-------
848
579 FEDERAL SLPPLEMENT
Apex Oil Co that a 'person in charge" can
include both the  individual employee  and
the  corporation    Although  the  issue in
Apex Oil Co was whether an owner-opera-
tor (the corporation in that case) could be
heid liable as a 'person m charge," Id at
1292-93, this Court considers the Eighth
Circuit's analysis significant in defining an
emplo>ee's liability under CERCLA
  Section 1321(b)(5) speaks m terms of any
  person in charge  We note that it would
  not  be inconsistent with  the  statutory
  language to hold both the employee and
  the corporation to its penalties [sic] for
  failure to report a spill
Id at 1293 n 6   "Person" as defined  in 33
USC  §  1321(a){7) is almost identical to the
definition  of  "person"  in  42   USC
§ 9601(21)  This  Court  finds that a  'per-
son" arranging for the disposal of hazard-
ous  substance should be  given a liberal
interpretation that may include both the
employee and corporation  Defendant Lee,
acting as an employee, had the responsibili-
ty to and did arrange for the disposal of
the hazardous waste pursuant to 42 U S C
§ 9607(aX3)
  [IS]  Finally,  due to  defendant  Lee's
unique position as both vice president in
charge of the Vernon plant and as a major
stockholder, active!} participating in  NEP
ACCO's  management,  he can be classified
as both an owner and operator of the NEP-
ACCO plant, pursuant to section 107(aXD,
42   USC   § 9607(aXD    42   USC
§ 960K20KA) states that an "owner or op-
erator"
  means     (n) in the case of an  onshore
  facility  or an offshore facility anj  per-
  son owning or operating  such facility
29  An employee of a corporation can be person
  alK liable for activities over uhich he had direct
  control and supervision  Defendant Lee  along
  with defendant Michaels  owned and operated
  the NEPACCO plant  Both were acme!\ in
  voKed in  the planning  and  implementation of
  \EP4CCO"s disposal practices  See Escude Cruz.
  v Onho Pharmaceutical  Corp  619 F 2d 902
  907 (1st Cir 1980) (employee was the  guiding
  spirit or  centra! fieure in the corporate acmi
  iv)  Mark v Polaroid Corp  237 F 2d 438 435
  (1st Cir 1956) (closets held corporation with of
  ficers who were both officers and shareholders)
  Rohm and Haas  Co v  Dawsort Chemical Co
                   Such  term does  not include a  person,
                   who,  without  participating  in  the  man-
                   agement of a     facility, holds indicia of
                   ownership primarily to protect his inter-
                   est in the      facility
                 The  statute literal!}  reads  that a person
                 who  owns interest  in  a facility and is ac-
                 tively participating  in its management can
                 be held  liable for the disposal of hazardous
                 waste a  Such a construction appears to be
                 supported  by  the  intent  of  Congress
                 CERCLA  promotes the timely cleanup of
                 inactive hazardous waste sites   It was de-
                 signed to insure, so far as possible, that the
                 parties responsible  for the creation of haz-
                 ardous  waste sites be liable for  the re-
                 sponse costs in  cleaning them up10  Con-
                 gress has  determined that the persons who
                 bore  the fruits of hazardous waste disposal
                 also  bear  the costs of cleaning it up   The
                 Eighth Circuit adopted the definition given
                 "owner    or    operator",    33   USC
                 § 1321(aX6), by the Fifth Circuit in United
                 States v Mobil Oil Corporation, 464 F 2d
                 1124, 1127 (5th Cir 1972)
                   The owner-operator of a  vessel  or a
                   vacility [sic] has the capacity to make
                   timely discovery of oil discharges   The
                   owner-operator has power to direct the
                   activities  of persons  who control  the
                   mechanisms  causing   the  pollution.
                   The owner-operator has the capacity to
                   prevent and abate damage  According-
                   ly, the owner-operator of a facility  gov-
                   erned by the  WPCA, such as the Mobil
                   facility here, must be regarded as a "per-
                   son in  charge" of  the  facility for  the
                   purposes of § 1161   A more restrictive
                   interpretation would frustrate  congres-
                   Inc  557 FSupp 739  818-19 (SD Tex 1983)
                   and Chanel Industries  Inc  v Pierre Marche
                   Inc  199 F Supp 748 (E D Mo 1961)
                    From the language  of the  statute either an
                   owner  or operator or  both can be held  liable
                   In some circumstances these parties ma>  be the
                   same or separate anc distinct persons.

                 30  See  Waste Industries, 556  FSupp  at  1316
                   Georgeoft 562 FSupp  at 1312 and the Congres
                   siona!  statements citec therein  See also H R
                   1016 supra at I reprinted in [1980] I SCode
                   Cong & Ad Nev.5 at 6119

-------
          LMTED STVTES
           V,
NORTHt  VSTERN  PHARM  4. CHEM  CO       849
Cite** 37* r.Supp 823
   Monal purpose  b\  exempting  from the
   operation of  the  \ct a  large class of
   persons  who  are  uniquely  qualified to
          the burden imposed bv it
 4per CW Co  530 F2d at 1*H (emphasis
 added)   Defendant Lee had the capacity to
 control  the disposal of hazardous waste at
 the NEPACJCO plant,  the power to direct
 the negotiations concerning the disposal of
 wastes  at the Dennev farm site,  and the
 capaciU to prevent and abate the damage
 caused by the disposal of hazardous wastes
 at the Dennev farm site   Finally Lee was
 a major stockholder in NEPACCO and ac-
 tively participated  in the management of
 NEPACCO  in  his  capactU  as  vice-presi-
 dent   The Court finds that the evidence
 presented ts sufficient to impose liability on
 Lee as  an "owner and operator"  pursuant
 to section 107(aXD, 42 U S C  §  9607(aXD
 To  hoW otherwise and  allow Lee  to be
 shielded by the corporate veil "would frus-
 trate  congressional purpose by exempting
 from the operation of the  A.ct a large ciass
 of persons who are uniquely qualified to
 assume  the  burden  imposed by [CERC-
 LA)"  Id.

  Michaels
  Michaels was present and supervised the
 construction and operation of the Verona
 plant  for one year (1970) prior to returning
 to his home state, Connecticut   He was
 not present at the Verona plant during the
 disposal of hazardous waste at the Denney
 farm  site  Michaels made frequent visits
 to the Verona plant in order to check on its
operations   Although defendant Lee fre-
 quernh   reported  to  Michaels concerning
the plant's operations the plaintiff failed to
establish that  Michaels  had  prior  direct
 know ledge of the proposed plan to dispose
of hazardous wastes at the  Denne>  farm
 site   Michaels  was aware of and actneh

31  See  supra notes 29-30 and  accompatu ing
  ie\i
   This  Coun having found defendant Michaels
  liable  pursuant to section  107(a)ll) dix.s noi
  dtem a nccxssan. to determine his liabiluv pur
  suani 10 section 107(a>(3) as a person who
  arranged for the disposal ol hazardous uasie 31
            participated in  previous  negotiations con-
            cerning the disposal  of  hazardous  waste
            with Rollins Purle and  1PC   U  was  not
            established whether N'EP-lCCO was  under
            contract with I PC at the time of  the Den-
            ney farm disposal   Michaels was  aware of
            the dangers  resulting from exposure  to
            dioxm  and  other hazardous  substances
            Michaels and defendant Lee were  verv con-
            cerned about establishing and maintaining
            safetj  precautions  against  exposure  to
            these substances  Michaels was the found-
            er and president of the NEP4CCO opera-
            tion m Verona, as well as, a major stock-
            holder  m  the  corporation   Michaels had
            the capacity and  general  responsibility  as
            president to control  the disposal of hazard-
            ous waste at the NEPACCO plant,  the
            power to direct the negotiations concerning
            the disposal of wastes at the Denney farm
            site, and the capacity to prevent and abate
            the damage caused by the disposal of haz-
            ardous wastes  at the Denney farm site
            See Apex Oil Co, 530 F 2d at 1293, quoting
            with favor  United  States  v Mobil  Oil
            Corp,  464 F2d 1124, 1127 (5th Cirl972)
            In view of these factors, the Court finds
            that defendant Michaels is strictly liable as
            an "owner and  operator" of the Verona
            facility for the response costs incurred pur-
            suant   to  section  107(aXD,  42  USC
            §  9607
-------
850
579 FEDERAL SLPPLEMENT
pursuant  to  section  106 states that the
parties  shall  be liable for  "all  costs of
removal or remedial action incurred  bv the
United States    not inconsistent with the
national contingency plan  '   42  U S C
§ 9607 be necessary to abate such danger or
threat" caused by the hazardous waste site
and 'such relief as the public interest and
the equities of the case may require '  42
U S C  § 9606  presenting  evidence of incon-
                sistency    The   content    of   section
                107(aX4XB) lends support to this conclusion
                in stating that responsible parties are liable
                for "anj other costs of  response  incurred
                bv anv other person consistent mtfi the
                national  contingency  plan     ' (emphasis
                added)   On its face, section 107  nongovernmental entities
                and  that such entities must  affirmatively
                show  that their  actions were  consistent
                Clearh  the standard as set forth  bv sec-
                tion  107(aH4KA> is that  the costs  incurred
                must be  'not inconsistent with the national
                contingencv plan  '  Apparenth  Congress
                considered the different  standards and spe
                cificallv set forth that nongovernmental en-
                tities must prove their costs  incurred were
-------
           LMTED ST4TES v
NORTHEASTERN  PH*.RM
Clu u Sn F.Supp 123 6
  FSupp  1327  1347 (DPR 1973) atfd 602 F id
  12   (1st  Cir 1979)   construing   33   LSC
  §§  J321(f)U)  and (2) of FWPCA  respectiveK
  shall be liable to  the  Untied  States for  the
     579 F SuOB —21
              [21]  The  defendants argue  that  the
            government cannot  recover  the attomej
            fees  incurred in  the prosecution of  this
            action   It is  well settled law that a part)
            cannot recover attorney fees unless provid-
            ed for by  contract  or statute   Alyeska
            Pipeline Co  v  Wilderness  Society  421
            US  240  262  95 SCt  1612   1624,  44
            LEd2d   141  (1975),   Bagby  v  Memll
            Lynch, Pierce,  Fenner and  Smith,  Inc
            491 F2d 192 (8th Cir 1973),  and City of
            Grandvtew v Hudson, 377 F2d 694 (8th
            Cir 1967)  The  Court finds that CERCLA
            specifically  allows  for  the recovery of at-
            torney   fees    Under  CERCLA  section
            107UX4XA), 42  U S C  § 9607(a)(4XA) res-
            ponsible parties are liable for "all costs of
                                          "  Section
                                        removal" to
            mean, inter alia, "action taken under sec-
            Gon  9604(b)    "   42  USC   §9601(23)
            Section 104(b) states, in pertinent part. .
               Whenever the President is authorized
              to act pursuant to subsection (a) of this
              section      [he] may undertake such
              planning, legal, fiscal, economic, engi-
              neering, architectural, and other studies
              or investigations as he may deem neces-
              sary or appropriate to plan and direct
              response  actions,  to recover the costs
              thereof, and to enforce the provisions of
              this chapter
            42 U S C § 9604(b) (emphasis added)   Ac-
            cordingly, since the plaintiff acted pursuant
            to section 104(a), the Court finds that under
            CERCLA, the defendants are jointly and
            severally liable for, and the plaintiff is enti-
            tled to recover, all litigation costs, includ-
            ing attornej  fees,  incurred  by  plaintiff
            The Court further finds that the defend
            ants are jointh  and severalK  liable to the
            plaintiff  for all costs  including salanes and
            expenses M incurred b\ plaintiff associated
            with such activities as  monitoring assess-

             actual costs incurred  not to require a show, ing
             of reasonableness   See also Lnued States v
             Beam Inc, 401 FSupp  1040  1045 (W, D K\
              1975)

            33 See United Stales i Hollywood Marine Inc
             519 FSupp 688  692 (S DTex 1981)  and Lmted
             Stales v Slade Inc  447 F Supp 638 645 (E 0
-------
852
579 FEDERAL SUPPLEMENT
ing and evaluating the release of contami-
nants and the taking of actions to prevent
minimize or mitigate damage  which might
result from a release or threat of release of
contaminants  from the Denney farm site
  122}   Plaintiff seeks' the  award  of pre-
judgment interest  In  the absence  of stat-
utory provision  the  granting of prejudg
ment interest lies within the discretion of
the Court   Mid-America Transportation
Co , Inc  v Rose Barge Line, Inc , 477 F 2d
914 (8th Cirl973), and Bricklayers' Pen
sion Trust Fund v  Taianol 671 F 2d 988
(6th  Cirl982)   Although  CERCLA  does
not specifically address the issue  of pre-
judgment interest  the  Court  finds  the
Sixth Circuits  ana)> sis  in Bricklayers'
Pension Trust Fund v Taianol of assist-
ance, in stating
    In the absence of legislative direction,
  the Supreme Court, again in [Rodgers v
  (jnited States, 332 U S 371, 68 S Ct 5,
  92 L Ed 3  (1947) ], directed that the deci-
  sion to grant or deny prejudgment inter
  est should hinge on  whether to do  so
  would  further the  congressional  pur
  poses underlying the obligations imposed
  by the statute in question  332  L S  at
  373 68 S Ct at 6
Bricklayers' Pension   Trust  Fund,  671
F 2d at 989   In determining this issue the
Court must be mindful of the Congression-
al intent to impose liability on those  respon-
sible parties for "all costs" incurred in tak-
ing remedial and removal action   It was
the intent of  Congress that CERCLA be
given a broad interpretation so as not to
restrict  the  liability  of those  responsible
parties   It  is also  well  established that
prejudgment interest ts compensatory  in
nature not pumti\ e  \n aw. ard of prejudp
ment interest  is not  foreign to  actions in
vohing  environmental  statutes    United
States  i   W/\ Zoe Colocotront 602 F >d
U 14 (1st Cir 1979)  I  mted Stale's i  Hoi
lyvood  \lannf  Inc  519 F Supp bS8 (S D
Tex 1981) and I nitid States  >  Valitoi-
^y Cooperage Co   -172 F Sufij; 4>4  458
(V\ D Pa 19791   Considering the intent of
      ss and  the equities invoked in thi
-------
                               CROOK ^  PEACOR
                               CIM u S7» F.Supp 153 UW4I
                                    853
  ORDERED that judgment is granted in
favor of  defendants  on  Count I of  the
amended complaint and it is further
  ORDERED that plaintiffs motion for de
claratory  relief  is granted  and therefore
the defendants  are jointly  and severally
liable for all future costs of removal  or
remedial action  incurred  by the plaintiff
relative to the Dennev  farm site that  are
not inconsistent  with  the national contin-
gency plan, and it is further
  ORDERED that the plaintiff shall within
thirty (30) davs from the entry of this order
submit an itemization of the costs incurred
by plaintiff after  December 10, 1980.  at
which time the defendants shall be granted
twenty (20) days to respond to the  plain-
tiffs itemization  of costs incurred, and it is
further
  ORDERED that defendants'  motion  to
strike plaintiffs reply bnef is granted, and
it is further
  ORDERED that upon a determination of
the amounts which plaintiff  is entitled to
recover, judgment will  be entered in  favor
of plaintiff and  against  defendants   on
Counts  II  and  HI of  the amended com-
plaint
   Wilson W CROOK,  HI. Plaintiff,
                   V
Donald R.  PEACOR.  William  B  Sim-
  mons, Jr. Enc J  Essene  E  William
  Hemnch, indixiduallx  and in their offi-
  cial  capacities, and The  Mmeralogical
  Societ\  of America a  Foreign corpora-
  tion, Jointh and Set erall}  Defendants
       Cn   A  No  83-CV-6063-A\

       Lnited States  District Court
           E D  Michigan S D

             Jan  31  198-4


    Former graduate student brought ac
tion against universitv professors and pub-
lishers of trade penodical alleging breach
of contract breach of fiducian duties, def-
amation  intentional infliction of emotional
distress interference with contractual rela-
tionship  and interference with prospective
advantage   Professors moved for dismiss-
al   The  District Court,  Feikens,  Chief
Judge, held that  (1) Eleventh Amendment
barred  action  for   monetary   damages
against professors in their official CLpacitj
but did not affect claim in anv other man-
ner,  (2) action was not subject to dismissal
on grounds professors' actions were pnvi
leged,  (3) statute of limitations  began to
run on date  of publication,  and (4) com-
plaint  failed  to state cause of action for
breach of fiduciary duty  and contract.
    Order accordingly

1  Federal Courts <&=>269
    Action brought  by  former  graduate
student against professors, in their individ-
ual and official capacities, based  upon pu-
blication  in  trade  penodical  discrediting
"discoveries" in graduate student's  thesis
and  suggesting means  by which interna-
tional  geological community  could  avoid
such misinformation  in future was barred
insomuch as  it attempted to impose  mone-
tary damages on professors in their official
capacity, but otherwise was not affected by
Eleventh  Amendment   USCA  Const
Amend 11
2  Libel and Slander «=51(4)
    Defamation action brought by former
graduate student against university profes-
sors based upon article  published by pro-
fessors in trade publication w hich discredit-
ed ' discoveries" in graduate students the-
si<; and suggested means b\ which interna-
tional  geological commumtv  could  avoid
such  misinformation in future  was  not
barred on ground action  of professors was
pnv ileged as habiluv could still be incurred
if malice or bad faith on  part of professors
   , demonstrated
3  Action ®=38( 4)
   Libel and Slander <&=27
    Single publication rule is common law
creation which applies to mass publication
-------
726
810 FEDERAL REPORTER, 2d SERIES
                                                                                         *!
in question is the kind normally performed
by a judge, second, whether the plamtiff
was dealing with the judge m his judicial
capacity.  The answer to the first prong is
already established.  Judge Sterhnske pre-
sided over the plaintiffs criminal tnal and
post-trial  proceedings and thus was per-
forming the normal duties of a judge  Sec-
ond, by virtue of her status as a defendant
in criminal proceedings, Eades' relationship
to the judicial system makes immunity ap-
propriate in light of the concerns expressed
in Bradley  Forrester v White, 792 F 2d
647 (1986)  The plaintiff was dealing with
the judge in an official capacity since the
acts  involved  post-tnal proceedings   As-
suming, arguendo, that the allegations of
the complaint are true, Judge Sterhnske's
actions are still judicial acts based upon the
rationale set forth m Stump   "This immu-
nity applies even when such acts are m
excess of their jurisdiction, and are alleged
to have been done maliciously or corrupt-
ly "  Pienon, 386 US  at 554, 87 SCt at
1218  We therefore hold that Judge  Ster-
hnske's  conduct,  albeit reprehensible,  is
cloaked  with absolute judicial  immunity

                  m
  [2]  Eades argues that defendants Buff
and Ewald are not shielded from liability
for damages under the doctrine of judicial
immunity   Plaintiffs rebance on our deci-
sion m  Lowe  v Letnnger, 772 F2d 308
(1985) is misplaced  In Love we said that a
court  clerk  enjoys  absolute  immunity
where he is performing nonroutane, discre-
tionary  acts akm to those performed  by
judges  There we said that the clerk of the
court was not entitled to quasi-judicial im-
munity  for allegedly concealing the entry
of an order   The duty to type and  send
notice after entry of judgment, the facts in
Lowe,  is  a non-discrefeonary,  ministerial
task   Here,  defendants Ewald and Huff
prepared and filed a false certificate sum-
marizing an instruction conference that al-
legedly  was  never  held, and altered the
docket to reflect that falsity   In so doing,
defendants Huff and Ewald breached  their
duties, and in that process exercised discre-
tion  As such, their duties had an integral
relationship with  the judicial  process and
                     are cloaked by the traditional doctrine of
                     judicial immunity.  Dteu  v Norton,  411
                     F2d  761, 763 (1969) (court reporter  and
                     court clerk, acting in discharge  of their
                     official  duties, were protected by doctrine
                     of judicial immunity), Bnscoe v. La Hue,
                     663  F2d 713 (1981) (court  reporters at
                     criminal proceedings  were immune from
                     liability under doctrine of judicial immuni-
                     ty),  Henry v  Farmer City State Bank,
                     808 F2d 1228, 1238 (7th Cir.1986) (court
                     clerks entitled to judicial immunity if their
                     official duties have an integral relationship
                     with the judicial process)
                      For the foregoing reasons, the judgment
                     of the district court is
                      AFFIRMED
                    UNITED STATES of America, Appellee,
                                      v
                    NORTHEASTERN  PHARMACEUTICAL
                      A CHEMICAL CO., INC., a Dissolved
                      Delaware Corporation, Edwin Michaels
                      and John W  Lee, Appellants.

                           Ronald Mills and Syntax
                               Agribusiness, Inc.

                         UNITED STATES of America,
                                   Appellant,
                                      v.
                    NORTHEASTERN  PHARMACEUTICAL
                      ft CHEMICAL CO, INC., a Dusoived
                      Delaware Corporation, Edwin Michaels
                      and John W  Lee, Appellees,

                           Ronald Mills and Syntex
                               Agribusiness, Inc
                             Nos. 84-1837, 84-1853
                         United States Court of Appeals,
                                 Eighth  Circuit
                           Submitted March  25, 1985
                             Decided Dec  31, 1986
                         Rehearing and Rehearing En Bane
                               Denied April 8,1987

                         United States brought action  against
                    chemical  manufacturer,  transporter  of
-------
                                 728
                     810 FEDERAL REPORTER, 2d SERIES
\
                                 spouse, Compensation, and Liability Act of
                                 1980, §§ 101(9X6),  107(aKD,  42 USC.A
                                • {§ 9601(9X6), 9607(aXD-        ^

                                 7. Health and  Environment  £& 5(5.5)
                                     Plant supervisor ff nchenucalmanufac-
                                 turer could be heM inmdlaffrflable for
                                 having arranged for traunortation and dis-
                                 posal of^ hazardous tsulslances where he
                                                kconnor handling and dis-
                                                    substances, and was
                                               sible for  arranging  for
                                              and disposal of  hazardous
                                             Comprehensive Environmen-
                                 tal Response, Compensation, and Liability
                                 Act  of   1980,  § 107(aX3),  42  USCA
                                 §  9607(aX3)

                                 8. Corporations *=>223, 336
                                    Shareholders and
                                 manufacturer who
                                 volved in or dtrectm
subs'
                                 rate acts which
                                 ration and Regpvetr JWT^ere individually
                                                    ; to imminent and sub-
                                                   nt to  health and envi-
                                                   Conservation and Re-
                                           of 1976, { 7003(a), as amended,
                                 42 US C.A. $ 6973(a)

                                 9. Corporations
                                    Capacity of
                                 sued is
                                 organized   Fed-R
                                 28 U.S C.A.

                                 10  Corporations «=»691
                                    Under  Delaware
                                 which  had forfeit
                                 failed to file
                                 lubon
                                 subjecfta sin action by federal govern-
                                 ment to^eniorce environmental laws   8
                                 Del C §278
                            corporation
                               but had
                             tary disso-
                        Stste, was stzl]
                                11. Health and Environment «=»25 15(51)
                                    Parties found liable for government's
                                response costs for  cleanup of hazardous
                                waste site under national contingency plan
                                had burden of proving that costs were in-
                                consistent with plan and therefore not re-
                                coverable   Comprehensive Environmental
                                Response  Compensation, and Liability Act
                                          of 1980, § 107(aX4MA,  6),  42  U.S.CA.
                                          § 9607(aX4XA, 6)

                                          12 Health and Environment «=»25.15(5.1)
                                             All costs  incurred by  government in
                                          cleaning up hazardous waste site that are
                                          not inconsistent with  national contingency
                                          plan are conclusively  presumed to be rea-
                                          sonable and thus recoverable from parties
                                          liable for cleanup   Comprehensive  Envi-
                                          ronmental Response, Compensation, and Li-
                                          ability Act of  1980, | 107(aX4XA), 42 US.
                                                9607(aX4XA)
                                         13  Administrative  Law  and  Procedure
    Health and  Environment *=-25 5(5.5),
      25 15(7)
    Choice of particular method for clean-
up of hazardous waste site is matter within
discretion of EPA in view of fact that de-
termining appropriate removal and remedi-
al action involves  specialized  knowledge
and expertise, and Agency's choice wfll be
upheld on review unless it is arbitrary and
capricious

14  Health and  Environment «=>25.5(5.5)
    Refusal to reduce amount of judgment
against parties liable for cleanup of hazard-
ous waste site by amount paid by settling
party  was  proper  where   government
sought total amount of its response costs
reduced by amount of settlement plus fu-
ture response costs in present action

15 Jory«°>14(2)
    When government seeks  recovery of
its  response  costs  under Comprehensive
Environmental  Response,  Compensation,
and Liability Act or  its abatement costs
under Resource Conservation and Recovery
Act it is seeking equitable relief in form of
restitution  or  reimbursement of costs  it
expended in order to respond to health and
environmental danger presented by hazard-
ous substances,  and  parties  from  which
government sought recovery were thus not
entitled to jury trial  Resource Conserva-
tion and Recovery Act of 1976, § 7003
-------
           UNITED STATES v NORTHEASTERN PHARMACEUTICAL       729
                            Clt«**810FMTM (8(1)Or IW6)
 §  107(aXl, 3, 4), 42 U S C A § 9607{aXl, 3,
 4)
  Ted L. Ferryman, St Louts,  Mo,  for
(NEPACCO)  and George Freeman, Rich-
mond, Va_, for (Syntex Agribusiness, Inc)
  David  C Shilton, Washington,  DC, for
appellee

  Before McMILLIAN, JOHN R
GIBSON and BOWMAN, Circuit Judges

  McMILLIAN, Circuit Judge
  Northeastern Pharmaceutical &  Chemi-
cal Co (NEPACCO), Edwin  Michaels and
John W  Lee appeal from a final judgment
entered m the District Court' for the West-
ern District of Missouri finding them and
Ronald Mills jointly and severally  liable for
response costs incurred by the government
after  December  11,  1980,  and all  future
response costs relative to  the cleanup  of
the Denney farm site that are not inconsist-
ent with  the national  contingency plan
(NCP) pursuant to §§ 104, 107 of  the Com-
prehensive Environmental Response, Com-
pensation, and Liability Act of 1980 (CERC-
LA), 42 U.S C §§  9604, 9607 (appeal No
84-1837)   For reversal, appellants argue
the district court  erred m  (1)  applying
CERCLA retroactively, (2) finding Michaels
and Lee  individually hable, (3) failing  to
dismiss NEPACCO as a party defendant,
(4) awarding response coats absent affirma-
tive proof that  the  response  costs were
consistent with the NCP, (5) refusing  to
reduce the award of response costs by the
amount of a pnor settlement, and (6) deny-
ing appellants a jury trial
  The  United States cross-appeals from
that pan of  the district court judgment
denying  recovery  of response costs  in-
curred before December 11, 1980,  and find-
ing appellants and Mills were not liable for
response costs pursuant to § 7003(a) of the
Resource  Conservation  and Recovery Act
of 1976 (RCRA)  (also known as the Solid
Waste Disposal Act), as  amended, 42 U S
1  The Honorable Russell G Clark United States
  District Judge for the Western District of Mis-
    910 F 20—18
C A  § 6973(a) (West  Supp 1986) (appeal
No  84-1853)   For reversal the govern-
ment argues the district court erred in (1)
finding the government could not recover
response costs incurred before  the  effec-
tive date of CERCLA, December 11, 1980,
and (2) finding appellants and Mills were
not liable for response costs under RCRA
§ 7003(a),  42   USCA   § 6973(a)  (West
Supp 1986)
  For the reasons discussed below, we af-
firm in part, reverse m part, and remand
for further proceedings consistent with this
opinion

L  FACTS
  The following statement of facts is taken
in large part from the district court's excel-
lent memorandum opinion, United States v
Northeastern  Pharmaceutical & Chemi-
cal Co,  579  FSupp  823  (WDMo 1984)
(NEPACCO)  NEPACCO was incorporate
ed in 1966 under the laws of Delaware; its
principal  office was located in  Stamford,
Connecticut Although NEPACCO's corpo-
rate charter was forfeited in 1976 for  fail-
ure to maintain an agent  for service of
process,  NEPACCO did not file  a certifi-
cate of voluntary  dissolution with the  sec-
retary of state of Delaware  In  1974 its
corporate assets were liquidated,  and the
proceeds  were used to pay corporate debts
and then distributed to the shareholders
Michaels  formed NEPACCO, was a  major
shareholder, and  was its  president   Lee
was NEPACCO's vice-president, the super-
visor of its manufacturing plant located in
Verona, Missouri, and also a shareholder
Mills was employed as shift supervisor at
NEPACCO's Verona plant
  From April 1970 to  January 1972  NEP-
ACCO manufactured the disinfectant hexa-
chlorophene at its Verona plant  NEPAC-
CO leased the plant from  Hoffman-Taff,
Inc, Syntex Agribusiness, Inc (Syntex), is
the successor  to Hoffman-Taff   Michaels
and Lee  knew that NEPACCO's manufac-
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 730
810 FEDERAL REPORTER, 24 SERIES
 turrng process produced various hazardous
 and tone byproducts,  including 2,4,5-tn-
 chlorophenol (TCP), 2,3,7,8-tetrachlorocb-
 benzo-p-dioxin (TCDD or cboxin), and tolu-
 ene  The waste byproducts were pumped
 into a holding tank which was periodically
 emptied  by  waste haulers   Occasionally,
 however, excess  waste  byproducts were
 sealed in 55-gallon drums and then stored
 at the plant
  In July 1971 Mills approached NEPAC-
 CO plant manager Bill Ray with a proposal
 to  dispose  of the  waste-filled 55-gallon
 drums on a  farm  owned by James Denney
 located about seven miles south of Verona
 Ray visited the Denney farm and discussed
 the proposal with Lee,  Lee approved the
 use of Hills' services and the Denney farm
 as a disposal site  In mid-July 1971 Hills
 and Gerald Lechner dumped approximately
 85  of  the 55-gallon drums into  a large
 trench on the Denney farm (Denney farm
 site) that had  been excavated  by Leon
 Vaughn.  Vaughn then filled in the trench.
 Only NEPACCO drums were disposed of at
 the Denney farm site
  In October 1979 the Environmental Pro-
 tection Agency (EPA) received an anony-
 mous tip that hazardous wastes had been
 disposed  of  at the Denney farm   Subse-
 quent  EPA  investigation confirmed  that
 hazardous wastes  had m fact been disposed
of at the Denney farm  and that the site
was not  geologically suitable for the dis-
posal of hazardous wastes. Between Janu-
ary and  April 1980 the EPA  prepared a
plan for  the cleanup of  the  Denney farm
 site and constructed an access road and a
security fence. During April 1980 the EPA
conducted an on-site investigation, exposed
and sampled 13  of the  55-gallon drums,
which were found to be badly deteriorated,
and took  water and soil samples  The sam-
ples  were found  to contain  "alarmingly"
 high concentrations of dioxm, TCP and tol-
 uene
  In July 1980 the EPA installed a tempo-
rary cap over the trench to prevent the
entry and run-off  of surface water and to
minimize  contamination of the surrounding
sod and groundwater  The EPA also  con-
                    tracted with Ecology & Environment, Inc,
                    for the preparation of a feasibility  study
                    for the cleanup of the Denney farm site.
                    Additional on-site testing  was conducted
                    In August 1980 the government filed its
                    initial  complaint against NEPACCO, the
                    generator of  the  hazardous  substances,
                    Michaels and  Lee, the corporate  officers
                    responsible for arranging for the disposal
                    of the hazardous  substances,  Mills, the
                    transporter of the hazardous  substances,
                    and Syntex, the owner and  lessor of the
                    Verona plant, seeking injunctive relief and
                    reimbursement of response costs pursuant
                    to RCRA  § 7003, 42 U S C § 6973 (count
                    I)  In September 1983 the feasibility  study
                    was completed
                      In the meantime the EPA had been nego-
                    tiating with Syntex about Syntax's liability
                    for cleanup of the Denney farm site. In
                    September 1980 the government and Syn-
                    tex entered into a settlement and  consent
                    decree.  Pursuant to the terms of the set-
                    tlement, Syntex would pay $100,000 of the
                    government's response costs and handle
                    the removal, storage and permanent dispos-
                    al of the  hazardous  substances from the
                    Denney farm site  The EPA approved Syn-
                    tex's proposed cleanup plan, and m June
                    1981  Syntex  began  excavation  of the
                    trench   In November 1981  the site was
                    dosed.  The  55-gallon drums are  now
                    stored  m a specially constructed concrete
                    bunker on the Denney farm  The drums as,
                    stored  do not present an imminent and
                    substantial endangerment to  health or the
                    environment,  however, no plan for perma-
                    nent disposal  has been developed, and the
                    site will  continue to require testing and
                    monitoring m the future
                      In August 1982 the government filed an
                    amended complaint adding counts for relief
                    pursuant to CERCLA §§ 104, 106, 107, 42
                    U S C  §§ 9604, 9606, 9607 (counts II and
                    III)  CERCLA was enacted after the filing
                    of the initial complaint.  In September 1982
                    the district court granted partial summary
                    judgment in favor of the government, hold-
                    ing NEPACCO had the capacity to be sued
                    under Delaware law   In September 1983
                    the district court denied the  defense de-
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           UNITED STATES v  NORTHEASTERN PHARMACEUTICAL       731
                             ate u aid FM 72* <*«i Or I*M>
mand for a jury tnal, holding the  govern-
ment's request for recovery of its response
costs was comparable to restitution and
thus an equitable  remedy  The tnal was
conducted during October 1983   The dis-
trict court filed its memorandum opinion in
January 1984

II   DISTRICT COURT DECISION
  The district court found that dioxin, hex-
achlorophene, TCP, TCB  (1,2,3,5-tetrachto-
robenzene, also found at  the Denney farm
site), and toluene have high levels of toxici-
ty at low-dose levels and are thus "hazard-
ous  substances"  within  the  meaning of
RCRA § 1004(5), 42 USC  § 6903(5), and
CERCLA  § 101(14), 42 USC § 9601(14)
579 FSupp at 832, 845,  see also  United
States v   Vertac   Chemical  Corp,  489
F.Supp  870,  874-79 (E.DArk 1980) (diox-
in).  The district court also found there was
a substantial likelihood that  the environ-
ment and  human beings would be exposed
to the hazardous substances that had been
disposed of at the  Denney farm  site   579
F Supp  at 846 & n. 28 (discussing meaning
of "imminent and substantial endanger-
ment" standard)   A state geologist  testi-
fied the Denney farm site is located  in an
area in which substances rapidly move
through the sofl and mto  the  groundwater
and, although no dioxin had been found m
the water in nearby wells, dioxm had been
found as far as 30 niches beneath  the soil
m the trench   Id. at 832-33

  A.  RCRA Finding*
  The  district court  held   that  RCRA
§ 7003(a),  42 USC §  6973(3), requires a
finding of negligence in order to hold past
off-site generators and transporters liable
for response costs, id. at 836,  and thus
RCRA -did not apply to past non-negligent
off-site generators  and transporters of haz-
ardous substances   Id. at 834-37,  accord
United States v  A & F Materials Co , 578
FSupp  1249,  1258 (SDill 1984),  United

2.  CERCLA establishes  two funds   CERCLA
  § 232 42b.SC S 9641 establishes the Post-Clo-
  sure Liability Trust Fund, which is funded
  through taxes on hazardous substances disposed
  of at qualified disposal facilities and the "Su
States  v  Waste Industries,  Inc,
FSupp  1301, 1308 (EDNC1982), rev'd,
734 F 2d 159 (4th Cur 1984), United States
v  Wade,  546 FSupp 785, 790  (ED Pa
1982), appeal dismissed, 713 F2d 49 (3d
Cir 1983),  United States v  Midwest Sol-
vent Recovery, Inc, 484 FSupp  138, 144
(N D Ind 1980)

  B   CERCLA  Findings
  CERCLA § 104, 42 USC § 9604, autho-
rizes  the  EPA to take direct "response"
actions, which can include either short-term
"removal" actions or long-term "remedial"
actions or both, pursuant to the NCP, with
funds from the "Superfund," * and to seek
recovery of  response costs  from respon-
sible parties  pursuant to CERCLA §  107,
42 U S.C § 9607, in order to replenish the
Superfund.  The EPA can also use CERC-
LA §  106, 42 USC § 9606, to seek injunc-
tions to compel responsible parties to dean
up hazardous waste sites that constitute an
"imminent and substantial endangerment"
to health and  the environment   In the
present case, count II sought injuncbve
relief pursuant  to  CERCLA  §  106,  42
U S C § 9606, and count III sought recov-
ery of the government's past and future
response  costs  pursuant  to   CERCLA
§§ 104,  107, 42 UJS C §§ 9604, 9607
  The district court appbed CERCLA retro-
actively, 579 FSupp at 839, but  held the
government  could not recover  response
costs  incurred before the effective date of
CERCLA, December 11, 1980   Id. at 841.
The district court also held CERCLA mi-
poses a standard of strict  liability, id. at
843-44,  and that responsible parties can be
held jointly and severally liable,  id. at 844-
45
  The district court also found NEPACCO
liable as an "owner or operator" pursuant
to   CERCLA   § 107(aXD,   42   USC
§ 9607(aKD   Id.  at 847  With respect to
the individual defendants, the district court
  perfund " or Hazardous Substances Response
  Trust which is funded largely by special taxes
  on the petroleum and chemical industries and
  also bv genera! appropriations.
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 732
810 FEDERAL REPORTER, 2d SERIES
 found Mills liable aa a "person who
 accepted any  hazardous  substances for
 transport to disposal     sites selected by
 such  person,"  pursuant   to   CERCLA
 $ 1OT(»X4),  42 U.S C.  } 9607(aX4)   Id.
 Mills was not represented by counsel in the
 district court and has not appealed.  The
 district court also found Lee liable as  an
 "owner or operator" pursuant to CERCLA
 § 107(aXD, 42 U S C $ 9607(aXD, and as a
 "person  who by contract,  agreement,  or
 otherwise     arranged with a transporter
 for transport for disposal   . of hazardous
 substances,"   pursuant   to    CERCLA
 § 107(aX3), 42 U.S C }  9607(aX3)  Id.  at
 847-49  The district court found Michaels
 liable  as a person who  arranged for the
 transport and  disposal of hazardous sub-
 stances  pursuant to CERCLA } 107(aX3),
 42 USC  § 9607(8X3)'   Id. at 849 n 31
 The Lability of NEPACCO, Lee,  Michaels,
 and Mills  was joint and several  Id.  at
 849-50
  The district court further  found  the
 government's nght to recovery of response
 costs was  very broad and included litiga-
 tion costs, attorney's fees, future response
 costs,  and  prejudgment  interest, and that
the defendants m an action by the govern-
 ment for recovery of response coats had
the  burden of proving  that  the govern-
ment's response costs  were inconsistent
with the  NCP  At at 850-52.  NEPACCO,
Michaels and Lee have appealed  Mills has
 not  appealed   The  government filed  a
cross-appeal Syntex filed an anucus cun-
ae brief,  generally m support of appellants'
re Inactivity arguments *

III.  CERCLA-RETROACTmTY
  A.  Application of CERCLA  to Pre-
       1980 Acts
  Appellants first  argue  the district court
erred  in applying  CERCLA  retroactively,
3  We do not consider m this appeal and cross-
  appeal the  arguments raised by Syntex about
  causation, strict liability, joint and several liabil-
  ity and  separation of powers  Syntex. as anu-
  cus, cannot raise issues not raised by the par
  ties  See,  e.g.  Preservation Coalman, Ine  v
  fierce, 667 F.2d 851. 861-67 (9th Cir 1982). Btng
  v Roadway Express Inc.. 485 FJd 441 452 (5th
  Cir 1973)  Most cases have imposed strict liabil
                     that is, to impose liability for acts commit-
                     ted before its effective date, December 11.
                     1980    CERCLA   § 302(8),  42   USC
                     § 9652(a), provides that "[ujnless otherwise
                     provided, all provisions of this chapter shall
                     be effective on December 11, 1980 "  Ap-
                     pellants argue  that CERCLA should not
                     apply to pre-enactment conduct that was
                     neither negligent nor unlawful when com-
                     mitted  Appellants argue that all the con-
                     duct at issue occurred in the early 1970s,
                     well before  CERCLA  became  effective
                     Appellants also argue that there a no lan-
                     guage supporting retroactive application in
                     CERCLA's   liability  section,   CERCLA
                     5 107, 42 U S C $ 9607, or  in the legisla-
                     tive history  Appellants further argue that
                     because CERCLA  imposes a new kind  of
                     liability, retroactive application of CERCLA
                     violates due process and the  taking clause
                     We disagree
                       The district court correctly found Con-
                     gress intended  CERCLA to  apply retroac-
                     tively  Id. at 839   We acknowledge there
                     is  a presumption  against the retroactive
                     application of statutes   See  United States
                     v Security Industrial Bank, 459 U S 70,
                     79,  103 SCt 407, 413, 74 LEd.Zd 235
                     (1982)  We  hold, however, that CERCLA
                     { 302(a), 42  US C  $ 9652(a), is "merely a
                     standard 'effective date'  provision that indi-
                     cates the date when an  action can first be
                     brought and when the time  begins to run
                     for issuing regulations and doing other fu-
                     ture acts mandated by the statute."  Unit-
                     ed State* v  Shell Oil Co, 605 FSupp
                     1064, 1075 (D Colo 1985), cf  Von Allmen
                     v   Connecticut   Tea/then   Retirement
                     Board, 613 F2d 356, 359-60 (2d Cir 1979)
                     (veterans statute)
                       Although CERCLA does  not  expressly
                     provide for  retroactivrty, it  is manifestly
                     clear that Congress intended CERCLA  to
                      try and joint and several liability under RCRA
                      and CERCLA. Set, e-g United States v Ottati it
                      Goss, lac,  630 F£upp   1361,  1395-96.  1401
                      (D N H 1985).  United States  v  Conservation
                      Chemical Co, 619 F-Supp  162  191, 198-99 204
                      (W DMol985)  United States  v  Chcm-Dyne
                      Corp 572 F.Supp 802 808-11 (SDOhio 1983)
                      See also Developments at the Law—Toxic Waste
                      Litigation. 99 HarvL-Rev  1498. 1517-43 (1986)
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UNITED STATES v  NORTHEASTERN PHARMACEUTICAL
                                                                            747
es Corp, 404 FSupp 726. 730-35 (D Md
1975) (overview of Delaware and  federal
cases, holding that a corporation that had
been dissolved, even though it was  still
conducting  certain  proceedings  brought
dunng its winding-up period, had  lost its
capacity  to sue and be sued and thus could
not  be sued  more than three years after
dissolution)
  [10] Here, NEPACCO has lost its char-
ter,  but  it has not been dissolved   We
agree with the district  court that, under
these circumstances, NEPACCO's  charter
can be "revived" and that it has  the capaci-
ty to be sued even though the govern-
ment's initial complaint was not filed  until
more than three years after forfeiture

VII   BURDEN  OF PROOF  OF  RE-
      SPONSE COSTS
  The district court found appellants  had
the  burden of proving  the  government's
response costs were inconsistent with the
NCP, 579 F.Supp at 850, and that response
costs that  are not inconsistent with  the
NCP are conclusively presumed to  be rea-
sonable  and therefore recoverable, vL at
851   Appellants  argue  the  district court
erred in  requiring them to prove  the re-
sponse costs   were inconsistent with  the
NCP, not cost-effective  or unnecessary
Appellants further argue the district court
erred in assuming aD costs that are consist-
ent  with the  NCP are conclusively  pre-
sumed to be  reasonable  Appellants  note
that  the information and facts necessary to
establish  consistency  with  the  NCP  are
matters  within  the  possession  of   the
government
  111) We  believe the district  court's
analysis     is    correct      CERCLA
§ 107(aX4XA),  42 U S C  § 9607
                              ent with the NCP and, therefore, not recov-
                              erable   See United  States v  First  City
                              National Bank, 386 U S 361, 366, 87 S Ct
                              1088,  1092, 18 LEd.2d  151 (1967)   Con-
                              trary to appellants' argument,  "not incon-
                              sistent" is not, at least for purposes  of
                              statutory construction and not  syntax, the
                              same  as "consistent"   See, e.g.  United
                              States v  Ward, 618 FSupp at 899, Unit-
                              ed States  v Conservation Chemical Co,
                              619 FSupp  at  186,  Lone Pine Steering
                              Comm.  v  EPA, 600 FSupp  1487,  1499
                              (DNJ.), ajfd, 777  F2d  882 (3d Cirl985),
                              cert, denied, — US 	, 106 SCt 1970,
                              90 LEd 2d 654 (1986), New York v  Gener-
                              al Electric  Co, 592 FSupp  at  303-04
                              (state action for  recovery  of  response
                              costs),  J.V Peters  & Co v RwkeUhaus,
                              584 F.Supp 1005,  1010 (N D.Ohio 1984),
                              ajfd, 767 F.2d 263  (6th Cir 1985).
                                The statutory scheme also supports allo-
                              cation of the burden  of proof of inconsist-
                              ency with the NCP  upon the  defendants
                              when the government seeks recovery of its
                              response coats.  Aa noted above, CERCLA
                              S 107
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 748
810 FEDERAL REPORTER, 2d SERIES
 § 9607(aX4XA), "all costs" incurred by the
 government that are  not inconsistent with
 the NCP are  conclusively presumed to be
 reasonable   CERCLA  does  not  refer to
 "all reasonable costs"  bat simply to  "all
 costs "  Cf. Federal Water Pollution Con-
 trol  Act § 311(f)  (FWPCA),  33 U S C
 § 1321(f) (responsible parties are liable for
 "actual costs incurred" by the government
 for cleanup),  see, e.g,  Union Petroleum
 Corp  v. United States, 228 CtCl 54, 651
 F.2d 734, 744 (1981) (construing "actual
 costs incurred"  in 33 U.S C  § 1321(f) to
 apply  conclusive presumption of reason-
 ableness)   Case  law  interpreting  the
 FWPCA is relevant because CERCLA de-
 fines the NCP by  referring to  the NCP
 mandated  by  the  FWPCA    CERCLA
 §§101(31),  105,  42  USC  §§9601(31),
 9605,  see United States v Conservation
 Chemical Co, 619 F.Supp  at 204 (noting
 cross-references  in CERCLA  to FWPCA),
 United States v  Shell Oil Co, 605 F Supp
 at  1073-74 & n. 4 (the NCP as revised to
 incorporate CERCLA  was issued m 1982)T
  Appellants also argue the district court
 erred in requiring them to establish that
 the government's cleanup actions were not
 cost-effective and  necessary   This  argu-
 ment challenges the government's choice of
 a  particular cleanup  method.  We  note,
 however,  that CERCLA § 105(3), (7), 42
 U S C  § 9605(3), (7), requires the EPA. as
 the agency designated by the President, to
 revise  the NCP  required by § 311 of  the
 FWPCA, 33 USC §  1321, to include  the
 "national  hazardous  substance  response
plan,"  which  is specifically  required  by
 CERCLA  to include "methods and criteria
for determining the appropriate extent of
removal, remedy, and other measures," and
"means of assuring  that remedial action
measures are  cost-effective"  Considera-
 tion of whether particular action is "neces-
sary" is thus factored into the "cost-effec-
tive" equation  The term  "cost-effective"
is defined by regulation as "the lowest cost
alternative that is technologically  feasible
and reliable and which effectively mitigates
7.  The 1982 NCP  10 CJ R. % 300 1- 86 (1985),
  was revised effective Feb  18, 1986 50 Fed Reg
                    and minimizes damage to and provides ade-
                    quate protection of public health, welfare,
                    or the environment"  40 C F R § 300 680")
                    (1986)

                      [13]  Because determining the appropri-
                    ate removal and remedial action involves
                    specialized  knowledge and  expertise, the
                    choice of a particular cleanup method is a
                    matter within the discretion of the EPA
                    The applicable standard of review a wheth-
                    er the agency's  choice is arbitrary and ca-
                    pncious  As explained m United States v
                    Ward,
                      [i]f [appellants] wish the court to review
                      the consistency of [the government's] ac-
                      tions with the NCP, then they are essen-
                      tially alleging  that the EPA did not carry
                      out its statutory duties  The statute pro-
                      vides liability except for costs "not incon-
                      sistent" with  the NCP   This language
                      requires deference  by this court to the
                      judgment of agency professionals.  [Ap-
                      pellants], therefore, may  not  seek  to
                      have the court substitute its own judg-
                      ment for that of the EPA  [Appellants]
                      may only show that the EPA's decision
                      about the method of cleanup was "incon-
                      sistent" with the NCP m  that the  EPA
                      was arbitrary and capricious m the dis-
                      charge  of their duties under the NCP
                    618 F.Supp at 900
                      Here, appellants failed to  show that the
                    government's response costs were incon-
                    sistent  with the  NCP  Appellants  also
                    failed to show that the EPA acted arbitrari-
                    ly and capriciously m choosing the particu-
                    lar method it used to clean up the Denney
                    farm site

                    VIII  REDUCTION  OF  AWARD  BY
                          AMOUNT  OF  PRIOR SETTLE-
                          MENT
                      Appellants next argue the district court
                    erred in refusing to reduce the amount of
                    its judgment by  $100,000, the amount paid
                    by Syntex pursuant to the settlement and
                    consent decree in September 1980  Appel-
                     47.912-79 (1985)
 .1
s.
i
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            UNITED STATES  »  NORTHEASTERN PHARMACEUTICAL      749
                             Ol* wllO FJd 726 (Mil Or 1*86)
 lants  argue that unless the judgment is
 offset by the amount of the Syntex settle-
 ment, the government  will improperly re-
 ceive  a double recovery  of  that  amount
 from  Syntex and appellants  Thus, appel-
 lants  argue the district court should have
 reduced the award by (100,000
   [14] The  government  argues the dis-
 trict court correctly  refused to  reduce the
 award by the amount of the Syntex settle-
 ment    We   agree    According  to  the
 government's exhibits, the government did
 not seek a double recovery  The  govern-
 ment had incurred response costs of $494,-
 639 54 through March 10, 1983, but sought
 recovery  from appellants  of only $394,-
 639 54, or the total amount of its response
 costs to date reduced by the $100,000 Syn-
 tex settlement, plus future response costs
 Thus,  the government sought to recover
 from appellants an  amount  that had  al-
 ready  been reduced to reflect the amount
 of the Syntex settlement

 IX. DEMAND FOR JURY TRIAL
  [15]  Appellants next argue the  district
 court erred in denying then* demand for a
 jury (nal because the government's action
 for recovery of its response costs  under
 CERCLA and  RCRA  was  essentially  a
 claim  for  legal damages   We  disagree
 When the government seeks recovery of its
 response costs under CERCLA or its abate-
 ment costs under RCRA. it is  in effect
 seeking equitable relief m the form of resti-
 tution  or reimbursement of  the costs  it
 expended in order to  respond to  the health
 and environmental danger presented by
 hazardous  substances   See,  eg. United
States  v /Vice, 688 F2d at 213-14 (reim-
 bursement of abatement costs under RCRA
as equitable relief), United States v Con-
servation Chemical  Co, 619 FSupp  at
 201 (RCRA), United States v Mottolo, 605
 FSupp at 912-13 (citing seven cases, in-
cluding NEPACCO,  that characterize re-
covery  of response costs under CERCLA as
equitable  relief),  see generally  Develop-
ments,  99 Harv L.Rev  at  1492  & nn  46,
47  The district court correctly  found ap-
pellants did not have a nght to a jury trial
 of claims for equitable relief  See Ross v
 Bernhard, 3% U S  531, 533 90 S Ct. 733,
 735, 24 L Ed 2d 729  (1970)

 X   CONCLUSION
   In conclusion, we  hold (1) CERCLA ap-
 plies retroactively, (2) the government can
 recover  its pre-enactment  response  costs
 under CERCLA, (3) RCRA imposes  strict
 liability upon past off-site  generators and
 transporters-of hazardous  substances, (4)
 Lee and Michaels can be held individually
 liable, (5) NEPACCO had the capacity to be
 sued, (6) appellants had the burden of prov-
 ing the government's response costs were
 inconsistent with the NCP, (7) the govern-
 ment's award should not be reduced by the
 Syntex settlement,  and (8)  appellants did
 not have the nght to a jury trial
  Accordingly, the judgment of the district
 court is affirmed in  part, reversed in part
 and remanded for further proceedings con-
 sistent with this opinion.   The  district
 court's refusal  to dismiss NEPACCO as a
 party defendant, retroactive application of
 CERCLA to pre-enactment conduct, imposi-
 tion of individual liability upon  corporate
 officers who actually control the  handling
 and  disposal  of  hazardous  substances,
 placement upon the  responsible parties of
 the burden of proof that the government's
 response costs are  inconsistent  with the
 NCP, refusal to reduce the award by the
 amount of the pnor settlement, and denial
 of a jury trial are affirmed. The district
 court's refusal to allow the government to
 recover its response  costs incurred before
 the enactment of CERCLA in 1980, refusal
 to impose strict  liability upon past off-site
 generators and transporters of hazardous
 substances under RCRA §  7003(a), 42 U S
 C A  §  6973(a) (West  Supp 1986), and impo-
 sition of liability upon appellants as owners
 or  operators of a  facility pursuant to
 CERCLA    §  107(aXl),     42    USC
 § 9607(aXD, are  reversed
  On remand,  before awarding a specific
amount of pre-enactment response costs to
the government  under  CERCLA,  the dis-
trict court should afford appellants an op-
portunity to show  that the  government's
-------
 1410
685 FEDERAL SUPPLEMENT
   IT IS FbRTHER ORDERED  that de-
 fendant County of Kent's motion to dismiss
 is GRANTED in part and DENIED in part
   IT IS FURTHER ORDERED that plain-
 tiffs  fourteenth  amendment  claims  are
 DISMISSED without prejudice as to all de-
 fendants,
   IT IS FURTHER ORDERED that plain-
 tiffs section 1981  claim is DISMISSED as
 to all defendants,
   IT IS FURTHER ORDERED that plain
 tiffs pendent state claims are DISMISSED
 without prejudice as to all defendants
 UNITED STATES of America, Plaintiff,
                   T
 NORTHERNAIRE PLATING CO, Will-
  art) S  Garwood and R.W  Meyer. Inc.,
  Defendant* and Third-Party Plaintiffs,
                  v
 CITY OF CADILLAC. Third-Party De-
  fendant and  Fourth-Party Plaintiff,
                  v
 RW  MEYER, Jr, R.W Meyer Sr, Indi-
  vidually and d/b/a  R.W  Meyer Con-
  struction Company,  Fourth-Part} De-
  fendants.
          No G84-1113  CA7
      United States  District Court,
          V,  D Michigan, S D
             May 6, 1988

    Environmental   Protection   Agency
sought to recover cost of removing hazard-
ous substances from a site in northern Mi-
chigan  The Dietnct Court, Hillman, Chief
Judge, held that (1) documentation detaB-
ing source and  computation  of each cost
item requested by EPA compiled  with na-
tional contingency plan  (2) EPA's decision
to award cleanup contract without competi-
tive bidding was not arbitrary or capricious
and was cost-effective, and (3) EPA could
recover indirect costs
    Ordered according!}
                1  Jurj «=»14(1)
                   Action for recoverj under Comprehen-
                sive Environmental Response,  Compensa-
                tion and Liability Act was equitable action
                so that defendant had no tight to jury trial,
                action Bought restitution or reimbursement
                of costs  expended in order to  respond to
                health and environmental danger presented
                by hazardous substances  Comprehensive
                Environmental  Response, Compensation,
                and  Liability Act of 1980,  { 107(a)  as
                amended, 42 USCA  §  9607(a);  USCA
                Const-Amend 6
                2. Federal Cml Procedure «=>2532
                   Environmental  Protection   Agency's
                summan judgment motion on coat of envi-
                ronmental cleanup, in action brought under
                Comprehensive  Environmental  Response,
                Compensation, and Lability Act, was npe
                for  consideration  and  was  appropriate
                method to resolve pending cost issues in
                absence of discovery disputes pending in
                case filed three and one-half years ago,
                defendants had adequate opportunity to de-
                pose people whom they wished to depose
                and defendants failed to move for continu-
                ance to permit further discovery  Compre-
                hensive Environmental Response, Compen-
               sation, and Liability Act of 1980, § 107(a),
               as amended, 42 U S C A  § 9607(a), Fed
               Rules Civ Proc Rules 56, 56(e, f), 28 U S
               C_A
               3 Health  and Environment «=>2§.5(SJ}.
                     25.15(5.1)
                  While defendant in Comprehensive En
               vironmenta) Response, Compensation, and
               Liability Act action may raise inconsistent
               with  nationa1 contingency plan as defense
               to action for costs, defendant carries bur
               den of showing costs sought are uiconsist
               ent  with  plan   Comprehensive Environ
               menta1  Response, Compensation, and Lia
               bihtv Act  of 1980, § 107(aK4), as amended,
               42 U S C A § 9607(aX4j
               4 Health  and Environment *»25 5(5 5)
                  Environmental  Protection  Agenc) 's
               documentation detailing source and compu
               tatran of each cost item requested in action
               for cost of removing hazardous substances
               from site in northern Michigan under Com
               prehensive Environmental Response, Com
*
£
-------
                     ILS. T. NORTHERNAIRE PLATING CO.
                          dta*tU3 PJopp. 1410 (WJUIkk 1M)
                                 1411
 pensanon, and Liability Act was consistent
 with provision of national contingency plan
 requiring documentation to  be  collected
 and maintained to support  actions taken
 under plan to form basis for cost of recov-
 ery   Comprehensive  Environmental Re-
 sponse, Compensation, and Liability Act of
 1980,  § 107,  as  amended,  42  USC.A.
 I 960?
 5. Health and Environment *»25.15(5.1)
     Defendant may meet burden of show-
 ing that expense sought in  action under
 Comprehensive  Environmental  Response,
 Compensation, and Liability Act is too cost-
 ly to be consistent with national contingen-
 cy plan only by demonstrating that Envi-
 ronmental Protection  Agency's  decision to
 incur  cost was arbitrary and  capricious
 Comprehensive  Environmental  Response,
 Compensation, and Liability Act of  1980,
 § 105(7),   as   amended,  42   USC.A
 § 9605(7)
 6. Health and Environment  «=25.5<5.5)
    Environmental  Protection Agency did
 not act arbitrarily or capriciously by char-
 acterizing site as imminently threatening to
 public  health and welfare or by choosing to
 by-pass competitive bidding and awarding
 cleanup contract to company without com-
 Ipetitive bidding under provision of Compre-
 hensive Environmental Response, Compen-
 sation, and Liability Act providing that na-
 tional  contingency plan  should   include
 means of assuring that remedial  action
 measures  were cost-effective, report indi-
 «w*d that removal action was needed with-
 in six  months, while competitive bidding
 process normally took nine to 12 months
 Comprehensive  Environmental  Response,
 Compensation, and Liability  Act of 1980,
 §105(7),   as   amended,  42   USCJL
 § 9605(7)
 7. Federal Civil Procedure *=>24S1
    Genuine  issue of material  fact as to
 whether  Environmental  Protection  Agen-
 cv's payment of $993 to corporation to per-
 form title search on property was cost ef-
 feett*» or whether EPA could have had job
 completed  for $120  precluded summary
judgment for EPA on cost of title search in
 action  brought under Comprehensive Envi-
 ronmental Response, Compensation, and Li-
 ability  Act.  Comprehensive Environmental
 Response, Compensation, and Liability Act
 of  1980, } 107,  as  amended, 42 US C A
 § 9607
 8. Federal Civil Procedure *»2737 10
    Under Comprehensive Environmental
 Response, Compensation, and Liability Act,
 Environmental Protection Agency could re-
 cover all costs not inconsistent with nation-
 al contingency plan, including attorney fees
 and reimbursement  for  costs incurred by
 Department  of  Justice   Comprehensive
 Environmental  Response,  Compensation,
 and Liability Act of 1980, § 107, as amend-
 ed, 42 USC A. § 9607
 9. Health and Environment <*=25.15(51)
    Although agencies' choices concerning
 negotiation and litigation strategy do not
 involve type of scientific and public health
 concerns involved in choice of what remov-
 al action to take under Comprehensive En-
 vironmental Response, Compensation, and
 Liability Act,  so that litigation and related
 activities may not deserve same deferential
 arbitrary and capricious  review that  is ap-
 plied to agencies' choice of cleanup remedy,
 in reviewing any agency response decision
 for cost effectiveness under national con-
 tingency plan, burden remains on defend-
 ant to show that agencies' action was not
 cost effective   Comprehensive Environ-
 mental Response, Compensation, and Lia-
 bility  Act of  1980, § 107, as  amended, 42
 U S C -A.  $ 9607
 10.  Health and Environment *»25.5(&5)
    Merely raising question of why more
 than one attorney attended proceedings  m
 action under Comprehensive Environmental
 Response, Compensation, and  Liability Act
 and more than one Environmental Protec-
 tion Agency employee was sent to negotia-
 tions on site  was insufficient to establish
 that Environmental Protection Agency's ac-
 tion was not cost effective   Comprehen-
sive Environmental  Response, Compensa-
tion, and Liability Act of 1980, $ 107, as
amended, 42 USC.A  §  9607
 11.  Health and Environment *=25.5(55)
    Travel reports, vouchers  and authori-
 zations for travel established  that Environ-
 mental Protection Agency did not improp-
 erly allocate  travel  costs for  unrelated
                                                                                                               Msa
-------
1412
685 FEDERAL SUPPLEMENT
cleanup site  to  subject cleanup site  and
instead property deleted cost attributable
to unrelated  cleanup  site in documenting
travel costs associated with removal action
at subject site
12  Federal Civil Procedure «=>273€
    Environmental Protection Agency  was
entitled to recover payroll expenses in-
curred in preparation for litigation and  doc-
umenting of costs after removal action un-
der   Comprehensive   Environmental  Re-
sponse, Compensation, and Liability  Act
Comprehensive  Environmental  Response,
Compensation, and Liability Act of 1980,
§ 107, as amended, 42 USCA § 9607
13.  Federal Civil Procedure *=»2735
    United States Department of Justice's
calculation  of costs incurred  in litigating
action under Comprehensive Environmental
Response, Compensation, and Liability  Act
not by adding up each and every specific
cost accumulated in litigation, but by figur-
ing, on annual basis,  what portion of de-
partment's  total costs were  allocated to
case was not unreasonable or inaccurate so
that Department of Justice was entitled to
recover $35,473   Comprehensive Environ-
mental Response, Compensation, and  Lia-
bility  Act of  1980, f  107,  as amended, 42
U S C A  §  9607
14  Health  and Environment  *=25.5(55)
    Environmental   Protection   Agency
could  recover, under Comprehensive Envi-
ronmental Response, Compensation, and Li-
ability Act,  indirect costs in amount of $52,-
978.50 representing costs which were  nec-
essary to operation of program and support
of site cleanup efforts, but which could not
be direct!)  identified to efforts of an)  one
site and which  were liken to overhead
costs   Comprehensive Environmental  Re-
sponse, Compensation, and Liability Act of
1980,   § 107,  as  amended,  42  U S CA.
$ 9607
IS  Interest *=39(2.20)
    Prejudgment  interest,  like  attorney
fees and other  costs,  was  recoverable in
action brought under Comprehensive Envi-
ronmental Response, Compensation,  and Li-
ability Act as part of costs to Government
of removing  hazardous substances from
site even before enactment of amendment
specifically  providing for recovery  of  pre-
                judgment interest  Comprehensive Envi-
                ronmental Response, Compensation, and li-
                ability Act of 1980, §§  107,107(a), 
-------
 I
                  U.S  T. NORTHERNAIRE  PLATING CO.               1413
     ~                 CtowMS WSapf. M10 (WJkJIkk INS)
Plaintiff's Motion to Strike Jury De-   tennme how much defendants most pay
    mand
   fl]  Defendant Meyer filed a jury  de-
 mand along with its answer to plaintiffs
 complaint  Plaintiffs action for recovery
 under CERCLA  is  an equitable  action,
 seeking  "restitution  or reimbursement of
 the costs it expended m order to respond to
 the  health  and  environmental   danger
 presented   by   hazardous   substances"
 United States v. Northeastern Pharma-
 ceutical & Chemical Co, 810 F 2d 726,749
 (8th Cir.1986) (hereinafter  "NEPACCO"),
 cert dented, — US 	,  108 SCt 146,
 98 L.Ed.2d 102 (1987), Maryland Casualty
 Co  v Armco,  Inc.,  822  F2d 1S48 (4th
 Or 1987), cert dented, — US 	, 108
 S a 70S, 98 L.Ed.2d 654 (1988)  Defend-
 ant does not have a nght to a pay  trial of
 plaintiffs chum for equitable relief   NEP-
 ACCO,  supra,  see  also Tv.ll v   United
 States, — US 	, 107 SCt 1881, 1835,
 95 L.Ed.2d 365 (1987) (discussing absence
 of nght  to jury tnaJ in equitable actions)
 Therefore,  plaintiffs motion to strike jury
 demand,  to which defendant  Meyer  has
 never responded, is granted.

 II  Plaintiffs  Motion for  Summary
    Judgment on  Costs
  CERCLA authorizes the  EPA "to take
 direct 'response' actions which can  include
 either short-term 'removal'  actions or long-
 term 'remedial' actions or both, pursuant to
 the [national contingency plan], with funds
 from the 'Superfund,' and to seek recovery
 of response costs from responsible  parties
 pursuant to  Section  107 of CERCLA,  42
 USC  § 9607, in order to  replenish  the
 Superfund "  NEPACCO, 810 F 2d at 731
(footnote  omitted)    Although this court
 has  already  determined that  defendants
 Garwood, Northernaire, and Meyer  are lia-
ble to the  United States for its costs  in-
curred relating to the removal action at the
Northernaire site, the court now must de-

 1.  Plaintiffs motion originally requested S22.113
 in payroll finrfiit"^ $53,397 in indirect cos*.
 and $6,825 in travel 0005. Plaintiff later mod-
 ified these requests according u> the documents
 and affidavits filed with the court la addition.
 plaintiff supplemented its original request  for
 "pnjudgnxxu. interest at a rate to be determined
 later " with a request for the spccsfk amount of
 interest  noted above, $60,621»  Tnu  $60,622
                                       Prior to 1986,42 U.S C § 9607(aX4) provid-
                                       ed
                                         [Ajny person  who accepts  or accepted
                                         any hazardous substances for transport
                                         to disposal or treatment fatalities or sites
                                         selected  by sucn person,  from which
                                         there IB a release, or a threatened release
                                         which causes the incuirence of response
                                         costs, of  a hazardous substance, shall be
                                         liable  for—
                                           (A)  all  costs of removal  or remedial
                                         action  incurred by  the  United  States
                                         Government or a state not inconsistent
                                         with the  national contingency plan;
                                           (B) any other necessary  costs of re-
                                         sponse incurred by any other person con-
                                         sistent
                                         plan,
with  the national  contingency
                                         Plaintiff, seeking to resolve the question
                                       of how much is  owed  without trial, has
                                       submitted  documentary evidence  which,
                                       plaintiff argues, demonstrates that defend-
                                       ants  owe plaintiff $234,337 97 m costs in-
                                       curred by  the Environmental  Protection
                                       Agency ("EPA"),  160,62199 in  prejudg-
                                       ment interest on those EPA costs, and $35,-
                                       473 28 in costs incurred by the Department
                                       of Justice.  The most recent cost summary
                                       submitted by the plaintiff breaks down the
                                       EPA costs as follows  $22,241 69 for EPA
                                       payroll, $6,97470 for EPA travel,  $11,-
                                       64108 for a contract with "Weston", $140.-
                                       41900  for  a contract with "Petrochem",
                                       $993 00 for a contract with "GCA",  $90 00
                                       m miscellaneous expense to "Weston", and
                                       $52,97850 "indirect cost"1
                                         Defendants  Meyer, Northernaire, and
                                       Garwood have filed two briefs m opposition
                                       to plaintiffs motion for summary judgment
                                       on costs   Defendants raise three reasons
                                       which they argue  preclude this court from
                                       granting  plaintiffs motion  1) plaintiffs

                                        m interest is calculated for the EPA costs atone.
                                        Because plaintiffs motion sought interest OB all
                                        costs, including those incurred by the Depart
                                        ment of Justice, the court ituimrt that by sub-
                                        sequently specifying the amount of interest on
                                        the EPA costs, plaintiff is not thereby withdraw
                                        ing its request for prejudgment interest on non-
                                        EPA
                                                           fef<-
-------
 1414
686 FEDERAL SUPPLEMENT
 costs were inconsistent with the national
 contingency plan ("NCF') because plaintiff
 failed to collect and maintain sufficient doc-
 umentation of costs and because plaintiffs
 expenses were not cost-effective,  2) genu-
 ine issues of fact remain concerning wheth-
 er  or not  certain costs were actually  in-
 curred,  and 3)  plaintiff is  not entitled to
 recover "indirect costs" or prejudgment in-
 terest under Section  9607

  A  Standard for Summary Judgment
  Plaintiff B motion for summary judgment
 is governed by Federal Rule of Civil Proce-
 dure  56   Plaintiff, as movant, carries the
 burden of  demonstrating that no genuine
 issue of material fact remains and that it is
 entitled to judgment as a matter of law
 Under Rule 56
-------
                     us.

 ing coat issues in this case
 F-Supp at 1006-07.
v NORTHERNAIRE PLATING CO.
QIC w MS FJfcvp. 1410 (WJ»Jllch. IMS)
                                  1415
  SCRDI, 685
  B  Cbmmteney wtfA  the NCP
  [3]  Under  42 U.S C. § 9607(aX4),  the
United States may recover costs "not in-
consistent  with the national  contingency
plan" The NCP is described in 42 US.C.
§9605  and promulgated  in  40  CFR.
§§ 800.1-.86 (1987)   While a defendant in
a CERCLA action may raise inconsistency
with the NCP as a defense to an action for
costs, Untied States v  Outboard Manne
Corp, 789  F.2d 497 (7th Or), cert denied,
— U.S 	, 107 S Ct457,93 LEd2d 403
(1986), the  defendant carries the burden of
showing  the costs-sought under Section
9607 are inconsistent with the plan.  NEP-
ACCO, 810 F.2d at 747-48

  1  Compliance with 40 C.FR. 300 69
  [4]  Defendants raise  two different is-
sues  of  non-compliance with  the NCP
First,   defendants   Northernaire   and
Garwood claim that plaintiff faDed  to col-
lect and maintain sufficient documentation
supporting  tiie costs as required  by 40
C.FJI | 800.69 (1987)  This section of the
NCP provides, m pertinent part
  During all phases of response, documen-
  tation shall be collected and maintained
  to support all actions  taken  under this
  Plan, and to form the basis for cost re-
  covery    In general, documentation shall
  be sufficient to provide the source and
  circumstances of the condition, the identi-
  ty of responsible  parties, accurate  ac-
  counting  of  Federal  or private  party
  costs incurred, and impacts and potential
  impacts to the public health and welfare
  and the environment
Defendants state that plaintiff has failed to
present information concerning the avail-
ability of lower bids, and argue that the
documents  plaintiff produced  during dis-
covery concerning contract  awards, cost
summaries, and EPA payroll reports failed
to "support all actions  taken under  this
Plan."
  In explaining what documentation is re-
quired, the regulation provides that the
documentation be "sufficient to provide
accurate accounting of Federal     costs
incurred."  Plaintiff has submitted docu-
 mentation detailing the source and compu-
 tation of each cost item requested.  De-
 fendant Meyer has  submitted  even more
 government  documents  concerning costs,
 presumably obtained from plaintiff.  I con-
 clude that defendants Garwood and  North-
 ernaire have not shown  plaintiffs actions
 were inconsistent with 40 C F.R § 300.69
 2.  Compliance with 40 CFR. §30068
   [6]  Second, defendants protest the fail-
 ure of plaintiff to take cost-effective reme-
 dial  action.   Section  9605(7) of CERCLA
 provides that the NCP shall include "means
 of assuring that remedial action measures
 are cogteffectave over the period of poten-
 tial exposure to the hazardous substance or
 contaminated  i********!!?    "   The  term
 "cost-effective" was  defined m the NCP
 during 1988 to 1985 to be "the lowest cost
 alternative that  is technologically feasible
 and reliable and which effectively mitigates
 and minimm* damage to and provides ade-
 quate protection of public health, welfare,
 or  the   environment"    40    C.F.R
 S  800680X1985),  NEPACCO, 810 F^d.at
 748  A defendant may meet the burden of
 showing that an expense is too costly to be
 consistent with the NCP only  by demon-
 strating that the agency's decision to incur
 that cost was arbitrary and  capricious
 NEPACCO, 810 F2d at 748   The  defer-
 ence with which courts review such deci-
 sions recognizes  that  "determining the ap-
 propriate  removal  and remedial action in-
 volves specialized  knowledge  and  exper-
 tise," id., consideration of "numerous set
 entific factors," and balancing  "cost with
 feasibility  and  adequacy   of   remedy"
 United  States v  Ward,  618 F-Supp 884,
 900  (DNC1985),  tee also,  42 USCA
 5  9613(j) (West  Supp 1987) (1986 amend-
 ment stating decision in selecting response
 action wfl] be upheld unless objecting party
 can demonstrate the decision was arbitrary
and capricious or not  in accordance with
law),  House Reports  No 99-258 fill and
V) on the Superfund Amendments of 1986,
 reprinted in  1986  United State*  Code
 Congressional and Administrative News
2835, 3047-48, 3149
  [6]  With these standards in  mind,  the
court will  address each action that defend-
-------
 1416
685 FEDERAL SUPPLEMENT
 ant argues was not cost-effective  First,
 defendant argues  that plaintiffs decision
 to award the cleanup up contract to Petro-
 chem Services, Inc, ("Petrochem") without
 competitive bidding was "arbitrary and ca-
 pncious" and not cost-effective   At the
 tune the United States contracted with Pe-
 trochem for the cleanup of the Norther-
 naire site, federal  law provided that "[a]ll
      contracts for property and  services
 shall be made by advertising, as provided
 in section 303 [41 U S C § 253], except that
.such purchases and contracts may be nego-
 tiated by the agency head without advertis-
 ing if—     the  pubbc exigency  will  not
 admit of the delay  incident  to advertis-
 ing   "   41   U S C    §  252(c)   (1974),
 amended by 41 U S CA § 252 (West Supp
 1987)  Both parties agree that  plaintiff
 awarded a contract to Petrochem without
 advertising  The EPA found that "the re-
 lease of        hazardous   substances)
 presents  an  imminent  and  substantial
 threat to the pubbc health and welfare,"
 and that formal advertising "could delay
 the emergency response  action necessary
 to remove the hazardous substances) or to
 prevent  the  release of such  substances)
 which, upon exposure,  may cause death,
 disease,  or illness "
   Meyer argues that this finding is inaccu-
 rate, that there was no imminent or sub-
 stantial threat to the public health or wel-
 fare  which would require abandonment of
 the formal bidding process  Meyer refers
 to the Julj 1982 memo of Robert Bowden,
 Chief of the  Spill Response  Section of the
 EPA, ui  which Bowden states that there is
 no emergency at the Northernaire site, a
 March 1983 memo from the on-scene coor-
 dinator George  Madany,  stating  that no
 immediate  removal is  warranted,  and an
 April 1983 report which also states  that the
 site was not an immediate threat to human
 health or the environment and the cleanup
 operations  could wait six  months   Meyer
 charges  that the EPA could have started
 the bidding process in 1982, and,  alterna-
 tively, that no emergency existed  in 1983
 which required circumvention  of advertis-
 ing requirements
   Robert Bowden.  Chief of the Spill  Re-
 sponse Section of the EPA, explains in  his
 second affidavit that the process of award-
                nig a contract through competitive bidding
                is  very time consuming, taking, normally,
                nine to twelve months  The March 1983
                memo on which defendants rely also stated
                that the "tanks and drums" containing ac-
                ids and cyanides "are badly rusted " Cer-
                tain  vats,  the report concluded, "appeared
                capable of holding the contents for a few
                months longer "  Mr  Bowden, in his affi-
                davit, also states  that "if the acids and
                cyanide came  into contact,  the resulting
                reaction  would  form  hydrogen cyanide
                gas," which "could result  in severe injury
                or even death to persons in the  area"
                Defendants do not dispute these  factual
                assertions
                  Meyer and the government  both rely  on
                the same  reports,  menus, and letters  to
                provide  the factual basis  for  their  conclu-
                sions  Rather than raising a genuine issue
                of fact, Meyer disputes the propriety of the
                agency's decision, a question of law to  be
                decided by the court under an arbitrary and
                capricious  standard.  Given  the risk  of
                death or  injury should  the  tanks  leak,
                agreement by  the authors of the March
                1983 memo and the April  1983 report that
                removal action  was  needed  within six
                months, and the nine to twelve month time
                period  necessary to let the removal con-
                tract for competitive  bidding, I conclude
                that  the EPA  did not act arbitrarily  or
                capriciously by  characterizing the site  as
                imminently threatening or by choosing  to
                by-pass  competitive bidding
                 Meyer charges that the "extremely high"
                amount that Petrochem billed the EPA per
                day "certainly  creates a question of cost
                effectiveness "   Defendant has not produc-
                ed  any evidence suggesting that plaintiff
                had a more cost effective alternative to the
                Petrochem contract Defendant's concluso-
                ry  allegations  do not demonstrate  plain-
                tiffs decisions were arbitrary or capricious
                 [?}  Meyer also challenges the $993 that
                the EPA paid GCA  Corporation to perform
                a title search on the Northernaire property
                Meyer submits  a memo which  disapproves
                a plan submitted by GCA to do the work
                for $2,289 and notes that the work could be
                done  by the Wexford County  abstract of
                fiee at an estimated cost of $120 00   Both
-------
 parties agree that EPA
 GGA $998 for the work.  Meyer objects to
 reimbursing the government $998 for a job
 which  the SPA had earlier acknowledged
 couM have been finished for $120. Defend-
 ant's proof tends to show that an official at
 one time believed there was a cheaper al-
 ternative to  GCA's  first  offer, and pre-
 cludes summary judgment on this particu-
 lar cost
   [8-10] Defendant questions  plaintiffs
 decision to send more than one attorney to
 proceedings on thn case and more than one
 EPA  employee to  negotiations on  the
 Northernaire site  Congress has provided
 that the plaintiff m a CERCLA action may
 recover "all  costs" not inconsistent with
 the NCP  42 U.S.C  ( 9607  These costs
 include attorney's fees and reimbursement
 for costs incurred by  the  Department of
 Justice   Untted  States v.  Northeastern
 Pharmaceutical  &  Chemical  Co.,  579
 PSupp  823, 851 (WJ> Mo 1984),  ajfd, 810
 F 2d 726 (1986), cert  dented, —  U.S 	,
 10S  SCt 146,  98  LEd.2d 102   (1987),
 SCRDI, 65S F.Supp  at 1009  Costs that
 are not inconsistent with the NCP "are
 conclusively  presumed  to be reasonable"
 NEPACCO,  810 F.2d  at 748.   Agencies'
 choices concerning negotiation and htigs
 toon  strategy do not involve the type of
 scientific and  public health  concerns  in-
 volved m the choice of what removal action
 to take  litigation and related activities,
 therefore, may not deserve the same defer-
 ential arbitrary and capricious review that
 it applied to the agencies' choice of cleanup
 remedy   However, in reviewing any agen-
 cy  response decision for cost effectiveness
 irao£? the NCP, the burden remains on the
 defendant to show that the agencies' action
 was not cost effective   Merely raising the
 question of why more than one person at-
 tended certain proceedings does  not meet
 this burden.
US. v. NORTHERNAIRE PLATING CO.                1417
     OttMltS ESopp. 1*10 (WJUIkfc. IfSS)
   went on to pay   $140,419 00, the amount that Ms Pipkin, a
                     program  analyst  for  the  government,
                     states m her affidavit was the total cost of
                     the Petrochem contract No evidence sug-
                     gesting a lesser amount was actually paid
                     or billed appears m the record.  No genu-
                     ine issue  of fact  remains  regarding the
                     amount plaintiff paid to Petrochem.
                       [11]   Defendant objects that plaintiff im-
                     properly allocated the total travel costs for
                     Nortbernaire and another site to the North-
                     ernaire  she alone   Defendant attached
                     travel reports, vouchers, or authorizations
                     for five tnps  December 1982,  February
                     1988, March 1983,  April 8,1984,  and April
                     12,1984  These documents show that each
                     tnp pertained to at least one other site m
                     addition to the Nortbernaire site  In htt
                     affidavit submitted m response to Meyer's
                     brief, Richard  D  Hackley,  an accountant
                     with the EPA, states that only half of the
                     expense of the December  1982 tup was
                     attributed  to Northernaire   Mr  Hackley
                     states that cost of the April 3,1984 tiro has
                     been deleted from the  amount sought by
                     the government  The cumulative summary
                     of travel costs dated  October  14,  1987,
                     notes that only one-fourth  of the March
                     1983 tnp and only half of the April 12 tnp
                     were charged to the Northernaire site  Al-
                     though Mr  Hackley  does not  specifically
                     address the allocation of costs among sites
                     for the February 1983 trip, he states in his
                     second affidavit that he  has again reviewed
                     the cost data  and believes that the  cost
                     data "represents a fully  accurate statement
                     of an costs through May  11,  1987
                     associated with the Immediate Removal Ac-
                     tion at  the Nortbernaire site "  Given this
                     record,  no genuine issue of fact remains
                     concerning the propriety of plaintiff s allo-
                     cation of travel costs
   C   Factual  Disputes  over   Certain
    _   Cottt
   Defendant Meyer argues that the invoic-
 es from Petrochem total only $118,880-21,
 not the $140,419 bffled  The cost summary
 for the Petroehem contract shows two in-
 voices  No  88818 for $186,285.87  and No
188188 for $4,138.18   These invoices total
                       [12]  Defendant objects to plaintiffs de-
                     mand for $2,780 of its payroll expenses,
                     incurred as late as two  years after the
                     removal action.   These expenses are doc-
                     umented in exhibits attached to plaintiffs
                     brief along with all other payroll expenses
                     requested by plaintiff  Plaintiff represents
                     that after the removal action,  payroll ex-
                     penses  were incurred preparing for litiga-
                     tion and  documenting costs   Defendant
-------
 1418
685 FEDERAL SUPPLEMENT
has not presented any evidence from which
a fact finder could infer that these payroll
costs were not related  to the removal ac-
tion or were  excessive or inconsistent with
theNCP. In a CERCLA action, plaintiff IB
entitled to all recovery  costs, including at-
torney  fees  and  litigation  expenses in-
curred by the staffs of the EPA  and the
Department of Justice   United States v.
Northeastern Pharmaceutical & Chemi-
cal  Co., 579  FSupp 823  (WD Mo 1984),
aff'd, 810 F 2d 726 (1986), cert, dented, —
US 	,  108 S.Ct 146, 98 L.EA2d 102
(1987)
  [13]  Defendants   Northernaire   and
Garwood object to the 135,478 requested m
Department of Justice costs   Defendants
argue that the plaintiff has  presented no
evidence of,  and the defendants  have no
way of verifying, specific  Department of
Justice  expenses   In  his  affidavit, how-
ever, Philip Stinnes, Deputy Executive As-
sistant in the Executive  Office of the Land
and  Natural  Resources Division  at the
United States Department of Justice, ex-
plains that the  Department's cost figure
was calculated not by adding up each and
every specific cost accumulated in litigat-
ing this case, but by figuring, on an annual
basis, what portion  of the Department's
total costs were to be allocated to this case
  Mr Stinnes states that the  total  amount
charged to the Superfund account by the
Lands Division of the Department is deter-
mined by multiplying each total Lands Divi-
sion cost (printing,  freight,  etc.)  by the
ratio between the professional hours devot-
ed to Superfund eases, including this case,
and total Division professional hours  For
the years in question  here,  this  ratio of
Superfund  hours to  total hours  ranged
from 19 to  27  percent  The portion of
Lands Division costs allotted to Superfund
cases were then charged to the Superfund
account   To arrive  at  the Department's
Superfund  costs for this  particular case,
the Department then prorated the total Su-
perfund costs by the percentage of profes-
sional hours  actually spent on this  case
The percentage of professional hours spent
on the Northeraave case of aD Superfund
professional hours m the Lands  Division
ranged from  027 to .88 percent annually.
                  Thus, defendants' objection to lack of
                documentation for all $85,478.28 fafls to
                raise a genuine issue of material fact ne-
                cessitating trial —Defendants have not
                presented any evidence to this court that
                suggests that the Department's cost figure
                for this case, or the Department's method
                of computing that figure, is unreasonable
                or inaccurate

                  D  Indirect Costs
                  [14]  Defendant Meyer m«m««™»  that
                the EPA's "indirect costs" are not recover-
                able  Mr Cook, cost accountant with the
                Superfund Accounting Branch of the EPA,
                stated in an affidavit that the EPA's "mdV
                rect costs" for this case, amounting to $52,-
                97850, "are coats which are necessary to
                the operation of the  program and support
                of site clean up efforts, but which cannot
                be directly identified to the efforts of any
                one site "  Mr Cook likens indirect costs to
                "overhead costs," and states that they are
                "such things  as rent and utilities for site
                and non-site staff office space,  payroll and
                benefits  for  program  managers, clerical
                support and other administrative support
                staff,  and pay earned by on-scene coordf
                nators while on leave, or performing tasks
                not directly associated  with a particular
                site "  These costs, he continues, are "gen-
                erally  understood and accepted within the
                business community, and are recognized as
                costs to  the  Agency in  all  government
                grants and contracts"
                  The total indirect cost figure sought here
                is the result of multiplying the number of
                EPA personnel hours charged  to the site,
                by the cost rate for  each specific year in
                that Region   In 1988, that rate was $72
                per hour, in 1984 it was $61, in  1985  it was
                $58 and m 1986 it was $51 per hour  The
                plaintiff calculated indirect costs for 1987
                and 1988 using a provisional rate of $51 per
                hour
                  Under Section 9607, defendants are liable
                for "all costs of removal or remedial  action
                incurred by the United States Government
                    not inconsistent with the [NCP] "  At
                the time of the removal action ID this case,
                Section 9601(25) defined "response" as "re-
                move,  removal, remedy, and remedial ae-
-------
U& v. NORTHERN AJRE PLATING CO.
     CtteMMS FAvp. 1410 (WJUBA. IMS)
                                                                             1419
 tion." In 1986, Congress »dded the follow-
 ing clause  to this  definition,  "all  such
 terns (including the terms 'removal* and
 *remedaJ action*) include eft/fervemenf oc-
 txmtu*  related  tktnto."   42  UJ5.C.
 {  9601(26) (emphasis added).  Thus, m or-
 der to determine the recoverabflrty of mdi-
 rect costs, the court must decide  whether
 Congress intended that Superfund's admin-
 istration costs were costs of  "removal or
 remedial action," or using the* 1986 amend*
 meat as a  guide, costs of "enforcement
 activities" "related" to the "removal" or
 remedial action m this ease   The Act de-
 fines "Removal" to  include
   the cleanup or removal of released hat*
   ardous substances from the environment,
   such actions as may be necessary taken
   m the event of the threat of release of
   hazardous  substances  otto the  environ-
   ment, such actions as may be necessary
   to monitor,  assess, and evaluate the re-
   lease of threat of release of hazardous
   substances,  the disposal of removed ma-
   terial, or the taking of such other actions
   as may be  necessary  to prevent,  mini-
   mize, or mitigate  damage to the public
   health or welfare or to the environment,
   which  may  otherwise result from a re-
   lease or threat of release   The  term
   includes, in addition, without being limit-
   ed to, security fencing or other measures
   to hmit access, provision of alternative
   water  supplies,  temporary  evacuation
   and housing of threatened individuals not
   otherwise provided for, action taken un-
   der techon  9604(b) of this title, and any
   emergency assistance which  may be pro-
   vided under the Disaster Relief  Act
 42 U.S.C ( 9601(23) (emphasis added)
   The activities  authorized  by  Section
 9604(b) include
   such planning, legal, fiscal, economic, en-
   gineering, architectural, and other stud-
   ies or investigations as  [the President}
   may deem necessary or appropriate to
   plan and direct response actions, to re-
   cover the costs thereof, and to  enforce
   the provisions of **"• fhaptw
42 UJS.C |  9604(b)                   *
   The term "remedy" or "remedial action"
is  defined to mean
   those actions consistent with permanent
   remedy taken instead of or m addition to
                       removal actions m the event of a release
                     . or threatened release of a hazardous sub-
                       stance into the environment, to prevent
                       or  minima*  the release  of hazardous
                       substances so that they do not migrate to
                       cause substantial  danger  to present or
                       future public  health or welfare or the
                       environment  The term includes, but is
                       not limited to, such actions at the  loca-
                       tion of the release as storage,  confine-
                       ment, perimeter protection using dikes,
                       trenches, or ditches, day cover, neutrali-
                       zation, cleanup  of released hazardous
                       substances or  contaminated materials,
                       recycling or reuse, diversion, destruction,
                       segregation of reactive wastes, dredging
                       or excavations, repair or replacement of
                       leaking containers, collection of leachate
                       and runoff, onsite treatment or incinera-
                       tion, provision of alternative w»Ler sup'
                       plies, and any  monitoring reasonably re-
                       quired to assure that such actions protect
                       the public health  and  welfare and  the
                       environment   The term   includes  the
                       costs of  permanent relocation  of  resi-
                       dents and businesses and community fa-
                       cilities where  the President  determines
                       that, alone or in combination with other
                       measures, such relocation is more cost-
                       effective  than and environmentally pref-
                       erable  to the  transportation,  storage,
                       treatment, destruction, or secure disposi-
                       tion offstte of hazardous substances, or
                       may otherwise be necessary to protect
                       the public health or welfare
                       Although these provisions read as if they
                     pertain to a particular site and not to all
                     sites generally, Congress clearly intended
                     that the United States recover ail of the
                     costs  incurred in a remedial or  removal
                     action   The language of Section 9604(b),
                     combined with  the broad remedial purpose
                     of CERCLA, supports a liberal interpreta-
                     tion of recoverable costs  " 'Congress in-
                     tended that those responsible  for problems
                     caused by the disposal of chemical  poisons
                     bear the costs and  responsibility for reme-
                     dying  the  harmful  conditions they  cre-
                     ated'"  Wall* v Waste  Resource Corp.,
                     828 F^d 977, 980  (6th Gr.1987) (quoting
                     Untied Statet  v ReiUy Tar  4k Chemical
                     Corp.,  646 F-Supp  1100, 1112 (DMmn.
                     1982))  The Sixth Circuit has stated that it
££*«
-------
 1420
686 .FEDERAL SUPPLEMENT
 " ViU not interpret Section 9607(a) m any
 way that apparently frustrates the stat-
 ute's goals, in the absence of a  specific
 congressional intention otherwise'" Id. at
 981  (quoting New York v. Shore Realty
 Corp, 759 F2d 1082, 1046 (2d Or 1986))
  The legislative history is silent, and the
 case law sparse on the precise issue of the
 recoverability  of  EPA's "indirect costs"
 In SCRDI, supra, the court granted "ad-
 ministrative,  investigative, and  legal ex-
 penses  associated  with  the  cleanup" and
 the "litigation"  65S RSupp. at 1007-09
 (D.S C1985) (awarding $1,065,910 92 m fed-
 eral costs and $98,000 in state administra-
 tive expenses)  In United States v North-
 eastern Pharmaceutical & Chemical Co.,
 579 FSupp  828 (W.D.Mo 1984), affd, 810
 F.2d 726, cert dented, — US 	, 108
 S Ct 146, 98  LJkL2d 102 (1987), the court
 found defendants hable  for "all costs,  in-
 cluding salaries and  expenses, incurred by
 plaintiff associated with such activities as
 monitoring, assessing and evaluating the
 release  of contaminants  and the taking of
 actions  to prevent,  minimize or  mitigate
 damage which might result from a release
 of  contaminants  from  the  Denny farm
 site" Id. at 851-62 (emphasis added)  Be-
 cause neither the  opinion in NEPACCO,
 nor the opinion in SCRDI, specify whether
 or not the costs granted included the type
 of "indirect costs" that the EPA seeks in
 this case, these cases do not provide specif-
 ic guidance on the decision at issue m this
 case

  There is one very recent opinion on point,
 however  In United States  v  Ottatt &
 Cost, Inc., No  C-80-225-L (DJ* H, slip op
 March 17,1988), the court prohibited recov-
 ery of $336,922 m EPA indirect costs, in-
 cluding expenses for rent, utilities, supplies,
 clerical staff, and other overhead expenses
 The court found that the costs were "neces-
 sary to operate the  Superfund  program"
 but could not "be attributed directly to the
 0 & G/GLCC sites "  The Ottati court gave
 no further explanation for its decision  to
 deny indirect costs
  Interpreting the  statute's provisions, its
legislative history, and  the  meager  case
authority on  this  issue,  I conclude  that
 Congress intended that the United States
                may recover the "indirect costs" under Sec*
                toon 9607   This portion of plaintiffs mo-
                tion for summary judgment » granted,

                  D.  Prejudgment Interest
                  [15]  On October 17,  1986, BIX months
                before this court's opinion granting plain*
                tiff summary judgment as to liability, Con-
                gress added the following language to the
                end of Section 9607(aX4)
                  The amounts recoverable in an action
                  under this section shall include interest
                  on the amounts recoverable under sub-
                  paragraphs (A) through (D)   Such inter-
                  est shall accrue from the later of (0 the
                  date payment of a specified amount IB
                  demanded m writing, or (ri) the date of
                  the expenditure concerned.  The rate of
                  interest on the  outstanding unpaid bal-
                  ance of the amounts recoverable under
                  this section shall be the same rate  as is
                  specified  for interest on investments  of
                  the Hazardous Substance Superfund es-
                  tablished  under subchapter A of chapter
                  98 of Title 26
                42 USC.A $ 9607(aX4) (West Supp.1987)
                  In this case this court is bound by the
                amended  provision, despite its enactment
                after much of the requested interest had
                accrued.   See  Bradley  v   Richmond
                School Board, 416 UJS 696, 94 S Ct 2006,
                40 LJkL2d  476 (1974)  Even  interpreting
                42 V£ C  9607(a) prior to the amendment,
                prejudgment interest would be appropriate
                United States v Northeastern Pharma-
                ceutical A Chemical Co, 579  FSupp 828
                (W D Mo 1984) (holding prejudgment inter-
                est recoverable), ajfd, 810  F.2d  726 (8th
                Cir 1986), cert denied, — US  - , 108
                S Ct  146, 98 L.Ed.2d 102 (1987),  tee  also
                Walk v  Waste Resource Corp.,  823  F 2d
                977, 981 (6th Cnr.1987) (stating that subse-
                quent legislative history  of  CERCLA pro-
                vides "useful guidance" to unsettled inter-
                pretation)   In the absence of  a statutory
                provision  to the  contrary, the award of
                prejudgment interest is a matter addressed
                to the discretion of the court Bricklayer's
                Pennon Trust Fund t Tatanol,  671  F-2d
                988  (6th  Or 1982)   Congress  intended
                CERCLA  to provide a w^h^twffi for
               covery of all costs of removal actions from
-------
                     US. T. NORTHERNAIRE PLATING CO.
                          OMMttS FJopp. 1410 (WJMUdu NSQ
                                  1421
 those who ire responsible  See Rodgen v
 United State* 882 U.S. 871, 878, 68 S.Ct
 5,6-7,92 LJkL 8 (1947) (prejudgment inter-
 est for statutory obligation depends m part
 upon Congressional purpose in imposing
 obligation)   Interest lost on monies  ex-
 pended from the Superfond was part of the
 cost to the government of removing haz-
 ardous substances  from the  Nortbernaire
 site.
   Interpreting  CERCLA  to fulfill  Con-
 gress' purpose  of  fully reimbursing  the
 federal government-for its dean up  ex-
 peases, I conclude that prejndgment  inter-
 est, Eke attorney's fees and the other coats
 discussed above, was recoverable even be-
 fore the  1986 amendment, and is appropri-
 ate ID this ease   I am aware  that  other
 courts have denied prejndgment interest
 See SCRDI, supra, Ottatt A Cost, supra.
 However, I find that the intent of Congress
 was  to grant such  interest, and that ore-
judgment interest  is  necessary  to  fully
 compensate  plaintiff for its clean op and
 enforcement  efforts   NEPACCO,   579
 F.Supp at 852.
  Section 9607 now provides that the rate
 of prejudgment interest  payable is  the
 same as the rate of interest on investments
 of the Hazardous  Substance Superfund.
 In us affidavit, Mr  Hackley sets forth the
 interest  rates on  Superfund investments
 for each year  from  1984 through  1987,
 which range from  56S to 1082 percent
 Even m  the absence of the amendment
 applying these rates makes sense if plain-
 tiff is to be reimbursed for what it has
 actually expended.  Section 9607 also pro-
 vides that the interest shall  accrue  from
 the later of either the date payment of a
 specified amount is demanded in writing, or
 the  date of the  expenditure concerned.
 Here,  plaintiff demanded  reimbursement
 for some of its expenses on or  about Au-
 gust 18,1984  However, many of the costs
recovered m this action were not actually
incurred   until  after  August  18,  1984
Therefore, although the court finds  that
plaintiff  is entitled to  reimbursement of
$288,844.97 m EPA  costs and $85,478.28 in
Department of Justice costs, and although
plaintiff M entitled to prejudgment interest
OB those easts at the annual rates set forth
m Mr  Haetiey's affidavit plamtiff is not
 entitled  to interest on the  entire amount
 calculated from  August 18, 1984.  The
 court wfll delay ruling on the total amount
 of interest due plaintiff until the parties
 agree among themselves on an amount or,
 m the event no agreement is reached, sup-
 ply the court with affidavits calculating the
 amount of interest due taking mto account
 the  date on which  the expenditures oc-
 curred.

 in   Conclusion
   Plaintiffs motion to strike jury demand
 is granted.  No issue of material fact re-
 mains concerning all of the costs recovera-
 ble under 42 U.S C   { 9607(a), except for
 the cost of the totk search and the interest
 Plaintiffs motion for summary judgment a
 denied as to the amount owed plaintiff for
 the title  search and for prejudgment inter-
 est  The court wfll delay ruling on the title
 search cost and  the total interest to be
 awarded pending submission of further af-
 fidavits

                ORDER
  In accordance with the opinion filed this
 date,
  FT IS ORDERED that plaintiffs motion
 for summary judgment on costs is granted
 as to $268,818 25, consisting of all amounts
 sought except for interest and the $993 00
 paid to GCA for  the  title search.
  IT  IS  FURTHER ORDERED  that de-
 fendant ts liable for prejudgment interest
 on the $268,818.25, and that within 80 days
 of this order, the parties shall file with the
 court a  stipulation  as to the amount of
 interest  owed  under  Section 9607(a)   In
 the event agreement cannot be reached,
 plaintiff shall file an affidavit or affidavits
 setting forth the  total amount of interest
 due under Section 9607(a), taking mto ac-
 count the date  on which each expenditure
 occurred.   The  court's ruhng  on  the
 amount  of  prejudgment  interest to be
 awarded  plaintiff wfll be held m  abeyance
 pending receipt of this inf ormataon.
  IT IS FURTHER ORDERED that plain-
 tiffs motion for summary judgment on de-
fendant's babflity for the $998 paid to GCA
» denied.

-------
-------
1422
686 FEDERAL SUPPLEMENT
  IT IS FURTHER ORDERED that within
80 days  of the  filing  of this order, the
parties shall submit affidavits or other em-
dence concerning the title search expense
ao that the court may  determine, without
the expense of trial, whether plaintiff is
entitled to  judgment on this amount
  FT IS FURTHER ORDERED that plain-
tiffs motion to strike jury demand is grant-
ed
              Michigan, SJ>
             May 17, 1988

    Owner of patents relating to electrical-
ly prewired  portable wall panels  used in
large  offices brought infringement action,
and alleged infnnger counterdauned for
patent unenforceabflity and invalidity  The
District Court,  Enslen, J,  held that (1)
patents  for electrically prewired portable
wall panels for use m  large offices  were
not invalid as rendered obvious by  prior
art; (2) owner failed to establish that claim
18, dealing with panel-to-panel connectors,
was infringed,  and (3) alleged infnnger
failed to establish by clear and  convincing
evidence that inventors misled Patent and
Trademark Office either by - deliberately
misrepresenting  or  omitting prior art  at
issue  or by being grossly negligent
    So ordered.

1. Patents *=>16.»
    Patents for electncaUy prewired porta-
ble wall panels for use in large offices were
not mvahd as rendered obvious by  prior
art; unlike prior art, patents were "non-
handed," did  not employ flexible  cord  to
                accomplish electrical connections, and did
                not make use  of conventional  plug and
                socket means to make connections.  85U.S
                     {282
                                            otested,  ad-
2. Patents «=»112.1
    Where there has been
versanal proceeding  m which alleged pat-
ent infnnger fully participated as protester
and prior art evidence at trial was cumula-
tive of Patent and Trademark Office pro-
ceedings, trial court may give PTO'a deci-
sion deference that is due to qualified gov-
ernmental agency.
                S. Patents «=1
                    Factors  to be considered m determin-
                ing level of ordinary skill and art, for pur-
                poses of determining whether patent is in-
                valid  for obviousness, include educational
                level of inventor, type of problems encoun-
                tered m prior art,  prior art solutions to
                problems, rapidity with  which innovations
                are made, sophistication of technology, and
                educational level of active workers m field

                4. Patents *=S6.1(3)( S&2Q)
                    Principal  "secondary  considerations"
                supporting findings  of nonobviousness are
                whether invention was  commercially suc-
                cessful, whether invention represented  so-
                lution  to  previously unsolved but  recog-
                nized problem ID industry, and whether oth-
                ers had tinted to devise solution to problem
                and failed
                                                   *
                5  Patents «=>101(6)
                    Claims in patents relating to electrical-
                ly prewired portable wall panels for use in
                large offices were not too vague to distinct-
                ly define invention daim, and thus were not
                mvabd. 35 USCA  §§  112, 282(3)

                6. Patents *»101<1)
                    Fact that drafting  of patent  claims
                could have been better cannot, standing
                alone, invalidate otherwise unobjectionable
                patent  86 USCJL §§  112, 282(3)
                7 Patents *»167(l'/4,
                    Asserted claims are not to be limited
                by bringing mto  them specific structure
                described in specification and drawings of
                patent m suit, m determining whether pat-
                ent has been infringed.
-------
                IN THE UNITED STATES DISTRICT COURT. -
               FOR THE WESTERN DISTRICT OF
 UNITED STATES OF AMERICA,   '
                  Plaintiff,
 v.
 NORTHERNAIRE PLATING COMPANY,
 WILLARD S.  GARWOOD,  and
 R. W.  MEYER,  INC.
                  Defendants,
 and
 R.  W.  MEYER,  INC.,
                Defendant and
                cross-Plaintiff
 v.
 NORTHERNAIRE  PLATING COMPANY
 and WILLARD S.  GARWOOD,
               Cross-defendants
and
NORTHERNAIRE PLATING COMPANY
and WILLARD S. GARWOOD,
               Defendants and
               Third Party
               Plaintiffs
v.
CITY OP CADILLAC,
              Third Party
	Defendant.
                                       \\
                                                 ^  -  -  /: -'> V?
                                                      '  "" if
                                     CIVIL ACTION NO.
                                     G84-1113-CA7
                                     HONORABLE DOUGLAS W. HILLKAN
                                     PLAINTIFF'S MOTION FOR
                                     SUMMARY JUDGMENT ON COSTS
                                                        r-\'\
                                                                \
                                                          T?^-1
                                                          t&S*-
          Plaintiff the  United States of XBirTca Hereby moves
this Court for entry of  an order awarding it recovery of
COStS rronnor-^ad wifch fch« inm+dl**-* r*i*nv»\  »f±ian carried OUt at
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                               -  2 -
 the Northernaire site.   In support of its motion, plaintiff
 states as follows:
           1.  This Court has previously found defendants
 Northernaire Plating, Willard S. Garwood, and R. W. Meyer,  Inc.
 jointly and severally liable pursuant to Section 107 of CERCLA,
 42 U.S.C. i960?,  for the cost of the immediate removal action
 carried out at the Northernaire  site by EPA.  The purpose of the
 immediate removal action was to  remove drums of abandoned
                       4
 hazardous wastes  and to  clean up some surface contamination of
 the site.
           2.   Along with the supporting memorandum, plaintiff is
 also  filing Declarations of willimina Pipkin, William Cooke.
 Richard Hacklev and Philip Stiness.  The Pipkin  Declaration
 establishes the amount of costs  incurred by EPA  Headquarters  in
 connection with the Northernaire site through July 21,  1987;  the
 Cooke Declaration explains how certain  indirect  costs  are
 calculated;  and the Hackley declaration sets  forth the costs  of
 EPA Region V through July 21, 1987.  Similarity,  the Declaration
 of Philip Stiness establishes the Department  of Justice's  costs
 through June 30,  1987.   The total amount  sought by plaintiff at
 this time is $270,952.07.
           3.   In  its supporting  memorandum, plaintiff sets forth
 the legal authorities that establish the plaintiff's right to
 recover response,  administrative,  investigative, legal coats,  and
prejudgment interest.  Furthermore,  the memorandum demonstrates
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                              - 3 -

that the costs incurred were not inconsistent with the National

Contingency pl*» (*NCP*),  as required by Section  107 of CERCLA.

         WHEREFORE, plaintiff respectfully requests this court to

(1) grant plaintiff's motion for partial summary  judgment on the

issue of the United States' response costs under  CERCLA § 107(a);

(2) find defendants jointly and severally liable  for the amount

of two hundred seventy thousand, nine hundred fifty-two dollars

and seven cents ($270,952.07); and (3) award plaintiff prejudment

interest at a rate to be determined later.

                         Respectfully submitted.
                         ROGER L. MARZULLA
                         Acting Assistant Attorney General
                         Land and Natural Resources Division
                    By:
                         ROBERT H.__OAKLEY, Attorney  ^/
                         Environmental Enforcement Section
                         Land and Natural Resources Division
                         United States Department of Justice
                         Washington, D.C.  20530

                         JOHN A. SMIETANKA
                         United States Attorney
                         Western District of Michigan
                    By:
                         THOMAS GEZON
                         Assistant U.S. Attorney
                         399 Federal Building
                         110 Michigan Avenue, N.w.
                         Grand Rapids, Michigan  49503
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                              . 4 -

OF COUNSEL:

BABETTE J. NEUBERGER
BERNARD LANDMAN
Assistant Regional Counsel
Environmental Protection Agency
Region V
230 South Dearborn Street
Chicago, Illinois  60604
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                              - 5 -


                      CERTIFICATE OF SERVICE

      I,  Robert H.  Oakley, certify that on August 31, 1987,  I

 served a copy of the  foregoing  Plaintiff's Motion for Summary

 Judgment on Costs  on  each of the following:
                         John M. Kruis
                         Smith, Haughey, Rice & Roegge
                         200 Calder Plaza Building
                         Grand Rapids, Michigan  49503

                         Miles J. Murphy, III
                         Cholette, Perkins  & Buchanan
                         600 Old Kent Building    ~  -
                         Grand Rapids, Michigan  49503

                         Robert P. Tremp
                         415 Munson Avenue
                         Traverse City,  Michigan  49684

                         Owen J. Cunnings
                         Cunnings Mcciorey  Davis & Acho, P.c.
                         33900 Schoolcraft, Suite G-i
                         Livonia, Michigan   48150


by placing a copy  in an envelope addressed  to each of the above

with proper postage affixed and placing the envelopes in the U.S.

Mail.
                          ROBERT H. OAKLEY
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                IN THE UNITED STATES DISTRICT COURT
                FOR THE WESTERN  DISTRICT OF MICHIGAN
  UNITED STATES .OF AMERICA,

                  Plaintiff,

  v.

  NORTHERNAIRE PLATING COMPANY,
  WILLARD S. GARWOOD, and
  R. W. MEYER, INC.

                  Defendants,

 and

 R. W. MEYER, INC.,

                Defendant and
                Cross-Plaintiff

 v.

 NORTHERNAIRE PLATING COMPANY
 and WILLARD S.  GARWOOD,
                Cross-defendants
and
NORTHERNAIRE PLATING COMPANY
and WILLARD S.  GARWOOD,

                Defendants and
                Third Party
                Plaintiffs
v.

CITY OF CADILLAC,

              Third Party
	Defendant.
CIVIL ACTION NO.
G84-1113-CA7

HONORABLE DOUGLAS W.  HILLMAN
MEMORANDUM IN SUPPORT OF
PLAINTIFF'S MOTION FOR
SUMMARY JUDGMENT ON COSTS
          Plaintiff United States of America submits  this

Memorandum in support of its Motion for Summary Judgment on its
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                                     - 2  -
        right to recover all coats connected with the immediate removal
        action carried out at the Northernaire  site.  Specifically, the
        United States requests this'Court  rule  that  (l) the United states
        is entitled to recover its response, administrative,
        investigative and legal costs; (2) the  United States is entitled
 .  -    to recover prejudgment interest; (3) the costs  incurred by the
        United States were not inconsistent  with the National contingency
        Plan; and (4) no material issue of fact exists  concerning  the
        specific amounts to which the United States is  entitled to
        recover.  The total sum that the United States  seeks to recover
        at this time is $270,952.071

                            I.  STATEMENT OF THE CASE
\                This is an action under Section 107(a)  of the
       Comprehensive Environmental Response Compensation and Liability
       Act of 1980,  42 U.S.C. §9601 fi£ sea. ("CERCLA*) to recover the
       costs of an immediate removal action carried out at the
       Northernaire site during July-August 1983.  The primary purpose
       of the immediate removal action was to dispose of abandoned
       barrels of cyanide, acid and other electroplating wastes.2
            1Thi> figure includes Environmental Protection Agency  costs
       through July 21, 1987 and Department of Justice costs  through
       June 30,  1987.
            2As set forth in the Bowden Declaration  and  explained  in the
       Memorandum filed in support of Plaintiff's Motion for  Partial
       Summary Judgment, the immediate removal action also  removed some
       contaminated soil and sealed a leaking sever.  The immediate
       removal action did not seek to remedy any contamination of  the
       groundwater, and none of the costs  included  in this  motion  were
                                                         (continued...)
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                                      - 3 -
Ndflk              On April  30, 1987 this Court found defendants
         Northernaire Plating Co., Willard S. Garvood, ,and R.W. Meyer,
         Inc.  jointly and severally liable under Section 107(a) of CERCLA
         for the costs of the immediate removal action.   The  only
         remaining  issue in  this case is the amount of those  costs, which
         the United States seeks to establish with this  memorandum and the
         supporting declarations.
                   The costs that the United States seeks to recover  can
         be  classified as follows:
                   1)  Contractor and EPA oversight costs:   These are the
         sums paid  to EPA's  contractors and EPA's employees to plan and
         carry out  the immediate removal action;
                   2)  Litigation costs; and
                   3)  Prejudgment interest.3
                      II. THE UNITED STATES' RESPONSE  COSTS
                      INCURRED AT THE NORTHERNAIRE  SITE ARE
                        RECOVERABLE  yjlDER CERCLA I 107 f Ai .
                 A. The  United  States is entitled to recover its
          response,,  administrative,  investigative and  litigation costs

                  Section 107(a) of CERCLA, 42 U.S.C.  §9607(a), provides
        that CERCLA defendants are liable for 'all  costs of removal or
        remedial action incurred by the United States  Government or a
             2(...continued)
        incurred  in connection with any removal of  subsurface
        contamination or of groundwater contamination.
             3Because prejudgment interest will continue to accrue
        through the entry of judgment, it makes little  sense to offer a
        figure  now.  Instead, this figure will be supplied as a part of
        the  final accounting of the litigation costs incurred herein.
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                              - 4 -

 State not inconsistent with the national contingency plan*

 (»NCP*).   *A11 costs* within the meaning of this provision

 include administrative, investigative,  and litigation costs, as

 well  as prejudgment interest.

           Section 101(23)  Of CERCLA,  42 U.S.C.  § 9601(23},

 defines the term 'removal* to mean:

           The cleanup or removal of released hazardous
           substances from the environment, such actions
           as may be necessary taken in the event of the
           threat of release of hazardous substances
           into the environment, such actions aa mav b«
           necessary to monitor, assess, and evaluate  •frfift
           release or threat of release of hazardous
           substances. the disposal of removed material,
           or the taking of such other actions as  may  be
           necessary to prevent, minimize, or mitigate
           damage to the public health or welfare or to
           the environment, which may otherwise result
           from a release or threat of release.  The tern
           includes, in addition .  . . action taken under
           Section 9604 fbl  of this tit^fr and any emer-
           gency assistance which may be provided under
           the Disaster Relief Act of 1974.  .  . .

Id.   (emphasis supplied).

           The definition of removal therefore  includes, by

explicit reference, the kinds of action*  specified in Section

104(b) of  CERCLA, 42 U.S.C. f 9604(b).  That  section provides:

          Whenever the President is authorized to  act
          pursuant to subsection (a) of this  section,
           ... he mav undertake such  investigations.
          monitoring, surveys, testing, and other
           information gathering aa he  may deea neces-
          sary or appropriate to identify the existence
          and extent of the release or threat thereof.
          the source and nature of the hazardous sub-
          stances, pollutants or contaminants involved,
          and the extent of dancer to  the public health
          or welfare or to theenvironment.  In addition,
          the President may undertake  such planning.
          legal,  fiscal, economic, engineering,  archi-
          tectural, and other studies  or investigations
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                               -  5  -
           as he may deem necessary or appropriate
           plan an
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                              - 6 -
                                  *
           The broad cost  recovery rights of the government under

 CERCLA were summarized by the court in United States v.  North-

 eastern Pharmaceutical &  Chemical Co. (*NEPACgQ*),  579 p. Supp.

 823, 851-852 (W.D.  Mo. 1984), aff'd 810 F.2d 726 (8th Cir.  1986),

 as follows:

           [U]nder CERCLA,  the defendants are jointly
           and severally liable for, and the plaintiff
           is entitled  to  recover, all litigation coats.
           including attorney fees, incurred bv plaintiff.
           The Court further finds that the defendants are
           jointly and  severally liable to the plaintiff
           for all costs,  including salaries and expensesL
           incurred  bv  the Plaintiff associated with such
           activities as monitoring, assessing and evaluating
           the release  of  contaminants and the talcing of
           actions to prevent, minimize or mitigate damages
           which might  result from a release or threat of
           release of contaminants from the Denny Farm Site.

 (emphasis  supplied).4
                            i
           Based on  the express language of CERCLA,  other courts

have also  held that the Government is entitled to  recover  its

investigative costs from  parties liable under Section 107(a).

Citv of New  York  v.  Exxon Corp.. 633 P.2d  609  (S.D.N.Y. 1986)

 (recoverable response  costs include  costs  of collecting and

analyzing  ground  water samples, hydrogeological  studies and

remediation  study).  Cf.  New York v. Shore Realty Corp..  759 F.2d

1032, 1042-43 (2d Cir. 1985)  ('Costs in assessing the conditions
     4 Hotably,  the legislative history of the (*SARA*) Superfund
Amendments and Reauthorization Act of 1986 confirms this view of
the scope of  recoverable costs.  SAt H.R. Rep. no. 253, Superfund
Amendments of 1985, pending,  99th Cong., 1st Sess. at 67  (1985)
(the modification of the definition of 'response action*  in  the
bill "will confirm the EPA's authority to recover costs for
enforcement actions taken against responsible parties*)  (emphasis^
supplied).
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                               -  7  -
 of the site . . .  squarely fall  within CERCLA's definition of
 response costs*).   Sfifi New York  v. General ^J,eetrie Co..  592 F.
 Supp. 291, 198 (N.D.N.Y.  1984)  (investigation and initial
 "response costs* are clearly authorized as costs of response
                               /
 under section 101(23),  42 U.S.C.  § 9601(23)); United states v.
 Wade. 577 F.  Supp.  1326,  1333 n.4  (E.D. Pa.  1983) (cost of
 "'investigating,  monitoring,  testing,  and  evaluating the situation
 at the Wade site ...  is recoverable as  a cost of removal.1*);
 United States v.  Conservation Chemical £9..  619 F. Supp.  162, 186
 (W.D. Mo.  1985); United States v.  South Carolina Recycling  &
 Disposal.  Inc.  (*g£BDI*)f  11 Chemical and Radiation Waste
 Litigation Reporter 135,  138 (D.S.C.  Kov. 22,  1985).5  See  alao
 United States v. Hollywood Marine. Inc..  519 F. Supp.  688,  692
 (S.D.  Tex.  1981); United  Statea  v. Slada. 447 F. Supp. 638, 645
 (E.D.  Tex.  1978)  (construing "actual  costs  incurred*  language
 under analogous Clean Water Act  cost  recovery provision  to
 include all salaries and  expenses of  government employees).
           Courts have also held  that  Section 104(to)  explicitly
 entitled the  United States to recover its litigation costs from
 liable parties.  MBPACCO.  579 p. Supp.  at 851 ('the court  finds
 that  under CERCLA,  the  defendants are jointly and severally
 liable for, and the plaintiff is entitled to recover, all
 litigation costs, including attorney fees,  incurred by
plaintiff.*);  SCRPI. 11 c.tR.H.L.R.  at 138  (holding that
     5 Throughout this memorandum, citations to this  reporter are
abbreviated as  'C.4R.W.L.R.*.  A copy of the SCRDI  case is
attached hereto as Exhibit A.
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                              - 8 -
 Government can recover litigation expenses from liable  parties);
 United States v.  Conservation Chemical Co..  619 F.  Supp.  at  186
 (following NEPACCOl.
           Costs of  administration associated with cleanups and
 related enforcement efforts are also recoverable.  NEPACCO.  579
 F.  Supp.  at 851-52  (finding defendants liable "for all  costs,
 including salaries  and expenses, incurred by plaintiff  associated
 with such activities as monitoring, assessing and evaluating the
 release of  contaminants  .  .  .  .*); SCRDI, 11 C.6R.W.L.R. at 138
 (holding  that Government  can  recover administrative and
 investigative costs from  liable parties).  Accord. New Yorfr v.
 Shore Realty Corn.. 759 F.2d  1032, 1042-43  (2d Cir. 1985) ("The
 State's costs in  assessing the conditions of the site and
 supervising  the removal of the drums of  hazardous  waste  squarely
 fall within  CERCLA's definition of response cost.  .  .  .»)
                B.  The United states  is Entitled
                       to Pra"judgment  Interest
          As will now be  demonstrated, the  United  States' right
to receive prejudgment interest is supported both  by federal
statute and  by  case Ian predating  enactment of the statute.
          1.  The United  States Is Entitled to Prejudgment
               Interest As a Matter of  Federal  Law
          The Superfund Amendments and Reauthorization Act of
1980 ('SARA')  amended Section 107  of  CERCIA by adding the
following provision (100  Stat.  1628-1629):
          The amounts recoverable in  an action under
          this  section shall  include  interest on  the
          amounts recoverable under  subparagraphs (A)
          through (0).  Such  interest shall accrue from
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                               - 9 -
           the later of (i)  the date payment of a
           specified amount  is  demanded in writing, or
           (ii)  the date of  the expenditure concerned.6
           The provision goes on to state that the rate of
 prejudgment interest 'shall be the same rate as is specified
 for interest on investments of the Hazardous Substance
 Superfund .  .  .*  Under this provision, an award of
 prejudgment interest is required here, notwithstanding that
 the costs in this case were incurred before its passage.7
           The law is settled that "a court is to apply the
 law in effect at the time it renders its decision, unless
 doing so would result in manifest injustice or there is
 statutory direction or legislative history to the contrary.*
 Bradley v.  Richmond School  Board. 416  U.S. 696,  711  (1974).
 See also Thorpe v.  Housing  Authority ofthe Citv ofDurham.
 393  U.S.  268,  281 (1969).   In  Bradley, the district  court had
 granted attorney's fees to  civil  rights plaintiffs,  despite
 the  absence  of  explicit statutory authorization.  393 U.S.  at
 706.   While  the case was on appeal, Congress  explicitly
 authorized such fees by enacting the Education Act Amendments
 of  1972.  416 U.S.  at 715.  The Supreme  Court 'reject[ed] the
 contention that a change in the  law  is to be given effect in
 a pending case  only where that is the  clear and stated
     6 In this case,  the United States demanded payment of
$171,000.00 by defendants in letters dated August 13,  1984.   No
payment has ever been made.
     7 SARA was signed by the President October 17,  1986.
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                              - 10 -
 intention of the legislature.*  416 U.S. at 715.   Instead,
 the burden is on the party denying the applicability of the
 new law to a pending case to show that Congress did not
 intend it to apply,  or that application would cause a
 manifest injustice.   Id.
           This case  is analytically indistinguishable from
 Bradley.  As in Bradley. Congress has simply given explicit
 statutory authorization for the award of a sum which
 previously-could be  granted under common law rules.8
           Bradley*s  discussion of "manifest injustice* also
 applies to this case.   The Court noted that the case before
 it was not a "routine private lawsuit*  (416 U.S. at 718), but
 one in which the plaintiffs were  ''vindicating a policy that
 Congress considered  of the highest  priority"  fid,  at  719,
 quoting Newman, v. Piaaie Park Enterprises.  Inc..  390 U.S.
 400,  401-402 (1968)).   The  instant'case as well  is not a
 dispute between private parties,  but  one where  the United
 States is vindicating the important congressional policy  of
 making responsible parties pay  for the  cost of cleaning up
 dangerous waste sites.  Bradley also  found important the  fact
 that  retrospective application  of the attorneys'  fee
     8As with  the Education Amendments of 1972 considered in
Bradley, the legislative history of SARA is silent on the
question whether  Congress intended the amendment to Section
107 to apply to pending cases.   See, e.g.. H.R. Rep. 99-962,
99th Cong., 2d Sess.  203 (1986); H.R. Rep. 99-253, Pt. 1,
99th Cong., 1st Sess.  73 (1985).  Also as with Bradley, and
the Education  Amendments, precedent existed prior to the
passage of SARA that  prejudgment interest could be recovered
under Section  107(a)  of CERCLA.
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                              - 11 -
 provision would not deprive  defendants of "a right that had
 matured or become unconditional.*  416 U.S. at 720.  Here
 also, defendants can claim no matured or unconditional right
 that would be infringed by a grant of prejudgment interest.
 Finally,  Bradley found relevant that "there was no change in
 the substantive obligation of the parties.*  Id. at 721.  The
 Court found instead that:
           The availability of § 718 to sustain the award
           of fees against  the Board therefore merely
           serves to create an additional basis or source
           for the Board's  potential obligation to pay
           attorneys'  fees.   It does not impose an
           additional  or unforeseeable obligation upon
           it.
 Id.
           That is precisely  the case here,  since  (as
 discussed  below)  the  amendment to Section  107  simply  provided
 a more explicit statutory  authorization  for relief that was
 already available under CERCLA and  case  law pertaining to
 pre^udgment interest.   Thus, under  the Bradley analysis, the
 manifest injustice exception does not apply.
           The Bradley rule has been followed in this circuit
 on numerous occasion*•  Se.e  e.g.. Searboro v.  First Am. Nat.
 Bank of Nashville.  619 F.2d  621,  622  (6th Cir. 1980); &2S&1
v. United  States I.M.S.. 515 F.Supp.  712,  714 (S.D. Ohio
1981); Central  States. Southeast, etc.  v.  Alco Earn. Co. 522
F. supp. 919,  921 (E.o.  Mich.  1981).   This rule plainly
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                              - 12  -
 applies here,  and  requires that the Court grant the United
 States an award of prejudgment interest.
         2.   Even prior to the enactment of SARA, the
             United States was entitled to prejudgment
             	u;rr_rn,	interest under CERCIA	
           Generally,  in the absence of an unequivocal
 prohibition of interest on statutory obligations, the courts
 have  fashioned federal rules of decision granting or denying
 interest on particular obligations by reviewing the
 congressional  purpose for imposing then, and by considering
 other relevant legal  principles.  Sflfl, efg.. Royal Indemnify
 Co. v. United  States. 313 U.S. 289, 296 (1941)  (*In the
 absence  of  an  applicable federal statute, it is  for the
 federal  courts to  determine, according to their own criteria,
 the appropriate measure of damage, expressed in terns of
 interest, for  non-payment of the amount found  to be due.*);
 Rodders  v.  United  States. 332  U.S. 371, 373,  (1947)  {'For  in
 the absence of an  unequivocal  prohibition  of  interest on such
 obligations, this  Court has  fashioned rules which granted  or
denied interest on particular  statutory obligations by  an
 appraisal on the Congressional purpose in imposing them and
 in the light of general principles deemed relevant by the
Court.*).
          By following the  analysis set forth  in Rodaera v.
united states,  the Court  in NEPACCO held, before SARA, that
CERCLA authorized  the United States to recover  prejudgment
interest  for Superfund costs.   579 F. Supp. at 852.  In
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                              - 13 -

 NEPACCQ. the United States had  spent considerable sums from

 the Superfund to clean up dioxin  contamination of a farm

 site.  The Government sought prejudgment interest in addition

 to recovery of other response and remedial costs in order to

 make the Superfund whole.  The  Court looked at the

 congressional intent behind CERCIA:

           In determining this issue, the Court must
           be mindful of the Congressional intent to
           impose liability on those responsible parties
           for "all costs* incurred in taking remedial
           and removal action.   It was the intent of
           Congress that CERCIA  be given a broad inter-
           pretation so as not to  restrict the liability
           of those responsible  parties.  It is also
           well established that prejudgment interest  is
           compensatory in nature,  not punitive.

 Id.   Clearly,  awarding prejudgment interest under  CERCIA is

 consistent with the Congressional purposes of enabling

 recovery of all costs from responsible parties and

 replenishing the Superfund for  use"at other sites.

           Courts have routinely awarded prejudgment interest

 in cases brought by the United  States to  recover the costs of

 removing oil from navigable waters under  Section 311 of the

 Clean Water Act,  33 U.S.C. f 1321.  See,  e.g..  United States

 v. The M/V 2oe Coloeotroni. 602 F.2d 12,  14  (1st Cir. 1979)

 (assessing prejudgment interest on costs of cleaning up oil

 spill);  United States v. Hollywood Marine.  Inc.. 519 P. Supp.

 688, 692  (S.O.  Tex. 1981) (same); United States v. Malitovskv

 Cooperage Co..  472 F. Supp. 454,  458 (W.D.  Pa. 1979) ('In our

opinion,  the 'costs' thus incurred by the Government as a

result of the  defendant's detention of the money  advanced by
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                                - 14  -
   the government for  clean-up constitute a part of  the costs
   incurred and thus the responsibility of the defendant.*).
   Significantly,  Congress modeled Section 107 of CERCLA  in
   substantial part on Section 311 of the Clean water Act. 9
   Indeed,  in Section  101(32) of CERCLA, 42 U.S.C. § 9601(32),
   the term ''liable* is defined as having the same meaning as
   under Section 311 of the Clean Water Act.  The analogy to
   cases brought to recover cleanup costs under Section 311  is
   therefore clear, and prejudgment interest should also be
   awarded  under Section 107(a) of CERCLA.
             In other  analogous contexts as well, courts have
   held  that prejudgment interest is the rule and not the
   exception.   For example, in admiralty cases, "prejudgment
   interest  in  a sole  fault collision case has always been
   allowed by maritime law unless exceptional circumstances
   render such  an  award inequitable.*  United states v.Pe^vey
   Baroe Line.  748  F.2d 395, 401-02 (7th Cir. 1984).  See also
   Hillier v. Southern Towina Co.. 740 P.2d  583,  584 (7th cir.
   1984)  ("it is an abuse of discretion to deny prejudgment
       9 In Pnited Stataa v. SCRPT.  11  C.  fc  R.W.L.R 135  (D.S.C.
  Nov. 22, 1985), Exhibit A hereto,  the court recognized that
  prejudgment interest may be awarded under  CERCLA.   The court
  declined to award prejudgment  interest in  that case, however,
  because, in the word* of the court, the defendants had not
  been "recalcitrant, deceptive,  or unreasonable* and had "not
^-sought to delay either the cleanup activity or progress of
f this case.*  Id- at 138.  As the discussion in the text above
1 demonstrates, th« court clearly applied an erroneous
  standard.  Good faith or lack  of wrongdoing on the part of a
 ^defendant is irrelevant for purposes  of assessing prejudgment
  interest.  This decision is presently on appeal before the
  Fourth Circuit.
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                              - 15 -
  interest [in admiralty cases]  absent  'peculiar
  circumstances'"),  similarly,  although the Fair Labor
  Standards Act, 29 U.S.C.  § 201 e£ aasL., does not expressly
  authorize the assessment of prejudgment interest on back pay
  awards,*fi]t is well established  that prejudgment interest
  should be allowed on the amount found to be due**  Userv v.
 Associated Druera. Inc.,  538 F.2d  1191, 1194 (5th Cir. 1976).
           As in these cases, here the United States can only
 be made whole by an award of prejudgment interest.  Had the
 defendants paid their obligations in  response to the United
 States' demand letter, the money  spent on  the immediate
 removal action could have continued to accrue interest as
 part of the Superfund.  The congressional  mandate  that the
 United States should recover 'all funds* connected with
 response actions can only be effectuated by an  award of
 prejudgment interest.            __
         III.  THE SUPPORTING DECLARATIONS AND VERIFIED COST
          SUMMARIES ESTABLISH  BEYOND  DISPUTE THE AMOUNT
          OF PLAINTIFF RESPONSE COSTS CALCULATED TQ DATE.
          The declarations and verified costs  summaries
 attached hereto establish the  amounts of plaintiff's response
 costs  incurred and calculated  to  date.10   Those costs include
 the Government's costs of investigation,  monitoring, response
     10 Sfift not*  1 sjutca.   Also, additional litigation
expenses have been incurred since the dates of those
calculations, and will continue to be incurred through the
remainder of this litigation.  At the conclusion of this
litigation, plaintiff will submit verified proof of
additional costs  to this Court.
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                              - 16 -
 actions, administration,  and  litigation, including attorney's
 fees.
           Specifically, the Verified cost summaries attached
 to the declaration to Mr. Richard/-Hackley\ of EPA Re
 willimina /Pipkin/of EPA Headquarters, and PhilipfStiness
 Financial Management Division, Department of Justice
 establish the amounts of plaintiff's direct and indirect
 response costs.   Mr.  Hackley compiled and reviewed
 documentation concerning EPA Region V's response costs
 incurred in connection with the Northemaire site to July 21,
 1987.   HaOcley declaration 11  6-9.  Similarily, the
 Declaration of Willimina Pipkin establishes the costs
 incurred by EPA  Headquarters  in connection with the  immediate
 removal action that is the subject of this case.  The  cost
 summary prepared by Philip Stiness, Financial  Management
 Division, U.S. Department of  Justice, establishes the  amount
 of the  Justice Department's Superfund costs  calculated to
 June 30,  1987, relating to the United States'  response to the
 release of  hazardous substances at the  Northemaire site.
 The cost summaries  compiled and summarized by Mr. Hackley,
 Ms. Pipkin,  and  Mr. Stiness are contained in the attachments
 to their declarations.  These declarations  list and summarize
 response costs incurred by plaintiff, namely,  EPA and
Department  of Justice payroll, travel,  indirect costs
 (administrative  and other costs), and EPA's costs under
contracts with private firms.   Finally, in the Declaration  of
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                              -  17 -

 William Cook,  the plaintiff explains the basis  for the

 determination  of certain indirect costs, by EPA.

           The  verified cost summaries submitted by plaintiff

 summarize  voluminous underlying bills,  'invoices under

 pertinent  contracts, vouchers, timesheets, and  other

 accounting records.  The declarants who prepared  and/or  -

 compiled those cost summaries explain in their  declarations

 how they prepared and compiled those summaries  and describe

 their personal familiarity with the underlying  accounting

 records.   Those summaries, coupled with the declarations,

 fully establish the amounts of plaintiff's response costs.11
     11 summaries of voluminous records, such as the
accounting records here, are admissible in lieu of all the
underlying documents where all the underlying documents
cannot be conveniently examined by the Court, the underlying
records have been made available to all parties for
examination, and a witness testifies that he prepared the
summary and is familiar with the underlying documents and
records.  Rule 1006, Fed. R. Evid. A recent decision by the
court in United Stataa v. SCRDI. NO. 80-1274-6  (D.S.C., Nov.
22, 1985), Exhibit A hereto held that affidavits and cost
summaries submitted by the Government in support of its
motion for summary judgment on the issue of the Government's
cost recovery under CERCLA f 107(a), were admissible and
sufficient to establish conclusively the amount of those
costs where the defendants did not controvert the amount:

        The cost documents which underlie the government's
        cost summary are records of regularly conducted
        activity, which are subject to  the hearsay exception
        provided by Fed. R. Evid. 803(6).  The  Federal Rules
        recognize the utility and admissibility of evidence
        summaries in circumstances such as this:  [quotation
        of Rule 1006, Fed. R. Evid. omitted].   Fed. R. Evid.
        1006.  Pursuant to Rule 1006, summaries of evidence
        should be admissible whenever the underlying  evidence
        would itself be admissible,   [citations omitted].
        Because plaintiff's cost exhibit summarizes
        admissible documentary evidence and  was properly
                                              (continued...)
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                                    - 18 -

        The  total amount sought by the  United states at this time is

        $270,952.07.          \
                            t  * i   "

                 Copies of the underlying response cost records and

        documents have been given to the  defendants.12  Thus,

        defendants have had ample opportunityto examine the

\y      underlying records to identify  any genuine issues of material

        facts concerning the amount of  plaintiff's response costs.

        However, defendants have failed to take any discovery
        --    , _:                         _.	  - - - -   _    _      _,

        concerning-plaintiff's costs.   Accordingly, defendants are  in
       no position to question the accuracy of  the  costs as set out

       in the declarations filed with this memorandum.

                 The facts concerning the United States' costs

       cannot reasonably be disputed by defendants.  Plaintiff has

       unquestionably incurred those costs, in  the  amounts stated in

       the supporting declaration and cost summaries, in response to

       the release of hazardous substances at the Northernaire site.
            11(...continued)
               authenticated by custodial affidavits, the summary
               and affidavits were admitted as evidence.
                 If plaintiff's cost summaries are not admitted at
       trial  in the present case and if defendants were to challenge
       the  authenticity and admissibility of plaintiff's underlying
       cost documentation as records kept in the ordinary course  of
       business,  plaintiff might be required to present up to  50
       witnesses to establish the amounts of all its response  costs.

           12  Plaintiff has previously provided each defendant with
       a copy of cost summaries (which have since been partially
       updated)  and offered each an opportunity to review the
       underlying documentation.
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                              - 19 -

 There are no genuine issues  as to any material facts concerning

 the amount of plaintiff's  response costs.

           IV.  THE RESPONSE  COSTS INCURRED BY
ARE
                       NOT INCONSISTENT WITH
                      NATIONAL CONTINGENCY PLAM

           Under CERCLA §  107 (a), the United states is entitled to

 recover all response costs  incurred by itself or a state "not

 inconsistent with the national contingency plan.*  42 U.s.c.  §

 9607 (a).  As explained more fully below, defendants bear the

 burden of establishing that plaintiff's response costs were

 inconsistent with the NCP.   Nonetheless, however, plaintiff here

 demonstrates that all the removal and response actions undertaken

 by  the United States were indisputably consistent with the 1982

 NCP that was applicable during the Northernaire cleanup.13

 De fendants  cannot possibly  satisfy their  burden of demonstrating

 that plaintiff's  response costs were inconsistent with the NCP.

            A.  Tha National Contingency Plan r*NCP*"|.

          Section 107 (a)  of CERCLA, 42 U.S.C. f 9607 (a),  provides

 that responsible  parties  (defined in that subsection)  shall  be

 liable  for  'all costs of  removal or remedial action incurred by

 the  United  States Government or a State  not inconsistent with the
     13 The NCP  first utilized by EPA under CERCLA was the
"National Oil and Hazardous Substances Pollution Contingency
Plan* that was developed in compliance with the Federal Water
Pollution Control Act,  as amended, 33 U.S.C. Si 1251 e_t sfifl. See
1980 NCP, 40 C.F.R.  f 1510.1 (1980).  That earlier NCP was in
effect until July 16, 1982, when EPA promulgated its revised NCP
pursuant to CERCLA  f  105.  The 1982 NCP, codified at 40 C.F.R.
Part 300, was the first NCP which specifically *effectuate[d] the
new responsibilities  and powers created by CERCLA.*  47 Fed.
31180.  The NCP  was again revised in 1985; that 1985 NCP  is also
codified at 40 C.F.R. Part 300.
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                              - 20 -

 national contingency plan.*  Under  CERCLA § 105, "the response  to

 and actions to minimize damages from hazardous substances

 releases shall, to the greatest extent possible, be in accordance

 with the provisions of the [NCP].»  42 U.s.c. § 9605(a)(i).   The

 NCjP__embodies_ and encourages  a  spirit of flexibility in response

 to cleanups of hazardous substances.14

           The NCP provides for response actions of the Federal,

 state,  and local governments.  The  NCP provides that action

 begins  with discovery of the release or threatened release of a

 hazardous substance at a site  and notification of the EPA.  40

 c.F.R.  §300.63.   An7 preliminary assessment would follow, during
                  f
 which EPA would,  inter alia, investigate the discharge of

 hazardous substances,  evaluate the  magnitude, source, and nature

 of the  release or threatened release, determine the  feasibility

 of removal,  assess  the effectiveness of removal actions, and

 initiate  action.   40 C.F.R.  $300.€4.  The NCP  further provides

 for cleanup, mitigation,  and disposal measures, and  monitoring

 removal actions  to  determine their  effectiveness.  40 C.F.R.

 §300.65

          As previously set  forth in the  Declaration of Robert
^
Bowden} filed  in support of  plaintiff's motion for partial


     14 One  sponsor of CERCLA  emphasized  that "the purpose of
 [CERCLA i  104]  and  the response  plan  is to protect the public
health and welfare  in the broadest sens*.   In protecting those
interests, the President is  not  to be constrained by a rigid  or
inflexible construction . .  .  .* 126  Cong. Rec. 516428  (Dec.  12,
1980); a$ft S.  Rep.  No. 848,  96th Cong., 2d Sees, at 55  (July  13,
1980).  The  1982  NCP itself  states that the EPA,'has sought to
ensure that  the  [NCP]  does not contain unnecessarily rigid or
cumbersome provisions."  47  Fed.  Reg.  31180.
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                              - 21 -
  summary judgment, in May of 1981,  the Michigan Department of
  Natural Resources (*MDNR*) attempted to inspect the Northernaire
  site, but found the building locked and abandoned.  Bowden, 1 7.
  Drums of plating waste had been left outside of the building, and
  EPA was informed by MDNR that a child had received chemical burns
  as a result of playing around the abandoned drums.  ld.« Analysis
  of groundwater by MDNR from private drinking water wells  in the
  vicinity of Northernaire showed the presence of cyanide,  lead,
 ^cadmium, nickel, chromium, copper, and zinc.  Bowden,  1 8.
           In March 1983, EPA and its contractors  inspected the
 Northernaire site and found the inside of the building in a state
 of disarray, with numerous tanks and drums of chemical substances
 scattered about the building.  Substantial amounts of cyanide and
 acid were among the substances identified.  These substances, if
.mixed,  could form deadly hydrogen cyanide gas.  The EPA
 inspectors also located a sewer line on the north side of the
 building and observed two pipes and discolored soil, indicating
 contamination.   Bowden, 1 9.
           On or about June 28,  1983, the EPA informed defendants
 of  its  intent determination that 'Immediate Removal Action* was
 necessary at the Northernaire site and that the agency would
 /proceed  to undertake the necessary work unless the defendants
 undertook the cleanup themselves.  Defendants refused  to do  so.
 Bowden,  5  10.
           Accordingly, on or about July  15,  1983, EPA commenced
 an  immediate removal action at the Northernaire  site  to respond
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                              - 22 -
 to releases and threatened  releases of hazardous substances  into
 the environment.   Bowden, 1 11.  Among other things,  the EPA's
 activities included neutralization of caustic acids,  bulking and
 shipment of liquid acids  for proper disposal, neutralization and
 solidification of caustic and  acid sludges for proper disposal,
 excavation and removal  of the  contaminated sewer line, and
 decontamination of the  inside  of the building.  The Immediate
 Removal Action was completed on August 3, 1983.  Bowden, 1 12.
           EPA's investigation  and carrying out of the Immediate
 Removal Action was clearly  consistent with the evaluation and
 initiation of action phase  of  the NCP as  set forth at 40 C.F.R.
 §300.63.   That phase, as  noted above, provides that  EPA shall
 evaluate the magnitude  and  severity of a  pollution discharge,
 determine the feasibility of and  assess the  effectiveness  of
 removal,  and then initiate  action.   Bowden's description of what
 was done at the Northernaire site comports with these
 requirements.
          B.   Defendants Bear the  Burden of Demonstrating
              That Plaintiff's  Response Costs Were
              Inconsistent With the NCP.	
           The lav is veil established that, where the United
 states  seeks to recover its response costs under CERCLA f
 107(a)(4)(A),  42  U.S.C. 5 9607(a)(4)(A),  the burden rests upon
 the defendant party to  demonstrate that government response costs
were incurred in a manner inconsistent with the NCP.   See United
States v.  Northeastern  Pharmaceutical.  810 F.2d 726, 747  (8th
Cir. 1986)  ('the parties  claiming the benefit of the exception
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                              - 23 -
 [that response costs inconsistent with the NCP are not
 recoverable],  have the burden  of proving that certain costs are
 inconsistent with the NCP and, therefore, not recoverable.");
 United States v.  Ward.  618 F.  Supp. 884, 899 (E.D.N.C. 1985)
 ('The burden of raising and proving inconsistency with the NCP
 is, however, on the .  .  .  defendants."); United States v.
 Conservation Chemical Co..  619 P.2d 162, 186 (W.D. Mo. 1985)
 ("the burden of proving,  that  the costs incurred were
 inconsistent with the National Contingency Plan is on the
 defendants ....").
           Any  challenge by defendants to the propriety of  EPA's
 remedial and response actions  under CERCLA, and to the
 consistency of those actions with the NCP, must be considered in
 light of a restrictive standard  of  judicial review.   Congress
 recognized the need to provide for  flexibility and deference to
 agency expertise:  "the respdhse to and actions to minimize
 damages from hazardous substance* releases shall, to the greatest
 extent possible,  be in accordance with the provisions of the -
 [NCP].*  42 U.S.C. i 9605 (emphasis added).   The legislative
 history of CERCLA clarifies the Congressional intent that, while
 the NCP was to guide response  actions,  it was not to serve as an
 inflexible rule against which  investigatory and cleanup
               «
 activities were to be measured,  and that, in implementing the
                             f
plan, deference was to be given the protection of public  health,
welfare  and the environment.  Sift,  &*&,., 126 Cong. Rec. 516427
-------
                                       - 24 -

           (Dec. 12, 1980) (comments of Senator Stafford); S. Rep. No.  848,

          96th Cong., 2d Sess.,  at 55 (July 13, 1980).

                    Judicial review of decisions made pursuant to

      O  / discretion conferred by Congress  should be substantially

        ( deferential.15  In technical and  factual areas, such as the

\p?  /A    response and remedial  decisions in this case, courts recognize

          decision making as the primary responsibility of agencies.  See.

     •\    e.g..  Ethvl Corp.  v. EPA,  supra.  541 F.2d 1.  These decisions

          involve  scientific and technical  matters particularly within the

          agencies' expertise,   on such occasions, the court's review must

          be at  its most deferential.

                    Two recent district court decisions confirm  that agency

          decisions regarding response actions under  CERCLA are  to  be

          upheld unless arbitrary and capricious.  United states v. ward.
               15  In this context,  a 'court is not empowered to substitute
          its  judgment for that of  the agency,* Citizens to Preserve
          Overton  Park v. YffilEA, 401 U.S.  402, 416 (1971), and dfl novo
          review is  disfavored.  Chrysler Corn.v. Brown. 441 U.S. 281
          (1979).  Accordingly, such agency decisions are entitled to a
          presumption of regularity.*  Qverton Park.  401 U.S. at 415.  The
          Courts generally presume  agency decisions valid.  As stated by
          the  court  in Ethvl Cora,  v. EPA. 541 F.2d 1 (D.C. Cir.) (fin
          band. cert denied. 426 U.S. 941 (1976);

                  [AJfter our careful study of the record,
                  we must take a step back from the agency
                  decision.  We must look at the decision
                  not as a chemist, biologist, or statistician
                  that we are qualified neither by training nor
                  experience to be, but as a reviewing court
                  expressing our narrowly defined duty of
                  holding agencies  to minimal standards of
                  rationality.

         Id-  at 36-37
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                              - 25 -

 618 F. Supp. 884 (E.D.N.C.  1985); United States v. Western
                                              V
 Processing. Co.. No.  C-83-252M  (W.O. Wash. Feb. 19, 1986)(Exhibit

 B hereto).

           The WarjJ court held that  for the defendants to carry

 their burden under CERCLA of showing that EPA's response costs

 were incurred in a manner inconsistent with the NCP, they must

 establish that EPA acted in an  arbitrary and capricious fashion.

 618  F.  Supp.  at 899-901.  Relying upon Overton Park, supra.  the

 court held that EPA's determination of appropriate remedial

 action is "entitled to great deference* and that  its actions are

 "presumed to be consistent  with the NCP unless otherwise shown."

 Id.  at  899-900.16  The court further observed:

        The statute provides liability except  for  costs
        'not inconsistent' with  the  NCP.  This  language
        requires deference by this court to the "judgment
        of agency professionals.  The defendants,  therefore.
        may not seek to have the court substitute  its own
        •judgment for that of the EPA.

                        ******

        [IJt would be  an unreasonable waste of judicial  time
        and government resources not to mention an usurpation
        of agency authority, to  require the EPA to justify its
        every  action in order to recover  under [CERCLA]
        section 107.

 Id.  at  900 (emphasis  added).

           In  United States  v. Western Processing Co.. No. C-83-

 252M (W.O.  Wash.  Feb. 19, 1986), the  court held that,"[b]ecause
     16 See United States v.  Beattv. Inc.. 401 F. Supp.  1040
(W.D. Ky.  1975)  (presumption of reasonable applies to clean-up
costs incurred by  Government under Federal Water Pollution
Control Act § 311(f),  33 U.S.C. § 1321(f)).  CERCLA  incorporates
the standard of  liability set forth in 33 U.S.C. § 1321.  42
U.S.C. § 9601(32).
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                              - 26 -

 the selection of a remedy  involved balancing of numerous
                 »
 technical factors within EPA's expertise, its remedy must be

 upheld unless the agency was  'arbitrary and capricious'  in

 selecting it.*  (slip.  op. at p.  6).  The 1986 Superfund

 Amendments clarified and confirmed that response actions  under

 CEHCLA shall  be  upheld  unless the objecting party can demonstrate

 that the response decision was 'arbitrary and capricious or

 otherwise not in accordance with  law."  42 U.S.C. $9613(3)(2).

 Moreover,  even if a court  holds a response action in part to be

 arbitrary and capricious,  the court shall award all other

 response costs or damages  that are not inconsistent with the NCP.

 Id..   42  U.S.C. §9613(1)(3).
V.  THE UNITED STATED IS EflTTTt-EP TO PARTIAL SUMMARY
JUDGMENT ON THE ISSUE OF THE AMOUNTS OF  ITS RESPONSE  COSTS
          The United States has moved  pursuant  to Rule 56(a)  and

(d), Fed. R. civ. P.,  for partial  summary judgment seeking a

ruling on the amounts  of its  recoverable response costs under

CERCIA f 107(a).  Rule 56(a)  authorizes a claimant to move for a

summary judgment in his favor on  'all  or any part* his claim.

Rule 56(d) provides that  if summary judgment is not rendered on

the whole case or for  all the relief asked, the court

        shall thereupon make  an order specifying
        the  facts that appear without substantial
        controversy, including the extent to which
        the  amount of  damages or other relief  is
        not  in controversy,  and directing such
        further proceeding  in the action as are
        just.  Upon the trial of the action, the
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                                       - 27 -
                  facts so specified shall be  deemed
                  established ....
                   The United States' motion  for partial summary judgment
          seeks  a  conclusive determination on  the amounts of its
         recoverable response costs  incurred and calculated to date.
         Because "the amount[s] of [plaintiff's response costs] ...  is
         not in controversy.  .  .  .,  the fact [of those amounts of response
         costs should]  be deemed  established."  Rule 56(d).  At least one
         court has entered partial summary judgment on the identical issue
         of the amount of the Government's response costs under CERCLA §
         107(a)  based upon the Government's affidavits and verified cost
         summaries.   United states v. SCRPI. (D.S.C. November  22, 1985)
         (Exhibit  A hereto).   Because the defendants failed to present any
         opposing  affidavits  or documentation or otherwise controvert the
         validity  of the  amount of those costs, the SCRDI court accepted
         the Government's statement  of costs as true.  Id..
                  A plaintiff is entitled to summary judgment when the
         pleadings,  deposition, answers to interrogatories, admissions  and
         affidavits  or declarations  show that there is no genuine issue as
        to any material  fact and the moving party is entitled to judgment
        as a matter of law.   Rule 56(a).  The Supreme Court  has recently
        emphasized  that  summary  judgment is a favored procedure which is
        appropriate  even in  complex cases,  celotex  Corp.  v. catrett.  ioe
f
   e;
  N  \   S.  Ct.  2548,  2555 (1986); Matsushita Elee. Indua.  Co.  v.  Zenith
^      Radio Cora..  106 S.  Ct. 1348, 1355-57,  1361-62  (1986); Anderson
i>\'  J   v»  Liberty Lobby. Inc.. 106 S. Ct. 2505,  2511 (1986).
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                             - 28 -

          Here, there is no genuine  issue  as to the amounts of

the United States' response costs and the  consistency of those

costs with the KCP.

         WHEREFORE, for the foregoing reasons, plaintiff

respectfully requests this Court to  (1)  grant plaintiff's motion

for partial summary judgment on the  issue  of the United states'

response costs under CERCLA § 107(a); (2)  find defendants jointly

and severally liable for the amount  of two hundred seventy

thousand, nine hundred fifty-two dollars and  seven cents

($270,952.07); and (3) award plaintiff prejudment interest at a

rate to be determined later.

                         Respectfully submitted.
                         ROGER L. MARZULLA
                         Acting Assistant Attorney General
                         Land and Natural Resources Division
                    By:
                         ROBERT H. OAKLEY, Attorn
                         Environmental Enforcement Section
                         Land and Natural Resources Division
                         United States Department of Justice
                         Washington, D.C.  20530

                         JOHN A. SMIETANKA
                         United States Attorney
                         Western District of Michigan
                    By;
                         THOMAS GEZON
                         Assistant U.S. Attorney
                         399 Federal Building
                         110 Michigan Avenue, N.W.
                         Grand Rapids, Michigan  49503
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                              -  29  -

OF COUNSEL:

BABETTE J. NEUBERGER
BERNARD LANDMAN
Assistant Regional Counsel -
Environmental Protection Agency
Region V
230 South Dearborn street
Chicago, Illinois  60604
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                             - 30 -


                •

                     CERTIFICATE OF SERVICE

     I, Robert H.  Oakley, certify that on August 31,  1967,  I

served a copy of the foregoing Memorandum in Support of

Plaintiff's Motion for  Summary Judgment on Costs on each of the

following:
                         John M. Kruis
                         Smith, Haughey, Rice & Roegge
                         200 Calder Plaza Building
                         Grand Rapids, Michigan  49503

                         Miles J. Murphy, III
                         Cholette, Perkins 6 Buchanan
                         600 Old Kent Building
                         Grand Rapids, Michigan  49503

                         Robert P. Trenp
                         415 Munson Avenue
                         Traverse City, Michigan  49684

                         Owen J. Cunnings
                         Cunnings McClorey Davis & Acho, P.C.
                         33900 Schoolcraft, Suite G-l
                         Livqnia, Michigan  48150


by placing a copy in envelopes addressed to each of  the  above

with proper postage affixed and placing the envelopes in the U.S.

Mail.
                               ,    /   /
                          "~'
                         ROBERT H. OAKLEY
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                                         ' ^~>  / .»
                                          
                              )
NORTHERNAIRE PLATING COMPANY, )
INC., et al . .                 )
                              )
                Defendants.   )
                 DECLARATION OF WILLIMINA PIPKIN
          I, Willimina Pipkin, depose and say:
          1.  I am employed by the United States Environmental
Protection Agency (EPA), 401 M Street, S.W., Washington, D.C.
20460, as a Program Analyst in the Guidance and Oversight Branch
of the Superfund Enforcement Division in the Office of Waste
Programs Enforcement (OWPE) .  I have been employed by OWPE for
three years.
          2.  During the past three years, I have been employed
as a Program Analyst in the Oversight and Documentation Section.
One purpose of the Section is to investigate and compile costs
incurred by EPA in connection with Superfund site clean-ups.  In
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                              _ 2 -
my capacity as Program Analyst, I have personally compiled and
reviewed the cost documentation for the Immediate Removal Action
at the Northernaire Plating Company site located in Cadillac,
Michigan.
          3.  Pursuant to Section 221 of the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980,
("CERCLA"), 42 U.S.C. § 9631, enacted on December 11, 1980, the
Hazardous Substance Response Trust Fund was established.  This
Fund originally consisted of 1.6 billion dollars to be
appropriated to EPA over a period of five years.  For the
Northernaire Plating Company Site, the Fund has been used to pay
various government response costs, including: the costs of an
Immediate Removal Action to cleanup hazardous substances and
contaminants from the site, and the costs of investigation and
enforcement action following the Immediate Removal Action at the
site.
          4.  As part of the cost documentation for the
Northernaire Plating Company site, I compiled the supporting
documents from the EPA Headquarters Financial Management Office,
and the Contract Project Officers in the EPA Headquarters program
Offices.
          5.  These documents or records are all kept  in the
course of the regularly conducted activities of the various EPA
and the EPA contractor offices involved.  These records.are kept
pursuant to EPA's duties under Section 111 of CERCLA,  42 U.S.C. §
9611.  The records include employee time cards and travel
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                              - 3 -
vouchers, as well as contractors' invoices, and treasury
schedules.
          6.  After collecting the above-mentioned documentation,
I personally compiled the information found in the Headquarters
summary of costs.  The summary is attached and is incorporated as
part of my declaration.  To the best of my knowledge, all of the
summarized costs have been paid by EPA.
          7.  The cost summary lists the response costs incurred
by EPA (as of certain specified dates) in connection with the
Immediate Removal Action at the Northernaire Plating Company
site.  The summary includes costs incurred by EPA Headquarters
for employees' salary and costs incurred under contracts with
private firms.
          8.  The summary of costs incurred by EPA for
Headquarters payroll expenditures was calculated as of July 21,
1987.  Those costs totalled $964.81.  This summary was compiled
in the following manner:
             A.  On or about June 12, 1987, I sent a memorandum
to George Alapas of the EPA Financial Management Division (FMD)
requesting a Software Package for Unique Reports (SPUR) for
Northernaire Plating Company, and requesting the corresponding
employee payroll timesheets and/or timecards.  The SPUR is a
computer printout which lists the site-specific'expenditures made
by EPA.  I received the Northernaire Plating Company SPUR and
corresponding documents on or about July 10, 1987.
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                              - 4 -
             B.  Upon my receipt of the Northernaire Plating
Company SPUR and supporting documents, I reviewed the records for
accuracy and prepared a summary of the Headquarters payroll
expenditures by employee name and total salary charged to the
Northernaire Plating Company account for site immediate removal
cleanup.
          9.  The summary contains costs incurred by EPA under
the Technical Assistant Team (TAT) contract with Roy F. Weston,
Inc.  This figure was calculated as of July 21, 1987.  Those
costs totaled $11,731.08.  This summary was compiled in the
following manner:
             A.  On or about April 2, 1984, Alan Feldman, another
member of the Guidance and Oversight Branch, sent a procurement
order to Roy F. Weston, Inc., requesting the contractor's costs
for the site.
             B.  On or about May 11, 1984, he received a Letter
Memorandum from Weston identifying the costs incurred for this
immediate removal action.
             c.  Upon his receipt of these documents, he reviewed
the records for accuracy and prepared a summary of the costs
incurred by EPA under the TAT contract by contractor name,
contract number and total contract costs.  Those costs include
$11,641.08 for the work performed at the site, and $90.00  for
procuring the Letter Memorandum.
         10.  The summary includes costs incurred by EPA under a
contract let by the On-Scene Coordinator, Ken Banaszek, with
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                              - 5 -
Petrochem Services, Inc.  Calculated as of July 21, 1987, those
costs totalled $140,419.00.  This summary was compiled in the
following manner:
             A.  On or about June 12, 1987, I sent a memorandum
to George Alapas requesting a SPUR for the Northernaire Plating
Company site and the corresponding vouchers and treasury
schedules.  On or about July 10, 1987, I received the requested
information.
             B.  Upon my receipt of this requested information, I
reviewed the records for accuracy and prepared a summary of the
costs incurred by EPA under the OSC let contract by contractor
name, contract number, and total contract costs.
         11.  The summary includes costs incurred by EPA under
the Technical Enforcement Support (TES) contract with GCA
Corporation. Calculated as of July 21, 1987, those costs totalled
                                  f
$993.00.  This summary was compiled in the following manner:
             A.  On or about June 17, 1987, Marlene Lemro, a
program specialist with the Guidance and Oversight Branch,
contacted Alliance Technologies, Corporation (formerly GCA) via
memorandum, requesting documentation of costs incurred by EPA
under the contract with GCA for the Northernaire Plating Company
site.
             B.  Upon my receipt of this documentation,  I
reviewed the records for accuracy and prepared a summary of costs
incurred by EPA under the TES contract by contractor name,
contract number, and total contract costs.
-------
                              - 6 -

         12.  On or about July 21, 1987, I forwarded the cost

summary information to John Oaks, CERCLA Enforcement Support Unit

of the Waste Management Division, EPA-Region V.

         13.  All the records documenting the costs incurred at

the Northernaire Plating Company site and authorizing payment of
            *
CERCLA funds for the Immediate Removal Action are kept and

maintained in the Financial Management Office at EPA

Headquarters.  The Financial Management Office at EPA Region V,

and at the Financial Management Field Office in Research Triangle

Park, North Carolina, as part of the regular course of business

of these EPA Offices.

          I declare under penalty of perjury that the foregoing

is true and correct.

Executed on 	, 1987.
                            Willimina Pipkin
                            U.S. Environmental Protection Agency
                            Washington, D.C.   20460
-------
                              _ 7 -
                                      Cost Summary (Removal)*
                                      Northernaire Plating, MI
                                      Prepared 6/28/84
                                      Updated  7/21/87


EPA EXPENDITURES

EPA PAYROLL - H.Q.                                       964.81

EPA PAYROLL - REGION V                                21,148.27

EPA INDIRECT COST - REGION V                          53,397.00

EPA TRAVEL - REGION V                                  6,825.63

TAT CONTRACT - WESTON (68-95-6669)                    11,641.08

OSC LET CONTRACT - PETROCHEM  (68-95-0064)            140,419.00

GCA - CONTRACT (68-01-6769)                              993.00

MISC. EXPENSE - WESTON                                     90.00
                                                     $235,478.79
* THIS SUMMARY INCLUDES REMOVAL COSTS ONLY
-------
                              - 8 -

                      CERTIFICATE  OF SERVICE

     I, Robert H. Oakley, certify that on August 31, 1987, I

served a copy of the foregoing Declaration of Willimina Pipkin on

each of the following:
                         John H. Kruis
                         Smith, Haughey, Rice & Roegge
                         200 calder Plaza Building
                         Grand Rapids, Michigan  49503

                         Miles J. Murphy, III
                         Cholette, Perkins & Buchanan
                         600 Old Kent Building
                         Grand Rapids, Michigan  49503

                         Robert P. Tremp
                         415 Munson Avenue
                         Traverse City, Michigan  49684

                         Owen J. Cunnings
                         Cununings McClorey Davis & Acho, P.C.
                         33900 Schoolcraft, Suite G-l
                         Livonia, Michigan  48150


by placing a copy in an envelopes addressed to each of the above

with proper postage affixed and placing the envelopes in the U.S.

Mail.
                         ROBERT H. OAKLEY
-------
                IN THE UNITED STATES DISTRICT COURT
               FOR THE WESTERN  DISTRICT OF MICHIGAN
                        SOUTHERN DIVISION
 UNITED STATES OF AMERICA,     )
                              )
                Plaintiff,    )
                              )   CIVIL ACTION NO.  G84-1113-CA7
 V.                            )
                              )
 NORTHERNAIRE PLATING COMPANY, )
 INC.,  fi£_al.,                 )
                              )*
                Defendants.   )
              DECLARATION OF PHILIP B./STINESS
JR.
          I, Philip stiness, depose and state the following:
          1.  I am Philip Stiness and am employed as the Deputy
Executive Assistant in the Executive Office of the Land and
Natural Resources Division at the United States Department of
Justice (hereafter "Department*).
          2.  My responsibilities include the review of costs
incurred by the Department in the prosecution of cases under the
Comprehensive Environmental Response, Compensation and Liability
Act of 1980 (hereafter •CERCLA*  or "Superfund*).  Those costs  are
then charged against the Department's Superfund account
established by Interagency Agreement with the U.S. Environmental
Protection Agency.
          3.  I have knowledge of the following procedures
regarding DOJ costs incurred under CERCLA.   The procedure for
recording and calculating these  costs incurred by the Department
is as follows:
-------
                              - 2 -
           (a)  Attorneys and paralegals are required to complete
 timesheets weekly which show the case(s) and activities they have
 worked  on, as well as their associated hours.  These sheets are
 submitted  to the Systems Group of the Executive Office and fed
 into the Lands Division Attorney Time Reporting System (ATRS).
 From this  system, there is prepared a monthly detailed printout
 of attorney and paralegal Superfund hours by case.
           4.  The FY 1984, 1985, 1986, and 1987 Interagency
 Agreements signed by the Department of Justice and the
 Environmental Protection Agency require the Department to use a
 standard accounting procedure to determine CERCLA costs.  That
 procedure  allocates actual costs between the Superfund account
 and the Land and Natural Resources Division's regular accounts
 based on the level of effort expended by professional employees
 directly on cases.  This level of effort is  determined by the
 ratio of Superfund case hours to tfie total Division case  hours.
 This percentage is then applied to all  Lands Division costs and
 the resulting amount is charged to the  Superfund  account. The
 information necessary to develop these  costs is derived from  two
 sources:   (1)  the Attorney Time Reporting System,  which
 generate*  th* professional case hours to arrive at  a percentage,
 and (2) the Department Accounting System, which provides the
 Division with a monthly report on expenses by  category.   The
portion of funds considered Superfund are  then prorated to each
active Superfund case based on the number  of professional hours.
-------
                              - 3 -
           5.  Th« activities of making, recording and reporting
 these various times, expenses, and activities are conducted by
 Department employees in the normal course of business.
           6.  The Financial Management Information System and
 Attorney Time Reporting System have produced reports or records
 concerning Department of Justice costs incurred in connection
 with  United States v. Northernsire Plating Co. (DOJ File No. 90-
 11-3-44),  and calculated for the period from July 1, 1984,
 through  June 30, 1987.  The portion of Department of Justice
 costs determined to be Northernaire Superfund costs, the
 procedures described in paragraph 4 above, is indicated on
 exhibits 1 (fiscal year 1985), 2  (Fiscal Year 1986),  and  3
 (Fiscal  Year 1987 to June  30, 1987) attached hereto.
           7.  Based upon these reports concerning the
 Department's costs relating to Northernaire Plating,  the
 Executive  Office of the Lands Division, under my supervision,
 prepared a summary of the  Department's costs  incurred in
 connection with Nothernaire for the period from July 1,  1984,
 through  June 30, 1987.   (A copy of that summary is attached
hereto as  exhibit 4.)  Calculated as  of June  30, 1987, those
costs total $35,473.28.   (Id-)
                                   Lilip BT Stiness, Jr.
                                  U.S. Department of Justice
Executed this  *  f  day of q/Xft*isXJf   1987.
-------
                                                            u

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-------
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                        EXHIBIT
-------
                              - 4 -


                      CERTIFICATE  OF SERVICE
      I, Robert H. Oakley, certify that on August 31, 1987,  I

 served a  copy of the foregoing Declaration of Philip Stiness on

 each  of the  following:
                         John M. Kruis
                         Smith, Haughey, Rice & Roegge
                         200 Calder Plaza Building
                         Grand Rapids, Michigan  49503

                         Miles J. Murphy, III
                         Cholette, Perkins & Buchanan
                         600 Old Kent Building
                         Grand Rapids, Michigan  49503

                         Robert P. Treap
                         415 Munson Avenue
                         Traverse City, Michigan   49684

                         Owen J. Cunnings
                         Cunnings McClorey Davis i Acho,  P.C.
                         33900 Schoolcraft, Suite  G-l
                         Livonia, Michigan  48150


by placing a copy in an envelope addressed to each of  the above

with proper postage affixed and placing the envelopes  in the U.S.

Mail.
                         tfOBERt tt-  OAKLEY
-------
                IN  THE UNITED STATES DISTRICT COURT
               FOR THE WESTERN DISTRICT OF MICHIGAN
                         SOUTHERN DIVISION
 UNITED STATES OF AMERICA,    '      )
                                   )
                    Plaintiff,      )
                                   )      Civil Action No.
 v.                                 )        G84^1113-CA7
                                   )
 NORTHERNAIRE PLATING COMPANY, INC. )
       I
                   Defendants .     )
                   DECLARATION OF WILLIAM COOKE
          I, WilliamICooke/ depose and say:
          1.  I aa employed by the United States Environmental
Protection Agency  (EPA), 401 M Street, S.W., Washington, D.C.
20460, as a cost Accountant with the Superfund Accounting Branch
of the Financial Management Division of EPA.  I have been in this
position for a period of ten months.  Between the years  1978 and
1986 I was a Cost Accountant with the Procurement and Contracts
Management Division of EPA.
          2.  Prior to my current position, my primary
responsibility with EPA had been to determine the indirect costs
rates which are applicable to government contractors' costs and
Agency grantee*..
          3.  Since late October 1986, I have been  involved with
the process of establishing EPA's indirect  costs rates  for the
Superfund program.
-------
           4.  My  educational background includes a bachelor's
 degree from Susquehanna University, that was conferred in 1970.
 My major course of study was accounting,  in 1975, I became a
 Certified Public  Accountant,  in 1981, I received an M.B.A. from
 George Washington University, specializing in business-government
 relations.
           5.  The indirect costs of the Superfund program are
 those  costs which are necessary to the operation of the program
 and support of site clean-up efforts, but which cannot be
 directly identified to the efforts of any one site,  in lay
 terms,  the  indirect costs represent overhead costs, and include
 such things as rent and utilities for site and non-site staff
 office  space? payroll and benefits for program managers, clerical
 support and other administrative support staff; and pay earned by
 on-scene coordinators while on leave, or performing tasks  not
directly associated with a particular site.  Indirect costs  are
 generally understood and accepted within the business community,
I and  are recognized as costs to the Agency in all government
grants  and  contracts.  As indirect costs represent *real costs*
of operating the  Superfund program, they are recoverable under
section 107(a)(4)(A) of CERCLA, which provides that the
government  shall  recover 'all costs ... incurred by the United
States  Government.*
          6.  The indirect cost rates for the Superfund program
are determined for each fiscal year, commencing in  fiscal  year
 1983.   A different cost rate is calculated  for each Region.
-------
                                 x
                                X           (T
           7.  The  indirect cosf allocation procedure requires a
 determination of the total administrative overhead costs for
                            .
                        oar.
Agency for each fiscal year.  Based on a model developed by the
accounting firm of Ernst and -Whinney, the overhead costs of
Headquarters are allocated to each region.  This Headquarters
allocation is added to the regional overhead costs to get a
regional indirect costs pool.  The indirect cost rate for each
region is then determined by dividing this total pool of indirect
costs for each region by the Superfund program hours incurred in
each region.
          8.  Once the indirect cost rate for each region is
determined for each fiscal year, the indirect costs can be      __
allocated to specific Superfund sites.  The indirect costs for a
specific Superfund site are determined by applying the indirect
cost rate for the region to hours charged to the site by regional
program division personnel.
          9.  The indirect cost rates for EPA-Region V for each  	.
fiscal year (*FY*) are:  for FY 1983 $71.00; for FY 1984 $61.00;
and for FY's 1985, 1986, and 1987 $61.00.  The  indirect cost
rates for FY 1983 and FY 1984 are final rates that
and approved by the Office of  Inspector  General.   The rates  for
fiscal years 1985 through  1987  are  provisional rates only as the
rates are under review by  the Office  of  Inspector General.  It is
an acceptable accounting practice to  apply the rate for the
previous fiscal year, until  such time as a final rate is
determined.
-------
         10.  The established indirect cost rate for each region
is transmitted to the regions as it is determined.
          I declare under penalty of perjury that the foregoing
is true and correct.
Executed on    uA/i/l^  ^ U.'     1987.
                            William Cooke
                            U.S. Environmental Protection Agency
                            Washington, D.C.
-------
                                     SERVICE
      I, Robert H. Oakley, certify that on August 31, 1987, I

 served a  copy of the  foregoing Declaration of William CooJce on

 each of the following:
                         John M. Kruis
                         Snith, Haughey, Rice & Roegge
                         200 Calder Plaza Building
                         Grand Rapids, Michigan  49503

                         Miles J. Murphy, III
                         Cholette, Perkins £ Buchanan
                         600 Old Kent Building
                         Grand Rapids, Michigan  49503

                         Robert P. Trenp
                         415 Munson Avenue
                         Traverse City, Michigan  49684

                         Owen J. Cunnings
                         Cunnings McClorey Davis & Acho, P.c.
                         33900 Schoolcraft, Suite G-i
                         Livonia, Michigan  48150


   placing a copy in an envelope addressed to each of the  above

with proper postage affixed and placing the envelopes in the r

Kail.
                         ROBERT Hf OAKLEY
-------
                 IN THE UNITED STATES OF AMERICA
               FOR THE WESTERN DISTRICT  OF MICHIGAN
                        SOUTHERN DIVISION
 UNITED STATES OP AMERICA,    - )
                              )
               Plaintiff,     )
                              )
     v.                       )    Civil Action No.  G84-1113-CA7
                              )
 NORTHERNAIRE PLATING          )
  COMPANY, et al. .            )
               Defendants .
                DECLARATION OF RICHARD D .1 HACKLEY
          I, Richard D. Hackley, hereby depose and say:
          1.  I am an Accountant with the Superfund Accounting
Section, Planning and Management Division of the United States
Environmental Protection Agency, Region V, 230 South Dearborn
Street, Chicago, Illinois 60604.
          2.  I have held the position of Accountant with the
Superfund Accounting Section since January 1984 working as the
Superfund Cost Documentation Team Leader.
          3.  Since January 1984, I have had responsibility for
establishing and maintaining Region V's cost accounting system
for Regional expenses incurred  in connection with activities
conducted at Superfund sites in Region V pursuant to the
Comprehensive Environmental Response, Compensation and Liability
Act of 1980 (*CERCLA»), 42 U.S.C. §9601 et sea.
          4.  As part of my official duties I maintain the
accounting system, and oversee  a team that is responsible for the
receipt and maintenance of financial documents,  including
Regional payroll, travel, contractual and grants-related cost
-------
 documentation with respect  to  CESCIA expenditures.  Regional
 CERCLA expenditures are maintained under a site-specific
 accounting system which allows the Agency to determine the
 specific Superfund site associated with each cost expenditure.
           5.   Since 1982, the  Region V accounting office has
 received,  during  the regular course of business, Regional cost
 documentation with respect  to  the Northemaire Plating Company
 site  in Cadillac,  Michigan.  These records have been maintained
 under the  CERCLA  site-specific accounting system, in the course
 of regularly  conducted activities of the EPA.  EPA is required to
 maintain these records as part of its duties under §111 of
 CERCLA,  42 U.S.C.  §9611.  The  records for the Northemaire
 Plating Company site are voluminous and include employee time
 sheets,  employee  time cards, travel vouchers, contractors'
 invoices and  time sheets, and  treasury schedules.
           6.   On  or about June 1984, the Region V Superfund
 Accounting Section received a  request from the Emergency and
 Remedial Response branch of EPA's Haste Management Division to
 collect all Region V cost records for the Northemaire  site.  I
 personally compiled and reviewed the cost documentation for this
 site.   The records were forwarded to the Waste Management
 Division on June  28, 1984,  along with a summary of costs expended
 on the  project.
           7.   On  or about July 21, 1987, the Region  V Superfund
Accounting Section,  under my review, updated the  Region V  cost
documentation  summary associated with the Emergency  Removal
-------
 Action at the Northernaire  Plating Company site.  In corpilir.g
 the Region V cost  documentation update, the Region V Superfund
 Accounting Section, under my supervision, compiled and reviewed
 Region V personnel time sheets and travel vouchers.  The data
 obtained frost such compilation and review were compared to the
 data in EPA's financial management system computer reports (also
 known as the Software Package for Unique Reports or •SPUR'*).
 Following comparison of the cost documentation to the SPUR,
 appropriate adjustments were made in consultation with the
 program staff and  a summary was prepared that reflects all costs
 actually incurred  by EPA in connection with the Emergency Removal
 Action  undertaken  at the Northernaire Plating Company site.  The
 summary report is  appended to this affidavit.  In addition to the
 compilation and review of Region V's costs, the summary report
 also  includes costs incurred by EPA Headquarters, including
payroll,  travel and applicable contractor invoices and treasury
 schedules.   The Headquarter's costs are based upon records
 compiled and maintained by the EPA Headquarters, Financial
 Management  Division, Superfund Accounting Branch.
          8.   As part of the July 1987, cost documentation
 update,  I calculated the indirect costs r«»1 at«M to *M
 Northernaire site  in accordance with cost accounting  procedures
developed by the Superfund Accounting Branch, Financial
Management  Division, U.S. EPA Headquarters.  The  indirect costs
 identified  in the  attached  summary report represent the  costs
necessary to operate the Superfund program but  which  cannot be
-------
 attributed directly  to  specific sites.  I calculated the indirect
 costs  by applying  the  indirect cost rate for Region V for each
 fiscal year,  beginning with fiscal year 1983, to the hours
 charged to  the  site by Regional Program Division personnel.  As a
 result of these calculations, I have lowered our determination of
 the amount  of costs attributable to Region V's indirect costs
 from $88,301.00 (as previously stated in a letter from Robert
 Oakley of the Department of Justice to defendants dated July 7,
 1987}  to  $53,397.00.   The reason for this change is that Region V
 altered its procedures and now excludes from the calculation of
 indirect  costs  those hours charged to a particular site by
 employees of  the Office of Regional Counsel, the_Qffice of Public
 Affairs,  and  the Planning and Management Division.  Therefore, we
 excluded  all  hours charged by such persons on our final review of
the calculation of indirect costs, which resulted in the lower
 figure.  However,  all  direct hours of such persons are still
 recoverable and are included in the direct personnel costs of the
                             i
summary.  The indirect cost rates for Region V for each fiscal
year are determined by EPA-Headquarters, Superfund Accounting
Branch.
          9.  The attached summary report correctly  sets  forth
the results of the cost documentation update conducted in July
1987.  The memorandum accurately reflects the Region V payroll
and travel costs associated with the Emergency Removal Action at
the Northernaire Plating Company site and accurately reflects
indirect cost calculations determined in accordance  with  approved
-------
 accounting practices  developed by EPA-Headquarters.  In
 to my knowledge the memorandum accurately reflects payroll costs
 incurred by EPA-Headquarters, and contractor costs for cleanup
 work performed at the site  as part of the Emergency Removal
 Action.   The contracts that were let for cleanup of the site were
 national contracts managed  by EPA-Headquarters.  The cost
 documentation for expenses  incurred by EPA-Headquarters,
 including costs incurred under the national contracts, was
 prepared by Willimina Pipkin, of EPA-Headquarters, Guidance and
 Oversight Branch of the Super fund Enforcement  Division.  To the
                                                            \
 best of  my knowledge,  the debts incurred by EPA for the Emergency
 Removal  Action at the Northernaire Plating Company site have been
 paid.
           I  declare under penalty of perjury that the foregoing
 is true  and  correct.
Executed  on  CL-H Si*-1
               ^
               
-------
                                                                / _-e~c^3  *
                                                                o D a- p~  u'

                                                              ; •>: :    * '
EPA EXPENDITURES


EPA PAYROLL - H.Q.                                      964.81


EPA PAYROLL - REGION V       "                        21,148.27


EPA INDIRECT COST - REGION V                         53,397.00


EPA TRAVEL - REGION V                               —6,825.63


TAT CONTRACT - WESTON (68-95-6669)                   11,641.08


OSC LET CONTRACT - PETROCHEM (68-95-0064)           140,419.00


GCA - CONTRACT (68-01-6769)                             993.00


MISC. EXPENSE - WESTON                                   90.00
                                                   $235,478.79


                                           N

  THIS SUMMARY INCLUDES REMOVAL COSTS ONLY
-------
 EPA PAYROLL — HEADQUARTERS
                                                          COST StFMAFY
                                                          Forthernaire Plating,
                                                          prepared:  7/21/87
 EMPLOYEE MAKE

 Earth, Edwin

 Goldfarb, Jessie



 Pipkin,  Willunima

 Vanslyke,  David
FISCAL YEAR/
PAY PERIOD

  5-19

  7-15
  7-18
  6-11

  4-14
  4-15
  4-19
  4-20
  4-22
  4-23
  5-13
  6-08
HOURS
2.0
.5
.5
1.0
7.0
26.0
8.0
3.0
5.0
2.0
2.0
2.0
.2
48.2
AM3UNT
33.26
9.60
9.76
19.36
97.75
434.42
132.88
51.99
86.66
34.67
34.67
35.89
5.26
816.44
TOTAL HEADQUARTERS PAYROLL:  $964.81

DOCUMENTATION:  FMD SPUR Report dated 6/6/87
                Copies of Applicable Timecards/Time sheets
-------
    US EPA REGION V PERSONNEL  COST  -  SECOND A
            HAZARDOUS  SUBSTANCE  RESPONSE  SITE <* 83
                   NORTHERNAIRE  PLATING MI
          THROUGH PAY  PERIOD  16  OF  FISCAL YEAR 1987
    S3S3a883S3S33333a3333*33333S3SS3333333XS3333S3SSS33S
                                                       93333SS3333S833
tMPLOYEE NAME
BOWDEN, ROBERT J
-
'
CAMPBELL, MONICA S.
GARDNER, CARYN S.



-




FISCAL
YEAR
66
86

85
84
84
84
84
84
85
85
85
85
PAY
PERIOD
11
25

23
22
23
24
25
26
04
05
07
08
PAYROLL
HOURS
2.0
1.0
3.0
28.0
17.5
6.0
29.0
4.0
9.0
5.0
4.0
8.0
1.0
PAYROLL
AMOUNT
55.35
29.19
84.54
164.56
154.52
52.96
255.99
35.31
79.45
44.13
35.30
70.86
9.14
JAMES, ANTHONY
LANDMAN III, BERNARD
86
86
23
24
85
85
86
86
86
86
86
86
86
86
86
86
86
87
87
87
87
87
24
25
02
03
06
14
15
16
18
21
22
23
24
05
08
13
14
15
S3.S

 8.0
 4.0

12.0
737.66

 52.80
 26.40

 79.20
MINER, BETH  M.
86
 10
3.0
18.0
4.0
9.0
5.0
12.5
1.0
1.0
0.5
1.0
3.0
12.5
1.0
2.0
15.0
28.0
8.0
0.5
125.0
16.5
44.09
264.57
58.98
132.74
73.73
184.09
14.67
14.67
7.41
14.67
44.02
189.51
15.15
35.09
292.50
546.03
156.00
9^2
2,097.74
151.51
-------
    US EPA REGION  V  PERSONNtL  CCST  -  SECOND
            HAZARDOUS  SUBSTANCE  RESPONSE  SITE # 83
                  NQRTHERNAIRE  PLATING MI
          THROUGH  PAY  PERIOD 16  OF  FISCAL YEAR 1987
EMPLOYEE  NAME

»»•»»»»»» *3 8 333 3 3833

HINER, BETH M.
NEUBERGER, BABETTE J
FISCAL
YEAR
99 99 99
86
86
86
86
86
86
86

84
84
65
85
85
85
85
85
85
85
85
85
85
85
85
85
85
86
86
86
86
86
86
86
86
86
86
86
86
86
86
86
86
86
86
87
PAY
PERIOD
11
12
13
14
15
17
19

20
22
03
05
06
07
08
09
12
13
15
16
17
20
21
22
27 <
01
02
03
05
06
10
12
13
14
15
16
18
20
21
23
24
25
27
05
PAYROLL
HOURS
10.5
17.5
14.0
5.5
10.0
5.0
0.5
79.5
1.0
1.0
4.5
3.0
1.8
18.5
0.2
0.2
n.2
0.8
0.2
1.0
3.8
5.0
9.8
0.2
5.0
9.0
16.2
7.2
4.2
1.0
1.2
3.2
0.8
1.8
0.2
1.2
0.5
2.0
3.2
21.2
11.5
20.2
0.5
1.5
PAYROLL
AMOUNT
96.41
160.69
128.55
50.47
91.50
45.76
4.61
729.50
19.77
19.77
89.08
59.33
35.18
366.04
5.07
5.07
4.08
16.37
5.23
21.13
79.25
105.63
207.00
5.23
104.31
190.38
343.24
152.54
88.98
21.19
25.38
68.75
16.91
38.04
4.33
26.97
10.96
43.49
69.58
460.42
250;24
440.44
10.89
32.72
-------
  US EPA REGI3N V PERSONNEL COST - SECOND  AMENDMEN
          HAZARDOUS SUBSTANCE RESPONSE  SITE  *  83
                 NORTHERMAIRE PLATING MI
        THROUGH PAY PERIOD 16 OF FISCAL YEAR 1937
^PLOYEE NAME

NEUBERGER, BABETTE J
.
•



NORWOOD, DEBRA CAROL


RADCLIFFE, MICHELLE






^R.L, SHEILA A.


Total Personnel Cost
Total Personnel Cost
Total Personnel Cost
FISCAL PAY
YEAR PERIOD
87 06
87 07
87 08
87 13
87 14

86 12
86 13

85 04
86 13
86 15
87 05
87 07
87 10

87 13
87 14

2nd Amendment
1st Amendment
Original Summary
PAYROLL
HOURS
3.0
1.0
15.0
7.0
9.5
198.3
3.0
6.0
9.0
4.0
8.0
8.0
3.0
10.0
3.0
36.0
2.0
4.0
< 5.0
530.3
65 4
74. 1
PAYROLL
AMOUNT
65.25
21.76
335.88
156.89
212.84
4,235-61
17.72
35.42
53.14
32.99
68.44
68.27
27.29
87.82
27.29
312.10
17.98
35.98
53.96
8,548.01
1,121.69
11,478.57
TOTAL PERSONNEL COST FOR SITE #83
1,389 8
S21.U8.27
-------
               EPA REGION V  PERSONNEL  COST  -  FIRST AMENDMENT
                    NORTHERNAIRE  PLATING, MI   SITE NO 83
              ADDITIONAL PERSONNEL  COSTS THROUGH  PAY PERIOD 16
                            AS  OF APRIL28. 1984
NAME
fcanaszek, Kenneth
.



TOTAL
Plucmski . James
TOTAL
Neuberger, Bafcette

FY PP
84 11
13
14
15
16

84 15

84 09
J2
HOURS
1.0
6.0
12.0
8.0
7.0

9.0

.2
21.2
TOTAL DOLLARS
17.10
103.24
205.19
136.80
119.69
34.0
105.85
9.0
3.67
403.89
                                                                          TOTALS
                                                                         $582.02
                                                                          105.85
TOTAL                                              21.4                    407.56

Regan, Gerald           ' 84       11      1.0                  26.26

TOTAL                                               1.0                      26.26


TOTAL ADDITIONAL REGION V PERSONNEL COSTS FOR  SITE d  83                 $1,121.69
-------
                             PEpSCV.iL COSTS






                                          W:CNAJDE SITE H 63
 NAME



 Banaszek, Kenneth
TOTAL



Bowden, Robert



TOTAL



Filippini, Mark
TOTAL
FY
83





•






»



84




83

83






PP
08
09
10
11
12
13
15
17
18
19
20
21
22
. 23
24
25
26
04
OS
09
10

13

03
05
06
07
08
13

HOURS
15.0
20.0
24.0
26.0
5.0
18.0
26.0
16.0
11.0
6.0
16.0
56.0
100.0
95.0
30.0
12.0
2.0
18.0
1.0
6.0
6.0
510.0
5.0
5.0
10.0
17.0
33.0
16.0
2.0
4.0
82.0
DOLLARS TOTALS
225.41
301.99
362.38
392.59
75.58
272.13
393.07
242.79
166.30
90.71
241.83
846.60
1,521.00
1.589.40
" 453.54
181.42
30.24
297.66
16.54
102.60
102.60
$7.906.4
142.27
142. t
103.93
176.67
342.9*5
166.27
20.77
41.57
852.
-------
NCPT'-EKNAIPE SITE  *  R3
NAME FY
Kadany, George 83
TOTAL
Neuberger, Babette 82
83

.







84


TOTAL
Qstrocika, Steve 83
TOTAL
Powers , Ross 83
TOTAL
Radcliffe, Michelle 83

TOTAL
Reg?n, Gerald 83
TOTAL
1 W 1 F**r
9
TOTAL REGION V PERSONNEL COST
PP
13
14

23
26
03
04
06
07
08
10
13
18
21
25
03
05
08

13

13

08
13

13


s FOR sr
HC'JRS
36.. 0
5.0
41.00
2.0
1.0
2.5
1.0
7.5
2.0
17.0
3.5
2.0
.5
.5
5.?5
.25
1.0
.25
46.25
35.0
35.0
18.0
18.0
4.0
2.0
6.0
1.0
1.0

re t 83
DOLLARS
660.50
97.39

30.37
15.23
39.55
15.79
118.80
31.66
272.36
58.01
- 31.64
7.91
7.91
96.96
4.61
18.47
4.61

611.96

387.59

27.55
13.76

24.99



*
TOTALS

757.99













1
753.85

611.96

387.59


'.1.31

24.99

$11,478.57
-------
  "U.S. EPA Region V Indirect  Costs  Computation (IOC) 2nd 4re-d
  Hazardous Substance  Response  Site  -  NORTHERNAIRE PLATING, ^1 SITE SO.
    rough Pay Period 16  of  Fiscal Year 1984
 Fiscal Year 1984  Total Hours

 Fiscal Year 1985  Total Hours

 Fiscal Year 1986  Total Hours

 Fiscal Year 1987  Total Hours


   Total  IDC 2ND  AMENDMENT
Total Hours
0.0
28.0
3.0
0.0
IDC
Rate/Hour
$61.00
$61.00
$61.00
$61.00
Total
$0.00
$1,708.00
$183.00
$0.00
        31.0
               $1,891.00
 U.S. EPA Region V Indirect Costs Computation (IDC) First Amendment
 Hazardous Substance Response Site - NORTHERNAIRE PLATING, MI SITE NO.#83
 Through Pay Period 16 of Fiscal Year  1984
  "seal Year 1984 Hours
Total Hours

        44.0
                                              44.0
IDC
Rate/Hour

    $61.00
Total

  $2,684.00

  $2,684.00
  U.S. EPA Region V Indirect Costs Computation  (IDC) Original  Summary
  Hazardous Substance Response Site - NORTHERNAIRE  PLATING, MI SITE NO.  #83
  Through Pay Period 13 of Fiscal Year  1984
Fiscal Year 1983 Total Hours

Fiscal Year 1984 Total Hours


   Total IDC Original Summary

   TOTAL IDC FOR SITE
Total Hours

       661.0

        31.0
       692.0

       767.0
                                                      IDC
                                                      Rate/Hour
             Total

    $71.00    $46,931.00

    $61.00     $1,891.00
              $48,822.00

              $53,397.00
-------
U.S. EPA REGION V TRAVEL CQ$TS . SECOND A«EN>"ET
        HAZARDOUS SUBSTANCE RESPONSE SITE * 83
               NORTHERNAIRE PLATING MI
THROUGH PAY PERIOD 14 OF FISCAL YEAR
 TRAVELER                 TRAVEL       TREASURY                TRAVEL
 NAME                     VOUCHER    SCHEDULE                  COST
                          NUMBER      -NUMBER
 "«»**»»s««aaaa±asaeaas  aaaasssasa  aaasassssasssss  aasaaa=»«aa«ma

IANDMAN in,  BERNARD      73297       vosis                    410 73
                          71663       V0239                    443*44
                          73132       V0289                    378.00

                                                          1,231.17

NEUBERGER, BABETTE J      71662       V0206                    671.00
                                                    ssaassaassaass
  Total  Travel Costs 2nd  Amendment                      $ 1,902.17

  Total  Travel Costs 1st  Amendment                          850 93

  Totil  Travel Costs Original Surnary               	4,07; 53


  TOTAL TRAVEL COSTS FOR  SITE *S3                   	$ 6,825 63
-------
                     EPA REGION V  TRAVEL  COST  -  FIRST AMENDMENT
                           NORTHERNAIRE,  MI  SITE  NO. 83
                               ADDITIONAL TRAVEL COST
                    	AS  OF  MAY 31. 1984	.


                           TRAVEL
*AME                       VOUCHER NO.             AMOUNT           TOTAL

Banaszek, Kenneth           42863                 500.46
TOTAL                                                            $500.46

PLucinski, James            42862                350.47

TOTAL                                                             350.47

TOTAL ADDITIONAL EPA REGION V TRAVEL COSTS FOR SITE I 83         $850.93
-------
                                        COS'5
 NAPE
         ; Kenneth
                                          NORTHEP'.AIPE SITE  f  83
TOTAL
Filippim, Mark
TOTAL
Madany, George               32158
TOTAL
Neuberger, Babette          583088
TOTAL
Powers, Ross                 32157
TOTAL
TOTAL REGION V TRAVEL COSTS FOR  SITE  I 83
 88.60
128.25
 66.00
TS NUMBER
33479
32326
31871
31048
30926
30925
AMOUNT TOT/LS
2.882.95
212.20
120.95
280.00
103.75
S3, 599.6
189.83
                     JC9.a-
                      cs.ro
                  $4,072,53
-------
                                                       COST  SUMMARY
                                                       Norchernaire Plating
                                                       Prepared: 6/28/84.
        •                                     „.                          _
 TAT CONTRACT

 CONTRACTOR:  Veston

 CONTRACT NO:* 68-01-6669

 PROJECT OFFICER:  Susan Janowiak

 DATES OF SERVICE:   7/12/83 "- 2/13/84

 SUMMARY OF SERVICE:  Assist OSC in monitoring cleanup activities which included
   cost, site and environmental monitoring and assisted in OSC report reproduction.

 TOTAL CONTRACTOR COST:  $ 11,641.08

 DOCUMENTATION:   Contractor Financial Management  Report dated  5/8/84
                 Copies  of Applicable Paid Vouchers and Treasury Schedules
VOUCHER
NUMBER

i

1.,
16
17
18
19
20
21
22
23
VOUCHER
DATE

7/8/83
8/4/83
8/29/83
9/2/83
10/6/83
11/2/83
12/1/83
1/5/84
1/6/84
2/2/84
3/2/84
  VOUCHER
  AMOUNT
               TREASURY SCHEDULE
               NUMBER AND DATE
  670
1,059
   30
  563
1,177
  725
  873
   51
  854
1,049
  676
,641.51
,074.83
,541.00
,976.656
,161.24
,792.82
,885.25
,704.00
,116.62
.493.68
,684.42
227630
227703
227000
227002
227046
227096
227130
227187
227174
227211
227255
8/17/83
9/26/83
10/7/83
10/7/83
11/14/83
12/13/83
1/18/84
2/21/84
2/9/84
3/12/84
4/6/84
NOTE:  Voucher amounts arc  lump sum payments to individual contractors
 for work performed during  certain periods of time.
-------
                                                       COST  SUMMARY
                                                       Northernaire Plating, Ml
                                                       Prepared: 6/28/84
                                                       Revised.  7/21/87.
 OSC LET CONTRACT
 CONTRACTOR:  Pecrochem Services,  Inc.

 CONTRACT NO:-  68-95-0064

 DATES OF SERVICE:   7/5/83  - 8/3/83

 SUMMARY  OF  SERVICE: Assisted  OSC  with  removal actions at site

 TOTAL OSC LET CONTRACT:  $  140,419.00

 DOCUMENTATION:  FMD SPUR Report dated  5/31/87
                Copies of  Applicable Paid  Invoices  and  Treasury  Schedules
INVOICE
NUMBER

33313

33133 (Final)
INVOICE
DATE

8/15/83

5/2/84
INVOICE
AMOUNT

136,285.87

  4,133.13
 TREASURY SCHEDULE
 NUMBER AND DATE
227007

227365
10/12/83

6/8/84
-------
                                                      COST SUMMARY
                                                      Norchernarle Plating, MI
                                                      Prepared. 6/28/84
                                                      Revised:  7/21/87
 TES CONTRACT

 CONTRACTOR:  CCA Corporation

 CONTRACT NO:'  68-01-6769

 PROJECT OFFICER:   Linda  Stewart

 WORK ASSIGNMENT NO:  83-67

 DATES OF WORK:   9/21/83  -  1/26/84

 SUMMARY OF  WORK.   Title -Search

 TOTAL CONTRACTOR  COST  S 993.00
DOCUMENTATION:
VOUCHER
NUMBER
Contractor Cost Summary dated  7/14/87
Copies of Applicable Paid Vouchers and Treasury Schedules
A
5
6
7
8
36
38
   VOUCHER
   DATE

   10/20/83
   11/15/83
   12/9/83
   1/19/84
   2/16/84
   3/7/84
   07/15/86
   9/5/86
VOUCHER
AMOUNT

111,095.20
 81.989.82
 88,198.34
363,583.72
172,903.21
230,319.94
482,418.63
122.324.39
TREASURY SCHEDULE
NUMBER AND DATE
227069
227106
227134
227190
227224
227264
227084
227061
11/21/83
12/19/83
1/18/84
2/24/84
3/16/84
4/10/84
8/18/86
5/12/86
SITE
AMOUNT

 -0-
 -0-
303.71
445.38
 29.24
198.67
 15.12
    .94
NOTE:  Voucher amounts are lump  SUB  payments  to  an individual contractor for
 work performed during a certain period  of  time.
-------
                                                  COST SUMMARY
                                                  Northernaire Placing, MI
                                                  Prepared:  7/21/07
                                                                 -I
                                                                 . f
 PURCHASE ORDER

 CONTRACTOR:   Veston

 PURCHASE ORDER NO:  4W-2289-NASA                            ~~

 SUMMARY  OF WORK:  Cost recovery letter  report for work perfornd
   under  TAT  contract No: 68-01-6669*

 TOTAL CONTRACTOR COST:  $ 90.00

 DOCUMENTATION:  FMD SPUR Report dated 5/31/87
                Copy of Applicable Paid Voucher and Treasury Schedule

 VOUCHER            VOUCHER           VOUCHER       TREASURY  SCHEDULE     SITE
 NUMBER             DATE              AMOUNT        NUMBER  AND DATE       AMOUNT

48006              6/22/84           5,700.00      44463     9/10/84      90.00
-------
                      CEPTIFICATS OF SERVICE

     I, Robert H. Oakley, certify that on August 31, 1987, I

served a copy of the foregoing Declaration of Richard Hackley on

each of the following:
                A         John M. Kruis
                         Smith, Haughey, Rice & Roegge
                         200 Calder Plaza Building
                         Grand Rapids, Michigan  49503

                         Miles J. Murphy, III
                         Cholette, Perkins & Buchanan
                         600 Old Kent Building
                         Grand Rapids, Michigan  49503

                         Robert P. Trerap
                         415 Munson Avenue
                         Traverse City, Michigan  49684

                         Owen J. Cummings
                         Cummings Mcclorey Davis & Acho, P.C.
                         33900 Schoolcraft, Suite G-l
                         Livonia, Michigan  48150


by placing a copy in an envelopes addressed to each  of the  above

with proper postage affixed and, placing the envelopes in the U.S.

Mail.
                         'ROBERt  H.
-------
               IN THE UNITED STATES DISTRICT COURT
               FOR THE WESTERN DISTRICT OF MICHIGAN
UNITED STATES OF "AMERICA,

                 Plaintiff,

v.

NORTHERNAIRE PLATING COMPANY,
WILLARD S. GARWOOD, and
R. W. MEYER, INC.

                 Defendants,

and

R. W. MEYER, INC.,

               Defendant and
               Cross-Plaintiff

v.

NORTHERNAIRE PLATING COMPANY
and WILLARD S. GARWOOD,
                                     CIVIL ACTION NO.
                                     G84-1113-CA7

                                     HONORABLE DOUGLAS W. KILLMAN
                                     MEMORANDUM IN RESPONSE TO
                                     OPPOSITION OF R. W. MEYER,
                                     INC. TO PLAINTIFF'S MOTION
                                     FOR SUMMARY JUDGMENT
                                     ON COSTS
               Cros s-defendants
and
NORTHERNAIRE PLATING COMPANY
and WILLARD S. GARWOOD,

               Defendants and
               Third Party
               Plaintiffs
v.                               )

CITY OF CADILLAC,                )

              Third Party        )
              Defendant.         \

                           INTRODUCTION

     Defendant R. W. Meyer,  Inc.  ('Meyer')  makes three major

arguments in its opposition  to plaintiff's  motion for summary
-------
                              - 2 -
 judgment on costs.  First,  Meyer claims that EPA should  have
 delayed the immediate removal action at the Northernaire site to
 allow for competitive bidding on the main contract for that
 removal.  Next, Meyer claims that the United States did  not
 conduct the immediate removal action in a cost-effective manner
 and erred in its accounting of costs.  Finally,  Meyer argues that
 the United States is not entitled to prejudgment interest.
     As will be demonstrated, the competitive bidding process
 would have delayed the immediate removal action for nine to
 twelve months, during which time the community would have been
 exposed to possible death or injury from the hazardous substances
 abandoned at the site.  To further explain the circumstances
 surrounding the Immediate Removal Action, the United States
 submits the Second Affidavit of Robert Bowden, who was ultimately
 responsible for the 1983 immediate removal action at the
 Northernaire site.
     Concerning Meyer's claim that the United States did not
 conduct the immediate removal action in a cost effective manner,
 the United States here demonstrates that Meyer has not met  its
 burden to show that these costs were inconsistent with the  NCP.
 As for Meyer's assertion that the United states erred in its
 calculation of its costs, the United States  is filing a Second
 Affidavit of Richard Hackley to review these claims.  In certain
 limited instances, Meyer has raised enough of the argument  that
 the United States has decided to drop  its claims  for those
particular costs.  The Hackley Affidavit sets forth those  costs
-------
                              -  3  -
and alao accounts  for  the  amount owing to the United states  for
prejudgment interest.1
I.  Meyer Has the  Burden of Demonstrating that the  Plaintiff
Incurred Costa in  a  Manner Inconsistent with the NCP.
     it is important to  recognize  (and Meyer does not dispute
this) that a defendant in  CERCLA cost recovery action brought  by
the United States  has  the  burden of  proving that the United
States incurred costs  inconsistent with the HCP.  See United
States v. Northeastern Pharmaceutical  fNEPACCCM . 810 F.2d 726,
747 (8th Cir.  1986)  ("the  parties  claiming the benefit  of the
exception [that response costs were  incurred  inconsistent with
the NCP], have the burden  of proving that certain costs are
inconsistent with  the  NCP  and, therefore, not recoverable*).
Additionally,  the  language of the  statute demonstrates that
Congress recognized  the  need to provide  for  flexibility and
deference to agency  expertise;  'the response to and actions to
minimize damages from  hazardous substances releases shall, to the
greatest extent possible,  be in accordance with the provisions of
the [NCP].'  42 U.S.C. § 9605 (emphasis  added).
          Given the  complexity of  the many technical decisions
that must be made  in this area, judicial review of decisions made
pursuant to discretion conferred by Congress should be
substantially deferential.2  in technical and factual areas,  such
     1Mr.  Hackley has now calculated the amount of prejudgment
interest owing in paragraph 9 of his Second Affidavit.
     2 In this context, a 'court is not empowered to  substitute
its judgment for that of the agency,* Citizens to Preaervg
                                                  (continued...)
-------
                              -  4  -

as the response and remedial decisions in this  case,  courts

recognize decision making as the primary responsibility  of

agencies.  See, e.g..  Ethyl  Corp.  v.  EPA.  541 F.2d 1  (1976).

These decisions involve scientific and technical matters

particularly within the agencies'  expertise.  On such occasions,

the court's review must be at its  most deferential.

     Furthermore,  courts have held that agency  decisions

regarding response actions under CERCLA are to  be upheld unless

arbitrary and capricious.  United  states v. Ward. 618 F. Supp.

884 (E.D.N.C. 1985) (EPA's determination of appropriate remedial

action is 'entitled to great deference* and are "presumed to be

consistent with the NCP unless otherwise shown.*)  i United States

v. Western Processing. Co..  No.  C-83-252M  (W.D. Wash. Feb. 19,

1986)  (EPA's selection of a remedy will not be overturned unless
     2 (...continued)
Overten Park v.  Volpe. 401 U.S. 402, 416 (1971), and dft nevo
review is disfavored.  Chrysler Cora, v. Brown. 441 U.S. 281
(1979).  Accordingly, such agency decisions are entitled to a
presumption of regularity.*  Overton Park. 401 U.S. at 415.  The
Courts generally presume agency decisions valid.  As stated by
the court in Ethvl Corp. v. EPA. 541 F.2d 1 (D.C. Cir.) (an
                  , 426 U.S. 941 (1976);
        [A]fter our careful study of the record,
        we must take a step back from the agency
        decision.  We must look at the decision
        not as a chemist, biologist, or statistician
        that we are qualified neither by training nor
        experience to be, but as a reviewing court
        expressing our narrowly defined duty of
        holding agencies to minimal standards of
        rationality.
  . at 36-37
-------
     ./•
fr  LS
                              .  5  -
it is 'arbitrary and capricious")  (Exhibit B to plaintiff's
opening memorandum).
     Thus, it is Meyer's burden  to prove that the United States
incurred costs inconsistent with the NCP, and if this burden
cannot be met, then the United States should be granted summary
judgment.
II.  The Letting of the Petrochem  Contract Was Not  Inconsistent
with the National Contingency Plan.
     Most of work done in the Immediate Removal Action was done
by EPA contractor Petrochem, Inc.   Meyer asserts  that the
decision of On Scene Coordinator Xen Banaszek of EPA to waive
competitive bidding on the Petrochem Contract was inconsistent
with the National Contingency Plan ("NCP") and therefore not a
recoverable cost by the United States.  Mem. at 5-6.  However, •
delay the letting of the contract  for competitive bidding would
have subjected the community to an unwarranted risk of injury or
even death from the hazardous substances abandoned at the site by
defendants.
     As Robert Bowden explains in his Second Affidavit, the
letting of contracts through EPA's competitive bidding process is
a time consuming business.  Bowden Sec. Aff. 3.  First, a
proposal of work must be developed by EPA and reviewed both by
the Region and Headquarters personnel.  Id-  Next, there is a
thirty to sixty day period during which  EPA receives bids from
companies interested in doing the work.  Id* These bids must then
be evaluated by EPA both in terms of the estimated costs and the
technical sufficiency of the suggested means  for completing the
-------
                              - 6 -
work.  Ifi.  This review by EPA results in a narrowing  of  the
field of applicants,  who are then asked to submit  revised bids
that respond to comments made by EPA.  Once this second set of
bids are received by EPA, they must be evaluated again, and
negotiations are conducted with the remaining bidders. ££.  Only
after this entire process is a decision made concerning who will
be awarded the contract.  In 1983, the time of the immediate
removal action, it typically took nine to twelve months tq
complete this process,   jd.  Thus, if EPA had chosen to submit
the Petrochem contract for competitive bidding, the Immediate
Removal Action would have taken place in the summer of 1984 and
                     «
not 1983.
     This delay could have serious results.  As Mr* Bowden
explained in his first affidavit, the Northernaire site contained
large amounts of cyanide and acids.  If these substances  came
together, the resulting reactions-would produce hydrogen cyanide
                           >f
gas, which is highly toxic. Bowden Sec. Aff. 11 4-5.   Bowden also
points out the chemical reaction  concerned  is exothermic,  meaning
that it produces heat that in turn speeds up the  reaction.
Bowden Sec. Aff. 15.  It is not  disputed that the Northernaire
site was unattended,  and this could  have allowed  a leak  of deadly
chemicals to go unnoticed for some time.  Given that  the
Northernaire site is snail in area and locatd  in  an industrial
park surrounded by other businesses, this means that  the
surrounding population could be exposed to  this gas,  and death
and injury could result.
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                              . 7 -
     The danger that such a reaction could result is demonstrated
by the very documents on which Meyer relies to argue that no
emergency existed.  According to a Memorandum dated March 31,
1983 sent to Bowden from George Madany,  then on-scene coordinator
(Exhibit 3 to the Meyer memorandum and Exhibit A to the Second
Bowden Affidavit), 'the tanks and drums [containing the acids  and
cyanides] are badly rusted.*  In this same memorandum, Madany
estimated that certain vats containing hazardous substances
'appeared capable of holding the contents for a few months
longer.*  (emphasis supplied.)  Additionally, the Weston Sper
Report of the March 1983 inspection (Exhibit 5 to Meyer's
Memorandum)  of the Northernaire site describes the interior of
the Northernaire building as being "in a state of disarray . . -»*
,*  and recommends that cleanup take place in six months.  On  ^>
July 5, 1983 On Scene Coordinator Ken Banaszek signed a  finding
stating that:
          Ose of formal advertising for procurement  of
          the above described services is  impracticable
          because such method of procurement would
          delay the emergency response action necessary
          to remove the hazardous substance(s) or  to
          prevent the release of such substance(s),
          which, upon exposure, may cause death,
          disease, or illness.
Accordingly, pursuant to 42 U.S.C. f252(c)(3), the Petrochem
contract was awarded without competitive bidding.
     Meyer asserts that there was no emergency  sufficient to
justify the decision to award the contract without competitive
bidding.  Men. at 5.  Meyer relies on a July 1982  memorandum  by
-------
                              - 8 -
Robert Bovden (Ex.  2 to the Meyer memorandum),3 the March  1983
memorandum by then On Scene Coordinator George Madany  (Ex.  3),
and part of the March 1983 western Sper report (Ex. 5),  the latter
tvo of. which are discussed above.  Each of these  documents
recognizes that a clean up must take place, and merely states
that it need not be done immediately.  Additionally, tvo of the
three documents, the Madany memorandum and the West on  Spur
report,  state that a clean up should take place  in less than the
nine to twelve months needed to complete the competitive bidding
process.
     Meyer is essentially arguing that the only  type of emergency
that would authorize the use of 42 U.S.C. §252(c}(3)  is one where
the clean up must be accomplished immediately.  However, in
reality there is a range of levels of emergency.   In 1983 EPA had
to contend with the problems presented by hundreds of sites
contaminated with hazardous substances.  Ideally, clean up of
each site would have proceeded immediately; however, the
limitations of available funding and personnel meant that EPA had
to inspect the many different sites and take  action according to
the danger that each presented.  In the case  of Korthernaire, EPA
     3The Bowden memorandum states that EPA  intends to take no
action because the matter is being handled by the Michigan
Department of Natural Resources  (DHR).  As Bowden explains in his
second affidavit, DNR lacked the ability to  carry out the
immediate removal action itself, and  sought  to have the work  done
by defendants.  When defendants refused, DNR asked EPA to handle
the matter.  Bowden See. Aff. 1 7.  Thus, EPA could not have
started the competitive bidding process in July of 1982  (the  date
of the Bowden memo) because the responsibility for the matter was
with DNR at that time.
-------
                              . 9 -
 decided that it could wait several months, but could not wait the
 nine to twelve months needed to complete competitive bidding.
      Meyer  is nov asking this Court to second guess EPA's
 decision concerning how long it could safely wait before carrying
 out the immediate removal action.  However, this is exactly the
 type of technical decision to which courts usually defer to the
-agency.  Ethvl Corp. v. EPA. 541 P.2d 1  (D.C. Cir. 1975).
 Moreover, the particular facts here demonstrate that EPA acted
 correctly.   The containers concerned were "rusty* and not
 expected to last more than 'few months.* Ex. 3 to Meyer
 Memorandum  at 3.  Of course, predicting when abandoned drums of
 hazardous waste will leak is obviously an impossible task.
 Bowden Sec. Aff. 1 7. Because the Northernaire building was
 unattended, any leakage would probably not have been detected
 quickly.  Finally, the consequences of such a leakage, injury and
 death to the surrounding population, were so grave that caution
 by EPA was  justified.  Therefore, EPA's  decision not to wait the
 nine to twelve months needed to conduct  competitive bidding  on
 the Petrochem contract was not inconsistent with the NCP.
      Bowden also demonstrates in his affidavit  that even  in  the
 absence of  competitive bidding, EPA closely scrutinizes the  costs
 of an immediate removal action.  The On  Scene Coordinator is at
 the site continually, and must be  informed of all  charges by the
 contractor  within twenty-four hours of their incurrence.   Bowden
 Sec. Aff. 1 9. The On Scene Coordinator  has available to him for
 assistance  technical personnel who aid him in reviewing technical
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                             - 10 -
decisions made by the contractor.  Id.   Finally,  the contract
charges are reviewed by EPA after completion of  the contract,  and
adjustments to of the contractor's claims are made.  X£.
II.  Plaintiff has proven that its costs are valid.
     In the next section of its brief,  Meyer challenges the
United States' accounting of specific costs incurred by EPA.  The
United States will deal with each item in turn.
A.  The Petrochen Contract
     According to its the calculations made in the Pipkin
Affidavit, 1 10, the amount EPA paid to Petrochem was
$140,419.00.  Meyer claims that the invoices relating to the
Petrochem contract only add up to $113,880.21, and not the
$140,419.00 claimed by plaintiff.  Mem. at 9.  However, Meyer
does not set forth its calculations or provide an affidavit
stating under oath that the $140,419.00 total is incorrect.
Under these circumstances, the plaintiff cannot respond to
Meyer's claim because it does not know the ba«<« for **- -
Furthermore, Meyer's failure to support its assertion with either
an explanation of its calculations or an affidavit  is
insufficient to create a material issue of fact.
     Later in its memorandum (p. 15), Meyer returns to the
subject of the Petrochem contract and notes that cost summaries
dated May 24, and June 28, 1984 show Petrochem  costs at
$136,285.87, and not the $140,419.00 now sought by plaintiff.
Meyer uses the difference between the present figures  and those
in 1984 to argue that the United States paid Petrochem for work
-------
                             - 11 -
well after the completion of the immediate removal action.
However, as explained in the Second Hackley affidavit,  the  EPA
contract with Petrochea entitled EPA to withhold payment of a
certain percentage of the money owing Petrochem until a review
was completed of the validity of its charges.  Hackley  Sec. Aff.
1  12.   In this instance, some of the charges were disallowed,
some were allowed, and the final figure paid to Petrochem was
$140,419.00.  jd.  Thus, the difference between the cost figures
from 1984. and that contained in plaintiff's affidavits is that
the latter reflect the final settling of disputed charges
relating to the Petrochea contract.
B.  GCA Title Search
     Meyer next challenges the $993.00 that EPA paid to GCA Corp.
to perform a title search on the Northemaire property.  Meyer
notes that in an EPA memorandum it attaches as Exhibit 6 to its
brief an earlier work plan submitted by GCA to do this work for
$2,289.00 was rejected as too expensive, and that the memorandum
went on to state that the work could be done by the Wexford
County abstract office at an estimated cost of $120.00.  Mem.  at
10.  Eventually, EPA did have GCA do the work, but for $993.00,
and not the $2,289.00 previously requested.
     Meyer coaplains that EPA should have  retained the Wexford
County abstract office to do the work at $120.00.  However,  EPA
decided that it needed the additional services performed by GCA,
and as noted above, its decision must be given deference.
Clearly, the requirement that the United States  incur  costs not
-------
                             - 12 -
inconsistent with the NCP does  not mean that the  Court should
have to second guess a decision made concerning which title
search method to use.  Meyer has  failed to meet its burden of
demonstrating that this particular cost was inconsistent with the
NCP.4
C.  Travel Coats
     The next items that Meyer  challenges are certain travel
costs incurred by EPA employees.   Meyer asserts that it is not
clear that travel involving Ken Banaszek and other EPA employees
as referenced by Exhibits 7, 9, 11-13 was allocated among the
various Superfund sites visited on the trips.  Mr. Kackley has
reviewed these charges and reports that in fact the proper
allocation was made.  Sec. Hackley Aff. 1 11 (b).
     Exhibits 9, 10, 14, and 15 all relate to two trips taken by
two EPA employees to the Northernaire site in April  1984 as part
of travel that involved several Superfund sites.  Meyer argues
that it is not clear that the trips were allocated among the
various Superfund sites (instead of being charged entirely to the
Horthernaire site) and guest ions why travel  was  necessary  in
April of 1984 after the completion of the Immediate  Removal
                                                     tv*-101—
Action.  Mem. at 9.  While the costs of this travel  wa«  correctly
allocated among the various sites, the United States has decided
to delete these costs from the amount It is  seeking  from
defendants because of the gap in time between the  immediate
     4If anything, the documents relating to this  cost
demonstrate that EPA was seeking to hold costs down at this site,
and was carefully reviewing the charges of  its contractors.
-------

                                        - 13  -
           removal  action and the contested travel.  Sec. Hackley Aff.  1
           ll(b).
           D.  Litigation Expenses
                 Meyer attacks as not cost effective the government's
           practice of sending more than one attorney to two depositions and
           to the oral argument of plaintiff's motion on partial summary
           judgment.  However, it is customary in cases involving lawsuits
           filed on behalf of EPA by the Department of Justice for an
           attorney from both agencies to attend discovery proceedings and
           important court hearings.   Moat of the cases involve highly
         v technical factual matters, and EPA  attorneys can provide an
           amount of expertise.  The situation can be analogized to that
n  j   L*-^" where a  large corporation is represented both by its in house
_J**^
           counsel  and by an outside law  firm.  In those instances,  it  is
           accepted that attorneys from both  the corporation  and  its law
           firm will take an active ro^e  in "the case.
                In  this instance, only at the first deposition in the case
           did plaintiff have more than one attorney present, and that  was
           so that  the three attorneys assigned to the  case could begin with
           the same familarity with the  issues to  be raised  in discovery  by
           defendants.  Furthermore, the  United States  has done its best to
           hold down litigation costs in  this case.   It has noticed no
           depositions itself, and did not attend  three depositions noticed
           by defendants that it concluded were unrelated  to  the issues
-------
                             - 14 -
raised by its complaint against defendants.5  Given the
complexity of the ease,  it is  not inconsistent with  the NCP  for
it to have attorneys from both  EPA and the Department of Justice
attend depositions and major court hearings.
S.  Payroll expenses
       Meyer questions the increase from in the costs allocated
to payroll expenses of $10,349  in a cost summary  dated May 5,
1984 to the figure of $13,078.66  contained in a cost  summary  on
June 28, 1984.  Meyer asserts that these costs could  not  relate
to the immediate removal action carried out in the summer of
1983.  However, as previously demonstrated, the United States can
recover as part of its response costs the litigation costs it
incurs in its efforts to recoup the expenditures made from
Superfund.  NEPACCO. supra.  The  costs challenged here by Meyer
vere incurred when EPA was doing  the vork needed to refer this
case to the Department of Justice for filing.  This work included
preparation of the litigation report and documentation of costs
incurred in the immediate removal action.  Meyer has  introduced
no evidence to demonstrate that any of these litigation costs
incurred during this time period were excessive or inconsistent
            also asserts that three attorneys were present at  the
oral argument of the motion for partial summary judgment.  The
third attorney present was Mr. Thomas Gezon, an Assistant U.S.
Attorney in the Western District of Missouri who has  been
assigned to this case.  No charge for Mr. Gezon's time,  either at
the oral argument or for any of the other time he has spent  on
this case, is included in the amount that plaintiff seeks to
recover from defendants.
-------
                             - 15 -

with the National Contingency Plan.   Accordingly, Meyer has not

raised a material issue of fact concerning these costs.

F.  Qvarfliohta

     These costs do not relate to any charges incurred as part of

the immediate removal action and are not a part of the costs  for

which plaintiff seeks recovery.  These costs were not included by

Mr. Hackley in his accounting of the government's costs  in his

first affidavit.

G.  EPA Indirect Costs

     Section 107(a) of CERCLA provides that if the  conditions for

liability are met, then the United States can 'recover  all  costs

or removal or remedial action incurred . . . .*  Part of the

costs that the United States seeks to recover in this case are

known as 'indirect costs,* meaning that they cannot be  allocated

to a particular case or Superfund site, but rather are  a cost of

the entire Superfund program.  William Cooke explained the

concept of indirect costs in his affidavit filed in support of

plaintiff's"motion for summary judgment on costs:

          In lay terms, the indirect costs represent
          overhead costs, and include such things as
          rent and utilities for site and non-site
          staff office space; payroll and benefits for
          program managers, clerical support and other
          administrative support staff; and pay earned
          by on-scene coordinators while on leave, or
          performing tasks not directly associated with
          a particular site.  Indirect costs are
          generally understood and accepted within the
          business community, and are recognized as
          costs to the Agency in all government grants
          and contracts.  As indirect costs represent
          'real costs* of operating the Superfund
          program, they are recoverable under  section
          107(a)(4)(A) of CERCLA, which provides that
-------
                                     - 16 -
                  the government shall  recover 'all costs ...
                  incurred by the United states Government.'

         Cooke Aff. 1 5.  Meyer does not dispute Cooke's statement that
         such indirect costs are recognized by industry as true cost by
         the Government of doing business.
              Meyer makes the argument,  never accepted by any Court, that
/*    M
'   ''    the United States is not entitled to recover its indirect costs
                                <*
         connected with a response action under CERCIA.  Meyer bases its
         argument on the absence of any express reference to indirect
         costs in the definition of removal contained in Section 101(23)
         of  CERCIA, 42 u.s.C. §9601(23).  However, that definition
         includes 'such actions as may be necessary to monitor, assess and
         evaluate the release or threat of release of a hazardous
         substances ... or the taking of such other actions as may be
         necessary to prevent, minimize or mitigate damage done to  the
         environment . . . .'  The breadth--of the phrases 'such actions  as
                                    -r
     ((^ may be necessary' i» clear evidence that Congress wanted the
    (*   United States to recover all costs, direct and indirect,
    :>  i^-
        connected with cleanup efforts.  Certainly it is 'necessary' for
      | EPA employees to have offices to carry  out their functions,  'for
      <
      I  utilities to be paid, for clerical support to be available,   and
      '
      i  for EPA to hire managers to oversea the Superfund program as a
        whole.
             The Dnited States' position is also  supported  by the decided
        case law.  In United States v. SCRDI. 11  C.  ft R.W.L.R. 138
        (D.S.c. Nov. 22, 1985) (Exhibit A to plaintiff's opening
-------
                              -  17  -

 memorandum), the Court expressly allowed the United States to

 recover  its administrative costs, which are of necessity

 indirect.  Furthermore, the very case cited by Meyer,  United

 States v. NEPACCO. 579 F. Supp. 823, 850 (W.D. Mo. 1984), holds

 that the United States can recover administrative costs.  NEPACCQ

 sets out the following categories of costs that can be recovered:

          (a) Investigations, monitoring and testing to
          identify the extent of danger to the public
          heath or welfare or the environment.

          (b) Investigations, monitoring and testing to
          identify the extent of the release or
          threatened release of hazardous substance.

          (c) Planning and implementation of a response
          action.
          (d) Recovery of the costs associated with the
          above actions. Aiul Lu enfore* the previaiana
          of CERCLA, including the costs incurred for
          the staffs of the EPA and the Department of
          Justice.6
J
Category (d) clearly refers to indirect or administrative costs.

The reference to costs 'associated* with categories  (a)-(c)

tracks the language of the statute and is meant to pick up costs

that can not be directly attributed to investigation, monitoring,

or implementation of response actions.  Any other interpretation

makes that part of the Court's ruling redundant, since direct
     6Elsevhere, the Court states that 'the defendants/are
jointly and severally liable for all costs, ineludino/salariea
and expenses, incurred by plaintiff associated with  sVicJl___—^
activities as/monitoring, assessing and evaluating the release of
contaminants and the taking of actions to prevent, minimize or
mitigate damage which might result from a release or threat of
release from the Denney farm site.*  Id- at 852; emphasis suppliedflt
-------
                             -  18 -
costs associated with response actions would fall into categories
(a)-(c).7
     Meyer's argument also'conflicts with EPA's own
interpretation of its responsibilities under CERCIA.  Section
101(23) includes in the definition of 'removal* any action that
the United States can take under its powers in Section 104(b),
which is the section that specifies the types of actions for
which EPA may use the money contained in Superfund.  Thus, any
costs incurred by^EPA under Section 104fb) are charged against
Superfund are *removal* costs and can be recovered  from liable
defendants.  EPA has interpreted CERCLA to allow it to charge its
v  '"""" 	
indirect costs to Superfund pursuant to the power granted it to
draw on Superfund in Section 104(b).  Of course, the
interpretation of a statute by an agency charged with enforcing
it is due great deference.  New York Pept. of Social  Services v,
Dublino. 413 U.S. 405, 421 (p72)*~'(»«« must be mindful that  'the
construction of a statute by those charged with  its execution
must be followed unless there are compelling reasons  that it is
wrong. . .'») (quoting Red Lion Broadcastino Co. v. TCC.  395 U.S.
367, 381 (1967)); Housing Authority of Elliott County v.
Beraland. 749 F.2d 1184, 1189 (6th Cir.  1984)  ('Interpretation of
a statute by a federal agency charged with  its administration  is
     7This was also the interpretation made by the Court in SCRPI
of MEPAccos  »ln MBPACCO. the  [court] concluded that CERCIA
specifically allow* for the recovery of  all litigation costs,
including attorney fees, and administrative and investigative
costs associated with cleanups.*  United states v. SCRDIf supra
at 138.
-------
 entitled to a strong presumption of validity.*)-j  Additionally,

 Congress has been kept informed of this/practice through the

 regular oversight process, and has never% objected to it in the

 seven years that Super fund has been in operation.     ir  cv

     If Meyer's argument concerning indirect costs were accepted,

 long standing EPA procedure would be thrown out the window, and

 the United States would not be able to 'recover all costs of

 removal or remedial action incurred . . .* as provided for in

 Section 107 (a) of CERCLA.  No court has ever denied EPA its right

 to recover its administrative costs, and accordingly, plaintiff

 asks this Court to grant it summary judgment on  its right to

 recover indirect costs.8                    „	  „—^

   IV.  Tha United States fta Entitled tp Pre-1 udtraent_ J.nj>erest..


     As the United States demonstrated inxlts^gp_ejiing--br'Ief,  the

 1986 amendments to CERCLA specifically included in the definition

 of response costs pre judgment interest.  Plaintiff's  Mem.  at  8.
     8Meyer also notes that in the first Hackley Affidavit,  the
United States reduced its accounting of administrative overhead
in Region V, one of the components of  indirect costs from
$88,301.00 to $/453,397.00.  The reason for this reduction is set
forth in Mr. Hackley's first affidavit, 1  8,  and the United
states will not repeat it here.

     Mr. Cooke noted in paragraph 9 of his affidavit that the
indirect cost rates for fiscal years 1985-87 were provisional
and subject to review.  Mr. Cooke also state that it was a
generally accepted accounting principle to apply provisional
rates until the final rates were available.  ££.  In his Second
Affidavit, Mr. Hackley states that the final figures for 1985 and
1986 are now available, and their application to this case
results in a reduction of the costs attributable to EPA Region
V's indirect cost from $53,397.00 to $51,506.00.  sec. Rackiey
Aff.5.
-------
                             - 20 -
 Furthermore, prior to the enactment of these amendments,
 substantial precedent existed for such an award of prejudgment
 interest,  see, e.g. United states v. KEPACCQ.  579 P.  supp.  823,
 852  (W.D. Mo. 1984), aff d 810 F.2d 726 (8th Cir.  1986),  and
 other authorities cited in plaintiff's memorandum at 12-15.   In
 opposition, Meyer cites the case of S£BDI> in which the court
 declined to award pre judgment interest in the absence of proof
 that defendants had been "recalcitrant, deceptive or unreasonable.*
 However, the United States has previously stated why it believes
 that the court erred in its ruling on this point, and the United
 States will not repeat its arguments here.
     In any event, Meyer makes no mention of the SARA amendments
 that now require prejudgment interest or the well established
 principle that *a court is to apply the law in effect at the time
 it renders its decision, unless doing so would result in manifest
 injustice or there is statutory direction or legislative history to(
 the contrary.*  Byadlev v. Ric.hm.ond School Board. 416 U.S.696, 711
 (1974).  Meyer's failure to refute the plaintiff's position on
 prejudgment interest means that the Court should grant that part of/
 plaintiff's motion for summary judgment.
                             CQNCTiHS IQtf
     The legal principles that the plaintiff set  forth  in its
 opening memorandum have not been challenged by Meyer  or the other
 defendants.  Furthermore, Meyer has  failed to  establish a material
 issue of fact concerning consistency of  the Petrochem contract
with the NCP.  While Meyer was able  to successfully challenge
-------
                             - 21 -

certain costs, plaintiff has eliminated  these costs  from the

amount it seeks to recover in this case,  and problems with  these

costs need not prevent the United States from receiving summary

judgment on the remainder of its motion.

                         Respectfully submitted,
                    By:
                         ROGER L. MARZULIA
                         Acting Assistant Attorney General
                         Land and Natural Resources Division
                                H. OAKLEY, Att
                         Environmental Enforcement Section
                         Land and Natural Resources Division
                         United States Department of Justice
                              Washington, D.C.  20530

                         JOHN A. SMIETANKA
                         United States Attorney
                         Western District of Michigan
OF COUNSEL:
                    By:
                         THOMAS GEZON
                         Assistant U.S. Attorney
                         399 Federal Building
                         110 Michigan Avenue, N.W.
                         Grand Rapids, Michigan  49503
ROGER GRIMES
BABETTB J. NEUBERGER
BERNARD LANDMAN
Assistant Regional Counsel
Environmental Protection Agency
Region V
230 South Dearborn Street
Chicago, Illinois  60604
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                              -  22  -



                      CERTIFICATE OF  SERVICE

      I, Robert H. Oakley, certify that on October 15, 1987, I

served a copy of the  foregoing Memorandum in Reply to the

Opposition of R. W. Meyer, Inc. to Plaintiff's Motion for Summary

Judgment on Costs on  each of the following:
                         John M. Kruis
                         Smith, Haughey, Rice 6 Roegge
                         200 Calder Plaza Building
                         Grand Rapids, Michigan  49503

                         Miles J. Murphy, III
                         Cholette, Perkins £ Buchanan
                         600 Old Kent Building
                         Grand Rapids, Michigan  49503

                         Robert P. Trenp
                         415 Munson Avenue
                         Traverse City, Michigan  49684

                         Oven J. Cummings
                         Cummings McClorey Davis & Acho,  P.C.
                         33900 Schoolcraft, Suite G-l
                         Livonia, Michigan  48150


by placing a copy in envelopes addressed to each of  the  above

with proper postage affixed and placing the envelopes  in the U.S.

Mail.
-------
                         SV1ITH HALCHEY  RICE £ ROEGGE
Ojs.rt O
L Roland
Thom» F
P L*urri«T Mulvihiil
jjmr, K Millrr 111
Uiorrncc P Mullifan
Vtichwl S B*rnn
*Pion»i R Tukcr
Paul H Rrmhif*
Unce it Mather
Charles T Behlrr
G
Karen S
Oan C Paner
Bnanj Piacbia
Phillip K Vlowrn
Kay Griffith Huaauav
Danid R Faf an
SwaJ
                                                            Laurrncr D Smith
                                                              I»U 1980
      Mr. C.  Duke Hynek, Clerk
      U.S.  District Court
      458 Federal Building
      110 Michigan, N.W.
      Grand Rapids, MI 49503

      Re:   USA v Northernaire Plating Co., et al
             Case  No:   G84-1113-CA7
             O/File:    34626

      Dear  Mr. Hynek:

             We enclose herewith  Defendant R.  W. Meyer,  Inc.'s
      Brief in Opposition to Plaintiff's Motion  for Summary
      Judgment on Costs with our Proof  of Service.

                                   Very truly  yours,

                            SMITH,  HAUGHEY, RICE  & ROEGGE
                                      John  M. Kruis
      eh
       cc:   Robert H.  Oakley
             Thomas J.  Gezon
             Babette  J. Neuberger
             Miles J.  Murphy,  III
             Robert P.  Tremp
             Owen  J.  Gummings
                                                          Cjp. //



41


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-------
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    AAPCS.
                               UNITED STATES DISTRICT COURT
                               WESTERN DISTRICT OF MICHIGAN
                                     SOUTHERN DIVISION
             UNITED STATES OF AMERICA,

                  Plaintiff,
             -vs-

             NORTHERNAIRE PLATING CO.,
             WILLARD S.  GARWOOD and
             R.W. MEYER,  INC.,

                  Defendants  and
                  Third-Party Plaintiffs,

             -vs-

             CITY OF CADILLAC,

                  Third-Party Defendant and
                  Fourth-Party  Plaintiff,

             -vs-

             R. W.  MEYER,  JR.,  R. W.  MEYER, SR. ,
             Individually and d/b/a R.  W.  MEYER
             CONSTRUCTION COMPANY,

                  Fourth-Party  Defendants.
             Robert  H. Oakley
             Land and Natural Resources Div.
             Environmental  Enforcement Section
             U.  S. Department of Justice
             Washington,  DC  20530
             (702) 633-5415

             Thomas  J. Gezon (P24066)
             Chief Assistant U.  S. Attorney
             399 Federal  Building
             110-Michigan Avenue, N.W.
             Grand Rapids,  MI  49503
             (616) 372-2404
Civ. Actions  G84-1113-CA7

HON. DOUGLAS W. HILLMAN

DEFENDANT R.W. MEYER, INC.'5
BRIEF IN OPPOSITION TO
PLAINTIFF'S MOTION FOR
SUMMARY JUDGMENT ON COSTS
  L. Roland Roegge  (P19551}
  John M. Kruis  (P34626)
  Attorneys for  R.  W. Meyer
  200 Calder  Plaza  Building
  Grand Rapids,  MI   49503
  (616) 774-8000

  Babette J.  Neuberger
  Office o* Regional Counsel
  U.S. Environmental
  Protection  Agency, Region V
  111 W. Jackson Blvd.
  Chicago,  IL  60604
  (312) 886-6609
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              Michael P. McCasey  (P28307)
              Miles J. Murphy, III (P38604)
              Attorneys for Northernaire
              and Garwood
              900 Campau Square Plaza Bldg.
              99 Monroe N.W.
              Grand Rapids, HI  49503
              (616) 774-2131

              Robert P. Tremp (P21557)
              Co-Counsel for City of Cadillac
              415 Munson Avenue, Suite 108
              Traverse City, MI  49684-3059
              (616) 941-8227
       Owen J. Cummings (P12381
       Attorney for the City of
       Cadillac
       33900 Schoolcraft, Suite G-l
       Livonia, MI  48150-1392
       (313) 261-2400
 SMITN
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Submitted by:

SMITH, HAUGHEY,  RICE  &  ROEGGE
Attorneys for  Defendant R.w.  Meyer
By:  John M. Kruis  (P34626)
BUSINESS ADDRESS:
     200 Calder  Plaza Building
     Grand  Rapids,  MI 49503
     (616)  774-8000
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                                       TABLE OF CONTENTS
                     Section
Pag-
                 I,   Facts	

               II.   Law  and  Argument	

                         A.    Standard of Review for Summary Judgment	

                         B.    Plaintiff Violated 41 U.S.C. § 252(c) in
                              That  It  Did Not Advertise the Immediate
                              Removal  Action for Competitive Bidding 	

                         C.    Plaintiff's Claimed Costs Are Inconsistent
                              with  the National Contingency Plan  	

                         D.    Genuine  Issues of Material Fact Exist as
                              to  Whether the Plaintiff's Claimed  Costs
                              Were  Actually Incurred in the Immediate
                              Removal  Action	1

                         E.    Plaintiff Is Not Entitled To Recover
                              Prejudgment Interest	2

              III.   Conclusion	2
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   SMITH NAUGHT*
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                                             FACTS

                    This action was brought by the United States under Section
                107(a) of the Comprehensive Environmental Response Compensation
                and Liability Act of 1980, 42 USC § 9601, et seq,  ("CERCLA'),
                seeking to recover the costs of an immediate removal  action  that
                was carried out at the Northernaire site in Cadillac,  Michigan.
                The immediate removal action was commenced by  the  Environmental
                Protection Agency ("EPA") on July 15,  1983, and was completed  on
                August 3, 1983   (Plaintiff's memorandum in support of motion,
                pp. 21-22; Declaration of Robert Bowden, paragraphs  11,  12).
                    On April 30, 1987, this court entered an  order granting the
                United States' motion for partial summary judgment,  finding
                defendants Garwood, Northernaire and Meyer jointly and severally
                liable for the costs incurred during the immediate removal
                action.  The court ordered that the defendants were  jointly  and
                severally liable "for the costs incurred during  the  clean up of
                the Northernaire site, insofar as those coats  are not
                inconsistent with the National Contingency Plan".   (Emphasis
                added).
                    The plaintiff has now brought a motion  for  summary judgment
               on costs, seeking to obtain an award of all  c^sts allegedly
                incurred during the immediate removal  action,  without having  to
               present proofs at trial.  Specifically, plaintiff is seeking  to
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   RCetMCCGC
200
 recover contractor and EPA oversight costs, litigation costs, and
 prejudgment interest.  In support of its motion, plaintiff has
 filed a memorandum of law and what it terms "supporting
 declarations", in the hope that this court will find those
 declarations sufficient and will not require plaintiff to present
 actual proof of the costs incurred
     Defendant R.W. Meyer, Inc. strongly opposes plaintiff's
 motion, for several reasons.  First, when the EPA hired a
 contractor to conduct the immediate removal action, the project
 was not advertised for competitive bidding, contrary to statutory
 requirement.  Second, it is defendant's position that much of the
 plaintiff's alleged costs are inconsistent with the National
Contingency Plan ("NCP") and thus cannot be allowed.  Third,
 there are significant issues of fact as to the amount and
validity of the costs allegedly incurred, which must preclude the
granting of summary judgment.  Finally, it is this defendant's
position that plaintiff is not entitled to recover prejudgment
interest,  particularly at this stage of the proceedings.
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   SMITH MJMJOMft
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 JWCALDE* PL
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MCMGAM4
                                               II.

                                         LAW AND ARGUMENT


                A.   Standard of Review for Summary Judgment.


                     Plaintiff's motion for summary judgment is brought pursuant

                to Fed.R.Civ.p. 56(c), which provides that judgment can be

                entered only "if the pleadings, depositions, answers to

                interrogatories, and admissions on file, together with the

                affidavits, if any,  show that there is no genuine issue as to an

                material fact and that the moving party is entitled to a judgmen

                as a matter of law "  It is well-established, however, that "The

                summary judgment standard in this Circuit is a stringent one."

                United States v Chem-dyneCorp.,  572 F.Supp. 802, 810  (S.D. Oh.,

                W.D. 1983).  As the court there stated:
                          "In deciding a Motion for Summary Judgment,
                          the Court must construe evidence in a light
                          least favorable to the movant and most
                          favorable to the opposing party."  Bonn
                          Aluminum & Brass Corp. v Storm Kin Corp.,  303
                          F.2d 425, 427 {6th Cir. 1962).  The Court
                          must exercise extreme caution in disposingof
                          complex cases on a Motion for Summary
                          Judgment.  S.J. Groves & SonsCo. v Ohio
                          Turnpike Commission, 315 F.2d 235, 237  (6th
                          Cir. 1963), Cert. Denied, 375 US 824, 84
                          S.Ct. 65, 11 L.Ed.  2d 57 (1963)."  (Emphasis
                          added).  572 P Supp  at 810.
                  Moreover-,  "When a summary judgment motion is made, all

             reasonable  doubts must be resolved in favor of the party opposin

             the motion  and  the motion must be denied xf there are any

                                           3
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                unresolved factual issues   Impossible Electronics Techniques,
               i Inc.  v Wackenhut Protective Systems,  Inc.,  669 F.2d 1026,  1031
                (5th Cir. 1982)."  Hill v Linahan, 697 F.2d 1032,  1035 fn.  4
                (llth Cir. 1983).  Summary judgment is an extreme remedy that
                should not be granted unless the moving party has established the
                right to judgment with such clarity as to leave no room for
                doubt.  Mandel v United States, 719 F.2d 963 (8th Cir. 1983);
                Jones v Nelson,  484 F.2d 1165, 1168 (10th Cir. 1973).
                     In this case, there are numerous unresolved issues of fact
                pertaining to plaintiff's alleged costs.  In its motion,
                plaintiff has not established its right to judgment as a matter
                of  law, and this defendant submits that the motion must be
                denied.
                B    Plaintiff Violated 41 U S C  § 252{c) In That It Did
                     Not Advertise the Immejiiate Removal Action for
                     Competitive Bidding.
                     41 O.S.C.  S 252(c) requires that:
                          "All  purchases and contracts for property and
                          services shall be made by advertising, as
                          prpvided in section 253 of this title, except
                          that  such purchases and contracts may be
                          negotiated by the agency head without
                          advertising if —
                                              * * *
                          (2)-'The public exigency will not admit of  the
                          delay incident to advertising.'
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   SMITH
   RCEIROCQOC
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     When the contract  for the  immediate  removal action was'
 procured, the EPA recognized that  it was  subject to  the
 competitive bidding  requirements of 41  U.S.C.  252(c).  However,
 it circumvented those requirements when it  let the contract to
 Petrochem Services,  Inc., by making  'Findings" that  the
 Northernaire site presented an  emergency  situation.   (See  Exhibit
 1 — Determination and  Findings, signed by  Ken Banaszek, On-Scene
 Coordinator).  Specifically, Mr. Banaszek relied upon 41 U.S.C.
 252(c)(2), quoted above, as authorizing waiver of the competitive
 bidding requirement  in  an emergency situation
     One of the "Findings" made by Mr.  Banaszek was  that the site
 presented "an imminent  and substantial  threat  to the public
 health and welfare."  All of the documents  on  file,  however,
 indicate the opposite — that in fact  there was no  imminentflHd
 substantial threat to the public health and welfare.  Exhibit 2,
 a memo from Robert Bowden, dated July  16, 1982, clearly
 demonstrates that point.  There, Mr. Bowden specifically states,
 "There is no emergency  so I do  not plan further actions at this
 time."  It was not until eight  months  later, in March, 1983, that
the EPA conducted a  further site inspection, and not until July,
 1983 that it-was declared an  "emergency".
     Following the March, 1983  site  inspection, the EPA again
determined that the  site did not present  an emergency situation.
 In a memo dated 3/31/83 (Exhibit 3),  then On-Scene Coordinator
George Madany stated that there were  no drums or any hazardous
                               5
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             materials outside the building, and that although  there  were  a
             number of vats, drums and pails containing various fluids,  Ther<
             was no evidence of a spill or leakage."  Tests also indicated
             that there was no hydrogen cyanide inside the building.   All  of
             the air-sampling tests were negative, and the vats containing
             fluids "appeared capable of holding the contents for a few month-
             longer."  Mr. Madany concluded that "no immediate  removal is
             warranted "  (Exhibit 3, p. 3).
                -  Although the EPA was well aware of the condition of the
             Northernaire site as early as June-July, 1982, it  was not until
             July 5,  1983, that it decided to classify the site as an
             "emergency" and not submit the contract for competitive bidding.
             In a memorandum dated July 5, 1983 (Exhibit 4), Mr. Banaszek
             stated that the contract procurement was not being publicized
             "because the procurement is of such unusual and compelling
             emergency that the Government would be seriously  injured if bids
             or offers were permitted to be made more than 15  calendar days
             after issuance of the invitation for bids or request for
             proposals or the date of transmittal of the synopsis, whichever
             is earlier."   There was in fact no  "unusual and  compelling
             emergency."  The Weston Sper Technical Assistance Team  prepared .
           i  report dated April, 1983 (pertinent pages attached as Exhibit  5)
             in which they- specifically stated:
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   SMITH
   nCE4ROCGGC
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2W CAUSE* PIAZA
                          "The OSC  (On-Scene Coordinator) determined
                          the site  was not an  immediate threat to human
                          health or the environment and the clean-up
                          operations could wait 6 months for the
                          Superfund Remedial clean up.  The OSC's
                          decision  was based upon the  following:

                          (1)  Cyanide vapors  were not detected inside
                              the  building;

                          (2)  Explosive vapors were not detected
                              inside the building;

                          (3)  Tanks were not  leaking  inside the
                              buildings;

                          (4)  Acid and caustic material were
                              maintained in separate  areas;

                          (5)  The  building was secured by  locked doors
                              that would prevent access to chemical
                              containers;

                          (6)  The  structure of the building was sound
                              and  prevents exposure of the chemical
                              containers to the environment."

                              (Emphasis added).   (TAT Report,  p.  8).
     Although the EPA was  fully  aware  of  the  condition of  the

Northernaire site for over a year,  and specifically  determined

during that year that it did not present  an emergency situation

and did not warrant  immediate  removal, the contract  was  suddenly

awarded to Petrochem without competitive  bidding,  stating  without

explanation that it  had suddenly become an emergency.  It  is

significant that the bill  from Petrochem ($140,419.00)  is  the

highest cost item on the list  of EPA expenditures, and  the singlt

largest expense which the  Government is now seeking to  recover

against the defendants.  It  is this defendant's position that,

                               7
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   SMi-Vi
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                not  having been advertised for competitive bidding, the Petrochem
                contract is  invalid.  At the very least, the question of whether
                the  contract should have been submitted for competitive bidding
                is an  issue of fact which bears close scrutiny and which
                precludes the granting of summary judgment   In that regard, it
                should be noted that defendants have been attempting to take the
                deposition of Ken Banaszek for approximately two months, after
                being told by plaintiff's attorneys that he is the key individual
                to testify regarding EPA expenditures.  However, defendants have
                been unable to locate him to effect service of a subpoena or to
                obtain his appearance for a deposition.

                C.   Plaintiff's Claimed Costs Are Inconsistent with the
                    National Contingency Plan.

                    Plaintiff claims that there is no  genuine issue of material
                fact as to whether the costs allegedly  incurred were consistent
               with the National Contingency Plan ("NCP").  That  is not the
               case.  This defendant contests plaintiff's motion  for  the very
               reason that there is a material dispute as to whether  the alleged
               costs have been incurred consistent with the NCP.
                    The NCP states that:
"The appropriate extent  of  the  remedy shall
be determined by the  lead agency's  selection
of a cost-effective remedial  alternative that
effectively mitigates  and minimizes threats
to and provides adequate protection of public
health and welfare and the  environment."  40
CFR 300 68{i)(l).  (Emphasis added).
                    8
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SMITH MAUCHC-
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        TIM
GAANO
      The case law is consistent with the NCP, requiring that,
 "Any clean-up must be consistent with the National Contingency
 Plan ("NCP"), and the most cost-effective means must be chosen
 among equally effective plans." United States v Western
 Processing Co., No. C-83-252M  (W.D. Wash. Feb. 19, 1986),
 plaintiff's Exhibit B at 624-625.
      The manner in which the immediate removal action and this
 subsequent litigation were conducted was not cost-effective, and
 thus  not consistent with the NCP.   Some of the government's
 claimed costs were so extraordinary and/or inexplicable as to
 rise  to the level of "arbitrary and capricious".  One such
 example is the awarding of the contract to Petrochem without^
 competitive bidding, which has now resulted  in a  claim for
 Petrochem's services of S14JX, 000.00.  It was not  cost-effective
 to forego competitive bidding  when the status of  the site was
 known to the EPA for over a year.   Bids could have been obtained
 early-on,  but instead the EPA  simply chose to take no action
 until July, 1983, when it then suddenly decided to classify  the
 site as an emergency.
     With regard to the merits of  the Petrochem bill, plaintiff
 has provided copies of invoices purporting to support the  claim
 for $140,000.  In reviewing those  invoices,  however,  including
 the invoices from the subcontractors, the amounts charged total
only $113,880.21, creating a discrepancy of  approximately
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   SMITH i
   net * Boecct
AMOIMIOMLC
auuOMC
        $26,000.  Moreover, it should be noted that Petrochem spent a
        total of only 25 working days at the site, yet billed the EPA a
        total of $88,873.99 just for its personnel and equipment costs,
        which is an average of $3,554.96 per day.  That amount appears to
        be extremely high and certainly creates a~~question of cost
        effectiveness.
            Another example is a  "Work Plan" submitted by the GCA
        Corporation in November, 1983, which was a plan to have a title
        search conducted for the Northernaire property.  Simply preparing
        the Work Plan resulted in  a 15-page document, and an estimated
        cost for the title search  of $2,289.00.  Somewhat to the EPA's
        credit,  they disapproved the Work Plan on the basis that it was
        too expensive, and stated  specifically that:
                 "The work plan specifies that the title
                 search will be conducted by the Wexford
                 County abstract office at an estimated cost
                 of $120.00.  This cost appears reasonable  and
                 the work done by this title company  should be
                 sufficient to meet the Regional needs."
                 (Exhibit 6).
            In spite of that disapproval and the  fact  that  the  necessary
       work could be done for $120.00, the EPA paid  GCA Corp. $993.00,
       for which it seeks reimbursement from the  defendants.  Defendants
       should not be required to pay  $993.00 for  a  job the  EPA
       acknowledges could have been done for $120.00.
            The government is also seeking costs  for EPA payroll and
       travel, totalling approximately $29,000.00.   Upon defendant's
                                     10
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   SMITH
   RCt
* »*0*I MlOML CMWOMTIM
no CALDEB »IUA SOUJMG
 review of  the documents supporting that claim, it is
 that  they  were not incurred cost-effectively/ and were assigned
 to  the Northernaire site in an arbitrary and capricious manner.
 For example, the records indicate that two EPA employees,
 Mr. Banaszek and Mr. Filippini, traveled from Chicago to Lansing
 and back on December 13-16, 1982, for negotiations on two
 Superfund  sites, one of which was Northernaire.  (See Exhibits 7
 & 8)   This defendant questions the cost-effectiveness of  having
 two-EPA employees conduct those negotiations; of more serious
 concern is the arbitrary manner in which both the travel expenses
 and the payroll expenses for that trip were apparently charged
 only to the Northernaire site, when the purpose of the trip was
 to deal with two sites.
     Another example of the same problem occurred on April
 1984,  when both Mr  Banaszek and Mr  Plucinski traveled  from
 Chicago to Traverse City and Lansing.   (See Exhibits 9 &  10).
 Again, although it is not entirely clear,  it appears that  all  of
 the travel and personnel expenses were  assigned to the
 Northernaire site.  Similar situations  appear to have arisen  on
 several occasions when Mr. Banaszek traveled to Michigan for
meetings on multiple sites, which occurred on February  23, 1983,
March 8, 1983, and April 12, 1983    (See Exhibits  11-13).
According to the Cost Summary submitted by plaintiff to
defendants, plaintiff is seeking to  recover Mr  Banaszek's salar
expense of $8,488.45, and travel costs  of  $4,100.31.   There is n<
                              11
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   RCE4ROCOCC
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                way to determine whether  those  costs were  incurred or assigned
                solely to the Northernaire  site,  or whether they include several
                other sites  as well.   Moreover, Mr. Banaszek  is but one example
                out of a total of twelve  EPA employees whose  salaries and/or
                travel expenses were  assigned,  to one extent  or another, to the
                Northernaire site
                     The most recent  example of the lack of cost-effectiveness is
                the costs incurred by the Department of Justice and/or EPA  in
                pursuing this litigation.   The  first specific instance was on
                January 8, 1987,  when counsel for the City of Cadillac took the
                deposition of Robert  Meyer  in Cadillac.  The  government had three
                attorneys present at  the  deposition, one from the Department of
                Justice in Washington,  D.C., and  two from  Region V headquarters
                in  Chicago.   The  rest of  the parties were  represented by only one
                attorney.  Then,  on March 24, 1987, when the  hearing was held on
                Plaintiff's  motion for partial  summary  judgment, the government
                again  had three attorneys present.  When the  deposition of
                Willard Garwood was taken in Clear-water, Florida, on March  30,
                1987,  the government  had  two attorneys  present, while  the other
                parties were each represented by  a single  attorney.  Although it
                was  not necessary and does  not  seem possible  to  justify,  the
                plaintiff is now attempting to  recover  both payroll  and travel
                expenses  for having multiple attorneys  appear at every
                proceeding.
                                             12
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   SMITH
   «CE t aOCOCE
200 CAL0EM »UkZA B*.-l£MG
   --«*!« IUPOS
                     As the plaintiff has pointed out in its brief, response1
                costs under CERCLA may be denied when they have been incurred in
                an arbitrary and capricious fashion   See United States v Ward
                618 F.Supp.  884 (E.D.N.C. 1985).  Defendant submits that in this
                case numerous costs were incurred in an arbitrary and capricious
                fashion,  and thus should be denied   At the very least, they
                require very close scrutiny by the court, and should not be
                awarded by way of summary judgment

                D    Genuine Issues of Material Fact Exist as to Whether the
                     Plaintiff's Claimed Costs Were Actually Incurred in the
                     Immediate Removal Action.

                     Plaintiff states in its brief that the defendants do not,
                contest the  amount of the costs incurred in the immediate removal
                action, and  thus that no material issue of fact exists
                respect to the amounts the plaintiff is entitled to recover.
                That is totally inaccurate; the defendants do indeed challenge
                the validity of the plaintiff's claimed costs.
                     One  of  the matters contested is the amount paid to
                Petrochem   As stated earlier, this defendant contests  the
                validity  of  the entire contract since it was not submitted  for
                competitive  bidding.  Moreover, the supporting documentation for
                the amounts  paid to Petrochem do not support the claim for
                $140,000  00.
                                              13
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   SMITH KAUGHFt
   MCEtflOCOGE
  ATTOflMCYSATUM*
wo CA^^PLAZA BLMJDMO
      RAMOS
     Defendant also contests the amount paid to GCA Corp,  The
EPA paid GCA $993.00 for a job that they admitted could have been
done for $120.00.  The additional $873.00 remains unexplained.
     Also in question, as set forth above, is the manner in which
payroll and travel expenses were assigned to the Northernaire
site.  Multiple persons attended multiple proceedings, often with
respect to multiple sites, yet it seems that all of those
expenses were arbitrarily assigned to the Northernaire site.
    " An additional matter which is in significant dispute  is the
extent of the immediate removal action and the time period durinc
which costs were allegedly incurred.  According to the
plaintiff's own brief and the EFA's documentation, the  immediate
removal action was started on July 5, 1983, when the  contract  was
awarded to Petrochem, and was completed on August 3,  1983.
However, at page 2 of its brief, plaintiff states that  it  is
seeking to recover $270,952.07, which in  footnote 1  is  stated  to
include EPA costs through July 21, 1987,  and  Department  of
Justice costs through June 30, 1987.  If  the  immediate  removal
action was completed on August 3,  1983,  as plaintiff  states,
there is a serious question as to  how plaintiff  can  recover costs
incurred through July 21, 1987, particularly EPA costs.
     For illustrative purposes, defendant has attached copies of
several EPA documents demonstrating  costs incurred  several month'
after the completion of the immediate  removal action.  (Exhibits
14-17).  Exhibit 14 is a Travel Authorization, dated 3/28/84,
                              14
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SMlTW
 authorizing Mr. Banaszek to travel to Traverse City and Lansing
 on 4/3/84.  Exhibit 15 is a travel voucher for expenses incurred
 by Mr  Plucinski for his travel along with Mr. Banaszek on
 4/3/84.  Those expenses were incurred eight months after the
 immediate removal action was completed.
     Of greater interest are Exhibits 16 and 17.  Exhibit 16 is i
 Cost Summary for the Northernaire site dated 5/24/84, showing EPJ
 expenditures of $167,753 79.  That summary includes payroll costs
 for~ten employees, totalling $10,349.89.  Yet, on Exhibit 17
 (Cost Summary of 6/28/84), there are payroll costs  totalling
 $13,078.66,  for twelve employees.  It appears that additional
 payroll costs of approximately $3,000.00 were incurred  for EPA
 employees from nine to twenty-one months after completion of_the
 immediate removal action.                                  ^^
     Another question arising from the Cost Summaries is a charg*
of $4,500.00 for "overflights," which is not supported  with any
documentation.  Defendant has been unable to locate any document:
among the documents furnished by plaintiff that would define
 "overflights" or support the charge of $4,500.00.
     Finally, both of the cost summaries indicate a total charge
 from Petrochem of $136,285.87.  However, the Cost Summary
attached to  the Declaration of Willimina Pipkin indicates  a
charge from  Petrochem of $140,419.00   Again, this defendant
questions the increase of $4,000.00 incurred  a  year  or  more  afte
the completion of the immediate removal action.
                              15
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  SMITH
POOOUXEB PLXZA Bl.m««G
                     In addition to the  foregoing  expenditures, plaintiff is

                seeking to  recover what  it  terms  "EPA indirect costs".  Those

                costs are not  defined  by plaintiff,  nor  has any supporting

                documentation  been provided.   While  the  Declaration of  Richard

                Hackley purports to support the claim for  indirect costs, the

                only discussion  or definition of such costs is found  in paragraph

                8,  where he states,  "The indirect  costs  identified in the

                attached summary report  represent  the costs necessary to operate

                the Superfund  program  but which cannot be  attributed  directly to

                specific sites."  (Emphasis added).   In  plaintiff's brief,  p. 16,

                plaintiff simply identifies indirect costs as  "administrative and

                other costs."  It is defendant's position  that recovery of  such

                 indirect costs" is not  authorized by CERCLA, either  pursuant to

                statute or  case  law.

                     Section 9607 of CERCLA provides that  a defendant may be

                liable for  "all  costs  of removal."  Section  9601(23)  defines

                removal as  follows:
(23) "remove" or  "removal" means the clean-up
or removal of released  hazardous substances
from the environment, such actions  as may  be
necessary taken in  the  event  of the threat of
release of hazardous  substances into the
environment, such actions as  may be necessary
to monitor, assess, and evaluate the release
or threat of release  of hazardous substances,
the disposal of removed materials,  or  the
taking of such other  actions  as may be
necessary to prevent, minimize or mitigate
damage to the public  health or welfare  or  to
the environment,  which  may otherwise result
from a release or threat of release.   The

                    16
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 SMITH HMjG»Cr
 «« 4 AOCGCC
ATTQANEtS AT !_*•»
  4NDIUPO&
                        term includes, in addition, without being
                        limited to, security fencing or other
                        measures to limit access, provision of
                        alternative-water supplies, temporary
                        evacuation and housing of threatened
                        individuals not otherwise provided for,
                        action taken under section 9604(b) of this
                        title, and any emergency assistance which may
                        be provided under the Disaster Relief Act of
                        1974 [42 U.S C.A. S 5121, et seq ].
                   While this statute may provide for the recovery of the

              direct costs of removal, it does not authorize the recovery of

              any "indirect costs".  The term  'removal" refers specifically to

              actions taken at a specific site, and not to any costs indirectly

              incurred to operate the Superfund program in general.

                   In United States v Northeastern Pharmaceutical ^Chemical

              Company, Inc., 579 F Supp. 823, 850 (W.D. Mo.  1984), aff'd 810

              F.2d 726 (8th Cir  1986), the court summarized the response

              the government may recover.
                        "With regard to the government's response
                        costs incurred, these activities would
                        include:

                        (a)  Investigations, monitoring and  testing
                             to identify the extent of danger to the
                             public health or welfare or the
                             environment

                        (b)  Investigations, monitoring and  testing
                             to identify the extent of the release or
                             threatened release of hazardous
                             substances

                        (c)  Planning and implementation of  a
                             response action
                                            17
-------
  SUlTM
   «CE t ROiOOC
MO
                          (d)  Recovery of the costs associated with
                              the above actions, and to enforce the
                              provisions of CERCLA, including the
                              costs -incurred for the staffs of the EPA
                              and the Department of Justice."
 See also, United States v Conservation Chemical Company, 619

 F Supp.  162,  186 (W.D  Mo. 1985).

     The court went on to state  "the defendants are jointly and

 severally liable to the plaintiff  for all costs, including

 salaries and  expenses, incurred  by plaintiff associated with such

 activities as monitoring, assessing and evaluating the release of

 contaminants  and the taking of actions to prevent, minimize or

 mitigate damage which might result from a release or threat of

 release of contaminants from the Denney farm site."  (Emphasis

 added).  The  court was again demonstrating  that the costs  the

 plaintiff could recover were costs directly incurred at or in

 association with the specific site, not indirect costs or  costs

 necessary to  operate the entire  Superfund program.

     The plaintiff is attempting here to recover all costs,

 including EPA overhead costs and all other  imaginable costs,

which plaintiff admits "cannot be  attributed directly to specific
                     <
 sites."  (Hacjcley Declaration pp.  3-4.)  At the same time,

plaintiff acknowledges that,  "Regional  CERCLA  expenditures are

maintained under a site-specifiq accounting system which  allows

the Agency to determine the specific  Superfund site  associated

with each cost expenditure  "   (Hackley  Declaration,  p.  2   )  In


                              18
-------
SMITH
RCE 1 OQCOCC
 other words, the EPA knows exactly what costs were incurred

 can be attributed directly to the Northernaire site, yet is

 attempting to recover both those costs and an additional

 $53,000.00 of "indirect costs".  The direct costs are, in fact,

 the only expenditures plaintiff is entitled to recover

 Plaintiff is not authorized to recover, under CERCLA or any case

 law promulgated thereunder, both 100% of all direct costs and the

 "indirect costs" now being claimed

    - Not only does this defendant assert that plaintiff is not

 entitled to recover indirect costs, but there is a  significant

 issue regarding the manner in which they were determined.  On

 July 7, 1987, attorney Robert Oakley of the Department of Justice

 submitted a letter to the defendants claiming indirect costs of

 $88,301 00   However, when Mr. Hackley submitted his  DeclarSPron,

 the amount was reduced to $53,397.00 because the EPA  "altered  its

 procedures"   If a mer4 altering of procedures can  result  in a

change of $35,000.00, defendant seriously questions the accuracy

and reliability of the EPA's accounting methods.  There are

 serious questions of fact involved in  looking at that issue, and

defendants should at least be given an opportunity  to conduct

 further inquiry

     As pointed out by the court in United  States v Conservation

Chemical Company, at p. 186, and by plaintiff  in its  brief,    '

p  17,  fn. 11, summary judgment on costs  is only appropriate

where material facts have not been put  in issue  and the amount of

                              19
-------
   SUrTM
   SCE i aOEGGE
* »*O*f MJOIUI. COWUTION

  *TTO«»i£»S At _»«*
                 the  costs  have  not  been  controverted by the defendants.   In the

                 present case, numerous  issues of material fact have been  put  in

                 issue, requiring  that plaintiff's motion be denied.
                 E.    Plaintiff  Is  Not  Entitled to Recover Prejudgment
                      Interest
                     A significant  portion of plaintiff's brief  is  spent arguing

                 plaintiff's entitlement  to prejudgment interest.  This defendant

                 submits that since  plaintiff is  not entitled  to  a judgment  on

                 costs at this stage of the proceedings,  any discussion of

                 prejudgment interest is  premature.

                     Defendant would, however, refer  the court  to the case  of

                 United States v SCRDI, attached  as Exhibit A  to  plaintiff's

                 brief.  There, the  court denied  plaintiff's claim  for prejudgment

                 interest:
                          "The parties  agree  that  CERCLA does  not
                          specifically  address  the issue of  prejudgment
                          interest.   In the absence of  express
                          statutory  provision,  the question  must be
                          resolved by the  courts.   This court
                          recognizes that  some  CERCLA actions  may
                          present circumstances in which an  award of
                          prejudgment interest  is  appropriate  "   See
                          NEPACCO, 579  F.Supp.  at  252.   In this  case
                          however, there is no  indication that the
                          defendants have  been  recalcitrant, deceptive
                          or unreasonable   Moveover, defendants have
                          not sought to delay either the clean-up
                          activities or the progress of this ~ase.
                          Under such circumstances, this court declines
                          to award prejudgment  interest.'  Id   at 8
                                              20
-------
   SMITH MMJGMEY
   BCE i ftOCGOE
* "io«tMK>iut.co*»o«ATKM
  ATTORNEYS AT LAW
JOO CALDEH »LAZA BUS-DUO
     Defendant submits that the same reasoning  is  applicable
 this case.  The defendants have not been  "recalcitrant, deceptive
 or unreasonable", nor have they sought to delay either the
 clean-up or the progress of this litigation.  Accordingly,  should
 the court at some point address the issue of prejudgment
 interest, defendant submits that plaintiff  is not  entitled  to
 such a recovery
                               III.
                            CONCLUSION
     Contrary to plaintiff's assertions,  defendant submits  that
 virtually every aspect of plaintiff's claimed costs is in dispute
 to one extent or another.  The greatest single  EPA expenditure,
 the contract to Petrochem, is in dispute  because  it was  not
 submitted for competitive bidding,  the  underlying documentat!
 does not support the amount claimed,  and  certain  portions of that
 expenditure were made following the completion  of the immediate
 removal action.
     Much of the remainder of plaintiff's claim is disputed as
 not being cost-effective and not consistent with  the National
 Contingency Plan.  Plaintiff is not entitled to recover costs
which are inconsistent with the NCP,  and  the significant
 unresolved issues on that question preclude the granting of
 summary judgment   Moreover, defendant  challenges the period of
 time and the manner in which costs were incurred by both the EPA
and the Department of Justice,  and again questions whether they
                              21
-------
  SMITH HAUQHiV
  RCE 4 BOEG6E
•*O*«MlOH*l. COWOIUTNM
       MOB
                were  incurred  in a cost-effective manner and as part of the
                immediate removal action.  Finally, defendant strongly contests
                any claim for  indirect costs as not being authorized under
                CERCLA, and not being supported in any way by the plaintiff, and
                further maintains that plaintiff is not entitled to recover
                prejudgment interest.
                    The extent of the plaintiff's recovery must be closely
                scrutinized by this court.  As stated in United States v  Western
                Processing Company, at p.  625:
                         "The remedy of the Governments will be
                         reviewed on the  basis of EPA's administrative
                         record and the responsible parties will  not
                         have to reimburse the Governments  for those
                         unsupported portions of the remedy."

                    Defendant has demonstrated numerous unsupported  portions  of
               the remedy claimed by plaintiff in this case.   Moreover,
               defendant has demonstrated serious issues  of  fact  that preclude
               the granting of summary judgment on costs    Accordingly,
               defendant requests that plaintiff's motion be denied.
               DATED: 	^-33	,  1987.
                                             SMITH, HAUGHEY,  RICE &  ROEGGE
                   (P34626)
     ttorneys for  Fourth-Party
    Defendants
BUSINESS ADDRESS:
    200 Calder Plaza Building
    Grand Rapids,  Michigan  49503
    (616) 774-8000
-------
       SITE  INSPECTION



             FOR



NORTKERNAJRE 'PLATING -COMPANY



     CADILLAC, MICHIGAN
-------
       SITS INSPECTION



             FOR



NORTHERNAIRE "HATING "COMPANY



     CADILLAC, MICHIGAN
        Prepared by:



         rfESTON SPER



  Technical Assistance Team



          Region V



         April 1983



       TAT-05-F-00133
-------
                  TABLE OF CONTENTS









                        '   -                     PAGE



su rarer                                         -  i
                  •            *


SITS HISTORY                                       2




SITE STATUS                       "                2




AieLIMINARY ASSESSMENT                            16




CH-mOLOGlCAL SUMMARY OP EVENTS                   17



APPENDICES




  A.  Incident Report Form and Site Safety Plan




  B.  Northernaire PIP Plan
                        s.



  C.  Chemical Packing List and Photographs
-------
                                 SLTJMW

The following is a ce.»rt on a  preliminary site inspection to determine
if CERCIA emergency cleanup action was necessary at Northernaire
Plating Coinany in Cadillac, Michigan.  Tfte inspection was completed on
16 March and 17 March  1933.  Containers of acid and caustic material
ware observed inside the building.  T\ts containers were not leaking and
no cyanide gas was detected.  The CSC determined the site was not an
imiediate threat to human health or the environment and site cleanup
should be conducted as a CERCLA Remedial cleanup.
-------
 SITE HISTCP.Y

 The Northernaire Plating  Co-npany is  located  at  1002  Sixth Street  in
 Cadillac, Michigan  (Figure 1).   The site is one half mile  northwest  of
 the center of the  city of  Cadillac,  Michigan  in  an area  of  mixed
 residential,   coiroercial,' and   industrial   facilities.     The  nearest
 building is owned  by a beer distributor  and  is  250  feet  wsst of  the
 site.   The site is located one-fourth of  a mile southwest of  the city
 of Cadillac's municipal well  field.   The  topography of the  urj>3diate
 area is flat  and dominated by sandy soils.

 Several private wells near the Northemaire Plating Company were tested
 by the f'achigan Dspartiflent of Natural  Resources (KDKR)  in October 1978.
 High levels of chroniun were found in two wells.   The source  of soil
 and groundwater contamination was  identified  as being a leaking  sewer
 line and  catch  basin  twenty  feet north  of  the  Nsrthernaire  Plating
 Company building.    Plating waste  was discharged  into the sewer line
 from  the facility's  process  tanks.    Sewer  line  connections  ware
 improperly constructed  and waste  seeped   into  the  ground at  several
 locations.  In October  1978, the city  of Cadillac  revoked
 Northernaire's sever discharge permit and  plugged  their  sewer connec-
 tion.   It is  suspected  that plating  waste continued to be discharged
 into the sswer line and  sespad  into the  ground. Northernaire continued
 in operation  until  April or Kay  1981.

 The f!D\*a inspected  the  site   in May  1981  and  found  the   facility
 deserted. Drums of plating waste were left outside of the building.   A
 child  playing  near  the  barrels obtained  a  chemical  bjm  from  the
 material  contained  in one  of the drums.  MDNR personnel transferred  the
 barrels inside the  building.

 On 19  July 1982, >DN*R inspectors collected.,soil,  sludge, drum  and tank
 sa-nples.   The sa.Tple  locations ar?^  identified  on Figure  3  and  the
 results are listed "in Tables 1  and 2.   The MDNR has installed  padlocks
 and  boarded   windows  to  prevent  access to the  building.    MDNR
 investigators  reported  observing a cloud of gas vapors.  They  reported
 the  vapors as cyanide  gas and  indicated   the  gas  was  being generated
 inside'the building.

 SITE STATES

 On Thursday 16 Karch 1983 TAT members  John Douoalian  and Tom  DsFouw
 were   requested   by  Mr.   George  Kadany  USEPA   to  conduct  a  site
 inspection of the Northemaire  Plating  Company in Cadillac,  Michigan.
 The  inspection was made to confirm the  M2NR report indicating  possible
 cyanide gas vapors  inside the building.

Air  monitoring was "conducted  by  USEPA and  TAT  personnel  inside  and
outside the building using CN Draeger tubes,  exolos.im*ter and  HNU.   No
 readings  w-re obtained inside or outside  the  building.   A site  survey
was made  in Level  "3"  protection by TAT inspectors.-  The  inside  of the
-------
          was in a state of disarray;  ho*?vec,  no leaking dears or ta-xs
 were observed.   Liquids were  observed in several process  tanks inside
 the building.  Dnm,  tank  and lab chemical  locations  are identified on
 Figure 2.  Litnrjs paper was  used for prf measjrements  of open tanks and
 druns.  A complete inventory of  tanks and pH nttasure-nents are listed in
 Table 3.  The pi me.a.sjre'nents  of open drums indicated they *ere filled
 with  caustic material.    Four  cardboard boxes  containing  laboratory
 chemicals were observed near the office  area.   The cisraicals are listed
 in Tables 4 througp  6.   Table 7 lists chrnucals idsntified  in the lab
 area.   In  addition,  several boxes of chemicals  ware  identified  in a
 washroom north of  the office.    Labels  on  the boves indicate  they
 contain the S2.i«  cnemcals.    A  packing  list  from one of  the  boxes is
 enclosed in the appendix.

 Photographs were  taken  inside  the  building  to  docixnent  container
 locations.   The photographs  are  included in Appendix A.

 TAT inspectors located a s?wer line on the  north  side of. the bjilding.
 The inspectors opened the manhole twenty feet  north of  the building and
 observed two pipes  and discolored  soil.   The manhole  is  a connection
 between the facility  and the city of Cadillac's  sewer line.  The  se*-ar
 line was not sealed and the material under the  iranhole was  soil.  Xt
 was apparent that  waste  was  being  discharged  into  the  nanhole  area
 where it seeped into  the  ground.  As the ground  became saturated,  the
 material  entered the  second  pipe that drained northeast into the  city
 of  Cadillac's sewer line'.   The  sewer line  flows along Eigth Avenue to
 8th Street (Figure  4).   The 8th Street sswer  line  discharges to  the
 City of  Cadillac Se*age Trea^ivsnt Plant.

 The  OSC determined the site  was  not  an Limediate threat to human health
or  the environment and the cleanup operations could wait six months for
 the  Superfund l&nedial cleanup.   .The OSC's  decision was based  upon the
 following:

      1}  Cyanide vapors were not detected inside the  building;

      2)  Explosive vapors were not detected inside the  building;

      3}  Tanks were not leaking  inside the building;

      4}  Acid and caustic material  were contained in  separate  areas;

      5)   The building was secured by locked doors  that would  prevent
         access to chemical  containers.

     6)  The structure of  the building  was sound and prevents exposure
         of the chemical containers to the  environment.
-------
-------
   DATE
  FROM
                  UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                                     REGION V

          22NOV,982      "               '
SUBJECT   T£S york Assignment
              teTtrrcnfef--
Remediai  Response Branch
    T0   Sharon Foote
         Compliance Branch, OWPE (WH-527)

         Attached is a work plan disapproval for TES Work Assignment No. 83-67,
         I.e., title search for Northernaire Plating Company.  As explained on
         the attached form, this work plan does not conform  to Regional needs.
         Please contact Chris Liszewski at FTS 886-7576, should you have any
         questions.

         Attachment

         cc:  Ken Banaszek       s~
             Babette Neubergert/
                                                                   00337
-------
Appropriation No
   & CERCU 68-20X814$
DCNo.  AA0207
                           ENVIRONMENTAL PROTECTION AGENCY
                                Technical Support for Enforcement
                                    at Hazardous Waste Sites
                                                                             EPA Contract No 68414769
                                                                             Contractor GCA Corporation
                                                                             Wort Assignment NO  -
                                                                             No el Pages to Follow   0
3 Original Won Assignment
                              Qtwork Plan Approval
                               OlsapprovaT
                                                             D Work Assignment Amendment
                                                               Assignment Change No	
                                                               A revised Wortt Plan  2 is  C u not reou-red
 Trt« Contractor snail furnish facilities, materials, and the necessary professional, technical and supporting personnel for performance of
 the work required ftv this Work Assignment described Dole*                     	  	    	  	  	
        Northernalre Plating Co.,  MI - Title Search  (W.A. No.  83-S7)
Priority
  O High
  Q Medium
  CLow
              Level of Effort — Technical
              Laoor Hour* lor Total
              Work Assignment
              Period of Performance
              Effective Date to
              Completion of Deliverable*
              Hazardous Waste Site Acct No
                                         Government Etl
                                                             Contactor Est
      Reference Information
        O Attached
        C Transmitted Separately
        & Not Appi»caoie
Regron
                   [ City
                          Chicago
(Slate-   • Illinois
statement of work s^^rv  The November 4, 1983, work plan  submitted by  SCA Corporation  do
                                              r»gti»etir»g
                                           G Letter Report
                                                                  Draft Final Report
                                                                                      Z Other
 Protect Officer JuNt A. KJaas
                                                   •Don* No. 0021383-4842 (FTSt
 Contract Negotiator* Alan Trail
                                                   Phone No 0021 382 3195 (rTS)
 Work Assignment Manager
 (name address 4 pnone No >
 Regional Contact
 (name address 4 phone No)
       Contractinc OtfiC*'
                                                                                  DATE
       Contractor Ac«nowi«dfltment of
       (Signature 4 Miff
                                                                                  DATE
              Sne« i vVftue — Contracting OH«cer COPT 
-------
Northerner* P,at,ng Co.,  «..  Tnle  Search  (U A. No. 83-67)
                              is excessive and unacceptable
-------
-------
    OSICIHAL
U S tn*l«O«tME««T A_ P«3TECT'O» »CS»CT
     TRAVEL AUTHORIZATION
  (Rut rr*tr\t 6e/brp eompfcnnf /om»;

         [""""I AMENDMENT
                                                           C~J
      netahP. Banaszek.  Envlnonmental  Engineer
                                                                  Deceabsr 3, 1982

.. Of WC»*» STAfiON OKGANIZATlOiT

   Haste Manaqenent  Division. Remedial  Response Branch.  Re/nedlal Response Section I
                   PERIOD O» TNAvCl.
               3ATI
                                         OAtf
                                                            »«»• «
                                                                               O •>*• •
         12-13-82
                                    12-16-82
                                                       tO CONSULTANT
ITIMCNAMT. »U»'O*C AND O'
   -«»OM:  CHICAGO.  ILLINOIS    TO:   LANSING, MICHIGAN   AND RETURN     HIIANSI

   OUST IFI CATION:   To  attend negotiations with generators for Rose Township and Northerner*.
                                                         }///'
                                                                  39
                                                                                 $200 APVAHC
                                                                                   IQUE
                                                                              4 Mr
             or
i-^3*
        >OH t*H"'t»



    C0*CN**«f••* O"«ifO C0MV(v*MCt
               TOT
                                                       10   CMANCt Of ITATtQm Al.3»AMCt*
        .tC TMAXf'OBT*
                                                                           Oi.3 eeoat •
                                                          f M
            COST CtTlMATC AHO ACCOUMT COOCt
                                                               COOK
                 MO.
0501    68-20X8145
                                          orncc coot
                                                           DOMESTIC  C
 DOCUMENT
  COMTBOL
OtUlCATlON
 DOCUNINT
                         ACCOUNT
                         MUMVK*
                                         eeec
                                                                  CI.A$I AND
                                                         coot   AMOUNT   ceot
                                                                                        coat
                       3T680SFTB2
                                         1111
                                       00.
                                                                        J1S4
                                                                                        9114
                       3TSRQSFT83
                                         Jin
                                       za.
                                                        110
                                                                        Jl SJ
                                                                   7131
                                         2114
                                                        9U4
                                                                         Jl JS
                                                                                        2US
                                         Jill
                                                         1I4S
                                                                        21M
                                                                             1137
                                         1117
                                                  B5"
                                                        2151
                                                                         21)1
                                                                             1717
                                        TOTAL I  >i
                                                        MAHC AMD
                                                         R.E. Bartelt. Chief.  RRB
                                       •* «AJ b*
                                                       fai
                                                             •uih«ru«ii«A M •ee«rt«-xe» «uh EPA P*Uey and
                                                        M AMC A»3 t>TkC f1
                                                         B.C. Constantelos.  Director. WSD
                                         USED UNTIL.
                                                        It (*M«utTCO.
                                                                         FISCAL ACCOUNTIMK
                                                                      00245
-------
-------
                                   Ofiorr romp/ermg

                                   AMENPMENT
                                                               CANCELLATION   December 3, 1982
                 ".,  On-Scene  Coordinator/Environmental  Eng1neer
     IC«AI- /TAtiON oaGAMU»TioN                                   —'—-
     tte/anaqeaent Division.  Remedial Response Branch. Remedial  Response Section  I
                             T»AVEL
        STA*TtMC OATK
                                          OA t(
                                                                     >tec *
         12-13-82
                                  12-16-82
                                 CONSULTANT

                                 1""? IMTCIMllTTtMT
T. ITINERANT. PURPOSE A»O OTMEft
  FROM:  CHICAGO,  ILLINOIS  TO:   LANSING,  MICHIGAN   AND RETURN     MILANS

  -USTIFICATIOH:   To attend nesotitUons with generators for Rose Township and  Northemalre
                                                                                  "- -.::$200 ADVANCED
                                                                                        REQUESTED
                                                                                     -.          ' 5«-r
AMMUAi. UEAWf «UTHOI*IZeO mow
                                              TO
                                                                            r*«u«r»tf tor !»•••>
 .  DAILY MCTMOD Or
  QQ
     eo»r
                    27 ...00
                                       ACTUAI. »UB» MTB »
». mOOt Of INTERCITY tMAVCL.
pn
           e*««i«»
                                              J«CT TO
                    coMv«**nc>fCM; *•>»   mf~*i rouno TO «t «ev*MTA0>eua
                                              to T»« «o**•••«•«»t      .
                                                                            3     «
                                                                          MOT TO CBCMD COST •»
                                                                          CA»»>«» iNCl.uO>M«
                                                                          Of•>• OK
a.
                                                              CHANCE Or tTATlQM AVt,O»ANCE»
                             go AC*
   *. •C6l«TKAT>e«
                                                            f w'
             COST ESTIMATE AND ACCOUNT COOES
      AP»NO»*IATION MO.

         68-20X8145
                          I«MV1
                                                                                          2711
                                          2117
                                                         2141
                                                                           2UJ
                                                                                           I7J7
                                         TOTAL  S528
     '•GIN «NO AtfTNOHlZATtON
                                                          M*MC AMO TlTbC

                                                          R.E. fartglt. Chief, RRB
Agthiinj n-«a
-------
-------
• R.
A^O^'O'NAl \

[~~! AMENDMENT
DCANCELLATIOM
i >,*wt A. 3 ii*_;\^
«Danaszek, Environmental Enginesr/On-Scene Coordinator
r" - —r-rr i
- -
[«HiMr "
a "anans«ant Division, Ranedial Response Branch, Remedial Response Section I
»«f»ioso' TBAVES.
»TA« 'mo OA -f
4-3-S4
• w9'-tSA rc
4-4-84
r' 1 »CT» » - ^| JT* $ . _
C6 CONSUL TAN^T
^^ «•* T€»»*i * TT ^ T f~~j TCMff9^ftft«
  FRCH:  CHICAGO, II    TO:  TRAVERSE CITY, MX    TO:  LANSING. MI   _AND RETURN    MITRAVERSS
           portion of -Michigan, 1ac)[aiiltaaERSAXSE)
            r
                                           $150 ADVANCE
                                           REQUESTED
      LE*VC *UTKO«IZFD
                                                                        /or
                                         . »«•» NTB
t. MOOS Or INTE3CITY TRAVEL
    COVMOM cA«»tcn
    AIM IN LKU or AWTIIAiC f.V£ ca
        »wMt*>* 9 ••K9 COM«(*ANCC
      "••" °^m^^ * * "•
                                                                        cxecie COST
              TV
  1C CO <-T
                         so«r-
                                                          tttATf
  11 c « ; t
                                                     f >-
           COST estlMATC «KO *CCOU«T CODES
                                                  u.
                                                           cooe
                NO
       63-201(3145
                                            ceoc
                 naresnc   D
                       ACCOUNT
                                                      OUJCCT CL»$« ANO AMOUNT
                                     coat  AM
                                                   ceoc
                                                                 COOK
                                                                               eo: t
                     AT3B05FH33
 2U1
                                    $125
               2111
                              3141
2'M
                                     Ull
       5235
                                                  .2111
                                                                  2U4
                                                                                2)55
                                     2114
                                                   2114
                                                                  214)
                                                                                2tS«
                                     2MJ
       $  70
                                                   2135
                                                           2147
                                                                                2157
                                     Jilt.
                                                                  21 SI
                                     J1I7
       SI 00
                                                   2141
                                                                  2151
                                    TOTAL  553Q
                                                   MAWC AMO Til
                                                   R.E. BarteU.  Chief. ^RB
i* ir*XtvdcCft>4Anc* with RPA policy **>*
      -i!«5>-*'»;ji*c «T» .^- iw«c
   —••x^-^*''^-'^*^«- '*--  — " ^
               B.G.'Constantelos^ Director.
   ••* JilC i (»,. 7_|0) »*CviOUl EOittOM MAT PC USED UH»IL SU»»LY IS
                                         FISCAL ACCCUNT'f.C.
                                                                         00144
-------
-------
   TRAVEL VOUCHES
                OVTV S" «iO

         C" n' c i"?«- -     1i—1— • *"> *
                                              9  CASH PAYMENT FlECEtrT
     TRANSPORTATION
     PEQUcSTS OR
     TRANSPORTATION
     TICKETS IF PUR
     CMASEO WITH CASH
     ft it »\r nu>nt>*r ft orr
    toooet "> On rt't'lt
        I
                                 < to ">* Ui'iefl Sufri
                                    'jn dr»c»bM brio*
  AGENT S
VALUATION
 OF TICKET


    lit
                                      ISSUING
                                       CAR
                                       RIER
                                         It)
   MODE
 CLASS OF
  SERVICE
AND ACCOM
MODATIONS
    Ic)
 DATE
ISSUED
                                                                  POINTS OF TRAVEL
                                                                                    IH
                                                                                                           TO
                                      '.-.TO
                                                »* {»c
                                                                                          CC'.
                                                                                                      Che ?'c
  13  i CtM '» !•>»*0 DT mr vv^rn
                         J t w« »">d CO '*«! "O f* Ottt 0' «ny know'MC" *«d b»''*l i"0 l**»f S« m«nt c' C'tC t "•* I «O« O*»"
                          etc, t pt i a.»m c »'T>rO it btttd an ihr *««r*g* COM Ol IO04-"9 •"<«"*« du'ing tnt pt'.oO cO«t'«0 by
                                                                                            AMOUNT
                                                                                            CLAIMED^
                                                                                                                       IT
       ff'i iitii'9* ol it i  f" i" *i f'Ptiir KCOunl troKii t fo'ffilu't ol c<*"~> US U 5 C 2S'*t tn0 mi/ itIVI >n I l>nt O' not i
       tntt SIO 000 O* "••?' lonmfti tor net *>o'* tf>tn S yttn O' »o"i 118 U S C 73? i 0 lOOII
 14
     r»*cm* r >n th> in r'fit ol mt Govtfnmrni  INOfE II long timtntt I
     4" mciudrt}  tnt tpp'O'-ff otft< ami fi**t tfrn futnonftif in ,
                  rt/*tn> or tftner to *O Ctrti'f tjt USC 680ti I
                  1
APPROVING
OFFICIAL
     HERE
                                                                            f OH f!Mf.Cf Off Id USf QHL
                                                                                    COMPUTATION
                                                                           f .
                                                                                                             S
                                                                           IF A**V
   LAST PRECEDING VOJCMf « PAIU ONDSR SAUJ TRAVEL AUTHORIZATION
                               C S* •••Ou
                                                             EAR
                                                                                    TO A»PRO*«IATiON

                                                                                    '  -   .     '" ''
                                                                                     .;;r  I
     THIS VO^CMJR IS CERTIFIED CORRECT AND PROPS3 1-03 PAYMtNT


                                                         I DATE
AUTHORIZED
CERTIFYING
OFFICIAL   .
                                                                   'fV/i/0
                                                                ./«':
                                                                                     N6TTOTRAVILER>
   •
 t£ .  ACCOU\Tif>x5  .<^5        . ~r^~
                                                   if I I   -   f-
                         -  7 «j— /^TV
                                       //    ^
                                       e <"• ^—^
                                                     x/  //— ^ /   7 ,y ,-r-
                                                                  r  L-»
                                                                                         STANDARD FORM 1012 (REV  1C-7H
                                                                                            *a ar CSA         *' l0'"7
-------
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   CAT!


SUBJECT
                  UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
           ..,n f* - J	.
           MTV-. 2o  -~J
                                       REGION V
          TRIP REPORT - Travel  to Michigan Department of Natural  Resources,
                       Wednesday and  Thursday (2/23-24/33)

          Kenneth Banaszek, OSC     /
          Remedial 'Response Section

         Gregory A. Vanderlaan,
         Remedial Response Section
         PURPOSE
on>fJ~   V\

           J
         To meet with responsible  state  staff to share information and forecast
         strategy for four  sites.

         PERSONS CONTACTED

         Fred Norl ing, U.S.  EPA
         Gary Kleppar, M)NR
         Gary Simons,  IfJNR
         Dan Cummins,  NDNR
         T.  Eftaxiadis,  rDNR
         Roger Jones,  PDNR
         Jim Truchan,  M)NR
         Roy Klaviter,
         Jin Lahti   MUPH
         HIGHLIGHTS

         2-23 a.m.:  Received  and  dicussed  report entitled "Groundwater Contamination
         investigation  Conducted  ai
                 " - Cumnnns.
         2-23 p.*n. .   Discussed  planned  F.I.T. effort at
         Snefly discussed  status  of Morthernaire Plating Co., C.A. - Kleppar, Simons.
         Outlined RAI^P  and  Responsible  Party Search procedures for •••m^HBHp^


         2-24 a.n. :   In depth  strategy  meeting to update responsible state personnel
         of statJS and  history  of 4Bl^P^BV0VBi^B» - Kleppar, Si irons, I'lav
         Lanti.

         2-24 p.n.:   Follow up  on  all previous discussions.   General promotion cf
         program and interaction - DNR  staff.
-------
ACTION

Nortnernaire P^ting  Co.    Review draft C.A. and forward,
to HQ {Kitty Taimi) - Banaszek, Norling.
                                                              comments,
          Plan to be on site when F.l.T. initiates work  -  Banaszek,  Eftaxiadts.
                        Site.visit week of March 7th  and  discussion
with CH2M Hill, and DNR - Banaszek.

•••••••^^  Contact CH^M Hill to make introductions  with  DNR and
EPA personnel, await RAMP preparation - Banaszek.

cc:  Northernaire Plating Co. File
     Rasmussen File . .
     Saranac File
     Spiegel berg File
     Wash King Laundry File
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                           ThAVEL AUTHORIZATION
                                                form I
 'm
  Kenneth Banasze*. Environmental Enqfneer/On-Scene Coordinator
  or "C 'it. ITA riOfc'
                                                   f~"! CANCELLATION
  Haste Managar.ent Division, Remedial  Response  Brancn. Remedial  Response Section I
                                    CWOIW6 S»«Tf
                                    3-11-33
                                    3-4BU
                                                          Q ««T«
3-3-33
                                               »*. CONSULTANT
» .  ITIMCAAMY.
                  AND QTMCN DETAILS
  *RQM:   CHICAGO. ILLI.JCIS    TO:  LANSING, HI    TO:  TRAVERSE CITY. HI   AND RETURN



  JUSHSICAUON:  To site fc1slU/MHP meeting*    .
'—    *  * /    » V                      "•*•      *%   *"**  * <*  **   **
                                                                                 HIUU6I
                                                                                 HITRAVE
             B37W
                                               TSTUT
     »*» OltM $
     cotr vooeiMO MTf > 2/«00
                                                                       »CTO*L.
*. UQOC 0' IMTCACITT THAVCV
     CO
                                                                                            CC1T1IU*-
                *tiT**« (HZ
                                   •••a
                                                                   O»
                                                                          c"P».o eooe* . »*
     T«»l  blM
                                                           C  <•€»«.
                                                                       Cft»CHt«*
                *ttt
   f  t'Cttl «CS*Ct.
                                                           f x'texcu• *«ou> c*«ct«»fi
II.
            COST tST'MATC AHQ ACCOUNT COOCI
              rK»«ICIMB »IM*MC1 »*»ICI COOK
                                               II. <*UH»OSC COOt


                                                 DOMESTIC  0
 OOCUMCMT
           09UICATIOH
                          ACCOWMT
                                                                   CUAU AMO AMOVMt
                                         eeoi
                                                        _!££'_
                                                         Jill"
                                                                _eeec I

                                                                ~2141
                                                                                         COOT
                                                                                              I ..
                                                                                         2IS4
                                          2111
                                                2tll
                                                                          JU4
                                                                                         JISJ
    -V
                                 2114
                                                                          2141
                                 111}
                                                3111
                                                                 1147
                                                                                II J?
                                                         2117
                                                                          21JJ
                                          2117
                                       Si 00
                                                         2141
21 SI
                                                vSOo
                                                              RarfgU. C
                meuriucAjri|»Mic«« •• ««r ** n*e»»»«rj f«rUiit *u(li*ri*»iien in •«c*rd»nc« with EPA policy «nd
        >* (r*At*d to ««»•!
                                                           .G.  Constancies. Director^ WMD
                                                                                      rtSCAL ACCOUNTING
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1 IAJ ORIGINAL^ v " C~] AMENDMENT Q CANCELLATION
I fA**riift^h R_ a ft A *^* e t CTnu« •»-*...-_ ^ _ A. _ n §- • j ^. «• *. j _» . ^ -
Apri] 5, 1983

  "T*"« " *-  *''a" c*;»»».»»T'tirS'
                                   Enoineer/Oc-Scene Cr^-i^-^tS'
  * ,*• - *-  » w» -"-•••i^ATtCf,                         		•


 |   waste f-anaganent Division.  RmediaT Response Branch. Remedial Response Section I


                                                    M »PPCtC*BLt HCC'S

                                                      r~i
          4-12-83
.  4-14-83
                                                    tt> COMSULTANT
 1. ITINERARY, f»U*P0ie AND OTHER OCTAILS


   FROM:  CHICAGO.  ILIINOIS  TO:  DETROIT, MICHIGAN  TO:  LAMSIHG, MICHIGAN AND RETURN



     ISTIFICATIOH:   To  inspect the ChemcentraVOetrolt site per conditions

                   of  the consent judgement entered 3-25-83.  To visit

       \ '        MDNR offices in Lansing to Interact on provisions of.
                   RI/FS.-t Notthernaire.     -•*
                                                     MIDORI
                                                     HILAKSI
                                                                            v.  : - REQUESTED^

                                                                       OBLIGATED^
 AMMUAL Ut*Vt
               >«ei*nu«$e»«e*T
                   ^•«••
         IMTCKC'TY TKAVEL
                                                                     «tor TO CICECO eo»r •*
                       AMD ACCOUMT cores
         63-20X8145
                     3T6B05FT83
* I* OiIM AMD
                                                    R.F.. Bartelt
                                               ••••ry f»r thit •wthof*t>ii«ft m •ceo>«*nc* with EPA policy
                                                    6.6. Cun*>UTvte1ot, Director. WMD
                          COITION MAT at ul«O
                                          FISCAL AeCOUNTINO
-------
-------
            \
                                                            F~l CANCELLATION
                N
    Ke-1 _::"s;=' 75/Jav     r-f
» MODE O* IWTS3CITY TBAVEI.
       IM L"tu or <.UT
                                                                                      ee»t
                                                          U T«*>4*aO*TA 'ION Or (VWC
  je  co  .!.»•.to
12
            COST ESTiMAte AND ACCOUNT COPTS
                                                        11
        63-20:13145
                                   ».NA«:C orricc cooc
                                                              coot


                                                       DOMESTIC   D
             MUMj;p
                          ACCOUMT
                          NUM9ER
                                                            OBJECT CL*S» ANO
                                         cooc
                                                         coot
                                                                        coat
                                                                                        co:
                       4T3a05FH33
                                     211)
S125
                                                                     It 43
                                         7IIJ
                                           123L
                                                         2131
                                                                                        2) S3
                                         2114
                                                         21)4
                                                                                         2154
                                         7115
                                           TTo"
                                                         JI3J
                                                                         3147
                                                                                         21$'
                                         21U
                                                                         21 SI
                                         2117
                                           $190
                                                         7UI
                                                                         2153
                                                                                         1217
                                        TOTAL  S53Q
                                                      JR.E. BarteU. Chief» RRB
                 *ni' inr^r suih «»p»n»i% »« may hr nicrtiiary for Ihit •uthofiraiinn in accordance with FPA pehcy and
               TO Irju^l *ni' inr^
               ^^-^     v'
                                                        B.G. ConstanteTos» Director. I
'•> ?6IC I {R,. 7. jot  POEviOOi ECITION MAT- PC utEO UH'IL
                                                        IS
                                                                                     FISCAL ACCCUNT'SC.

                                                                                 00144
-------
-------
         tfir Pmxy AC*
        "tnt on the fu. • '
                                                                                  7 TBAVtV AUTMO«UATI
    t MAILING AOD"tSS tint-off *lf C
                                                            n Of *•« 11 ,t»*«OSS NO
 I TRAVEL ADVANCE
   A~.OVu«
   CHASED wrrn CASH
   jfltf ttttffi p
   coupon  f tun ,i vita
   lf»O¥T t>*>f*< OH ItrttW
   i-ar I
                              10 mt UMI«»*0 6>r m* tin** jnt >t p«t «j*m « »imtd n Olltd on tht «v*r*g« COM of IO04'"J ineurrrd during int per
SIGN
                                                                                  AMOUNT
      ffii''» tn forme tccovi worn t tottnturt of tH"^ 178 U S C 25'^1 tng mtt ftivn >n t lint o' not mo'
      ifiin SlO 000 or imp' lomnenf to' not fno't tfitn 5 ftt'i O' Dot* (18 U S C 33J < a IOOU
          >n th» >n */»t el i
   "»«*«» O* '»t 0tpirtfnrnt or
                                t< ta^ont tjiii il «ny art
                         Co»*rnm*nt INQTC H long tfiiunct t
                                           t ltd in
                           IO to tfrt' V f JI 1/5 C S80t) t
                                                      iitfit tilll
    xf BE
                      fJWCf to iot*rn'r IJi I/* (, DBMS/    . I     J-.^
                         r    '        r   /•ftw"&
                      •'^U. 1/gr^tMegtliUJ
                                                                                    i use QHLY
                                                                           COMMUTATION
                                                                   U ANY
   LAST
                VOUCHER **iu UNDER SAME TRAVEL AUTHORIZATION
                               7  TOTAL vl«'«i«o COBRfCt »o«
                                                 RlATi^N
                                                ..    J   .'I
                                                                           NETTOTRAVE1.ER>
    THIS VO JCHJR IS CERTIFIED CORRECT ANO PROPS* I-OR PAYMENT

                                                  DATE

SIGN MI RE  J>
AUTHORIZED
ClRTlfVINC
                                           -*rr-7—*^-Acr
                                                                               STANDARD FORM ioi2 (REV io-m
                                                                                  ec by GSA. Hl         >10'*7
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                                             Cost  Summary
                                             Northernaire Plating, MI
                                             As of 5/24/84
EPA PAYROLL


TAT CONTRACT - WESTON


OSC LET CONTRACTS - PETROCHEM

OVERFLIGHTS


GCA CONTRACT




TOTAL EPA EXPENDITURES
- $    10,349.89

 $    11,641.03

 $   136,285.87

 $     4,500.00*

 $	977.00




 $   163,753.79
* See Summary  page  for miscellaneous  contracts
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                                             Cost Summary
                                             Northsrnaire Plating, M.
                                             AS Of 5/24/84
EPA PAYROLL

EMPLOYEE NAME

Neuberger, Babette
Filippini, Mark G.
Banaszek, Kenneth P,
Ostrodka, Stephen L.
Powers, Ross E.
Bowden, Robert J.
Madany, George H.
Radcliffe, Michelle
Wilma, David W.
VanSlyke, David
TOTAL SALARY

 $   295.89
     758.65
   7,315.46
     611.96
     387.59
     113.86
     374.30
      13.78
      43.94
     434.46
TOTAL EPA PAYROLL COSTS:
 $10,349.89
DOCUMENTATION: FMQ SPUR  Report
               Copies of  Applicable  Timecards
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                                             Cost Su—ar/
                                             Northernaire
                                             As of 5/24/84
"TAT CONTRACT

CONTRACTOR: 'Roy  F. Weston, Inc.

CONTRACT  #: 68-01-6669

EPA PROJECT OFFICER: Jack JO]oKian


          TOTAL CONTRACTOR COSTS:             $ 11,641.03


DATES WORK PERFORMED: 7/12/83 - 2/13/84

SUMMARY OF WORK  PERFORMED: Assisted OSC  in monitoring cleanup
      activities;  assist  in  preparing  OSC report.

DOCUMENTATION: Contractor Cost Summary
               Copies of  Applicable Invoices
               Copies of  Applicable Treasury  Schedules
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                                             Cose
                                             Northernaire Placing
                                             AS c£ 6/28/34
EPA PAYROLL          "            S   13,073.66

EPA TRAVEL                    "   5 ~ '  4,923.46

TAT CONTRACT - V>ESTON            S   11,641.03

OSC LET CONTRACTS - PETRCCHEM    S  136,285.87
               <
OVERFLIGHTS                      S    4,500.00*

GCA CONTRACT                     S      977.00
TOTAL EPA EXPENDITURES     .      S  171,406.02
* See Su-riary pa^e for miscellaneous .contracts
                                                       trSOOO
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                                              Cos't  Summary
                                              Northernaire Plating,  MI
                                              As of 6/28/84
 EPA  PAY~CL:.

 EMPLOYEE  \'av'E

 Neuberger, Babette
 Filippini, ^ark G.
 Banaszek, Kenneth P.
 Ostrodka, Stephen L.
 Powers, Ross E.
 Bowcen, Robert 7..
 Madany, George 0.
 Radcliffe, Michelle
 Wilma, David W.
 VanSlyke, David
 Plucirski, James
 Radcliffe, Michelle
TOTjkL 5iLA3V
1

8









,161
852
,488
611
387
142
757
41
43
434
105
51
.42
.17
.45
.96
.59
.27
.99
.31
.94
.46
.85
.25

TOTAL £?* PAYROLL COSTS:
 513,073.66
               FMD S?LR  Resort
               Copies of Applicable  Ti-ecaris
               Copies of Applicable  Ti-%es*e«ts
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                                             Cost Sut-rr.ar/
                                             Northernaire  Plating,
                                             As of 6/28/84
EMPLOYEE NAME
TOT*L TPAVEL COSTS
Banaszek, Kennetn
Filippini, Mark
Madarr/f George
N'euberqer, Babette
Plucinski,
Powers, Rcss
   S 4,100.31
       189.83
        88.60
       128.25
       350.47
        66.00
TOTAL EPA TRAVEL COSTS.
   S 4,923.46
:OCU:!ESTATICN: FMD SP(jR Report
               Copies  cf  Applicable  Timecards
               Cootes  cf  ^policable  Tiniesheets
               Copies  cf  Aoplicable  Treasury Schedules
-------
                                             Cost  Summary
                                             Northernaire  ?ra£Tnc"  MI
                                             As Of 6/28/84
TAT CONTRACT

CONTRACTOR: Roy F. Weston, Inc.

CONTRACT *: 68-01-666?

EPA PROJECT OFFICER: Jack JojOkian



         TOTAL £ONTR*CTOR COSTS:


DATES WORK PERFORMED: 7/12/83 - 2/13/84
S 11,641.03
SUMMARY OF WORK PERFORMED: Assisted OSC in monitoring cleanuo
      activities; assist in preparing OSC report.

DOCUMENT VTION: Contractor Cost Summary
               Copies of Applicable Invoices
               Copies of Applicable Treasury Schedules
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OSC LET
                                             Cost SuTisr/
                                             Nortnernairs Plating,
                                             As of 6/23/84
CONTRACTOR  Petrcc'iem Services, Inc.

CONTRACT =: 63-95-0064


         TCTAL CONTRACTOR COSTS.              S  136,235.37
                •
               f

DATES WORK PERFORMED: 7/5/83 - 8/3/33

DOCUMENTATION : Copies of Applicable  Invoices
               F'lD SPUR Report
               Copies of Applicable  Treasury  Schedules
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                                             Cost Summary
                                             Northernaire Plating, MI
                                             As of  6/28/84
M!SCE,ILAVEGUS
CONTRACTOR: EMSL Overflights

PROJECT »: AMD 84025

         TOTAL COSTS INCURRED:                S  4,50Q.OQ«

DOCUMENTATION: C^st Summary
               f

* Project is not completed.   The  total  cost  should not
     not exceed 54,500.00
CONTRACTOR: GCA Technologies  Corporation  "

CCA'TSACT *: 68-3i-6769

to. A. i: 83-6"

         TOTAL COSTS  INC.^RED-                S 977.00
                                   j"

DATES f«CR< ?E^?C?.MED: 9/7/83  *  12/83

SUMMARY OF WORK ?ERFORMED:  Title  Search

DCCL'MENTATI01'3: Contractor  Cost  Summary
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   j    ' DETESWIJATICN AND FT  -*NGS - AUTHORITY
   '     TO NEGOTIATE AN INDIVIDUAL CONTRACT
        Contract N\jrber:     63-95-0064
        rjpon the basis of the following findings and determination,  the  pronosed
        contract described below may be negotiated without formal advertising
        pursuant to the authority of 41 U.S.C. 252(c)(2),  as  implemented by
        § 1-3.202 of the Federal Procurement Regulations.

                                        Findings  * -

        1.   The  Environmental Protection Agency proposes to procure  by negotiation
        services to respond to an emergency in which there is a release  or sub-
        stantial threat of release of a hazardous substance(s) into  the  environment.

        2.   Procurement by negotiation of the above described services is  necessary
        because  the  release of such hazardous substance(s)  presents  an urminent and
        substantial  threat to the public health and welfare.

        3.   Use  of  formal advertising for procurement of the above described
        services  is  impracticable because such method of procurement would delay
        the  emergency response action necessary to rarove  the hazardous  substanceCs)
       or to prevent the release of such substance(s) which, upon exposure,  may
       cause death, disease,  or illness.
                       «.^*       ^^^^— ^^

«•                              - .Determination

       The proposed contract  is for services for which the public exigency -ill not
       peroit the delay ircident to fomal advertising.
                        1983
                                                        Contracting Officer
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           UNfTSD S   TE5
  CA-E   jjiy 16, I 352



SUBJECT   Nortnern Air Plating Company

        Cadillac, Michigan



  «OM   Robert J  Bowden, Chief

        Spill Response  Section



    T0   Rfchard £  Bartelt, Chief  ^

        Remedial Response Branch
                                                   i   tn ,7 : -T - ,—


                                                   u      "' « J •>  *J»   '
  Enclosed is a brief memo developed by the TAT on this  site.



  Apparently tne problem  is inside the  buildings and the DNR  is



  acting on it   There  is no emergency  so  I do not plan  further
          1


  actions at this time    If the DNR identifies a significent



  fire hazard and Myers does not cooperate we might become involved



  SRS will  track developments
,,/.-/•
                                                            ..0009
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               UNITED STATES ENVIRONMENTAL
                                   REG-CN V
     .Nothernaire Plating  Inspection  Trip
MOM G*»orge H. Madany, 0^6  V
     SpiM Response Section
            J. Sowrten,  Chief
     Spill Response Section
                                                               Ross °owers, John
                                                                            A
                                                                          soil
Northernaire Plating  was  inspected nn March 16 and 17.
fiourjfll i an , Thomas  necauw,  Darnel Darnell and ^len "are
in this inspection.   The  building is of  sheet mptal anchored to a
slah.  T^e ronf is  m good  condition and th» builn'mq is fiscally l
Tnere are no nrums  or any hazardous materials outside the building
scMll insiie fe buiHino would  se»p to  tne outsid*.  Parts of the
sHe tie building was contaminated when  the plant  was operational.
are a^out ?t> va^s containing  various levels of flutes.  Tno ac"1 *^n^ is
Ime^! with an intact  plastic  lining.  Tnere are  about 50 drums *i«i 5"1 o^
t^at are Costly ^pty, h'Jt  so^e  con*ain  slu^gos.   Tn»"» ar= pi1»s o* ""-/
si jdges on tie floor  and  in netwpen the  tanks.   There was no evi?ence n*
52 ill or I?*k:a35   Tests  wi'h V^ger tu^es m^icate^ no ny^rogei cy*'11*3
MS ic1 e f>e bu ilnng.   /*o wev 3 r , t he t a n K s and d ru"is are ^a ^ 1 y_ r y 5 1 e : / I*
      -»!
                 action  is  being contp^p  ate-1 ,    reconnoni  upgrj»-'inq  i
                                                                              T
                                                                                 1$
On Marci 15, 1^53,  at  about  1-45 p.n. ,  you informed  me  that
31 at i ng in Cadillac, Michigan  is an  abandoned hazardous  waste  sit3 fat -is/
be in need of immediate removal.  Doss  Bowers was to assist ^e tie  fi's<:
^ay or two, and loug ^allottt  ard Kevin ^lerarri  of TAT  were' to <*«»*  ^ t°er =
a^d help me.  The responsible  parties  were Top Locker Enterprises  w*o  •>3"
purchase^ ^orthernair* Assets, an^ whose Vice-President is Jii 2->"e, i.»r'i,
Florida (813) 595-3235.  The la-i"! is owned hy Myers  Construction Co.
represented ny Attorney Han  SamaMich  CS15) 775-l^°l.  I contact?"!  J
^allotti and Pierard and agreed to nee.t then at  the Mn"3 office m
at 2. OH p.m. local  time.  Lat«>r, Steonen Ostro'ika contac^o'i us an
Strongly to postpone our investigation until  the followi :
A prot«*Ctlve-Cl OtMng  and a  ^ac^mp that wo
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         t ot tna ' I  n* 1 office in C.irtiUac ?t  1  3') p.n    5 <^-  tv-" • "1 *i
         ? tnH ' •> t i?t  nr is iPvnl'ed in  acnmiil  TV-S* ire  ir*ter pol 1 utpfl un^erjro'inl v *t c.-r ar:'  i T>11 s  11 tn •
n*arsy >r?a, thus causing sone'rssi lents  to q?%  sick.  H?  sM '?1 • ? pir -
f-jrps t^at . ?r* ta<*n of various parts of thp  plant an-1 g;wc • e a cony of
tne analytical  results  of the sanpl oc th;>t they  nod t.iken.  Tn>«, I l*>0'^i
thrc c:i a report titleJ "Renj-lial Action  .'OU.T  °lans", tun v ic pr?"*!-.1
by PIT,  A"}out 2 00  p.m., Oan Darnell and Ross 3o;/ers arrived.  "? rfi-j-
cusscd t*>e sitiofion anr* the strategy that v«  should  folio/.  ".? haj cn"-
si^ered sa.npl ing for analysis, but as th= n*,S  haM  al re^dy don"  that, th«"-?
would be no premum  in  rppetition   However, a thorough pH  e/-*l u^tinn  i i;
e»sy a"d woul "I give  us  ?n idea of possi'ile ciange-  in casa of le ' s.  So \ i
        to nave tiis Hone.  Ross suggf»ste 50 o.,i. , th» TAT meters htTl not  arrived,  I callc-d  you  and yc i
saH tnat John nourjalian and TO..I OsFou./  fron  the Michigan office /ere
scne-iuled to replace Sallotti and Pierard.   As  John  and  Tom -/°-e  expsct2'l
to arrive at fi nn  p.n., vje decided to start  the m/estimation.   Ross Powers,
r,i 3n M;»r?, Dan Darnell  and I went to the  site.   I checked  tne afiospiere  nev
\.ho building with  a Drager tube for HCH and  the result  was negative.  Then I
ms-rted tne Orag::'r tube through a hole in  the door.  Tiie  test  was negative.
The-, 1 inserted the Prager  tjbe de-^pT into the building  thrcugi a hile  in
the "inda/   T^e test «-3S negative.  Then  I  opoiod the  door an-f r?p»5toX  tro
test just in^ids fie dco-.   The test was  nejativc.  Thsn I not  :n= cx.j'*"1-
r?t?r and testae; tre atmosphere.  The expl osimeter test  v«s negative.  Tn_
oxy;°n ;a-tial  press-re was  adequate.  Then I  went throjghc pt tie Suili  g
v^th " °'sroes 2*"j a harri hat on and tested for HC'.   ^11  tss's \.*-« n°-i-

cf labo-atory bottles, piles of^dry sludq«»s, drums that ,pr= n.ostly en2"'.
but sone hel sludges or liquids'in them,  five gallon pails t->3t  /*r-_ mos*'y
   ;y, boxes containing plating related chemicals and rustfl /ot5 t»it n-1
   lous e"jounts of fluids in them^The st^el  of the vats  uas over I/?" t *K k
    appeared capable of holding the contents for few months 1 onqer. _ It'e got a
     ide? what to  do tne  following day.   Then Glen Hare took us out""irj fsce'l
tneir sanitary sew?r and  its evo1>/p"ie^t,  and sh'v/ert  how their polluted efflu-
ent reached ground ';ater.  i'e then rant  and chec's^'J  into a nocel .   Soon  tht?-»-
aft^r, Jo^n and Ton arrived.  i'<» discussed our findings -nth th<-> i.  "'e ti1-""
tola them our objecti/es  for the  following day werr>

    1 -  Map the inside of the  plan*-.

    2 -  Identify all cneiicals  prespnt  using available' inf--i.it

    3 -  .ChecH the p^ o>  *11 liqui (
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   0"i  7"i"s1iy —>mnc "• t  p pri *." ,  P-'SS  PO/-TS, )o^n Pour ilie>n, Ti^i^i  r>/»  -
   /MI,'  I . ar^ cr tT* Site.   1 ne T.3 r drossod in lev^l  8 safoty gem a*f*r  rf t?'e-
   phone i o iTrsJtiin with  John Titorspn  an! th°ir chief safety offi:;r, ^o -'  '
   Pjllorn.  They laf?r  dresse-i in 1e/r>1  r.  Many of the lab bottl°s  «• r • ti *.-"-'•
   1 (»'•>-'o-1  nth con"a"CiJl  proprietary labels or the label  was df»f<5<-ed.  ^n-ji*
   four cf  five bottles ter3 broken because of a freeze.  Roxes contai".r<' ci-m-
   c^'t r),->d proprietary Ja^0^.  Tlrer<» was a 20 gallon rtnn of hyd^xhl sric  acid
   and  a 2J gallon drun of  nitric  aod.   Botn were full and in 'irancJ nevconlt-
   tio^.  There v«ra about  ?s  vats containing cadmiu-n, zinc, copper, and  clirc" j"
   cyanides, rinse v/at?r  tanks, acid  tank  mfh and intact plastic liner,  aod  a
   cleanup tank ccntaini rig  acidified  dichrornatP.  While th°re tpre piles  of dried
   sli'dges, there was no  e/iHence of  a leak or spill.  About 50 ruste* druns an1
   an equivalent nu.nber of  pails uere present,  itost of them wre empty, but so> .'
   of then contained sludges or liquids.

   There was a pilp of files and cancelled checks that may be very useful  for en-
          it purposes.
  i"r. Royce Sinons (616) 775-5098, v*io used to v.-ork  in the plant eerie by to as-
  sure us of the safety of the operation in the plant.   I gathered  from hi.n tnat
  after a ne./ ^aiager took over, he fouled up the procedures and the plant hcd
  to r'ose down unei the sanitary sewpr department refused to take  their efflu-
  ent.

  Ross ?o -ers dug sliollou pits at various locations  and  turned  up different col-
  ored soils.  This r^y be an indication that soil pollution around tr:> plant


  Around 3*00 p.n. , I reached the conclusion that no immediate  removal  is  tor-
  ranted,  however, it would be prudent to undertake a planned, instead of rs-
  redial  action ard thus stave off the  possibility of spills.   The  TAT was s'il
  still  cneci'ing so^e pH's.  I as'
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 SYNOPSIS EXEMPTION
                       1900-5.:
                            )
 Contract Nurrber:    68-95-0064
 Pursuant to the Federal Procurement Regulations,  Subpart 1-1.1003-2(4),  the
 proposed procurement is not being publicized in the Department of Oamerce
 publication, "Comerce Business Daily,  Synopsis of U.S.  Government Proposed
 Procurement, Sales and Contract Awards," because  the procurement is of such
 unusual and compelling, emergency that the t&verranent would be seriously
 injured if bids or offers were permitted to be made more than 15 calendar
days after issuance of the invitation for bids or request, for proposals or
the date of transmttal of the synopsis,  whichever is earlier.
        July 5, 1983
           Date
SO
                                               Contracting Officer
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                             IS v  R W
                             ClieuMf F2d
   the   circumstances   surrounding  the
   search  or seizure and the nature  of the
   search  or seizure itself "  Thus the per-
   missibility of  a particular practice  "is
   judged  by balancing its  intrusion on the
   individual's Fourth Amendment interests
   against its promotion  of legitimate gov
   ernmental  interests "
Id., 489 U S  at	, 109 S Ct at 1414 103
L Ed 2d at 661 (citations omitted)
   The obvious necessity  for police interdic-
tion of drug couriers and  traffickers does
not outweigh the constitutional standards
for police intrusion into the affairs of ordi-
nary citizens—be they within their homes
or deplaning a flight from Miami  The oral
argument of the U S  Attorney in this case,
that the defendant must have satisfied the
drug courier profile because when the de-
fendant was  searched, the officers discov-
ered drugs, is a stark example of the need
for the courts to ensure that the law en-
forcement agencies in this country adhere
to constitutional requirements in their zeal
to combat the drug problem that plagues
this nation
     UNITED STATES of America,
           Plaintiff-Appellee,
                   v
          RW   MEYER.  INC,
          Defendant-Appellant
              No 88-2074

     United States Court of Appeals
              Sixth  Circuit

         Argued \ug  14  1989
         Decided Nov  20,  1989
    Lnited States brought action against
landowner, operator of electroplating facili-
ty  and its president to recover cost to
remove hazardous substances   The Lnited
States District Court for the Western  Dis
VIEYER.  INC                       1497
1497 (Mh Clr  1989)
  trict of  Michigan  670 F Supp 742 ana 685
  FSupp  1410,  Douglas W  Hillman Chief
  Judge, found defendants jointly and sever-
  ally liable for response costs and awarded
  direct and indirect costs and prejudgment
  interest   Landowner appealed   The Court
  of Appeals, Ralph B  Guy, Jr   Circuit
  Judge, held that  (1)  overhead expenses
  attributable' to cleanup site could be recov-
  ered,  (2) prejudgment interest provision of
  Superfund  Amendment and Reauthonza-
  tion Act could be retroactively applied after
  Government undertook removal action  and
  commenced suit,   and (3) Environmental
  Protection  Agency  (EP4)  could  award
  cleanup  contract without  competitive  bid-
  ding
     Affirmed
  1  Health and Environment , over-
  head costs were allocated to specific clean-
  up  sites   Comprehensive Environmental
  Response, Compensation, and Liability  Act
  of 1980, §  107(a), as amended 42 U S C A
  § 9607(a)
       See publication Words and Phrases
     for  other judicial constructions  and
     definitions.

  2  Interest «=39(220)
      Prejudgment interest provision of Su-
  perfund  Amendment and Reauthonzation
  Act couid  be  retroactively applied after
  Government undertook  removal action  and
  commenced suit to recover response costs
  even though  Act  had  specific  effective
  date, district court had discretion to award
  prejudgment interest even before Act au-
  thorized it   Comprehensive Environmental
  Response, Compensation  and Liability  Act
  of 1980, §  107(a), as imentied 42 L S C A
  § 9607(a)
  3  Health and Environment <5=255<55)
      Landowner was  jointiv and  severally
  liable with  operator of electroplating facili-
  ty and its president for Government's  cost
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1498
889 FEDERAL REPORTER. 2d SERIES
to-remove hazardous substances causing
indivisible harm  Comprehensive Environ-
mental  Response, Compensation, and  Lia-
bility Act of 1980, §§ 101OXA, B), (20XA),
107(aMD,  (b),  as  amended,  42 USCA
§§ 960K9XA, B), (20KA), 9607(a)(l, 2), (b)
4  Contribution «=5(6), 6
    Landowner was entitled to contnbution
from operator of electroplating facility and
its president to extent that landowner could
demonstrate divisibility of harm from haz-
ardous  substances and  payment of more
than its fair share   Comprehensive Envi-
ronmental Response, Compensation, and Li-
ability Act of 1980, §§ 1010MA, B), (20KA),
107(aKl),  (b),  as  amended,  42 ISC A
§§ 960K9XA, B), (20HA), 9607(aXl,  2), (b)
5.  Health and Environment «=>25.5(5.5)
   * Environmental   Protection   Agency
(EPA) was not required to conduct competi-
tive bidding for contract to clean up haz-
ardous substances such as cyanide and acid
within six months and complied with  Na-
tional Contingency  Plan   Government affi-
davits  indicated that competitive bidding
process averaged 9  to 12 months and that
rusted drums could cause severe injury  and
death   Comprehensive Environmental  Re-
sponse,  Compensation, and Liability Act of
1980, §§ 105(aH7), 107
  Thomas J  Gezon, Asst I S Atn , Office
of the US  Atty   Grand Rapids, Mich,
Jacques B Gehn, Vicki B  Plaut, Sarah P
Robinson (argued), L S  Dept  of Justice,
Land & Natural Resources Dn , Washing
ton, D C , for U S
  Jon  D  VanderPloeg  (argued)  Smith,
Haughev  Rice  &. Roegge, Grand Rapids,
Mich   for RVi   Me\er Inc

  Before GUY, BOGGS and  NORRIS,
Circuit Judges

  RALPH B GU\  Jr  Circuit Judge
  Defendant R% Mever Inc (Me\er) ap-
peals from a district court order granting
summan judgment for plaintiff the L nited
States (hereinafter referred to as the Envi-
                     ronmental Protection Agency (EPA) or the
                     government), in this action arising under
                     the   Comprehensive  Environmental   Re-
                     sponse Compensation and Liability Act of
                     1980 (CERCLA), as amended bj the Super
                     fund Amendments and Reauthonzation Act
                     of 1986 (SARA), 42 U S C  § 9601, et seq
                     Meyer claims that summary judgment was
                     improper  for  several  reasons   First, it
                     claims that, as a matter of law, the govern-
                     ment's  indirect costs are not recoverable
                     under CERCLA   Next, it contends  that
                     the district court erred in applying retroac
                     lively CERCLA's amendments authorizing
                     the award of prejudgment interest Meyer
                     also claims that the district court erred in
                     finding the defendants jointly and severally
                     liable under CERCLA   Finally, Meyer ar-
                     gues that summary judgment was improp-
                     er because  numerous  issues  of  material
                     fact surrounded the government s claimed
                     direct costs of removal,  indirect costs, pre-
                     judgment interest,  and  the issue  whether
                     the  government's  actions were consistent
                     with the National Contingent  Plan (NCP)
                     as required under  CERCLA   Having de-
                     termined that the district court s resolution
                     of this matter was correct, we affirm
                      The facts underlying this case, as found
                     bj the district court, indicate  that Me\er
                     owns some property  (the  property)  in a
                     mixed residential, commercial  and  industri-
                     al setting  in  Cadillac  Michigan   From
                     1972  until mid-1981, Me\er  leased  thi«
                     propert\   to  Northernaire  Electroplating
                     Company (Northernaire) to operate an elec
                     troplating business  Willard S  Garwood
                     was  the president and sole  shareholder of
                     Northernaire from  1975 until mid-1981  In
                     the course of its  business, Northernaire
                     utilized  highh corrosive  and  caustic sub-
                     stances including cyanide zinc hexavalent
                     chromium cadmium and chromic acid  In
                     March 1983  officials from the EPA and the
                     Michigan  Department  of  Natural   Re-
                     sources (MDNR)  examined the property
                     Their examination was prompted b\ earlier
                     reports of MDNR  officials  indicating that
                     the building had beer  locked and  aban-
                     doned and that a child had receded chems
                    cal  bums  from playing  around discarded
                    drums of  electroplating waste that were
                                                                                   J
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                            U S. v  R.W
                            CtttuSKFM
left outside the building  State tests on
samples of the soil, sludge, and drum con-
tents disclosed the presence  of significant
amounts of caustic and corrosive materials
During their examination of  the site  EPA
and MDNR officials  observed  drums and
tanks housing cyanide Uttered  among dis-
array inside  the  facihu   Based on  their
observations  outside  of  the  building,1 the
officials determined that Northernaire had
discharged its electroplating  waste into a
"catch"  basin  and  that the  waste  had
seeped into the ground from the bottom of
the basin  The waste then entered a pipe
that drained into a  sewer line  that dis-
charged into the sewage treatment plant
for the citj of Cadillac
  Approximately June 28, 1983  EPA offi-
cials  advised  Mejer  Northernaire,   and
Garwood of their intent to engage  in  an
immediate  remo\al action on  the property
Although the EPA adtised the  defendants
that the} could conduct  the removal action
themselves, the defendants declined to do
     Consequently, the EPA  aided b\ con-
        , conducted   the removal  action
from Julv  5 until  August 3  1983 z
  After Mejer, Northernaire  and Garwood
failed to respond to an  August 13, 19*4
EPA demand  letter  seeking  pa\ment for
the costs of the removal  action, the govern
ment filed a complaint against them in fed-
eral court  seeking reimbursement,  pursu-
ant  to  CERCLA   On June  3,  1986,  the
government filed a motion for partial  sum
man judgment on the issue  of the defen
dants  liabilm   Following a hearing, the
court granted this motion, finding the de
fendants joint)} and severalh  liable for the
governments  response  costs    Lnited
States v Northernaire  Plating Co   670
F Supp  742 f> D Mich 1987)  The go\ern-
ment then filed  a motion  for summan
1  The EPA and MDSR officials observed soil
  discoloration indicative of contamination in ad
  dition to pipes an unsealed sewer tine  and a
  catch" basin open to tne  ground
2  The remo\al action entailed neutralizing the
  caustic acids and sludges  bulking and shipping
  ihe liquid  acids excavating and removing the
  contaminated sewer line  and decontaminating
  the interior of the building The propem con
  tamed  among other substances  5 400 gallons of
>  waste c\anidc  140 barrels of  waste cxanidr
  mix 3 450  gallons of acid  and 5 000 gallons of
  waste hvpochlorne solution
MEYER  INC                      1499
1497 (MhClr 1989)
  judgment  on the  issue  of  costs   The
  government sought 1269,81125 in response
  costs in addition to prejudgment interest on
  that amount   The 8269,81125 included
  $52,978 50 in indirect costs,1 costs paid to
  contractors, EPA direct payroll and travel
  expenses, and $35,473 28 in Department of
  Justice  enforcement  costs   This motion
  also was  granted  with the exception  of
  $993 incurred for a title search * and with
  the proviso that the parties submit further
  affidavits   regarding  the    appropriate
  amount of prejudgment interest  United
  States v  Northernaire Plating Co, 685
  F Supp  1410 (W D Mich 1988)   After the
  parties  stipulated  to  $74,00497 as  the
  amount of accumulated prejudgment inter-
  est,9 the court ordered the  defendants  to
  pay that amount to the government   On
  September 2, 198S the court issued a final
  judgment  on the government's claim  Only
  Mever has appealed from that order

                     I
    [1] This  case comes before us as an
  appeal from a summary judgment ruling
  Our review of such judgments is governed
  b\ the principles set forth in Celoter Corp
  v Catrett  477 L S  317, 106 S Ct 2548, 91
  L Ed 2d 265 (1986)  in  which the Supreme
  Court stated
    [T]he  plain language of Rule 56(c) man
    dates  the entn  of summan judgment,
    after  adequate time for  discover}  and
    upon motion against a part} who fails to
    make  a showing  sufficient to  establish
    the existence of an element essential  to
    that parts's case  and on which that par-
    t\ will bear the burden of proof at trial
    In such  a situation, there can  be "no
    genuine issue  as  to  aru  material fact"
  3  A< discussed infra  this amount represents a
    reduction from amounts previous!} sought  as
    indirect costs

  4  After disallowing the $993 for the title search
    the court uhimaieh awarded  the government
    $268 818 25 plus $7400497 m prejudgmem in
    teres' which totals 1342 823 22

  5  In the  stipulation  the defendants exphcith
    preserved iheir rign, ic appeal ihe governments^,'
    entitlement to preiudgment interest
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1500
-889 FEDERAL REPORTER, 2d SERIES
  since a complete failure of proof concern-
  ing an essential element of the nonmov
  ing party's  case necessarily renders  all
  other facts  immaterial
Id  at 322-23, 106 S Ct at 2552 (quoting
Anderson v Liberty Lobby,  477 I S 242,
250, 106 SCt. 2505, 2511,  91 LEd2d 202
(1986))
  The bulk of Meyer's claims concern the
extent of its  liability under  CERCLA for
the  government's  response  action  We
shall consider  these claims first and begin
b> examining  the applicable  statutory au-
thont) and language
  CERCLA, 42 L S C § 9601, et seq, was
enacted in December 1980  "to initiate and
establish a comprehensive response and  fi-
nancing mechanism to abate and  control
the vast problems associated  with aban-
doned and inactive hazardous waste dispos-
al sites"   HRRep  No    1016(1),  96th
Cong, 2d Sess 22, reprinted in 1980 L S
CODE CONG  i ADMIN  NEWS 6119.
6125   In Walls v  Waste Resources Corp,
823 F 2d 977 (6th  Cir 1987), we noted that
CERCLA was  intended " 'pnmanlj to facil
itate  the  prompt  cleanup of  hazardous
waste sites b\ placing the ultimate finan
cial responsibility for cleanup on those re-
sponsible for  hazardous wastes '"  Id  at
981 (citation omitted) *  CERCLA was reau
thonzed and  amended  in  1986 by  SARA,
PubL  99-499.   100 Stat  1613  (1986;
CERCLA, when onginallv  enacted, estab-
lished the Hazardous Substance Response
Trust Fund, 42 L S C § 9631, to be utilized
in connection with the  cleanup of releases
of hazardous substances into the environ-
ment  Section 9631 was repealed by SARA
provisions establishing the Hazardous Sub-
stance Superfund (Superfund)  26  L S C
§ 9507   Among  other things, the  Super-
fund finances  the government's  response
to actual or threatened releases of hazard

6  See generalh Annotation  Governmental Re
  covert of Cost of Hazardous Wtasie  Removal
  Under Comprehensive Environmental Response
  Compensation   ana Liabihtt  Act  (42  L S C
  §§ 9601 ei seq)  70 A L R  Fed 329 (1984 &
  Supp 1988)
7  The President has delegated in large measure
  his authorm under CERCLA and SARA to the
  Administrator of the EPA  See Executive Order
                      ous materials  "The Superfund's funding
                      sources include general revenue appropna
                      turns,  certain environmental taxes, monies
                      recovered under CERCLA on behalf of the
                      Superfund, and CERCLA-authonzed penal-
                      ties and punitive damages
                        Section 9604(a) of CERCLA authorizes
                      the President of the United  States to re-
                      spond with "remedial" or other "removal"
                      action against any threatened or actual re-
                      lease of any  hazardous substance that ma>
                      pose an imminent and  substantial  public
                      health threat'  Essentially, Congress has
                      authorized the government to utilize Super-
                      fund money to take direct response actions
                      that are consistent with the NCP * and to
                      recover all response costs from all persons
                      responsible for the release of a hazardous
                      substance   42  U S C §  9607(a)   The re
                      covered  funds are used to replenish  the
                      Superfund   Section  9607(a)  provides, m
                      pertinent part
                          Notwithstanding any other  provision
                        or rule of law,  and subject onh to the
                        defenses set  forth in  subsection  (b) of
                        this section—
                            (1) the owner  and operator of a ves-
                          sel or a  facility,
                            (2) am person who  at the time of
                          disposal  of am  hazardous substance
                          owned  or  operated   am  facilitv  at
                          which such hazardous substances were
                          disposed of,
                            (3) an\  person wlio b\  contract
                          agreement,  or otherwise arranged  for
                          disposal  or  treatment, or  arranged
                          with a  transporter  for transport  for
                          disposal  or treatment, of hazardous
                          substances  owned   or possessed  bj
                          such  person,  b%  am  other  part% or
                          entiU, at am facilitt  or  incineration
                          vessel owned  or operated bs another
                          pam or entm   and  containing  such
                          hazardous substances, and
                       \o  12580  52 Fed Reg  2«23 (Jan  23  1987)
                       repnnied IB  42 L S C  § 9615 App ai  168-72
                       (V.est Supp 1989)
                      8   The National Contingent Plan is described at
                       42 L SC § 9605 and  is set forth at 40 C F R
                       Pan 300 ei  seq  Thai plan sets forth  proce
                       dures and standards for responding to releases
                       of hazardous substances  pollutants  and con
                       tammants     42 L.SC  § 9605
-------
                             US  v R.W
                             Cite at U9 FJd
       (4) any  person who accepts or ac-
     cepted  any hazardous substances  for
     transport  to disposal  or treatment fa-
     cilities, incineration vessels or  sites se-
     lected  by such person, from which
     there is a release, or  a threatened re-
     lease which  causes  the incurrence  of
     response costs,  of  a  hazardous sub-
     stance, shall be liable for—
       (A) all costs of removal or remedial
     action incurred b> the United States
     Government  or a State or an Indian
     tribe not inconsistent with the  national
     contingency plan,
       (B) am  other necessan costs of re-
     sponse  incurred b>  anj other person
     consistent with the national contingen-
     cy plan,
       (C) damages for injun  to,  destruc-
     tion  of,  or loss  of natural resources,
     including the reasonable costs of  as-
     sessing  such injurj,  destruction,  or
     loss  resulting from such a release, and
       (D) the costs of am health  assess-
     ment or health effects  stuch  earned
     out  under section 96040) of this title
As noted  section  9€07(a)  authorizes the
government to recover all costs of removal
or remedial response actions   The  statute
defines remove or removal as follows
     The  terms "remove"   or  ' removal"
  means [sic]  the cleanup or removal of
  released  hazardous substances from the
  environment such actions as mav  be nec-
  essan,  [sic]  taken in  the event   of the
  threat  of release  of   hazardous sub-
  stances into the environment such  ac-
  tions as  mav be  necessan,  to monitor,
  assess, and evaluate the release or threat
  of release of hazardous  substances, the
  disposal of removed material, or the tak
  ing of  such other actions as mav  be nee
  essarv  to prevent  minimize  or mitigate
  damage to the public health or welfare or
  to the environment uhich mav otherwise
  result from a release or threat of  release
  The  term  includes in addition   without
  being limited to secuntv fencing or oth
  er measures  to limit access  provision of
  alternative  water  supplies   temporan
  evacuation and housing of threatened in
  dividual? not otherwise provided  for ac
  tion  taken under section 9604(b)  of this
 MEYER, INC.                       1501
14*7 <6tl»Clr |«M)
    title,  and  any  emergency  assistance
    which max be provided under the Disas-
    ter Relief and Emergencv Assistance-Act
    [42 U S C A  § 5121 et seq ]
  42  U S C  § 9601(23) (footnote omitted)
  The action  authorized  bj section  9604(b)
  that is referenced  in the definition of re-
  move or removal includes'"such planning,
  legal, fiscal, economic,  engineering, archi-
  tectural, and other studies or investigations
  as [the President] may  deem necessan or
  appropriate to plan and direct response ac-
  tions, to recover the  costs thereof, and to
  enforce the provisions of this chapter "  42
  I S C  § 9604(b)
    The statute defines remedy as follows
      The terms "remedy" or "remedial  ac-
    tion" means [sic]  those actions consistent
    with permanent remedy taken instead of
    or in addition to  removal actions  in the
    event of a release or threatened  release
    of a hazardous substance  into the envi-
    ronment, to prevent or minimize  the  re-
    lease  of hazardous substances so that
    thev do not migrate to cause substantial
    danger to present or future public health
    or welfare or the environment   The term
    includes, but is not limited to, such ac
    turns at the  location  of the release  as
    storage, confinement,  perimeter  protec-
   •tion using dikes, trenches or ditches,
    claj cover, neutralization, cleanup of re-
    teased hazardous  substances or contam-
    inated materials  recvclmg or reuse,  di-
    version, destruction segregation of reac
    tive wastes, dredging  or excavations re-
    pair or  replacement of leaking contain
    ers, collection of leachate, and runoff,
    onsite treatment  or incineration,  provi
    sion of  alternative  water supplies, and
    anv monitoring reasonable  required  to
    assure that such actions protect the pub-
    lic health  and welfare and the environ
    menl   The  term includes  the costs  of
    permanent  relocation  of  residents and
    businesses   and  commumtv   facilities
    where  the President  determines  that
    alone or in combination with other mea-
    sures  such relocation is more cost-effec
    tive than and environmentalh preferable
    to the transportation storage treatment,
    destruction, or secure disposition offsite


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1502
889 FEDERAL REPORTER, 2d SERIES
  of hazardous substances, or maj other-
  wise be  necessary to protect the public
  health or welfare, the term includes off-
  site transport and offsite storage treat-
  ment,  destruction, or secure  disposition
  of hazardous substances and associated
  contaminated materials
42 L S C § 9601(24)
  The term respond or response is current-
ly defined as "remove, removal,  remedy,
and remedial action, all such terms (includ-
ing the terms 'removal' and 'remedial  ac-
tion') include enforcement activities related
thereto "   Id  § 9601(25)
  The government submitted to the district
court extensive documentation supporting
its claim that the defendants owe  it $234,-
33797  in EPA direct and  indirect costs,
plus $60,621 99 in prejudgment interest," in
addition  to $35,473 28 in  Department  of
Justice costs   The requested EPA costs
were allocated  as  follows
  $ 22,24169 -  EPA payroll
     5.97470 -  EPA travel
   153,14308  -  \anous    contract    ex-
                 penses  (including  $993
                 that  ultimateh was  dis-
                 allowed)
    52 978 50  -  EPA "indirect costs"
  $23433797  -  (Total)10
Mejer challenges the government s entitle
ment to  recoverv  of  indirect  costs under
CERCLA  claiming  that   administrative
costs are recoverable  onh  to the extent
thej  are  related to a removal action  Me\
er concedes that  recoverable  expenses  in-
clude "pavroll costs and travel expenses of
the EPA personnel directly involved with
the Northernaire  site removal action, and
those of  the Justice Department attorneys
involved  in  this cost  recover} action
[and] related administrative costs, as that
right is recognized in reported cases '  The
gist  of Mever's claim  is that  the  govern-
ment impermissibiv is seeking recovery  of
9  The amount of  preiudpment interest sought
  subsequentK  uas  amended to encompass pre
  judgment mteres a  a rate to be  determined in
  the future  The parties uilimaieh stipulated to
  1~>A KM 9" in prcmdpmeni interes

10  The courts ultimate award of cost-; totalling
  $2688182^ is comprised of $233 344 97 in  al
                      indirect administrative costs or other costs
                      inherent in operating the Superfund gener
                      allv  Mever claims that these costs are not
                      recoverable because they are unrelated to a
                      given  removal action at a  given site   It
                      contends that the absence of any reference
                      to indirect costs in the statute and legisla
                      tive history, in the face of the statute's
                      explicit delineation  of  recoverable costs,
                      supports its claim that indirect costs  are
                      not recoverable
                       According to William Cooke, a cost ac-
                      countant with  EPA's Superfund Account-
                      ing Branch, the $52,978 50 in indirect costs
                      sought by  the  government represents real
                      costs that are necessary  to  operate  the
                      Superfund Program and to support cleanup
                      efforts at specific  sites, but that cannot be
                      linked directly to  the efforts at any one
                      particular site   Cooke  indicated that  the
                      indirect  costs  essentially  are  "overhead
                      costs" attributable to "rent and utilities for
                      site and non-site office space, payroll and
                      benefits  for program managers,  clerical
                      support and other administrative support
                      staff  and pav earned bj on-scene coordi
                      nators while on leave, or performing tasks
                      not directh  associated with  a particular
                      site "  Cooke descnbed such costs as inner
                      ent in all government grants and contracts
                      and as wideh recognized and understood in
                      the business communirv "
                       The district court approached the indirect
                     costs issue b\ examining the statuton defi-
                     nition of response at the time of the remov -
                     al action and as amended bv  SARA in 1986
                     At the time of the removal action response
                     was defined as ' remove  removal, remedv
                     and remedial  action '   The 1986 amend
                     ment added enforcement activities as recov
                     erable  costs   42 L S C  § 9601(25)   The
                     issue  before  the  district  court  became
                     whether  Superfund administrative  costs
                     are encompassed bv the cost of remov al or
                     remedial action or enforcement  activities
                       lowed EPA costs plus J35 473 28 in  Department
                       of Justice costs
                     11   The EPA produced a manual for fiscal
                       19S3-8*  tha  explains EPA indirect cose- «
                      their a I locati or and thai provides instruction"-
                      EPA personnel for calculating indirect cosn i
                      purpose' of CERCLA cost  recoverv
-------
                             U.S. v. R.W
 /   '        -              CtuuM? FJd
 contemplated by the statute as recoverable
 The distnct court  correctlj  observed the
 absence of guidance in the legislative histo-
' ry  on this issue   The court recognized
 existing authontv for granting administra-
 tive, investigative, and legal expenses asso-
 ciated with the cleanup of a  site and with
 anv attendant litigation  See, e g,  United
 States i South Carolina Recycling & Dis-
 posal Inc  (SCRDI), 653 FSupp  984 (D S
 C 1984)  (government permitted to recover
 litigation costs, including attorney fees, ad
 mimstrative costs,, and investigative costs
 related to cleanup), affd in part, vacated
 in part and remanded, United  States v
 Monsanto  Co, 858  F 2d 160 (4th  Cir 1988),
 cert denied, — US  	, 109 SCt 3156,
 104 LEd2d 1019 (1989), United States v
 Northeastern  Pharmaceutical & Chemi~
 cal  Co  (KEPACCO), 579  FSupp   823
 (WD Mo 1984)  (recoverable costs  include
 "all litigation costs,  including  attorney fees
      salary  and expenses      associated
 with    monitoring, assessing and evaluat-
 ing the release  of  contaminants and  the
 taking of actions to prevent, minimize or
 mitigate damage which might result from a
 release  or  threat  of  release  of contami
 nants"), id  at  851-52 (footnote  omitted),
 affd in  part, rev d in part, and remand
 ed  810  F2d 726 {8th Cirl986),  cert  de-
 nied  484  US  848,   108  S Ct   146, 98
 L Ed 2d 102 (1987)  The court  also noted,
 however, that neither SCRDI nor NEPAC
 CO squareh faced the indirect  costs ques
 tion  we confront toda\  In  the  one case
 that considered the question, United States
 i Ottati & Goss, 694  F Supp 977 (D N H
 1988) the  court denied EPA recover} of
 indirect  costs  for rent, utilities,  supplies,
 clerical support, and other  "overhead" ex-
 penses because those  costs were deemed
 necessan  to operate  the Superfund  pro-
 gram generalh and  could not  be attributed
 dwectK  to  a particular site  The distnct
 court here, however  found that  because
 the  Ottatt  d Goss  court offered no addi
 tionai explanation for its decision to dem
 recoven of indirect costs  the case »as of
 limited \alue

 12   Although Mfver claims that  EPAs indirect
  costs are unrelated and unatmbutable to the
  governments removal action the governmenl
MEYER, INC                       1503
1497 (Mil Or 1989}
    The  court  concluded  that Congress in-
  tended that the government recover "all of
  the costs incurred in a remedial or removal
  action," and  that the language of  section
  9604(b) together "with the broad remedial
  purpose of CERCLA, supports a liberal in-
  terpretation of recoverable costs "  North-
  ernaire,  685  FSupp at 1419  We agree
  with this  interpretation, finding  that the
  challenged indirect costs are part and par-
  cel of all costs of the removal action, which
  are recoverable under CERCLA
    Contran to Meyer's assertions, the chal-
  lenged  indirect costs are attributable to its
  cleanup site in that they represent the por-
  tion of EPA's overhead expenses that sup-
  ported the government's response action on
  Meyer's property u  As such, the govern-
  ment's  total response costs necessarily in-
  clude both direct and indirect costs inher-
  ent in  the cleanup  operation  The EPA
  demonstrated  that  its  indirect costs for
  such things as  office space for EPA em
  ployees who oversee response actions  rep-
  resent  costs  incurred in support  of more
  than one response action and that are ap-
  portioned  regionally among  all  the  re-
  sponse  actions undertaken in  a given  re-
  gion William Cooke described the method
  of calculating and allocating indirect costs
  of the Superfund program to  a particular
  response action  Essential!}, the  EPA de-
  termines,  for  each  fiscal year, the total
  amount  of EPA overhead costs  at EPA
  headquarters  and the  ten regional EPA
  offices that support  CERCLA response ac
  tions   EPA   allocates part  of the head-
  quarters' overhead costs that support re-
  sponse  actions to each  of its ten  regional
  offices   Those  costs are added  to each
  regional office's  own overhead costs that
  support such actions  EPA then calculates
  an indirect cost rate for each region each
  fiscal vear bv dividing the region's total
  overhead costs attributable  to Superfund
  activities  plus its share  of headquarters'
  overhead  costs  by  the total  number  of
  hours billed b\ regional Superfund person
  nel in a given fiscal vear  To determine

   affidavits  suggesting otherwise were  not cha)
   Icnged  b\ affidavit or  olher evidence offered b\
   Mever
-------
1504
889 FEDERAL REPORTER, 2d SERIES
what portion of its indirect costs support a
particular response action, EPA multiplies
the number of hours billed bj certain  re-
gional personnel to  a  particular response
action by the indirect cost rate for that
fiscal year Finally, to determine the total
indirect  costs  attributable to  a particular
response site,  EPA adds the indirect costs
attributed to that site for each year dunng
which response action occurred at that site
According  to  the  government, the  $52,-
987 50 sought in indirect costs represents
the portion of EPA overhead costs attribut-
able  to  the response  action  on Meyer's
property,  which must  be  added  to  the
government's direct costs to determine the
EPA's total cost of the removal  action
The use  of direct and indirect  costs in cal
culatmg  total cost comports with standard
accounting practices " and reflects the true
overall cost incurred b\  the government in
cleaning up Meyer's property
  Given  section 9607(a)'s authorization for
the government to recover all costs of  its
removal  or remedial actions " we are not
persuaded that the governments  indirect
costs  were unauthorized   Rather  to  the
extent cleanup actions are necessan  we
are persuaded that the  statute contem
plates that those responsible for hazardous
waste at each  site must bear the full cost
of cleanup actions  and  that  those costs
necessanh  include  both direct costs and a
proportionate  share of indirect  costs attrib-
utable to each site   In essence then,  the
allocation of the indirect costs to specific
cleanup  sites  effectively  renders   those
costs  direct costs attributable to a particu
lar site   We are confident that had  Mever
or the  other   defendants undertaken the

13  See  C  HORNGREN A G  FOSTER COST
  ACCOUNTING  A MANAGERIAL  EMPHASIS
  20-36 (6ih ed  1987)

14  The district court in NEPACCO described  re
  coverable response  costs as extremelv broad
  and  as including
     (a) Investigations  monitoring and  testing
   to identih the extent of danger to the public
   health  or welfare  or the environment
     (b)  Investigations monitor np anc  testing
   to identify the extent of the release o- threat
   ened release of hazardous substances
     (c) Planning and  implementation of a  re
   sponse action
                      cleanup operation by contracting with an-
                      other company to perform the cleanup, the
                      costs of that  cleanup  whether  character-
                      ized  as  costs, direct costs  plus  indirect
                      costs, or" otherwise, would include the type
                      of indirect costs challenged here   The fact
                      that  the government's  indirect costs may
                      be higher than another entity's does  not
                      make those costs  any less recoverable, par-
                      ticularly in view of the  defendants' failure
                      to handle the  cleanup on  their own   We
                      are not persuaded that the challenged indi-
                      rect costs are unrelated or unattnbutable
                      to the removal action on Meyer's property
                      and conclude that the district  court proper-
                      ly found those costs recoverable
                        Meyer also claims that, even if the EPA
                      is authorized to recover indirect costs, ma-
                      teral issues of fact regarding those costs
                      should have precluded summarj judgment
                      In making this claim, Mever  does not dis-
                      pute  the fact  that  it offered  no opposing
                      affidavits to the government's  claim  for
                      indirect  costs   Rather,  Meyer claims that
                      because of changes in the amount  of indi
                      reel costs sought  bv the government and
                      because  of the complexities involved in cal-
                      culating such costs, the government failed
                      to sustain its  burden of proving  the  ab-
                      sence of am  genuine  issues of material
                      fact regarding those costs   The  govern-
                      ment presented various documents support
                      ing its claim for indirect costs   As previ
                      ouslj noted, Cookes affidavits clearlv  set
                      out how  the EPA indirect  costs are calcu-
                      lated  Moreover  Richard  Hackle\, an ac
                      countant  for the Superfund, explained the
                      basis for the  EPA's  reductions  in the
                      amount  sought  as  recoverable  indirect
                      costs IS   Although Mever had  ample oppor-
                          (d) Recovers of the costs associated
                         the above  actions  and to enforce th(  provi
                         sions of CERCLA including the costs incurred
                         for the staffs of the EPA and the Department
                         of Justice
                       579 F-Supp at 850  Arguablv the indirect costs
                       allocated to Mever represent costs associated
                       with the  cleanup of Mever s propertv
                     15  Hacklev reduced an original figure of 188
                       301 in indirect costs to 153 397 to reflect the fac'
                       that the EPA no longer included in it* calcula
                       tion of indirect cost* hours  charged  to a particu
                       lar site bv employees of the Office  o< Regional
                       Counsel  Office of Pubhc Affairs and the Plan
                       ning and Management  Division  The S53 39?
-------
fc&ESt&m
                                      US  v R.W
                                      ate •*•» TIA
          tunit> to engage in discovery or otherwise
          to acquire evidence to support its claim
          that a genuine issue of material fact exist-
          ed, it failed to do so   Based on the  doc-
          uments before it  the district court proper!}
          determined that no genuine issue of materi-
          al fact existed  regarding  indirect costs
          According!},  summary  judgment  for  the
          government proper!} was granted
               ^
                             II
            (2]  We next consider Meyer's claim  that
          the district court  erred in applying retroac
          tivelv the SARA amendment to CERCLA
          that authorized the government to recover
          prejudgment  interest"  This amendment
          took effect approximate!} six months pnor
          to the  district court's award of prejudg-
          ment interest in  this case, but after  the
          removal action undertaken  b\ the  govern-
          ment and  the commencement of this suit
          Mever acknowledges the general rule that
          a court is obliged  to apph the law in effect
          at the time of its decision, Bradley  v Rich-
          mond School Board 416 U S 696,  94 S Ct
          2006, 40 L Ed 2d 476 (1974), but notes that
          an exception  to  the  general rule exists
          when such application  would cause mam
          fest  injustice or  is contran to statutory
          authont} or legislative  histon  Id  at 711,
          94 S Ct at 2016   Meyer claims that  be-
          cause the amendment in question explicit!}
          provided for  an effective date of October
          17,  1986,  Congress did  not intend  the
          amendment  to be  applied  retroactive!}
          Additional!}   Mever claims that it  should
          have had  the opportunitt to demonstrate
          that the amendment s expansion of Mever's
          potential liability  would result in manifest
          injustice   Mever  also claims tha: genuine
          issues of material fact surrounded the pro-
          pnett of the  prejudgment interest  award
            subsequent was reduced to JS2 978 50 because
            the former figure  was subject  10 a provisional
            indirect cos)  rate while  the latter figure re
            fleeted the application of the final rate
          16  SARA amended the section 9607(a) proxi
            sions on habilit\  to authorize prejudgment in
            terest  The amended prousson provides in  per
            tment  part
             The  amounts recoverable in  ar atnor under
             this  section shall  include interest  on  the
             amounts recoverable  under  subparagraphs
MEYER. INC                       1505
1497 (ttbClr I«W|
  In particular, Meyer claims that because it
  has not been "recalcitrant, deceptive or un-
  reasonable," SCRD1,  653 F Supp  at 1009,
  or otherwise delayed  the cleanup action or
  subsequent litigation, the prejudgment in-
  terest award was inappropriate
    These claims do not persuade us that the
  district court erred in  awarding the govern-
  ment prejudgment interest   For  one, the
  district court's denial  of prejudgment inter-
  est in SCRDI  was  vacated in  view of
  SARA's intervening authorization of  pre-
  judgment  interest   Therefore, the  case
  was remanded for reconsideration of the
  prejudgment interest issue    Monsanto,
  858 F 2d at 176   Although it is true  that
  Congress  gave  no clear  indication  as to
  whether SARA should be applied  retroac-
  tively, we do not view  SARA's provisions in
  isolation    Rather, the  legislative history
  indicates that SARA was intended  to "revi-
  talize the  Superfund program  to permit
  substantial progress in  addressing one of
  our  most  pressing   environmental  prob-
  lems—the  protection  of the public from
  hazardous  chemical  substances"   H R
  Rep No 99-253(1), 96th  Cong , 2d Sess 54,
  reprinted in 1986 I  S  CODE  CONG &
  ADMIN NEWS 2835, 2836  Moreover, the
  legislative histon to SARA's provisions on
  liabilit} indicates that  the amendments are
  intended to clarify that all response costs
  are recoverable from responsible parties
  and  notes  that section  9607  "gives  the
  [EPA] Administrator  authonu  to obtain
  prejudpment interest  in all  cost recover}
  actions'  Id at 73, reprinted in 1986 U S
  CODE CONG  4 ADMIN  NEWS at 2855
  We do not read the statutor>  or legislative
  histon, governing prejudgment  interest as
  e\mcmg congressional intent to postpone
  its  application   Accord  Monsanto,  858
  F 2d at 175 (' me language and legislative
     (A) through (D)  Such  interest  snail accrue
     from the later of (i)  the date payment of a
     specified amount  is demanded in writing or
     (n) 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 spec)
     fied for interest on investments of the Hazard
     ous Substance  Superfund established  under
     subchapter A  of chapter 98 of  Title 26
   43 L S C § 9607ta)
  •«f
  #M_V  f
fcW'
         "  ?
            i
  •*•">» -»" *
 ***\-*&
-------
1506
889 FEDERAL REPORTER, 2d SERIES
history of the 1986 amendment [authoriz-
ing prejudgment interest] reveal no statu-
torj direction or congressional intent to
delay its application")
  We also note that m NEPACCO, 810
F 2d 726, the retroactivity of CERCLA was
considered    The  court applied CERCLA
retroactively despite CERCLA's proclaimed
effective date of  December 11, 1980, the
alleged absence of language in CERCLA's
liability  provisions  or  legislative  history
supporting  retroactive  application, or the
fact that CERCLA imposed a new kind of
habibt)   The court, noting section %07's
reference to proscribed conduct in the past
tense, found that Congress intended CERC-
LA to apph  retroactive!) despite  the ab-
sence of express provisions  in CERCLA
authorizing  such   application    See also
United  States v  Hooker Chemicals &
Plastics Corp, 680 F Supp 546 
-------
                            US
                            CluuM9 VM
42 U S C '§ 9607
-------
1508
889 FEDERAL REPORTER. 2d  SERIES
"H.R Rep No 99-253(1), 99th Cong, 2d Sess
 79, npnntfd in 1986 U S CODE CONG &
 ADMIN NEWS 2835. 2861  To the extent
 that Meyer can demonstrate the divisibility
 of the harm and that it paid more than its
 fair share, it will be entitled to relief in its
 action for contribution current!}  pending
 against the other defendants  Accordingly,
 we conclude that the district court did not
 err  in finding the  defendants  jointly  and
 several]}  liable

                   IV
   [5]  Mever  also  urges  that  genuine is-
 sues of material fact existed so as to pre-
 clude  summar> judgment   We  already
 have rejected those  arguments with respect
 to the issues of indirect cost and prejudg-
 ment interest  We  brief]} address Meyer's
 claim relative to the issues of  compliance
 with the National Contingency Plan and of
 direct costs
   The government's costs are  recoverable
 to the extent the> are not inconsistent with
 the  NCP   42  L S C § 9607{aH4)   As not-
 ed, Meyer bears the burden of demonstrat-
 ing that the costs sought under CERCLA's
 liability provisions are inconsistent with the
 NCP  Section 960ota)(7)  of  CERCLA di-
 rects that the  NCP  require remedial action
 to be cost effective   To prevail  on its claim
 that the EPA's costs were inconsistent with
 the  NCP, Mever  had to demonstrate that
 the EPA's decision  to incur the challenged
 costs was  "arbitrarv or capricious "  See
 NEPACCO, 810 F 2d at 748  To that end,
 Meyer claims that a $140 419 cleanup con
 tract awarded  to Petrochem without com
 petitive bidding was arbitrarv  and capri-
 cious
   Although 41 U S C « 253 imposes a com-
 petitive bidding requirement  for federal
 contracts, section 253tc)(2) establishes an
 exception  for public exigencies   in claim
 ing  that the environmental conditions on
 Meyer's propem did not pose a public exi-
 gencv   Mever relied  on various  1983
 government documents indicating that  im
 mediate action  was  no' warranted  Those
 documents indicated that cleanup opera
 tions could wait six months  because  the
 site  did not pose ar immediate threat to
                     human health or  the  environment   The
                     court, in resolving this issue, however, not-
                     ed additional government affidavits indicat-
                     ing that competitive bidding is a tune-con-
                     summg process averaging nine to twelve
                     months and that the conditions of various
                     rusted drums containing cyanides and acids
                     on  Meyer's propem,  noted  in the  1983
                     documents, could cause severe injury and
                     death to  persons  coming in contact with
                     them   Meyer did not respond to or other-
                     wise challenge these factual assertions
                       Under these facts, the district court con-
                     cluded that the EPA did not act arbitrarily
                     and capnuoush bj electing to forego com-
                     petitive bidding bv  characterizing  Meyer's
                     property  as  imminently dangerous   We
                     agree  that Meyer  failed to  demonstrate
                     that the government's actions were incon
                     sistent with the NCP or, otherwise, to raise
                     a genuine issue of material fact regarding
                     the propnetj  of the government's  decision
                     to forego competitive bidding  The  fact
                     that a cleanup operation can occur within
                     six  months rather  than immediately  does
                     not render the potential danger from the
                     release of  hazardous substance insignifi
                     cant  Rather, the government must orga
                     nize its response efforts in accordance with
                     the seventv of the  danger posed   In any
                     case,  it was  reasonable  for  the  district
                     court to conclude that in this case  compet-
                     itive bidding  would have jeopardized the
                     goal of completing the cleanup of Meyer's
                     propertv within six months
                       As for the government's direct costs w e
                     note that  rather than offering evidence to
                     counter or otherwise challenge the exten-
                     sive government documentation of its d)
                     rect costs, Meyer onl>  raises  vague  chal-
                     lenges to  the  validitv  of those costs based
                     on the government s evidence   In so doing
                     Mever has failed to demonstrate a genuine
                     issue  of  material  fact  regarding   the
                     governments  direct  costs   Accordmglv
                     summarv judgment  for the government on
                     this issue also was  appropriate
                       The  district court s  judgment  is  AF-
                     FIRMED  in all respects
-------
                  UNITED STATES COURT OP APPEALS
                      FOR THE SIXTH CIRCUIT
UNITED STATES OF AMERICA,          U.S. Court of Appeals No:
                                   88-2074
          Plaintiff-Appellee,
                                   Western District of Michigan
-vs-                               District Court No:
                                   G84-1113-CA7
NORTHERNAIRE PLATING COMPANY;
WILLARD S. GARWOOD,

          Defendants,

R.W. MEYER, INC.,

          Defendant-Appellant.
          BRIEF OF PEFEHDAHT-APPgLLAMT, R.W. MKYHK.r IBC.
                                     • t
                              SMITH, HAUGHBY, RICE: 6 ROEGGE
                              By:  Jon-D* Vander Ploeg  (P24727)
                                   L. Roland Roegge-(P19551)
                                   Johtt H. Kruiv (P34626)
                                   Attorneys £or-R.W> Meyerr
                                   Inc-   - ' »•*
                              BUS INESS^ ADDRESS^* '- I
                                   '20ft' Caldojr P£aaAk'Boilding^
                                   Grand Sapitff ^ |O^} 49503
                                          *

                                            - yt *'
                                      * ^ J^'J ^, **^  • t
                                               v.
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SMI* MAUOMfY
                                     TABLE  OF  CONTENTS



              TABLE  OF  CONTENTS    	

              INDEX  OF  AUTHORITIES  - 	

              DISCLOSURE  OF  CORPORATE AFFILIATIONS AMD FINANCIAL
              INTEREST     	      	

              STATEMENT OF ISSUES PRESENTED FOR  REVIEW   	

              STATEMENT OF THE CASE 	

                  1    The  Nature  Of This  Case  	

                  2.   The  Course  Of The Proceedings  	

                 - 3    Disposition In The  Court Below     	

                  4.   Statement Of  Facts  Relevant To The  Issues
                       Presented For Review  	

                       a    The applicable st.at.ut.es and regulations

                       b    EPA's  motion for  summary  ludoment  for  th*
                            assessment of  costs   	

                       c    Plaintiff's affidavits in support  of its
                            motion	

                       d.   Defendant's response and submission of
                            evidence in opposition to the  motion
                            V
                       e    The decision of the District Court
             ARGUMENT
                                            I.
                       THE EPA WAS NOT  ENTITLED, AS A  MATTER  OF
                       LAW, TO RECOVER   INDIRECT COSTS  AS  PART  OF
                       ITS RECOVERY OF  COST  FOR COMPLETING
                       IMMEDIATE REMOVAL UNDER CERCLA     .  -
                                            II
IF THE EPA MAY RECOVER  INDIRECT COSTS  ,
THERE WERE MATERIAL ISSUES OF FACT WITH
REGARD TO THOSE CLAIMED COSTS THAT SHOULD
HAVE PRECLUDED SUMMARY JUDGMENT  	
                                                    i

                                                  ill


                                                    v

                                                    2

                                                    3

                                                    3

                                                    5

                                                    6


                                                    7

                                                    7


                                                   10

                                                  41
                                                   11


                                                   16

                                                   16

                                                   17
                                                    17
                                                                           24
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  iiiMHim.rn«in«
  ATTOMNfVSATUMr

»OCAyjtt»L«*IU«U»rt
                                       TABLE OF CONTENTS
                                           (Continued t
                     B.
The appropriate standard  fop  reviewing  the
plaintiff's Motion  for Summary Judgment .  .

There were material questions of  fact on the
issue of "indirect  costs." and summary
was inappropriate  .....    ...
                     A.
                     B.
                    III.

SUMMARY JUDGMENT SHOULD NOT  HAVE  BEEN
GRANTED AWARDING PREJUDGMENT INTEREST  .

The amended act should  not have been applied
retroactively   .  .    .........
Plaintiff's claim for preiudoment  interest
presented material issues  of  fact  .  .  .
                                               IV.
                          THERE WERE MATERIAL QUESTIONS  OF FACT WITH
                          REGARD TO THE EPA'S OTHER  CLAIMED COSTS FOR
                          COMPLETING IMMEDIATE REMOVAL WHICH SHOULD
                          HAVE PRECLUDED SUMMARY  JUDGMENT
                                               V
                          THERE WERE MATERIAL  ISSUES  OF FACT WITH
                          REGARD TO WHETHER THE  EPA'S ACTIONS HAVE
                          BEEN CONSISTENT WITH THE  NATIONAL
                          CONTINGENCY PLAN UNDER CERCLA,  WHICH SHOULD
                          HAVE PRECLUDED SUMMARY JUDGMENT . . .
PAGE NO.



 .  .  24



   .  26




      28


      26


      30
                                                    32
                CONCLUSION
                                                    35

                                                    38
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AT LAW

A BULDMQ
                               INDEX  OF AUTHORITIES
         CASES

         Bradley v Richmond School Board.
         416 US 696 (1974)	,	     28

         Cia. Petrolera Canbe.  Inc.  v Arco Carribbean.  Inc .
         754 P 2d 404 (1st  Cir.  1985)	        .     18

         Hill v Lijtahan,
         697 F.2d 1032, 1035 £n  4 (llth  Cir  1983)   .                 25

         Impossible Electronics.  Inc   v Wackenhut Protective
         Systems.  Inc .
         669 F.2d 1026, 1031 (5th Cir. 1982)	             75

         Jones v Nelson.
         484 F.2d 1165, 1168 (10th Cir. 1973)   	       25

         Kansas Gas & Electric Co  v  Brock.
         780 F 2d 1505 (10th Cir   1985)    .        	     18

         Mandel v United  States.
         719 F.2d 963 (8th Cir.  1983)	         25

         NatJ-onal  Freight. Inc v Larson.
         760 F 2d 499 (3rd Cir  1985)  .

         See NEPACCQ.  579  F SUP at 252	                   30
         United  States  v Chem-dyne Corp..
         572  F.Supp   802,  810  (S  D.  Oh , W D  1983)   .  .  .

         United  States  v Conservation Chemical Company.
         619  F   Supp   162,  186  (W D.  MO.  1985)   .      .  .

         United  States  v Lamp.
         606  F.Supp.  193 (W D   Tex.  1985)   	

         United  States  v Northeastern Pharmaceutical &  Chemical Co ,
         579  F.  Supp.  823,  850-852 (W D Mo.  1984)

         United  States  v Ottati £ Goss,
         694  F.  Supp   977  (D N  H   1988)

         United  States  v Slade,
         447  F   Supp   638  (E D. Tex.  1978)	
111
                               24


                               23


                               18


                               21


                               22


                               21
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   SMTTM KAUQMft
   net« notooc

  ATTQftNfVSATLM*
200 CALDCfl »V
                                      INDEX OF AUTHORITIES
                                           (Continued!
                 United  States  v South Carolina Recycling and
                 pj.sposal.  Inc  ,
                                                                        PAGE NO.
                OTHER AUTHORITIES

                653 F.Supp   984  (D  S.C.  1985)  ...      .  .        ...  22

                40 CFR  300  689(i)(l)           	      	    35

                41 U.S.C. Section 252(c)   ...        	          .     9

                42 U.S.C. 9601(23)     	      .	17

                42 U.S.C. Section 9601(24)   	       .9

                42 U.S.C. Section 9604(b)    ....      .      ....   8

                42 U.S.C. Section 9607(a)	        .   .     7, 18
                                                                          •
                42 U S.C. Section 9607   ...                          7

                42 U.S.C.A.  Section 5121	            .  .            8

                1980 U S  Code Cong  & Adm   News,  p ,2838                     19

                Section 121(b)    	               29

                Section 9601(23^                   	              7, 18

                Section 9601(25)                         	           18

                Section 9604(b)  .            ...            .... 8, 18, 19

                Section 9607(a)   •                    ...                   1?

                See,  1980 U.S  Code Cong  &  Admin.  News, p.  3296 [House
                Conference  Rpt   No   99-962]                .                   19

                Wright & Miller, Federa^ Practice  and  Procedure; Civil Sec
                2727  ...          .        	      ....        25
IV
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                    UOTTED STATS COP1T OF APPEALS
                          FOE THI SDCTH CttCCTT

 (This itattraant should ba placad Immadlattly prtoadlnf tha statamant of umm
 in tha biitf of tha party.  SM copy of Stfi CIr. R, 29 on ravarsa lida of tftts form.)
 UNITED STATES  OF AMERICA-,

         Plaintiff-Appellee,
      v.
  NORTHERNAIRE  PLATING COMPANY;
  WILLARD S. GARWOOD,

         Defendants,

  R.W. MEYER, INC.,

         Defendant-Appellant.
U.S  Court of  Appeals  No:
88-2074

Western District of Michigan
District Court No:
G84-1113-CA7
                 DISCLOSURE OF CORPORATE AFFILIATIONS
                         AND  FIHANCIAL INTEREST
PunuMt to ith CIr. R. 29,  R.W.  Meyer, Inc.
          followinf dUcloiurt!
                                             or party)
1.     Is said party a subsidiary or •fflllatt of a publiely owntd corporation?

      If th« answar is YES, list ^tlow tn« identity of tht parmt corporation or affiliatt
      and tha ralationahip batwaan tt and tha  namad partyt
2.     Is than a pubUoiy ownad eorooration, not  a  party to tha  appaal* that has a
      financial intar«st in tha outeoma?   No
      If «*a antwar Is YES, list tha tdtntity of such corporation tnd tha natura of tha
          rial intarati
           (Sifnatura of Couniau
      Jon  D.  VanderPloeg (P24727)
         t
(Data)
SCA-l
                    Ps
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                            STATEMENT OF ISSUES PRESENTED FOR REVIEW

                                               1.

                          WAS THE EPA ENTITLED, AS A MATTER OF LAW, '
                          TO RECOVER "INDIRECT COSTS" AS PART OF ITS
                          -RECOVERY OF-COST FOR COMPLETING IMMEDIATE
                          REMOVAL UNDER CERCLA*

                                              II.

                          IF THE EPA MAY RECOVER "INDIRECT COSTS",
                          WERE THERE MATERIAL ISSUES OF FACT WITH
                          REGARD TO ITS CLAIMED COSTS THAT SHOULD
                          HAVE PRECLUDED SUMMARY JUDGMENT?

                                              III.

                          DID THE DISTRICT COURT ERR WHEN IT AWARDED
                          PREJUDGMENT INTEREST ON PLAINTIFF'S MOTION
                          FOR SUMMARY JUDGMENT?
                                              IV.
                          DOES THE SUPERFUND AMENDMENTS AND
                          REAUTHORIZATION ACT OF 1986, AS IT RELATES
                          TO THE QUESTION OF PREJUDGMENT INTEREST,
                          APPLY RETROACTIVELY IN THIS CASE?
                                               V.
                          WERE THERE MATERIAL ISSUES OF FACT WITH
                          REGARD TO THE EPA'S OTHER CLAIMED COSTS FOR
                          COMPLETING IMMEDIATE REMOVAL WHICH SHOULD
                          HAVE PRECLUDED SUMMARY JUDGMENT'
                                              VI.
                          WERE THERE MATERIAL ISSUES OF FACT WITH
                          REGARD TO WHETHER THE EPA'S ACTIONS HAVE
                          BEEN CONSISTENT WITH THE NATIONAL
                          CONTINGENCY PLAN UNDER CERCLA, WHICH SHOULD
                          HAVE PRECLUDED SUMMARY JUDGMENT'
200 CAl^Odl PL
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   SM1M
200 CUM* Pl
                      STATEMENT OF  THE  CASE

           1     The  Nature  Of  This  Case.

           This  action.was  brought  by the United States under
 Section  107(a)  of the Comprehensive Environmental Response
 Compensation  and Liability Act of  1980, 42 USC Section 9601,
 seq.  ("CERCLA").  In  this  law suit, the United States seeks to
 recover  its costs of  an  "immediate removal action."  The
 purpose  of the  immediate removal action was to remove drums of
 hazardous wastes and  to clean up some  surface contamination
 from a site in  Cadillac, Michigan.  The immediate removal
 action was commenced  by the Environmental Protection Agency
 {"EPA")  on July 15, 1983,  and was  completed on August 3, 1983.
                                                          *
 (R. 126, Memorandum in Support of  Plaintiff's Motion for
 Summary  Judgment on Costs, pp.  21-22;  R. 47, Affidavit of
 Robert Bowden,  paragraphs  11  and 12).
          The action  was brought against defendants Willard
 Garwood, Northernaire Plating Company  ("Northernaire ), and
 R w. Meyer, Inc  ("Meyer") seeking joint and several liability
 for the  claimed removal costs.  Northernaire had carried on an
 electroplating  business at the site from 1971 to 1981
 Northernaire had leased the site from  its owner, Meyer
Willard  Garwood was the president  of Northernaire.  (R  47,
Affidavit of Robert Bowden, paragraphs 5, 6, and 10)
          Plaintiff initially filed a  motion for partial
summary  judgment on the question of liability.  That motion was
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 granted in April 1987,  and the defendants were  held to be
 jointly and severally liable for  recoverable  costs incurred in
 the removal action   (R.  104,  105,  Opinion and  Order dated
 4/30/87).-  Later,  plaintiff filed a motion for  summary judgment
 by which it sought to establish the nature and  amount of those
 recoverable costs    The District  Court granted  that motion, and
 it entered an  order awarding $268,818.25, together with a
 finding that defendants would  also  be liable  for  prejudgment
 interest.1  (R.  177,  178, Opinion  and Order dated 5/6/88).  The
 parties subsequently filed a stipulation regarding the
 computation of  the prejudgment interest  (R. 181, Stipulation
 Regarding  Prejudgment Interest),  and the District Court entered
 an  order pursuant  to the stipulation for additional liability
                                                          •
 in  the  amount of $74,004.97   (R.  185, 186, Opinion and Order
dated 8/8/88).
          This  appeal is taken from the orders  granting summary
 judgment to  the plaintiff  on the  question of  costs   Meyer
contends that certain of those costs, particularly the
government's "indirect  costs"  are not recoverable under CERCLA,
as a matter of  law,  as  they  are not properly  attributable to
this removal action.  Meyer  also  contends that  prejudgment
interest should not  have been  awarded.  Further, it is Meyer's
position that there  were material questions of  fact, with
regard to these claimed costs,  which should have precluded
summary judgment
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flCIIAQMM
2.
                            The Course Of The Proceedings.
                       Plaintiff's complaint was filed in the District
             on September 25, 1984. (R  1, Complaint).  Meyer, Garwood,  and
             Northernaire all defended, and various cross-claims and third-
             party claims were filed during the course of the proceedings.
             Meyer cross-claimed against Northernaire and Garwood, alleging
             their liability to Meyer, to the extent Meyer may be liable to
             the plaintiff. (R. 19, R w. Meyer, Inc 's Cross-Claim Against
             Northernaire Plating and Willard S. Garwood).  Northernaire and
             Garwood filed cross-claims against Meyer. (R  36, Northernaire
             Plating Company and Willard S  Garwood 's Cross-Claim Against
             R W.  Meyer,  Inc ) .
                       Each of  the defendants also filed third-party  "
             complaints against the City of Cadillac, Michigan. (R  27,
             Third-Party Complaint, R. 33, R.W. Meyer, Inc.'s Third-Part^l
             Complaint Against  the City of Cadillac).  The City  of Cadillac
             filed a fourth-party complaint against Meyer. (R. 102, Fourth-
             Party Complaint by Third-Party Defendant City of Cadillac
             Against R.W. Meyer,  Jr. and R W. Meyer, Sr., Individually and
             d/b/a R w  Meyer Construction, Jointly and Severally} .
                       With the exception of the cross-claims among the
             original defendants,  all of these claims have been decided by
             the District Court on motions for summary judgment.   Final
             judgment has been  entered in favor of the plaintiff against the
             original defendants,  resulting in this appeal.  The City of
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   SMITH
   actiaotcm
  ATTOMNCYSATUMW
XBC
                 Cadillac  has  been  dismissed,  and  that  is  not  appealed   The
                 cross-claims  among the  original defendants  remain  pending  in
                 the  District  Court.

                           3-   Disposition  In The Court Below.
                                           *                         i
                           The District  Court  granted partial  summary judgment
                 to the plaintiff on April 30, 1987.  Meyer, Northernaire and
                 Garwood were  held:
                            ...jointly and severally liable  for the
                          costs incurred during the clean up of the
                          Northernaire site, insofar as those costs
                          are not inconsistent with the national
                          contingency plan." (R. 105, Order dated
                          4/30/87, p. 2).
                On May 6, 1988, the District Court granted summary  judgment to
                the plaintiff on the amount of the recoverable claimed costs.
                The court awarded $268,818 25, "...consisting of all amounts
                sought except for interest and the $993.00 paid to  GCA for the
                title search."  The parties were instructed, in that order, to
                file a stipulation regarding the amount of interest, and  in the
                absence of agreement, the plaintiff was to file affidavits to
                establish the amounts.  The court's ruling on prejudgment
                interest was held in.abeyance, pending receipt of the
                stipulation or affidavits   The question of the expense for
                title search was also left for subsequent proofs by affidavits
                or other evidence  (R  178, Order dated 5/6/88)
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  SMI1W MAUQMTC


  MHMIOtlAl GQAPQfti

  ATTOHNfYSATyUW

MDOLDWLAi*
GAANOMAPDS
                        environment   The term includes,  but is  not
                        limited to, such actions st  the  location of
                        the release as storage,  confinement,
                        perimeter protection using dikes,  trenches,
                        or, ditches, clay cover,  neutralization,   '
                        cleanup of released hazardous  substances or
                        contaminated materials,  recycling or reuse,
                        diversion, destruction,  segregation of
                        reactive wastes,  dredging or excavations,
                        repair  or replacement of leaking
                        containers, collection of leachate and
                        runoff,  onsite treatment or  incineration,
                        provision of alternative water supplies,
                        and any monitoring reasonably  required to
                        assure  that such actions protect  the public
                        health  and welfare and the environment.
                        The term includes the costs  of relocation
                        of  residents and businesses  and community
                        facilities where the President determines
                        that, alone or in combination  with other
                        measures,  such relocation is more cost-
                        effective than and environmentally
                        preferable to the transportation,  storage,
                        treatment,  destruction,  or secure
                        disposition offsite of hazardous
                        substances,  or may otherwise be necessary
                        to  protect the public health or welfare
                        (42  U S.C.  Section 9601(24)).
                            The EPA procured  a  contract with a private

             company, Petrochem Services,  Inc.,  for it to perform the

             removal   Meyer contends  that the  EPA's actions in obtaining

             those services were governed  by  41  U.S.C. Section 252(c), which

             requires that:
                       All purchases  and  contracts  for property
                       and services shall be  made by advertising,
                       as provided in section 253 of this title,
                       except that such purchases and contracts
                       may be negotiated  by the  agency head
                       without advertising if --
                       (2) The public exigency will  not admit of
                       the 'delay-incident  to  advertising.
                                                                            o
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   SMTM MMJQMfY
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                Plaintiff doss not dispute the appl^cafcility of this section,
                but claimed in the motion that it was excused from the
                competitive bidding process by subsection (2) for emergency
                circumstances.
                               b.   EPA's motion for summary -judgment for the
                                    assessment of costs.
                               Plaintiff's motion for summary judgment on costs
                set forth several affidavits alleged to establish its costs
                incurred for the immediate removal action at the Northernaire
                site.   Accordingly, plaintiff claimed that there were no
                genuine issues of fact regarding whether the amounts it claimed
                in the affidavits were accurate and sufficiently associated
                with the Northernaire site so as to be recoverable   Plaintiff
                further argued that the costs it claimed were not inconsistent
                with the National Contengency Plan, and that there was  'o
                genuine issue of fact with regard to that question.  (R  126,
                Plaintiff's Motion for Summary Judgment on Costs and Memorandum
                in Support of Plaintiff's Motion for Summary Judgment on
                Costs).  Indeed, the District Court's earlier order on the
                question of liability allowed for costs that were not
                                •»
                inconsistent with the NCP   CERCLA would permit recovery of
                costs  only to that extent
                               Plaintiff claimed that the costs it sought  to
                recover were generally categorized as follows:
                                               10
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                        1)    Contractor and  EPA oversight costs, which
                             included  sums paid to  the  contractor  end to
                             EPA's  employees to plan  and carry out the
                             immediate removal  action;
                        2)    Litigation costs;  and
                        3)    Prejudgment interest.
              Plaintiff  asked for  judgment in the amount of $270,952.07 for
              items  1  and  2,   That  figure was allegedly substantiated by
              affidavits submitted  with the  motion.   Those affidavits shall
              be discussed  in more  detail below.  Plaintiff submitted no
              calculation  of  prjudgment interest, arguing that it  would
              continue to  accrue through the date of  judgment and  should be
              computed then.
                                 Plaintiff's affidavits  in  support of  its
                                 motion
                                                         4-'
               Plaintiff initially submitted  four
with its motion.  Each of these affidavits are reproduced in
their entirety in the Joint Appendix  to  this  Brief.
               The first of the affidavits was that of EPA
employee, Willimina Pipkin.  She said that she was a Program
Analyst in the Guidance and Oversight Branch  of the Superfund
Enforcement Division in the Office of Waste Programs
Enforcement (OWPE)  Ms  Pipkin's affidavit stated that she
compiled and reviewed cost documentation  for  the immediate
removal action at the Northernaire site   Thus, her affidavit
purports to put forth a complete summary  of costs for the
Northernaire site. (R. 126, Declaration  of Willimina Pipkin)-

                               11
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•ciftitotaai
                             The second affidavit was that of  EPA accountant,
                                              *.   *

              Richard Hackley.   He sought to verify,  and attached to  h^s

              affidavit,  and computer report that he  had prepared .and

              supplied to Ms. Pipkin.  Ms.  Pipkin's and Mr.  Hackley's
                                               *
              affidavits  both include a figure they attribute  to the

              Northernaire site referred to as "indirect cost."  (R.  126,

              Declaration of Willimina Pipkin, p.  7,  Declaration of  Richard

              D.  Hackley,  p. 3).   The amount reported is $53,397.00.  (R   126,

              Declaration of Richard D.  Hackley,  Cost Summary  attachment).

              Mr.  Hackley states,  with regard to  these indirect  costs, that

              they,  "...represent  the costs necessary to operate the

              Superfund program but  which cannot  be attributed directly  to

              specific cites. '  (R.  126,  Declaration^of Richard D. Hackley, p

              3-4)

                             Plaintiff also supplied  the affidavit of William
             Cooke, a cost accountant  with  the  Superfund Accounting Branch

             of the Financial  Management  Division of  EPA.  (R  126,

             Declaration of,William  Cooke)    Mr.  Cooke stated that  he  had
                            «.

             been involved with  the  process of  establishing EPA's  indirect

             costs rates for the Superfund  program.   He explained,  in

             general terms, what is  meant by 'indirect costs -and  how  they

             are calculated.   He stated:
The indirect costs of the Superfund program
are those costs which are necessary to  the
operation of the program and support of
site clean-up efforts, but which cannot be
directly identified to the efforts of any
one site.  In lay terms, the indirect costs
represent overhead costs, and  include such

                     12
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 SMfTW KAUQMCl
 ACEtAOfOQI
ATTOWNtYSATtX*
 QftAMOMffOS
                        things,as rent and utilities for site and
                        non-site staff office space, payroll and
                        benefits for program managers, clerical
                        support and other administrative support
                        staff; and pay earned by on-scene
                        coordinators while on leave, or performing
                        tasks not d-irectly associated with a
                        particular site	 (R. 126, Declaration of
                        William Cooke, p. 2).
              He also stated:
                        The indirect cost allocation procedure
                        requires a determination of the total
                        administrative overhead costs for Agency
                        for each fiscal year   Based on a model
                        developed by the accounting firm of Ernst
                        and Whinney, the overhead costs of
                        Headquarters are allocated to each region.
                        This Headquarters allocation is added to
                        the regional overhead costs to get a
                        regional indirect costs pool.  The indirect
                        cost rate for each region is then
                        determined by dividing this total pool of
                        indirect costs for each region by the
                        Superfund program hours incurred in each
                        region.
                                            ***
                        Once the indirect cost rate for each region
                        is determined for each fiscal year, the
                        indirect costs can be allocated to specific
                        Superfund sites.  The indirect costs for a
                        specific Superfund site are determined by
                        applying the indirect cost rate for the
                        region to hours charged to the site by
                        regional program division personnel
                                            ***
   The indirect cost rates for FY  1983 and
FY 1984 are final rates that were  reviewed
and approved by the Office of Inspector
General.  The rates for fiscal years  1985
through 1987 are provisional rates only  as
the rates are under review by the  Office of
Inspector General   It is an acceptable
accounting practice to apply the rate for
the previous fiscal year, until such  time

                     13
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SMITH
                        as  a final  rate is  determined.  (R.  126,
                        Declaration of  William  Cooke, pp.  2-3*.
                Plaintiff's offerings also included an affidavit
 from  Department of  Justice employee, Philip Stiness.  Mr.
 Stiness  sought  to establish costs of the Department of justice,
 relating to  the Northernaire site,  in the amount of $35,473.28.
 (R. 126,  Declaration of Philip B. Stiness, Jr., p  3).
                Plaintiff also submitted two more affidavits
 subsequent to its filing of the motion, but before the District
 Court decided the motion   These affidavits are also reproduced
 in their  entirety in the Joint Appendix to this Brief.  One of
 those was the statement of EPA employee, Robert Bowden.  He set
 forth reasons why the agency had not gone through the
                                                          •
competitive  bidding process, opining that the  site presented
sufficient emergency to let the contract without delay.  (R.
 166, Second  Affidavit of Robert Bowden, pp. 2-5)
                Plaintiff also presented another affidavit of
Richard Hackley.  In this statement he changed some of the
calculations he had included in his earlier affidavit   While
he had previously claimed that indirect costs  attributable to
the Northernaire site totaled  $53,397 00, he  now stated that
the indirect cost was $52,978.50.   That change, he said, was
due to the finalized rates that were established for  fiscal
years, 1985  and 1986  (R  158, Affidavit of Richard D  Hackley,
p. 2).  He also changed the figure  for costs attributable to
Regional personnel, because he,     .discovered several minor

                               14
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   VMOMLOMMI
  ATTOMNCYS AT UU*
200 CALM* PUUA •UfcOMQ
   GRAND KAffO*
                corrections  needed  to  be made  in  order to make the summary
                completely accurate '   No  further explanation of  those
                corrections  was given.  (R   158, Affidavit of  Richard D
                Hackley, p   3).  Ultimately, plaintiff's  claim for costs,  set
                forth in this affidavit, was as follows:
                          ,EPA payroll  —
                               Headquarters
                               Regional
                          Indirect cost - Regional
                          EPA travel ~
                               Headquarters
                               Regional
                          TAT contract —
                               Weston  (68-95-6669)
                          OSC let contract —
                               Petrochem  (68-95-0064)
                          GCA contract — (68-01-6769)
                          Misc. expense --
                               Weston
                                              966.81
                                           21,274.88
                                           52,978 50
                                                0.00
                                            5,974.70
                                           11,641.08

                                          140,419.00
                                              993.00
                                                            A
                                               90.00
This affidavit also  now calculated prejudgment interest in the
amount of $60,621.99.  (R 158,  Affidavit of Richard Hackley,
Cumulative Cost Summary).   Thus,  plaintiff's total claim was
for $234,337 97 (alleged EPA costs),  $60,621.99 (prejudgment
interest), and $35,473  28  (alleged Department of Justice
                                  (
costs).
                               15
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    MAOOHtt
 •CMMOfOOf
WMMAICMPOI
AtTOttNCVSATUW
                             d.    Defendant's  response  and  submission of
                             Meyer opposed  the motion, and submitted numerous
              attachments to its brief.  These were documents obtained from
              plaintiff which were inconsistent with the statements set  forth
              in plaintiff's affidavits supporting its motion.  Those
              attachments are set forth in  their entirety in the Joint
              Appendix submitted with this  Brief.
                        Meyer took the position that there were numerous
              issues of fact precluding summary judgment on the question of
              costs.  Meyer also took the position that indirect costs,  not
              directly attributable to the  Northernaire site, and prejudgment
              interest, are not recoverable under CERCLA as a matter of  law.
                                                                       *
              Meyer also claimed that plaintiff's failure to abide by
              requirements for competitive  bidding precluded its claim,  and
              that plaintiff's claimed costs were inconsistent with the
              National Contingency Plan
                             e.
                    The  decision of  the District Court.
               The District  Court  held in favor of Plaintiff,
and granted summary  judgment awarding the costs requested,
the exception of the  claimed $993.00  cost of a title search
The court held that  no material  questions of fact existed that
would preclude summary  judgment, and  that indirect costs and
pre;judgment interest  were  recoverable under CERCLA and in this
case.
                               16
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 SMTM MAUOMtt
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                                          ARGUMENT
                                             I.
                        THE EPA WAS NOT ENTITLED, AS A MATTER OF
                        LAW, TO RECOVER  'INDIRECT COSTS" AS PART OF
                        ITS RECOVERY OF COST FOR COMPLETING-
                        IMMEDIATE REMOVAL UNDER CERCLA.
           Plaintiff has  been awarded what  it  termed  "EPA
 indirect  costs  "   As defined by the affidavit of  Richard
 Hackiey,  these  are costs necessary to operate the Superfund
 program "...but which cannot be attributed directly  to  specific
 sites."   As  explained by the Cooke affidavit,  these  indirect
 costs,  generally,  are EPA overhead expenses,  including, among
 other things, rent and payroll  expense not related to the
 specific  site.  It is Meyer's position that recovery of these
 indirect  costs  is  not authorized by CERCLA, either pursuant to
 the statutory language or by any caselaw interpreting that
 language.
          The statute does provide,  without question, for the
 recovery  of  any direct costs of removal, but  the  term
 'removal,1 as defined in 42  U.S.C.  9601(23),  refers
 specifically to actions  taken at a specific site.  It does not
 refer to  any costs  indirectly incurred to  operate the Superfund
 program in general
          Plaintiff  has  argued  that the statute requires
 interpretation  that  will  permit the recovery  of indirect  costs
The starting point  for statutory interpretation,  however,
 should be the statute itself    where,  as here, the language  is
                                17
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   SMITH
JOB Outfit PVAi* lUUMO
 clear and unambiguous and there is no clearly expressed
 legislative intention to the contrary,  there is  neither  need
 nor cause to look elsewhere   In CERCLA,  as  amended by the
 Superfund Amendments & Reauthorizaton Act of 1986  ("SARA ),
 Congress  provided lengthy and detailed definitions of  the
 statutory terms  it used.   Those terms,  as defined  and  used7- are
 plain,  unequivocal and unambiguous.   The  enactment speaks for
 itself, and the  language must therefore be regarded as
 conclusive.   See,  National Freight.  Inc  v Lar,son. 760 F 2d 499
 (3rd  Cir.  1985);  Cia  Petrolera Caribe. Inc   v Arco Carribbean.
 Inc.. 754  F 2d 404 (1st  Cir  1985);  United  States v Lamp.  606
 F.Supp. 193 (W D   Tex  1985);  and Kansas  Gas & Electric  Co  v
 Brock.  780  F 2d  1505 (10th Cir.  1985).
                                                     i     •
           42 U S.C.  Section 9607(a)  unambiguously  imposes
 liability  for "all costs  of [the]  removal action incurred by
 the United  States...not inconsistent  with] the national
 contingency plan.'  Section 9601(25)  defines 'respond  or
 response"  to mean a removal action,  and  "removal  action'
 includes enforcement activities  related to the removal action
 Section 9601(23)  then defines,  in extended detail, the terms
 remove" and "removal action "   In that section, the terms
 expressly relate  to  cleanup and removal activities taken at the
 hazardous waste sites
          The definition  of removal  action includes actions
 taken under  Section  9604(b),  that is,  action to  investigate,
monitor, survey or test a site  to identify the existence,

                               18
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SMTTM MUOMIt
ACC4MCOM
extent and  source 'of  a  release, and planning necessary to plan
and direct  a  response to the  release and recover the costs o
that response action.   This reference is not to ongo-ing EPA
indirect costs of the.Superfund program which are totally
unrelated and unattributable  to a given site removal action.
See, 1980 U S. Code Cong. & Admin. News, p. 3296 (House
Conference  Rpt. No. 99-962],  where instead of a House amendment
of Section  9607{a) to clarify that all costs incurred by the
United States under Section 9604(b) are recoverable costs, the
conference  substitute deleted that reference to Section 9604(b)
costs "since  such costs are defined as costs of response in
current law '
          The statute,  as amended, clearly says what it says
and means nothing else  — The costs of a removal action and
enforcement activities  related to that action are recoverabl
Indirect costs of operating the Superfund program generally,
not related nor attributable  to a given site removal action,
fall outside  the express language of the statute and are,
therefore,  not recoverable.
          An exhaustive search of the legislative history of
SARA,  1980  U.S. Code  Cong. &  Adm. News, p  2838, supports this
reading and conclusion   All  relevant comments emphasize that
the costs recoverable are the costs of site cleanups and the
costs of enforcement  activities related to those cleanups
There is nothing in the oluminous legislative history  to
support the plaintiff's assertion that indirect costs of

                               19
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SMRHMAUOHR
•cftnocooi
              operating the Superfund program in general,  unrelated  to a

              given site removal  action,  are  recoverable under CERCLA

                        Plaintiff argued  in the  lower  court  that 'EPA's

              interpretation of the  statute should  be  given  great weight.
                                                        T
              That  is  not true here.   As  aptly stated  in National Freight.

              Inc..  supra,  at 505:
                        It  is  true  that  the  interpretation of the
                        agency charged with  the  implementation of a
                        statute is  generally accorded  substantial
                        deference....The question before  this
                        court,  however,  is a matter of pure
                        statutory construction.  In such  a case,
                        agency expertise is  not  controlling; the
                        question is  one  which the courts  are
                        relatively more  able to  answer....
                        (citations omitted).
                       No case  law  interpreting CERCLA has  authorized  *

             recovery of the  indirect costs  sought  by the plaintiff.   One

             District Court decision, as shall be discussed below,  has

             expressly rejected the government's claim for  indirect costs.

             Administrative costs related  to a removal action  are,  indeed,

             recoverable.  Those would  include payroll costs and  travel

             expenses of'the  EPA personnel directly involved with the

             Northernaire site  removal  action, and  those of the Justice

             Department attorneys involved in this  cost recovery  action

             Moreover, plaintiff would  be  correct to assert a  claim to

             recover related  administrative  costs,  as that  right  is

             recognized in reported cases    No reported case,  however, has

             recognized an EPA  right to recover  indirect   administrative or
                                            20
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SMTM MAUOMTt
MCMKMM
              other  costs  of  operating  the  Superfund  program generally, -hich
              are  unrelated to  a  given  site rsrrovai action
                        Plaintiff,  in the court below, placed reliance on
              United States v Northeastern  Pharmaceutical & ChemicalCo., 579
              F. Supp  823, 850-852  (W.D. Mo.  1984) (hereinafter cited as
              'NEPACCO").  There, the court found defendants liable for all
              costs  incurred  by plaintiff,  including  salaries and expenses,
              associated with activities such  as monitoring, assessing and
              evaluating the  release of contaminants  and the taking of
              actions to minimize relulting damage at "at the Denney Farm
              site.'  In so holding, the court was referring to nothing more
              nor  less  than direct, site specific response costs.  In
              support,  the court, in footnote  33, referred to United States v
              Slade.  447 F. Supp. 638 {E.D.  Tex. 1978).  There, in an action
              to recover costs  of oil spill cleanup under the Federal Watej
              Pollution  Control Act, the court construed  actual costs
              incurred," as used  in that statute, to  include salaries and
              expenses of the agency's employee's.  The salaries and expenses
              recoverable amounted to $583.54, being  "accumulated personnel
              and material costs" attributable to the two Coast Guard
              investigators who personally  investigated the oil spill and
              obtained oil samples  from the river and defendants' barges to
              send to the EPA  Those were  clearly direct, related
              administrative  costs of responding to the oil spill.  Thus,  the
              NEPACCO decision  does not lend support  to the proposition  that
                                            21
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   ACftftOCOOI
200 &
                administrative costs, unrelated to a specific response action,

                are recoverable

                          Plaintiff also relied, in the lower court,  upon

                United States v South-Carolina Recycling and Disposal. Inc..

                653 F.Supp. 9B4 (D.S.C. 1985) {hereinafter referred to as

                 SCRDI").  That court also did not, however, authorize recovery

                of indirect costs.  The administrative and other costs held

                recoverable by that court were those costs associated with the

                cleanup and the cost recovery litigation.  The Court made no

                finding that administrative costs, unrelated to the specific

                site removal action, were recoverable.

                          In United States v Ottati & Goss. 694 F. Supp. 977

                (D.N.H. 1988), the court specifically held that indirect costs
                                                                          *
                claimed by the government were not recoverable under CERCLA

                The court said,  simply:
                          $336,842 00 are indirect costs which
                          include expenses for rent, utilities,
                          supplies,  clearical staff and other
                          overhead expenses.   These costs necessary
                          to operate the Superfund program cannot be
                          attributed directly to the 0 & G/GLGC
                          sites,  and are therefore disallowed."
                                 & Goss. supra. 995
                          In NEPACCO.  supra.  850, the court summarized the

                response costs the government may recover:
With regard to the aovernment's response
costs incurred, these activities would
include-

(a)  Investigations, monitoring and  testing
     to identify the extent of danger to

                     22
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 SMTTH MAUOHCt
 ACIt ACCOM
ATTQNNITSATUWr
                             the public health or welfare or the
                             environment
                        (b)  Investigations, monitoring and testing
                             to identify the extent of the release
                             or threatened release of hazardous
                             substances.
                        (c)  Planning and implementation of a
                             response action.
                        (d)  Recovery of the costs associated with
                             the above actions, and to enforce the
                             provisions of CERCLA, including the
                             costs incurred for the staffs of the
                             CPA and the Department of Justice.
              See also, UnjL^ed States v Conservation Chemical Company. 619 F.
              Supp.  162, 186 (W.D. Mo  1985).
                        Plaintiff is attemting to recover all cost, including
              EPA overhead and all other imaginable costs, although it admits
              that they cannot be attributed directly to specific sites or,
              more particularly,  Lo this site.  At the same time, Richard  ^
              Hackley's acknowledges that regional CERCLA expenditures are*
              maintained under a  site-specific accounting system which allows
              the Agency to determine the specific Superfund site associated
              with each cost expenditure.  In other words, EPA knows what
              costs  can be directly attributed to the NorthernaiTe site, yet
              it  attempts to recover both those costs and an additional
              $53/000 of  indirect costs    Plaintiff is not authorized under
              CERCLA or any case  law interpreting CERCLA, to recover the
              indirect costs that are claimed   The District Court erred when
              it  misinterpreted the statute and awarded indirect costs
                                             23
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200 GALOOT PIAZA RADM
                                              II

                          IF THE EPA MAY RECOVER  INDIRECT COSTS ,
                          THERE WERE MATERIAL ISSUES OF FACT WITH
                          REGARD TO THOSE CLAIMED COSTS THAT SHOULD
                          HAVE PRECLUDED SUMMARY JUDGMENT.

                          A.   The appropriate standard for reviewing the
                               plaintiff's Motion for Summary Judgment.
                          Plaintiff's motion was brought pursuant to FRCP

                56(c), which provides that judgment can be entered only  if the

                pleadings, depositions, answers to interrogatories, admissions

                on file,  together with the affidavits, if any, show that there

                is no genuine issue as to any material fact and that the moving

                party is  entitled to a judgment as a matter of law.'  It is

                well-established that the summary judgment standard is a

                stringent one.   See United States v Chem-dvne Corp  . 572 '

                F Supp  802,  810 (S D  Oh ,  W D  1983)   As the court there

                stated:
                          'In deciding a Motion for Summary Judgment,
                          the Court must construe evidence in a light
                          least favorable to the movant and most
                          favorable to the opposing party.".... The
                          Court must exercise extreme caution in
                          disposing of complex cases on a Motion for
                          Summary Judgment..   (citations omitted).
                          Moreover,   When a summary judgment motion is made,

                all  reasonable doubts must be resolved in favor of the party
                                                 '  ,
                opposing the motion and the motion must be denied if there are

                any  unresolved factual issues   impossible Electronics. Inc  ^

                Wackenhut Protective Systems. Inc  . 669 F 2d 1026, 1031 (5th
                                               24
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 Cir.  1982)  "  Hill  v  Linahan.  697 F  2d  1032,  1035 fi  4  '11
 Cir   1983)    Summary judgment  is an extreme  remeay that shoj
 not be  granted unless  the moving party has established the
 right to  judgment  with such clarity as to leave no room for
 doubt.  Mandel v United States.' 719 F.2d 963 (8th Cir. 1983); '
 Jones v Nelson. 484  F.2d 1165, 1168 (10th Cir. 1973).
          with regard  to the standard  for reviewing the motion,
 the lower court made much of the fact  that defendants offered
 no opposing affidavits.  The court must remain cognizant of the
 following, however  The burden rests with the moving party to
 demonstrate that there is no genuine issue of material  fact
 Wright  & Miller, Federal Practice and  Procedure; Civil Sec.
 2727.   Thus,  the opposing party is  entitled  to all the
 favorable inferences that may  be drawn from  the papers before
 the court, and the papers of the moving party are to be
 scrutinized carefully.  Since  the purpose of the motion is
determine whether  a  factual issue exists, affidavits may not be
used  to resolve disputed factual issues.  They may be used only
to determine whether any issues actually are in dispute  Wright
& Miller, supra. Sec.  2738.
          Most importantly, even if the party opposing  the
motion  does not submit counter-evidence, summary judgment may
be entered under the rule only 'if  appropriate    In discussmy
the 1963 amendment to  Rule 56, the  Advisory  Committee stated  in
 its note:
                               25
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 SMfTX HAUOHCt
 ftCttMtOOl -
 IJMIIIILIUMBI

ATTOANfVSATUUW
                         where  the  evidentiary natter  i*  surr^rt cf
                         tne metier, aoes  not  esiatlisn  tre  a^ssnce
                         of a genuine  issue,  summary judgment must
                         be denied  even if  no opposing  evidentiary
                         matter is  presented." Wright & Miller,
                         suora.  Sec. 2739.
              Summary  judgment may be  inappropriate where the unopposed

              affidavit does not present sufficient information to  justify

              rendering judgment in a  complicated  factual situation, or where

              disputed questions of fact turn exclusively on the credibility

              of the movant's witnesses.  Wright & Miller, supra. Sec  2739.

              In short, the court is not required  to grant the motion  if the

              moving party's affidavits are unopposed.  The test is whether,

              after examining the papers, the court can find that the  moving

              party has carried his burden of proving the absence of a
                                                                        *

              factual dispute   If the affidavits, though unopposed, leave

              factual questions open,  the motion must be denied.
                        B    There were material questions of  fact on the
                             issue of  "indirect costs.' and summary  ludgment
                             was inappropriate.
          Plaintiff's  affidavits  offered to support his

computation of  indirect  costs  present inherent material issues

of fact requiring  resolution at trial.   Therefore,  plaintiff's

proofs of the claimed  indirect costs  were inappropriate for the

granting of summary  judgment   Moreover, they present

significant questions  regarding the manner in which they were

determined.  As Meyer  pointed  out in  his brief to the District

Court (R. 133,  Defendant R  W   Meyer,  Inc 's Brief in Opposition


                               26
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   SMTHMMJQMfX
  ATTOKNCWATUM*
JW CALMft »LAZA BUtOMQ
   QAANDMPOS
                to Plaintiff's Motion for Sunrary Judgment en Costs, p
                Justice Department Attorney, Robert Oakley, submitted a
                to the defendants on July 7, 1987, claiming indirect costs of
                $88,301.00   However,, when Mr. Hackley submitted his
                declaration, the amount was reduced to $53,397.00, because the
                EPA "altered its procedures'.  In short, the mere altering of
                procedures resulting in a change of $35,000.00 demonstrates
                serious questions as to the accuracy and reliability of the
                EPA's accounting methods.
                          Plaintiff has attempted to prove facts and figures
                which necessarily have underlying assumptions involving complex
                accounting methods, and questionable accounting practices for
                allocation of these indirect costs to this particular site.
                All of the information going to these questions rests with the
                plaintiff and its witnesses, and their allegations deserve
                careful scrutiny and cross examination in the presence of the"
                finder of fact.  Meyer could do no more than question the
                accuracy and accounting theories which must necessarily
                underlie the plaintiff's affidavits, but Meyer should be
                entitled to conduct that examination at trial.  The substantial
                questions of fact arising out of the affidavit allegations are
                apparent on their face,  and the District Court should not have
                found that these affidavits carried plaintiff's burden of
                proving absence of a factual dispute to justify summary
                judgment.
27
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SMTTM HAUONfY
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                                           III.
                        SUMMARY JUDGMENT SHOULD NOT HAVE BEEN
                        GRANTED AWARDING PREJUDGMENT INTEREST.
                        A.    The amended act  should not  have been applied
                             retroactively.
                        The  District  Court  granted,  on plaintiff's  summary
              judgment  motion,  an  award of  prejudgment interest  on  the  costs
              allegedly incurred by the government.   As its  authority to  do
              so under  CERCLA,  the Court cited,  first, an amendment to  the
              Act-that  took  effect on October  17,  1986.  That was
              approximately  six months before  the  Court's decision, and well
              after the immediate  removal action in  this case and  the
              commencement of this law suit   The  District Court held,
              nevertheless,  found  that it was  bound  to apply the amendment  in
              this case
                        As the  District Court  properly noted, the  question  of
              a Federal statute's  retroactivity  has  been addressed by the
              Supreme Court  in  Bradley v Richmond  School Board.  416 US  696
              (1974).   There, the  Supreme Court  said that  .    A court  is
              to apply  the law  in  effect at the  time it renders  its decision,
              unless doing so would result  in  manifest injustice or there is
              statutory direction  or  legislative history to the  contrary
              Bradley,  supra. 711   The statutory  direction evident in  the
              Superfund Amendments and R«?authonzation Act of 1986 ( SARA },
                                            28
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   flCIiAOtOM
  UliCllllCPUPBI

  ATTQANfYSATUM

WCCALDW1
   GMANOf
 demonstrates  that congress did not intend for it to have

 retroactive effect

           Section four of SARA provides,   Except as otherwise"

 specified in  Section 121(b)  of this Act or in any other

 provision of  titles  I,  II, III,  and IV of this Act, the

 amendments made  by titles I,  II,  III,  and' IV of this Act shall

 take  effect on the enactment of  this Act.    (Emphasis added)

 At  the  beginning of  SARA,  Section one  states that "This Act may

 be  cited  as the  'Superfund Amendments  and Reauthonzation Act

 of  1986'    It is apparent that  when Section four of SARA talks

 about the effective  date,  and states that the amendments  shall

 take effect on the enactment of  this act,   it is talking about

 the enactment of  the Superfund Amendments and Reauthonzation

Act of  1986, not  about  the original Act,  CERCLA.  SARA was not

enacted until October 17,  1986,  when it was signed inuu law
                                                            I
President  Reagan.  Accordingly,  the effective date of SARA i!

October 17, 1986   It appears that congress did not intend

retroactive application of the amendatory act

           Further, the  question  of whether retroactive

application would create  a manifest injustice in this case

presents  a  question  of  fact    As  the Bradley court pointed out,

the new law will  not  be applied  to the past, if that would

result in  a manifest  injustice   Where plaintiff seeks interest

on a substantial  amount of money from  a time approximately two

years prior to the enactment of  the new statute, addition of

that cost  to plaintiff's  claimed recovery is a significant


                               29
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SMTM
MCttMIQM
              expansion of defendant's potential liability.   Meyer  should

              have the opportunity to show that manifest  injustice  would

              result,, under the circumstances in this  case,  if  the  new

              statute were applied retroactively to expand that potential
                                                                          .«••"
              liability.   Therefore, -the District Court erred when  it held

              the amendatory act to have application in this  case.


                        B    Plaintiff's claim for preiudcment  interest
                             presented material issues of  f^aet.


                       Where the amendatory act regarding prejudgment

              interest did not apply,  there were material  issues of fact

              regarding the availability of prejudgment interest in this case

              that  should have precluded summary 3udgment.  in  United States

              v SCRDI.  supra,  the Court denied the government's claim for

              prejudgment interest saying:

                         The parties  agree  that CERCLA does  not
                       specifically  address the issue of
                       prejudgment interest.   In the  absence of
                       express  statutory provision, the question
                       must be  resolved by the Courts.  This Court
                       recognizes that some CERCLA actions  may
                       present  circumstances in which an  award of
                       prejudgment interest is appropriate.  See
                       NEPACCQ.  579  F SUP  at 252.   In this  case,
                       however,  there is no indication that the
                       defendants have been recalcitrant,
                       deceptive or  unreasonable.   Moreover,
                       defendants have not sought to  delay  either
                       the clean up  activities or the progress of
                       this  case.  Under such circumstances, this
                       Court  declines to award pre}udgment
                       interest.   id  at  1009

                       Defendant submits that the same reasoning is

             applicable  to this  case    Meyer has not  been  recalcitrant,
                                            30
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   SMfTM tUUOHCt
   •tCftnofOQl
200 CMMN »tA2A lUfcOMO
                deceptive  or  unreasonable',  nor has it sought to delay either
                the clean  up  or  the  progress of this litigation.  To the exflfct
                that plaintiff claims  that  it is entitled to pre^udgment
                interest,  these  matters are questions of fact that must be
                resolved before  the  Court should have awarded prejudgment
                interest on summary  judgment   Accordingly, summary judgment
                awarding prejudgment interest was inappropriate for this reason
                also.
                                                31
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SMTNHAUONlt
KCttAOtttM
                                            IV.
                        THERE WERE MATERIAL QUESTIONS  OF  FACT  WITH
                        REGARD TO THE EPA'S OTHER CLAIMED COSTS  FOR
                        COMPLETING IMMEDIATE REMOVAL WHICH SHOULD'
                        HAVE PRECLUDED SUMMARY JUDGMENT.
           There were material  questions  of  fact  before  the
 Court on plaintiff's claimed costs,  apart from the  indirect
 costs,  that  should  have  precluded  summary judgment.  First,
 Meyer contested the validity of  the  entire  contract with Petro
 Chem  as shall  be discussed  below,  because it was not submitted
 for competitive bidding.  The  amount of  the Petro Chem
 contract,  approximately  $140,000.00,  should have been in
 dispute.
           Clearly,  the government  is obligated to let such
 contracts  through a competitive  bidding  process, but it may  be
 excused from that obligation where there is sufficient
 emergency  so that time would not allow the  bidding  process    If
 there was  not  a sufficient  emergency, then  the Petro Chem
 contract was invalid in  this case.   Without question, the
 existence  of an emergency in this  case,  contrary to the
 District Court's  opinion, was  a  significant question of fact
 Plaintiff's initial  affidavits requesting recovery  of the Petro
Chem contract  cost,  did  not explain  any  excuse from the
 competitive bidding process    Meyer  filed its reply to  the
motion  and affidavits, submitting  the prior government
documents  relating  to the Northernaire site which had concluded
that no emergency existed   (R.  143,  Defendant R.w. Meyer,

                               32
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  SMTHMMlQMfY
JOS OttflW »LAZ» tULOMQ
 Inc's  Brief  in  Opposition to Plaintiff's  Motion  for  Summary
 Judgment  on  Costs,  Attachments  1,  2,  3, 4,  5)
           Plaintiff replied  with more affidavits.  Now,  the
 government's affidavits  were offered  to show that an emergency
 did  exist, and  that steps had to be taken immediately so  that
 the  time  required  for  competitive  bidding was  inappropriate.
 As noted  above  in  the  discussion of appropriate  standards  for
 reviewing motions  for  summary judgment, the Court should  not
 have accepted the  additional affidavit as proof  that no
 material  question  of fact existed,  where a question does
 exist, that  is  not  to  be resolved  by  affidavits   Rather,
 summary judgment is appropriate only  if the moving party's
 affidavit  has carried  the burden of proving that no  question
 does exist.   The papers  before the Court  in this case showed
 that a serious  question  existed about the government's clair
                                                            !
 that there was  sufficient emergency to avoid the competitive"
 bid process
          Meyer's brief  to the District Court  demonstrates
 numerous additional fact questions with supporting documentary
 attachments   (R. 143,  Defendant R.W.  Meyer, Inc  's Brief  in
 Opposition to Plaintiff's Motion for  Summary Judgment on Costs,
 pp. 8-15).   Moreover,  where  those  questions existed, they
 should not have been resolved by affidavit   Rather,
 plaintiff's  affidavits did not carry  its  burden  of proving
 absence of factual  questions  The relevant portions of  Meyer's
brief to the District  Court  are reproduced  in  the  joint

                               33
-------
   SMTTM KAUOHft
   •Cf AMMO!
  ATTOMCVSATUUW
2QOCALD&1A2AMA
                 appendix to  this  brief,  and are illustrative  of  the numerous
                 factual issues  that are  inherent in plaintiff's  attempt to
                 demonstrate  lack  of fact questions where  factual iss-ues do
                 exist.  Thus, the District Court should have  denied summary
                 judgment on  each  of these claimed costs.
34
-------
   SMTTM HAUQMCY
JOC CAtDW PUO* •UUMO
   QIUNOMPO8
                                               V.
                          THERE WERE MATERIAL ISSUES OF FACT WITH
                          REGARD TO WHETHER THE EPA'S ACTIONS HAVE
                          BEEN CONSISTENT WITH THE NATIONAL
                          CONTINGENCY PLAN UNDER CERCLA, WHICH SHOULD
                          HAVE PRECLUDED SUMMARY JUDGMENT
                          The District Court held that plaintiff would be
                awarded its claimed costs to the extent that they were not
                inconsistent with the National Contingency Plan   (  NCP )
                Plaintiff does not contest this legal requirement for recovery
                of costs.  Rather, plaintiff contended that there was no
                material dispute about whether its alleged costs had been
                consistent with the NCP
                          The NCP states that:
                          'The appropriate extent of the remedy shall
                          be determined by the lead agency's
                          selection uf a cost-effective remedial
                          alternative that effectively mitigates and
                          minimizes threats to and provides adequate
                          protection of public health and welfare and
                          the environment  '  40 CFR 300 689(i)(l).  ,
                          (Emphasis added)
          Meyer's brief and exhibits  to  the  District Court
demonstrated the existence of  factual questions  regarding the
cost-effectiveness of plaintiff's  immediate  removal action
Where the manner in which the  immediate  removal  action  and  this
subsequent litigation were conducted  was not cost  effective,
they were not consistent with  the  NCP   Some of  the
government's claimed costs were  so extraordinary and
inexplicable as to rise to the level  of   arbitrary and

                               35
-------
KAUOMtt
capricious."  The most telling example was its award of the
contract  to Petro Chem without competitive bidding, which has
now resulted in a claim of $140,000.00 for the Petr6 Chem
contract.  It was not-cost-effective to forego competitive-  ->
bidding when the status of the site was known to the EPA for
over a year.  Clearly, bids could have been obtained, but the
EPA simply chose, instead, to take no action until July 1983.
Then it suddenly decided to classify the site as an emergency
which would not allow the competitive bid process   The papers
before the District Court at the time of the motion for summary
judgment demonstrated, unequivocally, this change in approach
that was taken by the government.
          If, indeed, it was Meyer's burden to prove
inconsistency with the NCP, and to demonstrate existence of a
genuine issue of fact in that regard, it did so.  Further, the
government's apparent change in position regarding the
emergency or non-emergency status of this site, raises a
genuine issue of fact as to whether the government's action was
arbitrary and capricious.  Beyond that, as Meyer's brief to the
District Court pointed out, simple examination of the Petro
Chem invoices demonstrated serious questions about cost-
effectiveness.  It was noted that Petro Chem spent a total of
only 25 working days at the site, yet it billed the EPA a total
of 588,873 99 just for its personnel and equipment costs   That
averaged $3,554 96 per day   The magnitude of that charge
creates a question of cost-effectiveness that should have been

                               36
-------
200 CAlDCM *UU* BCNLOMO
                subject to greater scrutiny    (R. 143, Defendant R W. Meyer,

                Inc's Brief in Opposition to Plaintiff's Motion for Summary^

                Judgment on Costs, pp. 8-10).

                          Meyer raised other questions regarding the cost-

                effectiveness and, thus, consistency with the NCP, with regard

                to plaintiff's other claimed costs.  Those are sufficiently

                detailed in Meyer's brief to the District Court, reproduced in

                the Joint Appendix.  (R. 143, Defendant R.w. Meyer, Inc's Brief

                in Opposition to Plaintiff's Motion for Summary Judgment on
                                          X
                Costs,  pp.  10-13}   In summary, Meyer raised sufficient facts

                to demonstrate significant questions about the cost-

                effectiveness of plaintiff's handling of the immediate removal

                action  and  this litigation   Therefore, the District Court

                should  not  have granted summary judgment in which it found

                there to be no question regarding whether the EPA's actions
                                                                           1
                were consistent with the NCP.  Summary judgment should have

                been denied.
                                               37
-------
                           CONCLUSION

           The District  Court  should  not  have granted summary

 judgment  on  plaintiff's claimed costs  in this case.. The

 indirect  costs claimed  by  the plaintiff, in the amount of

 $53,978.50,  were  not  related  to the  immediate removal action at

 the  Northernaire  site   Thus, they are not recoverable as a

 matter of law under CERCLA.   Further, even if the statute were
       X
 interpreted  to allow  their recovery, there were significant

 issues of fact regarding their accuracy, the accounting methods

 employed  by  the agency,  and,  moreover, whether the affidavits

 offered by plaintiff  were  sufficiently credible to permit

 summary judgment.  In short,  plaintiff's affidavits did not

 carry its burden  of demonstrating the absence of material.

 questions of  fact   Rather, questions regarding the

 government's  complex  and questionable accounting practices

 should have been  subject to strict scrutiny in the presence of

 the fact  finder and were totally inappropriate for resolution

by affidavit.

          It  was  also inappropriate  for  the District Court to

grant summary judgment  awarding prejudgment interest to the

plaintiff.  The amendatory statute,  SARA, permitting recovery

of prejudgment  interest  should not have  been applied

retroactively to  this case    Even it were possible to apply the

statute retroactively,  that would depend upon resolution of a

factual question; whether  retroactive application would create

injustice to  the defendant.   Where the statute does not apply,


                               38
-------
  SMTT* HAUQMfX
200 CAtDtM »LA2A KNkOMO
                there were factual issues that should have been resol'-ed before
                the District Court could grant prejudgment interest by s
                judgment.
                          There were- numerous factual questions with regard to
                plaintiff's other claimed costs.  First and foremost, was the
                question of cost-effectiveness and whether the EPA's actions
                were consistent with the National Contingency Plan   These
                questions were totally inappropriate for resolution by
                affidavit as they involved the credibility of the affiants,
                inherent opinions of the affiants regarding choice of
                responses, and plaintiff's obvious change in position regarding
                the alleged emergency nature of the Northernaire site   Thus,
                the District Court should have found that significant issues of
                fact existed regarding all of plaintiff's claimed costs, and
                whether those costs were inconsistent with the NCP   Moreovg^'
                the District Court should have denied summary judgment at this
                stage of the proceedings, and this Court should reverse the
                summary judgment that was entered.
DATED:
                           |
1989     StJlfH, H&UGHEY, RICE & ROEGGE
          f
                               By:
                                                                             fl
                                                   Jon D. Vander  Ploeg^P24~2? >
                                                   Attorney  for Defendant-
                                                   Appellant, R.W  Meyer,
                                                   Inc                      '
                                              BUSINESS ADDRESS:
                                                   200 Calder Plaza Building
                                                   Grand Rapids,  MI  49503
                                                   (616) 774-8000
                                               39
-------
UNITED STATES OF AMERICA,

        Plaintiff-Appellee,

-vs-

NORTHERNAIRE PLATING COMPANY;
WILLARD S.  GARWOOD,

        Defendants;

R.W. MEYER, INC.,
                  APPELLOIT'S/APPEllEE'S DESIGNATION
                        OF APPENDIX CONTENTS
                  b Sank Grtvt Rok ll(b).
        • MM to to acfaiM i»
tht roBavuf fflap «ife
oesciupTioN or ENTRY
Sep a^j-gghed sheet






DAT!







RECOR0
ENTRY VO




-


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DESCRIPTION Or



'






DATE










TRANSCRIPT PAGES



.

4
1
i



NOtt



9CA.IOI
7
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 SESCRIPTIOIf Of  ENTRY               DATE           RECORD EHTRY KQ
 District Court  Docket  Entries       NA             NA
 Plaintiff's Complaint               9-25-84        l
 Answer to Complaint         .        11-13-84       5
 Meyer's Answers to Plaintiff's
 Request for Admissions             6-25-85        12
 Northernaire and Garwood's
 Answer to Request for  Admissions    3-12-86        28
 Affidavit of Robert  Bowden          6-03-86        4?
 Opinion                            4-30-87        104
                                                  x
 Order                               4-30-87        105
 Motion by plaintiff  for Summary
 Judgment  on  Costs with
 attachments                         9-01-87        126
 Brief  of  Defendant,  Meyer in
 Opposition to Plaintiff's Motion
 for Summary  Judgment on Costs
 with attachments                    9-24-87        143
 Memorandum by plaintiff             10-16-87       158
 Second Affidavit of  Robert
 Bowden                             10-26-87       166
 Reply  by  Defendant Meyer            3-02-88        172
 Letter by Attorney Kruis
 without attached memorandum
 opinion                             4-04-88        174
 Opinion                             5-06-88        177
 Order                               5-06-88        178
 Stipulation                         7-14-88        181
 Opinion                             8-08-88        185
 Order                               8-08-88        186
Order                               9-02-88        187
Notice of Appeal                    9-30-88        188
-------
-------
-------
-------
                   If.'  lili UKITfD  VIA I Li; COUIU1 O! APl'LAU>
                           FOR TIfi: M\TH CIRCUIT
                         UNITED  STATES,OF AMERICA,
                                    v.
                                         Plaintiff-Appellee": ",. ;
-  JOSEPH FREEDMAM
    Office of-
                     Counsel-
  Lnited State?  Environmental Prptjection
          QT.  D,C.  20460- "
S7NDRA CONNORS
  Office of ^Cor.Pljance and Enforcerent Monitoring
  United States  E-'ironnent?! Protection Agency
  Washington, D  C   20^60
    C£-7 GPIMES
    Office cf Regional
    bnit?d stato^ ^-/^ron
                               Protection Agency
  c*ic?go. Illinois  00004
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                            INDEX

                                                       Page

 Opinions and orders below ———-—.——.	——  i
 Jurisdiction —	———	—	——  i
 Issues presented -———	——————  2
 Statement —————————»-..-  3
   A.  Statutory Background: 'The 'Comprehensive
       Environmental Response,  Compensation,
       and Liability Act	  3
   B.  The facts of this case —————  9
   C.  District court proceedings ——————  n
   D.  The district court opinions ———————  13
 Argument:
   I  Introduction:  Standard of review and scope
      of issues on appeal ———————..  ig
     A.  The standard of review —————  is
     B.  The scope of issues in this appeal ———  19
  II  Indirect costs are response costs, and
      CERCLA plainly authorizes the United
      States to collect them from liable
      parties	—	—-—  22
     A.  Introduction ——————————  22
     B.  Indirect costs are a component of the
         total cost of the response action -———-  24
     C.  CERCLA makes responsible parties liable
         for 'all costs of removal or remedial
         action* and this includes the indirect
         costs of removal or remedial action -———  30
- III  EPA's indirect response costs are not an
      unconstitutional tax	—————	—.—-  37
  IV  EPA's system of calculating its indirect
      costs is not a "rule* which must be issued
      in accordance with APA rulemaking require-
      ments ——------———————__ 41
   V  The district court properly awarded pre^udg-
      ment interest ——	——————	44
  IV  Meyer raised no genuine issues of material
      fact to preclude the grant of summary
      judgment -—	——	46
 VII  The district court did not err in holding
      Meyer jointly and severally liable ———	 48
 Conclusion —	——	————————	51
 certificate of service ——	——————— 52

                         CITATIONS

 gases;

 Bell v.  Wolfish.  441 U.S. 520	21
 Boone Coal qntit Tim^>er Co. v. Polan. 787 P«2d 1056 — 21
 Bradley  v.  Richmond School Bo^rdT 416 U.S. 696 —— 45
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                              - li  -
                                                       Page

Continued;

prock y. CathedralBluffs Shale Oil Cof. 796
  F.2d  533	43
grown v. Marshall. 704 F.2d 333, cert, denied,
  464 U.S. 835	•	7	21
Bryant  v. Commonwealth of Kentucky. 490 F.2d 1273 	 19,47
Celotex Corp. y. Catrett. 477 U.S. 317 ————.—.- 18,19
Central & Southern Motor Freight Tariff Association
  V. U.S.. 777 F.2d 722	41
Chemical Waste Management Corp. v. Armstrong. 669
  F. Supp. 1285 —	  9
ghrysler Corp. v. Brown. 441 U.S. 281 ———————— 44
             Co. v.
  805 F.2d 1074	—	
Federal Power Common v. New England Power. 415
  U.S. 345	
general Engineering v. Virgin Islands Water & Power.
  805 F.2d 88 	
Hand v. Central Transport, Incf. 779 F.2d 8 ~——•
golden v. Owens-13, lino is. I n
-------
                             - iii -
                                                       Page
Continued;
State of New York v. Shore Realty Corpt.  759
  F.2d 1032 —	r	—  8
State of Ohio De.pt. of Human Services v.  U.S.  Dept.
  pea 1th and Human Services.  862 F.2d 1228 ——-——— 44
Telecommunications Research and Action v. FCC. 800
  F.2d 1181	—	43
United Parcel Service. Inc. v. Mitchell.  451 U.S.'
  56	21
United States v. Conservation Chemical Co_.. 619
  F. Supp. 162	—	—•— 33,49
United States v. Chem-Dvne Corp.. 572 F.  Supp.
  802	  8,49
United States v. Dickerson. 640 F. Supp.  448 —— 49
United States v. Hollywood Marine. Inc..  519 F.
  Supp. 688 ———-—-—-——————————— 34
United States v. Malitovskv Cooperage Co.. 472 F.
  Supp. 454 ——	—	—	~—	— 34
United States v. Monsanto Co.. 858 F.2d 160,
  cert, petition pending, S. Ct. No. 88-1401 ———  passim
United States v. Northeastern Pharmaceutical &
  Chemical Co. f*NEPACCO*l. 810 F.2d 726, cert.
  denied, 108 S.Ct. 146	———	—	———  passim
United States v. Otatti t Coss. 694 F. Supp. 977 —— 33,49
United States v. Reilly Tar & Chemical Corp.. 546
  F. Supp. 1100 —-——~——	—	—	—  4
United States v.Sla.de. 447 F. Supp. 638 ————— 34
United States v. South Carolina Recycling and Dis-
  posal. Inc.. 653 F. Supp. 9B4, aff'd in part,
  vacated in part, and remanded, »ub npm. United
  States v. Monsanto. 858 F.2d 160 —•	—— 15,33,46
Ur:t€d £t;-ss v. Ward. 618 F. S^pp. 8F4	47
Kails v. Waste Resource Corn. . 823 F.2d 977 —-——*   4,6

Statutes, Rules and Regulations;

Administrative Procedure Act  ("APA*)!
  5 U.S.C. 552 	   3,41
  5 U.S.C. 553(a) 	 44
  5 U.S.C. 553(b) 	 42,44
Clean Water Act:
  Section 311, 33 U.S.C. 1311	   6
Comprehensive Environmental Response, Compensation,
  and Liability Act (*CERCLA»):
  Section 101(9), 42 U.S.C. 9601(9) 	 14
  Section 101(23), 42 U.S.C. 9601(23)  	   5
  Section 101(24)	   5
  Section 101(25), 42 U.S.C. 9601(25)  	   5,6,27
  Section 101(32), 42 U.S.C. 9601(32)  	   8
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                              - IV  -
                                                       Page
Continued;
  Section 104, 42 U.S.C. 9604	  4,35
  42 U.S.C. 9604 (a)	*•	  4
  Section 104(b), 42 U.S.C. 9604(b) 	  4,5
  Section 105, 42 U.S.C. 9605	  6
  Section 106(b), 42 U.S.C. 9606(b) 	 46
  Section 107 	  6,18,36
  Section 107 (a), 42 U.S.C. 9607 (a) ————.-——  passim
  Section 107(a)(1) 	 14,15
  Section I07(a)(2) 	 14,15
  Section 107(a)(3) 	"- 14
  42 U.S.C. 9607(a)(A) 	  7,17
  42 U.S.C. 9607(a)(B) 	  7
  Section 107(b), 42 U.S.C. 9607(b) 	  7
  Section 107(b)(3) 	 14,35
  Section lll(a), 42 U.S.C. 9611(a) 	 34,35
  42 U.S.C. 9611(a)(l) 	 35
  Section 113(a), 42 U.S.C. 9613(a) 	 42
  Section 113(b), 42 U.S.C. 9613(b) 	  1
  Section 113(f), 42 U.S.C. 9613(f) 	  8,15
  26 U.S.C. 9507	  9,34
  26 U.S.C. 9507(a) 	  9
  26 U.S.C. 59A	  9
  26 U.S.C. 4611-4612 	  9
  26 U.S.C. 4661-4662 	  9
  26 U.S.C. 4671-4672 	  9
Federal Water Pollution Control Act:
  Section 311, 33 U.S.C. 1321	—  6,8
  33 U.S.C. 1321 (f) 	34
Independent Offices Appropriation  Act  (»IOAA"):
  31 U.S.C. 483a	37,38
  :i U.S C. S7C1	3~,
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Continued;
                                                       Page
40 C.F.R. 300 — — ——.——————————
40 C.F.R. 300.69 — — - — - — ——————.—„—_..
48 C.F.R. Chapter 1, Parts 1-99 ~ 	
48 C.F.R. 30 	
48 C.F.R. 30.101 	
48 C.F.R. 30.201 	
48 C.F.R. 30.418 	
48 C.F.R. 418.40 	
48 C.F.R. 418.50 	
48 C.F.R. 418.60 	
48 C.F.R. 31 	
48 C.F.R. 31.201-1 	 	 	 	 	 	 	
48 C.F.R. 31. 202 (a) 	 	 	 	 	
48 C.F.R. 31. 203 (a) 	 	 	
48 C.F.R. 31. 203 (b) 	
48 C.F.R. 205-1 	
48 C.F.R. 205-51 	
Fed. R. App. P. 4(a)(l) 	
Fed. R. Civ. P. 1 	


Fed. R. Civ. P. 56 (c) 	 	 	 	 	 -<
Fed. R. Civ. P. 56 (f) 	
50 Fed. Reg. 47,912 	
52 Fed. Reg. 2923 	
53 Fed. Reg. 40352 	
53 Fed. Reg. 40355 	
53 Fed. Reg. 51,393 	
Miscellaneous;
132 Cong. Rec. H9624 	 	 	
132 Cong. Rec. S14903 	 	
132 Cong. Rec. S14935 	
132 Cong. Rec. S17138 	
Executive Order No. 12580 	 — 	 	 	 — 	 — 	 -
H.R. Rep* Ho. 253, 99th Cong., 1st Seas., Part
1 at 74 — 	
H.R. 2817 	
H.R. Rep. No. 96-1016, Part 1, 96th Cong. 2d Sess.,
reprinted In 2 CERCL^ ^eqj.slatiye History
at 56 	
Horngreen £ Foster, Cost Accounting: A Managerial
Exphasis — — -— — 	 	 ———_——.—— — —
OMB Circular A-87 -———--—— — ———————
Section 5 of Pub. L. 100-679 (Nov. 17 1988) 	
6,16
16
28
28
• 29
• 29
. 29
• 29
• 29
• 29
- 28
» 28
• 29
• 29
- 29
- 29
- 29
• 2
- 19


- 18
- 16
- 6
- 4
- 30
- 30
- 6

- 37,46
- 36
- 37
- 50
- 4

- 50
- 50


- 4

- 28
- 30
- 29
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                                                       Page
Continued;
Restatement (Second) of Torts —————
S.TRep. No. 96-848, 96th Cong. 2d Sess.
  -reprinted in 1 Legislative flistory of
  the Comprehensive Environmental Response,
  Compensation, and Liability Act of 1980
-49
   4,8
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                  IN THE UNITED STATES COURT OF APPEALS
                          FOR THE SIXTH CIRCUIT
                              88-2074
                        UNITED STATES OF AMERICA,
                                             Plaintiff-Appellee
                                   v.
                                              I
                             R.W.  MEYER,  INC.
                                             De fendant-Appel1ant
             ON APPEAL FROM THE UNITED STATES DISTRICT COURT
                   FOR THE WESTERN DISTRICT  OF MICHIGAN
             BRIEF FOR THE UNITED STATES OF AMERICA,  APPELLEE
                        OPINIONS AND ORDERS BELOW
          The opinion and the order of the district court (the Honorable
Douglas w. Hillman) on liability were issued on April 30, 1987, and
appear in the Record as Items 104 and 105  (*R. 104 and 105*).  The
opinion is published at 670 F. Supp. 742  (W.D. Mich. 1987).  The opinion
aid the order cf the district court on costs were issued on May 6, 1988,
and appear in the Record as Items 177 and  178  (R. 177 and 178).  They are
published at 685 F. Supp. 1410  (W.D. Mich. 1988).  The opinion and the
order concerning the amount of prejudgment interest to be awarded were
issued on August 8, 1988, and appear in the Record as Items  185 and  186
(R. 185 and 186).  They are not published.
                               JURISDICTION
          District court jurisdiction was  based on Section  113(b)  of the
Comprehensive Environmental Response,' Compensation, and  Liability  Act
(*CERCLA»), 42 U.S.C. 9613(b)  (providing  for  exclusive original
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                                   - 2 -
 jurisdiction  in the federal district courts over ail controversies
 arising under CERCLA with certain exceptions not relevant here),  and 28
 U.S.C..1345 (providing federal district court jurisdiction over all civil
 actions commenced by the United States).
          This Court's jurisdiction rests on 28 U.S.C. 1291 (granting the
 federal appeals courts jurisdiction over all final judgments of the
 district courts).  On September 2, 1988, the district court entered an
 order, under  the authority of Fed. R. Civ. P. 54(b), finding that there
 vas no just reason for delay in entering a final judgment on the
 plaintiff's (the United States's) claims against the defendants
 (Northernaire Plating Co., Willard S. Garvood, and R.W. Meyer, Inc.), and
 entering final judgment for the United States on its claims.  R.W. Meyer,
 Inc.  ("Meyer*) filed a notice of appeal from this judgment on September
 30, 1988, within the 60-day time period prescribed by Fed. R. App. P.
 4(a)(l) and 28 U.S.C. 2107.
                            ISSUES PRESENTED1
          1.  Whether Section 107(a) of CERCLA, which authorizes  the
United States to recover from persons responsible for a  release  of
hazardous substances "all costs*'  (42 U.S.C. 9607(a))  of  responding to
such a release, authorizes the United States to recover,  in^er- alia,  the
Environmental Protection Agency's  (EPA's)  'indirect costs* of responding
to that releMM, that is, those EPA  'overhead* expenses  which supported
EPA's action* in responding to the release.
          2.  Whether the United  States'  recovery  from liable parties of
     1    The second and third  issues have been raised solely by the
aaicus curiae. and have been  raised for the first time on appeal.  As
described, aufira. at 21, these issues are not properly before this Court.
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                                   - 3 -
 £;/-.  &  *indirecv costs" of responding to hazardous substances releases
 imposes an unconstitutional tax.
          3.  Whether an internal EPA manual which describes in general
"terms  the methodology used by EPA to calculate its indirect costs of
 responding to a release is a "rule* which should have been promulgated
 under  the rulemaking requirements of the Administrative Procedure Act
 (»APA»), 5 U.S.C. 553.
          4.  Whether, in an action to recover the costs of responding to
 a release of hazardous substances from the parties responsible for the
 release under the authority of Section 107(a) of CERCLA, the United
 States may~recover prejudgment interest on the amount of the 'response
 costs.*
          5.  Whether there were genuine issues of material fact
 concerning the amount of the costs incurred by the United States  in
 responding to a release of hazardous substances which precluded the entj
 of summary judgment awarding such costs to the United States.
          6.  Whether the district court erred in ruling that R.C. Meyer,
 Inc.  ('Meyer'), is jointly and severally liable for the costs cf  the
United States' action in responding to the release of hazardous
substances on Meyer's property.
                                STATEMENT
          A.  statutory Background?  The Comprehensive  Environmental
Response. Coapanaation. and ^lability Acfr. — Congress  enacted  the
Comprehensive Environmental Response, Compensation, and Liability Act of
1980 CCERCLA*) in response to the serious environmental and  public
i
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                                   - 4 -
 health problems posed by the  improper disposal of hazardous substances.2
 In enacting  CERCLA,  Congress  intended both that "the federal government
 be immediately given the tools necessary for a prompt and effective
 response  to  the problems of -national magnitude resulting from hazardous
 waste  disposal,* and that 'those responsible for problems caused by the
 disposal  of  chemical poisons  bear the costs and responsibility for
 remedying the harmful conditions they created," Walls v. Waste Resource
 Corp..  823 F.2d 977, 980  (6th Cir. 1987), quoting from United States v.
 Reillv Tar & Chepieal Corp..  546 F. Supp. 1100, 1112  
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                                   - 5 -

Section 101(23) of CERCIA, 42 U.S.C. 9601(23}  (defining 'removal').5

•Remedial* actions, by contrast, refer to longer term,  permanent clean-

ups of sites.  See Section 101(24) of CERCIA,  42 U.S.C. 9601(24)

(defining 'remedial').  CERCIA uses the broad terms 'respond* and

'response* to include both removal and remedial actions.  See Section
     5    Section 101(23) of CERCIA defines 'removal' to mean:

          the cleanup or removal of released hazardous
          substances from the environment, such actions
          as may be necessary taken in the event of the
          threat of release of hazardous substances
          into the environment, such actions as may be
          necessary to monitor, assess, and evaluate the
          release or threat of release of hazardous
          substances, the disposal of removed material,
          or the taking of such other actions as may be
          necessary to prevent, minimize, or mitigate *
          damage to the public health or welfare or to
          the environment, which may otherwise result
          from a release or threat of release.  The term
          includes, in addition * * * action taken under
          Section 9604(bi of this title * * *.

Id. (emphasis added). The definition of removal therefore includes,
explicit reference, the kinds of actions specified in Section 104(b) of
CERCIA, 42 U.S.C. 9604(b).  That section provides, in pertinent part:

          Whenever the President is authorized to act
          pursuant to subsection (a) of this section,
          * * * he may undertake such investigations,
          monitoring, surveys, testing, and other
          information gathering as he may deem neces-
          sary or appropriate to identify the existence
          and extent of the release or threat thereof,
          the vource and nature of the hazardous sub-
          stances, pollutants or contaminants involved,
          and the extent of danger to the public health
          or welfare or to the environment.  In addition,
          the President may undertake such planning,
          legal, fiscal, economic, engineering, archi-
          tectural, and other studies or investigations
          as he may deem necessary or appropriate to
          plan and direct response actions, to recover
          the costs thereof, and to'enforce the provi-
          sions of this Act.
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                                   - 6 -
 101(25) of CERCLA, 42 U.S.C. 9601(25) (defining "response*).6   EPA's
 response actions are guided by the national contingency plan*  a
 regulation promulgated by EPA pursuant to Section 105 of CERCLA,  42
 U.S.C. 9605.  The national contingency plan prescribes methods for
 investigating, planning, and undertaking response actions.7
          In order that 'those responsible for problems caused by the
 disposal of chemical poisons bear the costs* of responding to "the
 harmful conditions they created" fWa,lls v. Waste Resource Corp..  823 F.2d
 at 980), Congress, in section 107(a) of CERCLA, identified the persons it
 deemed responsible for the release or threatened release of a hazardous
 substance and provided that these persons are liable for the costs of
 responding to the release or threatened release.  Section  107(a) of
 CERCLA lists four classes of persons who are responsible for cleaning up
 contaminated sites:  (l) the owners and operators of a  facility at which
 there is a release or threatened release of hazardous  substances; (2) the
 persons who owned or operated the facility at any time in  the  past when
 disposal of a hazardous substance occurred;  (3) the persons who  arranged
 for the treatment or disposal of hazardous substances  which were treated
 or disposed at the facility; and  (4) the persons who transported
     6    Section 101(25) of  CERCLA,  42  U.S.C.  9601(25),  provides:   "The
terms 'respond' or  'response' means remove,  removal,  remedy,  and remedial
action, all such terms  (including  the terms  'removal' and 'remedial
action') include enforcement  activities  related thereto."
     7    The national  contingency plan  is codified at 40 C.F.R. 300.   It
was originally promulgated under the  authority  of Section 311 of the
Clean Water Act, 33 U.S.C. 1311.   Pursuant to the mandate of Section 105
of CERCLA, 42 U.S.C. 9605, EPA  revised and updated the plan for CERCLA
purposes.  The last revision  was adopted on  November 20,  1985 (see 50
Fed. Reg. 47,912).  EPA recently proposed further revisions to the plan.
See 53 Fed. Reg. 51,393 (December  21, 1988).
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                                   - 7 -

 hazardous  substances to the facility (if they selected the facility).

 See  42 U.S.C. 9607(a).

           Under Section 107(a) of CERCLA, persons in any of these four

 classes are liable for *&H sss£&. of -removal or remedial action incurred

 by the United States * * * not inconsistent with the national contingency

 plan*  (emphasis added), 42 U.S.C. 9607(a).  See supra at   describing the

 national contingency plan.  Thus, they are liable for the full cost of

 all  removal and remedial actions taken by the United States which are not

 inconsistent with the national contingency plan.  The liable parties

 themselves bear the burden of proving that the United States' response

 actions are inconsistent with the national contingency plan.  See, e.g..

 U_n.A£e_d_ States v. Northeastern Pharmaceutical & Chemical Co.  f'NEPACCO*}.

 810  F.2d 726, 747-748 (1986), cert, denied, 108 S. Ct. 146  (1987).8

          The sole defenses to liability for response costs which persons

 in these four classes may raise are contained in Section  107(b) of

 CERCLA, 42 U.S.C. 9607(b).  These defenses are very  limited,9 and coui

 have uniformly held that CERCLA'& statutory scheme imposes  strict
     8    Moreover, Congress made these  responsible  parties liable not
only to the United States, but to any  entity  or  person  which cleans up a
release for vhicfe these parties  are  responsible.   Section 107(a)  provides
that reponsible parties 'shall be liable*  for, inter alia.  *all costs of
removal or reaasUal action incurred  by the United States Government or a
State or an Indian tribe not inconsistent  with the national contingency
plan* and 'any other necessary costs of  response incurred by any other
person consistent with the national  contingency  plan,*  42 U.S.C.
9607(a)(A) fc  (B) .

     9    Under Section 107(b),  42 U.S.C.  9607(b) of CERCLA, a person who
is 'otherwise liable*  f i.e.. under the terms  of  Section 107(a)) may avoid
liability only by proving that the release or threatened release of
hazardous substances and the damages caused thereby  result solely from
(1) an act of God; (2) an act of war;  and  (3) in certain carefully drawn
circumstances, the acts of third parties.
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                                   - 8 -
 liability,  l,,jB.. liability without fault.10  Moreover,  courts have  also
 held that,  under Section 107(a) of CERCIA, responsible parties nay  be
 held jointly and severally liable for response costs.   Courts have
 applied the common law rule that, when multiple parties are responsible
 for a single, indivisible harm, they are jointly, and severally liable  for
 the costs of responding to that harm, and that, "in order to avoid the
 rule of joint and several liability, the responsible parties themselves
 must bear the burden of proving that the harm at issue is divisible.11
 Parties held jointly and severally liable may mitigate the harshness of
 the rule of joint and several liability by suing one another in
 contribution.  Section 113(f) of CERCIA, 42 U.S.C. 9613(f), codifies this
 right of contribution, and directs courts hearing contribution claims to
 'allocate response costs among liable parties using such equitable
 factors as the court determines are appropriate,* 42 U.S.C. 9613(f).
     10   Section 101(32) of CERCIA, 42 U.S.C. 9601(32), provides that
"liability* under CERCIA "shall be construed to be  the  standard of
liability which obtains under section 311 of the Federal Water Pollution
Control Act [33 U.S.C. 1321],' which Congress recognized was  a strict
liability standard.  See S. Rep. Ho. 96-848, 96th Cong., 2d Sess. at 34
(1980), reprinted in 1 CERCIA Legislative History at  308,  341.  Courts,
including this Court, have uniformly recognized CERCIA's strict liability
scheme.  See, e.g.. J.V. Peters I Co. v. Administrator. EPA.  767  F.2d
263, 266 (6th Cir. 1985) ('Section 107 imposes a form of strict
liability*); United States v. Monsanto Co.. 858 F.2d  160,  167 (4th  Cir.
1988), cert, petition pending, S.Ct. No. 88-1401  (*[v]e agree with  the
overwhelming body of precedent that has interpreted section  107(a)  as
establishing a strict liability scheme); United States  v.  NEPACCO.  810
F.2d at 732 n.3   (finding it unnecessary to rule on the issue but noting
that *[mjost cases have imposed strict liability and  joint and  several
liability under * * * CERCIA'); and State of New York v. Shore  Realty
Corp.. 759 F.2d 1032, 1042  (2d Cir. 1985).
                                    . '
     11  See, e.g.. United States v. Chen-Dyne Corp.. 572  F.  Supp.  802,
805 (S.D. Ohio 1983). United States v. Monsanto Co..  858  F.2d at  171-173;
and United States v. NEPACCO. 810 F.2d at 732 n.3  (dictum).
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                                   - 9 -
 See, e.a.. Chemical Waste Management Corp. vf Armstrong.  669 F.  Supp.
 1285,  1295 (E.D. Pa. 1987).
          To  finance the United States' responses to releases and
 threatened release of hazardous substances, Congress created the
 'Hazardous Substances Superfund* (the "Superfund"), 26 U.S.C. 9507.
                »
 Money  in  the  Superfund derives from several sources, including yearly
 congressional appropriations from general revenues; transfers from the
 treasury  of amounts paid in special environmental taxes (imposed under 26
 U.S.C. 59A, 4611-4612, 4661-4662, 4671-4672); monies recovered under
 CERCLA on behalf of the Superfund; and amounts paid in penalties and
 punitive damages under CERCLA.  26 U.S.C. 9507(a).
          B.  The facts of this case,12 — R.W. Meyer, Inc.  {'Meyer*)
 owns a parcel of land in Cadillac, Michigan, located in an area of
 residences and commercial and industrial  facilities.  Meyer  leased this
 property  (hereinafter 'Meyer's property*) to the Northemaire
 Electroplating Company (*Northernaire*) from 1972 until the  middle of
 1981, when Northerns ire abandoned the property.  Northemaire  (of which
 William Garwood was president and sole shareholder  from 1975 until the
 middle of 1981) used Meyer's; property to  operate an electroplating
 business.  In this electroplating business, Northemaire  used  caustic
 plating baths vbich contained cyanide and heavy metals  (including  zinc,
              *
 hexavalent chromium, and cadmium), and chromic acid, a highly  corrosive
 acid which reacts with caustic substances.   Opinion of April 30,  1987  (R.
 104), at 4, 5.
     12   This description  of the  facts  is taken from the district
court's April 30, 1987, Opinion  on liablity.   Meyer does not contest any
of the findings described here  (although',  of  course, Meyer challenges the
district court's conclusion that it is jointly and severally liable).
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                                   - 10  -
           On March  16  and  17, 1983, officials from the United States
 Environmental  Protection Agency  (»EPA*) and the Michigan Department of
 Natural  Resources investigated Meyer's property.13  They found the
 interior of  the  building on the  site in disarray, littered with drums and
 tanks  containing cyanide.  Outside  the building, they observed discolored
 soil  (indicating contamination), two pipes, an unsealed sever line, and a
 catch  basin  open to the ground.  The investigators determined that
 Northernsire had discharged its  electroplating wastes into the "catch*
 basin, that  the  wastes had seeped out from the bottom of this basin into
 the ground and had  entered one of the pipes, and that this pipe had
 drained  into a sewer line  that discharged into the City of Cadillac
 Sewage Treatment Plant.  Id. at  4-6.  See also Affidavit of Robert Bowden
 (May 9,  1986), attached to the United states' Motion for Partial  Summary
 Judgment on  Liability  (R.  45, 46),  (hereinafter 'First Bowden
 Affidavit*).
           On June 28,  1983, EPA  informed Meyer, Northernaire,  and Garwood
 that EPA intended to conduct an  immediate removal action at  the site.  In
 doing so,  EPA  offered  Meyer and  the others the opportunity to  undertake
 the removal  action  themselves.   They declined.  From July 5,  1983, until
 August 3,  1983,  EPA (with  the aid of contractors) conducted  the removal
 artion.   It  neutralized the caustic acids and sludges, bulked  and shipped
 the liquid acids, excavated the  contaminated sewer  line, and
     13   The site was  initially  investigated  by state officials who
reported, lntfir alia, that  the building  had been locked and deserted,
that drums of electoplating waste had  been  left outside the building,  and
that a child had received chemical burns from  playing around the drums
outside,the building.   The  state  officials  took samples of the soil and
sludge at the site and  of the contents of drums and tanks on the site,
and determined that these samples contained significant amounts of
cyanide, lead, cadmium, nickel, chromium, copper, and zinc.  Opinion of
April 30, 1987, at 5.
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                                   - 11  -

 decontaminated  the building.  Among the substances found at the site

 5400  gallons  of waste cyanide, 140 barrels of waste cyanide nix, 3450

 gallons  of  acid,  and 5000 gallons of waste hypochlorite solution.  On

 August 13,  19B4,  the EPA sent a demand letter to Meyer, Northernaire, and

 Garwood  requesting payment of the costs of the removal action.  They did

 not make payment.  Opinion of April 30, 1987, at 6-7.  First Bowden

 Affidavit at  11-12.

          C.  D\str\ct court prpceedinag, — On September 25, 1984, the

 United States filed a complaint against Meyer, Northernaire, and Garwood

 under Section 107(a) of CERCLA seeking reimbursement of the response

 costs it incurred in undertaking the removal action on Meyer's property.

 See Complaint (R. I).14  On June 3, 1966, the United States moved  for

 partial  summary judgment on the question of Meyer's and the other

 defendants' liability  (R. 45, 46).  Meyer and the others filed  numerous

 responses to  the  United States' motion;15 on March 24, 1987, the distr.
     14   Meyer  filed a cross  claim  against Northernaire and Garwood  (R.
19); Northernaire and Garwood  in turn  filed a cross-claim against Meyer
(R. 36).  Northernaire and Garwood filed a third party complaint against
the City of Cadillac  (R.  27, 31); Meyer followed suit and also  filed  a
third party complaint against  the City of Cadillac  (R. 29,  31).  The  City
of Cadillac filed a 'counter-complaint* against Meyer, Northernaire,  and
Garwood (R. 50), and a fourth  party  complaint against R.W.  Meyer, Jr.,
and R.W. Meyer,  Sr., individually and  doing business as the R.w. Meyer
Construction Co.  (R. 99,  101,  102).  The City of Cadillac moved for
summary judgment in the third  party  action by Meyer, Northernaire,  and
Garwood against  the City; in its opinion of August  8, 1988, the district
court granted the City's  motion, ruling that Meyer, Northernaire, and
Garwood had no grounds for seeking contribution or  indemnification  from
the City (Opinion of August 8,  1988  (R. 104), at 19).  In the same
opinion, the district court dismissed  the city's fourth party complaint
fid.).  The only claims presently pending in the district court are
Meyer's and Northernaire  and Garwood's contribution cross-claims against
each other.  See id.               m t

     15   See Meyer's brief in opposition to United States' motion  for
partial summary  judgment  on liability  (R. 61); Meyer's amended  brief in
opposition (R. 62); Meyer's supplemental brief in opposition  (R.  85); and
                                                          (continued...)
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                                   - 12 -

 court held a hearing on the motion;  and  on April 13, 1987, the court

 granted the United States'  motion.   It ruled that, under Section 107(a)

 of CERCLA, Meyer,  Northernaire,  and  Garvood are jointly and severally

 liable for the United States'  response costs (R. 104, 105).

           On September 1,  1987,  the  United states filed a second potion

 for partial summary judgment against Meyer and the other defendants,

 seeking an order that the  defendants are liable to the United States for

 $269,811.25 in response costs ($234,337.97 in costs  incurred by the EPA

 and $35,473.28 in  costs incurred by  the  Department of Justice) and for

 pre-judgment interest on that amount (R. 126).16  Meyer and the other
      15(...continued)
 Meyer's supplemental brief on the Superfund Amendments and
 Reauthonzation Act of 1986 (R.  98).   See also Northernaire and Garwood's
 brief in opposition to United States'  motion for partial summary judgment
 on liability (R. 58);  Northernaire and Garwood's amended brief in
 opposition  (R.  83); Northernaire and Garwood's supplemental brief
 regarding SARA (R.  9?); and City of Cadillac's brief in opposition to
 United States'  motion for partial summary judgment on liability (R. 67).

      16  To support its motion on costs, the United States filed several
 declarations:  (l)  the Declaration of Willimina Pipkin, an EPA program
 analyst,  which describes the costs incurred by EPA in its headquarters
 office in Washington,  D.C., and costs incurred by EPA in hiring outside
 contractors ('Pipkin Declaration*); (2) the Declaration of William Cooke,
 an EPA cost accountant, which describes EPA's indirect costs ('Cooke
 Declaration');  (3)  the Declaration of Richard Hackley, an EPA accountant,
 which discuss** costs incurred by EPA's regional office and summarizes
 all EPA-incurr«* costs ('First Hackley Declaration'); and (4) the
 Declaration of Philip Stiness, Jr., Deputy Executive Assistant of the
 Land and Natural Resources Division of the Department of Justice, which
 describes the costs incurred by the Department of Justice ('Stiness
 Declaration').   These four declarations were filed with the United States
 motion for  partial  summary judgment on costs (R. 126).  In addition, the
.United States filed two affidavits when it submitted its response to
 Meyer's opposition  to the motion (R.,156): (1) the Second Affidavit of
 Robert Bowden,  Chief of the Spill Response Section of EPA, Region V,
 which discusses EPA's  removal action on Meyer's property  ('Second Bowden
 Affidavit'),  and (2) the Affidavit of Richard Hackley, which updated and
 summarized  all  of the EPA-incurred costs ('Second Hackley Affidavit*).
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                                   - 13 -
 defendants  filed  responses to the United States' motion.17  on Kay 6,,
 1988,  the district  court  issued an opinion and order, awarding the United
 States all  of  the response costs it sought (with the exception of a $993
 title  search),  and  ruling that the United States was entitled to
 pre^udgment interest on the award  (R.  177 at 26, R. 178).  The court
 requested further affidavits on the calculation of the amount of
 prejudgment interest  (and on the question of the $993 title search) (R.
 177 at 23-26).18  On July 14, 1988, the parties filed a stipulation that
 the amount  of  prejudgment interest which had accumulated was $74,004.97
 (R. 181), and  on  August 8, 1988, the court entered an order awarding that
 amount to the  United States  (R. 185 at 19, R. 186).
          On September 2, 1988, the court issued an order finding  no just
 reason for  delay  in entering final judgment on the United States'  claim
 against Meyer,  Northernaire, and Garwood, and entering  final judgment  on
 the United  states'  claim.19  Of the three defendants, only Meyer
 appealed.
          D.   The districtcourt opinions. — In  its  opinion on
 liability,  the district court ruled that there was  a  release and  a
 threatened  release  of hazardous substances  (waste  cyanide and  waste
     17   See Meyer's brief  in  opposition to United States'  motion for
partial summary judgment  on  costs  (R.  143);  Meyer's reply regarding the
United States' motion for summary  judgment on costs (R.  172); and Meyer's
letter regarding  the United  States'  motion (R.  174).  See also
Northernaire and  Garwood's brief in  opposition to United States' motion
regarding costs  (R. 133).
     18   The United States  withdrew its claim for reimbursement of the
$993 spent on the title search  (see  Opinion  of August 8, 1986, R. 185, at
3, 19).
     19   As indicated supra n.  14,  the only remaining claims in the
district court are the respective  contribution cross-claims of Meyer, and
Northernaire and  Garwood.
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                                   -  14  •
 cyanide mix) on Meyer's property (R. 104 at 10-13); that the latter was a
 "facility* within the meaning of Section 101(9) of CERCIA,  42-U.S.C.
 9601(9) (id. at 11); and that the United States had incurred 'response
 costs" in planning and implementing the removal action at the site fld^
 at  13-14).  The court ruled that Meyer was liable for the response -costs
 under Section 107(a)(1) and (2) of CERCIA because it was the owner of the
 site; that Northemaire was liable under Section 107(a) (2)  of CERCIA
 because it was the operator of the site at the tine of the disposal of
 hazardous substances there; and that Garwood was liable under Section
 107(a)(3)  of CERCIA because he had arranged for the disposal of hazardous
 substances at the site.  Id. at 14.20
          In addition, the court ruled that Meyer, Northernaire, and
 Garwood are }ointly and severally liable for the United States' response
 costs fid, at 16-18).  The court held that CERCIA does not mandate the
 imposition of ]oint and several liability on multiple defendants in all
 cases.  Rather, the court held, under CERCIA,  "whether or not joint and
 several liability is to be imposed turns on whether or not  the  harm is
 divisible," and "if the harm is indivisible then each defendant who is
 found liable is subject to liability for the entire harm*  fid,  at  16).
 The court specifically found that the environmental harm on Meyer's
 property is 'indivisible"  (id.1, and held Meyer, Northernaire,  and
 Garwood jointly and severally  liable for that  harm (ii,. at 16-17).21
     20   In addition, the court  rejected the  defendants'  attempts to
invoke the limited "third party"  defense  under Section 107(b)(3)  of
CERCIA.  Opinion Of April 30,  1987,  (R. 104) at 14-16.
     21   In doing so, the court  explained that although Meyer,  as the
landowner-lessor of the site,  had not actually deposited the hazardous
substances at the site, it was nonetheless jointly and severally liable
for the response costs.  The court stated that Congress had clearly
                                                          (continued...)
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                                   -  15  -
court carefully noted, however, that parties held jointly and severally
liable may apportion the total liability among themselves through
contribution suits under CERCLA (see Section 113(f) of CERCLA, 42 U.S.C.
9613(f)):  *tQ]uestions of determining  'equitable shares of the
liability' with respect to an indivisible injury are appropriately
resolved in an action for contribution after plaintiff has been made
whole,* id. at 17-18, quoting from United states v. South Carolina
Recycling and Disposal. Inc. f'SCRDIf.l . 653 F. Supp. 984, 995 n.8 (D.
S.c. 1984), aff'd in part, vacated in part  (on other grounds), and
remanded, sub nom. United States v. Monsanto. 858 F.2d 160 (4th Cir.
1988),22
          In its opinion on costs, the court first addressed  the
defendants' request that the court deny summary judgment 'until  'further
information is obtained," i.e.. until the  defendants conduct further
discovery (Opinion of May 6, 1988, R. 177,  at 5-6).  The court declinec
     -v                                                                I
the defendants' request, on the grounds that: (1) there were  no discovl
disputes pending; (2) a year had passed since the court entered  its
cpirion holding the defendants liable;  (3)  over seven months  had  passed
since the United States had filed  its partial summary judgment motion  on
costs; (4)  the defendants had engaged in some discovery  during that  time;
(5) the defendants had had 'an adequate opportunity  to depose those
     21(...continued)
indicated it* intent that the owners  of  sites  be liable for the costs of
cleaning up those sites  (see Sections 107(a)(1)  and (2)  of CERCLA); that,
in this case, Meyer was  the owner  of  the site; and that,  in this case,
the environmental harm at the site was indivisible.  Id.  at 16-17.
     22   The district court cited the decision in United States v. South
Carolina Recycling and Disposal. Inc.'. 653  F.  Supp. 984,  as it is
reported in the Bureau of National Affairs  'Environment Reporter-Cases"
series at 20 Env't Rep.  Cas. 1753, 1760  n.8.   See Opinion of April 30,
1987 (R.  104} at 18.
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                                   - 16  -
 people whom they wished to depose*  (id.  at 6-7); (6)  the defendants  had
 not moved  for a continuance under Fed. R. Civ. P. 56
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                                   -  17  -
employee payroll expenses incurred within two years after the removal
action, id. at 16; and the $35,473 in Department of Justice costs,  id.  at
18).
          Third, -the court held that the United States was entitled to
the $52,978.50 in 'indirect costs* incurred by EPA  fid, at 18-23).  In
characterizing these indirect costs, the court looked to the Cooke
Declaration (see supra n. 16),24  The court noted that Mr. Cooke, an EPA
cost accountant, described the indirect costs as 'overhead costs* and
stated that they are "such things as rent and utilities for site and non-
site office space; payroll and benefits for program managers, clerical
support and other administrative support staff; and pay earned by on-
scene coordinators while on leave, or performing tasks not directly
associated with a particular site*  (id. at 18).  The court stated the
question before it as whether these  costs were 'costs of  'removal or
remedial action" 
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                                   - 18 -
           Lastly, the court held that the United States was entitled to
 prejudgment  interest on the total amount of the award fid, at 23-26).   it
 noted  that Congress, in amending CERCLA  in 1986 (by the enactment of
 SARA,  see  supra n. 2), had provided that the 'amounts recoverable [under
 Section 107] shall include [prejudgment  interest],* 42 U.S.C. 9607(a).
 The  court  held that it was bound to apply the amended version of CERCLA,
 under  the  rule that a court should apply the law in effect at the time of
 its  decision, absent manifest injustice  to the parties.  In addition,
 however, the court held that, even without the amendment of CERCLA, the
 United States would be entitled to prejudgment interest.  In the absence
 of a statutory provision, the court held, prejudgment interest was  a
 matter for the discretion of the court,  and, here, was  necessary xn order
 to make the United states whole:   'Interest lost on monies expended from
 the  Superfund was part of the cost to  the government of removing
 hazardous  substances from the Northemaire site'  (iflj. at  24).
                                 ARGUMENT
                                     I
                  INTRODUCTION: S77_HDAP.D OF REVIEW AND
                        SCOPE OF ISSUES  ON APPEAL
           A.  The standard of  review.  — A ruling on  a  motion for  summary
 judgment is a ruling of law, and,  as such, is  reviewed  de novo by  this
 Court.   See State of Alaska v. Lvno. 797 F.2d  1479,  1481  (9th Cir.  1986),
 cert,  denied, 480 U.S. 945  (1987).   This Court,  therefore,  must examine
 the  same questions that the district court examined,  namely,  whether the
 •pleadings, depositions, answers to interrogatories,  and  admissions on
 file,  together with the affidavits,  if any' indicate  the  presence of any
                                    * i
 'genuine issue as to any material  fact,' Fed.  R.  Civ.  P.  56(c), and
whether the moving party  (here, the United States)  is entitled to
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                                   -  19 -
judgment as a matter of law, id.   See Hand vf  Central Transport.  Inc..
779 F.2d 8, 10 (6th Cir. 1985), and Celotex Corp.  v.  Catre^t.  477 U.S.
317, 322 (1986).  In determining whether the papers indicate the
existence of a genuine issue of material fact, the 'evidence must-be
viewed in a light most favorable to the party opposing the motion and
that party must be given the benefit of all reasonable inferences,* Hand
v. Central Transport. Inc.. 779 F.2d at 10.  See Smith v.  Hudson. 600
F.2d 60, 63 (6th Cir.), cert, dismissed, 444 U.S.  986 (1979).   However,
"where the movant brings forward and supports [its] motion for summary
judgment, [its] opponent may not rest merely upon  [its] pleadings but
rather must come forward to show genuine issues of fact,* Bryant v.
Commonwealth of Kentucky. 490 F.2d 1273, 1275 (6th Cir. 1974).   'Mere
conclusory and unsupported allegations, rooted in speculation, do not
meet that burden,* id.  Summary judgment is not a 'disfavored procedural
shortcut,* but, instead, *an integral part of the  Federal Rules  as  a
whole, which are designed  'to secure the just, speedy, and  inexpensive
determination of every action,'* celofre* Corp. vf  Cffrrett.  477 U.S.  at
327, quoting from Fed. R. Civ. P.  1.
          B.  The scope of  issues  in this appeal.  — With  the notable
exception of Meyer's argument that the district court erred in imposing
joint and several liability  (Meyer Br. 40-47), none  of the issues  raised
in this appeal concerns the district court's  opinion on liability
(Opinion of April 30, 1987, R. 104).  Neither Meyer  nor the amj£l  eurjae
challenge the district court's holding that Meyer, Northernaire, and
Garwood are each liable for response costs  incurred  as a  result  of the
release of hazardous substances on Meyer's property.  Instead (again,
with the exception of the  joint and  several  liability issue), the issues
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                                   - 20 -
 on  appeal  concern the calculation of the response costs for vhich Meyer
 and the  others are liable.
           Meyer, the appellant, raises seven issues (see Meyer Br. 2)
 which collapse into four general issues.  One, of course, is the issue of
 joint and  several liability  (see iflj_, issue VII).  The other three,
 concerning response costs, are whether CERCLA authorizes the United
 States to  recover EPA's indirect costs in support of the response action
 (see id..  issues I and II); whether the district court properly awarded
 prejudgment interest (see id^., issues III and IV); and whether there were
 genuine  issues of material fact precluding the entry of summary judgment
 regarding  certain items of cost  (see id., issues II, V, and VI).  These
 issues are properly before this Court, and we address each of them in
 turn in  the body of our argument.
           The areici curiae raise three issues  (see amici, Br. X).  Two of
 these are  issues which Meyer has not raised on appeal and which no one
 raised in  the district court.25  These two new  issues are  (1) whether the
 United States' recovery from Meyer  of  EPA's indirect costs which
 supported  the response action on Meyer's property constitutes an
 unconstitutional tax, and  (2) whether  an internal EPA manual which
         t
 describes  in general terms EPA's method  of, calculating  its  indirect
 response costs is a 'rule* which must  be promulgated under the
 Administrative Procedure Act's rulemaking requirements.26   These two
 issues are not properly before this Court.  This Court  should  decline to
     25   The amici curiae  did  not file a brief in the district court.
                    k    •*
     26   The ftffiiii's  first issue  —:,whether CERCLA authorizes the
recovery of the United States'  indirect costs — raises similar (though
not identical) arguments to those  which Meyer raised in the district
court and which Meyer  has raised again in this Court (compare ajuc^ Br.
1, issue 1, with Meyer Br.  2, issue I).
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                                   - 21  -

 rule on them.  To rule on these new issues would violate two doctrines:

 the doctrine against addressing issues raised solely by amici curiae.27

 and the doctrine against addressing issues which were not raised in the

 district court.28  In the event that the Court decides, nonetheless, to
     27   See United Parcel Service. Inc. v. Mitchell. 451 U.S. 56, 60
 n.2  (1981)  (declining to consider an argument raised by amicus curiae
 •since it was not raised by either of the parties here or below*);  Bell
 v. Wolfish. 441 U.S. 520, 531 n.13 (1979) (declining to address arguments
 raised by amiCUB curiae because 'neither argument was presented to or
 passed on by the lower courts* and because neither argument had 'been
 urged by either party in this Court*); Knetseh v. United States. 364 U.S.
 361, 370 (1960) (holding that the Court had *no reason to pass upon* an
 argument raised by amieus curiae which had "never been advanced by
 petitioners in this case*); General Engineering v. Virgin Islands Water &
 Power. 805 F.2d 88, 92 n.5  (3rd Cir. 1986)  (declining to rule on issue
 raised by amicus curiae which the parties had not raised either in the
 district court or on appeal because it presented no "extraordinary* or
 •exceptional* considerations); Preservation Coalition. Inc. v. Pierce.
 667 F.2d 851, 861-862 (9th Cir. 1982) (finding no 'exceptional
 circumstances* to justify addressing an issue raised  in the court of
 appeals solely by the anicus curiae even though the parties had raised
 the issue in the district court and the district court had ruled on
 and National Coa/n on Ego nutrition v. .P.T.C... 570 P.2d 157,  160 n.3
 Cir. 1977), cert, denied, 439 U.S. 621  (1978  (refusing to address a
 constitutional argument made solely by an amicus curiae because the
 argument was 'not made before the FTC or even by the  petitioners
 themselves in this court and is therefore not properly before us*).

     28    This Court consistently declines to address arguments raised
 for the first time on appeal, even when they are raised by the parties
 themselves.  See Maezkco v. Joyce. 814 F.2d 308, 310  (6th Cir.), cert.
 denied, 108 S. Ct. 98 (1987)  (*we decline to address  this  issue  for the
 first time on appeal*); Helden v. Owens-Illinois. Inc.. 793 F.2d 745,  754
 (6th Cir. 198C) (*ve will not allow the plaintiff to  raise this  'public
 policy' exception for the first time on appeal"); BooneCoal  and Timber
 Co. v. Polan. 7S7 F.2d 1056, 1064  (6th Cir. 1986)  (argument *not raised
 before the district court*  is 'not properly before the court  [of
 appeals)*); Rues* Kwik Car Wash v. Marathon Petrolftfj"! CPi - 772 F.2d 214,
 217 (6th Cir. 1985)  (refusing to address  issue raised for  the first time
 on appeal); Sigmon Fuel Co. v. Tennessee  Vallev Authority. 754 F.2d 162,
 164-165 (6th Cir. 1985)  (stating,  *[i]n the interests of judicial  economy
 and the finality of judgments, and mindful  of our role as  an  appellate
court, we have declined to  review  arguments not presented  to  the district
court in the first instance*  (citing cases),  and declining to review such
an argument); and Brown v. Marshall. 704  F.2d 333,  334  (6th. Cir.), cert.
denied, 464 U.S. 835  (1983)  (*[t]he clear rule  is that appellate courts
do not consider issues not presented to  the district  court*).
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                                   - 22 -
 address the am.ici's  two new  issues, however, we present our argument on
 them below in the  body of  our  argument.
                                    II
              INDIRECT COSTS ARE RESPONSE COSTS,  AND CERCLA
                 PLAINLY AUTHORIZES THE UNITED STATES TO
                     COLLECT THEN FROM LIABLE PARTIES
           A.   Introduction.  — Section 107(a) of CERCLA provides that
 responsible parties,  such  as Meyer, 'shall be liable  for * * * all costs
 of removal * * * action incurred by the United States * *  * not
 inconsistent with  the national contingency plan,* 42  U.S.C. 107(a).  As
 we show below,  the district  court  correctly  held that the  'indirect
 costs*  in  dispute  here are part of "all costs of  [the]  removal action*
 undertaken by EPA  on Meyer's property,  and,  as such,  are response costs
 which must be borne  by Meyer.   As  the court  held, these indirect costs
 represent  that portion of  the  EFA's overhead expenses which supported the
 Meyer response action.  As explained  below,  EPA  determines the  total
 amount  of  its costs  which  support  a response action by calculating both
 its  'direct*  costs and its 'indirect* costs  and  adding them together.  In
 doing so,  EPA follows standard cost accounting principles. Under these
 principles,  total  cost is  the  sum  of  'direct*  and  'indirect*  costs.
 Direct  costs  are those costs incurred which  are  attributable  solely to
 c^e  pzrtirrjZer  •tuFpo^se artien (e.g. . payroll  eyr-e'isc.s fcr t.r.6  hours
 which an EPA site  manager  spends working on  tasks  at a particular site).
 Indirect costs, on the other hand, are costs incurred which support more
 than one response  action  (e.g.. the cost of  office space for EPA
 employees  who oversee response actions), and so  must be apportioned among
 all  the response actions which they'support.  The indirect costs at issue
here represent  the portion of  these shared costs (colloquially called
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                                   - 23  -
 •overhead* expenses) which supported the response action on Meyer's
 property.29
          The district court, in granting EPA's indirect response costs
 to  the United States, relied on the declaration of an EPA cost
 accountant, Mr. William Cooke, which the United States submitted to the
 court with its motion for summary judgment on costs.  As discussed below,
 the Cooke Declaration describes these indirect costs and states that they
 represent EPA's calculation of EPA's overhead expenses which supported
 the Meyer response action.  Neither Meyer nor Northernsire and Garwood
 offered any affidavits or other evidence to contradict or call into
 question any of Mr. Cooke's assertions.  They did not challenge the
 assertion that these 'overhead* expenses supported the response action on
 Meyer's property, and they did not challenge or  inquire  into the
 accounting principles which EPA used to determine which  of  its overhead
 expenses supported response actions or  the manner in which  EPA calculat
 the portion of these allowable overhead costs which supported the  reao\
 action on Meyer's property.  That being the case, Meyer  and the arnica,
 curiae (which did not even participate  in the case below) may not  now, on
 appeal, baldly assert, as a matter  of fact, that EPA's  indirect costs  are
 "totally unrelated and unattributable to*  (Meyer Br. 21)  the  removal
 ?-*ic^ in this case.30
          To be sure, Meyer and the  aroici may argue, as  they  do,  that
 CERCLA does not authorize the EPA  to recover from Meyer a component of
svln
     29   We use the term  'overhead*  in this colloquial sense
throughout.
     30   Indeed, much  of  Meyer's  and the amici's argument turns on this
unsupported factual assertion.   See,  e.g..  Meyer Br.  at 19, 21-22, 23-24,
25, and amici brief at  9 n.9,  11,  13, 15, 17, and 31.
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                                   - 24  -
 EPA's total  response costs, that is, the portion of EPA's overhead costs
 which supported the Meyer response action.  However, as we show below,
 CERCLA plainly authorizes the United States to recover these response
                        f
 costs.  -We first describe what these indirect costs are and how they are
 calculated in order to demonstrate that the indirect costs incurred here
 constitute a part of the total costs to EPA of carrying out the Meyer
 response action.  We then show that, as an important component of EPA's
 total response costs, they may be recovered from liable parties; in doing
 so, we respond to Meyer's and the Amisi's arguments to the contrary.
          B.  Indirect costs are a component of the total cost of the
 response action. —  In his Declaration, Mr. Cooke, a cost accountant
 with  the Superfund Accounting Branch of the Financial Management  Division
 of the EPA (and a Certified Public Accountant), described the kinds  of
 costs EPA considers as the indirect costs of a response  action and how
 EPA calculates these indirect costs.31  As stated  above, Meyer did not
 offer any affidavits or other evidence  in the district court to challenge
 any of  the assertions made by Mr. Cooke in his declaration,32  and the
 district court relied on the Cooke  Declaration in  describing the  indirect
     31   See Declaration of William  Cooke,  attached to United States
Motion for Partial Summary Judgment on  Costs,  (R.  126),  (hereinafter
"Cooke Declaration*).
     32   see supra  n.  17 for  a  listing of Meyer's submissions opposing
the United States' motion for  summary Judgment on costs.  While Meyer
attached a variety of exhibits to  its principal brief in opposition (R.
143}, none of these  addresses  the  manner in  which EPA calculates the
indirect cost component of its response actions.  Meyer's memorandum
attacking the United states' authority  to recover the indirect cost
component of its response costs  (R. 172)  attached no affidavits or other
exhibits.
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                                   - 25  -

 costs  of the removal action and in awarding then to the United States

 See  Opinion of May 6, 1988, at 18-23  (R. 177).33

          Mr. Cooke described EPA's indirect costs as follows:

          The indirect costs of the Superfund program are those
          costs which are necessary to the operation of the
          program and support of site clean-up .efforts, but
          which cannot be directly identified to the efforts of
          any one site.  In lay terms, the indirect costs
          represent overhead costs, and  include such things as
          rent and utilities for site and non-site staff office
          space; payroll and benefits for program managers,
          clerical support and other administrative support
          staff; and pay earned by on-scene coordinators while
          on leave, or performing tasks  not directly associated
          with a particular site.  Indirect costs are generally
          understood and accepted within the business
          community, and are recognized  as costs to the Agency
          in all government grants and contracts.

 Cooke  Declaration at 2.

          Mr. Cooke also explained EPA's method for determining the

 amount of these shared costs which supports a particular response action:

 EPA  first determines, for a given fiscal year, the total amount of

 overhead costs which support CERCLA response actions.   It  figures these

 overhead costs both for the headquarters office of the EPA in Washington

 and  for each of the ten regional offices of the EPA.   EPA  allocates a

 portion of the headquarters office overhead costs  (those which it has

 determined support response actions)  to  each of the  ten regional offices

 and  adds this aaount to each regional office's own overhead costs  (again,

 those  regional overhead costs which  it has determined support response
     33   The amici curiae have  appended to their brief a copy of an
internal EPA document entitled 'Superfund Indirect Cost Manual for Cost
Recovery Purposes,* dated March  1986,  and two updates to this document.
This document and  its updates were  not submitted to the district court.
This manual describes,  in general terms,  EPA's system for calculating its
indirect costs of  a response action,  and comports with the brief
description of how indirect costs are calculated which is contained in
the Cooke Declaration.  See discussion of the manual infrg at 41*44.
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                                   - 26  -
 actions).  Then, by dividing the total amount of response action overhead
 costs  for each region  (the sum of that region's headquarters office costs
 and that region's own costs) by the total number of hours billed by
 regional Superfund program personnel in that fiscal year,34 EPA arrives
 at  an  'indirect cost rate* for each region for that fiscal year.35  To
 figure its indirect costs in support of a particular response action in a
 given  fiscal year, EPA multiplies the number of hours certain regional
 personnel (the regional 'program* personnel) spend working directly on
 (and therefore 'bill* to) a particular response action in that fiscal
 year by the indirect cost rate for that fiscal year.  To calculate the
 sum of its indirect costs in support of a particular response action, EPA
 figures its indirect costs for the response action for each year during
 which  work is undertaken on the response action and then adds these
 amounts together.  Cooke Declaration at 2-4.  See also First Kackley
 Declaration at 3-4.
          The district court awarded a*total of $342,823.97  in  this
 case.36  Of that amount, $74,004.97  represents prejudgment interest;
 $35,473.28 represents enforcement  costs of  the Department of*Justice;
                                              t,
 $153,143.28 represents costs paid  to contractors which  EPA hired to help
 conduct the removal action; and $81,203.89  represents  internal  EPA
     34   This includes  all  hours billed by regional program personnel in
a fiscal year  (hours billed  to particular sites and also 'non-site*
hours).  The aaj.ci state incorrectly (aj&i£i br. 5)  that this figure
includes only site-specific  hours.
     35   The indirect cost  rate for,each region is audited annually by
the Inspector General of the EPA.  See Cooke Declaration at 3.
     36   See Opinion and Order of May 6, 1988 (R.  177, 178) and Opinion
and Order of August 8, 1988  (R.  185, 186).
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                                   -  27 -

 costs.37  With the exception of the figure for pre^udgment interest,

 of these figures has a "direct* and an 'indirect* cost component.  Meyer

 and the amici challenge only the indirect cost component of the EPA

 internal costs figure.38  Of the $81,203.89 in internal EPA response

 costs, $28,216.39 were 'direct* costs and $52,987.50 vere "indirect*

 costs.  The $28,216.39 in EPA's 'direct* costs consisted of payroll

 expenses for the hours which headquarters and regional EPA personnel

 billed directly to the response action in this case, and travel expenses

 for EPA personnel travel associated with this response action (see

 Attachment D to the Hackley Affidavit).  The figure of $52,987.50 in

 EPA's 'indirect* costs was arrived at in the manner described by Mr.

 Cooke (see Opinion of May 6, 1988, at 18-19), and represents the portion

 of EPA overhead costs which supported the response action on Meyer's
     37   See Attachment D to the Affidavit of Richard Hackley (OctobelB
15, 1987), which the United States submitted with its Memorandum in   ^^
Response to Meyer's Opposition to the United States Motion for Partial
Summary Judgment on Costs  (R. 158) (summarizing total EPA costs).

     38   Nowhere do Meyer or the amici challenge the "indirect* cost
component of either the $35,473.28 in Department of Justice enforcement
costs or the $153.143.28 in contractor costs.  Yet, like the EPA's
internal costs, both the Department and Justice costs and the contractor
costs are composed of both 'direct* and 'indirect* costs.  The
Declaration of Philip Stiness, Jr., submitted by the United States with
its summary judgment motion on costs  (R. 126), explains that the
Department of Justice determines the total amount of its response action
costs (essentially the costs of enforcement activities, which CERCLA
expressly includes within the definition of a response action, see 42
U.S.C. 9601(25)) by calculating its direct costs and its indirect costs.
See Exhibit 1 to Stiness Declaration  (apportioning costs of personnel,
benefits, unemployment, travel, freight, communications, printing, other
services, supplies, equipment, and insurance  claims).  Similarly, as
explained, infra n.40, all federal contractors, including those hired  by
EPA to aid in response actions  (including, specifically, the contractors
which provided services on the response action in this case), determine
the total cost of the service they are providing to the United states
(and hence their contract price) by calculating, and then adding
together, their "direct* and 'indirect* costs.
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                                   -  28  -
 property.  Taken together, EPA's 'direct* and "indirect* costs  constitute
 the total of EPA's internal costs on the removal action in this case.
          EPA's practice of adding together its direct costs and its
 indirect costs in order to determine the total of its internal  costs on
 the response action, and its practice of figuring its indirect  costs by
 calculating what are essentially 'overhead* costs comport with  standard,
 elementary cost accounting principles,39 and are consistent with well-
 established government contracting principles.  Thus, the United States
 permits contractors and grantees of the United States to determine the
 cost of whatever product or function they are providing under their
 contract or grant by figuring both the direct and the indirect cost of
 that product or function, and, in doing so, it permits the contractor or
 grantee to include various items of "overhead* as the indirect costs of
 that product or function.  For example, the Federal Acquisition
 Regulation {which prescribes detailed requirements for the letting,
 managing, and accounting of federal contracts) permits federal
 contractors to calculate the total cost of whatever they  are providing to
 the United states by adding together their direct and  indirect costs, and
 permits them to include various items of 'overhead* as  indirect costs.40
     39   For a basic discussion of cost accounting principles,  including
the principle that the cost of an  item consists of its  direct  and
indirect costs, see Horngreen and  Foster, Cost Accounting:  A Managerial
Emphasis at 20-36  (6th ed. 1987).  See especially id. at 29.
     40   The Federal Acquisition  Regulation  ('FAR')  is issued jointly by
the Secretary of Defense, the Administrator of General  Services, and the
Administrator of the National Aeronautics and Space Administration,  and
is promulgated at 48 C.F.R. Chapter 1, Parts  1-99).   The FAR includes a
section on "cost accounting standards*  (see 48 C.F.R. 30) and one on
'contract cost principles and procedures*  (48 C.F.R.  31).  In prescribing
accounting methods for commercial  organizations, the  FAR states:  'The
total cost of a contract is the sum of the allowable  direct and indirect
costs allocable to the contract *  * *  ,* 48 C.F.R. 31.201-1.  The FAR
                                                          (continued...}
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                                   -  29 -

Similarly, the Office of Management and Budget (*OMB*),  in

accounting principles for state and local governments which receive

federal grants or contracts, allows state and local governments to
     40(...continued)
defines a direct cost as "any cost that can be identified with a
particular final cost objective  [i.e.. with whichever product or service
whose total cost is being determined],* 48 C.F.R. 31.202(a).  It defines
an  indirect cost as "any cost not directly identified with a single,
final cost objective, but identified with two or more final cost
objectives or an intermediate cost objective,* 48 C.F.R. 31.203(a), and
it  identifies as different types of indirect costs manufacturing overhead
(including within it building occupancy expenses and personnel
administration costs), selling expenses, and general and administrative
expenses  (see 48 C.F.R. 31.203(b)).  The FAR also prescribes the extent
to  which particular expenses may be counted as part of a total cost; it
discusses the allowability of, inter alia, public relations and
advertising costs; automatic data processing equipment leasing costs;
bonding costs; civil defense costs; compensation for personal services;
depreciation, economic planning costs; employee morale, health, welfare,
food service, and dormitory costs; insurance and indemnification costs;
labor relations costs; maintenance and repair costs; manufacturing
production engineering costs; material costs; organization costs; o
business expense; patent costs; rental costs; selling costs; taxes;
training and education costs; transportation; and travel costs.  See 48
C.F.R. 205-1 to 205-51.

          The FAR relies in large measure on the Cost Accounting
Standards promulgated by the Cost Accounting Standards Board  (*CASB*)
(see 48 C.F.R. 30.101 and 30.201).  This Board, which was created by
Congress and is recognized as a  leading authority on cost accounting
principles, has issued a set of cost accounting standards.  Originally
created to be independent of the executive departments  (and at that time
headed by the Comptroller General of the United States, see 50 U.S.C.
2168), the CASB has been recently reconstituted as an independent  board
within the Office of Federal Procurement Policy.  See Section  5 of Pub.
L.  100-679 (Nov. 17, 1988)  (re-establishing the CASB and charging  it with
the responsibility for establishing cost accountiing standards  for use  by
all executive agencies and contractors and subcontractors).   Cost
Accounting Standard 418  (promulgated at both 4 C.F.R. 418  and  48 C.F.R.
30.418) concerns the determination and allocation of direct and indirect
costs.  It defines the terms 'direct costs* and 'indirect  costs*  (4
C.F.R. 418.30); prescribes fundamental requirements of  determining,
classifying and allocating direct and indirect costs  (4  C.F.R.  418.40  and
48 C.F.R. 30.418-40); mandates techniques  for applying  these  requirements
(4 C.F.R. 418.50 and 48 C.F.R. 30.418-50); and provides illustrations  of
its rules (4 C.F.R. 418.60 and 48 C.F.R. 30.418-60).
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                                   -  30  -

 calculate their total costs by adding together direct and indirect

 costs.41

          Thus, the "indirect" cost component of EPA's internal  costs  in

 support of the response action on Meyer's property vas determined

 according to standard accounting principles and represents a component of

 the total cost to EPA of performing the response action on Meyer's

 property.  Because these indirect costs constitute a part of the total

 cost to EPA of performing the response action on Meyer's property, they

 are 'response costs," and, as described below, are plainly costs which

 the United States may recover from Meyer under Section 107(a) of CERCLA.

          C.  CERCLA makes responsible parties liable for "all costs of

 removal or remedial action* an
-------
                                   - 31  -

 As  such, these  indirect costs are plainly part of *all costs of

 * * action,*  42 U.S.C. 9607(a).  Meyer, as the owner of the property

'"contaminated  by hazardous substances which was the subject of the removal

 action  in this case, is liable for these response costs.42

          Meyer and the ajaisi premise most of their argument that Meyer

 is  not  liable for these indirect costs on the repeated assertion that

 these indirect costs are not related to or attributable to the response

 action  taken  in this case.  See citations to their briefs supra n. 30.43

 Yet, as indicated above (see fiujzra at 24), neither Meyer nor the am^iei

 have any basis  for making this assertion.  No one in the district court

 challenged the United States' description of these indirect costs or

 offered any evidence in an attempt to raise, as an issue of fact, the

 question whether these costs are 'related to* or 'attributable to* the

 response action in this case.44
     42   As discussed  above,  CERCLA defines the terms  'removal action
and 'remedial action" very broadly.  See  sypra n.5  (defining  'removal*).
Neither Meyer nor the amici  argue that the  immediate  removal  action
undertaken on Meyer's property (the neutralization  of the  acids,  the
bulking and shipping of the  liquids, the  excavation of  the sewer  line,
and the decontamination of the building)  is not a 'removal action* as
defined by CERCLA.

     43   According to  Meyer and the aaici. EPA's indirect costs  do not
represent the administrative costs of a response action, but  instead,
some vague general operating costs which  do net suroort response  actions.
See, e.....q*. ••iei br. 13 (referring to EPA's indirect  costs of the
response action as 'the indirect costs of managing  the  Superfund
program*) and Meyer Br.  25  (referring to  EPA's indirect costs as  *all
cost, including EPA overhead and all other  imaginable cost*). Meyer and
the amicj. lack any factual support for these statements, and, as
indicated (supra at 24), they  did not even  attempt  to put  forth any
factual materials to challenge the United States' declarations and
exhibits which explained the manner in which EPA determined the amount of
shared costs which supported the response action in this case.

     44   Both Meyer's  and the aniej's argument seems to turn on  the
statement in the Cooke  Declaration that:  'The indirect costs of  the
Superfund program are those  costs which are necessary to the  operation of
                                                          (continued...)
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                                   - 32 -

           Indeed,  both Meyer and the MBICJ. essentially recognize, as a

 conceptual natter,  that  the United  States nay recover EPA's indirect
                                                 *•  *
 costs.   Meyer states  that  *[a]dminstrative costs relatedto a removal

 action  are,  indeed, recoverable* (emphasis in original) (Meyer Br. 22).

 The amjLci  appear to concede  (ajsic^.  br. 17 and 17 n.ll) -that Meyer is

 liable  for any administrative costs or expenses reasonably necessary for

 and incidental to  the response action.   Both Meyer and the amici  insist,

 however, with no factual support whatsoever, that the 'administrative*

 costs for  which responsible parties are  liable are contained within EPA's

 direct  costs,  that is, its payroll  and travel expenses.  See aaici br. 17

 n.ll.

           As  demonstrated  above  (supra at 24-30), however, the  indirect

 costs at issue here are  just the kind  of 'administrative* expenses which

 Meyer and  the amici recognize responsible parties oust be liable for

 under CERCLA.   As  the portion of EPA's 'overhead* expenses which

 supported  the response action, they are  the portion  of EPA's

 "administrative* expenses  which supported the response action.   As  such,

 they are an essential component of  the total cost to EPA of  carrying out

 the response  action and  plainly come within the  scope of a responsible
     44{...continued)
the program and  support  of site clean-up efforts,  but which cannot be,
d^rectlv  identified  to the efforts of any one site* (emphasis added),
cooke Declaration  at 2.   On the basis of this statement, apparently,
Meyer assert* that the United States 'admits that [EPA's indirect costs]
cannot be attributed directly to specific sites or, more particularly, to
this site* (Meyer  Br. 25}.   This is absurd.   By definition, 'indirect
costs* are those which *cannot* be attributed solely to one site (if they
could, they would  be direct costs), but which are attributable to (jLjJEL..
which support) more  than one site and so must be allocated among them.
See supra  at 24-30 discussing indirect and direct costs generally.
Indeed, Mr. Cooke  stated specifically that these indirect costs *are
those costs necessary to the operation of the program and support of site
clean-up  efforts*  (emphasis added), Cooke Declaration at 2.
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                                                                    os^s;
                                   -  33  -

party's liability for 'all costs of removal * * * action,* 42  U.S.C.

9607(a).  Section 107(a) does not make persons liable for 'direct*  col

it makes persons liable for 'all costs' (id,1). and 'all costs' includes

•direct -and indirect costs.45  Thus, in United States v. NEPACCO.  579  F.

Supp. 823, 850, 851-852 (W.D. Mo. 1984), aff'd in part, rev'd  in part (on

other grounds), and remanded, 810 F.2d 726, the court stated that the

United States was entitled to recover "the costs associated with* its

response activities (579 F. Supp. at 850)  and made plain that  responsible

parties are liable for 'all costs, including salaries and expenses,

incurred by the plaintiff  [United States]* (ijL. at 851).  Similarly,  in

United Sta'tes v. SCRDI. 653 F. Supp. at 1008-1009, the court granted the

United States and the State of South Carolina their 'administrative*

costs.  See United States v. Conservation Chemical gOj. 619 F. Supp.  162,

186  (W.D. Mo. 1985) (United States may recover, inter alia, 'costs

associated with* its response action), and cases cited infra  at  41.4€
     45   The phrase 'all costs of  [a] removal  *  *  * action*  (42 U.S.C.
9607(a)) plainly  includes *all costs* vhich supported  that  removal
action, whether they are accounted  for as  'direct'  or  'indirect* costs.
To the extent that this reading requires statutory  construction, however,
EPA's interpretation of the  phrase  'all costs*  must receive substantial
deference from the Court.  See New  York Dept. of  Social  Services v.
Dublino. 413 U.S. 405, 421  (1973)  (*we must be  mindful that 'the
construction of a statute by those  charged with its execution must  be
followed unless there  are compelling reasons  that it  is  wrong * *  * ).

     46   United  states v. Otatti t GOBS.  694 F.  Supp. 977, 995 (D. K.H.
1988), appeal pending, 1st Cir. Hos. 89-1063  &  89-1065,  is  the only case
in which a court  has denied  the United States'  recovery  of  indirect costs
incurred by EPA in support of a response action.   The  court did, however,
grant the State of New Hamphire the indirect  costs it  had incurred in
support of the response action  (see 694 F. Supp.  at 1002, 1003).   In
denying the United States' request  for EPA's  indirect  costs,  the court
referred to the costs  as 'expenses  for rent,  utilities,  supplies,
clerical staff and other overhead expenses,*  but stated, with no
explanation or elaboration,  that these costs  'cannot  be  attributed to*
the sites at issue, 694 F.2d at 995).  The court's decision on EPA's
indirect costs was error and the case  is being  appealed.  The district
                                                          (continued...)
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                                   - 34  -

          Again mischaracterizing EPA's indirect costs (this time as the

 costs of  'general government functions,* amici br. 16), the amici argue

 against recovery of EPA's indirect costs by asserting that (a)  CERCLA

 prohibits EPA  from using the money in the Superfund (established under 26

 U.S.C. 9507, see discussion sjjpja «t 9) for 'general government

 functions,* and  (b) any money EPA spends from the Superfund on "general

 government functions'  is therefore unauthorized, and  (c) EPA may not

 recover these  "unauthorized* expenditures famici br.  16-17).  This

 argument  has no merit.  As the sjEi£i recognize, CERCLA specifically

 authorizes EPA to spend Superfund monies on the administrative costs of

 response  actions.  Section 111(a) of CERCLA, which specifies the uses of

 the Superfund, states  that the Fund shall not be used "for any

 administrative costs or expenses * * * unless such costs and expenses are

 reasonably necessary for and incidental to the implementation of this

 title  rtitle 1. CERCLA "I* (emphasis added), 42 U.S.C.  961l(a).47  Section
     46 (...continued)
court in this case specifically declined to  follow the Ottati  and Goss
court (see Opinion of May  6,  1988, at  22).

          Moreover, under  the cost recovery  provision of  the Federal
Water Pollution Control Act,  33 U.S.C.  1321(f), which makes responsible
parties liable to the United  States  for "all costs incurred* by the
United States in cleaning  up  spills  of oil or hazardous substances  in
United states' waters, courts grant  the United States its administrative
expenses.  Se* United States  v, Hollywood Marine. Inc.. 519 F. Supp.  688,
'••91, 692  (S.D. Tex. 1981)  (granting  the United States costs of contract,
Coast Guard personnel salaries, materials, equipment and  lease); Unitefl
States v. Malitovsky Cooperage Co..  472 P. Supp.  454, 456, 459 (W.D.  Pa.
1979) .(granting United States costs  of contract,  "expenses and costs  of
the on scene coordinator," and "other  expenses and supplies'); and  United
States v. Slade. 447 F, Supp. 638, 645 (E.D. Texas 1978)  (grafting  the
United States contract, personnel, and materials  costs).   Nor   ,: these
cases denied the United States any of  its costs on the basis  v;ct its
costs did not support the  clean-ups  undertaken.
   *                                 • '
     47   In addition, Section 111(a)  of CERCLA states specifically that
the Fund shall be used for "(pjayment  of government  response  costs," 42
U.S.C. 9611(a)(1).
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                                   - 35 -
 111(a) thus specifically authorizes tne expenditure of lund ttone>  on
 administrative expenses which are 'reasonably necessary for and
 incidental to the  implementation* of,  inter alia. EPA's response
 authorities under  Section 104 of CERCLA.  As the portion of EPA
 •overhead* expenses which supported the response action on Meyer's
 property, the indirect costs at issue  here represent administrative
 expenses  'reasonably necessary for* and 'incidental to* the response
 actions taken in this case.  The ami£i have no basis for arguing that EPA
 nay not utilize Superfund monies on the indirect costs of response
 actions.
          The amici also argue (aai£l  br- 18) that the United States may
 not recover indirect costs which are spent from non-Superfund monies
 because, they argue, the United States may not put these non-Superfund
 monies, once it has recovered them, into the Superfund.  However,
 contrary to amici's suggestion, CERCLA does not limit a responsible
 party's liability  to those costs which have been paid out of the
 Superfund.  Section 107(a) of CERCLA states in no uncertain terms:
 'Notwithstanding any otherprovision orrule of law, and subject  only to
 the defenses set forth in  [section  107(b)(3)],* past and present  owners
 and operators, generators  (persons  who arrange for disposal of hazardous
 substances), and transporters 'shall be liable for * *  * all  costs of
 removal irr rj,i*ilial action incurred by the United States  *  *  * , * 42
U.S.C. 9607(a) (emphasis added).  Thus, Congress did not condition the
extent of responsible parties' liability  to the  United States on the
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                                   - 36  -

 source  of the money used to clean up tne site or tne destination of the

 monies  once  recovered.  This argument is also without merit.4?

          By the plain language of Section 107(a), Congress has mandated

 that  the parties it has deemed responsible for hazardous substance

 releases  (those persons identitified in Section 107(a)) are to bear the

 full  burden  of costs and responsibility for mitigating the dangers of

 these releases.  The district court correctly held that EPA's indirect

 costs are 'costs of 'removal * * * action"  (Opinion of May 6, 1988,  at

 19),  and, as such, are costs for which Meyer is liable.  If liable

 parties like Meyer do not bear the cost of the EPA's indirect response

 costs,  then  they evade Congress' command that they be  liable for "all

 costs*  of response actions, and the public,  rather than the liable

 parties, must bear this portion of the response costs.49
     48   The argument that responsible parties are liable only  for
monies spent from the Superfund  is also refuted by two other points.
First, Section 107 of CERCLA makes responsible parties liable  for
response costs incurred by a State, an Indian tribe, or 'any other
person,* 42 U.S.C. 9607(a)  (see  supra n.  8), and a state, Indian tribe,
or 'any other person* may recover their 'response costs*  from  liable
parties even though the state, India-, tribe, or other person did not
spend money from the Superfund in taking  response actions.  Second,
courts have held that the United States may recover from  liable  parties
response costs incurred prior to the enactment of CERCLA; since  the
'Superfund* was not created until CERCLA's enactment, the United States
recovers non-*Superfund* monies  in these  cases.  See, e.g.. United States
v. NEPACCO. 810 F.2d at 737.

     49   When Congress reauthorized CERCLA in 1986, it emphasized that
it wanted the United States to recover all costs of its response actions.
In the words of Senator Stafford, Senate  floor manager of SARA:  'The
theory underlying Superfund's liability scheme was and is, that  the
Government should obtain the full costs of cleanup.' 132  Cong. Rec.
S14903 (daily ed. Oct. 3, 1986)  (remarks  of Senator Stafford)  (Emphasis
added).  See also 132 Cong. Rec. S14935  (daily ed. Oct 3, 1986)  ('The
President can recover every dollar of the broad-based tax imposed  by the
Act by pursuing the polluters in cost-recovery cases.')(remarks  of Sen.
Durenberger.) (Emphasis added);  132 Cong. Rec. H9624  (daily  ed.  Oct.  8,
1986) ('it is expected that the  EPA and the Department of Justice  will
vigorously pursue cost recovery  actions  for a.^1 moneys expended  pursuant
                                                          (continued...)
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                                   - 37  -

                                   III

                  EPA'S INDIRECT RESPONSE  COSTS ARE NOT
                         AN UNCONSTITUTIONAL TAX

          The amici argue  faro-ici br. 28-35) that EPA's indirect response

 costs are a "tax* and  that this "tax* is unconstitutional because

 Congress did not delegate the 'taxing* power in CERCLA.   As indicated

 earlier  (supra at 20), this argument is being raised solely by the amici

 in this appeal, was not raised in the district court, and is not properly

 before this Court.  However, should the Court decide to address this

 issue, we demonstrate  that the areiei's argument is without any merit.

          In National  Cable Television Ass'n v. United States. 415 U.S.

 336  (1974), and Federal Power Cop™*n v. New England Power. 415 U.S. 345

 (1974), the Supreme Court construed the provisions of the Independent

 Offices Appropriation  Act  (*IOAA*), 31 U.S.C. 9701 (previously codified,

 at the time of these cases, at  31 U.S.C.  483a).  The IOAA, at the time of

 these decisions, had provided that:

          It is the sense of Congress that any work, service *
          * * benefit  * *  * license * * * or  similar thing of
          value or utility performed, furnished, provided,
          granted * »  * by anj  Feaerai  agency * *  * to or  for
          any person * * * shall be self-sustaining to the full
          extent possible, and  the  head of each Federal  agency
          is authorized by regulation * * * to prescribe
          therefor * * * such fee,  charge, or price, if  any, as
          he shall determine *  * *  to be  fair and  equitable
          talcing into  consideration direct and indirect  cost to
          the Government, value  to  the  recipient,  public policy
          or interest  served, and other pertinent  facts  *  * *  .

 65 Stat. 290 (Aug. 31, 1951)  (codified  at 31  U.S.C.  483a).  The  Court

 determined that Congress,  in enacting this statute,  had  conferred on

agencies the power to  impose a  'fee*  for  a thing of  value  conferred on an
     49(...continued)
to the act where responsible  parties can be identified*)  (remarks of Rep.
Eckart) (emphases added).
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                                   - 38 -
 individual,  and  had  not conferred on agencies the power to levy a 'tax.*
 Under the  taxing pover, the Court stated, Congress could "act arbitrarily
 and disregard benefits bestowed by the Government on a taxpayer and go
 solely on  ability to,pay, based on property or income,* National Cable
 Television Ass'n. 415 U.S. at 340.  Because this was such a broad power
 and because, in  the  Court's view, the IOAA did not contain sufficient
 standards  to guide the exercise of such a broad power, the statute could
 not be interpreted to grant the power to levy a tax.  Instead, the Court
 determined,  the  IOAA confers the authority to impose 'fees* — 'specific
 charges for  specific services to specific individuals or companies'  (New
 England Power Co.. 415 U.S. at 349).  A  fee, the Court stated, unlike a
 tax,  "bestows a  benefit ,on the applicant, not shared by other members of
 society,*  National Cable Television Ass»n. 415 U.S. at 340*341.
           The amici  argue that EPA's indirect costs are a  "tax"  on liable
 parties; that CERCLA did not delegate  the taxing power; and, therefore,
 "indirect  costs* are an "unconstitutional tax*  famici br.  28-35).   The
 amici  are  incorrect.  The recovery  of  the indirect costs  of a  response
 action  is  net the imposition of a tax.   jjr j,ci's argument  is prerised on
 the  sane incorrect,  unsupported factual  assertion which underlies the
 other  arguments  against indirect costs,  i.e.. that EPA's  indirect costs
 are  "general costs of administering the  [CERCLA] program" unrelated to
 the  response actions (amici br. 28):   The amici argue that the recovery
 of the  indirect  costs of a response action is "the collection of funds
 for general government functions not specifically connected to an
 identifiable party"  f amici br. 30), and, therefore,  is a  "tax* fid;,,).
However, as discussed at length supra  at 24-36, EPA's indirect costs are
 "connected to an identifiable party";  they are  part  of the total cost to
-------
                                   -  39  -

 EPA of cleaning up the release of hazardous substances on Meyer's

 property, and are costs for which Meyer, as the owner of the property

 contaminated by hazardous substances, is liable.   In short,  these costs

 are "connected to an identifiable party*; they are costs for which Meyer

 bears full responsibility.50

          We note, however, that the cases decided under the IOAA are

 instructive on the question of how the costs of a response action may  be

 calculated.  As originally enacted (and as in force at the time of the

 National Cable Television Ass'n and New England Power decisions), the

 IOAA had authorized federal agencies to prescribe a "fee* which the head

 of the agency determined to be "fair and equitable," taking into

 consideration, inter alia, "direct and  indirect cost to the Government*
     50   Amici's argument that Section 531 of SARA specifically
prohibits the imposition of a tax is misleading and beside the point.
First, as discussed in the text, EPA's indirect response costs are not a
•tax"; they are part of the total cost of responding to a release of
hazardous substances, and recovery of these costs is specifically
provided for in Section 107(a).  Second, Section 531 of SARA, in
providing that: 'Notwithstanding any provision of this Act not contained
in this title [Title V: the Superfund Revenue Act of 1986], any provision
of this Act (not contained in this title) which -**  (1) imposes any tax,
prenuuiE, or fee,  (2) establishes any trust fund, or  (3) authorizes
amounts to be expended from any trust fund [—) shall have no force or
effect" (Pub. L. 94-499, sec. 531, Oct. 17, 1966), was providing for the
repeal of certain provisions in the 1980 statute.  In SARA, Congress
repealed the provisions of the 1980 statute regarding the "Superfund"
itself (e.g.. the provisions creating the Fund, providing for the
imposition of environmental taxes to raise revenue  for the Fund, and
authorizing expenditures from the Fund) and enacted Title V of SARA, the
Superfund Revenue Act of 1986, in their stead.

          Moreover, just because indirect costs under CERCLA are not a
tax, this does not mean that they are a "fee."  Section  107(a) of  CERCLA
imposes neither a "tax* nor a "fee."  It makes certain persons, deemed  by
Congress to be the parties responsible for the release of hazardous
substances, liable for "all costs* of responding to these releases.  He
note, however, that the amici do not aid their argument  by  implying  that
Section 107(a) response costs are a'"fee"; as discussed, infja. at    ,
courts routinely hold that agencies may set a "fee" according to the -
total cost of the service for which the fee is imposed,  and that this
total cost includes both "direct* and "indirect* costs.
-------
                                   - 40  -
 (60 stat. 290).  In 1982, Congress revisedjand recodified the IOAA.   See
 Pub. L. No. 97-258, 96 Stat. 1051  (Sept. 13, 1982).  In doing ,so,  it
 amended the statute to provide that the head of an agency shall establish
 a charge which is "fair* and based on, inter alia, .'the costs to the
      *•                                *
 Government,* id. (codified at 31 U.S.C.  9701(b)).  The Explanatory Notes
 to this revision state:  "In clause 2(A), the words 'direct and indirect'
 are omitted as surplus,* Explanatory Notes following 31 U.S.C. 9701.  In
 other words, referring to the 'costs to the Government* refers to the
 direct and indirect costs to the Government; costs, according to the most
 fundamental and well established accounting principles, are figured by
 determining and adding together direct and indirect costs.
          Indeed, the fees which agencies set under the IOAA, and which
 courts have specifically approved, are based on the total cost to the
 agency of providing the service for which the fee  is assessed. ' This
 total cost is figured in much the  same-way the total cost of  a response
 action is calculated, and includes the direct and  indirect costs to the
 agency of providing the service.   Thus, in Mississippi Power  & Licrht v.
I 5  Naclear Regulatory COES.ISS^::!-.. 601 F.2d 223  (5th C-r. 157=), ceri.
 denied, 444 U.S. 1102 (1980), the  Fifth Circuit upheld the Nuclear
 Regulatory Commission's fee schedule  for processing application permits
 and for inspections, and, in doing so,  stated:
          The petitioners further  object to being charged for
          administrative and technical  support costs.  The
          Commission's position is that these costs must be
          included in the fee schedule  because they constitute
          part of the total cost of providing a  service;  the
          petitioners contend that such costs should  be
          excluded because they represent general agency
          expenses which do not benefit an  'identifiable
          recipient.'
          The cost of performing a service, such as granting a
          license to construct a nuclear reactor,  involves a
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                                    - 45 -
                    THE DISTRICT COURT PROPERLY AWARDED
                            PREJUDGMENT  INTEREST

           The district court committed no error in granting the United

 States prejudgment interest on the award of response costs.  As the court

 stated,, (Opinion of May 6, 1988, at 23-26), CERCLA, as amended by SARA,
                                           I
 provides that the amounts recoverable under Section 107 'shall include

 interest* and such interest 'shall accrue from the later of (i) the date

 payment of a specific amount is demanded in writing, or (ii) the date of

 the expenditure concerned," 42 U.'S.C. 9607(a).  As the court recognized

 (Opinion of May 6,,1988, at 23), '[t]he law is settled that a court is to

 apply the law in effect at the time it renders its decision, unless doing
                                                  f     r

 so would result in manifest injustice or there is statutory direction or

 legislative history to the contrary*,* Bradley v. Richmond School Board.
                                                   " '     i  *

^416>U.S.  696, 711  (1974).  The Fourth Circuit, in United States v.      ^.

 Monsanto. 858 F;2d 160, addressed the identical argument against

 pre^udgment interest which Meyer makes here, and held that  'the language

 ana legislative history of the 1986 amendment reveal no statutory

 direction or congressional intent to delay its application,  and the

 defendants have failed to demonstrate any 'manifest  injustice'  that would

 arise from-its immediate operation,* 858 F.2d at  175-176  (omitting

 'footnote).54  Bere, while Meyer argues for an opportunity *to show
      54V^'  Such legislative direction does exist  for'the new reimbursement
 procedures added to Section 106 (b) of CERCLA, .42 U.S.C.  9606(b),^by SARA.
 See 132 Cong'. Rec. H9624  (daily ,ed.,October  3^,1986) (Remarks of Rep. Eckart.
                                    *
-------
                                   - 46 -
 manifest injustice,  it has not even hinted at what that manifest
 injustice might be.   See Meyer Br. 30-33.55
           In any event, Meyer ignores  the district court's alternative
 holding on prejudgment interest.  The  court made plain that even if
 CERCLA had not expressly provided for  prejudgment interest, it would have
 assessed prejudgment interest against  Meyer and the others because it was
 necessary to make the United States whole:  'Interest lost on monies
 expended from the Superfund was part of  the cost to the government of
 removing hazardous substances from the Northemaire site*  (Opinion of Kay
 6,  1988,  at 24).   As the district court  recognized  fidA).  some courts
 awarded prejudgment  interest before CERCLA was amended in  1986.  See,
 e.g..  United States  v. NEPACCO. 579 F. Supp. at 850.
                                    VI
             MEYER RAISED NO GENUINE ISSUES OF MATERIAL FACT
                 TO PRECLUDE THE GRANT  OF SUMMARY JUDGMENT
           Meyer argues that there were genuine issues of material fact
which  precluded the  entry of summary judgment on EPA's indirect costs
 (Meyer Br.  26-29)  and on certain of the  direct costs,(Meyer Br. 34-39).
however,  the district court correctly  concluded, after a careful review,
that there were no genuine issues of material fact  precluding  the entry
of summary judgment  for the United States on costs.   See Opinion of  Kay
6, 1988,  at 5-22.  We note, at the outset, that, as indicated  above
 (supra at 7), Meyer,  having been held  liable, bears the burden of proving
that the  actions taken by the United States  (and the costs incurred
thereby)  are inconsistent with the national contingency plan.   See United
     55   United States v. Monsanto.  858  F.2d 160,  reverses United
v. SCRDI. 653 F. Supp. 984, on  the  issue  of pre judgment interest.  The
district court opinion, U.S. v .  SCRDI .  is the only case which Meyer
regies on in arguing that  it should not be assesoed pre judgment interest.
See Meyer Br. 32-33.
-------
                                   - 47  -
States v. KEPACCO. 810 F.2d at 747.  In addition, as Meyer recognizes^Bj
 (Meyer Br. 37-38), the question in reviewing the United States' response
actions  is whether they were 'arbitrary and capricious,* Opined States v.
Ward. 618 F. Supp. 884, 900  (D. N.C. 1985).
          On the question of indirect costs, neither Meyer nor
Northernaire and Garwood filed any affidavits or other evidence to
challenge the United States' declarations or the exhibits which
accompanied then.  See supra at 24.  In fact, Meyer did not even argue
that there were genuine issues of fact precluding summary judgment on
indirect costs.  See Meyer's briefs  in opposition to United States'
notion for summary judgment on costs listed at id.  As discussed at
length above at 24-30, the United States supported its request for the
indirect costs incurred by EPA in support of the response action in its
declarations and the exhibits attached to the declarations.  As this
Court stated in Brvant v. Commonwealth of Kentucky. 490 F.2d at 1275:
•Where the movant brings forward and supports  [its] motion for summary"
judgment, [its] opponent may not rest merely on  its pleadings  but rather
isust come forward to show genuine  iss-es cf fact.  Mere ccr.clusory and
unsupported allegations, rooted in  speculation,  do not meet that burden.*
See discussion of summary judgment  standards,  supra at  18-19.  Here,
although Meyer argues that the existence of factual  issues precluded
summary  judgment on costs, it filed nothing in the district court to
challenge the united States  submissions; it did  not  argue the  presence of
                                                      r
such issues to the district  court;  and, while  it asserts  now that  there
are 'inherent material issues of fact requiring  resolution at  trial*
(Meyer Br. 28), it does not  even specify what  these  alleged issues are.
See Meyer Br. 26-29.
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                                   - 48 -
           On the question  of  issues  of fact concerning specific direct
 costs incurred by the United  States, Meyer argues  (Meyer Br. 34-39) the
                    »                                         *
-existence of factual  issues concerning only one of the direct costs, the -
 contract awarded to the  Petrochem Company.  Its principal argument is
 that there were issues of  fact  concerning whether conditions at the site
 posed enough of an emergency  for the United States to have  invoked the
 •public exigency* exception to  the  competitive bidding requirement  for
 federal contracts (see 41  U.S.C. 252(c)).  The district court carefully
 considered precisely  this  argument  and concluded that there were no
 issues of fact precluding  summary judgment.   Opinion of May 6,  1988,  at
 10-12.   As the district  court stated, Meyer did not  dispute the factual
 assertions made in the Second Affidavit  of Robert  Bowden  (see  supra n.16)
 regarding the United  States'  reasons for deciding  against competitive
 bidding (the risk of  death or injury if  the badly  rusted  drums containing
 cyanides and acids leaked), and Meyer relied  on the  same  documents on
 which the United States  relied  in arguing the existence  of a factual
 issue.   As the district  court stated in rejecting  Meyer's contention:
 "Rather than raising  a genuine  issue of fact, Meyer  disputes the
 propriety of the agency's  decision.*  Opinion of May 6,  1988,  at 12.
 And,  as the district  court held, the latter  is a  question of law properly
 decided for the United States.   Id.  Meyer's  only other argument is that
 there were factual issues  concerning the rates paid to Petrochem.  Yet,
 as  the court noted fid^.  at 12-13),  Meyer submitted nothing to establish
 such factual issues,  and instead merely made *conclusory allegations.*
 There were no genuine issues  of material fact precluding summary
 judgment.
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                                   -  49  -
                                   VII
                THE DISTRICT COURT DID NOT ERR IN HOLDING
                   MEYER JOINTLY AND SEVERALLY LIABLE
          As explained in the seminal case on joint and several liability
 under CERCLA, United States v. Chen-Dyne Corp..  572 F. Supp.  602 (S..D.
 Ohio 1983), while  CERCLA does not expressly state that the liability of
 responsible parties is joint and several, the legislative history of
 CERCLA makes clear Congress' intent that the scope of liability *be
 determined from traditional and evolving principles of common lav,* 572
 F. Supp. at 808.   As the Chem-Dyne court explained, under these common
 law principles, "where two or more persons cause a single and indivisible
 harm, each is subject to liability for the entire harm,* 572 F.2d at 810
 (citing Restatement (Second) of Torts, Section 875).  Furthermore, the
 burden of demonstrating that the environmental harm is divisible lies
 with the responsible parties.  Id.  Courts have uniformly followed
 Dyne and have held that, where harm is indivisible, CERCLA imposes joint
 and several liability.  See, e.crf . United States v. Monsantp.  858 F.2d at
 171-173; United States v. NEPACCO. 810 F.2d at 732 n.3  (dictum)? United
 States v. Dickereon. 640 F. Supp.  448, 450  (D. Hd. 1986); United States
 v. Ottati and Cos*. Inc.. 630 F.  Supp. at 1395-1396;  and United States v^
 ConservatJQp ^bOii7*l Co..  589 F.  Supp.  at 63.^
     56   Congress, in reauthorizing and amending  CERCLA in 1986,
completely endorsed Chem-Dyne'a exposition  of  CERCLA's  liability scheme.
The Report of the House Energy and Commerce Committee,  in discussing H.R.
2817 (the predecessor House bill to SARA, the  1986 amendment)  states:
          Explicit mention of joint'and several  liability was
          deleted from CERCLA in 1980 to allow courts to
          establish the scope of liability  through a case-by-
          case application of 'traditional  and evolving
          principles of common law* and pre-existing statutory
          law.  See 126 Cong. Rec. H11787  (daily ed. Dec. 3,
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                                   - 50 -

           In this  case,  the district court made an explicit finding that

 the environmental  ham posed by the conditions on Meyer's property vas

 "indivisible* (opinion of April 30, 1987, at 16), and properly held Meyer

 jointly and severally liable.  Meyer did not even attempt to raise, as a

 factual natter,  the question -whether the harm vas divisible.  See Meyer's

 briefs  in  opposition to  the United States' motion for summary judgment on

 liability  listed supra n.15.  Moreover, Meyer, as the landowner-lessor of

 the property,  was  not in a position to argue that the harm was physically

 divisible  and that it was responsible  for some divisible part of the

 harm.   Cf.  United  States v. Monsanto.  858 F.2d 160  (affirming imposition

 of  joint and several liability on landowner-lessor).57
                56 (...continued)
           1980)  (statement by Rep.  Florio);  126 Cong. Rec.
           S14967  (daily  ed. Nov.  24,  i960) statement by Sen.
           Stafford).  The courts  have made substantial progress
           in doing  so.   The Committee fully  subscribes to the
           reasoning of the court  in the  seminal case of United
           States v.  Chem-Dyne Corporation.f  ), which
           established a  uniform federal  rule allowing for joint
           and  several liability in  appropriate CERCIA cases. *
           * *   The  CoBKittee believes that this uniform feaeral
           rule on joint  and several liability [articulated  by
           the  Chem-nyne  court]  is correct and should be
           followed.  It  is unnecessary and would  be undesirable
           for  Congress to modify  this uniform rule. Thus,
           nothing in this bill  is intended to change the
           application of the uniform  federal rule of joint  and
           several liability enunuciated  by the Chem-Dvne  court.

H.R. Rep.  Ho.  353,  99th  Cong.,  1st  Sess., Part 1  at 74.   See also 132
Cong. Rec. 817X38 (daily *4. October  17, 1986)  (statement by Senator
Stafford,  primary sponsor of SARA,  upon  enactment of SARA,  that  CERCLA
has 'been  held to impose strict,  joint and several liability, which was
the outcome that was expected by  myself  and  others in 1980*).

     57    In arguing against joint  and several liability, Meyer  is
essentially arguing for  an opportunity to apportion the liability between
itself and the other liable parties.  See Meyer Br. 46-47.   As the
district court carefully explained  (Opinion  of April 10,  1987, at 17-18),
Meyer will have that opportunity  in its  contribution case against the
other liable parties (which is  presently pending, see £u££& n.14).  see
discussion sjj££ft regarding CERCIA'a contribution  provision at  8.
-------
                                   - 51  -



                                CONCLUSION

          For the reasons stated above, the judgment of the district

court should be af firmed.

                         Respectfully submitted,

                              DONALD A. CARR
                                Acting Assistant Attorney General


                              JACQUES B. GELIN
                              ROBERT H. OAKLEY
                              NANCY B. COLLINS
                              SARAH P. ROBINSON
OF COUNSEL:                     Attorneys. Department of Justice
                                Washington. D.C. 20530
KAREN H. CLARK                          (2021 633-4358
JOSEPH FREEDKAN
  Office of General Counsel
  United States Environmental Protection Agency
  Washington. D.C. 20460

SANDRA CONNORS
  Office of Compliance and Enforcement Monitoring
  United States Evijoninental Protection Agency
  Washington. D.C. 20460

ROGER GRIMES
  Office of Reiona
  United States Environmental Protection Agency
  Chicaor. Illirfig 606C4
MARCH 1989
90-11-3-44
-------
                             - 52 -

                      CERTIFICATE OF SERVICE

          I certify that a copies of the foregoing Brief  For

United states of America, Appellee has today been served  upon

counsel, by placing the' sane in the United States nail, postage

prepaid, properly addressed, this 31st day of March 1989, to:

                    Jon D. Vander Ploeg
                    SMITH, HAUGHEY,  RICE & ROEGGE
                    200 Calder Plaza Building
                    Grand Rapids, Michigan 49503

                    Miles J. Murphy, III
                    CHOLETTE, PERKINS fc BUCHANAN
                    900 Canpeau Square Plaza
                    99 Monroe Avenue, N.W.
                    Grand Rapids, Michigan 49503

                    Oven J. Cunnings
                    CUMMINGS, MCCLORY, DAVID & ACHO, P.C.
                    33900 Schoolcraft, Suite G-l
                    Livonia, Michigan 48150-1392

                    Susan E. Morrison
                    SIUDARA, RENTROP, MARTIN fc MORRISON
                    74 E. Long Lake Road, 2nd Floor
                    Bloomfield Hills, Michigan 48013

                    Robert P. Tramp
                    415 Munson Avenue
                    Suite 108
                    Traverse City, Michigan 49684-3049

                    John C. Martin
                    PATTON, BOGGS 6 BLOW
                    2550 M Street, N.W.
                    Washington, D.C. 20037
                                   SARAH P. ROBINSON
                              Attorney, Department  of Justice
                              P.O. Box 23795
                              L'Enfant Plaza  Station
                              Washington, D.C.  20026
                                    (202) 633-4358
-------
-------
-------
-------
               IN THE  UNITED STATES COURT OF APPEALS
                       FOR THE SIXTH CIRCUIT
 UNITED STATES OF AMERICA,       }
                                )
     "Plaintiff-Appellee,     .   )
                                )
     v.                         )     No. 88-2074
                                )
 R.W. MEYER,  INC.,               )
                                )
     Defendant-Appellants.      )
                      BRIEF FOR AMICI CURIAS

                          J. Gordon Arbuckle
                          John C. Martin
                          Peter 0. Robertson
                          PATTON, BOGGS & BLOW
                          2550 M Street, N.W.
                          Washington, D.C.  20037
                          (202) 457-6000

                          Attorneys for: Themo Chem PRP Group;
                          Cleve Reber Task Force;
                          Chemical Manufacturers Association;
                          Motor Vehicle Manufacturers Association,
                          National Association of Manufacturers;
                          and
                          Nat*oral Chamber Litigation Center for the
                          Chamber of Commerce cf the United States
Of Counse.

David F. Zoll
Vice President and General Counsel
Chemical Manufacturers Association

William H. Crabtree
Vice President and General Counsel
Motor Vehicle Manufacturers Association

Jan Amundson
General Counsel
National Association of Manufacturers

Robin S. Conrad
National Chamoer Litigation Center for the
Chamber of Commerce of the United States

Dated: January 31, 1989
-------
                        TABLE OF CONTENTS

ISSUES PRESENTED FOR REVIEW	     1

STATEMENT OP THE CASE	     2

      The Statutory Scheme	     2

     "The Indirect Cost Manual	'	     4

      The Factual and Procedural Background....	     6

SIMMAR* OF ARGUMENT	     9

ARGUMENT	\	    12

I.    CERCLA AND ITS LEGISLATIVE HISTORY  DO NOT  PERMIT
      RECOVER* OF INDIRECT COSTS	    12

      A.    The Plain Language of the  Statute Does  Not
           Permit Recovery of Indirect  Costs	    12

           1.    CERCLA Specifies Recoverable Response Costs,
                and It Does Not  Provide for Recovery of
                Indirect Costs	    12.

           2.    Because The Release or  Threatened  Release
                From the Northernaire Site  Did Not Cause
                the Incurrence of Indirect  Costs EPA May
                Not Recover These Costs	    14

           3.    The Statute Does Not  Allow  Expenditure
                of Superfund Money For  the  Cost  of General
                Government Functions, and EPA May  Not Recover
                These "Unauthorized Costs	»	    16

           4.    Congress Did Not Intend That General
                Appropriations to EPA Be  Reimoursed and
                Paid Into the Superfund Under the  Guise
                of Indirect Costs	    18

      B.    Under the Circumstances of This  Case  the
           Government's Interpretation  of the Statute  Is
           Not Entitled to Deference	    19

      C.    CERCLA's Legislative  History Does Not Permit
           Recovery of Indirect  Costs	    20

           1.    The Legislative  History of  the 1980
                Statute Indicates That  Only Direct Costs
                Are Recoverable	    20
-------
            2.    The  Legislative History of tr-e 1986
                 Amendments  Confirms That  Indirect Costs
                 Are  Not  Recoveraole	   22

       D.    Authority Under  Section  311 of FWPCA Does Not
            Permit Recovery  of  Indirect Costs	   23

-II.    THE  CASE LAW INTERPRETING CERCLA DOES NOT ALLOW
       RECOVERY OF INDIRECT  COSTS	   25

 III.   EPA'S ATTEMPT  TO CHARGE  RESPONSIBLE PARTIES FOR
       INDIRECT COSTS IS  A TAX  PROHIBITED BY CERCLA AND
       THE  CONSTITUTION	   28

       A.    EPA's Assessment of Indirect Costs Is a Tax	   29

       B.    The Statute Demonstrates that CERCLA Does Not
            Authorize Assessment of a Tax	   33

       C.    EPA's Assessment of a Tax in the Form of
            Indirect  Costs is Unconstitutional	   33

IV.    BECAUSE EPA'S  POSITION ON INDIRECT COSTS HAS A
       BINDING FUTURE EFFECT ON RESPONSIBLE PARTIES, THE
       RULE SET FORTH IN THE INDIRECT COST MANUAL MUST BE
       SUBJECTED TO NOTICE AND COMMENT UNDER THE APA	   35

CONCLUSION	   41
-------
                       TABLE OP AUTHORITIES
 CASES

 Artesian Water Co.  v. New Castle County^
 851  P.2d 643  (3d Cir. 1988)	19
 Caminetti  v.'United  States,  242 U.S. 470  (1917)	-.12

 Chevron  U.S.A.,  Inc. v. Natural Resources Defense
 Council, Inc., 467 U.S. 837  (1984)	18

 Dedham Water Co. v.  Cumberland Farms, Inc.,
 689  F. Supp. 1223  (D. Mass.  1985)	15

 Eagle Picher Industries v. EPA,
 759  F.2d 922 (D.C. Cir. 1985).	..14

 FPC  v. New England Power Co., 415  U.S. 345
 (1974)	29, 32, 34

 INS  v. Chada, 462 U.S. 919 (1983)	33, 34

McLouth Steel Products Corp. v. Thomas,
 838  F.2d 1317 (D.C.  Cir. 1988)	35, 37

Muller Optical Co. v. Equal  Employment
Opportunity Conun'n,  743 F.2d 380  (6th Cir. 1984)	33

National Cable Television Ass'n,
 Inc. v.  United States, 415 U.S.
 336  (1974)  	27, 28, 29,  30, 32, 33, 34

National Freight, Inc. v. Larson,  760 F.2d 499
 (3c  Cir. 1985), cert, denied, 474  U.S. 902 (1985)	..18

National Motor Freight Traffic Ass'n v.
United States,  268 F. Supp.  90 (D.D.C. 1969}
aff d per cunam 393 U.S. 18 (1968)	37

New  York v. Shore Realty Corp., 759 F.2d  1032
 (2d  Cir. 1985)	15

Ohio Dep'tof Human  Services v. HHS, No.  86-3449
 (6th Cir. Hov.  28, 1988)	34, 35, 38

Securities  Industry  Ass'n v. Board of Governors
of the Fed. Reserve  Sys., 468 U.S.  137 (1984)	18

Spiers v. Ohio Dep't of Natural Resources
(In  re Jenny Lynn Mining Co.), 780 F.2d 585
(6th Cir. 1986),  cert, denied, 477 U.S. 905  (1986)	30
-------
 St.  Francis Hospital  v.  Weirperger,
 4^3  F.  Supp.  323' (N.D.  Ca~.  1976).	39

 United  States v.  Chem-Dyne  Corp.,
 572  P.  Supp.  802  (S.D.  Ohio 1983}	-....23

 United  States v.  Dae  Rim Fishery Co., Ltd.,
 794  F.2d 1392 (9th  Cir.  1986).	23

 United  States v.  Hollywood  Marine,  Inc.,
 519  P.  Supp.  688  {S.D.  Tex.  1981)	23,  26

 United  States v.  Northeastern Pharmaceutical
 &  Chemical  Co., 579 P.  Supp. 823  (W.D. Mo. 1984),
 aff d,  810  F.2d" 726 (8th Cir. 1986), cert, denied,
 ...  S.  Ct.  _-£ (: = '"	..23, 24,  26

 United  States v.  Nortl-ernaire Plating Co.,
 685  F.  Supp.  1410 (W.D.  Mich. 1988)		8,  20

 United  States v.  Ottati  & Goss, Inc.,
 694  F.  Supp.  977  (D.N.H.  1988)	.24

 United  States v.  P/B  STCO 213, ON  527 979,
 756  F.2d  364  (5th Cir.  1985)	23

 United  States v.  RiverCoal  Co., Inc.,
 748  F.2d  1103 (6th Cir.  1984)	30

 United  States v.  Slade,  Inc.
 447  F.  Supp.  638  (E.D.  Tex.  1978)	23,  26

 Onited  States v.  South  Carolina Recycling
 & Disposal, Inc., 11  Chemical 4 Radiation
 '/ya£c= :.t.g*t-c"  Pspcrrer .35 (D.S.C. Nov. 22,  1985)	26

 United  States v. Wade,  577  F. Supp.
 1326 (E.D. Pa. 1983)	14,  15

 United Technologies Corp. v. EPA,
 821  F.2d  714  (D.C. Cir.  1987)	38

Walls v. Waste Resource  Corp.,
 761 F.2d  311  (6th Cir.  1985)	19
CONSTITUTIONS

U.S. Const., Art. I, S 8, cl.  1	27, 32
-------
 STATUTES


 5  U.S.C.  SS  551-559	34


 5  U.S.C.  S 551(4)....	36


 5  U.S.C.  $ 551(5)	35


 5  U.S.C.  S 553(b)	..35


 5  U.S.C.  § 553(b)(A)	38, 39


 5  U.S.C.  $ 553(c)	35


 5  U.S.C.  S 553(d)	35


 5  U.S.C.  § 553(e)	35


 26 U.S.C. SS 59A, 4611, 9507	2


 26 U.S.C. S 9507	2


 26 U.S.C. S 9507(C)	6


 33 U.S.C. S 1321	22
   <

 33 U.S.C. S 1321(f)(l)	23


 42 U.S.C. SS 9601(23)	3, 4, 13


 42 U.S.C. SS 9601(24)	"	3, 4


 42 U.S.C. S 9601(25)	13


 42 ;..£ C. § Q£   22)	22


 42 U.S.C. ^       i)	31


 42 U.S.C. S 9604(a)(l)	3


 42 U.S.C. S 9604(c)(l), (3), & (4)	3


 42 U.S.C. S 9607	17


42 U.S.C. f 9607(a)	6, 12, 32


42 U.S.C. S 9607(a)(l)-(4)	3


42 U.S.C. S 9607(a)(4)	14


42 U.S.C. S 9607(a)(4)(A)	3


42 U.S.C. § 9611	2
-------
 42 U.S.C.  S  9611(a)...	16

 42 U.S.C.  §  9611(a)(l)  &  (2)	16

 42 U.S.C.  $  9611{a}{5)  &  (6),  (c) &  (m)	16
                                                            t
 Superfund  Amendments and  Reauthorization
 Act?  Pub.-L. -No.  99-499,  § 531-, 100 Stat.
 1613,  1782 (1986)	32, 34



 MISCELLANEOUS

 40 C.F.R.  S  300.65	4

 40 C.P.R.  S  300.68	4

 40 C.F.R.  S  300.65(a)(2)	31

 B.  Mezines, J. Stein i  J. Gruff, Administrative
 Law (1988) 	38, 39

 Black's Law Dictionary  (4th ed. 1968)	30

 H.R. Rep.  No. 253 Parts I, II and V,
 99th Cong., 2d sess., reprinted in 1980 U.S.
 Code Cong. & Admin. News  	21, 22, 36

 Office of  Management and  Budget, "Budget
 of  the United States Government, Fiscal
 Year 1990," Appendix	2

 Office of  the Comptroller, Office of
 P im-^s t ration ard ?esc^rc = s v£rtie~£~t
 "Suoerfund Indirect Cost  Manual foe Cost
 Recovery Purposes FY 1983 through FY 1986"
 (Marcn 1986}	4, 5, 15, 18, 36, 37

 S. Rep. No. 848, 96th Cone., 2d Sess.  (1980)	19, 20

 Senate Committee on Environment and Public Works,
 Committee  Print Serial  No. 97-14, 97th Cong., 2d Sess.,
 A Legislative History of  the Comprehensive Environmental
Response,  Compensation  and Liability Act of  1980,
Vol. I (1983)	21
-------
                    mirm> STATB copiT or  APPEALS
                          rot THI SIXTH cmcorr

(ThU suttorat should b« piaetd m»m«diittly pr«e«dlnf tn« stitarttt nt of iaua* contain**
 in tn« brt«f of tt« party.  SM copy of Stft  Cfr.  FL  24 en rav«n« uda of thia form.)
 UNITED  STATES  OF AMERICA

     Plaintiff-Appellee,
      v.
                                           No. 88-2074
 R.W. MEYER, INC.

     Defendant-Appellant.
                 DISCLOSURE OF CORPORATE AFFILIATIONS
                         AND  FINANCIAL INTEREST
Pursuant to  8th Cf. R. 25,  the^ThermoChemPRPGrouo
                        """"^^""""^
•nakoi the foUomnf ducloaurt:
I.     ts said party a auDsidiary or affiUatt of a publiely owntd corporation!
                                                   «
      It t*ia tnsw«r :s YES, list twlow tn« identity of ifm oa/«nt corporation or
      and tn« raiationahip bttwttn it and  th« namtd party?
      Is tfun • pUbUely o«n«d eorooration, not a party to tn«  app«al» that haa a
              intartit tn tna ou«om«»
      If tfM amwor l» YEi Ust f< itftntity of such corporation and the natur* of tho
      flnaiwiai mttrvt)
             .7)
1-30-89
           (Sijnatur* at
 (DataT
6CA-1
7/11
        Ptft I of
-------
                     OKTTSD STATB COJJlt OP APPEALS
                           FOE TH1 Sim
 (ThU statanant should bt place* inmediataly praeodfnf the statement of iauei contained
 ui tfta brtaf «f tha party.  S«a copy of «CA Clr. R. 25 on reverse side of Uiia  form.)
                                             No. 88-2074
UNITED STATES OF AMERICA            j

     Plaintiff-Appellee,             !


                                        )
     v.                                 >


R.W.  MEYER,  INC.                     )

     Defendant-Appellant.            )
                  DISCLOSURE OF CORPORATE AFFILIATIONS
                          AND  FINANCIAL CNTtREST

Pursuant to ith  C^. R. 23,   Cleve  Reber Task  Force
                         ^ m"^~*
-ntxm the followinf dueloaurtt


                                                                       No
1.     Is said party i  sufisidtary or afflUata of a publicly  o«m«d eorporttion?
                                                     *
      If th« answer '.9 YES. Ujt b»low tn« id*-itlty of tha oartnt corporation or tffiHatt
      and  tft« r«tAt:cnsfv^ &atw«tn *t &nd tn« nAmed partyt
2.     Is thar*  a oubUely  ownad eoroorttton. not a party to tna  app«aU  that has a
              mtaraat in tna outcome*
      tf t)tt amwar Is YES, Ust f.a identity of such corporation tnd tna natur* of tha
      flnajwial intereau
                                                          1-30-89
                     of Counvtu                           Oata)
SCA-l                                                             Pt
-------
                            STATE! CprjlT Of APPEALS
                          FOI THI sum OECUTT

 (ThU itataawnt should* bo placorf UmnodiaMly proetdlnf tno stattmcnt of tjsuoi eontamod
 in tfto MMf «f OM party.  Soo copy of 6th  Or.  R. 23 on r«v«n« sidt of tltia form.)
      Plaintiff -Appellee/
 UNITED STATES OF  AMERICA           }
                                        J    No.  88-2074
                                        *
 R.W. MEYER,  INC.                     )


     Defendant-Appellant.            )
                 DISCLOSURE  OF CORPORATE APFIUATIOKS
                         AMD FINANCIAL INTEREST
Pursuant to «tft Cir. R.  25,

mak« trw  followinf diselosurti


                                                                      No
1.     Is aid party t subsidiary or tffUittt of t puoUely o«m«d eorporutlon?
      If th« inswtr •» YES, Lst 5»ie« t*t itftntity of t*» Darent  corpoftc.oft or tfflLs't
          vno rtUtioraftip bttwttn it *nd  tr\« namtd partyi
2.     Is tlMft «  puOUely own«d  coroerttion, not  •  party to tn« appoai, that hat a
              inttrait in tft«  out com*'
      If tht tmwtr is YES, lut  t*i« Kftntity of suoft corporation and the naturt of th«
      flnaneial int«r«iti
                                                         1-30-89
                     of Cjun**u                           TData*
6CA-1                                                             Ps««  i of
T/M
-------
                     (JOTTED STATES COU1T OF  Af FEALS
                          FOt THI SIXTH CttCUlT

 (TMi statanaat should &• placed liwmadiaMly prteadlnf tn« itatamant of usual contained
 in th« (Mttf of th« party.  SM copy of 8th Or.  R.  23 on ravana sida of' tnu form.)



 UNITED STATES OF  AMERICA           j

      Plaintiff-Appellee,            !


                                            No.  88-2074
      »•
 R.W. MEYER,  INC.

     Defendant-Appellant.
                 DISCLOSURE OP CORPORATE AFTTUATTOKS
                         AND FINANCIAL INTEREST
Pursuant to 8th Cur.  R. 25, ^JSJi^^
                         .^MW«»MBII^^M^IIMBM«^IMMpM^BHHBMMMMl^M

mak« ttw  followinc diselosur«t


                                                                     No
i.     l» aid ptrty « subsidiary or affUUu of • ,pudlicly own«d corporttion?
      If t"i« «-- **f s YZ5, Lst 'Sttow t»« idrstrty af «w 9«/%nt corpoc^Uan of
                uionship &«tw««n  it tnd  the naffltd pfiftyi
2.     b tfttn a  puDUety ownad  eoroorttien,  not a party to tn« appaaL  trtat ha» a
      fiaaaelai intanat in tna outcome' ^^^^^^

      If tht •mwar is YES, list tna idantity of such corporation and tha nature of tn«
              ifitaraati
                                                         1-30-89
                     of
SCA-i                                                            Pftfa I of
7/H
-------
                     GHTT1D STATES C001T Of
                          FOI THI SCTTB
 (TMi sutMMBt should b« pueo* twtnodiaftly proeodinf th« ttattnitflt of Imum eontamod
 ui tft« &**•* of tno party.  S*« copy of «U) Clr.  R. 25 on rtvona itdo of 'tun form.)
 UNITED STATES OF AMERICA           j

      Plaintiff -Appellee,             j
                                        !    No. 88-2074
                                        /
 R.W.  MEYER,  INC.                     )


     Defendant-Appellant.            )
                 DISCLOSURE OF CORPORATE AFFILIATIONS
                         WO FINA.fClAU INTEREST
                         National Chamber  Litigation Center,  Inc.  for
Pursuant to 0th Cir.  R. 23, llie__CJiaribej_of_Conunerce of_ :the United States
      tho  following dueloiurt:


                                                                     No
I.     Is siid pirty t sufisidiiry or tfftlittt of t publicly o«m«d eorporttlon?
      If tn« tnswtr :» YES, U4t !Mlow tit identity of tht Mftnt ctrportUon or
      and int rtutiorsftip  &«twt«n it ind tht nam«d ptrtyt
2.     IB th«M « puAUety own«d coroofttioft. net « ptrty  to  tho «pp«i, that hat  «
              tnttr«it m tno outeom**
      If tht antwor Is YES, list tno tdtntity of sucft eorporttion «nd tlw natur* of tfto
      flnaneial i
                                                        1-30-89
           iSifnatur* of Cjunvtu                           \DttoT
SCA-1                                                            Pi« i of
-------
                     OKIT10 STATS C001T OP
                          rot THI SIXTH cnururr

 (This itatemeBt inould be place* iiwrnedltttly preceding the statement of mum contained
 in tfte Mf«f «f th« party.  Se* copy of «tn CIr. (L 23 on reverse ude of Wi* form.)
                                        )
 UNITED STATES OF AMERICA

     Plaintiff-Appellee,
      V.
 R.W. MEYER,  INC.

     Defendant-Appellant.
                                            No. 88-2074
                 DISCLOSURE OF CORPORATE APPIUATIOMS
                         AND FINANCIAL INTEREST

Pursuant to 8th dr.  R. 23, Najtiona_L.-AggQCj^tion of  Manufacturers of  the
                                 """"""TnSmJ^ST^Srty^JniTe^^caTe^S^^L'ne r ic
      th«  foUowinf dueloturti
1.
ti «id party * sufisidury or •ffilltt* of t publicly owned corporation'
                                                                     No
      ff th« tnsw«r is YES, list Miow tn« identity of th« ocrtnt corporttion or tffillttt
      and tn« rtUtiomnip  b«twt«n it «nd ih« n«ffl«d party?
2.     to tNr« « publicly owned coroorttten, not • ptrty to  tn« appeal, that hat  •
              interejt in tne outcome*
      It tht Mfwer Is YES* tut tie identity of sucn corporation and the nature of the
      financial uttereiti
                                                        1-30-89
                                                         i Date)
SCA-l
7/11
                                                                i of :
-------
                   ISSUES PRESENTED FOR REVIEW

1.    Does CERCLA permit EPA to add the indirect operating costs
of the Superfund program to its direct response costs at a site
and recover them from responsible parties?
2.    Is EPA's assessment of general operating costs of the
Superfund program a levy of a tax contrary to CERCLA and the
Constitution?
3.    May EPA adopt and implement a methodology for calculation,
assessment and recovery of indirect costs without the benefit of
notice and comment rulemaking under the APA?
-------
                      STATEMENT OF THE CASE

      This  case  is before the Court on appeal from an order of the
-District Court  for the-Westetn District of.Michigan entered on
 May  6,  1988, providing that the government is entitled to
 $270,952.07  in  costs expended in the removal action at the
 Northernaire site in Cadillac, Michigan.

 The  StatutoryScheme
     The Comprehensive Environmental Response, Compensation and
 Liability Act ("CERCLA")r as amended by the Superfund Amendments
 and  Reauthonzation Act ("SARA") established an $8.5 billion
 "Hazardous Substances Superfund" (the "Fund" or "Superfund") to
 be used to conduct responses to actual or threatened releases of
 hazardous substances.  See SARA § 204(b); CERCLA § HI? 42 U.S.C.
 § 9611.  Revenues from taxes on petroleum, certain feedstock
 chemicals,  derivative chemicals, and an environmental tax on
 corporate income provide the bulk of money for the Fund.  26
 U.S.C. §§ 5^A,  4611,  9507.  In addition, the statute authorizes
 annual appropriations of $250 million from general revenues to
 the Fund.  SARA $ 517,  42 U.S.C. § 9507.
     The Fund is a source of revenue for EPA which is separate
 from its general appropriation.!/  Congress specified that the
I/    As with other federal agencies, EPA receives appropriations
      from general revenues for financing "salaries and related
      costs associated with administering the programs within  the
      Environmental Protection Agency."  Office of Management  and
      Budget, "Budget of the United States Government, Fiscal
      Year 1990," Appendix at I-U1.
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 Superfund can only  oe  used  for certain purposes, SARA § 507(c),
 26 U.S.C. S  9507{c), and  that it could not be employed for
 administrative expenses other than those "necessary for" and
 "incidental  to" the Superfund.program.  CERCLA $ Lll(a), 42
 U.S.C.  S  9611(a).
      Under specified conditions, the statute allows EPA to take
 action  on a,  release or threatened release of a hazardous
 substance by  either responding itself or_periutting a responsible
 party to  carry out  the response action.  CERCLA $ 104{a}(l), 42
 U.S.C.  S  9604(a)(l).  When  a release or threatened release of a
 hazardous substance "causes the incurrence of response costs"
 from  the  Fund,  SPA  is permitted to recover those costs to the
 extent  that the  response costs are "not inconsistent with the
 National  Contingency Plan"  and otherwise comply with the
 sta-.ute.  CERCLA $  107(a)(l)-(4), 42 U.S.C. S 9607(a) (1)-( 4).
 The statute imposes liability upon four classes of responsible
 parties:  owners of facilities, operators of facilities,
 transporters      zardous substances, and generators of Hazardous
 substances.  ^	
     CERCLA provides for  two categories of response costs*
 "removal" costs and "remedial" costs.  CERCLA S 107(a)(4){A},  42
 U.S.C.  §  9607(a)(4)(A).   "Removal" actions, the category  at  issue
 in this case,  are those emergency steps taken to address
 immediate risks to  public health or welfare or the environment
and generally  involve actions that may be completed within  twelve
months or with an expenditure of less than two million dollars.
CERCLA §§ 101(23),  104(c)(l), 42 U.S.C. S§ 960L(23), 9604(c){l),
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    3c£ ?e-.e rally 40 C.~.?  § 300.65.   "~e"-ed.£i"  actions  are
    remedies that require more ti-'e a~c -ere/ to *rple-ent,' tiev  are
    designed to produce a permanent solution to the risks  at a
    particular site.  CERCLA §§ 101(24),  104(c){3)  & (4),  42 U.S.C.
    S$ 9601(24), 9604(c)(3)  & (4)."  See generally  40 C.F.R.  §
    300.68.  Each type of response action is carefully defined  in the
    statute and regulations, CERCLA §  101(23),  (24), 42 U.S.c".  S  9601
    (23),  (24); 40 C.F.R. §§ 300.65,  300.68.
    The Indirect Cost Manual
         In March 1986,  EPA  issued its "Superfund  Indirect Cost
    Manual  For  Cost  Recovery Purposes"!/  (the "Indirect Cost
    Manual").   The Indirect  Cost  Manual explains that EPA  will  "seek
    to recover  all costs associated with  clean-up"  and that "costs
    should  include all direct and indirect costs related to site
^  clean-up."   Indirect Cost Manual at i (emphasis in original).
    According  to the manual, indirect  costs are the costs  "necessary
    to operate  the [Superfund]  program but which cannot be attributed
    directly to specific sites.   Examples include  prograti  rrarageTient,
    indirect salaries and fringe  benefits, administrative  support,
    rent, and utilities." Id.  The manual explains EPA's  intention
    to calculate indirect costs beginning with fiscal year 1983.
    2/    Office of  the  Comptroller,  Office of Administration and
         Resources  Management  "Superfund Indirect Cost Manual for
         Cost Recovery  Purposes  FY  1983 through FY 1986" (March
         1986).  The  manual  has  since been updated by memoranda.
         Copies of  the  manual  and of the updating memoranda are
         attached as  Exhibits.
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      In developing its allocation of indirect  costs  EPA  starrer
 with both "appropriations for salaries  and  expenses  and  for
 Superfund."  Id. at 1-4.   Thus,  the quantum of indirect  costs
 assessed against responsible parties includes  money  from both  the
 Superfund and EPA's general appropriation for  salaries and
 expenses.
      The Indirect Cost Manual specifies that,  in addition to all
 salaries and fringe benefits, travel costs/  rent and associated
 cos-s,  pr*-inr.g  costs,  supplies,  and contracted services whj.cn
 are directly allocable to a site,  the following indirect costs
 are to  be added  to those  direct  response costs: (1)  [indirect]
 salaries and fringe benefits;  (2)  EPA travel and transportation
 [not directly related  to  the site];  (3)  rent,  communications,  and
 utilities  [other  than  expenditures for  the  actual  clean-ups];  (4)
 printing and reproduction;  (5) supplies  and  materials  [other than
 those "directly"  used  for  the site);  and (6) other  [indirect]
 contracted services.   Id.  at 1-5.   These costs are derived from
 expenses  attributable  to  individuals ranging from  staff  level
 Regional personnel  up  through the  Administrator.   Id. at 1-5 to
 1-8.
     EPA determines  total  indirect costs for each  of the ten EP^
 Regional offices.   Those  costs are allocated between Superfurd
 and  non-Superfund  purposes.   .d. at  1-5.  EPA  then calculates  an
 indirect hourly cost rate  by dividing the regional  total for
 Superfund indirect  costs  by  the  regional total of  Superfund
program hours  (that  is, all  hours  charged to Superfund sites  in
 that region).  A separate  indirect hourly cost rate  is calculated
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 fcr each fiscal  year.   EPA  then applies the hourly indirect cost
 rate to the Superfund  hours associated with an individual Site t=
 determine total  indirect  costs for  the site.  Id. at 1-6, I-
 7.1'   The manual indicates  that indirect costs charged to a site
 have ranged from $52 to $75 'per hour of direct work on the
 site.

 The Factual and  Procedural Background
      EPA conducted a removal action between July 5, 1983 and
 August  3,  1983 at the  Northernaire site in Cadillac, Michigan, to
 dispose  of  abandoned barrels of electroplating wastes.  As none
 of  the defendants below reimbursed the government pursuant to its
 August 13,  1983 demand, the United States filed a complaint
 against  each of  them on September 25, 1984.  On April 30, 1987,
 the District Court found  the defendants ^jointly and severally
 liable to the government  for the costs of'the removal action
under Section 107{a) of CERCLA, 42 U.S.C. S 9607(a).
     On August 31, 1987,  the plaintiff filed a motion for summary
 judgment on costs, seeking $270,952.07.  The figure has sxnce
been revised to $270,229.75.  Memorandum in Response to
opposition of R.W. Meyer, Inc. to Plaintiff's Motion for Summary
Judgment On Costs.  The costs which are the subject of the mot.cn
can be divided into four  categories: (1) contract costs paid  to
EPA contractors for services at the site in the amount of
3/    The Indirect Cost Manual does not specify precisely  how  EPA
      develops its regional indirect cost pool.
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 $153,143.Q8i/';  (2) EPA's direct payroll and travel expenses *«

 the  amount of $28,216.39l/;  (3) the Department of Justice's

 enforcement costs in the amount of $35,473.28i/; and (4) indirect

-costs  in  the-amount of $53,397-.!'  The government also seeks

 $60,621.99 in pre-^udgment interest (through September 30,

 1987).  Id.

     In computing the indirect costs, the government multiplied

 direct hours by the indirect cost rate.I/  EPA charged ar averace
V    The contract costs were made up of: (1) $140,419.00 for the
      services of Petrochem, Inc. for site clean-up; (2)
      $11,641.08 for the services of Roy F. Weston, Inc. for
      technical assistance; (3) $993.00 for a title search
      performed by GCA Corp.; and (4) $90.00 for Roy F. Weston,
      Inc.'s preparation of a letter memorandum identifying
      Weston's costs incurred in the removal action.  Pipkin
      Declaration at 4-5.

jj/    CPA's direct payroll and travel expenses included: (1)
~~     $21,274.88 for EPA Region V payroll costs covering 1388.8
      payroll hours (Hackley Affidavit at Attachment A, p. 5);
      (2) $5,974.70 for EPA travel costs for Revion V personnel
      (Id. at Attachment C); and (3) $966.81 for EPA headquarters
      payroll costs covering 58.2 payroll hours.  Id. at
      .\ttt.c)'ment D.

6/    As of June 30, 1987.  Declaration of Philip 3. Stiness, Jr.
      at 3.

7/    That figure has since been reduced to $52,978.50.
      Affidavit of Richard D. Hackley at K 5.

8_/    For FY 1983, 641.5 EPA Northernaire site hours were
      multiplied by the indirect rate of $71/hr, resulting in
      total indirect costs of $45,546.50.  For FY 1984, 95 site
      hours were multiplied by the indirect rate of $61/hr,
      resulting in total indirect costs of $5,795.00.  For FY
      1985, 28 site hours were multiplied by the indirect rat^ of
      $53/hr, resulting in total indirect costs of $1,484.00.
      For FY 1986, 3 site hours were multiplied by the indirect
      rate of $51/hr, resulting in total indirect costs of
      $153.00.  See Region V Indirect Cost Allocation -
      Cumulative Summary in Affidavit of Richard D. Hackley  at
      Attachment D.
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 indirect cost rate cf $69 per hour.  Of approximately $81,195 i"
 EPA's non-contract costs, approximately $53,000 or roughly siKty-
 five percent was for the indirect costs allocated to the
. Nor thernaire,.site.           .	
- -    -        -     - - f.   -\-  '                                      «.
 j,i , - -.»     *»
      Ironically, the direct costs of EPA personnel were far -less
 than the indirect costs incurred by EPA.  EPA incurred only
 $28,216.39 in direct personnel and travel expenses, but it claims
 rearly twice tnat sun in indirect costs.  Indeed, the average
 nourly cost cnarged fee those actually participating in the
 clean-up was only about $15 per hour.  Yet, the average indirect
 charge added was $69 per hour.
      The Court  entered  its Order on May 6, 1988 partially
granting the government's motion for summary judgment on costs.
Tae award included that portion of the government's motion
seeking  indirect costs.   United States v. Northernaire Plating
Co.,  685 F.  Supp.  1410,  1420  (W.D. Mich. 1988).
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                               OF ARGOMEKT
      Neither  CERCLA nor  its  legislative history permits recovery
 of Indirect costs.   In CERCLA, Congress carefully defined the
 activities which  give rise to  recoverable clean-up costs; nothing
 suggests  authority  for indirect costs.  In SARA, Congress found
 it necessary  to specify  that "enforcement costs" are among the
 recoverable costs.   No comparable language was added to permit
 recovery  of "indirect costs."—'  In the absence of any language
 in the detailed definitions of compensable activities, the
 government may not  properly  infer a congressional intent to
 include liability for the government's expenses incurred in
 operating the Superfund  program.
     As a predicate  to liability under CERCLA, a claimant must
 show that the release or threatened release of a hazardous
 substance "caused"  the incur rence of response costs.  Because the
 alleged releases  from the Northernaire site cannot have caused
 che expenciture of  indirect costs, the statute does not permit
 recovery of indirect costs.
     The statute prohibits use of Superfund money for anything
 other than response  activities designated in the statute.  In
 turn, the Agency may only recover the response costs that are
£/    EPA consistently refers to the general costs of operating
      the Superfund program as "indirect" costs.  These costs are
      not indirect response costs, but more accurately general
      Superfund program costs not allocable to an individual site
      clean-up.  Because both parties below have termed these
      costs "indirect costs," the Amici will use that phrase to
      describe this category of costs.
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 a-trcr.zed by statute.   Because indirect  administrative ana ccner
 governmental functions  are not within  the expenc-tures permitted
 under CERCLA, EPA may not recover  these costs.
      The statute creates a trust fund  which  is  funded .n part
 through reimbursements  from CERCLA's cost recovery authority.
 Congress permitted the  transfer to Superfund only of money
 collected "on behalf  of the Superfund."   The statute nowhere
 suggests that Congress  intended the Environmental Protection
 Agency  ("EPA")  to recover througn  CERCLA  not only expenditures
 from the Superfund but  also expenditures  from EPA's general
 appropriation.   Hence,  this element of indirect cost recovery  is
 4 „legal.
      Nothing  in  the legislative history suggests that Congress
 intended  to allow recovery of  indirect costs.   Passages of the
 legislative history elaborate  in extensive detail the terms
 "removal" and  "remedial  action", and no language even hints ac  a
 congressional  intent  to  allow  recovery of indirect costs.  Had
 Cotgress  *.iteicec, that  tne terns »~c.tuce  indirect c~s~^, c~:
 would expect at  least some reference to that category of costs.
     CERCLA specifies that the  standard of liability under the
 statute will be  the same  as is  provided in section 311 of  the
 Federal Water Pollution  Control Act.   Section 311 confers
 liability only for the  'aclL<-1  costs"  of  clean-up, and no
precedent suggests authority for collecting  indirect costs under
section 311.
     The case law regarding the collection of indirect costs
under CERCLA confirms that the  statute does  not confer liaoility
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 fc.r indirect costs.   Courts  have  consistently permitted recovery
 only of costs that are directly connected  with  the clean-up of
 identifiable sites.   No case permits  recovery of general
 operating expenses.
      EFA's attempt to assess against  responsible parties a share
 of the  general  costs  of operating  the  Superfund program — that
 is, the costs of  managing  and administering  the program — is a
 tax prohibited  by CERCLA and the  Constitution.  The Supreme Court
 has held that the collection of the costs  of governmental
 services which  inure  to the  benefit of  the general public is a
 tax.  The benefits of the  general  administration of the Superfund
 program run to  the general public, so  the  collection of the costs
 of  administering  the  program is a  tax.  Section 531 of SARA
 specifically  prohibits  this  tax.   As Congress neither authorized
 the  tax  nor delegated authority to EPA  to  levy  the tax, the
 Constitution  bars  EPA from recovering  these  program costs.
     EPA's  Indirect Cost Manual imparts substantive obligations
 for  the  regulated  community.  The  manual dictates first that
 indirect  costs are to be assessed, and  second prescribes the
 formula  by which  they are  to be calculated.  The ranual has
general  applicability and portends to visit  bi.llions of dollars
of  indirect costs  upon  the companies subject to Superfund
 liability.  Accordingly, the prescriptions in the Indirect Cost
Manual must be subjected to  the notice  and comment requirements
of the Administrative  Procedure Act.
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                             ARGUMENT

 I.   CERCLA AND ITS LEGISLATIVE HISTORY DO NOT PERMIT RECOVERY
     OF INDIRECT COSTS.	'
 •*.-  ~*A. -«. '.The Plain Language of  the Statute Does Not Permit,
    \T" "~,  Recovery of  Indirect Costs.  	
      It  is axiomatic that the starting point in statutory
 interpretation is  a careful reading of the statute's language.
 M[T]he meaning of  the statute must, in the first instance, be
 sought in  the  language  in which the act is framed, and if that
 ...  is plain . .  . the sole function of the courts is to
 enforce it according to its terms."  Caminetti v. United States,
 242 U.S. 470,  485  (1917).  The plain language of CERCLA
 demonstrates that  EPA may not recover its indirect costs.
            1.  CERCLA Specifies  Recoverable Response Costs, and
                It  Does Not Provide for Recovery of Indirect
                Costs.	
     The relevant  language of CERCLA S 107(a), 42 U.S.C. §
 9607(a), provides  that when a release or threatened release
 "causes the incurrence of response cosrs" responsible parties are
 liable for "all costs of removal  . . . incurred by the United
 States government  . . . not inconsistent with the National
Contingency Plan,"  Section 101(23) defines the terms "remove"  or
 "removal" at length:
                 terms "remove" or "removal" means
            sic] the cleanup or removal of released
           hazardous substances from the environment,
           such actions as may be necessary taken in
           the event of the threat of  release of
           hazardous substances into the environment,
           such actions as may be necessary to monitor,
           assess, and evaluate the release or threat
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            of release  of  hazardous  substances, the
            disposal  of removed material, or the taking
            of such other  actions as may be necessary to
            prevent,  minimize, or mitigate damage to tne
            public health  or  welfare or to the
            environment, which may otherwise result from
            a -release or threat of .release.'  The term
            includes, in addition, without .being limited
            to,  security fencing or  other measures to
            limit  access,  provision  of alternative water
            supplies, temporary evacuation and housing
            of threatened  individuals not otherwise
            provided  for,  action taken under section
            104(b)  of this Act, and  any emergency
            assistance  which  may be  provided under the
            Disaster  Relief Act of 1974.
CERCLA  §  101123), 42 CJ.S.C. S 9601(23).

     Thus,  the provision defines  "cleanup or  removal" activities

in considerable detail and limits removal activities to those
                                                                  •
activities  responsive to a "release or threat of  release" of a

hazardous substance.  Despite the great degree of specificity in

the definition, nothing suggests  that the term includes the

indirect costs of administering the Superfund program.

     Neither .* there any support for the government's pcs-tic-.

in the  d«f        of "response."  The statute provides chat

response "means remove, removal,  remedy, and  remedial action; all

such terms  (including the terms 'removal1 and  'remedial action')

include enforcement activities related thereto."  CERCLA  §

101(25), 42 O.S.C. 5 9601(25) (emphasis added).

     Hence, while this provision  allows recovery  of "enforcement

costs"  related to the clean-up, it does not include indirect

costs.  If Congress found it necessary to specify that

"enforcement activities" related  to clean-ups are included,  it  is

difficult to understand how Congress could have  intended  to
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 permit  recovery  of  indirect costs in the absence of any reference
 to that  category of  cost.
      Similarly,  Congress was careful to assure that the measure
 of Jthe,government'-S  cost-recovery authority is clear elsewhere in
 "-,-">.-«                               A
 the statute.   In Section 107(a)(4), 42 U.S.C. § 9607(a)(4), the
 drafters expressly provided that, "(t]he amounts recoverable in
 an action under  this section shall include interest on the
 amounts  recoverable."  Once aga^r., despite this level of
 specificity, there is no provision permitting recovery cf
 indirect costs.  It  follows that the statute was never intended
 to permit recovery of indirect costs.  Cf.  Eagle Picher
 Industries v. EPA,  759 F.2d 922, 927 (D.C. Cir. 1985) (absence of
 an exemption in CERCLA for certain substances alongside the
 petroleum exemption indicates that Congress did not intend an
 exclusion for those substances).  Accordingly, CERCLA's specific
description of activities which may be compensated does not
 support EPA's claim to indirect costs.
            2.  Because The Release or Threatened Release From
                the Northernaire Site Did Not Cause the
                Incurrence of Indirect Costs EPA May Not Recover
                These Costs.	
     The statute specifically requires as a predicate to
 liability that the release or threat of release must have
 "caused" the incurrence of response costs.i£/  CERCLA §
10/   The Amici do not argue that "causation" is required in the
      sense that the government must identify the release of a
      particular substance in a mass of other substances as the
      "cause" of the government's expenditure. Compare e.g.
      United States v. Wade, 577 F. Supp. 1326, 1332  (E.D. Pa.
      1983).  This "fingerprinting" is a separate issue whicn is
      not the subject of the case before the Court.
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 107(a)(4),  42  U.S.C.  §  9607(c)(4).' A  number of cases have
 acknowledged that,  in order  to  recover under CERCLA, a claimant
 must  demonstrate  that the  release  at issue caused  its expenditure
                                                           *
 of  response costs.  E.g. Dedham Water  Co. v.Cumberland Farms,
 Inc.,  689 F. Supp.  1223, 1225-26 (D. Mass. 1985);  New York v.
 Shore  Realty Corp., 759 F.2d  1032, 1043 & n.16  (2d Cir. 1985);
 United States  v.  Wade,  577 F. Supp. 1326, 1333  (E.D. Pa. 1983).
     EPA's  claim  to indirect  costs is  devoid of this causal linK.
 ~.r.e government simply cannot  demonstrate that the  release or
 tnreatened  release at the Northernaire site "caused" the
 incurrence  of  indirect costs.   The only costs that could have
 been caused  by conditions at  the site  are the direct costs
 incurred in  responding to the release.
     By contrast, EPA's indirect costs are program costs that  the
Agency would incur regardless of the alleged release from the
Northernaire site.  Indeed, EPA has specified that, "[ijndirect
costs are the costs necessary to operate the (Superfund) program
but which cannotrTbeTactr4.Du>£g  a«rectly to specific s,res."
Indirect Cost Manual  at i (emphasis added).  Hence, the release
at issue cannot have  "caused" the  incurreace of this "response
cost" and the statute does not  permit  its recovery.
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            3.   The Statute Does Not  Allow  Expenditure of
                 Superfund Money For The  Cost of General
                 Government Functions,  And EPA May Not Recover
                 These Unauthorized Costs.	
      Recognizing both the inherent potential for attempts to
 evade congressional budgetary, oversight  in -an agency-administered
 trust fund and the  fundamental unfairness of an agency's use of
 money raised frorr identified  sources  for specific purposes to
 fund general governmental functions,  Congress, and particularly
 the taxing committees, went  to great  lengths to draft provisions
 restricting the  Agency's  use  of Superfund monies.  Thus, not only
                                                                 /
 are expenditures of Fund  monies subject  to  the same authorization
 and appropriation processes as are expenditures from  the
 Treasury,  but  the purposes  for which  such authorization of
 expenditures can be made  are  narrowly  circumscribed.  SARA §
 517(c),  26  U.S.C. S 9507(c).
     The statute prescribes that:
            [ajmounts  in the Superfund  shall be available, as
            provided in appropriation Acts,  only for the purpose
            of making  expenditures -
                 (A)  to carry  out  the purposes of (CERCLA §
                 lll
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 *nvestigations,  and  pilot  programs  not  relevant to the matter
 before the Court.  CERCLA  §  lll(a)(5) &  (6),  (c) and (m), 42
 U.S.C. § 9611(a)(S)  &  (6),  (c) and  (m).
      The drafters  of the statute anticipated  the situation where
 an agency might, through the expedient of characterizing its
 general  operating  and  administrative expenses as "response
 costs,"  seek  to  avoid  the  carefully formulated directive that
 Fund  monies should be  spent  for clean-ups.  CERCLA responds with
 a  flat prohibition against paying "administrative costs or
 expenses"  out of the Fund  "unless such costs  and expenses are
 reasonably necessary for and incidental  to" those activities
 implementing CERCLA  which  are appropriately Fund-financed.
 CERCLA S  lll(a), 42  U.S.C. S 9611(a).  In short, the statute
 provides  that Fund monies  are to be used for  "response costs,"
 and that  those "response costs" specifically  do not include any
 administrative costs which are not both  "incidental to" and
 "necessary for" a  response action.11^
     Cors-s-.ent with the requirement that only "response costs"
 be paid out of the Fund, Section 107 provides that the
 responsible parties  are liable for "costs of  removal or remedial
action incurred by the United States Covernnr.nt."  Thus the
statute authorizes EPA's expenditure and recovery only of
 "response costs";  it does  not contemplate recovery of indirect
costs.
II/   The claim in this case for direct personnel costs  includes
      both the cost of staff level personnel and supervisors.
      The Amici respectfully suomit that any administrative  cost
      "incidental to" and "necessary for" the  response action  at
      ch Ncrthernaire site  ia= included in  these direct  costs.
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            4.   Congress Did Not Intend That General
                 Appropriations to EPA Be Reimbursed and Paid Into
                 the Superfund Under the Guise of Indirect
                 Costs.	

^..,,,  Congress established a revolving "Superfund" that would be

"TiCeimbursed ^through-the "liability "provisions of CERCLA.  In.fact,
   IH           ""                               "*
                                                                  *
 the provision which authorizes the transfer of funds collected

 under CERCLA to the Superfund specifies that the appropriation

 applies to "amounts recovered on behalf of the Superfund under

 (CERCLA]."  SARA S 507(b)(2), 26 U.S.C. §9507(b)(2}(emphasis

 added).  Obviously/ EPA has no authority to add money to

 Superfund in a manner inconsistent with the congressional

 appropriation.

      Nothing in the statute or the legislative history suggests

 that Congress intended that part of its separate,  general

 appropriations to EPA from general revenues would be reimbursed

 by responsible parties.  Indeed,  it is simply inconsistent for

 Congress to have appropriated money from general revenues only to

 have it reinbursed to the Superfund.  Yet, EPA, in assessing its

 indirect c*    .  -cpressly includes not only expenditures from

 Superfund but, j-so costs paid by EPA's appropriations from

 general revenues.   See Indirect Cost Manual at 1-4.

       The only interpretion consistent with the statute is that

 responsible parties are liable only for EPA e
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       8.    Dnder the Circumstances  of This Case the Government's
            Interpretation of  the  Statute  Is Not Entitled to
            Deference.	
      The  government  has  suggested that  its interpretation of the
.statutory provisions is  due great deference.  Memorandum in
 »-. atym - <«*» W>,   nu               v           *•
 Response  to Opposition of R.w. Meyer* Inc. to Plaintiff's Motion
 for Summary Judgment on  Costs at  18-19.   While it is true that
 the interpretation of a  statute by  the  agency charged with its
 enforcement is  generally accorded substantial deference, that
 deference is not  unbounded.  A reviewing  court "must reject
 administrative  constructions of [a] statute . . . that are
 inconsistent with the statutory mandate or that frustrate the
policy that  Congress sought to implement."  Securities Industry
Ass'n v.  Board  of Governors of the  Fed. Reserve Sys., 468 U.S.
137, 143  (1984).  Where,  as here, the question is one of simple
statutory construction,  the agency's interpretation is not
controlling.  To  the contrary, such a "question is one which the
courts are  relatively more able to answer."  National Freight,
Inc. v. Larson, 760  F.2d  499, 505 (3d Cir. 1985), cert, denied,
474 U.S.  902  (1985).
     Additionally, Chevron U.S.A.,  Inc. v. Natural Resources
Defense Council,  Inc., 467 U.S. 837 (1984) and its progeny are
not precedent for deferring to the Government's construction of
the statute  in  this  case.  Chevron arose  in the context of a
rule-making  within the confines of  the  Administrative Procedure
Act and the  authorizing  statute.  In this case, EPA has
unilaterally asserted its  authority without the benefit of the
notice and public participation procedures attendant to a
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 rulemaking.   See  also Part  IV,  i_nfra.

      Accordingly,  this Court  is not bound by EPA's interpretation

 of  CERCLA.

        C.  CERCLA's Legislative History Does Not
 ""         Permit  Recovery  of' Indirect Costs.

      While the legislative  history is far from clearil/ the

 legislative activities concerning both the 1980 statute and its

 1986  amendments and reauthorization reflect the fact that

 Congress did  not contemplate charging responsible parties for

 indirect costs.

            .1.  The Legislative History of the 1980 Statute
                Indicates That Only Direct Costs Are
                Recoverable.	

      In its report accompanying the Senate Committee on

environment and Public Works' bill, S. Rep. No. 848, 96th Cong.,

2d Sess. (1980),  the Senate explained the import of the term

"response action".  In the  legislative history's most detailed

discussion of the terms "removal" and "remedial action," every

explanation,  every example, every elucidation refers to some form
12/   The Third Circuit commented that:

                CERCLA is not a paradigm of clarity or
           precision.  It has been criticized
           frequently for inartful drafting and
           numerous ambiguities attributaole to its
           precipitous passage.  Problems of
           interpretation ha e arisen from the Act's
           use of inadequately defined terms, a
           difficulty particularly apparent in the
           response costs area.

      Artesian Water Co. v. Ne«? Castle County, 851 F.2d
      643,  648 (3d Cir. 1988); see also Walls v. Waste
      Resource Corp., 761 F.2d 311, 318 (6th Cir.
      1985).
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 of  direct  costs.   For example,  '"removal1 may refer to actual
 removal  by any means."—/   Id.  at 53.  Nowhere are "indirect
 costs,"  "overhead  costs" or the like mentioned by the
 Committee.   Indeed,  the Court below stated, "these provisions
 {the definitions of  'removal1 and 'remedial action1] read as if
 they pertain to a  particular site and not to all sites
 generally."  Northernaire Plating Co., 685 F. Supp, at 1419.  The
 Anuci agree  that they read  this way and suggest that they do
 because Congress so  intended.
     Surely, had the Committee  intended that either "removal" or
 "remedial action"  encompass indirect costs, it would have said so
 at least once in the Report.  Had Congress intended to give so
 expansive a meaning  to these phrases it would not have been
 difficult to include some description of the meaning.
1_3/        Remedial action, on the other hand:
           involves the more permanent, costly measures
           which may be necessary after the need for
           emergency action has terminated ....
                Remedial action means stopping or
           containing the migration of hazardous
           substances into the environment in such a
           •manner as to assure that the hazardous
          --substances will not cause danger to present
           •or future puolic health, welfare of [sic]
          "the environment.
                Typically it is anticipated  that
           remedial actions will be taken on-site.
Id.  at 54-55 (emphasis added).
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 Congress chose  not  to ascribe that meaning to the terms, and tKe

 government  may  not  properly infer such a meaning.il/
                               \
             2.  The Legislative History of The 1986 Amendments
                Confirms That Indirect Costs Are Not
                Recoverable. •	

      SARA did not fundamentally change the statutory section at

 issue.   The only relevant addition was a provision inserted in

 the definition  of "response" which stated that the term "removal"

 included "enforcement activities related thereto."

      The relevant discussion in the House reports makes clear

 that  Congress1  intent was to add to the group of recoverable

 costs the enforcement activities related to a specific site.

 See, e.g., H.R.  Rep. No. 253 Parts I, II and V, 99th Cong., 2d

 Sess., reprinted j.n 1980 U.S.  Code Cong. & Admin. News: "[Section

101(25)] also modifies the definition of 'response action' to

 include  related enforcement activities.  The change will confirm

 the EPA's authority to recover costs far enforcement actions

taken against responsible parties." id. a^ 2848-49 (emphasis

added);   ".saction 101(25)] modifies the definition of  'response
14/   Senator Randolph described the purposes of S. 1480 as:
      "First, to mane those who release hazardous substances
      strictly liable for clean-up costs, mitigation and third-
      tarty damages.  Thus it assures that the costs of chemical
      poison releases are borne by those responsible for the
      releases."  Senate Committee on Environment and Public
      Works* Committee Print Serial No. 97-14, 97th Cong., 2d
      Sess., A Legislative History of the Comprehensive
      Environment -1 Response, Compensation and Liability Act of
      1980, Vol.   at 685 (1983) (emphasis added).  Senator
      Randolph di-- not say the bill was designed to make those
      who release hazardous substances liable for indirect costs
      or overhead or the cost of supervising the program.  He
      said they were to be responsible for clean-up costs, i.e.,
      the direct costs of cleaning up a particular site.
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 action1  to include  related  enforcement activities." ^d. at 2933
 (emphasis  added);  "[section 101(25)] amends the definition of
 what  constitutes a  response to  include related enforcement ,
 activities,  thereby permitting  recovery of those costs . . . ." id.
 at 3129  (emphasis added).
      Congress' affirmative  action in adding a new, specific
 category of  costs to  the list of recoverable costs is yet another
 indication that Congress did not intend to allow recovery of any
 costs not  specifically mentioned in the statute.  Had Congress
 intended to  allow indirect  costs to be recovered it could easily
 have  so  indicated,  as it did with enforcement costs.
      Congress described the costs recoverable under CERCLA and
 further  refined that description in SARA.  Yet, nowhere does the  •
 statute  or legislative history  even suggest that Congress intended
 indirect costs to be recovered.  Instead, the statute allows the
 recovery of  the clean-up and enforcement costs associated with
 particular sites.
      D.  Aufc    ty Under Section 311 of FWPCA Does Not Permit
           "_     / of Indirect  Costs.	
     The case -aw interpreting  Section 311 of The Federal Water
 Pollution Control Act ("FWPCA"), 33 U.S.C. § 1321, serves as a
 guide to the extent of liability under CERCLA.  Indeed, section
 101(32)  of CERCLA,  42 U.S.C. §  9601(32), incorporates  the liability
 standard of FWPCA Section 311 into Section 107 of CERCLA by
providing that the  term "liable" "shall be construed to be  the
standard of liability which obtains under Section 311  of  the
Federal  Water Pollution Control Act."  See e.g. United  States  v.
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 Northeastern Pharr.aceut-cal  &  Chemical Co., Ire., 810 F.2d 725,
 747-48 (8th Cir.  1986),  cert,  denied, 108 S. Ct. 146 (1987)
 (hereinafter "NEPACCO"?.
                        s
      Section 311  confers liability  "for the actual costs incurred
 .  .  .  for 'the removal of [discharged oil or hazardous
 substances]."  FWPCA $  311(f)(l), 33 U.S.C. S 1321(f)(l) (emphasis
 added).  Courts have consistently limited recovery under Section
 311  of FWPCA to the costs of clean-up actually  incurred.  E.s,,
 United States v.  P/B STCO 213, ON 527 979, 756  F.2d 364, 370  (5th
 Cir. 1985)  ("if the United States partially cleans up, the
 discharger's  liability  is no greater that the cost of cleanup
 actually performed").   In United States v. Hollywood Marine,  Inc.,
 519 F. Supp.  688, 691 (S.D. Tex. 1981) the Court allowed recovery"
 only of costs  "used in  the clean-up."  United States v. Slade, Inc.
 447 F. Supp.  638, 640-45  (E.D. Tex. 1978) permitted recovery of
 costs of the  "investigation of the  oil spill."  See also. United
 States v. Dae  Rim Fishery Co., Ltd., 794 F.2d 1392, 1394 (9th  Cir.
 1986)  ("the government may recover  its clean-up costs from the
 owner or operator . . .  ") (emphasis added);  United States v.
 Chem-Dyne Corp., 572 F,  Supp.  802,  809 (S.D. Ohio 1983) ("The  owner
 or operator of  a vessel  which  illegally discharges may be liable  to
 tne government  for its expenses in  cleaning up  the substances.")
 (emphasis added).
     Indeed,  the government is unable to cite even one instance
where it was  permitted  to recover indirect costs under authority  of
Section 311 of  FWPCA.  The absence  of such a decision  is
understandable; the statute and case law developed under the
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 prevision only  perTit  recovery of  "actual costs."  It follows tnat
 the government  may  only  recover  its  "actual costs" under Section
 107(a);  it «ay  not  recover  its indirect costs.  See NEPACCQ, 810
 F.2d at  747*48  (citing as CERCLA authority decisions under Section
 311~ which assessed  liability'for "actual'costs")..
  II. TEE CASE  LAW  INTERPRETING  CERCLA DOES NOT ALLOW
      RECOVERY  OF INDIRECT  COSTS.	
      The United States District  Court for the District of New
 Hampshire has provided the  most  straightforward holding cnat
 indirect costs  are  not recoverable.  In United States v. Ottati &
 Coss, Inc.,.694 F.  Supp. 977, 995  (D.N.H. 1988) the court stated,
 "$336,922.00 are indirect costs  which include expenses for rent,
 utilities, supplies, clerical staff  and other overhead expenses.  .
 These indirect  costs necessary to  operate the_S_uperfund program
 cannot be attributed directly to the O&G/GLCC sites, and are
 therefore disallowed." (emphasis added).
     The Ottati court mede  a specific statement of law that
 i ".direct  costs  ::e  r.ot recc.-eracle   In th_s case t.He cover-^ent  is
attempting to recover identical  types of indirect costs, and this
Court's  decision should be  identical — an unequivocal refusal.
     Nor do the cases cited below  by the government support
assessment of indirect costs.  In  United States v. Northeastern
Pharmaceutical  & Chemical Co , 579 F. Supp. 823  (W.D. Mo.  1984),
aff'd, 810 F.2d 726 (8th Cir. 1986), cert, denied, 108 S.  Ct.  146
 (1987),   the Court limited recovery to site specific costs.   The
NEPACCO Court identified recoverable response costs as follows.
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                 With regard  to  the government's
            response costs  incurred,  these activities
            would include:

            (a)   Investigations, monitoring and testing
                 to identify  the extent of danger to the
                 public  health or welfare or the
                 environment.

            (b)   Investigations, monitoring and testing
                 to identify  the extent of the release
                 or threatened release of hazardous
                 substances.

            (c)   Planning and implementation cf a
                 response aether*.

            (d)   Recovery of  the costs as spcia ted w11h
                 the above  actions, and to enforce the
                 provisions of CERCLA, including the
                 costs incurred for the staffs of the
                 EPA and the'Department of Justice.
NEPACCO, 579 F. Supp. at 850  (emphasis added).  The first three

categories are the removal activities identified  in the

statute.  The fourth category  includes enforcement costs (also

cited in the statute) and other costs "associated" with site-

soecific removal aeticrs.  As  the cojrt went on to state:
           [Tine defendants are  jointly and severally
           liable to the plaintiff  for all costs,
           including salaries and expenses, incurred by
           plaintiff associated  with such activities as
           monitoring, assessing and evaluating  the
           release of contaminants  and the taking of
           'actions to prevent, minimize or mitigate
           damage which might result from a release or
           threat of release of  contaminants  from the
           Penney farm site.
Id. ;»t 852-53 (footnote omitted)  (emphasis  added).   The NEPACCO

Court was clearly including costs associated  with site-specific
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 activities,  not costs  with  such  an attenuated connection to
 particular removal  actions  that  they cannot be connected to a
 specific site.
    _-The NEPACCO Court cited two cases for support of its holding
 that  the responsible party  was liable for "all costs, including
 salaries and expenses" — Hollywood Mariner 519 F. Supp. 688 and
 Slade,  447 F. Supp. 638.  NEPACCO, 579 F. Supp. at 852-53.  Both
 dealt with charges  incurred by the U.S. Coast Guard for clean-ups
 undertaken pursuant to the  Federal Water Pollution Control Act.
     The costs  in Hollywood Marine were "$3,354.16 for Coast
 Guard personnel  salaries and Coast Guard material and equipment
 costs or lease  costs used in the clean-up."  Hollywood Marine,
 519 F.  Supp. at  691 (emphasis added).  Slade allowed recovery of
 $587.54  in "personnel  and material costs" (including water
 sampling costs), which the  decision attributes to a Coast Guard
 "investigation of the  oil spill."  Slade, 447 F. Supp. at 640-
 41.  The expenditures  in both cases were for direct, site-
 specific clean-up costs —  costs wbxch would unquest-c-arly fall
 within CERCLA's definition  of "removal."  These cases are not
 authority  for recovery of indirect costs.  It follows that the
 NEPATCO  opinion  is not precedent for recovery of indirect costs.
     The government also relies  upon United States v. South
 Carolina  Recycling & Disposal, Inc., 11 Chemical & Radiation
 Waste Litigation Reporter 135 (D.S.C. Nov. 22, 1985) (hereinafter
 "SCRDI"),  incorrectly  suggesting that the SCRDI court "expressly
allowed  the United States to recover its administrative costs,
which are of necessity  indirect."  Memorandum In Response to
-------
 Opposition of R.W.  Meyer,  Inc.  to  Plaintiff's Motion for Summary
 Judgment on Costs at 17.   This  completely misstates the SCRDI
 holding, which noted that  "costs associated with the cleanup and
 this litigation are recoverable."   Id. at 138 (emphasis added).
      The SCRDI court described  those costs more fully as
 "administrative,  investigative/ and legal expenses associated
 with the cleanup and recovery of the federal government's
 costs."   Id.  at 137.   These are not indirect costs of
 administering the Superfund program generally but rather the
 costs  d'irectly attributable to  the clean-up of a specific site
 and  the  enforcement  action connected with that clean-up.
     None of  the  cases cited by the government supports its
 position.  To the contrary, these  cases have permitted recovery
 of direct costs only.  The costs at issue in those cases have
 always been directly  connected  to  and clearly identifiable with
 the  clean-up  or enforcement activities undertaken in connection
 vi th a particular site.  Thus,  existing precedent limits recovery
 to direct ~

 III.  EPA'S ATTEMPT  TO CHARGE RESPONSIBLE PARTIES FOR  INDIRECT
      COSTS IS A  TAX  PROHIBITED BY CERCLA AND THE CONSTITUTION.
     The Constitution confers exclusive power to tax upon
Congress. <*-U.S. Const., Art. I, §  8, cl. 1.  Absent an express
delegation of  this power, an agency lacks the authority to levy
 taxes.  National  Cable Television  Ass'n, Inc. v. United States,
415 U.S. 336,  340-41  (1974).  EPA's attempt to charge  responsible
parties for the general costs of administering the program  is  an
attempt to levy a tax.  This tax violates a controlling provision
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 of SARA.   As Congress  has  not  authorized EPA to assess a tax, the
 levy of a tax under  the  guise  of  indirect costs is
 unconstitutional.
          i
        A.  EPA'3 Assessment of Indirect Costs Is a Tax.
      In National Cable,  the Supreme Court considered the Federal
 Communication Commission's ("FCC's") attempt to recover the costs
 of regulating the cable  television ("CATV") industry. , The FCC
 had estimated "its direct and  indirect costs for CATV regulation"
 (id.  at 340)  (emphasis added)  and assessed a fee to cover that
 amount.
      The  Court noted that a fee is that which an agency exacts
 "for  a  grant  which, presumably, bestows a benefit on the
 applicant,  not shared by others members of society."  Id. at 340-*
 41.   Allowing  recovery of the  FCC's "oversight" costs would force
 the industry  to pay "not only  for benefits they received, but for
 the protective services  rendered the public by the Commission."
 Id. at  341.  Therefore,  the Court determined that it was
                      \
 inappropriate  to: "figure the  total cost (direct and indirect)
 .  . . and then to contrive a formula that reimburses the
Commission  for that amount.  Certainly some of the costs inured
 to the benefit of the public,  unless the entire regulatory scheme
 is a  failure.  ..."  Id. at 343.  The Court noted that the
          *
correct measure of the fee was  the "value to the recipient" of
the services rendered, id. at  344, as opposed to those costs
which inure to the benefit of  the general public.
      In a companion case, FPC  v. New England Power Co., 415 U.S.
345 (1974), the Court considered the Federal Power Commission's
-------
 ("FPC's")  assessment  which  was  "levied in an effort ... to
 recoup some of the .  .  .  costs"  incurred in administering the
 Federal Power Act  and the Natural Gas Act.
                 With  respect  to the electric utilities,
            the  Commission determines each year the cost
            of administering the Federal Power Act. . . .
            (The costs are] assessed against jurisdic-
            tional  utilities in proportion to their
            wholesale  sales and interchange of
            electricity.  . . .
                 As  respects natural gas companies, the
            Commission determines each year the cost of
            administering the  . . . Natural Gas Act. .  .
            These costs  . . .  are assessed against all
            natural  gas  companies ... in proportion to
            their deliveries of natural gas in
            interstate commerce.
Id. at 346-47 (emphasis added).  The Court struck down these
assessments as improper taxes and quoted for support the Bureau
of the 3udget Circular A-25 which stated that no charge should be
made "'when the identification of the ultimate beneficiary is
ooscure and the service can be primarily considered as
benefitting broadly the general public.'"  Id. at 350, quoting
Budget Circular No. A-25, Bureau of the Budget, Sept. 23, 1959.
     The Court determined that the National Cable fees were taxes
because the FCC's regulation benefitted the general public.
Likewise, the New England Po«er fees were specifically imposed to
recover the costs of administering the Federal Power and Natural
Gas Acts for the benefit of the general public.  Thus, the
collection of funds for general governmental functions not
specifically connected to an identifiable party  is a tax.il/
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      This  Court has followed the National Cable and New £ncland
 Power analysis.  In Spiers v. Ohio Dep't of Natural Resources (In
 re Jenny SJJBn Mining Co.), 780 F.2d 585 (6th Cir. 1986), ce'rt.
 denied, 477 U.S. -905 (1986),-this Court cited with approval
 National Cable, and stated n[o]ne of the characteristics of a tax
 as opposed to a fee is that a tax is an exaction for public
 purposes rather than a voluntary payment for a private
 benefit."  Spiers, 780 F.2d at 589; see-also United States v.
 River Coal Co., Inc., 748 F.2d 1103, 1106 (6th Cir. 1984).  EPA's
 assessment of indirect costs is not a voluntary payment for a
 private benefit, but more nearly an exaction for a public purpose
 — that is, a tax.
     National Cable and New England Power are analytically
 indistinguishable from this case.  EPA characterizes indirect
costs as "those costs which are necessary to the operation of the  ^
program and support of site clean-up efforts, but which cannot be
directly identified to the efforts of any one site."—'  Cooke
Declaration at 2.   In short, the government: is attempting to
collect funds for  the general support of its programs.  Seealso,
e.g., Plaintiff's  Memorandum in Response to Opposition of R.W.
15/  BladJaLfcaw Dictionary defines "tax" as a "pecuniary
     contcnjution .I. made by the persons liable, for the
             of the government."  Black's Law Dictionary 1628
     (4th ed. 1968).
16/  EPA characterizes these general program costs as indirect
     costs.  Mr. Cooke's definition and the definition  in  EPA's
     Superfund Indirect Cost Manual do not refer to these  as
     "response" costs — the only costs which the statjte  allows
     the government to recover.
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 Meyer,  inc.  to Plaintiff's Motion for Summary Judgment on Costs
 at  15;  Backley Declaration at 3-4.
      Not only are the purposes of these taxes the same,  but the
 -methods of assessment are also similar.  EPA calculates indirect
•"'ArTS'"'     ~ f" "' , --f •- , , , ^  '
 costs by determining "total administrative overhead -costs for
 Agency  [sic]/' by region.  Cooke Declaration at 3.  An indirect
 hourly cost  rate is then determined by dividing the regional
 total for indirect costs by the regional total of Superfund
 program hours.  The Superfund hours associated with an individual
 site are then multiplied by the indirect hourly cost rate to
 determine total  indirect costs for a site.  IdA
      jfet the individual liability of a responsible party is only
 for  the site at  issue — in this instance, the Northernaire
 site.  A responsible party does not benefit from payment of the
 general costs of  operating the program.  Instead, the benefit
 conferred upon the responsible party by the Superfund is payment
 of clean-up costs  that are deemed to be its liability under
 sectj.cn 107(a).il/  Thus, in all salient respects, this scheme
 matches the proportional assessments levied in National Cable and
 New  England Power.
 17/   In  fact,  the National Contingency Plan, the regulatory
      scheme implementing the statute,  provides that EPA is to
      atteapt to obtain the services of a responsible party to
      conduct the removal action.   See  40 C.F.R. § 300.65{a)(2);
      see also  CERCLA $ 104(a),  42 U.S.C. $ 9604(a).  If the
      responsible party were to  conduct the removal in lieu of
      EPA's  expenditure of Superfund money, the responsible party
      would  pay no indirect costs.  It  follows that when EPA
      assesses  indirect costs unrelated to the site, it confers a
      liability for costs that do  not benefit the individual
      responsible party.   Instead, those cost innure to the
      benefit of the public as a whole.
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      In summary,  the  indirect costs collected from responsible
 parties ar^jiot payments  for the benefit of individual
           •> *
 responsible-parties;  instead, they are costs benefitting the
 public as a whole.  Accordingly, the indirect costs are taxes.
        B. The Statute Demonstrates that CERCLA Does Not
           Authorize  Assessment of a Tax.	
      Section  531  of SARA  provides that, "[notwithstanding any
 provision of  this Act not contained in this title [Title V of
 SARA]  any provision of this Act {.not contained in this title)
 which  .  .  . imposes any tax, premium or fee . . . shall hay_e_ng
 force  or  effect."  Superfund Amendments and Reauthorization Act,
 Pub. L. No. 99-499, S 531, 100 Stat. 1613, 1782 (1986) (emphasis
 added).   Hence, any tax,  premium or fee appearing elsewhere (that,
 is, outside of SARA Title V) is invalid.  To the extent that  the
 government attempts to collect indirect costs relying on CERCLA §
 107(a), 42 "J.S.C. S 9607(a), they rely on an interpretation of
 that section specifically prohibited by SARA 5 531.  It follows
 from Sectior     of SARA  that Congress did not intend to provide
 EPA with  t«     -uthority to pay for administration of the
 Superfund program.
       C.  EPA's Assessment of a Tax in the Form of Indirect
           Costs  is Unconstitutional.	
     That Congress is the governmental entity vested with taxing
power  is  Swyond dispute.  U.S. Const., Art. I, S 8, cl. 1.  The
Supreme Court has ruled that agencies are empowered to tax only
when Congress has specifically and expressly delegated that
authority.  As the Court  in National Cable observed,  M[i]t would
be a sharp break with our traditions to conclude that Congress
-------
 had bestowed on a federal  agency  tne  taxing power  .  .  . ."

 National Cable, 415 U.S. at  340-41.il/
 —         .y

      The Supreme Court  has also held  that  the federal

 government's legislative power must be  exercised "in accord with

 a ^single,  finely wrought and exhaustively  considered, procedure"

 —  that is,  bicameral consideration and presentment  to the

 president.   INS v.  Chada,  462 O.S. 919, 951 (1983).  Any

 legislative  action  failing these  requirements would  violate

 'essential constitutional  functions."   Id.

      In this instance there  is no delegation of the  legislative

 power;  indeed,  there is an express direction that  no further  tax

 be  assessed  (SARA § 531).  Neither has  the action  passed  through

 the "single,  finely wrought  and exhaustively considered"

 legislative  procedure.  Accordingly,  National Cable, New  England

 Power,  and Chada  instruct  that the assessment of a tax in the

 absence of Congressional authorization  is  unconstitutional.   The
IS/  As this Court has noted:

                It is clear  that  "Congress  is not
           permitted to abdicate  or  to  transfer  to
           otne:s tr t e£3~".s_ l = c_sla^.ve  func
           with which it  is  thus  vested."   Schecter
           Corp. v. United States, 295  U.S.  495, 529
           (1935) (quoted with approval in  National
           *g»ble Television  Ass'n v. United  States,  415
           --IF.S. 336, 342  (1974)).  This does not mean,
           Jiowever, that Congress may never  delegate
           authority.  "If Congress  shall lay down by
           legislative act an intelligible  principle
           . . . such legislative action is  not  a
           forbidden delegation of legislative
           power."  Hampton  Co. v. United States, 276
           U.S. 394, 409  (1928).

Muller Optical Co. v. EqualEmployment  Opportunity Comm'n,  743
F.2d 380,  389-90 (6tn Cir. 1984).
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 Anici  submit  that  this Court should reverse the lower Court's
 decision charging  the indirect costs to the defendants as
 contrary to the  statute and an unconstitutional exercise of power
 reserved to Congress.
 IV.  BECAUSE  EPA'S POSITION ON INDIRECT COSTS HAS A
     BINDING  FUTURE EFFECT ON RESPONSIBLE PARTIES,  THE
     RULE SET FORTH IN THE INDIRECT COST MANUAL MUST BE
     SUBJECTED TO  NOTICE AND COMMENT UNDER THE APA.
     Even if  the statute and the Constitution provide no
 impediments to the collection of indirect costs, the lower
 Court's  assessment of indirect costs remains defective because
 the government violated the Administrative Procedure Act, 5
 U.S.C. SS  551-559  (1982) ("APA").
     EPA has  assessed indirect costs upon responsible parties
 based only  upon the "guidance" enunciated in the 1986 Indirect
Cost Manual;  the Agency has not promulgated a rule under the
 requirements  of the APA.  Because EPA's decision to charge
 indirect costs and its formula for computing those costs are
binding  rules of substantive law, the "guidance" must be
subjected to  the notice and comment requirements of the APA.
Sf_r,  e.c. Ohic Per't of "Mrs" Services v. HHS, No. 86-3449, sl*p
op. at 15  (6th Cir. Nov. 28, 1988) (LEXIS, Genfed library, USAP?
file);  McUaith Steel Products Corp. v. Thomas, 838 F.2d 1317,
          »••
1320-23  (D.C. Cir. 1988).  The APA establishes standards for
agency rulemaking, generally requiring (in the case of  informal
rulemaking) publication of the proposed rule in "the Federal
Register, a public comment period, and publication of the  final
rule  with a statement of basis and purpose.  As  this Court  has
-------
 noted,  "tt]he purpose  of  these provisions is to give these

 affected by the change an opportunity to participate in the

^ruleinaking process."   Ohio Dep't of Human Services v. HHS, No,

 86-3449; ""slip op.  at *15.ii/

     A  rulemaking  is any  "agency process for formulating,

 amending or repealing  a rule."  5 U.S.C. § 551(5).  The APA

 defines  a rule as:
            the whole or part of an agency statement of
            general or particular applicability and
            f-uture effect designed to implement,
            interpret or prescribe law or policy or
            describing the organization, procedure or
            practice requirements of an agency and
            includes the approval or prescription for
            the future of rates, wages, corporate or
            financial structures or reorganizations
            thereof, prices, facilities, appliances,
            services or allowances therefor or of
            valuations, costs, or accounting, or
            practices bearing on any of the foregoing.
5 U.S.C. § 551(4}.

     Certainly EPA's guidance on indirect costs — which costs  to

include, how the costs of EPA headquarters are to be allocated

among the various regions, how the costs are allocated  to

individual sites — constitutes an Agency "statement of  ...
19/  The APA requires that an agency involved  in an  informal
     rulemaking: (1) publish the proposed rule  in  the Federal
     Register, 5 U.S.C. S 553(b);  (2) accept written comments  on
     the rule from interested persons, 5 U.S.C. §  553(c);  (3)
     publish the final rule with a statement of basis and
     purpose, id., not less than 30 days before the  rule  becomes
     effective, 5 U.S.C. § 553(d); and (4) give interested
     persons the right to petition for its amendment or  repeal.
     5 U.S.C. § 553(e).
-------
 particular applicability and future effect designed to implement,
 interpret or prescribe law or policy."  See generally, Indirect
 Cost Manual.  The Agency has applied this "guidance" to all
^responsible parties liable under -CERCLA, -the guidance has future
 effect on these parties, and, it is designed to "implement,
 interpret or prescribe law or policy."
     The substantial impact of the position espoused in the
 manual is beycnc dispute.  The cost of the Northernaire clear.-.p
 was increased by about twenty percent of its total $270,000
 cost—/ or approximately $53,000.  The programmatic effect will
 be even more dramatic.  In 1985, Congress estimated that the cost
 of completing the Superfund clean-ups may be as much as $100
 billion.  H.R. Rep. No. 99-253, Part I, 99th Cong., 2d Sess., 55  "
 (1985).  Obviously, if, through the formula prescribed by the
 Indirect Cost Manual, twenty percent of that figure is charged to
 responsible parties in the form of "indirect costs," EPA's
assessment will cost the regulated community many billions of
dollars.
     Neither is there any question as to the general
applicability of the indirect cost rules.  The introduction  to
the Indirect Cost Manual states,  "it is critical that EPA seek
to recover all costs associated with clean-up.  These costs
should include all direct and indirect costs related  to site
clean-up."  Indirect Cost Manual at i (emphasis in original).
The manual is intended to determine appropriate charges  "for  each
20/  This figure includes all costs except pre-]udgment
     interest.  See Statement of Case, supra.
-------
 sice" and "to provide  instructions  to  regional financial
 management personnel for  calculating the amount of indirect cost
 which should be  claimed  in  cost  recovery actions."  Id.
 Moreover,  the manual was  provided to a variety of EPA offices
 charged with assessing responsible  parties with Superfund costs
 and it includes  worksheets  to be used by EPA personnel to
 determine  indirect costs  for sites  in the various regions.  Id.
        •
 at  II-3.
      Thus,  the Agency cannot legitimately argue that the rule
 implicit  in the  Indirect  Cost Manual is limited in its effect.
                               \
 The position  taken in the manual limits administrative discretion
 to  decline  to charge indirect cost  or to calculate them in a
 fashion  different from that enunciated in the Indirect Cost
Manual.  It  follows that  the Indirect Cost Manual has the
requisite "substantial impact" to necessitate rulemaking under
the APA.  National MotorFreight Traffic Ass'n v. United States,
268 F. Supp.  90  (D.D.C. 1969), aff'd per cunam, 393 U.S. 18
 (1958); McLou-i"  Steel Products, 838 F.2d at 1320,
     EPA does not have a  valid claim to the exception provided
for "interpretative rules."  See 5  U.S.C. § 553(b)(A).
Interpretative rules are  nonbinding agency opinions of how a
statute should be viewed, and do not set out rights or
obligations.  Ohio Dep't of HuTian Services v. HHS, No. 86-3449,
slip op. at 14-15, 17;  See generally, B. Mezines, J. Stein & J.
Gruff, Administrative Law § 15.01 (1988) (hereinafter
"Mezines").  EPA does not view the  calculation or collection of
indirect costs as non-binding.  To  the contrary, its guidance  on
-------
 the  subject dictates that these costs are to be charged to all

 responsible parties and suggests no alternative to EPA's

 determination  that indirect costs are part of the "response

 costs" under section 107 of the statute.  Hence, the EPA-guidance

 "conclusively  affects the rights of private parties" and

 demonstrates that this is not an interpretative rule.  Id. at S

 1507{3).li/

     I" adcitiC'w *nen an importa'-c pol-c., issue exists, tr.e r-le

 is not interpretative.  Mezines at S 1507(3).  "If this is a

 matter upon-which the agency should act only after informed

 reflection, the policies underlying [APA] section 553 seem to

 apply."  St.  Francis Hospital v. Weinberger, 413 F. Supp. 323,

 329  (N.D. Cal. 1976).  As this matter involves important policy

questions relating to liability under CERCLA, it clearly is not

of the nature of an interpretative rule.

     Neither  is EPA's action a general statement of policy.  See

 ? r ?,C.  5 =53(b){i).  Sue1- statere-.ts "impose no rights or
                      \
obligations and have no substantial impact on affected members of

the public."   Mezines, supra, § 1507(4).  EPA's indirect cost

recoupment clearly imposes a significant financial ooligation on
2\J  In Ohio Dep't of Human Services v. HHS, No. 86-3449, this
     Court rejected the Department of Health and Human Services'
     ("HHS1") argument that a regulatory provision establishing a
     ceiling on the amount of Medicaid funds allocable to the
     care of non-institutionalized spouses of institutionalized
     Medicaid recipients was an interpretative rule.  The HHS
     rule did not remind states of a pre-existing ceiling, but
     rather imposed a new one.  Id. at 18.  Similarly, EPA's
     determination that indirect costs must be assessed against
     PRPs is an entirely new rulemaking, requiring the procedural
     safeguards of the APA
-------
 the  responsible parties and thus could hardly have a more

 palpable impact on the regulated community.

     Because -EPA has attempted to impose a substantial burden

 upon ±he regulated community without the benefit of the notice

 and comment procedures available under the APA, the assessment of

 indirect costs is an invalid exercise of EPA's authority.  It

 follows that EPA may not recover the indirect cost assessed

 aga.nsc rre defendants.


                            CONCLUSION

     The Amici respectfully request that the Court reverse that

portion of the judgment below allowing the government to recover

$52,978.50 in indirect costs.

                                Respectfully submitted,
                                J.  Gordon Arbuckle
                                John C.  Martin
                                Peter D. Robertson
                                PATTON,  BOGGS & BLOW
                                2550 M Street, N.w.
                                Washiraton, D.C.  20037
                                (202) 457-6000

                                Attorneys for: Thermo Cheii PRP Group,
                                Cleve Reoer Task Force;
                                Chemical Manufacturers Association;
                                Motor Vehicle Manufacturers Association;
                                National Association of Manufacturers;
                                and
                                National Chamber Litigation Center
                                  for the Chamber of Commerce of
                                  the United States
-------
Of  Counsel:

David  F.  Zoll
Vice President and
General Counsel
Barbara A. Hinden
Assistant General Counsel
Chemical Manufacturers
    Association
2501 M Street, N.W.
Washington, D.C.  20037

William H. Crabtree
V.ce President and General Counsel
Motor  Vehicle Manufacturers
    Association
7430 Second Avenue
Suite  300
Detroit, MI  48202

Jan Amundson
General Counsel
National Association of
   Manufacturers
1331 Pennsylvania Avenue, N.W.
Suite  1500
Washington, D.C.  20004

Robin  S. Conrad
National Chamber Litigation
   Center, Inc.
1615 H Street, N.W.
Wasnington, D.C.  20062
Dated:  January 31, 1989
-------
-------
                      CERTIFICATE OF SERVICE



       I, Peter D. Robertson, hereby certify that on this 30th day

 of January 1989, two copies o"f the foregoing Brief for Amici

 Curiae was mailed, first class postage prepaid, to the following

 parties:
Jon D. VanderPloeg
Smith, Haughey, Rice & Roegge
200 Calder Plaza Building
Grand Rapids, MI  49503-2251

Babette J. Neuberger
Office of Regional Counsel
U.S. Environmental Protection
     Agency, Region V
111 West Jackson Blvd.
Chicago, IL  60604

Robert H. Oakley
Land & Natural Resources Division
Environmental Enforcement Section
U.S. Department of Justice
Washington, D.C.  20530

Jaques Gelin
Land and Natural Resources Division
Appellate Section
U.S. Department of Justice
Washington, D.C.  20530

Thomas J. Gezon
Chief Assistant U.S. Attorney
399 Federal Building
110 Michigan Avenue, N.W.
Grand Rapids, MI  49503
                               Peter D. Robertson
-------
           EXHIBIT  1

Superfund Indirect Cost Manual
             and
      Updating Memoranda
-------
          ENVIRONMENTAL PROTECTION AGENCY
          SUPERFIJND INOIRECT COST MANUAL



             FOR COST RECOVERY PURPOSES



             FY 19«3 through FY  1985
                                                              r-i.
            OFFICE OF THE COMPTROLLER



OFFICE CF ADMINISTRATION AND RESOURCES MANAGEMENT
                                       March  1986
-------
 Subject:  Recovery of Superfund indirect Costs


      Recovering the costs of Suoerfund sit* cle*n-un from parties
 responsible "for the contamination trill b* one of the major sources
 of replenishment of the Hazardous Substance Resoonse Trust Fund
 (the  Superfund) in the years ahead.  In that regard, it is critical
 that  EPA seek to recover all costs associated with clean-uo.  These
 costs should include all direct and indirect costs related to site
 clean-up.

      Indirect costs are the costs necessary to ootrate the orsara-
 but which cannot be attributed directly to specific sites.  Examples
 include orogram management, indirect salaries and frinqe benefits,
 administrative support, rent, and utilities.  EPA has developed
 an indirect cost allocation system which allocates these indirect
 personnel and orogram overhead costs down EPA's organizational
 structure to Superfund sites.  Determining the aporooriate charges
 for each site is the ultimate objective for cost allocation.

      while indirect costs are generally understood and accented
 in the business community, they are not normally used in the
government environment.  Accordingly, I have directed that this
manual be prepared to (1) provide an explanation of what indirect
costs are and how EPA allocated them, and (2) to provide instructions
to regional financial management personnel for calculating the amount
of indirect costs which should he claimed in cost recovery actions.

      The Suoerfund Accounting Branch, Financial Management Division,
at EPA Headouarters will calculate indirect cost rates for each
region for each fiscal year, beginning with fiscal year 1983.  As
rates for succeeding years are calculated, the Financial Management
Division will issue transmittals to keep this manual up to date.

      This manual has been provided to regional financial Management
Officers, Regional Counsels, Headauarters Legal Offices  (OECM  and
OGC)  and all Headguarters and regional Superfund Program Division
Directors.

      Suggestions for improvement or comments should be referred
to George Alaoas, Chief, Suoerfund Accounting Branch at  FTS
382-2268.  The address is:

               EPA Headguarters
               Superfund Accounting Branch, PM-226
               401 M Street, S.w.
               Washington, D.C.  20460
                          C.  Morgan  Ki
                          Comptroller,
-------
                           Introduction


 The purpose  of  this  manual  is  twofold:

^^^JipTo ^provide-.an-explanation  of how EPA's  indirect cost
  * """     rates-were  developed*  and

      (2)  To  explain  how those  rates should be  used  to  calculate
          indirect  costs allocable to individual  Suoerfund  sites.

      The  first  section  includes an  explanation of what indirect
 costs are, and  why and  hsw  tKe-' are allocated  so that  an indirect
 cost  rate can be developed.  The purpose  of the  section is to
 provide an understanding of  how this occurs so that Agency
 representatives can  become  comfortable  enough  with  the concents
 to  defend them  in  negotiations  and/or litigation.

      The  second section provides those  rates that have been
 calculated for  each  region  and  an explanation  of how thev  should
 be  applied to derive indirect  costs allocable  to a  given site.
 These costs  should be pursued  in cost recovery actions with the
 same  intensity  as  direct costs.
                               111
-------
                      Allocation Methodoloov
 ,;v, --s-The  purpose of  this -section is to present EPA*a methodology
 for  indirect cost allocation 'to Superfund sites in an understand-
 able format for non-accountants.  It is intended to assure the
 reader  that the indirect costs claimed in cost recovery actions
 have been derived from the most accurate and defensible methodoloqy
 available using qenerallv accented accounting principles.  As such
 these indirect_costs are valid and should be recognized as cart of
 the  total recoverable costs incurred bv the Government in clean-uo
 actions under the Comprehensive Environmental Response, Compensation,
 and  Liability Act (CERCLA).

      This section answers relevant questions about Superfund site
 indirect costs.  The specific questions this section addresses
 are  as  follows:

      •  What are indirect costs?

      •  What is cost allocation?

      e  Why and how did EPA develop an indirect cost allocation
        methodology for Superfund sites?

      e  What costs are allocated?

      •  What is the conceotual form of EPA's methodology?

      •  How does EPA aonlv the nethodoloqy to determine  indirect
        cost rates for Superfund sites?

      e  What does an indirect cost rate reoresent?

T^ie  answers to these questions should provide a sufficient under-
standing of the indirect costs of a Superfund site that  the  reader
will  accept their validity as recoverable costs.


What  are indirect costs?

      Indirect costs are those costs which are necessary  to the
operation of the program and support of site clean-up  efforts,  but
which cannot be directly identified to the efforts at  any one  site.

      They ranqe from costs closely related to site work  — oav
earned by on-scene-coordinators while  in training  or awaiting
the  next clean-up assignment — to costs not so closely  related
to site wor* ~ a portion of the Administrator's  time.  While
these costs are very different in their relationship to  any
                                1-1
-------
organizations.  This section describes the decision making process
EPA and Ernst and Whinney went through to decide upon the most
appropriate methodology.

     Development of a cost allocation methodology requires 1)
selecting a method, 2) selecting -how to accumulate costs, and 3)
selecting the allocation bases that link the cost objectives to
the costs themselves*  An allocation base is that which defines
the various recipients of the support provided by an organization
as well as the proportionate amount of that organization's costs
which should be allocated to each of those various recipients.
                                                       i.
     Delect: re the ^etKod!
     Selection of a particular method of allocation is dictated
by concerns about accuracy and practicality.  The various levels
of accuracy provided by each of the generally accepted alternative
methods is d.ictated by the decree to which each method recoanizes
the concept of sunnort department interdeoendency.  The following
is an illustration of this concept.
          Exa-iDle of Supnort Department Interdeoendency
      OFFICE
      OF THE
    COMPTROLLER
   OMISS
    OATA
PROCESSING
                           AA FOR SOLID
                            W*kSTE AND
                            EMERGENCY
                             RESPONSE
                             OFFICE OF
                           EMERGENCY  AND
                              REMEDIAL
                              RESPONSE
                                1-3
-------
      Within  those appropriations, costs specifically excluded
 from  allocation are  1) capital costs, which are considered
 investments  rather than operating expenses related to a given
 fiscal  year, and 2)  costs charged directly to Superfund sites,
,i.e. ,,-direct costs,  specifically, the indirect costs which are
 allocated-are-as follows:

        salaries and  fringe benefits
        EPA travel and transportation
        rent, communications, and utilities
        printing and  reproduction
        suonlies and  materials
        other contractual services.


 what  is the  conceptual form ofEPA's methodology?

      EPA's cost allocation methodology is a three stage process
 which allocates the  indirect costs from higher level organiza-
 tions down EPA's organizational structure through two  intermed-
 iate  levels  to the final cost objectives — Superfund  sites.
 The first intermediate level is the Assistant Administrator
 organizational level, and the second intermediate level is the
 regional oroaram division oroanizational level — that which
works most closely with the Suoerfund sites themselves.

      Stage 1

      The first stage's basic function is to allocate Headquarters
 support costs to the Agency's major "Assistant Administrator  (AA)"
 organizational level, i.e. Headguarter1s Program AAs — Pesticides
 and Toxic Substances: Air, Noise and Radiation; Water: Research and
 DevelopmentT and Solid vWaste and E^eraency Response (OSWER) — and
Regional Administrators (RAs).  An organization chart  for EPA
Headauarters is presented at the end of this section (page I-*)
 to aid  this discussion.  Temporary cost pools are created to
 receive the allocation to the "AA" level.  Dollars allocated  to
 the cost pools for the Headauarters program AAs for Pesticides
 and Toxics; Air, Noise and Radiation; Water; and Research and
Development are not  brought forward to Stage 2 for allocation  to
 lower organizational levels because they are non-allocable.

      They are considered non-allocable to Superfund because with
 the exception of Research and Development, they do not support
 Suoerfund.  While Research and Development does support Superfund,
 the beneficial relationship to actual site work is often  tenuous.
 Accordingly, we did  not allocate  it.  The cost pools formed  in
 Stage 1 to accumulate costs that are allocated to  the  AA  for
OSWER and the Regional Administrators are brought  forward to
 Stage 2 for  further  allocation because OSWER supports  Sunerfund
 and the Regional Administrators  support  their  regions.
                                1-5
-------
reqion can apply  indirect costs to each of its individual Super-
fund  sites.
                                                          *  *
      The rate for any reaion is calculated by dividinq the costs
allocated to'that region's Suoerfund site cost pool by the number
of regional-program division hours charged -to sites.  For example,
if the total cost allocated down EPA's oraanizational structure
to a  region's Superfund site cost pool is 51,500,000. and the
total regional program division hours charged to that region's
sites is 21,000 hours* the indirect cost rate for that region is
S71 per hour of regional orogram division labor.
         $1,500.000
           21,000
*  571.43, or S7l rounded to the nearest dollar.
What dees the indirect cost rate represent?

     Using the above examole, assume that the reqion had only
three sites, and the 21,000 regional program division hours were
charged to sites as follows:
               Site A
               Site 8
               Site C
     1,000 hours
    15,000 hours
     5,000 hours
               Total  « 21,000 hours.

Indirect costs for those sites would be as follows:
     Site A indirect costs
     Site 8 indirect costs
     Site C indirect costs

     Total
         S?i x  1,000 hours
         Sfl x 1S,000 hours
         S71 x  5,000 hours
S   71,000
$1,065,000
S  355,000

$1,500,000.
The rate is merely a means of determining an  individual site's
share of the indirect costs allocated to the  Suoerfund sites cost
pool.
                                1-7
-------
    AUTHORIZED EPA REGIONAL ORGANIZATION
          HQ Gananl
           Count**
          Offiet of
        Rational Counsel
    Division
                            REGIONAL ADMINISTRATOR
                                     REGIONAL
                               ADMINISTRATOR
                      Air
Divoion'
                                                            Public Affwn
                                   Congrmonal »nc
                                   lirarfovammantii
                                      Liauon
                            Office of Anisnm Rtgionii
                                AdmmiRmor for
                             Potiey and Managtnwm*
                                                        Eauai
                                                        Ooponunrry Otf
nrirenmtnal Strvic
     Oivnton
 • AlttmtttM R«9ionai orqtniattofi may n^tees Manaoamam Ottmen
** AttantaUM Rational or^niaooo nvy rvfttet a ungla Dmston tndudtng Air and W
                                  Manaoamam functions
                                    1-9
-------
          EPAIndirect CostRates and Explanation of use
     This section has four purposes:

          1)~ provide rules to-follow in applying regional  "
              indirect rates to individual Superfund sites;

          2)  issue instructions for including indirect costs
              in a site's cost documentation package;

          3)  'provide the regional indirect cost rates for
              each region and fiscal year;

          4)  provide a worksheet to calculate the indirect
              costs to be claimed in a Suoerfund site's cost
              recovery action.
Hules for Applying the ffates

     Rule •!

     A reoion*'s indirect cost rate must only be applied to hours
charoed to a site by regional program division personnel.  This
is because that rate has heen derived by dividing the indirect
costs allocated to a region's Sunerfund site cost pool by only
the nunber of hours charged to sites by regional program division
personnel.  For example, expanding the example used in Section I,
assume the total number of hours charged to sites is as follows:
          Regional Procran  Rejional Administrative  Headguarters
             Divisions            Divisions            Offices
Site A
Site B
Site C

Total
       1,000
      is.ono
       5,000

      21,000
                   5,200
                                2,550.
     If the S71 rate was applied to all regional hours charged
to sites in the region, the total calculated  indirect costs
for sites would be:
Site A:
Site B:
Site C:
(  1,000
(15,000
(  5,000
hours
hours
hours
  200
3,son
1,500
hours) x 571
hours) x $71
hours) x $71
S   85,200
$1,313,500
S  461,500
Total:  (21,000 hours + 5,200 hours) x  $71  »  51,860,200,
                                II-l
-------
 Indirect cost rate reference sheet and worksheet

      The remainder of this section provides,  by reqion,  the'
-indirect cost rates for each fiscal year and  a  worksheet that
-will  display.-the application of-a  region's  indirect  cost rates
 which produces the amount  of indirect  costs claimed  in cost
 recovery for a Superfund site.   The completed worksheet  and a
 copy  of  this manual should serve as the support and  documentation
 of  the amount of indirect  costs  claimed.  The fully  documented
 regional program division  hours  on which a  site's  indirect
 costs are calculated are,  and will continue to  be, part  of the
 documentation for direct site costs.
                               II-3
-------
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         UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                        WASHINGTON, D.C. 20460
                                                        OFFICE OF
                                                      ADMINISTRATION
                                                      AND RESOURCES
                                                       MANAGEMENT
 SUBJECT: Super fund Indirect Cost Update

 FROM:    Vincette L. Goerl, Director
         Financial Management Division (PM-226)

 TO:      Assistant Regional Administrators
         Regional Management Division Directors

         Gene Lucero, Director
         Office of waste Programs Enforcement

         Edward E. Reich
         Associate Enforcement Counsel
           For Hazardous Waste Enforcement
     In March, 1986, the Comptroller issued the Superfund Indirect
Cost Manual for Fiscal Years (FY) 1983, 1984, 1985, and 1986 which
provided indirect cost rates to be used in Superfund cost recovery
actions.  The manual also furnished guidance on the application
of the rates along with an explanation of tne methodology employed.

     The purpose of this memorandum is to update information con-
tained in the manual by (1) providing new rates for FYs 1983-86 and
a provisional rate for FY 1987, (2) clarifying the distinctions
between provisional rates and final rates, and (3) apprising you of
our plans regarding indirect coats during FY 1987.

     Attached are revised pages to the Manual providing the new
rates which should be used by the regional financial management
offices in computing indirect costs for cost recovery actions.
The rates should be applied in the same manner as explained in
Section II of the Manual.  You will note that the rates for FYs
1983 and 1984 are labelled "Final" while the FY 1985-87 rates are
termed "Provisional."  The general distinction is that final rates
are based on the actual costs incurred during the year, whereas
provisional rates are interim, temporary rates to be used until
actual costs are known and final rates can be computed.  EPA's
policy for determining provisional rates is to use the rates from
tne latest fiscal year for which rates based on actual costs have
been computed.  Since FY 1984 is the latest such year, the FY 1984
rates are used as provisional rates for 1985-87.
                             7-
-------
      In addition  to being baaed  on  the actual  incurred coats for
 the  year,  final ratea  also  reflect  adjustments  recommended 'by
 auditors from the Office of the  Inspector General  (OIG).  The DIG
 has  completed most of  the fieldwork on audits of FY 1983 and
 1984.   They have  recently begun  the FY 1985 and FY 1986 audit.

      Ideally,  final rates should be the basis  for determining the
 indirect costs allocable to a site  since they are based on actual
 coats.   In reality* many cost recovery actions are scheduled for
 completion before final rates are known.  In such cases, it is
 acceptable to use the  provisional ratea.  EPA 'a policy of provisional
 rate  determination based on latest  known final rates is a common
 and  accepted  practice  utilized by numerous government contractors
 and  grantees.

      Our goals regarding indirect costs for FY  1987 include the
 following: -

   1.  Computation and issuance  of  FY 1985 and 1986 final rates.

   2.  Analysis of the rate computation methodology for possible
       revisions.
                                                                  »
   3.  Evaluation of the existing indirect cost documentation with
       an eye towards  revision (e.g. the Manual) and/or issuance
       of new material.

   4.  Conducting training  courses  or workshops on indirect costs
       for Regional and Headquarters personnel.

   5.  Examining  the feasibility of incorporating indirect costs
            the Superfund accounting and financial reporting process
     The attached pages should be substituted for the corresponding
pages in the Manual.  Please direct any questions or comments to
William Cooke of the Superfund Accounting Branch on (202)  382-2880.

Attachments

cc$  David P. Ryan
     Budget Division
     Regional Comptrollers
-------
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-------
      I UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
      f                 WASHINGTON, O C. 20460
                         DEC 171987
MEHORANDDM
                                                       OPP1CE Of
                                                     ADMINISTRATION
                                                     .AND RESOURCES
                                                      MANAGEMENT
SUBJECT: Superfund Final indirect Cost Rates foe
                                  6
FROM:
TO:
                                  or
                       gertent Division

         Assistant Regional Administrators
         Regional Management Division Directors

         Gene A. Lucero, Director
         office of Waste programs Enforcement

         Edward E. Reich
         Associate Enforcement Counsel
          For Hazardous Waste Enforcement

     This memorandum transmits final indirect cost rates for
Fiscal Years  {FYs) 1985 and 1986.  These rates, shown on	
Attachment A, are applicable to payroll hours worked in selected
Responsibility Centers as described in two previous issuances:

  1.  Superfund Indirect Cost Manual For Cost Recovery Purposes,
issued by tne Comptroller in March 1986.
                        V
  2.  "Superfund Indirect Cost Update", issued by the Financial
Management Division  (FMD) in January 1987.

These rates have been audited by  the Office of Inspector General.

     FMD is currently conducting  a formal evaluation of  the indirect
cost process. This evaluation may result  in a revised rate process
for FYs 1987  and subsequent years.  Until a revision  is  implemented,
the FY 1986 rates should be used  as provisional  rates for
FYs 1987 and  1988.

     Please direct any questions  to Bill  Cooke of  the Superfund
Accounting Branch, FTS 382*2880.

Attachment

cc:  David P. Ryan
     Regional Comptrollers
-------
                     OFFICE  OF  THE COMPTROLLER



                   FINANCIAL MANAGEMENT DIVISION



       FINAL  INDIRECT COST RATES FOR SOPERFUND COST RECOVERY



                     FISCAL  YEARS 1985 AND 1986
                               FY 1985
FY 1986
 REGION I




 REGION II




 REGION III




 REGION IV




 REGION V




 REGION VI




 REGION VII




-REG I ON-VI11




 REGION IX




 REGION X
$ 57
$ 56
$ 48
$ 49
S 53
$ 54
$ 61
$60
$ 56
$ 57
$ 58
$ 57
$ 47
$ 48
$ 51
$ 53
$ 60
$ 63
S 54
$ 56
-------
                      EXHIBIT 2

Pertinent Sections of the Comprehensive Environmental
 Response, Compensation and Liability Act as Amended
and  the  Superfund Amendments and Reauthorization Act
-------
100STAT 1782
42 L'SC 9601
note
            PUBLIC LAW 99-499—OCT. 17,1986


      PART HI-COORDINATION WITH OTHER
               PROVISIONS OF THIS ACT.             :

SEC 531 COORDINATION

  Notwithstanding any provision of thu Act not contained m tk
title, any provision of thu Act 'not contained in thu tide) which-!
      (1) imposes any tax, premium, or fee,                      .
      (2) establishes any trust fund, or                          |
      (3) authorizes amounts to be expended from any trust fund.
shall have no force or effect.

  Approved October  17, 1986
              LEGISLATIVE HISTORY-H R. J005 'H R. 2817* iS 51i

              HOLSE REPORTS No 99-49 ' Comm on Wan and Meanii No 99-.253 Pt 1 Coma
                             on Energy and Commerce! Pt i  Comm on Wavj and Menu
                             Pt J'Comm on the Judiciary) Pt  -iiComm on Merchant Marnt
                             and Fi*hene»i Pt 5 'Comm on Public Works and Transport
                             tioni  all accompanying HR  £17 and No 99-962 (Comro a
                             Conference)
              SENATE REPORTS N'o 99-11 fComm on Environment and Public Workaiand Ne
                              99-73 'Comm on Finance* both accompanying S 51
              CONGRESSIONAL RECORD-
                   Voi  13111935<  May 14 considered and pawed HOUM
                               Sept 17-10 H i& conudered and pmtrt SetiaU amended. J
                                lieu of S  51                                    |
                               Dec  i  6  10  HR. 2817 con*ider«d and oaaaed HOUM HOUM
                                agreed to Senate amendment* to H R. JOOS with anenf
                               menu, inaening in lieu the text and title of H R,  ^8V?      )
                   Voi  112'19861-Oct 3 Senate agreedto conference report.
                               Oct 8 HouM ajreed to conference report.
              WEEKLY COMPILATION OF PRESIDENTIAL OOCLMENTS Voi  22 (19861-
                   Oct  iT Presidential statement
                                                                              I
-------
100STAT  1774
                         PUBLIC LAW 99-499-OCT. 17,1986
                                                                      r
             tion (and paragraph (2) of section 221(b) of the Hazardous
42 USC 9631    Response Act of 1980, as in effect before its repeal) as has not
             appropriated before the beginning of the fiscal year involved.
               (c) CONFORMING AMENDMENTS —
42 use              (1) Subtitle B of the Hazardous Substance Response Rev«ftlK
9631-9633          Act of 1980 (relating to establishment of Hazardous Substanct
                 Response Trust Fund), as amended by section 204 of this Act, a
                 hereby repealed
42 USC 9601          (2) Paragraph  (11) of section  101  of the Comprehensn,
                 Environmental Response, Compensation, and Liability Act of
                 1980 is amended to read as follows*
                   "(11) The term 'Fund' or Trust Fund' means the Hazardou
                 Substance Superfund established by section 9507 of the Intern*,
26 USC 9507        Revenue Code of 1986 "
               (d) CLERICAL AMENDMENT —The table of sections for subchapter \
             of chapter 98 of such Code is amended by adding after the item
             relating to section 9506 the following new item
                    'See »SOT Hcardoui Subtunc* Sup»rfund
26 LSC 9507      (e) EFFECTIVE DATE —
note                (It IN GENERAL.—The amendments made by this section shait
                 take effect on January 1,1987
                   (2) SUPERFUND TREATED AS CONTINUATION  OF OLD TIIJT
                 FUND —The Hazardous Substance Superfund established by thi
                 amendments made by this section shall be treated for all pur
                 poses  of law as  a  continuation  of  the  Hazardous Substanct
                 Response Trust Fund established by section 221 of the Hazard
42 CSC 9631        ous Substance Response Revenue Act of 1980  Any reference tr
                 any law  to  the  Hazardous Substance Response Trust  Punc
                 established by such section 221 shall  be deemed to include
                 fwherever appropriate' a reference to the Hazardous Substanct
                 Superfund established by the amendments made by this section

                 »ART II-LEAKING UNDERGROUND STORAJ
              TA>it TRUST FUND AND ITS REVENUE SOURCES

             SEC «1 ADDITIONAL  TAXES ON  GASOLINE.  OlESEtyXtEL. SPECIAL
                             FIELS PIEL5 LSEO IN AVIATIOVXND Ft ELS ISED!>
                      COMMERCIAL TRANSPORTATION ON INTEND WATERWAYS.
               (a; GENERAL RULE —
                    anQs|£> and inserting in
                         listfthereof the following-
               "fa i Iv GjXtRAL.—There is hereby imposed on gasokoe sold by the
             producet^or importer thereof or by any  producer of gasoline, a tai
             at the/rite specified in subsection (b)
                   RATE OF TAX —
                    ' IJ Is GENERAL.—The rate of the tax imposed by this sect
                 is the sum of—
                       v A) the Highway Trust Fund financing rate, and
                                               lENOMENT BY TAX REFORM ACT
                                                                                  firu
                                                                                 '(2JR

                                                                                  gai

                                                                                  finz
                                                                              (d) TERM
                                                                                 •m i
                                                                               October
                                                                               subsects
                                                                                  (2)
                                                                               FINANCt
                                                                                     f
                                                                                   Tar,
                                                                                   sha
                                                                                   gra
                                                                                   cios
                                                                                   nue
                                                                                   attr
                                                                                   Tru
                                                                                   tior
                                                                                   the
                                                                                   mg

                                                                                   the
                                                                                   ove»

                                                                                   £*
                                                                                   Tru
                                                                                      11
                                                                                    40S
                                                                                     198*
                                                                               "(d) RATE i
-------
T, 1986

 bv this section shall
- 11,1986
 98 of the Internal
nt of trust funds) u
lowing new section
3rihed in the Treas-
n aa the 'Hazardous
n referred to as the
be-
aded in this section,
ant to section 517(b)

d in section 9602fb>
•  y appropriated to

       section 59A,
u    .*),
uperfund under the
Compensation, and
ction referred to as

*. A   under section

CLA. and
'ic*3)  of CERCLA.

"and shall be avail-
My  for purposes of
 of section lllCa) of
 f the enactment of
 ^authorization Act

 so in effect), other
 and
  % so in effect), or
 vnich does not au-
 -fund for a general
 A) (as so in effect)
 TC, OP HAZARDOUS
 >r derived from the
 ransfer or disposal
 cooperative agree-
  m mental  Protec
 conditions apply~
 * on  December U
 local requirement
       final permit
       •saJ Act was
            PUBLIC LAW 99-499—OCT  17,1986
IOOSTAT  1773
         "(C> the transfer is from a facility identified as the McColl
       Site in Fullerton, California.
  "(d) AUTHORTTY To BORROW —
      "(1) IN GENERAL.—There are authorized to be appropnated to
    the Superfund. as repayable advances, such sums as may be
    necessary to carry out the purposes of the Superfund
      "(2) LIMITATION  ON AGGREGATE ADVANCES—The maximum
    aggregate amount of repayable  advances  to the Superfund
    which is  outstanding at any one time shall not exceed an
    amount equal to the amount which the Secretary estimates will
    be equal  to the sum of the amounts appropnated to the
    Superfund under  subsection (bxl)  during the following 24
    months
      "(3) REPAYMENT or ADVANCES —
         "(A) IN GENERAL.—Advances made to the Superfund shall
       be repaid, and interest on such  advances  shall be paid, to
       the general fund of the Treasury when the Secretary deter
       mines that moneys are available for such purposes in the
       Superfund
         '(B) FINAL REPAYMENT —No advance shall  be made to the
       Superfund  after December 31.  1991, and all  advances to
       such Fund shall be repaid on or before such date
         ' (C) RATE OP INTEREST —Interest on advances made to the
       Superfund shall be at a rate determined by the Secretary of
       the Treasury (as of the close of the calendar  month preced-
       ing the month in which the advance  is made) to oe equal to
       the current average market yield on outstanding market-
       able obligations of the United States with remaining peri-
       ods to  maturity  comparable  to  the anticipated  period
       during which the  advance will be outstanding and shall be
       compounded annually
  '
-------
100 STAT. 1772
PUBLIC LAW 99-499-OCT 17,1986
26 USC 26 onto     (c) EFFECTIVE DATS.—The amendments made by this section shall
              apply to taxable yean beginning after December 31,1986

   -  -       SEC SIT HAZARDOUS SUBSTANCE St'PEKFUND
                (a) IN GENERAL.—Subchapter A  of chapter 98  of the Internal
              Revenue Coae of 1&&6 treie:.r.g to esLabljsfcment of trust fundt) 4
              amended by adding after section 9506  the following new section

26 USC 9507     -SEC flMT HAZARDOUS SUBSTANCE SUPERFUND
                "(a) CREATION or TRUST FUND —There is established in the Treat.
              ury of the United States a trust fund to be known as the 'Hazardous
              Substance Superfund' (hereinafter in this section referred to as tfe
              'Superfund'), consisting of such amounts as may be—
                   "(1) appropriated to the Superfund as provided in this section
                   "(2) appropriated to the Superfund pursuant to section 5l7ibi
                  of the Superfund Revenue Act of 1986, or
                   "(3) credited to the Superfund as provided in section 9602bt
                "(b) TRANSFERS TO SUPERFUNO —There are hereby appropriated to
              the Superfund amounts equivalent to—
     p irro          "(1) the taxes received in the Treasury under section  59A.
                  4611,4661, or 4671 (relating to environmental taxes),
                   "(21 amounts recovered on behalf of the Superfund under the
                  Comprehensive  Environmental  Response. Compensation, antf
42 USC 9601         Liability Act of 1980 (hereinafter in this section referred to u
"*»               'CERCLA').
                   "(3)  all  moneys  recovered  or collected   under section
33 USC 1321         31 lfbx6XB) of the Clean Water Act,
42 USC 9601          "(4) penalties assessed under title I of CERCLA, and
42 USC 9607          "(5) punitive  damages under section 107(cX3) of CERCLA.
                "(c) ExFKNDm/RRB PROM SUPERFUND —
                   "(1) IN GENERAL.—Amounts in the Superfund shall be avail-
                  able, as provided  in appropriation Acts, only for purposes «
                  making expenditures
                       "(A) to carry out the purposes of—
                            "(i)paragrapns (1). (2), (5). and (6) of section lllla>of
Anu  p 1642.                 CERCLA  as in effect on the date of the enactment c<
                          the Superfund Amendments and Reauthonzation Act
                          of 1986,
                            "(11) section  lll(c) of CERCLA (as  so m effect), other -
                          than paragraphs (1) and (2) thereof, and
                            M(iu)  section  11 Km) of CERCLA (as so in effect) or
                       "(B) hereafter authorized by a  law which does not au-
                      thorue the  expenditure out of the Superfund for a general
                      purpose not covered by subparagraph (A) (as so in effect'
W«M dttpaML        "(2) EXCRFTION  FOR CERTAIN  TRANSFERS, ETC.. OF HAZARDOUS
                  SUBSTANCES.—No amount in the Superfund or derived from tin
                  Superfund shall be available or used for the transfer or disposal
                  of hazardous waste earned out pursuant to a cooperative agree-
                  ment between the Administrator of the Environmental Protec-
                  tion Agency and  a State if the following conditions apply-
                       "(A) the transfer  or disposal, if made on December U
                      1985, would not comply with a State or  local requirement.
                       ' (B) the transfer is to a facility for which a final perron
42 USC 6925             under section 300Sai of the Solid Waste Disposal Act <**
                      issued after January 1, 1983, and  before November 1,  1&4
                      and
                                                              "(C
                                                            Site u
                                                      •Md) AUTHOR
                                                          "(1) IN c
                                                        the Supe"
                                                        necessary
                                                          "12) Li*
                                                        aggregate
                                                        which is
                                                        amount eq
                                                        be  equal
                                                        Superfund
                                                        months.
                                                          "(3) REP
                                                                (A'
                                                             be rep
                                                             thege
                                                             mines
                                                             Supen
                                                                (Bi
                                                             Supen
                                                             such F
       Superi
       theTr
       tng th<
       the cu
       able 01
       ods tc
       during
       compo
     LtABtur
                                                       "
                                                           "(1) GEN
                                                         may oe ?a,
                                                            •!>>  Coc
                                                         CERCLA c
                                                         Act of I98f
                                                         shall authc
                                                         of any amo
                                                         other than
                                                            '(3) ORDJ
                                                         time the £
                                                         claims  Day
                                                         shall, to th
                                                         full m the c
                                                        (b) AUTHORIZE
                                                      appropriated, <
                                                      appropriated, t
                                                      year—
plus
                                                            12) 1388 ;
                                                            (3) 1989 :
                                                            (4) 1990 5
                                                            (5) 1991 i
                                                           for each
                                                                                aggregate amoi.
-------
42 § 9611                             PUBLIC HEALTH AND WELFARE

                  the Fund   Each such Inspector
provide iuch
             •te with the Inspector General in
                                                        Each Federal agency
   To the extent that the provisions of this chapter permit, a foreign claim.
ant may assert a claim to the same extent that a United States claimant may
assert a claim  if—

       (1) the  release of a hazardous substance occurred (A) in the naviga.
     ble waters or (B)  in or  on the territorial sea or  adjacent shoreline of a
     foreign country of which  the claimant is a resident,

       (2) the  claimant is  not  otherwise compensated  for his loss,

       (3) the  hazardous  substance was released from a facility or from a
     vessel  located adjacent  to or within  the navigable waters or  was dis-
     charged in connection with activities conducted  under the Outer Conn-
     nental Shelf Lands Act, as amended (43 U S.C.  1331 et seq ) or  the
     Deepwater Port Act of  1974. as amended (33 U  S.C 1501 et seq), and

       (4) recovery is authorized by a treaty or an executive agreement be-
     tween  the United  States and foreign  country  involved, or if the Secre-
     tary of State, in consultation with the Attorney General and other ap-
     propriate  officials, certifies that such country  provides a comparable
     remedy for United States claimants.
(PubL  96-310. Title I. § 111, Dec 11,  1980. 94 Sut  2788 >

                                Historical Now
                                        Dec II. I9M 94 Slat  2796  known at ite
                                        Hazardous Substance Response Revenue An
                                        Of 1980 which enacted subehapter U of IBB
                                        chapter and sections 4611 4612. 4661 4<*z.
                                        4681 and 4682 of  Title 26. internal Revew
                                        Code.  For complete classification of Title U
                                        to the Code, see Short Title of 1980 Amend-
                                        ment note set  out under section I  of Title U
                                        and Tables volume.
                                          The  Outer Continental Shelf Lands Act •
                                        amended referred to in subsec (Wl a \a
                                        Aug  7. 1933.  c  343  67 Slat  462  u
                                        amended, which is classified generally te  «*
                                        chapter (II (section 1331 ct seq)  of chapter
                                        29  of Title 43 Public  Lands.  For computf
                                        classification  of this Act  to the Code, Mt
                                        Short Title note  set out  under section 1331 
                                        plete classification of this Act to the Co*
                                        see Short Title  note set out  under wcon
                                         1301 of Title  33 and Tables *olu
            ia TtiL  The Intervention on
the High Sen ACL referred to in subsec  U)
(I), is Pub L 93.24*. Ft*  3  1974. SI Sut S
as amended,  which a classified generally to
chapter 21  (section 1471 « seq.) of Title  33,
Navigation and Navigable Water*.  For com*
plete  classification of Urn Act to the Code.
tee Short Tide now let owl under section
147|  of Title 33 and Tables volume.
  Section 304 of tha Act. referred to in sub-
tec (b), u xenon 304 of Pub L 96-310; Tale
III Dee 11. 19*0 94 Sttt 2809 which en-
acted MCQOD 96S4 of Una title and  amended
section  136* of Title 33
  Toil chapter, referred to u iubaea. 4cX3),
(h),  (i). and introductory  text of (A, »ai in
the  original  "this  Act", meaning Pub L
96-310 Dec  U, 1980. 94 SUL 2767 known
as the  Comprehensive  Environmental Re-
sponae. Compensation, and Liability Act of
1980  For complete classification of this Act
to the Code,  set Short Title note set out un-
der section 9601 of this otic and Tables vol-
ume.
  Subchapter t! of this chapter referred to in
subsec 
                                                                                       action in coun
                                                                                       to present (he
                                                                                         (I) The Pro-
                                                                                       claims filed  he
                                                                                       ant to make a
                                                                                       Any person  »t
                                                                                       as a pan of an
                                                                                       imprisoned  for

                                                                                         <2KA)  L'pon
                                                                                       ble inform an1
                                                                                       promote and a
                                                                                       ma> be liable.
                                                                                       upon a settiem
                                                                                       will be deemex
-------
c HEALTH AND WELFARE
t to ambient concentrations
es
>hall not be valid or paid m
 time   Such claims become
 appropriated, or otherwise
sending at any time exceed
hail pay such claims, to the
 e order in which they were

 y credited to the Fund un-
 able only for the purposes
 ctton (a) of this section
 for remedial action, other
 turn, with respect to  feder-

 >f this section shall in the
 ded m appropriation Acts
 tations designating one or
 i the Fund in accordance
 lent is also authorized to
 c  to settle claims to offi-
  rattve agreement with the
  jf this title.
  and r*gulatttrai

   of rules and regulations
  tal  injured parties by an
  which a hazardous sub*
  itons shall consider the
  •opnate to carry out the
  if such rules and regula-
    from which a hazard-
  in accordance with such
  rom public vessels, the
  -opnate  to potential m-
  
-------
42  § 9611
                                      PUBLIC HEALTH AND WELFARE
 injury or loss resulting from long-term exposure to ambient concentration,
 of air pollutants from multiple or diffuse sources.
             (•) Fundkig
                                                   i In Fund
  (1) Claims against or presented to the Fund shall not be valid or paid nt
excess of the total money in the Fund at any one tune  Such claims become
valid only when  additional money is collected, appropriated, or otherwise
added to the Fund.  Should the total claims outstanding at any time exceed
the current balance of the Fund, the President shall pay such claims, to the
extent authorized under this section, in full in the order in which they were
finally determined.

      In any fiscal year. 83 percent of the money credited to the Fund
der Ibfechapter II of this chapter shall be available only for the
            paragraphs  (1), (2), and (4) of subsection (a) of this,

  (3) No montain the Fund shall be available  for remediafaction, other
than actions spectral in subsection (c) of this section, ^dtnrespect to feder-
ally owned facilities

  (4) Paragraphs (1)
aggregate be subject to such ;
                            _ of subsecnonjXbf this section shall in the
                                 MS as aKprovided in appropriation Acts.
     (0 ObHgatton «f moneys
  The President isantfumzed to promulgate regulauptts designating one or
more Federal officials who may obligate money in tmvPund in accordance
with this  s$0don or portions thereot   The President ufclso authorized to
delegate/rfuthonty to obligate money in the Fund or to settJeXUinu to offi-
       a State operating under a contract or cooperative agreeauH^witli the
   ieral Government pursuant  to section 9604
-------
   TH AND V«L_F'Ji£

   y  For Iqpsktive hmo<-y
   L 06-510 Me 1980 US
            6119
  n«ire
-------
ALTH  AND WELFARE       ]

      6l»e notice and opportunity
e. _

vr text of(j)J
                                               PUBLIC  HEALTH AND  WELFARE
                                                                  42  § 9611
                                             on the National Priorities List concerned local and Stale officials and other
                                              persona of the limitations, set forth in subsection (aX2) of this section, on
                                                 of claims for necessary response coats incurred with respect to such
>f ewh department agency or L...WTJ
 i-- out any authority of this chapt*
 oJiganona. reimbursements, or 0th*
.ssure that the Fund is being proper),
pnateiy and expedioously considered
.ample of agreements with States (q
ludit Act) {31 US C.A. 5 7501 et seq ]
•apter and an examination of remedi*,
  for  remedial actions  The Inspector
u»> report regarding the audit repor
-«.. con^un suen recommenoaoons ti
en department, agency, or instrumen.
i its inspector general in carrying out

r text o/fljj

i«ry

it  for Toxic Substances and Diaeas*
 out acmnties described in subsection
s title not less  than ISO 000 000 per
3 not less than SS3 000.000 for fiscal
cal year for each of fiacai yean 1990
 are not obligated by the ena of  th«
turned to the Fund.
       990 and  1991, not more than
 i _ .a may be used for the purposes
opment, and demonstration program
>  and  training  program  authorized
ng to research development,  and
5  ~h amouna shall remain available
 ot more than the following amounts
  9660(a) of this title (relating to
,n and training activities)'
•00
   0
 '.KJO
 000
 000
 1 oe used for training under section
989  1990 and 1991, not more than
no may be used for the purposes of
-doua substance  research  centers)
       The following sums are authorized to be appropriated, out of any money in the
     Treasury not otherwise appropriated, to the Hazardous Substance Superfund.
           (A) For fiscal year 1987  1212.500000
           (B) For fiscal year 1988. $212,500.000
           1C) For fiscal year 1989  1212.500 000
           iD) For fiscal year 1990  J212.500000
           (E) For fiscal year 1991  S212 300 000
   ID aadition there is authorized to oe appropriated  to the Hazardous Substance
   Superfund for each fiacai year an amount equal to so much of the aggregate
   amount authorized to be appropriated under this subsection (and paragraph (2) of
   Mcoon 9631
              •dug par  lajteaE. (kx
 proton mmmfvbL n-KH. Og/fi  19*4 91
 SOL 1J27  b»«g M tat  Siaik/Aadtt Act of
 I*K  «hca * claxfiad to ^iaptar TS («
 7*1 at  •».) of Tiita Jl
 For amttam cHauftrtjA of th> Ad to (at
 Ccda. itt Shorn
 »»lofTUkJ: .^
            	(at.  Pub.1. 9«-m
 I Hll»x ia Br&naom hualiiii pv (Ik Htbtu-
 tuMd -lajtBBH- fa, -Auttern* pwpOMi •
 iht ntrifim  aad addot provwoai •waonaaf
           i from iht Huardoui SubMaaet Sv-
      i laiaMiibad uadat machaptg A of chapter
  I af Titlt 26 of BOX nan (baa SI.SOO 000 000 for
                                                                                          'I 207(«Xl)  in par  .   PubL
                                                                            addod previaioai  rdauaf to coxi
                                                                            t*~~f*r*~ *nth tutaat. (ml of iha
                                                                            MBtioa 9oO*fi) of inn tuk. aad aodad
                                                                            to laboraiory oudiav hai
                                                                            prepanooa of loucolofK amfilai
IlKdXIi.
-------
 42 § 9611
PUBLIC HEALTH AND WELFARE
 or appertaining to such Sue*,  after adequate public BOOM ud opportunity
 bearing ud consideration of ail public comment.
                       fStt mam volumifor tat
                                                                                    PUBLIC  HEALTH A

                                                                                     the Swonal *««,»
                                                                                       sona of the ta
                                                                                       of damn for,
 (k>lae*i
   IB each fiscal year, the Inspector General of each department, agency, or mstit
 mentality of tat United State* which is carrying out aay authority of tins chape*
 shall conduct aa annual audit of all payments, obligation*, retmbummenti, or oth»
 uses of the Fund in the prior fiscal year, to assure that the Fund is being properh
 administered and that  claim are being appropriately and expediOously consider*
 The audit shall include an examination of a sample of agreementi with State* (a
 accordance with the provisions of the Single Audit Act) [31 UJS CJL f 7501 et »*q
 carrying out response actions under this subchapttr and an exanunaoon of remedy
 invesagaaons and feas«bilit>  studies prepared for remedial actions  The Inspect*
 General shall submit to the Congress an annual report regarang the audit repoci
 required under this subsection.  The report shall contain such recommendations «
 the Inspector General deems appropriate  Each department, agency, or instnunea-
 taiity of the United States shall cooperate with its inspector general in carrying out
 this subseeoon

                      /5*e main volumt for text of (I)]

 (•) Ace**? for Tosk 9«eneiic«i tmt Dliim !
                                                 site-

                                                 <•»
  There shall be directly available to the Agency for Tone Substances and Dueasi
Registry to be used for the purpose of carrying out activities described la lubaectaoi
(cM> of this section and section 9604 of this Qtla not less than i50.000.000 per
fiscal year for each of fiscal yean 1987 and 1988. not leas than 155,000,000 for fiscal
year 1989. and not leas than 160 000.000  per fiscal year for each of fiscal years 1991
and 1991  Any fund* so made available which are not obligated by the end of tat
fiscal year in which made available shall be returned to  the Fund.


   For each of the fiscal yean 1987  1988. 1989  1990 and 1991, not more that
 $20 000 000 of the amounts available in the Fund may be used for the purposa
 of carrying out the applied research, development, and demonstration program
 for  alternative or innovative technologies sad  training program authorized
 under section 966 For the fiscal year 1988. S10 000 000
          (C) For the fiscal year 1989.120 000 000
          (D) For the fiscal year 1990  S30000000
          (B) For the fiscal year 1991  135.000,000
  No more than 10 percent of such amounts shall be used for training under section
  9660(a) of this title  in any fiscal year
   (J) aiettee t*tst4>
      For each of the fiscal yean 1987, 1988  1989. 1990 and 1991  not more than
    J5 000 000 of the amounts available in the Fund may be used for the purposes of
    section 311(d) (relating to university hazardous  substance research  centers)
                                                       The following sun at* lathe
                                                     Treasury not otherwise appro;
                                                           (A) For fiscal year 1987
                                                           (B) For fiscal year 1988
                                                           (C) For fiscal year 1989
                                                           (D) For fiscal year 199C
                                                           (E) For fiscal year 1991
                                                    IB addition there is authorized
                                                    Superfund for each fiscal year
                                                    mount authorized to be appropr
                                                    section 9631(b) of this otle) •* hi
                                                    the fiscal year involved.


                                                        the  amounts  authorized t
                                                      subsection in a given fiscal y«
                                                      smount eiceeds  the amotus
                                                      9S07(bX2) of Title 28 for the i
                                                                           (As amesdea Pubi.
                                                                         TW. L f
                                                                               dwCode.
                                                             to Tea. Ti* U af h*
                                                                » mam w tat Hi
                                                           Tnat Food, ntend to ID wt
                                                                 -41_— m~+  t \ \  mmf^^^A
                                                                  avi pv  ut IAMMM
                                                        W-140. Jolt IL } »1 No, JS
                                                       91*. w«ueh m nim*i put rataan
                                                        Mi SataMM Knpemt Tiw Fur
                                                        raj«HMD to ttat Fuad »e» MI el»
                                                                                                    IllofiteS
                                                                                      to IB iutt»«  (cKi*> of Uttl *
                                                                                     Him of Pnb U »a^e» *hie!i
                                                                                                 i tint of IB» titk
  Not later than 90 days after October 17. 1986. the President shall develop and
implement  procedures to adequately notify, as soon as practicable after a sue is
                                                     Th» etuwitf. rtfcmd to t
                                                   dXK). tnd laindacutr t*» of Hi  *
                                                   onpoiL ikn Act   meinmt Pub L. %-
                                                   II I9SQ. *4 Sot 2767 known » tb«C.
                                                   tin Envmoacea Hmfont Compesi.
                                                   Laouiri Acs of 19K.  For senvnu .<&
                                                   of tin Act to (te Code. HI Sbon Tiu
                                                   out uadv «KIM »401 at ts» otk u
                                                   •OllUM.
                                                     Tht Staak Audit Act. rafana IP * «
                                                   prateMy OOM Pub.L- 9S-XB. On.  »
                                                   Stu. 2321  kM«B  M UM Sia|k And
                                                    1*14. vbKk « rtmmfmit  to ttipur '
                                                    7)01 «  HQ.) of Titk It  Moorf •*

                                                    Cod*. Mi Sbon Tide not* »*o»» <**
                                                    7XII of Titk  Jt lad TiMx «otamt


                                                    I I !!(»>. « Pnm«w Pimdo* PV
                                                    tuad "la soMl' far -Auibonod p>
                                                    tat  ntrtiliM  aod «kM otonuatt
                                                    •pprapnHMt ftoei ibt Miartoui S«i
                                                    P***a»ji •uHnhrl Mirttr nit-tif r~ *
                                                    H of Tnh 2* of MX Don Uua SI.SOB.
-------
        HEALTH AND

 both short-term and long-term injury to,
 resources resulting from a release of a '
                                          -^
       or Indian tribe efforts m the restoration
       jumag the equivalent of any natural
       as a result of a release of a *
         «

:       li  jgt      PUBLIC HEALTH AND  WELFARE

^£«%     ,M)Wef*«JraialafarteA«to.iPm«i

 ^^**       The costs of grants under section 9660a of this title
                                                                                                              42 § 9611
  as are
  The costs of grants under section 9660a of this
of workers to the extent that such costs do not <
the fiscal years  1987. 1988,  1989, 1990. aad 1991
                                                                                                                 for each -of
 ccordane*  with subsection (m) of this seetj^
 o  9604(9  of this ode including the costs «
 idies, health assessments, preparation of toxic*
 namteaanee of a registry of persons exposed t*
 ong-term health effect studies, aad diagnost*
  to determine whether persons in population
 s in connection with a release or a suspect**
 ateney diseases.

 > ara provided in appropriation Acts, the cost
 L  overhead, related to  the purposes  of th»
 33 and needed to supplement equipment tot
 actors or other non-Federal enaoes, and or
 nage  assessment capability, for  any Feder*
 •nergeaey task forces, or other response team
 in.

 are provided at appropnaoon Acts, the cost)
 and safety of employees involved in respons*
 ' A program shall  be developed jointly b;
 ency, the Occupsoonal Safety and  Heslti
 nsotats for OecupmtxmaJ Safety and Healtl
d to, measures for identifying and aaatasmi
' in removal, remedy, or other response to
 sed. methods to protect workers from suet
 and enforcement measures to assure ad»
                                                                            - -~-, under subsection (f) of s
                                                  aupvniuiu AHmnumiiia aBO HCauthonzatMMl AM «« 10M  rt,n
                                                  note] (relating to lead po-omag m^SST *" °f 19M  W

                                                                   fStt matn voluntfor tat, o/fdJJ
                                                                            118 of the
                                                                               16981
                                             w ».>.—.> ... iv-pvoM w uirn
                                             releases of hazardous substances
       itu>t faolmes pursuant to peoftoni
      Jig to pennons  for assessment  of
     entered into under seeaon 9*04<»Xlj
•>>. conduct of remedial uivesegaoons aad
>ns other than the President and the eosa
 night of remedial  actmues at NatXHiaJ
insent orders  or settlement agreements.


i aeoainag resJ estav o» jnterests - rca,
 '» frtau££ to »cquis.Qo& o/ property)


660 of  this title (relating to research,
pt that  the amounts available for suefc
>Deofied in subsection (n) of trus seeaoo.


,   nder section 9623 of tin Otle except
ning October 1  1986, not more than 01
d from the Fund may be used for such
          ....                	             	..__«. .kMua.Quiw wan actions
        jpeofied at subsection (e> of tats section, with respect to  federally owned faoliMa,
        except that money in the Fund shall be available for to* provision of alternative
        water supplies (including the reimbursement of coats incurred by a municipality) IB
        uy case involving groundwater contamination outside the boundaries of a federally
        owned  facility IB which  the federally owned facility is  not die only potentially
        responsible party

         (4) Paragraphs (1) aad  (4) of subsection (a) of this section shall a the aggregate
       be subject to such amounts as an provided in appropriation Acts,

       (f) OMlfstto* of mtmtrt fcjr  fttini afflfKlei nMlfarlea at OMWr» er wBlMMM of rtslae
           »y 9tat* eflkMMs of lasla* into

         The President is authorised  to promulgate regnlaooas designating one or more
       Federal officials who may obligate money IB the Fund in accordance with thji aecoen
       or portions thereof   The  President  is also authorised to  delegate autAonty to
       obligate money in the Fund or to settle claims to officials of a State or Indian tribe
       operaOBg under a contract or cooperative agreement with the Federal Government
      pursuant to section 9604
-------
42  § 9611
PUBLIC HEALTH AND WELFARE
                                          1J
      (1) Tha cosa of assessing both short term and long-term injury to. destrt
    fion of, or Joss of any natural resource! resulting from a rtleatt of « hazard*
    substance
      <2) The cosa of Federal or State or Indian tnbe efforts tn the rettor»tt»
    rehabilitation, or replacement or acquiring the equivalent of any natural n
    source*  injured,  destroyed, or'lnt a* a result of a release of a hasardo*
    substance
      (3) Subject to such amounts as are provided in appropnattoa Acts the cost
    of a program to identify, investigate, and take enforcement and abatemet
    action against releases of hazardous substances
      (4) Any costs  incurred  in accordance  with  subsection  (m) of tha sect*
    (relating  to  ATSDR) and  section  9604(0 of this title including  the  costs »
    epideouologic and laboratory studies health assessments, preparation of ton*
    logic profiles, development and maintenance of a registry of persona exposed ti
    huaraous substances to atiow  long term  health effect studies, and diagram
    »e-v«es  not  otherwise available to determine whether persons to popuiatxto
    exposed  to hazardous suostances in connection  with  a release or a suspect*
    release are suffering from long latency disease*.
      (5) Subject to such amounts as are provided in appropriation Acts, the cost
    of providing  equipment and similar overhead, related to the purposes of tin
    chapter and section 1421 of Title 33, and needed to  supplement equipment am
    service*  available through contractors or other non-Federal entities, and  «
    establishing  and  maintaining damage assessment capability, for any  Feden
    agency involved in strike forces emergency cask forces, or other response team
    under the national contingency plan.
      (t) Subject to such amounts as are provided in appropriation Acta the cosa
    of s program to protect the health and safety of employee* involved in responai
    to hazardous substance releases   Such program shall be developed jointly  bi
    the  Environmental Protection Agency, the Occupational  Safety and Heah}
    Administration, and the National Institute for Occupational Safety and Healtl
    and shall include, but not be limited to  measures for  identifying and assesaiai
    hazards  to which persons  engaged m removal.* remedy, or other response a
    hazardous substances may be exposed, methods to  protect workers from sua
    hazards,  and necessary regulatory and enforcement  measures to assure ad*
    quate protection of such employees
   (7) ft>eleetto« eeett <
                                                       a)
     Cosa incurred by the President in evaluating facilities pursuant to peatxm
   under  section 9605(4) of tha  Qtle  (relating  to petition*  for assessment  of
   reiease)
   (S) CoMnet i
HS4ISMI)
     The costs of contracts or arrangements entered into under section 9604(aKli
   of this atle to oversee  and review the conduct of remedial lavesagaoons and
   feasibility studies undertaken by penons other than the President and the costs
   of appropriate Federal  and State  oversight of remedial activities at National
   ^nontMf  Lost sites  resulting  from consent orders or settlement agreement*.
      •v
   !»» AeeeMOM eeeu «M*r MCUOM te**j»
     The eosa incurred by the President in acquiring real estate or interest! in real
   estate  under section 9604(j) of tha title (relating to acquisition of property)
   (!•> Benejcft, dmioeeMM. M
     The cost of carrying out section  9660 of tha  title (relating to research.
   development,  and demonstration)  except that the aroouna available for such
   purposes shall not exceed the amouaa specified IB subsection in) of this section.
      PUBLIC  HEALTH Atf



  The cosa of gnaa under seed
of workers to the extent that s\>
the fiscal yean 1987,1MB, 1988
                                                     The coat* of say awards gran
                                                   (14)
                                                     The cost of carrying out the
                                                   Superfuad Amendments and ft
                                                   note] (relating to lead poisom&i

                                                                     /5*t max*
   (tit
     Reimbursements 10 local governments under section 9623 of this title, except
   that during the 5-fiscaJ-year period beginning October 1  1986, not more than 01
   percent of the total amount appropriated from the Fund may be used for such
   reimbunemena
                                                     utt nurii*« ft
                                                  (2) la toy fiscal year 85 pere
                                                tubchapter II of this chapter thai
                                                paragraphs (1). (2), sad (4) of lube
                                                inay be used for the payment of an
                                                this section in any fiscal year for «
                                                a needed for response to threat
                                                releases of hazardous substances,

                                                   (3> So money in the Fund shall
                                                specified in subsacooo (e» of this
                                                except that  money m the Fund
                                                water supplies (including the rein
                                                any case involving groundwater c
                                                 owned facility in  which the let
                                                 responsible  party

                                                   (4) Paragraphs (1) sad (4) of <
                                                 be subject to such amounts as I
                                                     If)
                                                              ef e»e«n sr r
                                                         Stale oflkmta w I
                                                       The President B authorized t
                                                     Federal officials who may oour
                                                     or portions  thereof   The Pre
                                                     obligate monev in the Fund or
                                                     operating under a contract or c
                                                     pursuant to section 9G04(ti of

                                                                            [Set f
                                                     Except in a situation requ
                                                   resources or to prevent or n
                                                   similar need for emergency at
                                                   restoration, rehahuiaow. or
                                                   natural resources unul a pan
                                                   developed aad adopted by att
                                                   of any State aad by the gov*
                                                   to natural  resources bewcgi
                                                   such tnbe. or held in trust fa
                                                   such mbe if such rssourjes
                                                   sustained damage to natural
-------
"BUG HEALTH AND WELFAHI
                                                     PUBLIC HEALTH AND WELFARE
                                                               42  § 9611
                          M MftMNnL 4M MCtlQk
   <»   ««)(«, ll(S)of BUM. No. I25HIAn. 2J l«t<
   of   « P ft. 2*U,M out ««OOM tariff MEti
   ?a
                                                      1 by the >««i»"i«..i«i^ BVJ-	• _*«-   .    •««»•««
                   tic ite.
       «c»n.
               I  9612TCX3)
      (4) Payment of costs

     S< Crantt for


     £^*^f«aS%L*2a£Z? - *• «"   tte
     Ti«Miun»in», «• »K«P» TfcOT) of
          JM.23. ITC7 «FR. 2fU
                  MDoTctaatlt.
    — _,.. 
         «•) «nd T(c)f)) of ExOnt No. 12310,
               ar of t    <
                               B   rotic*
               MCDM t(dX]> af EiOri  No.
  I25KIL /«. U 191?  » PR. 2913 <• OW M a
  aew oaov •am 9tu of IBM Mb.

      MMfv* KbBMT  For ligiiljin'i tanory Md
      M of f>ub.i.  «•-*«• ••  I9M  t'S-Cadt
      we Aan-Ntv
      Ptyuxot of DOC to acted 115.000,000 for tbt com of * pilot program for
    reroorml. deconumuuuion. or other •coon vnh rupcet to (Md-ooBtuaiauid Mil
    IB OM u thn« different metropolitan mu.

Tlw Pmtdent ihall not pty for »ny adnunaitniare ooea or expeoiea rat of the Fund
nitlfif such cost! and expenses are nasoaablj necessary for and modem*!  to the
mpjeraentaoon of  (his lubchapter
                                          Ik)
   (1)

     Clams asserted and eompensabie bat unsatisfied oader provisions of section
   1321 of Title 33, which are modified by ssetwB 304 of this Act may be asserted
   tfunst the Pond under thai sooehapter;  and other  clams resulo&f from a
   release or threat of releasf of a hazardous substance from a vessel or a facility
   may be  asserted against the  Fund under this subehapter  for injury to  or
   destruction or loss of. natural resources, including cost for damage assessment:
   Provtdtd. Aowvwr, That any inch claim may be asserted only by the President.
   as trustee,  for natural resources over which  the United States has sovereign
   rights, or natural resources wnhin the territory or the fishery conservation zone
   of the Chutad States  to the extent they ire aaaaged or prouncd by the United
   States, or by any Stau for natural resources within the boundary of that State
   belonging to, managed by. controlled by. or appertaining to the State or by any
   Indian  tnbe or by the United States acting on behalf of any Indian tnhe for
  natural resources  belonging to, managed  by, controlled by, or appertaining to
  such tnbe,  or held in trust for the benefit o' such tnbe  or belonging to a
  member of  such tnbe if such resources an suojeci to a crusi restnraon on
  •j^mQflfl

                                               (A) i

                                                 No natural resooree  claim  may be paid from  the Fund  unless  the
                                               President determines that the claimant has exhausted all adminismove and
                                               judicial  remedies to recover the amount of such daim from persons who
                                               may be  liable under section 960T of this title

                                              (B) DeJtaMo*

                                                 As used IB this paragraph the term "natural resource claim" means any
                                               claim for injury to  or destruction or loss of, natural resources   The term
                                               does not include any claim  for the costs of  natural resource damage
                                         Lses of the Fund under subsection (a) of tha section include—
-------
                        42  §9609
PUBLIC HEALTH AND WELFAKE
                                    r
                                  ib*
                                                p«wo u • molt
           Caw G«M vnft MHB » H.
                                     «d (0 "• <• tto
    ««XJX 11(|) of ExOrt. No. 12310,
of   "" «—•	r-T i mil udi
    of a
                                     Por
                                      Mi Short Tidi no
                                    of <*• a* Md T*MI
                                       PBB.L. ««-«•
                                                           t*JJ M4 MIX of tte
                                96-01 of tto mk.
                                                                      No I23KX » (ki COM OwM.
                                                                               No.
                                   of Ml
                           *» f«b.L. •»-*•» , M ew M • MM
                B&OM. NO. »na «
                   M.
                   23.
                                    n tb«
                       oT dm Mctm ivlMMf M
                       «M3 of tfM mlt 4iM|H*d.
                       of EvOnt Na
                              «B tto
                         1UIQ. 10 tta
                                                                           lISJa Jm U IftT. II
                                                           FR.Z923 tttoM»*ohu «•**)•(*•» Ml) of
                       vbmoUMrthr
                       tfct
                                      Witt *MCh *ffiT""T* «O

                                               ^f llM
                                                                           Far ln»iiin i kMtary
                                  Md M23
                                    «(ax 0>X1) of
     No.  CMtMtf
                                             i35      PU3UCBIALTH.

                                                  (t)  Psynent of
                                                        by UM
                                                  (3) feyattt Of UT
                                                   (4) Piymtnt of com tptofi

                                                (•) Gfwti Ar tirtalal M*(Ma

                                                   Th» ent of gnaa tudtr i
                                                            gnaa
                                            PiyaMat of not u
                                           . jnoni deeoot
                                           at one to three
                                       tbe Preeident ih«ll notpey for toy
                                       ouleM rach costs ud apeBMs an
                                       unpieoeataoon of i
                       i MIL  UM of

                       (•I teMMni
                         For tteporpoM (pcofiod in tht» Mctaon thorc * attthoflMd w bo tppropmM*
                       fro* tfao uafdou* Suboctaco Suporfund attblaiMd under inbdiipttr A of ehtpcor
                       98 of Tttte 26 not moro  ctuu 18500000000 for tht 5-»«tr ponod bofiaam| ov
                       October  17. 1968. ud raeh »um»  shall rtmaia »Tukob  aaol  •xpooded.   UM
                       proecdiBc ttntroet coubtatM t tpoafie wcbonuooB for the fund* •perepratad
                       under etio II of Public Uw &-160 (reiaaaf to pkraeat to the  Htsanmu Sttb-
                       sttaeei Trust Food)
                                             CUuat __      _„ _
                                           1321 of Title 33. vluA mood
                                           aguMt the Pond nader Hat i
                                           rewtM or thnet of (tiMM «(i
                                           may be aMenwl  afuaK the
                                           dMtrwtwB or foes of. nuani r
                                           Pmvut*t, Aowfiwn Tlau aajr si
                                           M enwtee. for nwarmi rwowe
                                           nghd, or nwtturmi rfioviMii »w.
                                           of the United Sttto to tbt txu
                                           Staum. or by aay Sttte for &»n
                                           bektogiBf w, ma&ftfid by, coot
                                                  tnbe or by tbt I'tuted
                                           UEurtl ngoune* btlonpng to
                                           t ueh tnbe, or held a trusi fo
                                           member of tach  tnbe if
                                                                                                  (2)
                                                                                                      (A)
                                                        Mo (taunt mouee eb
                                                       Prettdeot determtaei tbtt a
                                                       judml (vraediei to reeot*
                                                       may be habie under MCQOB
                                                         At uMd m
                                                       ebuiB foe injury to, or deto
                                                       doee not oidade «y eta
o
-------
42  § 9607
PUBLIC HEALTH AND WELFARE
                                                                      110
                                                                                      PUBLIC
          (C) damages for "I1"* to- destruction of. or loss of natural resources,
        mclodioff iht reasonable cost* of assessing such injury, destruction, or IOM
        resulting from such • release, and
          (D> the costs of any health assessment or health effects study earned on
        under section 9604(0 of this title.

  The amount! recoverable in an action under this seeuon shall include interest on
  the  amount* recoverable under lubparagnphi (A) through (D)   Such interest
  shall accrue from the  later of d) die  date  payment of a specified amount «
  demanded in writing, or (ut the date of the expenditure concerned. The rate of
  interest on the outstanding unpaid balance of the amount! recoverable under this
  section shall be the  sane rate as  is specified for interest oa investments of the
  Hazardous Substance Superfund established under subchapter A of chapter 98 of
  Title 26,  For purposes  of applying such amendments to interest under  this"
  subsection the term "comparable maturity" shall be oetermmed  with reference to
  the date on which interest accruing under this subseown i
                     fS*» main voiumt/or tat offb)]
     Except as provided in paragraph (2) of this subsection, the liability under i
       of an owner or operator or other responsible person for each release
         i substance or incident involving release of a hazardous substance shaJKnot

     (A) fo.r any vessel other than  an incineration  vessel which
            .substance  as cargo or residue  1300 per groat ton, or,
   whichever)! greater
     (D) for any 11
   subparagraph (Q of
   $50,000.000 for any
  (B) for another vessel other than an incineration vessel
or 1500,000. whichever is greater

                       mot* volumtfor tat cffOJ

                         vessel or any facility other
                         paragraph,  the total of
                            under this lubchapuuy

               [Set main votonu/or Uxt ef(g/md (3)]
                                                                   grow too.
                                                         those specified m
                                                         of response  plus
     Except as provided in paragraph ffcVno person shall  be liable under this
   sjtx:i*p:ejr for cotes or iunageft as a .result of action* uuten or omitted in the
   course of rendering care assistanee.Ar sdnce in accordance with the National
   Contingency Plan ("NCP") or at th^oirectio\.pf an onsosne coordinator appoint-
   ed  under such plan,  with respMC to an incuient creating a danger to public
   health or welfare or the environment as a resulMf any releases of a hazardous
   substance or the threat therm  This paragraph ihall not preclude liability for
   costs or damages as the/vault of negligence on\the part of  such person.
                       fernment shall be liable under this si
                       f acooos taken in response to an
                                                  ei
(2)
  Mo State or tocaJ
damages as ami
release or threatened release of a hazardous substance gei
faoiity owned b/another person. This paragraph shall not
COM* or damages at a result of gnu negligence or intentional
the State  qr local government.  For the purpose of the
                                       for costs or
                                          i by the
                                                                I by or from a
                                                                  i liability for
                                                                           by
                                                                    sentence.
                   or wanton misconduct shall constitute gross negi
       subsection shall not alter  the  liability of any person covered
      ons of paragraph (1), (2), (3)  or (41 of subsection (a) of thai section
  spect to the release or threatened release concerned.

                   fSn mam tolumtfar tat offttj
                                                                                States
                                                                                belonging to,
                                                                                any Indiaa
                                                                                or appertaining
                                                                                betonguig to a amber of
                                                                                State* or State or
                                                                                subsection la) of tha
cally  identified u sn
resources in an eovtmiasntai
ment analysis, and the deem
commnment of namni FMOQ
operating withm tht terns of
damages to u Indaa oibe oc
the issuance of that permit o
duty of the United Statss wit
the authomed tepRseoaave
trustee of such nannsl rtsour
by the United Stales Covert
retained by the trastse wttht
replace, or tcquire the «quivai
a State as tnstee under th
restore, replace,  or scqwrs i
State   The measure of dsn
subeeeooR (a) of this tenon <
to restore or replace such m
thia chapter  for natursl m

natural resoureeflHEe shs
graph (O of subsJHI tt) 01
of a hazardous substance ft
wholly before December 11

 F«ier*l
       The President ihali de
     under section 9605 of t
     behalf of the public ss tr
     section 1321 of Title 43
     destruction of or toss of
     such section 1321 of T.tl
     may  upon  request of r
     officials  discretion sss<
     State s trusteeship

    IB) State
        The Governor of each
      behalf of the public ss t
     section 1321 of Title U
      Such State officials »t
      purposes of this chaptc
      resources under their c
                                                                                         (C)
                                                                                            Any determination or
                                                                                          purposes of this ehapt*
                                                                                          State trustee in accord.
-------
PUBLIC EZALTH AND WILFABE
                                         108 >
                                                        PUBLIC HEALTH AND WELFARE
    42  §9607
                                                                                             by «a of CM or fin fayV
                                                                                         CAJ (N v > IMC. m pia
                 106. 41 .UJLCA. I t«M|
                                • 1 II
                                BW
                                tat
m. UJ.»
LIMv J7I
                       10 ia« pate h^ttfc or


                               Co. DCMxJMj
                                                   hsdta.uwHos.X.k*,****   l~ * U4. W^Ws*.
                                    (i)«fta»   «« wHtaiw m
                                                                                     tftl KM F-ftv*. UM.
                                     t ITMK    i^ Tartar   Ut *
                             M.-BCIUA    ^HLiwiwF*"?wTo.^r;,7t9F
                      tat quibftM • t
             U5
tat  DNH.1MJ 4JO
                                                                                   «M ««k
                                                                                       *  OBM *
                 doat eortmiy tad *tn *uitonari by
                                                   <• MM ••/tenly fcaT tod (h far
                 Md Lahbiy Ao.  SCA Samm «r
                 he. *  TboM. NOlad-l»»4
                IMS.
                                                NotwithstuuiiBg any other provinoB or rait of lav,  tmi  »ub)*ct only to the
                                                      Mt forth m aubMeuoa (b) of tha Mctwn—
         I9ST «M FJ^*. M.
         PSto*. 193.
                                                    (1) the owner and operator of * mMl or a faobty.
                                                     my penoa who at Che time of dttpoeal of any hazardous sulutaiwe owned
                                                  or opemed any facility at which such hazardous subetaocea wen dispoMd of
                                                    (5) any penoa who by contract, agreement, or otherwtae arranged for ditpot-
                                                  at or treatment, or arranged with a (raoaporter for transport for dupoaaJ or
                                                  treacmeet. of haxardoua subetaaees owned or poatesied by such person, by any
                                                  other party or entity, at any faobty or uxsaerauon vesaet owned or operated by
                                                  another party or enaty and containing such hazardous substances, and
                                                    (4) any person who accept* or accepted any hazardous substances for trans-
                                                  port to dapoaal or treatment faolrtm neuwratuB resaeia or sites aeleeted by
                                                  such penoa. from which there « a release, or a threatened reJease which causes
                                                  the mcurrence of responae coata. of a hazariou* subetaaee, shall be liable for—
                                                        (At all costs of removal or remedial aeoon tacurred by the United States
                                                      Government or a State or an Indian tribe not inconsistent with the naooaal
                                                      contingency plan,
                                                         any other necessary «•» of  reaponee incurred by any other
                                                      conavtent with the national conongeacy plan,
-------
42 §9601
PUBLIC HEALTH AND WELFARE
                                                                     76
    same  extent both procedurally and substanavery, a* any  nongovernmental
    entity, including lability under sectwo 9607 of this title.
        I) Tht term "person" means an individual, firm corporation.
              , consortium, joint venture, commercial entity, United States I
    meat  Statg,  municipality, eomnuwioa, polttxtl subdmswn of a
    interstate
     (22) The termNtlease" meui may spilling, taking, i
                                                                    any
    tmg, emptying.
    into the environment
                        I, injecting, escaping, leachi
                        dudmg the
                                  pooling, emit-
                                  ;, or disposing
        cles cont
but i
£A, f 2210}, or.
    for the purnetas of sectwn  9604 of this ml* or any other responsV^etion, any
                  i byproduct or special nuclear matenai from any praeesBiag site
                          dacardmg of barrel*.
                      any hazardous lubatamnt or
                    relesse which results in expo*
                    raped to a claim which such
                 such persons, (B) emissions from
                     'aircraft, vessel or paeans
                      product or special nuclear
                          defined m the Atomic
reiessej
              under section 7912(aXl> or 7942U) of Uus otk, and (D) the
              of fertilizer
     (23) The tanas "remove" or "removal" means the cleanup or removal of
   released hazardous substances from the environment, such actions as may be
   necessary * taken in the event of the threat of release of hazardous substances
   into the environment such actons as may be necessary to monitor, assess, sad
   evaluate the release or threat of release of hazardous substances, the disposal of
   removed matenai or the taking of such other actions as may be  necessary to
   prevent. ""••••"«• or mitigate damage to the public health or welfare or to the
   environment which  may otherwise result from a release or threat of release
   The term includes, in addition, without being limited to. security fencing or other
   measures to limit seeess, provision of alternative  water supplies, temporary
   evacuation  and housing of threatened individuals  not otherwise provided for,
   action taken under section 9604ft») of this title and any emergency  assists nee
   wtuca  ma; bt provided  uaotr the Disaster Relief Act of 1Tht
                                                                                              m the eas«
                                                                                for transpoRatiog  by a coi
                                                                                "trsaspsiraaar
                                                                                       O* 1
                                                                                                    OF
                                                                                           tsrsa -United S
                                                                                 Utuud States, the thsmct
                                                                                 Guam. Ameneu Samoa, th<
                                                                                 the Northern Miranis  an
                                                                                 United Stasss bat janioieo
                                                                                   (29> The tsm ^vsasT a
                                                                                 oal OMiunanes used, or cai
                                                                                 ^»M*A«
                                                          (21) The
                                                        the meaning
                                                        USCJLI
                                                         ,<3B) The terns "termon
                                                        ing provided m asc&aa 136
                                                          (31) The tern "aaaonal
                                                        plan published under stem
                                                        9609 of this otts.
                                                          (32) The tarns "hale'o
                                                        to be the standard ol Uai
                                                          (33) The term "pollutant
                                                        any element «Mfeam eoi
                                                        which after rs^^^Huo th
                                                        oon. or assinuBSWiatt at
                                                        indirectly by ingaooa thn
                                                        ted to cause death, docs*
                                                        physiological naifaacaoai
                                                        deformaaoas, in stub or
                                                        "pollutant or contaaots&t
                                                        any fraction thereof vtucr,
                                                         hazardous substance uade
                                                         shall not include natural i
                                                         quality (or mixtures of as
                                                           (34) The term  altem
                                                         drinking water and house
                                                           <38XA> The tern ox
                                                         960?
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 HAUGKEY,
ftlOGGCE
   AT
                            UNITED STATES COURT OF APPEALS
                                FOR THE SIXTH CIRCUIT
           UNITED STATES OF AMERICA,

             - "       'Plaintiff-Appellee,

           -vs-

           NORTHERNAIRE PLATING COMPANY;
           HILLARD S. GARWOOD,

                     Defendants,

           R.H. METER, INC.,

                     Defendant-Appellant,
U.S. Court of Appeals No:
88-2074..

Western District of Michigan
District Court No:
G84-1113-CA7
                                              r s REPLY BRIEF
                                          SMITH,  HAUGHEY,  RICE & ROEGGE
                                          By:   Jon D.  Vander Ploeg (P24727)
                                               L. Roland Roegge (P19551)
                                               John M. Kruis (P34626)
                                               Attorneys for R.H. Meyer,
                                               Inc.
                                          BUSINESS ADDRESS:
                                               200 Calder Plaza Building
                                               Grand Rapids, MI  49503
                                               (616) 774-8000
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   , HAUCHEY
I ICE & ROEGGE
'rofmionaJ Corporation

T   ~YS AT LAW
       Budding
Monroe Aveaue N VV
Grand Rapidi MI
  49S03 2251
                                        TABLE OF COKTCTTS
                                                                         PAQR VQ.
                TABLE OF CONTENTS '.	„.  .  .    i

                INDEX OF AUTHORITIES	IX

                ARGUMENT   	    2
                                                                 i
                                                I.

                           THE  AMICI  ARGUMENTS CONCERNING THE VALIDITY
                           OF EPA'S CLAIM TO INDIRECT COSTS ARE HELL
                           WITHIN THE SCOPE OF REVIEW  	    2

                                               II.

                           CERCLA DOES NOT PERMIT RECOVERY OF THE
                           GOVERNMENT'S INDIRECT  COSTS 	    5

                                               III.

                           EPA'S  ASSESSMENT OF INDIRECT COSTS IS AN
                           UNCONSTITUTIONAL TAX	15

                                                                               •

                           EPA'S  ASSESSMENT OF INDIRECT COSTS VIOLATES
                           THE  APA	17
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       AT LAW
00   -f Pl«i« Building
>0 Monroe Avenue N W
 Grind Rapid! MI
   49M3 2291
                                               AUTHORITIES
                                                                        PACE MO.
                Briscoe v Levi.
                535 F.2d 1259  (D.C. Cir.),
                cert, granted  429 U.S.  997,
                vacated & remanded 432  U.S.  404  (1983)	  .  3

                FPC v New England Power Co.
                415 U.S. 345 (1974)	15

                Glidden Co. v  Zdanofc.
                370 U.S. 530 (1962)	4

                Grubb v FDIC.
                833 F.2d 222 (10th Cir. 1987)	3

                Internat'l Ladies' Garment Workers'  Union v Donovap.
                722 F.2d 795,  806-807 appeal after remand               >
                733 F.2d 920 (D.C. Cir. 1983),
                cert, denied.  460 U.S.  820 (1984)	4

                Lurk v United  State?.
                370 U.S. 530 (1962)	4

                Milhouse v Leva,.
                548 F.2d 357 (D.C. Cir. 1976)	3

                New York v Shore Realty Corp.
                759 F.2d 1032, 1043 & n.16 (2d Cir.  1985)	10

                Northeastern Pharmaceutical  &  Chemical Co./ Inc..
                810 F.2d 726,  747-48  (7th Cxr. 1986)
                cert, denied 108 S.Ct.  146 (1987)	11

                Ohio Dep't of  Human Services v pHS.
                862 F.2d 1228, 1233-34  (6th  Cir.  1988)	19

                Turner v McMahon.
                830 F.2d 1003  (9th Cir. 1987)	  4



                OTHER AUTHORITIES

                S. Rep. no. 648, 96th Cong.  2d Sess. 54-55.(1980)	10

                Section 101(32),                                           "   ,1
                42 U.S.C. Section 9601(32)   	  U
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                                          IMPEX OF AUTHORITIES
                                               fContinuedI
                  Section  107(a)(4),
                  42 U.S.C.  Section  9607(a)(4)

                  Section  311(f)(l),
                  33 U.S.C.  Section  1321(f)(l)

                  Section  507(b)(2),
                  26 U.S.C.  Section  9507(b)(2)
                                   10


                                   11


                                   12
VfFTH. HAUGHEY,
RICE ft ROEGGE
Profession*) Corporation

r    -YS AT LAW

0    Phua Budding
 Monroe Avenue N VV
     *|Md« Ml
   49503 225!
Ill
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' M1TH HAUCHEY
 RICE &_£OEGGE
 Pi
           ion
       AT LAW
 X)    PU*» Budding
 1 Monroe Avenue N V>
 Grand Rapidi M!
   49SOJ 22)1
                                               I.
                          THE AMICI ARGUMENTS  CONCERNING THE VALIDITY
                          OF*EPA'S CLAIM  TO  INDIRECT COSTS ARE WELL
                          .WITHIN THE SCOPE OF  REVIEW.                        7
                          The Government  argues  that the Court should  not
                 address two arguments raised by  the Amici Curiae  in  this case:
                 that the assessment of  indirect  costs  against Meyer  is
                 unconstitutional and that, in  the  absence of notice  and comment
                 in compliance with the  Administrative  Procedure Act, EPA may
                 not assess costs under  CERCLA.
                          While Meyer did not  cast its argument in these
                 specific terras, the fact  remains that'Meyer raised its
                 objections to imposition  of  indirect costs and argued
                 vigorously that/ regardless  of the other  issues,  EPA could not
                 recover indirect costs.   Thus, the argument  in opposition  to
                 this element of the lower court's  award to the plaintiff was in
                 fact raised in the lower  court.
                          To complain that it  was  not  cast  in precisely the
                 same terms that it was  presented by  the Amici would  be to
                 elevate form over substance.  Obviously,  the Government is not
                 prejudiced or disadvantaged  by raising the  issue  at  this point
                 in the proceedings.  The  constitutionality  of  the EPA practice
                 and its violation of the  APA are legal matters  that  are not
1 The Government makes much  of  the fact that Meyer did not make
precisely the same arguments as advanced by the Amici Curiae.
See Government Brief at  21.   So that the issue does not color
the Court's resolution of  the substantive issues, Meyer concurs
with the arguments advanced  by  the Amici and hereby adopts >  -
those arguments.
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MITH HAUGHEY
RICE & ROEGCE
Prof«jion*J Corporation
r   -YS AT LAW
0    PltiA Building
i Monroe Avenue N W
     R*pids Ml
   49M3 2251
                altered by the fact that they were not presented below.  ££.(•<
                Briseoe v ifiyJL, 535 F.2d 1259 (D.C. dr.), cert, yrantafl 429
               .U.S.  997, .vacated & remanded 432 U.S. 404  (1983) (purely legal
                issue could be decided on appeal even though district court
                refused to consider issue on ground that issue was not ripe for
                adjudication; Grubb v ££!£, 833 F.2d 222 (10th Cir. 1987)
                (issue of supersedeas bond involved matter of law which could
                be considered notwithstanding the fact that it was not raised
                below);  Milhouse v Levi. 548 F.2d 357 (D.C. Cir. 1976) (because
                issue as to whether there was a violation  of ex post facto
              -  clause of Constitution did not require factual development,
                issue was reviewed on appeal).  It follows that the Court is
                free  to consider the arguments.

              /  the Court's subject matter jurisdiction.   The Amici Curiae  have
                argued that EPA has no cause of action permitting recovery  of
                indirect costs.  Stated otherwise, if recovery of indirect
                costs is beyond the permissible limits of  CERCLA either because
                that  recovery would be unconstitutional or because  it  would
                violate the APA, then this Court has no subject matter
                jurisdiction over EPA's claim to indirect  costs.   It  follows
                  i»
                that  the matter may be raised in an appellate court even  though
                the matter was not raised below.  £.9.. Internet'1  Ladies'
                Garment Workers' Union v Donovajfl. 722 F.2d 795,  806-807  appeal
                after remand 733 F.2d 920  (D.C. Cir. 1983), cert, denied.  460
                U.S.  820 (1984) (because standing issue and availability of
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vIITH, HAUGHEY
RICE &ROEGCE
TT'
0
         LAW
     'lau Building
 Motiroe Avenue N W
 Grand Rapid* MI
   49)03 22S!
                cause of action went  to  the court's  jurisdiction, the issues
                were considered for the  first  time on appeal).
                          Appellate courts  have also carved out an exception to
                    fp **«.
                the non-appealability of issues raised below where the matter
                                                                 <
                involves constitutional  principles.   E.g..  purjc v United
                States. 370 U.S. 530  (1962); Clidden Co.  v Zdanok. 370 U.S. 530
                (1962); Turner v McMahon. 830  F.2d 1003 (9th Cir. 1987)
                (failure to raise unconstitutionally of  statute did not
                preclude court's consideration of the issue in that the matter
                was purely legal and  did not require development of additional
                facts).  In the matter before  the Court,  the Amici Curiae have
                raised a significant  constitutional  issue which may be
                considered by the Court.
                          Accordingly, Meyer respectfully requests that the
                Court consider the arguments raised by the Amici Curiae in this
                case.
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1ITH HAUCHEY.-
UCE & ROEGCE
rofeuional Corporation
T    -VSATLAW
I    '!•*» Budding
Monroe Avenue N W
Grand R«ptdi Mi
  49J03-2251
                                              II.
                          CERCLA DOES NOT PERMIT RECOVERY OF THE
                          GOVERNMENT'S INDIRECT COSTS.
                          The'District Court granted plaintiff's motion for
                summary  judgment,  awarding recovery of virtually all of the
                costs  it claimed as costs of removal under the statute.  There
                is but one minor exception;  the cost of a title search which
                    ^
                was  not  allowed by the Court, but which was less than
                $1,000.00.   A significant amount was awarded to plaintiff for
                "indirect costs."   Defendants argue that these indirect costs
                are  not  costs incurred by the agency in this removal action,
                and  that they are  not within the contemplation of the statutory
                language for cost  recovery.   Plaintiff argues that these
                indirect costs are,  nevertheless,  sufficiently related to this,
                site that they are within the contemplation of the statute. ^F
                          The Court must focus on the nature of the indirect
                costs  which plaintiff has been permitted to recover.  These
                indirect costs represent overhead expenses of the agency that
               n             ' i  '
                are  not  directly related to this site.  Plaintiff is arguing
                over semantics with regard to whether these overhead costs are,
                or are not,  attributable to this particular site.  The nature
               t
                of the costs in question are defined in Mr. Cook's affidavit
                cited  in the prior brief of this defendant and in the
                plaintiff's brief  to this Court (See Defendant's Brief, p.  13-
                14).   According to Mr. Cook, these indirect costs represent
                  V  *•
                overhead costs including "rent, and utilities for site and non-
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4ITH, HAUCHE^
UCE 4 ROEGOE
>     lata Building
Mu. je Avenue N H
Grand R.ptd. M!
  4950 J 2251
                site staff  office  space;  payroll  and benefits  for program
                managers, clerical support  and other administrative support
                staff;  and  pay earned by  on-scene coordinators while on leave,.
                or  performing'tasks not directly  associated with a particular
                site.  .  ."  Mr. Cook also goes on to describe  the method by
                which the agency arrives  at these figures.
                         To summarize, plaintiff's  calculations of indirect
                                                                •5
                overhead are extrapolations which begin with computation of  the
                overhead cost of the Environmental Protection  Agency generally,
                including its Washington  office and  all of  its regional
                offices.  Mr. Cook claims that the agency then arrives at a
                                                                 I V
                percentage  of that overhead cost  which represents the
                percentage  of its  time spent on the  Superfund  program.  He
                       T                                       ^^
                claims  that the agency, then,  allocates this entire overhead
                cost to various sites.
                         Moreover, it is clear from Mr. Cook's affidavit that
                these overhead costs have no direct  relationship with any given
                site.   In fact, these are costs of operating the agency and its
                                                                   Is
                Superfund program  that would be incurred by the agency
                regardless  of whether this  site or any other exists.  Defendant
                contends that the  statutory language does not contemplate their
                recovery as costs  of removal for  a particular site.
                                                  „  j         i    « .
                         Plaintiff argues  that its  calculation of indirect
                                                                   •«,
                costs is consistent with  cost accounting principles
                (Plaintiff's Brief, p. 28-30). Regardless of whether that  is
                true (and defendant argues  that the  EPA's accounting methods
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vlITH HAUCHEY
=UCE & ROEGGE
*rofei»onal Corporation
TO* %EYS AT LAW
       Budding
 ^    Avtnut N W
 Grand Rapidf Ml
  49503 2251
                should have been  subject to  proofs  at  trial),  nothing in
                statutory  language  indicates that Congress intended-for the
                agency to  recover any  cost that  it  might possibly calculate
                under cost accounting principles;
                          The  statutory language refers  to costs of the removal
                action.  The most obvious interpretation of that language is
                that "costs" include those that ^re directly related to the
                removal action.   There is nothing in the statute/ or in the
                legislative history/ to indicate that  Congress intended "costs"
                to be defined  by  reference to  alleged  accounting principles.
                These alleged  accounting principles may  not be called upon to
                make "costs" more expansive  than would generally be understood
                after review of the statute  itself.  In  short, interpretation
                of this language  should not  depend  upon  reference to these  Ijj^k
                alleged accounting  principles.
                          Plaintiff's  explanation of its so-called proper cost
                accounting methods  for recovery  of  overhead costs/ that are not
                site specific/ demonstrates  the  extraordinary problems that
                would be created  if that was allowed.   Plaintiff's brief to
                i     •>   j
                this Court (p. 2S-26)  provides*a short summary of the  steps
                which, according  to Mr'. Cook's affidavit, are followed by EPA
                in determining the  indirect'costs.   All  of the facts which
                would give rise to  that calculation are exclusively within  the
                knowledge  of EPA.  Further/  the  ultimate conclusion  is based
                upon a multitude  of foregoing  factual conclusions/ all of which
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1ITH HAUGHEY,
ICE & ROEGGE
        LAW
 l    Uza Building
 Mo. ~< Avenue N W
1 JrcndJUpid* Ml
  4950S225I
               would have to be tested by proofs  to determine whether  the EPA
               figures have any validity.
                         For example,,.,plaintiff's brief acknowledges that-the'
               overhead costs begin with a determination of the total  overhead
               for the headquarters office of  the EPA in Washington.   The
               computations then proceed to  calculation of those  costs for
               each of its ten regional offices.  Plaintiff's brief states
               that it then, "... allocates  a portion of the headquarters
               office overhead costs  (those  which it has determined support
               response actions) to each of  the ten regional offices."  The
               calculations proceed to a similar  computation of each regional
               office's overhead costs.  That, again, depends upon another
                                                              *
               calculation of regional overhead costs which the EPA  "...  has
               determined support response actions."  The EPA follows  from
               this to arrive at an "indirect  cost rate" for each region for
                V
               each fiscal year.  The calculations continue with  a proposed
               method to apply that rate to  a  specific  response actions.
                         Without question, meaningful review of "calculations
               of the kind offered by plaintiff would require a great  amount
                                                  - -        i      '*
               of investigation, discovery,'and proofs  at trial.' While
               Congress has'intended  that EPA  be  allowed recovery of  costs  of
                                                                   •*
               response actions, Congress certainly  intended  for  cost recovery
               to be cost effective.  The.cost effectiveness  in  recovery of
               these overhead expenses would be minimal considering the time
               that EPA personnel would have to put  into  compiling and
               offering proof of this data,  and time and expense for the Court

                                               8
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            I f
SMITH HAUGHEY,
 RICE & ROEGGE
A ProfcnionaJ Corporation

     NEYS AT LAW

2   Jer Plaza Budding
250 Monroe Avenue N W
  Grind Rapidi MI
    49503 225]
                 system to digest, evaluate, and reach  judgment upon the    VB

                 government's computations.  Defendant  submits that it would not

                 .be .the intent of Congress for this statute to allow recovery of

                 costs if that recovery, in itself, would not be cost effective.

                 The Court should interpret the statute to allow recovery of

                 costs, in a cost effective manner, as'that would be consistent

                 with the intent of Congress.
                                                  t
                           The Government charged Meyer with direct costs that

                 averaged roughly $15 per hour and with in direct costs that

                 averaged,about $69 per hour.  The Government advances a number

                 of theories which are said to'validate the charge under

                 CERCLA.2

                         -  The Government goes to great lengths to attempt  to
                                                                             •^
                 include indirect costs within the phrase  "all  costs  of     Jj^

                 removal."  . See Government Brief at 30-34.  Yet the Government
                                       i
                 argument simply ignores the detailed  definition of  "removal"

                 within the statute. •There, Congress  set out  in explicit detail
                                                       i
                 the  matters which can"be properly considered  "removal actions."
  2-      -     '
    The Government's citation to the  Federal Acquisition
  Regulations .is'curious.  Obviously,  the matter of specifying
  which if any of the indirect costs  would be recoverable was
 .deemed to be of such 'a magnitude  as to necessitate rule-making
  with the attendant*notice and comment procedures.  Moreover,
 . ,tbe ?AR .specif ies-, very precise-provisions with which the
  .contractor must comply as a predicate to recovery of the
  7indirect costs.  More fundamentally,  FAR is intended to govern
  a setting where a private party is  charging the government for
,  its contract costs.  In the case  before the Court, EPA has
 ^received an appropriation intended  to pay for the
 i Administrative expenses of the Agency.  CERCLA recovery was
 Anever intended to supplement the  Congressional appropriatioi
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   •
  I
  V*
    -r )
ITH HAUCHEY,
ICE & ROECCE
        LAW
~   a* Building
1oni~. Avenue N W
 rwd Rapid* MI
 49503 2251
Nowhere  in  the definition  is  there any indication  that
              i>                       *
administrative efforts  fall within the compensable activities.
Moreover, the legislative  history specifies  in some detail  the
                                               »  j
nature of the activities that are compensable as response
actions.  SSS. S. Rep. no. '848,  96th Cong.  2d Sess.  54-55
(1980).  Again, there is no suggestion that  indirect'costs
could be compensated.3
          Thus,,the Government's  argument  effectively asks  the
                                                >'»
Court to simply assume,the inclusion of "indirect" costs within
the phrase  "all costs of removal"."  In the face of the  detailed
definitions and the legislative history to 'the contrary, the
assumption would clearly contravene Congressional  intent.
          The Government's statutory argument ignores other
language in the statute.   The statute expressly conditions
CERCLA liability upon a finding that the release or threatened
release of a hazardous  substance  "caused"  the incurrence of
response costs.  CERCLA Section 107(a)(4)/.  42 U.S.C. Section
9607{a)(4); E.g. ,New York  v Shore Realty Corp. 759 F.2d 1032,
1043 & n.16 (2d Cir. 1985).   The  indirect costs claimed in this
                                        	 ,.   (.   > I
action cannot have been caused by a~'release  from  the
                                            3'
  The Government seems  to suggest: that since'"indirect costs"
are common components of  other expenditures,' -the Court should
permit the assessment;of  indirect^ cost's in this matter.  See
Government Brief at  27-30.  The-suggestion that1 the government
is employing a commonplace^commercial practice is belied by the
large proportion that are indirect costs.  Nothing in the texts
or practices cited by the Government would support a charge of
indirect costs which would justify indirect!costs of this
magnitude.                                     •'*-».
                                10
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WITH,
RICE & ROEGCE
Profettioaal Corporation

T    EYS AT LAW

W    Ptua Building
) Monroe Avenue N W
- Grand Rapid* MI
   495032251
                "Budget of the  United States Government/ Fiscal Year 1990/
                      <        !         >           r

                Appendix at  I-UI.5     '

                 ,  ,    . ,Yet,  EPA  has declared in 4"ts ;Indirect Cost Manual
               »   , ^~*?.*•*' ,          *         ^  .,j«

                that it intends to  recover these 'general expenditures and,

                presumably,  it  intends to place them in  the Superfund.  There
                *  ,.,*,,*••  f

                is simply no support  for the proposition that Congress intended

                to authorize EPA to recover money which  originated in general

                revenues and place  that money in the'Superfund.  The more

                consistent interpretation would'be'that  Congress anticipated

                that EPA would  recover its'direct costs  (all of which would be

                expended from Superfund) and "that indirect, administrative
                                       i

                ,coets would  not.berrecovered underfthecllability scheme.  The

                cost of administering the-program*would'be borne by the yearly

                appropriations  provided:to EPA.6'- ,-  - >''-

                   lf.      It ^follows  that the statute does not support the
                ?£ t IT      --  *  • '                                  cc

                Government's  assertion of authority to recover indirect costs
                •  J! . i-'—1 '     -»*,_-           •*
   The Government advances a  circular argument concerning the
 language "notwithstanding any  other provision or rule of law"
 which.precedes the, liability section of CERCLA.  The issue
vbefore^theJCourt'is whether  the  language following this phrase
 provides ,authorityIfor *the recovery of indirect costs.  If
 Meyer,is'correctyinjasserting-that the phrase "costs of
 removal" /Joes'hot include^both.removal costs and indirect
 costs, ttieh. the prefatoryvlanguage has no bearing on matter.
       "fi*^ -^   ""* '      <:tff^~  '  *  '
-\ The 'point "is also consistent' with Congressional decision to
'provide $250 million.per "year-to the Superfund from general
 revenues.   Thus, to,the extent that EPA incurs permissible
/adminiBt rat ive. costs that are^paid from the Superfund/' it will
 be reimbursed from yearly general appropriations to the
-«.   w.e* v «• ST  ~> -*   « -  *    * '  -      f*  r
 Superfund.

                                13
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                    and Meyer respectfully submits that the Court '•should reverse
                    this element of the  lower Court's  decision.
'(X    r Pliu Building
•>0 Monroe Avenue N W
  Grand Rapid* Ml
    49W3-225I
                                                                 ', •»
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                                                         *-
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                                                      14
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>MITH
 RICE & ROlCCE
 Proittttoatl Corporation

\~   NEYS AT LAW

0>   r Ptmzi Building
* Monroe Avenue N W
 Grand Rapidi MI
   4910J 2251
                           EPA'S ASSESSMENT OF. .^INDIRECT''COSTS  IS AN  '
                           UNCONSTITUTIONAL TAX.
                                               i v
                     -•''*'   The mainstay of the Government's argument in response

                 to the Amici's point that assessment of indirect  costs is  an

                 unconstitutional tax is to assert that charging indirect costs

                 ca'nnof" be a tax because indirect costs are "connected to an

                 Identifiable party.*  Government Brief at 38-39.   In short, the

               &• 'Government argues that since indirect costs are part of what
                                      ,            6  -
                 goes into the overall program and because a portion of those

               ~'Costs*'-£s  -allocated to the "Northernaire site,  it follows that
                                               «* r   'H F **
                           t           *      * *•   **   "*"
               —'the coasts do not represent a tax.  The argument is frivolous.

                       ~?  The argument is analytically the same argument
                                         i -         ""- ~  -
               ^"advanced* by the government in FPC v New England Ppwer CQ.  415

                 U.S.  $$S' (1-974).  There the FPC had allocated the cost of   ^P

                 administering the Natural Gas Act based upon  the  proportion of

                 deliveries of natural gas in interstate commerce.  14- at  346-

                 47.   the  Court determined that the costs assessed against  the

                 natural gas companies were in fact taxes which the agency  had

                 no authority to levy.
    The Government's contention that Section  S31  of SARA does not
  prohibit a  separate tax, See Government Brief at 39,  n.50, is
  groundless.  The statute specifically states that
'-'-"f'ntotwlt&standihg any provision of this Act not contained in
  thfd- tijlle,  any provision" «£. this Act (not  contained in this
  titi
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ITH HAUCHEY.
CE 4
:»   AM Budding
Icmroe Avenue, N VV
rand R«ptd» Mi
 49)03 2251
                         Nor does, the argument  concerning the Independent

               Offices Appropriation^Act  ("IOAA")  have any bearing on the
                                     i
               issue .before ,the Court.  .The Government seems to argue:thatw

               because the IOAA now permits indirect costs it follows that
                             -T -i ,» ,                              *" "
                             j -. t '-
               CERCLA includes those costs.   Yet,  the Government also points

               to specific legislative history  that Congres.s-.found necessary

               to explain the Congressional purpose behind coat^provisions in

               the IOAA — to include indirect  costs.among the, "costs"
                              a.      jS       " f« ~             ~* -  ~
                         ..*  •*   -
               referenced in that statute.  No  such language is .present

               anywhere in the legislative history of CERCJLA.  c-,It follows
                           *» '  ,- v * ~ ' ~' -                   '     ^
               that Congress did hot'intend to  permit the tax implicit in

               EPA's assessment of indirect costs  under- CERCLA.

                         Accordingly, Meyer submits that thte .assessment of

               indirect costs is an impermissible  tax ,jln violation of the

              "Constitution.                              ,      - -
                                     'JF
                                               --•ai: Cri,  - * r":«*f -
A                                             « "S •
  Indeed, the legislative 'hisfror^ of* the^tpXX,:bnly 'further
demonstrates  that when Congress" wishes %o include "indirect
costs* among  the costs-recoverable under a'statyite it can
specify in  the legislative history that  it intends to P«nnit
those costs.   In CERCLA, despite  elaborate explanations'of
terms governing recoverable costs/ there is iip iiuiication;tha^:
Congress intended" recovery of indirect costs.           <   "" e „
                                                         t
                                16
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MITH. HAUGHEYf
RICE A ROEGGE
FroCemaaai Corporation
T    EYS AT LAW
X)    Plaza Building
5 Monroe Avenue N W
 Grind Raptd* Ml
   494032251
                                                        }-,
                    „   ,   EPA'S ASSESSMENT OF INDIRECT COSTS VIOLATES
                           THE APA.

                           The Araici have pointed o,ut that the  Indirect Costs
                     v
                Manual  which provides for assessment of Indirect  costs and

                specifies  the manner in which they are calculated must be
                                               4     +
                subjected  to the procedural requirements of the Administrative
                                            *  ^   % ^    *-w
                      *">  D                         "
                Procedure  Act.   In  response, the Qo^ernment argues  that the

                Indirect' Cost Manual which provides,.for assessment  of indirect

                costs and  prescribes the manner in, which they  are calculated is
                                     *5    W  *'"*• t t»   ~ •».««1»'r*-*-
               » 7       '  J             ta — • -    "
               * only a'""statement of general policy," exempt from the

                rulemaking requirements of^the APA and, in the alternative,

                that the manual establishes an "interpretative rule* which is

                "riot"subject  to the  APA.  Neither argument has  any merit.
                ,«"' 'j .*•-'»
                           In support of its argument that the  Manual is a
                                     f- X*                  '
                statement  of general policy, the .Government argues  that the

                text of the  Manual  only provides "EPA's view"  and "EPA's intent
                           A   *    '   C.1        C -'                        I
               J to seek these indirect  costs in cost recovery  actions."  Yet
                                  . f    ,*  '-    "*    V  *'
                    .v  \    .    *  * Z   " ' "  -'
                "the text of  the Manual  and its application in  this  case

               ^demonstrate  the binding character of the document.

               1         '  The first sentence of the Manual describes as its

                purpose "to  present EPA'e methodology for indirect  cost
                       t. t.   ("!  J-v'k ft>i    '   *
                'allocation to Superfund sites."  Indirect Costs Manual at  1-1

               ., (emphasis  added).*-  The  manual •'goes on to inform the reader that

               . "these indirect costs. a,re valid and .should be  recognized as

                   :, 'qf^-ithe^  total recoverable costs incurred by the Government
17
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   f HAUCHEY,
      AT LAW
)    {tax* Building
Monroe Amnitf N W
Grand Rsptdi MI
  49)03
                in clean-up  actions  under [CERCLA]."  Id.,  (emphasis  added).

                Similarly,,in;ita Introduction, the manual provides  that,  "it

               Is critical., that  EPA seek to .recover all .costs  associated with
                clean-up-/ • These "cfosts 'should include all direct  and indirect

                costs related'-to ViVe  clean-up."  jfl. at i ('emphasis in
                original)'.-  v/*":  "»•        '             „!

                          The EPA,: Comptroller stated that,
                          I:ha'vfe  Directed that this manual be"  ,   '

                        -  prepared*to ' (1)'* provide an explanation  of,'

                          what*^indirect* costs'are and how EPA
                                                          t,   Gr    ^
                          'allo'ea^ea-'them*. and (2) to provide
                                       f     *             *••»"•*' v    y
                          instructions" to regional' financial

                          management' personnel for calculating the

                          amount  of  indirect costs which' should be
                                 • ' i                 " *"  j*"*
                          claimed in cost recover actions.
                                                       • •       '3
                                                     ^    *•        +
                Id.  (emphasis added).   All of the EPA'regio'nal offices received

                copies of the manual-and forms that' were developed, to implement

                the  provisions ^of°the  Indirect''Cost Manual'for each Region.

                Not  surprisingly, affidavits'submitted  in  this' case demonstrate
                                                 f * *     £,»^"    /i  *»•*
                that EPA officials'adhered to the manual in  assessing the
                                               " '   T*   t*-   '*'*•,
                indirect costs.  V.-:-"t-"-'  * --* •* -ov

                          'Nor may EPA" etrade^the "APA'by^ciaiming'th'at ,the manual
                                             >^    *•   11
                                           ^.^ t*-*  ?. ^^ ^ > ^^^ O^-C^C-**   I  »
                is simply an; interpretatlve-rru'le setting forth EPA's view of
                        *         *                      e,      >    * i
                                       i& , V--** - -   ' ^ -"'-' ^^T
                           -v      J   --1.   J '.  '»v
                                                    •••- £-•*'*'*''*''''' >-—*
                                                       '    ""
9 In fact,  unlike comparable documents" with limited purposes,
EPA did not include, a disclaimer indicating that the manual was
to serve  only as guidance and  not asL a'binding" agency,'   * >"
statement.                                     •     -    '    ' .  ' ,.M
                    -           18
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    „> I    V
           : •$-
       J. S /"
MITH, HAUGHEY.
RICE ft ROEGGE
Profemonai Corporation
•••  NEYS AT LAW
»    PUx« Building
3 Monroe Avenue N W
 GnndRipdi MI
   49SOJ 22M
  the statute.  First,  the manual'doe. e- much more than simply
     * "" *
  state the Government's  position that indirect costs-are
  recoverable.  It provides a specific methodology of calculating
  those costs and goes  so far^as to specify hourly indirect cost
  rates (rates which imparted ^direct, .coasts for Meyer that were
  over four times the direct hourly cost*).  Clearly, the manual
  cannot be construed to  simply-,interpret the statute.  More
  fundamentally, the imposition,.of indirect costs and a method to
  calculate them impart substantive-iburdens upon the regulated
  community,.  It follows  that thejnatter should be the subject of
  riotice and comment under the-APA. ^Ohie Dap''
                                                                of Human
         862 F.2d 1228,t|1233-34-(6thrCirr.t 1988).
 ,' *     -~- ' "
 *»   -   y  ^Finally there  is  the-,suggestion in the Government
 **1 4 •% »     * •« *    *
  argument that since, Meyer had the opportunity to contest
 "Indirect ^costs in litigation,  it should not be permitted  bo
  >   tf * t    *• ^
  argue 'thab EPA was required to issue a rule.  In effect,  the
  Government argues that since litigation, is available to resolve
    *"t *"
  the issue,  the' matter^cannot be-contested on APA grounds.  The
  argument yields ^absurd results t  .  v,. -»
            First, if the  availability .of litigation were
  sufficient to avoid the  strictures of >APA rulemaking
^ requirements, agencies, would nearly* always be able to  avoid
  notice  and comment by^.noting that the matter can be litigated.
  Thus, agencies might "never  be required to subject their rules
  to  noti'ce and comment.   Obviously^ the APA was never intended
 s totyieljd>yhl's^rresult";!<*J      "!
                                                 5 '
                                 19
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MITH, HAUGHEY.
      Corporation

7-    YS AT LAW

O l   PUi» Buddmt
) Monroe Avenue N W
 Grind fUfxdi MI

   49M3 2251
                        !- Second,  the assertion ignores the reality of how the

                Supetfund program operates.   Much of the liability for

                Superfund cleanups is .resolved through settlement.1'0   A rule
                                       *.          *"*         *
                limiting the regulated'community*'s capacity to challenge EPA'e

                methodology" for  assessing indirect costs to those who litigate
                                                                n < '
                encourage litigation thereby'delaying cost recovery and future

                 ,           ft!                    S   i «.
                cleanups.  *•   -'

                DATED:      ¥719 ''. 1989.    SM^rtraTH^IGHET, RICE & ROEGGE
                                               BUSINESS
                                                    200 Calder Pla«a Building
                                                    Grand Rapids, HI  49503
                                                    (616) 774-^000
                              o
                                                    * r r t
10 AS of September 30, 1986, EPA had reached settlement with
responsible parties at"372 sites and parties had paid about
$619 million  in actual cleanup expenditures .pursuant to
settlements with EPA.  "Superfund'a First Six years:  A   ; ;
Progress Report," 13 EPA Journal 16  (Jan.-Feb. 1987).  ,.

                  *             20                      •' - '  •
                                                                               *  »
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"i
    ;»  • • .
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