL CONTRACTOR COST: Sll,<>38.51
DOCUMENTATION: FKD SPUR Repcr., 'date^ .Tune 30,
Ccpiesd of Applicable Paid Invoices and Treasury Schedules
-------
COST
CONTRACTOR: Environmental Monitoring Systens Laboratory
PROJECT NO: AMD 83039
SUltttFy OP WORK: Aerial photography and analysis support
TOTAL CDNIKACTOR COST: $10,980.00
DOCWEOTATICN: Contractor Cost Sirnary,
-------
CDST SUMMARY
INTSRMSENCY
AGENCY: Department of Justice
IAG NO: AD15F2A090
SUWftKY OF WORK:
TCTAL IAG COST:
n Litigation
VOUCHER VOUCHER
NUMBER AMCXJOT
2100517 S 241,735.82
2RQ0362 383,571.85
3R00103 439,786.81
3R00471 102,594.87
. .191,586.60
EAUS OF IAG VOUCHER
SERVICE AMOUNT
1st Otr. FY 62 $ Ir861.48
2nd Otr. PY 82 465.37
3rd Otr. FT 82 11,066.81
4th Otr. FY 82 69,663.70
4th Otr. n 82 10,945.41
Oct. /Nov. 1982 16,044.21
$110,046.98
EXULTATION: FMD SPUR Report, dated June 30, 1984
Copies of Applicable Vouchers of Withdrawal
-------
APPENDIX F
INFORMATION COVERED BY THE PRIVACY ACT
-------
INFORMATION COVERED BY THE PPIVACY ACT
The following list identifies those types of personal
information that must be redacted before cost documentation
may be produced durinq discovery or at trial. It must be noted
that this list is not all-inclusive. Because of the widely
varying types of invoices, vouchers, forms, and .other documervt'si
that will be produced, there may be other types of information/'
not identified here, that are entitled to be withheld from
disclosure'. ' ' ' .
• Social Security Numbers
* Credit card numbers
* Type of credit card (as indicated on either the
card imprint, on the pre-printed form, or hand •
written)
• Home address
0 Home telephone number
6 All non-business calls (place and number called,
time, amount, and bill total) on personal telephone
bill
• Drivers license number
* Comments on travel voucher such as "Stayed with
Relatives"
* Annual and sick leave balances
e Timecard or timesheet comments
0 Coded information on front of timecard
In addition, as noted in the text, all information relating
to sites other than the one for which the documentation, is to
be produced should be redacted. This typically invloves only
timesheets, timecards and travel vouchers.
-------
APPENDIX G
SAMPLE STIPULATION/PROTECTIVE ORDER
-------
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF
UNITES STATES OF AMERICA,
Plaintiff,
Defendants
Civil Action No.
STIPULATION AND PROTECTIVE ORDER
Plaintiff United States of America and defendants
have hereby stipulated that discovery in this
case will necessarily involve production of confidential
commercial and financial information. In view of this
stipulation, the Court finds that good cause exists for issuance
of a protective order. Upon consideration of the joint motion
for such an order filed by these^ parties, and pursuant to Rule
26(c), Federal Rules of Civil Procedure, IT IS HEREBY ORDERED:
-------
- 2 -
*
1. The United States may designate as "confidential
material* all or any part of: (1) its answers to interrogatories;
(ii) transcripts of depositions of its officers, directors,
employees, agents, and representatives; (iii) documents produced
by it; and (ivj any other discovery or disclosure made by it in
this litigation. The United States of America will make that
designation only after a bona fide determination that the
material contains "confidential information." As used in this
order, the term "confidential information" means proprietary
technical or commercial information designated as such by a
party producing such information, and constituting trade secrets,
confidential know-how, proprietary information, and the like,
which relates to a product or products or a commercial operation
used or proposed to be used, or which relates to or contains
financial, research or commercial information generated by
said party.
2. The designation of confidential material shall be
made in accordance with Paragraph 3 of this order, shall occur
prior to, or contemporaneously with, the production or disclosure
of that material or information, and shall be binding upon all
parties subject to Paragraph 9 of this Stipulation and Protective
Order.
-------
- 3 -
»
3. Any document, any written statement, and any transcript,
copy, excerpt, synopsis, summary or note pertaining to any such
document or statement, or to any oral statement, which contains
confidential information shall be stamped conspicuously with
the word "CONFIDENTIAL" prior to production. A party producing
"CONFIDENTIAL" documents will segregate the documents as to
which confidentiality is claimed, provide a list of said documents,
or otherwise "flag" the documents so that other parties are
notified of the claims. The designation and trsnsnittal of
confidential material shall be made by letter from the plaintiff
properly indicating that those documents which are confidential
are subject to this Protective Order;*
4. Any party may object to matter marked "CONFIDENTIAL"
by the United States and may apply to the Court for an orrter
removing such confidentiality at any time following production
of the document or thing in question, provided, however: (i)
the party making such application shall comply with [applicable
local rule, if any] in connection therewith; and (ii) nothing
in this paragraph shall alter the burden of proof which otherwise
would apply to a determination whether-the particular claim of
confidentiality is justified. Material or information claimed
-------
- 4 - -
•
to be confidential that is subject to a dispute as to whether
it is in fact confidential material or information shall,
until further order of the Court, be treated as confidential
in accordance with the provisions of this Stipulation and
Protective Order.
5. Material or ir.fonr.ation designite- confidential under
this Stipulation and Protective Order shall not be used or
disclosed by any party for business or competitive purposes, or
for any purpose whatsoever other than for the preparation for,
and trial of, this action and any appeal therein.
6. Counsel for the party who obtains material or
information designated confidential under this Stipulation and
Protective Order froir. the United States of America, or counsel
for any other party or any person or entity not a party, shall
not disclose or permit disclosure of this material or information
to any other person or entity, including without limitation any
officer, director, employee, agent, or representative of the
party who obtained disclosure, except in the following
circumstances:
a. Disclosure may be made to employees of counsel
who have a direct functional responsibility for the preparation
and trial of this action or any appeal therein. Any employee
to whom disclosure is made shall be advised of, and become
-------
- 5 -
*
subject to, the provisions of this Stipulation and Protective
Order requiring that the material and information be held in
confidence. A list of such employees must be furnished to
counsel for the party asserting confidentiality five (5) business
<-<•
days before disclosure is made. Counsel for a party includes"' *. '•&^
in-house counsel. Employees do not include persons, firms or
corporstions engaged by counsel on a contract basis., who £.:•.=. 11 be-.
subject to the requirements of Paragraphs 6(b) and 6(c) of this
Stipulation and Protective Order.
b. Disclosure may be made to consultants or experts
("Expert(s)"} employed by a party or counsel to a party to
assist counsel in the preparation and trial of this litiqation.
Prior to disclosure to any Expert, the Expert must agree to be
bound by the terrriS of this Stipulation and Protective Order by
executing the Confidentiality Agreement annexed hereto as
Exhibit A ("Agreement"), and he must be identified in writing
to counsel for the party asserting confidentiality not less
than ten (10) business days before disclosure is made to the
Expert. Identification of the expert shall include the expert's
name, business address, telephone number and the name(s) of
companies for which he is currently employed and by whom he
may have been employed for the period of one year prior to his
disclosure. A copy of each executed Agreement shall be furnished
not less than five (5) business days prior to disclosure to
-------
- 6 -
•
the Expert to counsel for the party claiming confidentiality
under this Stipulation and Protective Order. If counsel for
.the party asserting confidentiality objects to disclosure to
any Expert, then disclosure shall not then be made. Any dispute
in connection with disclosure of material or information claimed
to be confidential shall be presented to the Court for
determination.
c. In connection with any proceeding in this action,
disclosure may be made to witnessess who are officers, directors,
employees, agents, representatives, or Experts to the party who
designated the material or information as confidential. With
respect to any other person who is a witness or Expert witness,
disclosure shall not be made unless and until that person agrees
to be bound by the terms of this Stipulation and Protective
Order by executing the Agreement described in subparagraoh (b)
above, and that, person is identified in writing to counsel for
the party asserting confidentiality not less than ten (10)
business days before disclosure is made to the witness or Expert
witness.prior to the date set for the proceeding. Identification
shall include that information outlined in Paragraph 6{b) of
this Stipulation and Protective Order. If counsel for the
party asserting confidentiality objects to disclosure to any
person who is a witness or Expert witness, then disclosure
-------
- 7 -
*
shall not be made. Any dispute in connection with disclosure
of. material or information claimed to be confidential shall be
presented to the Court for determination.
7. .Counsel for any party who obtains material or
information designated confidential under this Stipulation and
Protective Crdsr from any ether party, counsel to any other
party, or any person or entity not a party shall keep that
material or information within its exclusive possession and
control and shall immediately place the material and information
in a secure and segregated facility. Except as provided in
Paragraph 6 above, no person shall have access to the foregoing
facility.
8. Each party, counsel for each party, and any
VS*J
person, witness, Exp"ert, or entity not a party to this action
who'obtains access to material or information designated
confidential under this Stipulation and Protective Order,,shall
not make copies, duplicates, extracts, summaries, or descriptions
of the material or information or any portion thereof.
9, All depositions of persons with knowledge of cost
documentation and EPA contractor costs in this action shall be
held in the presence only of the deponent, officers of the Court,
including the reporter, representatives designated by the
Plaintiff, and persons described in Paragraph 6, above.
10. To the extent that any answers to interrogatories,
exhibits, transcripts .of depositions, responses to requests for
-------
- 8 - •
»
admission, or any other papers filed or to be filed with the
Court reveal, may reveal, tend to reveal, cr may tend to reveal
any information claimed to be confidential by any other party,
counsel to any other party, or any person or entity not a party,
such documents shall be filed in sealed envelopes or other
appropriate sealed containers on which shall be endorsed the
caption of this litigation, an indication of the nature of the
contents of such sealed envelope or other container, the word
"CONFIDENTIAL", and a statement substantially in the following
form:
"This envelope, .containinq documents
which are filed in this case by
• _____ , ("the producing
party") is not to be opened and
the contents are not to be displayed
or revealed except by order of the
Court or consent of the producing
party."
In additional,.counsel for the party asserting confidentiality
should be so informed no less than ten (10) business days before
the date set for trial, motion, or other proceeding. Upon the
request of the party or counsel for the party claiming
confidentiality, the evidence shall be submitted in camera and
•hall be sealed, and any proceeding involving disclosure of the
evidence shall be held in camera.
11. Notwithstanding anything to the contrary, the
plaintiff is free to exhibit material or information designated
as confidential by that party to any person or entity not
-------
- 9 -
»
subject to the protective procedures set forth in this stipulation
and Protective Order, and such exhibition shall not result in a
waiver of the claimed confidentiality.
12. Upon final termination of this action, whether
by judgment, settlement, or otherwise:
a. Counsel cf record f~:: e^:;1- --arty-, person,-
and entity who obtained material or information claimed to be
confidential shall assemble and return to the party, person,
and entity or their counsel who disclosed the material or
information and claimed confidentiality therefor, all materials
in his or its possession or subject to his or its control that
reveal, may reveal , tend to reveal, or may tend to reveal
confidential materials or information, except that all such
materials constituting the work product of counsel of record
shall be immediately destroyed; arid .
b. The Clerk of the Court shall maintain in
perpetuity under seal all papers filed under seal with the
Court, including, without limitation, transcripts of deposition
answers to interrogatories, responses to requests for admission,
notion papers, memoranda of law, documents, and exhibits as to
which material or information a claim of confidentiaity was
made.
-------
CONFIDENTIALITY AGREEMENT
The undersigned is currently working at
which is located at . During the past year
the undersigned has been employed by the following companies
located at the corresponding addresses:
The undersigned hereby acknowledges that he (she) has read
the foregoing Stipulation and Protective Order executed by the
attorneys of record for the parties of the action presently
pending in the U.S. District Court for the District of
entitled United States v. , understands the
terms thereof, and agrees, upon threat of penalty of contempt, to
be bound by such terms. The undersigned understands that documents
which have been designated as confidential are likely to cause
substantial harm to the'applicable business' competitive position
if disclosed or handled in any manner other than that expressly
directed by the Stipulation and Protective Order. Among other
responsibilities, the undersigned shall keep the material within
his/her exclusive possession, place the material in a secure and
segregated facility, shall not make copies, duplicates, extracts,
summaries, or descriptions of the material or information or any
portion thereof, shall not disclose the information to persons
other than those specifically authorized by the protective order,
-------
- 2 -
*
and shall not use or disclose it for business or competitive
purposes. The undersigned understands that the pledge of secrecy
under this agreement continues after the lawsuit is over, and
extends to confidential .information disclosed in the future as
- ' * • . "• • ''•'•*%•• ••*
well as to confidential information already disclosed to the J* "-'
undersigned. Furtherr.ore, the undersignff understands that, a
breach of this Stipulation and Protective Order may constitute
contempt of court and may result in damage to the competitive
position of one or more private entities which may subject him
(her) and/or his (her) employee to civil claims for damages by
these entities.
Date: ' Signed;
-------
APPENDIX H
*
MODEL CONFIDENTIAL BUSINESS INFORMATION LETTER
-------
Contractor
Address
City, State, Zip Code
Re: Disclosure of Contractor Information in the case of
U.S. v. • ,
CERCLA Section 107 Cost Recovery.Action
Dear Sir or Madam:
As you know, the United States Government, through the
Environmental Protection Agency, has contracted with your firm
to undertake certain activities to assist in hazardous waste
site cleanup under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (CERCLA). The United
States has commenced the above-referenced action against liable
parties seeking reimbursement of all expenses incurred and to
be incurred by the government and its contractors for work done
at the site.
To prove the costs incurred in cleaning up the site,
however, it is necessary to disclose certain documents during
the course of litigating CERCLA cost recovery actions. In
particular, all contractor documents in the possession of the
U.S. EPA might be required to be disclosed, including, but not
limited to:
(1) Paid processed invoices;
(2) Timesheets, timecards and other payroll expense
information;
-------
— 2 —
»
(3) Travel expense receipts;
(4) Equipment expense receipts;
(5) Summaries of hours> costs per hours, overhead
costs and subcontractor costs;
(6) Technical Directive Documents (TDDs) and TDD
Acknowledgements of completion (TDD-AOCs).
It is our understanding that certain information contained
in the documents noted above has been claimed as confidential
by your company under 40 C.F.R. Part 2.
The purpose of this letter is to give you an opportunity
to comment on our plan to make these documents available to the
defendants and the court, and to request your consent to that
release.
To protect the information, you have provided us, the
United States proposes the following procedures. Once a request
for production of documents is received that may require
/
confidential business information to be disclosed, we will
contact counsel for the party requesting the documents to
determine if an agreement can be.reached in which the documents
are released under the terms of a stipulation and protective
order. The stipulation and protective order will guarantee
that the documents will only be disclosed to certain persons or
parties for certain limited purposes and will require that
those persons or parties agree to sign a confidentiality agreement.
A copy of the stipulation and protective order we propose to
use is attached for your review.
-------
- 3 -
*
Once the order is entered and counsel for the party
requesting the information has executed the appropriate
confidentiality agreements, the information will be produced.
You will be notified when the documents are produced.
In the event that the requesting party declines to agree
to production under the terms of a protective order* the United
States will either redact all confidential business information
and produce the documents or decline to produce the documents
altogether. In either case, the United States will be prepared
to submit memoranda to the court opposing production unless
under the terms of a protective order.
The Agency recognizes your need to keep certain information
confidential. We hope that this strategy will satisfy your
concerns.
Sincerely,
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APPENDIX I
EXAMPLE MOTION FOR PROTECTIVE ORDER
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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF
UNITES STATES OF AMERICA,
Plaintiff,
Defendants
Civil Action No,
JOINT MOTION OF PLAINTIFF, UNITED STATES OF AMERICA
AND DEFENDANT FOR A PROTECTIVE ORDER
Plaintiff United States of America ("the Government") and
defendant. hereby move the Court to
enter, a protective order in this case, pursuant to Rule 26(c),
Federal Rules of Civil Procedure. A Stipulation and Protective
Order is attached.
Discovery in this case will necessarily involve production
by the United States of financial information prepared and
submitted to it by its contractors. Those contractors would
be irreparably damaged by routine disclosure of this confidential
material and, accordingly, all parties urge the court to allow
the United States to impose the safeguards embodied in the
stipulation and proposed protective order.
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Administration of the provisions of the Stipulation and
Protective Order will be handled primarily by the parties and
*
should involve little, if any, Court time. The proposed order
contemplates an initial pood faith designation"of confidentiaity
by the United States. In the event that one or wore defendants
object to the claim of confidentiality of particular information,
the Court will be asked to review the information _in. earn era and
make a determination regarding production. If there is no
objection, however, the Court need not be involved at all. The
United States does not intend to indiscriminately mark every
document confidential and will exercise its best judgment and
put forth substantial efforts to minimize discovery disputes.
A protective order such as that urged by this motion will
enable the United States to respond fully to the Defendant's
discovery reouests and, at the same time, ensure that confidential
competitive ar.£ ' f inancial information will not be disseminated
in a manner inconsistent with the EPA contractors' business
interests or with the proper administration of justice.
WKEFEFOP.E, the Government and the Defendant's respectfully
request the Court to sustain this motion and to enter the
Stipulation and Protective order attached.
Respectfully submitted,
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[Name]
United States Attorney
By:
[Name]
Assistant U.S. Attorney
[Address]
ATTORNEY FOR PLAINTIFF
By:
[Name]
[Address]
ATTORNEY FOR DEFENDANT
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APPENDIX J
DELEGATION OF AUTHORITY FOR DEMAND LETTERS
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 104«0
MAR , 8 1
O"iei or
•OLIO WASTE AMD tMtMdtNCV *l«»ONM
MEMORANDUM
SUBJECT: Delegation of Authority to Issue Demand Letters
O^V jXoO *-w CO* )
Office of Waste Programs Enforcement
TO: Regional Administrators, Regions I - X
Directors, Air £ Waste Management Division
Regions III, IV, VI, VII, VIII, X
Directors, Waste Management Division
Regions I, V
Director, Office of Emergency and Remedial Response
Region II
Director, Toxics and Waste Management Division
Region IX
Directors, Environmental Services Division
Regions I - X •
Regional Counsel, Regions I - X
Purpose
This memorandum formally transfers the authority to issue
demand letters for recovering costs of CERCLA response actions
from the Director, Office of Waste Programs Enforcement to the
Regional Administrators.
Background
Where CERCLA funds are expended the Agency will attempt to
recover response costs from the party or parties who are liable
under section 107 of CERCLA.v The first formal step in recovering
Trust Fund expenditures is the issuance of a demand letter from
EPA to the responsible party or parties for payment of response
costs. Up to now, the Regional office has been responsible for
preparing the demand letter and sending it through the Office of
Waste Programs Enforcement for signature and Issuance by the
Director. Now that Headquarters has provided guidance and held
workshops on cost recovery actions, the necessity of Headquarters'
role in the issuance of demand letters has declined.
Policy
Effective immediately, Regional Administrators have authority
to issue demand letters in CERCLA 107 Cost Recovery cases. No
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review or advance concurrence from EPA Headquarters will be
neqessary. Regional Administrators may further delegate
authority for issuance of demand letters to the appropriate
Regional Division Director.
Demand letters may be issued after all appropriate
documentation on and accurate summaries of removal costs are
available (See Charter S of Draft Cost Documentation Procedures
Manual, &<• pt.ejr-.btr IS?:.) and generally should be issued before
the Cost Recovery case is referred to EPA Headquarters.
EPA Headquarters will not accept a Cost Recovery referral
package that does not include a copy of the demand letter and
response. Headquarters will make exceptions to this policy
only for Cost Recovery cases that are referred to Headquarters
prior to April 1, 1984 or cases for which the Region provides
a statement with the referral package explaining why a demand
letter was not issued. If the case is then referred to the
Department of Justice for litigation, DOJ will ordinarily issue
a demand letter befpre filing the case.
procedures for preparing and issuing demand letters are
contained in the following EPA guidance documents: "Guidance
on Pursuing Cost Recovery Actions under CERCLA" (August 1983,
pp. 20-30) and 'Cost Documentation for CERCLA 107 Efforts"
(September 1983, p. 8).
cc: William N. Bedeman, OERR
lirk t. Sniff, OECM
Lisa K. Friedman, OGC
Glenn Unterberger, OLEP
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