oEPA
Unittd State*
Environmental Protection
Agency
Off ice of
Solid Waste and
Emergency Respon*
DIRECTIVE NUMBER: 9832.17
1 * '.v '
TITLE: Arbitration/Procedures for Small Superfund
Cost Recovery' Claims
APPROVAL DATE: May 22, 1989
EFFECTIVE DATE: August 28, 1989
ORIGINATING OFFICE: Office of Enforcement
Q FINAL
a DRAFT
LEVEL OF DRAFT
D~A Signed by AA or PAA
OB Signed by Office Director
DC Review & Comment
REFERENCE (other documents):
OS WER OS WER OS WER
VE DIRECTIVE DIRECTIVE Dl
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"2 United states environmental Protection Agency
' . Wtshinflton. DC 20460
QSWER Directive Initiation Request
1. Directive Number
9832.17
2. Oriqlnitor Information
Name of ConUct Person
Janice. Linett'
MaflCode
LE134S
Office
Enforcement
Telephon
3. Title
Arbitration Procedures for Sniall Superfund Cost Recovery Claims
4. Summary of Directive (include brief statement of purpose)
Implements EPA's authority under §122fh)[2] of CERCLA, which authorizes the
head of any department or agency with authority to undertake a response action
under CERCLA to use arbitration as a method of settling CERCLA §107[a] claims
for recovery of response costs incurred by the U*S. pursuant to §104 of CERCLA.
5. Keywords
arbitration, response cost& ',
6*. Does This Direcwe Supersede Previous Direcuve(s)7 ^ . in ri
7,' V' X No Yt» W"*' tfrtctJvi (numbtr, title)
b. Does It Supplement Previous 0!r«ctrve(j)?
I No
D
Yt« What drecttv* (number, tftte)
7. unit Level
A-SIgnedbyAA/DAA
B - Signed by Office Director
C-For Review & Comment [ | 0 - ft Development
8. Document to be distributed to States by Headquarters? I y I YM
D
No
This Request Meets OSWER Directives System Format Standards.
9. Signature ol Lead Office Directives Coordinator -
1 0. Name and Title of Approving Official
*W
Date
Oat. y
EPA Form 1315-17 (Rev. 5-«7) Previous editions art obsolete.-
OSWER OSWEPt OSWER 0
VE DIRECTIVE DIRECTIVE DIRECTIVE
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OSWER Directive #9832.17
/ Vol. 54. No. 102 /Tuesday, May 30. 1989 / Rules and Regulations
ENVIRONMENTAL PROTECTION
AGENCY
40 CFR Part 304
[FRL-3521-8]
Arbitration Procedures for Small
Superfund Cost Recovery Claims
AGENCY: Environmental Protection
Agency.
ACTION: Final rule.
SUMMARY: Pursuant to sections I07(a)
and 122(h)(2) of the Comprehensive
Environmental Response,
Compensation, and Liability Act of 1980.
= s amended by the Superfund
Amendments and Reauthorization Act
of 1986 ("CERCLA"), and Executive
Order No. 12580, 52 FR 2923 [January 29,
1987), the Environmental Protection
Agency ("EPA") is promulgating today a
rale which establishes and governs the
procedures for EPA's arbitration of
small CERCLA section 107(a) cost
recovery claims. This m!e implements
EPA's authority under section 122(h)(2)
of CERCLA, which authorizes the head
of any department or agency with
authority to undertake a response action
under CERCLA to use arbitration as a
method of settling CERCLA section
107(a) claims for recovery of response
costs incurred by the United States
pursuant to section 104 of CERCLA,
when the total response costs for the
facility concerned do not exceed
S5CO.OOO, excluding interest, and when
the claim has not been referred to the
Department of Justice for civil action.
DATES: This final rule is effective on
August 28,1939.
ADDRESSES: The public docket for this
final rule is located in Room M3105, U-.S.
Environmental Protection Agency. 401 M
Street, SW., Washington. DC 20460, and
is available for viewing by appointment
from 9:00 a.m. to 4:00 p.m. Monday
through Friday, excluding holidays. For
an appointment, please call Janice Linett
at (202) 382-3077.
FOR FURTHER INFORMATION CONTACT:
Janice Linett, U.S. Environmental
Protection Agency, Office of
Enforcement anoTCornpHance
Monitoring, Waste Enforcement
Division. Room M3105. Mail Code LE-
134S, 401 M Street. SW., Washington.
DC 20460. (202) 382-3077.
SUPPLEMENTARY INFORMATION: The
contents of today's preamble are set
forth in the following form:
I. Introduction
II. Responsiveness Summary
III. Changes from Proposed to Fir.a! Rule
IV. Summary of Supporting Analyses
A. Executive Order No. 1CC91
B. Regulatory Flexibility Act
C. Paperwork Reduction Act - . -
List of Subjects in 40 CFR Part 304
I. Introduction '
Section 122(h)(2) of CERCLA provides
EPA, as well as any other department or
agency authorized to undertake a
response action under CERCLA. with
authority to promulgate regulations,
after consultation with the Attorney
General, for the use of arbitration as a
method of settling certain CERCLA
section 107(a) claims for recovery of
response costs incurred by the United
States pursuant to section 104 of
CERCLA. This authority is limited to"
cases in which the total response costs
for the facility concerned do not exceed
5500,000, excluding interest, and which.
have not been referred to the
Department of Justice for civil action.
On August 4,1988. EPA proposed a
regulation to implement its authority
under section 122(h)(2) of CERCLA (53. .
FR 29428). The August 4,1983 preamble
discussed the purpose of the proposed
rule in Part I and provided a detailed
summary of the proposed rule in Part IL
EPA accepted public comment on the
proposed rule for 60 days and received 4
letters totalling 12 pages of comment
Today, EPA is promulgating the final
rule to implement its CERCLA section
122(h)(2) authority. This rule establishes
and governs the procedures for EPA's
arbitration of CERCLA section 107[a].
cost recovery claims. In preparing this
final rulek EPA has carefully considered
all public comments on the proposed
rule and is making some modifications
in response to those comments. A
summary of all comments received and
EPA's response to each comment is
provided in Part II of today's preamble.
All changes from, the proposed to final
rule are discussed in Part III of today's
preamble. Part IV of this preamble
presents supporting analyses, and Part
V of this preamble provides a list of
subjects addressed by this rulemaking.
II. Responsiveness Summary
Comments were received from 4 :
commenters. Commer.ter 1 is Texaco
Inc. Commenter 2 is Ford Motor Co.
Commenter 3 is The Washington Legal
Foundation. Commenter 4 is The MITRE
Corp. Comments that do not relate to
any particular subpart of the proposed
rule are identified as General.
Comments relating to specific portions
of the proposed rule are organized
according to the subpart, section, and
paragraph of the proposed rule to which
they relate. Each comment contains a
summary of the comment and EPA's
response.
Comment #1: (Commenter 1. General)
Sites with response costs that do not
exceed S500.000 will probably result in
settlement, rather than arbitration,
unless there are only a handful of PRPs.
Response: In enacting section
122(h)(2) of CERCLA, Congress
recognized that arbitration could be a
valuable settlement tool in appropriate
circumstances. While the Agency
recognizes that small cost recovery
cases will often be settled by traditional
means, rather than through arbitration.
the Agency believes that arbitration
offers a useful alternative. It may be
particularly useful where there are
multiple PRPs, because the parties may
request that the arbitrator allocate
responsibility for payment of EPA's
response costs among the participating
PRPs.
Comment 32: (Commenter 1. General)
EPA's various attempts to favor itself in.
the proposed rule and to retain
considerable unilateral authority in the
proposed rule will make it less likely
that arbitration will be used.
Response: This commenter also
provides specific comments on the
. portions of the proposed rule that it
. considers biased in favor of the Agency.
Each specific comment is discussed
below.
Comment £3: (Commenter 2. General)
This comment expresses support for the
use of arbitration to settle cost recovery
claims and regrets that the statutorily
imposed $500,000 cost limitation will
minimize the availability of this process.
Response: No response needed.
Comment #4: (Commenter 2, General)
The proposed rule contains some flaws.
which, if left uncorrected. will limit the
appeal of the process to PRPs and
reduce its potential effectiveness.
Response: This commenter also
provides specific comments on the
portions of the proposed rule which it
believes to be flawed. Each specific
comment is discussed below.
Comment #5: (Commenter 3, General)
This comment expresses support for
EPA's proposed rule because it benefits
all parties involved by keeping potential
litigants out of the overcrowded federal
courts, avoids needless expenditure of
time and resources, avoids the
atmosphere of hostility that may result
from delays encountered in litigation.
and offers a speedy settlement by an
impartial party whose decision is not
subject to de novo re'view in court and is
not susceptible to multiple appeals. This
commenter strongly favors EPA's
implementation of its CERCLA Section
122(h)(2) authority and agrees with EPA
. that arbitration is especially appiopriate
when the case does not present issues of
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Federal Register / Vol. 54. No. 102 / Tuesday, May 30, 1989 / Rules and Regulations
2317;
national or precedential significance.
The cemmenter also supports this
voluntary arbitration process because it
will result in a binding decision on
issues agreed upon by the parties and
vvill thus obviate any future disputes as
to the validity of the settlement.
Resporse: No response needed.
Cc~r:c-r,! ^6: (Commenter 1. Subpart
A, § 3C4.12(d)) It is unclear when the
"Association" will be selected by EPA.
The 5olec;lo.- of the arbitration
o^-ar.izs'.ior. should be rr...:C,- p r^r to a
FRP request for arbitration.
Rc-spo.ise: EPA agrees that, for
arbitrations to ba administered by the
"Association." the "Association" should
be selected prior to a PRP request for
arbitration. EPA plans to select ths
"Association'"by competitive
procurement. Because the procurement
process is a lengthy procedure, it is
likely that there will be a period of time
between the effective date of this final
rule end the award of a contract to the
"Association." During this interim
period. EPA believes that a vehicle
should be available for conducting
arbitrations pursuant to this regulation.
Thus, EPA has amended the proposed
rule to permit EPA and one or more
PRPs at a facility to submit one or more
issues arising in an EPA cost recovery
claim for resolution by arbitration
during the interim period between the
effective date of the final rule and the
award of a contract to the
"Association." During the interim
period, referral of a claim shall be
accomplished by EPA and the -
participating PRP(s) entering into a joint
request for arbitration and reaching
mutual agreement upon the selection
and appointment of an arbitrator on a
case-by-case basis, in accordance with
appropriate procurement procedures.
Any arbitrations agreed upon in this
manner shall be conducted in
accordance with all provisions of this
rule, except for those provisions relating
specifically to the duties of the
"Association," which duties shall be
performed in a manner agreed upon, by
the parties. AJ1 costs, of such
arbitrations, including the arbitrator's
fee, shall be divided equally among all
parties, except that expenses of
witnesses shall be borne by the party
producing such witnesses, the expense
of an interpreter shall be borne by the
party requesting such interpreter, and
the expense of the stenographic record
and all transcripts thereof shall be .
prorated equally among all parties
ordering copies. Amendments to the
proposed rule which provide for these
interim procedures are found at
§§ 304.21(e] (Referral of claims). : '; .'
304.22(e) (Appointment of Arbitrator).
and 304.41[e) {Administrative fees,
expenses, and Arbitrator's fee).
Comment = 7: (Commenter 2, Subpart
A, i 304.12(d)) The preamble states that
an organization, defined as the
"Association," will be selected based
upon its ability to provide technically-
capable arbitrators and that such
organization will be required to "make
disclosures designed to ensure that it is
free from any institutional biases." The
proposed rule should include ciiteria to
select such an organization, specify the
technical capabilities that arbitrators
should possess, and include a
requirement that the selected
organization make full disclosure.
Response: EPA plans to select the
arbitration association by competitive
procurement. A great deal of
information is routinely required of
organizations interested in an EPA
contract (e.g., financial information, past
performance on other contracts, key
personnel) that will assist the Agency in
identifying any possible bias. EPA
regulations also specifically address
organizational conflicts of interest (4G
CFR1509.1552.209-70,1552!209-71, and
1552.209-72). If necessary, EPA may
' request further organizational
information and make it part of the
evaluation criteria in selecting the
organization. Section 304.23 of the
proposed rule includes procedures for
disclosure by each individual arbitrator
and for disqualification of the arbitrator
based on circumstances likely to affect
his or her impartiality.
'Comment £8: (Commenter 4. Subpart
A, § 304.12[d)) The entity to serve as the
"Association" should not be selected
through a competitive process which
includes cost, in addition to
. qualifications and suitability, as one of
its criteria. Including the cost criteria
will preclude organizations that have
chosen not to compete on the basis of
cost from consideration..Such
organizations are intrinsically freer from
conflict of interest and bias and are
better suited to serve as the
"Association" than those which belong
to the profit-making or cost-competing
sector. A not-for-profit status coupled
with a refusal to compete are indicative
of a company's determination to provide
independent and objective analysis and
to work in the public interest rather than
as the agent of a client This posture is
essential in any third-party neutral and
is particularly important in Superfund
settlements. Selection on the basis of
cost may create the impression that the
entity serves at the pleasure of EPA
rather than occupying a neutral position,
because an entity selected due to - ; --'
financial considerations is more subject
to influence on the basis of those
considerations than one that is no!.
Selection on the basis of qualifications
and suitability, without cost, would ;
achieve fairness without endangering
the success of the process. This is not to
say that not-for-profit, non-cost-
competing companies are not subject to
cost controls; they undergo rigorous
continual federal government audits
which result in governmental approval
of cost sensitive parameters for each'
upcoming year. Some e!so vo'.ur.'.ari'y
adhere to the Cost Accounting
Standards incorporated by reference in
the Federal Acquisition Regulations. By
procuring the services'of one of these
companies on the basis of qualification';,
the government procures services, the
costs of which have been previously
determined by the government to be
appropriate and competitive.
Response: As noted in EPA's
Response to Comments 6 and 7 above.
EPA plans to select the "Association"
by competitive procurement.
Competitive procurement is the primary
method by which Federal agencies
award contracts. EPA has not
determined that profit-making
organizations are inherently biased.
subject to influence, or otherwise
incapable of performing the functions cf
the "Association," or that there is some
other compelling reason to restrict the
basis for the selection of the
"Association" in the manner requested
by the commenter. Accordingly, EPA
declines to adopt the commenter's
suggestion.
Comment ~9: (Commenter 1, Subpart
B, § 304.20(b)) As written, if, during the
course of the arbitration, projected
response costs exceed $500,000, the
arbitration will become nonbinding or
terminate. Instead, the arbitrator should
retain jurisdiction, and the arbitration
should proceed as a binding arbitration
so long as the original estimate of
$500,000 was made in good faith and
was supportable when the request for
. arbitration was submitted.
Response: EPA's authority to use
arbitration is contained in section
122(h)(2) of CERCLA. That section
authorizes use of arbitration as a
method of settling cost recovery claims
of the United States "where the total
response costs for the facility concerned
do not exceed $500,000 (excluding
interest)." If response costs increase to
an amount that exceeds this statutory
ceiling prior to the rendering of a final
arbitral decision, EPA lacks authority to
resolve the claim by binding arbitration
and. therefore, declines to make the
.-change requested. As noted in Part II.B.
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23176 Federal Regis(et / VoL 54. No. 102 / Tuesday. May 30. 1989 / Rules and Regulations
of the preamble to the proposed rule,
EPA does not anticipate that the
procedure for converting the proceeding
to a non-binding, arbitration will be
often invoked, because the Agency does
not intend to use arbitration under this
rule unless and until it can establish,
with reasonable accuracy and certainty,
the total amount of response costs
incurred and to be incurred at the site.
Comment 70: (Commenter 2. Subpart
B. § 304.20(c))The second sentence of
this paragraph states. "Any issues
arising in EPA's claim that are not
submitted for resolution shall be'
deemed to be not in dispute and shall
not be raised in any action seeking
enforcement of the decision for the
purpose of overturning or otherwise
challenging the final decision, except as
provided in section 304.40(c) of this
part." This sentence and the last
sentence of § 304.40(c)(3) should be
deleted. (The Fast sentence of
§ 304.40(c){3) restates the prohibition
and includes an exception that allows a
party to raise new issues if necessary to
show that the decision was achieved
through fraud, misconduct, partiality.
excess of jurisdiction or authority, or
violation of public policy.} These
provisions should be deleted because
sthe language can be interpreted to mean
that any issue not raised during the
arbitration. Incrudir.g unforseeab'e
issues or issues that are not yet ripe,
csri.-ot be disputed in the future in any
forum. For example, a PRPgroup may
w:?h 'o imp!e:reni a proposed rerr.ed'y,
but rr.ay dispute EPA's claim for
response costs. In such a case,
arbitration of EFA's costs may be useful.
Since the above language could be
interpreted to c.zza that PRPs may not
dispute issues which arise during
implementation of the remedy, they may
be reluctant to submit cost issues to
.-.rbitruiicn or fsel compelled to raise all
imaginable remedy issues, thereby
increasing the complexity and cost of
the arbitration- CERCLA cases typically
involve several phases and all issues
may not be ripe for resolution at the
same time. . .
Response: First, it is highly unlikely
that arbitration under this rule could be
used in the hyporhetical situation pcsc-d
by the ccrr.rr.enter, because it can only
be used if the total past and future
response costs of the United States do
not exceed 5300,000. The United Stales'
response costs.at a site at which
remedial action will be undertaken will
most likely exceed this statutory ceiling.
Second, the purpose of the language to
which the corr.rnenter refers is to ensure
that the arbitral proceeding results in a
final and binding decisicn on the EPA
cost recovery claim submitted for
arbitration by precluding the parties
from subsequently raising issues not
presented to the arbitrator as a defense
to payment of the arbitrator's award.
The achievement of a final and binding
decision is one of the primary
advantages of arbitration, which
benefits EPA and the participating PRPa
alike. Third, § 304.20(cJ deals only with
issues in the arbitration proceeding and
enforcement thereof, and does not
purport to limit the issues parties may
raise in other proceedings. Finally, the
decision will not produce the result the
commenter fears because, under
§ 304.40(d) of the proposed rule, the final
decision is not admissible as evidence
of any issue of fact or law in any
proceeding, except as needed for the
United States to enforce the decision
and obtain payment and except as
needed for a participating PRP to defend
against a contribution action concerning
the EPA cost recovery claim submitted
for arbitration. For these reasons, EPA
declines to make the change requested.
Comment =11: {Commenter 2, Subpart
B, §§ 304.20 (d)(3) and (d)(4)(i)} The
proposed rule, in § 304.20(d)(4)(i].
identifies ability to pay as one of the
factors that an arbitrator may use to
allocate costs among participating PRPs
if the joint request for arbitration does
not specify the factors. Ability to pay
should be deleted as one of the factors
because: (1) it is dissimilar to the other
factors which relate to the relative
hazard to the public, e.g., mobility,
toxicity. volume; [2) it may sanction the
fundamentally-unjust proposition that
liability should be assessed based on
ability to pay: (3) it may result in "deep
pocket" PRPs shunning the arbitration
process; and (4) it may be used as
guidance by the arbitrator when
allocating liability under § 304.20(d}(3),
which allows the arbitrator to allocate
liability even if not requested by the
parties.
Response: As the commenter points
out. § 304.20(d)(4)(i). without waiving the
general applicability of the joint and
several liability standard, offers the
parties the option of specifying in the
joint request for arbitration, the factors
to be applied by the arbitrator in
performing the allocation-. Thus, the
parties may agree on a case-by-case
basis that ability to pay will not be
considered by the arbitrator as one of
the factors. If the parties do not supply
their own factors, this section specifies
that the arbitrator shall base the
allocation on such factors as the
arbitrator considers relevant, in his or
her sole discretion, such as volume,
toxicity. and mobility of the hazardous
substances, ability to pay, and inequities
and aggravating factors. EPA believes
that ability to pay is an appropriate
factor because, among other reasons, it
is among the factors Congress has
authorized the President to consider
when evaluating CERCLA settlements.
In addition to permitting the parties to
specify their own allocation factors, 'he
rule also addresses, through
§ 304.20(d)(4Xii). the commenrer's
specific concern that PRPs will avoid
using arbitration if certain PRPs at the
site are non-viable. That section permits
the parties to specify in the joint request
that the arbitrator may allocate loss
than all response costs awarded to r.P.\.
As noted in Part n.B. of the preamble to
the proposed rule, one of the reasons
this provision was included is to
encourage PRPs to use arbitration even
if certain PRPs at the site are non-viable.
Finally, the commenter's concern that an
arbitrator will consider ability to pay
when allocating liability for payment
under the second sentence of
§ 304.20(d)(3) is unfounded. That
provision directs the arbitrator to
allocate liability based upon the portion
of the harm attributable to each
participating PRP, if the arbitrator finds
that the actual or threatened harm at the
facility is divisible. The provision
applies only if the arbitrator finds that
harm at the facility is divisible and
specifically directs the arbitrator to
allocate liability for payment of EPA's
award based upon the portion of the
harm attributable to each participating
PRP. It does not provide the arbitrator
with the discretion to apply any other
factors. For these reasons, EPA declines
to make the change requested.
Comment *12: (Commenter 3, Subpart
B. § 304.20(d)(4)(ii}}The Commenter
agrees with this provision, which allows
the parties to specify in the joint request
that the arbitrator may allocate less
than 100% of response costs awarded to
EPA. The commenter notes that this
provision is more generous than the rule
enunciated in U.S. v. NEPACCO. 819
F.2d 726. 747 (8th Cir. 1986) (United
States entitled to recover all costs
associated with any response action
upheld as not arbitrary and capricious).
but believes that it should be included
since it will encourage PRPs to use
arbitration because they will not be
penalized by having allocated to them
response costs attributable to non-
participating or non-viable PRPs.
Response: EPA agrees that the
proposed arbitration rule sets forth a
standard of review and procedure that is
more generous than that provided for
under the statute and case law. It is
EPA's conclusion that, under section 10/
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Federal Register / Vol. 54. No. 102 / Tuesday. May 30. 1989 / Rules and Regulations 23177
of CEP.CLA end established case law,
EPA is entitled to recover "all costs"
incurred by EPA tr. connection with all
aspects of a response action upheld as
not arbitrary and capricious. For the
limited purpose of encouraging PRP
participation in arbitrations under this
rule, the Agency has adopted the
approach contained in § 304.20(d)(4)(ii).
Co~xeni ~13: (Corr.'ner.ter 1. Subpart
D. § 304.20(e)(i)) The arbitrator's review
of the cck-quacy of ;;ny r^cc/nse action
t.-.ker. by EPA should not be limited to
documents compiled by EPA. as would
be required under this provision.
Response: Under section 113(j) of
CERCLA, judicial review of any issues
concerning the adequacy of any
response action'taken or ordered by the
President is limited to the administrative
record upon which the President has
based the selection of the response
action. See, e.g., U.S. v. Seymour. 679 F.
Supp. 859 (S.D. Ind. 1987); U.S. v. Rohm
f- Haas, 660 F. Sup. 672 (D. N.J. 1987). As
noted in Part li.B. of the preamble to the
proposed rule, EPA maintains that,
consistent with section 113(j), the
arbitrator's review of any issue
concerning EPA's response action shall
be based upon the documents which
formed the basis for the selection of the
response action. ;'.e, the administrative
record. These documents will include
any written public comments received
by EPA concerning the selection of the
response action and any EPA responses
thereto. For this reason, EPA declines to
make the change requested. EPA has,
however, deleted the phrase "compiled
by EPA" from this section, because, in
addition to EPA, a State or political
subdivision cf a State, or an Indian
Tribe, or another Federal agency may
compile the administrative record when
it has been designated as the "lead
agency" for the site within the meaning
of the National Contingency Plan. 40 ;.
CFR Part 300. A conforming change has :
been made to § § 304.30fb)(3). - , :
304.30(c)(3). and 304.320H6). ; ;
Comment 914: (Connnenter 3, Subpart V
B. § 304.20 (e)(2Miii) and (e)(3)(iii)} -.;.,;:..*:
Under the proposed rule, once EPA's . '
response action is upheld (in part or in
full), the arbitrator .is required to review
EPA's costs on an arbitrary and .: ;..
capricious standard and to award EPA ^1
all costs incurred (for the portions of the" :
response action upheld) unless the ...
participating PRPs can show the costs ,' ',.
were: (1) Not actually incurred or to be"'.."
incurred: or (2) not actually incurred or, -..
to be incurred in connection with the : ' "\
response action; or (3) clearly excessive.
taking into account the circumstances pf ,.
the response action and relative to";' f^'\.
acceptable government procurement ::" - '
;- ' ' "'
and contracting practices in light of the
circumstances of the response action.
Under U.S. v. XEPACCO. the United
States is entitled to recover all costs
associated with any response action
upheld as not arbitrary and capricious.
As such, the "clearly excessive"
standard is more generous than the
standard applied in judicial cost
recovery proceedings. However, it has
several clear benefits that weigh in
favor of its use: (i) It encourages PRPs to
use arbitration raiher than take their
chances in court, in which forum the
issue of excessive costs is not
necessarily relevant; (2) it places the
burden of proof upon the PRP and thus
requires little additional work on the
part of the Agency; (3) it contains
sufficient qualifications that PRPs'will
rarely be able to prove the costs were
excessive. Thus, although the standard
is more generous than that which would
be applied in the judicial arena, the
benefits clearly outweigh any detriment.
Response: Again, as set forth in the
Response to Comment £12, EPA agrees
that the standard of review provided in
§ 3C4.20 (e)(2)(iii) and (e)(3)(iii) is more
generous than PRPs are entitled to in
judicial cost recovery actions. It is EPA's
view that, under the language of section
107 of CERCLA. judicial review of EPA's
costs is limited to whether the costs
incurred were not inconsistent with the
1s'CP. Under this standard, matters to be
renewed are confined to: Whether the
implemented cleanup was consistent '
with the response action selected by
EPA; whether the response action was
performed; and whether the claimed
costs were actually incurred. Unless the -
selection of the response action is
determined to be inconsistent with the
NCP. based on a standard of review of
arbitrary and capricious or otherwise
not in accordance with law, EPA is
entitled to recover all its actual costs of
implementation of the response action.
This circumscribed review of costs is
intended to support the principal '
objectives of CERCLA: (1) To place the
ultimate financial burden of hazardous
waste cleanup on those parties '-'.- ;
responsible for the problem; and (2) to
assure prompt replenishment of the
Superfund BO that monies can be
rededicated to response work at the
thousands of other hazardous waste
sites in the country that remain.
unaddressed. EPA has developed a more
flexible standard of review for the -
limited purpose of encouraging use of :
the arbitration regulation for small cost
recovery cases. Permitting PRPs to ""' :
challenge actual costs to the extent they
are clearly excessive^ an issue which is
:not relevant in litigation! may make :
. arbitration more attractive to PRPs than
litigation.
Comment ^15: (Coir.menter 1. Subpart
B. § 304.21(b)(2)) Waiver of the right to
notice and service by a party who fails
to furnish information relating to the
service (i.e., a party's name, address.
and telephone number, and, if the party
is represented by an attorney, the
attorney's name, address, and telephone
number) should be limited only to the
period of time during which the party
fails to provide such information.
Response: EPA agrees with this
comment and has amended this
subparagraph accordingly.
Comment 16: (Comrnenter 1, Subpart
B, § 304.24(b}) The last sentence of this
paragraph should not allow EPA greater
rights to withdraw from the arbitration
than provided to other parties.
Response: Under § 304.24(b), any
party may move to withdraw from the
arbitral proceeding within thirty days
after receipt of notice of appointment of
the arbitrator. After this thirty-day
period, only EPA may withdraw from
the proceeding in according with
§ 304.20{b)(3) or | 304.33(e). Sections
304.20(b)(3) and 304.33(e) address EPA's
right to withdraw if public comments
received on the proposed arbitral
decision disclose to EPA facts or
considerations which indicate the
proposed decision is inappropriate,
improper or inadequate. Section 122(i) of
CERCLA requires that EPA provide a
thirty-day public comment period on all
settlements reached through arbitration
pursuant to section 122(h){2). Section
122(i)(3) of CERCLA requires EPA to
consider any comments filed in
determining whether to finalize the
settlement and authorizes EPA to
withdraw from the settlement if the
comments disclose facts or
considerations which indicate the
' proposed settlement is inappropriate,
improper or inadequate. EPA's right to
withdraw based upon public comments
is authorized by section 122(i)(3) of
CERCLA. and. for this reason. EPA
declines to make the requested change.
As noted in Part Il.C. of the preamble to
the proposed rule, EPA anticipates that
withdrawal from the proceeding as a
~-. result of public comment will be an
infrequent occurrence, because small
cost recovery decisions of this kind are
not likely to generate a large amount of
public comment. -
Comment #17: (Commenter 1, Subpart
' C, 5 304.32(j)(6)} This subparagraph
": .unfairly gives only EPA the right to
v supplement the documents compiled by
v EPA which/formed the basis for the
; selection of the response action.
..,......
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23178.. Federal.Register. /^VoL 54. No. 102./ Tuesday, Mayf 30.. 1989b/.jRuIe3. and.Regulationai-'.
Response:. A's npted.in EPA's~.... ,
Response to Comment #13 above. EPA
maintains that any review of any issue
concerning the adequacy of any
response action taken or ordered by
EPA should, consistent with section
Il3(j) of CERCLA, be based upon the
documents which formed the basis for
the selection of the response action.
Section 113(j)(l) of CERCLA permits
supplemental materials to be considered
by a court in accordance with applicable
principles of administrative law. EPA
has. therefore, amended § 304.32(j)(6) to
authorize the arbitrator to permit any
party to supplement the documents
which formed the basis for the selection
of the response action if any party
demonstrates that supplementation is
appropriate based upon applicable
principles of administrative law. The
language to which the commenter
objects has been deleted.
Comment 218: (Commenter 1. Subpart
D, § 304.40(c)(2)(tv)) Among the grounds
provided for challenging a final arbitral
decision is that it violates "public
policy." This term is so broad that
arbitral decisions will be subject to
challenge for virtually any reason so
long as the appeal is couched in terms of
"public policy."
Response: Section 304.40(c)(2)
provides four grounds for challenging :"
the final arbitral decision; the last of
which is that the decision violates
public policy. As noted in Part II.D. of
the preamble to the proposed rule, these
four grounds are based upon generally
accepted common law grounds for
overturning an arbitrator's decision, as
reflected in case law. See, Local Union
No. 28 v. Newspaper Agency Corp., 485
F. Supp. 511 (D. Utah 1980). The Agency
daes not agree that allowing challenges
based upon violation of public policy
.vill permit challenges for virtually any
reason. Whether an arbitrator's decision
violates public policy is an issue for
resolution by the court, see, e.g., W.R.
Crcce & Co. v. Rubber Workers. 481 U.S.
757, 766 (1S33), and, as the Supreme
Court has stated, "[sjuch a public policy
. . . must be well defined and dominant,
and is to be ascertained 'by reference to
the laws and legal precedents and not
from general considerations of supposed
public interests.' " Id., quoting
M-jschany v. United States, 324 U.S. 49,
66 (1945). EPA therefore-declines to
make the requested change.
Comment =19: (Commenter 2, Subpart
D. § 304.40(c)(3)) See Comment #10 and
EPA's Response thereto.
III. Changes From Proposed to Final
Rule
This section summarizes the changes
that have been made to the proposed
rule. The reason for each of these
changes is discussed in.Part II of this _-.:.
preamble or is provided below. . "
Section 304.10: The authority citation
in this section has been changed from
section 122(h) of CERCLA to section
122(h)(2) of CERCLA to provide a more
accurate citation.
Section 304.12: Two clarifying changes
have been made to this section.
Paragraph (d) of this section, which
defines the "Association," has been
amended to add the words "to conduct
arbitrations pursuant to this part" to the
end of the definition. Paragraph (g) of
this section, which defines "interested
person." has been amended to add the
words "to the proceeding" after the
word "party."
Section 304.20: Two changes have
been made to this section. First, for
clarification, the words "actual or
threatened" have been inserted before
the word "harm" each time it appears in
the second sentence of paragraph (d)(3)
of this section. Second, the words
"compiled by EPA" have been deleted'
from the last sentence of paragraph
(e)(l) of this section because the
administrative record may be compiled
by a Federal agency other than EPA. or
by a State or political subdivision of a
State, or by an Indian Tribe when such
non-EPA entity is designated as "lead "..
agency" within the meaning of the NCP.
The identical change has been made to:- ;
§§304.30(b)(3). 304.30(c)(3). and "-; -:
304.32(j)(6). This change is explained in
Comment =?13, Part II. of this preamble.
Section 304.21: Four changes have
been made to this section. First, the
words "may be" in the first clause of
paragraph (a) of this section have been
changed to "is" for clarification. Second,
the last sentence of paragraph (b)(2) of
this section has been amended to clarify
that a party who fails to furnish the
information necessary for notice and
service under this part is deemed to
have waived his or her right to notice
and service only until such time as that
party furnishes the missing information. .
(See Comment £5, Part II. of this .
preamble for explanation.) Third.
paragraph (b)(ix) of this section has
been deleted. This preamble clarified
that EPA will select the "Association"
through competitive procurement. Since
EPA cannot advance funds to a
contractor, references in the proposed
rule implying advances by EPA of filing :.
fees, administrative fees and expenses, -
and the arbitrator's fee have been
deleted. (See § 304.41 (a) and (d) and the
discussion of changes to these two., >-.;'
paragraphs below.) Fourth, a new
paragraph (e) has been added to this :
section. This paragraph explains that,.
prior to EPA's selection of the
Association, EPA and one or more PRPs
at a facility may agree to submit one or
more issues arising in an EPA cost . -
recovery claim for resolution by
arbitration. Any such agreement must be
contained in a joint request for.
arbitration which meets all requirements
of paragraph (b) of this section. New
paragraph (e) also provides that any
arbitration agreed upon in this manner
shall be governed by this final rule,
except for those provisions which
pertain specifically to the duties of the
Association, which duties shall be
performed in a manner agreed upon by
the parties. It also explains that in any
arbitration initiated pursuant to new
paragraph (e), the selection and
appointment of the arbitrator shall be
governed by new § 304.22(e), and
payment of all costs of the arbitration
shall be governed by new § 304.41(e),
both of which are described below. The
third and fourth changes to this section .
are explained in Comment #6, Part II. of
this preamble.
Section 304.22: Two changes have
been made to this section. First; the
word "accepted" in the fifth sentence of
paragraph (b) has been changed to
"invited" for clarification. Second, a
new paragraph (e) has been added to
this section. This new paragraph (e)
explains that if EPA and one or more
PRPs at a facility agree to arbitrate an
EPA cost recovery claim prior to the
selection of the Association as provided
in § 304.21 (e), they shall reach mutual
agreement upon the selection and
appointment of an arbitrator on a case-
by-case basis, and the Administrator
shall obtain the sen-ices of the
arbitrator using appropriate
procurement procedures. New
paragraph (e) further provides that any
person appointed as an arbitrator in this
manner shall make disclosures to the
parties pursuant to § 304.23 of this part
shall arbitrate the claim pursuant to the
jurisdiction and authority granted to the
arbitrator under § 304.20 of this part.
and shall otherwise conduct the
arbitration pursuant to the procedures
estblished by this rule. This second
change is explained in Comment £6,
Part II, of this preamble.
Section 304.31: Paragraph (e) of this
section has been amended to require a
party who intends to be represented by
counsel to provide the telephone number
of counsel in addition to the name and
address. The identical change has been
made to § 304.32(e). This change is
needed to make the information
required by § § 304.31(e) and 304.32(e)
consistent with that required by
§ 304.21(b)(2) (Referral of Claims).
Section 304.32: Paragraph (j)(6) of this
section has been amended. The first
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Federal Register / Vol. 54. No. 102 / Tuesday. May 30. 1989 / Rules and Regulations 23179
sentence has been changed to allow the
arbitrator to permit any party to
supplement the documents which
formed the basis for the selection of the
response action (with additional
documents, affidavits, or oral testimony)
if any party demonstrates that
supplementation is appropriate based
upon applicable principles of
administrative law. The second
sentence of this paragraph has been
deleted. This change is explained in
Comment =17, Part II, of this preamble
Section 304.33: Paragraph (d) of this
section has been amended to require
service of the proposed decision to be
made by certified mail, return receipt
requested, or by personal service to
ensure that the'decision is received by
the parties.
Section 304.40: Two changes have
been made to this section. First,
paragraph [c)[l] of this section has beer,
amended to clarify that the final
decision is a settlement under section
122[h) of CERCLA. which may be
directly enforced pursuant to section
122(h)(3) of CERCLA. As amended, the
first and second sentences of paragraph
(c)(l) have been modified to provide
that: "If any award tr.ade in the final
decision is not paid within the time
required by § 304.33{f) of this part, the
final decision may be enforced as a .
settlement under section 122(h) of
CERCLA, 42 U.S.C. 9622{h), by the .
Attorney General on behalf of EPA in an
appropriate Federal district court
pursuant to section I22(h)(3) of
CERCLA, 42 L'.S.C. 9622(h)(3)." The
remainder of this paragraph is
unchanged. Second, the first clause of
paragraph (d) of this section, "[e]xcept
as otherwise provided in this secion,"
has been amended for clarification to
indicate the more precise cross-
reference to paragraph (c) of this
section. ' . . .;
Section 304.41: Three changes have
been made to this section. First the last
two sentences of paragraph (a) of this
section have been deleted. As noted in v
the discussion of § 304.21 above, EPA .
cannot advance fees to a contractor. ' '
Accordingly, the requirement that all
parties advance the filing fee has been
deleted from paragraph (a). PRPs may, v
of course, provide such an advance, ^i :.;
Second, paragraph (d) of this section has
been similarly revised to delete .
references to advance deposits from all
parties for the arbitrator's fee and the
administrative fee, and to provide _ . -
instead that the "Association" make . ;
appropriate arrangements for payment:
of these fees by the parties. Third, a new.
paragraph (elhas been added to this -:- '-'
section. It provides that in any '
arbitration conducted prior to the
selection of the Association (see
§ 304.21(e)), all fees and expenses of the
arbitral proceeding, including the
arbitrator's fee. shall be divided equally
among all parties, except that expenses
of witnesses shall be borne by the party
producing such witnesses, expenses of
an interpreter shall be borne by the
party requesting such interpreter, and
expenses of the stenographic record and
all transcripts thereof shall be pron:' \
equally among all parties ordering
copies. This change is explained in .
Comment *=6. Part IL of this preamble.
Section 304.42: Paragraph (c) of this
section has been amended to require the
parties to serve all papers associated
with the proceeding by personal service,
or by certified mail, return receipt
requested, or by first class mail, ar.d to
require the arbitrator and the
"Association" to serve all papers
associated with the proceeding by
personal service or by certified mail,
return receipt requested. This change is
to ensure that all papers from the
arbitrator and the "Association" are
received by the parties.
IV. Summary of Supporting Analyses
A. Executive Order No. 12231
Regulations must be classified as
major or non-major to satisfy the
rulemaking protocol established by
Executive Order No. 12291. According to
Executive Order No. 12291, major rules
are regulations that are likely to result
in":
(1) An annual effect on the economy
of S100 million or more: or
(2) A major increase in costs or prices
for consumers, individual industries.
Federal. State, or local government
agencies or geographic regions; or
(3) Significant adverse effects on .
competition, employment, investment
productivity, innovation, or on the
ability of.United States-based
enterprises to compete with foreign-
based enterprises in domestic or export
matters. - *'*' '' ' "
EPA has determined that this .
regulation is a non-major rule under
Executive Order No. 12291 because it
will not result in any of the impacts
identified above. This regulation
provides an entirely voluntary ;-;- - :.
procedure by which PRPs at a facility ' -
may reach agreement with EPA to have
their liability for a CERCLA section ..' '--;
107{a) cost recovery claim resolved by ;
arbitration. Arbitration is an alternative
dispute resolution iechnique that should
provide a quicker and less costly .^;.
method of resolution than traditional : ---:
litigation or negotiation. Therefore, the'' .
Agency has not prepared a regulatory .'
impact analysis for this regulation. This
regulation was submitted to the Office
of Management and Budget for review
as required by Executive Order No. "
12291.
B. Regulatory Flexibility Act
The Regulatory Flexibility Act of 1S80
requires that a Regulatory Flexibility
Analysis be performed for all rules that
are likely to have "significant economic
impact or. a substantial number of small
entities." EPA certifies that this
regulation will not have a significant
economic impact on a substantial
number ot small entities because the
rule provides a wholly voluntary
procedure by which PRPs at a facility
may react agreement with EPA to have
their liability for a CERCLA section
107(3] cost recovery claim resolved by
arbitration. Arbitration is an alternative
dispute resolution technique that should
provide a quicker and less expensive
method of resolution than traditional
litigation or negotiation. Therefore, EPA
has not prepared a Regulatory
Flexibility Analysis..
C. Paperwork Reduction Act
This regulation is not subject to the
provisions of the Paperwork Reduction
Act. Any collection of information in
this regulation is required in the course
of an enforcement action against a
specific party or parties and, therefore,
is exempt from coverage under the Act.
List of Subjects hi 40 CFR Part 304
Administrative practice and
procedure. Claims, Intergovernmental
relations, Hazardous substances.
Hazardous wastes. Natural resources,
Superfund. . .
Date: May 22,1989. -- :
William K. Reilly. '..-"
Administrator. : " .
For the reasons set forth in the -
preamble. Part 304. Title 40 of the Code
of Federal Regulations is added as set
forth below: -
PART 304ARBITRATION
PROCEDURES FOR SMALL
SUPERFUND COST RECOVERY
CLAIMS
. Subpart AG«n*ral ' ^ ;y
'Sec-'."-'" -' ''".'. ' ''- ; ' ' . '
304.10 Purpose.
304.11 Scope and applicability.
304.12 .Definitions. \:.-.', :
Subpwt BJurisdiction of Arbitrator,
Referral of Cteirra, and Appointment of
Arbitrator ~ :-.-..' -
304.20 VjurisictiOT of Arbitrator.'' ;
": 304.21 *T»eferral of claims *";; ..'
304.22 Appointment of Arbitrator.
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23180. Federal Register /Vol. 54. No. 102-/> Tuesday. May 30, 1989^7 Rules and Regulations
Sec. .
304.23 Disclosure and challenge procedures.
304.24 ' Intervention and withdrawal.
304.25 Exparte communication.
Subpart CHearings Before the Arbitrator
304.30 Filing of pleadings.
304.31 Pre-hearing conference.
304.32 Arbitral hearing.
304.33 Arbitral decision and public
comment.
Subpart 0Other Provisions
304.40 Effect and Enforcement of final
decision.
304.41 Administrative fees, expenses, and
Arbitrator's fee.
304.42 Miscellaneous provisions.
Authority: 42 U.S.C. 9607(a) and 9622(h)(2),
Executive Order No. 12580, 52 FR 2923
(January 29.1987). """ " ' ~~
. * . t
Subpart AGeneral
§304.10 Purpose. .
This regulation establishes and
governs procedures for the arbitration of
EPA cost recovery claims arising under
section 107(a) of the Comprehensive
Environmental Response. .
Compensation, and. Liability Act of 1980,
42 U.S.C. 9607(a), as amended by the
Superfund Amendments and
Reauthorization Act of 1988, Pub. L 99-
499.100 Stat. 1613 (1986) ("CERCLA"),
pursuant to the authority granted EPA
by section 122(h)(2) of CERCLA. 42
U.S.C. 9622(h)(2). and Executive Order
No. 12580, 52 FR 2923 (January 29.1987).
§ 304.11 Scope and applicability.
The procedures established by this
regulation govern the arbitration of EPA
claims for recovery, under section 107(a)
of CERCLA. 42 U.S.C. 9607(a). of
response costs incurred at or in
connection with a facility by the United
States pursuant to section 104 of
CERCLA. 42 U.S.C. 9604. The procedures
are applicable when:
(a) The total past and projected
response costs for the facility concerned
do not exceed $500,000. excluding
interest; and
(b) The Administrator and one or
more PRPs have submitted a joint
request for arbitration pursuant to
§ 304.21 of this part. --.'''.
§304.12 Definitions.
Terms not defined in this section have
the meaning given by section 101 of
CERCLA. 42 U.S.C. 9601. or the National
Oil and Hazardous Substances Pollution.
Contingency Plan. 40 CFR Part 300. All
time deadlines in this part are specified ..
in calendar days and shall be computed
in the manner described in Rule 6(a) of :
the Federal Rules of Civil Procedure. ;
Except when otherwise specified, the
following terms are defined for purposes
of this part as folio ws:
(a) "CERCLA" means the
Comprehensive Environmental
Response, Compensation, and Liability
Act of 1980,42 U.S.C. 9601. et seq.. as
amended by the Superfund Amendments
and Reauthorization Act of 1986. Pub. L.
99-499,100 Stat. 1613 (1986).
(b) "Administrator" means the EPA
Administrator or his designee.
(C) "Arbitrator" means the person
appointed in accordance with § 304.22 of
this part and governed by the provisions
of this part.
(d) "Association" means the
organization offering arbitration
services selected by EPA to conduct
arbitrations pursuant to this part.
. (e) "Claim" means the amount sought
by EPA as recovery of response costs
incurred and to be incurred by the -
United States at a facility, which does
not exceed $500,000, excluding interest.
(f) "Exparte communication" means
any communication, written or oral, '
relating to the merits of the arbitral
proceeding, between the Arbitrator and
any interested person, which was not
originally filed or stated in the
administrative record of the proceeding.
Such communication is not "exparte
communication" if all parties to the
proceeding have received prior written
notice of the proposed communication
and have been given the opportunity to--
be present and to participate therein.
(g) "Interested person" means the
Administrator, any EPA employee, any
party to the proceeding, any potentially
responsible party associated with the
facility concerned, any person who filed
written comments in the proceeding, any
participant or intervenor in the .
proceeding, all officers, directors, -
employees, consultants, and agents of
any party, and any attorney of record
for any of the foregoing persons.
(h) "National Contingency Plan" or ,
"NCF- means the National Oil and
Hazardous Substances Pollution
Contingency Plan, developed under
section 311(c)(2) of the Federal Water
Pollution Control Act 33 U.S.C. 1251. et
seq., as amended, revised periodically
pursuant to section 105 of CERCLA, 42
U.S.C 9605. and published at 40 CFR
Part 300.
(i) "National Panel of Environmental
Arbitrators" or "Panel" means a panel
of environmental arbitrators selected
and maintained by the Association to
arbitrate cost-recovery claims under this-
part .,.'.... '. . ' : -
(j). "Participating PRP" is any : " ---
potentially responsible party who har :
agreed, pursuant to § 304.21 of this parti :
to submit one or more issues arising in '
an EPA claim for resolution pursuant to
the procedures established by this part.
(k) "Party" means EPA and any
person who has agreed, pursuant to
§ 304.21 of this part, to submit one or
more issues arising in an EPA claim for
resolution pursuant to the procedures
established by this part, and any person
who has been granted leave to intervene
pursuant to § 304.24{a) of this part.
(1) "Persons" means an individual,
firm, corporation, association,
partnership, consortium, joint venture.
commercial entity. United States
Government, State, municipality,
commission, political subdivision of a
State, or any interstate body.
(m) "Potentially responsible party" or
"PRP" means any person who may be
liable pursuant to section 107(a) of
CERCLA. 42 U.S.C. 9607(a). for response
costs incurred and to b« incurred by the
United States not inconsistent with NCP.
(n) "Response action" means remove,
removal, remedy and remedial action, as
those terms are defined by section 101 of
CERCLA, 42 U.S.C. 9601, including "
enforcement activities related thereto..
(o) "Response costs" means all costs
of removal or remedial action incurred
and to be incurred by the United States
at a facility pursuant to section 104 of
CERCLA, 42.U.S.C. 9604. including, but
not limited to. all costs of investigation
and information gathering, planning and
implementing a response action,
administration, enforcement, litigation,
interest and indirect costs.
Subpart BJurisdiction of Arbitrator,
Referral of Claims, and Appointment
of Arbitrator
§ 304.20 Jurisdiction of Arbitrator.
(a) In accordance with the procedures
established by this part, the Arbitrator
is authorized to arbitrate one or more
issues arising in an EPA claim when:
(1) The total past and projected
response costs for the facility concerned
do not exceed $500,000. excluding
interest; and
(2) The Administrator and one or
more PRPs have submitted a joint
request for arbitration pursuant to
§ 304.21 of this part.
(b)(l) If the total past and projected
response costs for the facility concerned
increase to a dollar amount in excess of
$500,000. excluding interest, prior to the
rendering of the final decision pursuant
to $ 304.33 of this part, the parties may
mutually agree to continue the
proceeding as non-binding arbitration
pursuant to the procedures established
by this part, except that §§ 304.33(e) and
304.40 of this part shall not apply.
(2) If all of the parties agree to
continue the proceeding as non-binding
arbitration, the proposed decision
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Federal Register / Vol. 54. No. 102 / Tuesday. May 30. 1989 / Rules and Regulations 23181
rendered by the Arbitrator pursuant to
§ 304.33 of this part shall not be binding
upon the parties, unless all of the parties
agree to adopt the proposed decision as
an administrative settlement pursuant to
section 122(h)(l) of CERCLA. 42 U.S.C.
9622(h)(l). Any administrative
settlement agreed upon in this manner
shall be subject to the prior written
approval oF the Attorney General (or his
designee) pursuant to section I22(h)|l)
of CERCLA and shall be subjoct to
public comment pursuant to section
122(i) of CERCLA, 42 U.S.C. 9622U).
(3) If the parries do not agree to
continue the proceeding as non-binding
arbitration, or if the administrative
settlement agreed upon is not approved
by the Attorney General (or his
designee), or if EPA withdraws or
withholds consent from the
administrative settlement as a result of
public comment, EPA shall withdraw
from the proceeding and the Association
shall assess or refund, as appropriate,
any administrative fees, expenses, or
Arbitrator's fees.
(c) The Arbitrator's authority, as
defined by paragraphs (d) and (e) of this
section, to determine issues arising in
EPA's claim is limited only to the issues
submitted for resolution by the parties
in the joint request for arbitration
pursuant to § 304.21 of this part. Any
issues arising in EPA's claim that are not
submitted for resolution shall be
deemed to be not in dispute and shall
not be raised in any action seeking
enforcement of the decision for the
purpose of overturning or otherwise
challenging the final decision, except as
provided in § 304.40(c) of this part.
(d)(l) If the issue of liability of any
participating PRP has been submitted for
resolution, the Arbitrator shall
determine whether the participating PRP
is liable pursuant to section 107(a) of
CERCLA. 42 U.S.C. 9607(a). subject only
to the defenses specifically enumerated
in section 107(b) of CERCLA, 42 U.S.C.
9607(b).
(2) If the issue of the dollar amount of
response costs recoverable by EPA has
been submitted for resolution, the
Arbitrator shall determine, pursuant to
paragraph (e) of this section, the dollar
amount of response costs recoverable
by EPA pursuant to section 107(a) of
CERCLA. 42 U.S.C. 9607{a), and shall
award the total amount of such costs to
EPA.
(3) Unless the Arbitrator finds that the
actual or threatened harm at the facility
is divisible, any participating PRP whom
the Arbitrator determines to be liable
shall be jointly and severally liable for
the total amount of response costs
awarded to EPA. If the Arbitrator finds
that the actual or threatened harm is
divisible, the Arbitrator shall allocate
liability for payment of EPA's award
among the participating PRPs based on
the portion of the actual or threatened
harm attributable to each participating
PRP.
(4) Notwithstanding the indivisibility
of the actual or threatened harm, and
without waiving the general
applicability of the joint and several
liability standard, as an alternative to
paragraph (d}{3) of this ssc'.ior., th-3
parties may request the Arbitrator to
allocate responsibility for payment of
response costs awarded to EPA among
the participating PRPs whom the
Arbitrator determines to be liable. Any
such request shall be made in the joint
request for arbitration pursuant to .
§ 304.21 of this part. If such a request is
made, the provisions of paragraphs
(d)(4)(i). (d)(4)(ii), and (d)(4)(iii) of this
section shall apply.
(i) The joint request for arbitration
may specify the factors to be applied by
the arbitrator when allocating among
the participating PRPs responsibility for
payment of the response costs awarded
to EPA. If the joint request does not
specify such factors, the Arbitrator shall
base the allocation on such factors as
the arbitrator considers relevant, in his
or her sole discretion, such as volume,
toxicity, and mobility of the hazardous
substances contributed to the facility by
each participating PRP, ability to pay,
and inequities and aggravating factors.
(ii) The joint request for arbitration
may specify that the Arbitrator may
allocate among the participating PRPs
less than all response costs awarded to
EPA. If this is not specified, the
Arbitrator shall allocate among the
participating PRPs 100% of the response
costs awarded to EPA.
(iii) The burden of establishing the
appropriate allocation of responsibility
for payment of the response costs
awarded to EPA shall rest entirely with.
the participating PRPs.
(5) The parties may request that the
Arbitrator perform an allocation even if
the issue of the liability of the
participating PRPs is not submitted for
resolution in the joint request for
arbitration. Such a request for allocation
shall be made in the joint request for
arbitration pursuant to ( 304.21 of this
part. If such a request is made, the
provisions of paragraphs (d)(4)(i),
(d)(4)(ii), arid (d)(4)(m) of this section
shall apply.
(e)(l) If any issue concerning die
adequacy of EPA's response action has
been submitted for resolution or arises
during the Arbitrator's determination of
the dollar amount of response costs
recoverable by EPA, the Arbitrator shall
uphold EPA's selection of the response
action, unless any participating P?,? o!.r;
establish that the selection was
inconsistent with the NCP. The
Arbitrator's review of the adequacy cF
any response action taker, by EPA sh.;!!
be based upon the documents which
formed the basis for the selection of the
response action.
(2) If the Arbitrator upholds EPA's
selection of the response action in full.
the Arbitrator shall award EPA a!!
response costs incurred and-to b
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23182 Federal Register / Vol. 54. No. 102 / Tuesday. May 30, 1989 / Rules and Regulations
PRPs with an opportunity to discuss
referral of one or .more issues arising in
the claim for resolution pursuant to the
procedures established by this part.
Alternatively, one or more PRPs at a
facility may propose to EPA use of
arbitration, after receipt of a demand by
EPA for payment of a clai.T., but prior to
commencement of civii iitlgstij-n cf the
claim. Where practicable, before an
agreement to refer a claim for
arbitration is made final under this
alternative, either the PRPs or EPA shall
notify the other PRPs at the facility of
the potential use of arbitration.
(bj(l) The Administrator and one or
more PRPs associated with a facility
may submit to the Association a joint
request for arbitration of one or more
issues arising in an EPA claim
concerning the facility. The joint request
shall be signed by all of the parties and
shall include:
(i) A brief description of the facility,
the EPA response action taken at the
facility, the EPA claim, and the parties;
(ii) A statement of the issues arising in
the claim that are being submitted by
the parties for resolution by arbitration:
fiii) A statement that the parties
consent to resolution of the issues
jointly submitted pursuant to the
procedures established by this part by
an Arbitrator appointed pursuant to -
§ 304.22 of this part;
(iv) A statement that the parties agree
to-be bound by the final decision on all
issues jointly submitted by the parties
for resolution and to pay any award
made in the final decision, subject to the
right to challenge the final decision
solely on the grounds and in the manner
prescribed by § 304.40(c) of this part:
(v) A statement that the parties agree
ihat the award made in the final
decision may be enforced pursuant to
§ 304.40(c) of this part.
(vi) A statement that the parties agree
that the final decision shall be binding
only with respect to the response costs
at issue in the claim submitted for
arbitration;
(vii) A statement that the parries
agree that the statute of limitations
governing the EPA claim submitted shall
be extended for a time period equal to
the number of da^s from the date the
joint request for arbitration is submitted
to the Association to the date of
resolution of any enforcement action
relating to the final decision; and
(viii) A statement that each signatory
to the joint request is authorized to enter
into the arbitration and to bind legally
the party represented by him or her to
the terms of the joint request.
(2) The joint request shall also include
the name, address and telephone
number of each party, and, if a party is
represented by an attorney, the
attorney's name, address and telephone
number. A party changing any of this
information must promptly communicate
the change in writing to the Association
and all other parties. A party who fails
to furnish such information or any
changes thereto is deemed *.o have
waived his or her right to notice and
service under this part until such time as
the party furnishes the missing
information.
(c) Any party may move to modify the
joint request for arbitration to include
one or more additional issues arising in
the referred claim. To be effective, any
such modification must be signed by the
Arbitrator and all other parties. The
joint request for arbitration may also be
modified to add one or more additional
parties, if such intervention is permitted
by § 304.24(a) of this part. To be
effective, any such modification must be
signed by the Arbitrator, the intervening
party or parties, and all other parties.
(d) The statute of limitations
governing the EPA claim submitted for
arbitration shall be extended for a time
period equal to the number of days from
the date the joint request for arbitration
is submitted to the Association to the
date of resolution of any enforcement
action relating to the final decision.
(e] Prior to the selection of the
Association, the Administrator and one
or more PRPs associated with a facility
may agree to submit one or more issues
arising in an EPA claim for resolution by
arbitration. Any such agreement shall be
contained in a joint request for
arbitration which meets all requirements
of paragraph (b) of this section. In any
such arbitration, the arbitrator shall be
selected pursuant to § 304.22(e] of this
part, and payment of all costs
associated with the arbitration shall be
made pursuant to § 304.41(e) of this Part
Arbitrations agreed upon pursuant to
this paragraph shall be governed by the
procedures established by this part
except for those procedures which
pertain specifically to the dudes of the
Association. All duties of the
Association shall be performed in a
manner agreed upon by all of the
parties.
§ 304.22 Appointment of Arbitrator.
(a) The Association shall establish
and maintain a National Panel of
Environmental Arbitrators.
(b) Within ten days of the filing of the
joint request for arbitration, the
Association shall identify and submit
simultaneously to all parties an
indenrical list of ten persons chosen
from the National Panel of
Environmental Arbitrators, whom the
Association believes will not be subject
to disqualification because of
circumstances likely to affect
impartiality pursuant to § 304.23 of this
part Each party shall have ten days
from the date of receipt of the list to
identify any persons objected to. to rank
the remaining persons in ihe order of
preference, and to return the list !o the
Association. If a party does not return
the list within the time specified, all
persons on the list are deemed
acceptable to that party. From among
the persons whom the parties have
indicated as acceptable, and, in
accordance with the designated order of
mutual preference, if any, the
Association shall invite an Arbitrator to
serve. If the parties fail to mutually
agree upon any of the persons named, or
if the invited Arbitrator is unable to
serve, or if for any other reason the
appointment cannot be made from the
submitted lists, the Association shall
make the appointment from among the
other members of the Panel. In no event
shall appointment of the Arbitrator by
the Association take longer than thirty
days from the filing of the joint request
for arbitration.
(c) Within seven days of the
appointment of the Arbitrator, the
Association shall mail to each of the
parties notice of the identity of the
Arbitrator and the date of the
appointment together with a copy of
these rules. The Arbitrator shall, within
five days of his or her appointment, file
a signed acceptance of the case with the
Association. The Association shall,
within seven days of receipt of the
Arbitrator's acceptance, mail notice of
such acceptance to the parties.
(d) If any appointed .Arbitrator should
resign, die, withdraw, be disqualified or
otherwise be unable to perform the
duties of the office, the Association may,
on satisfactory proof, declare the office
vacant. Vacancies shall be filled in
accordance with the applicable
provisions of this section, and the matter
shall be resumed.
(e) If the Administrator and one or
more PRPrassociated with a facility
enter into a joint request for arbitration
prior to the selection of the Association
(see § 304.21fe) of this part), the
Administrator and the participating
PRPs shall reach mutual agreement upon
the selection and appointment of an
.Arbitrator on a case-by-case basis, and
the Administrator shall obtain the
services of that person using appropriate
procurement procedures. Any person
appointed as an Arbitrator pursuant to
this paragraph shall make disclosures to
the parties pursuant to § 304.23 of this
part; shall resolve the issues submitted
for resolution pursuant to the
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jurisdiction and authority granted to tho
Arbitrator in § 304.20 of this part, and
shall otherwise conduct the arbitral
proceeding pursuant to the procedures
established by this part.
§ 304.23 Disclosure and challenge
procedures.
(a) A parson appointed as an
Arbitrator under § 304.22 of this part
sh-j':l. within five days of receipt of his
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Federal Register / Vol. 54. No. 102 / Tuesday. May 30. 1989 / Rules and Regulations
(iv) The participating PRP 5s in one of
the categories of liable parties in section
107(a) ofCERCLA, 42 U.S.C. 9607(aJ;
(3) An index of any docnments which
formed the basis for the selection of the
response action taken at the facility (all
indexed documents shall be made
available to any participating PRP);
(4) A summary, broken down by
category, cf all response costs incurred
and to be incurred by the United States
in connection with the response action
taken by EPA at the facility (supporting
documentation for the summary shall be
made available to any participating PRP
pursuant to the procedures.described in
Rule 1006 of the Federal Rules of
Evidence);
(5) To the extent such information is
available, the names and addresses of
ail identified PRPs for the facility, the
volume and nature of the substances
contributed to the facility by each
identified PRP. and a ranking by volume
of the substances contributed to the
facility;
(5) A recommended location for the
pre-hearing conference and the arbitral
hearing; &r.d
(~) Any other statement or
documentation that EPA deems
necessary to support its claim.
(c) Within thirty days after receipt of
EPA's written statement each
participating FRP snail submit to the
Arbitrator two copies of an answer and
shall serve a copy of the answer upon
all other parties. The answer shall in all
cases include the information requested
in paragraphs fc)(l), (c}(6), and (c][7) of
this section, shall include the
information requested in paragraph
(cj(2) cf this section if the issue of the
liability of the answering participating
F'RP has been submitted for resolution,
shall include the information requested
in paragraph (c)(3) of this section if any.
i=Su3 concerning the adequacy of EPA's
response action has been submitted for
resolution or may arise during the
Arbitrator's determination of the dollar
amount of response costs recoverable
by EPA, shall include the information
requested in paragraph (c][4) of thr.s
section if the issue of the dollar amount
of response costs recoverable by EPA
has been submitted for resolution, and
shall include the information requested
in paragraph (c)(5fof ihis-section if any
issue concerning the allocation of
responsibility for payment of EPA's
award has been submitted for
resolution:
(1) Any objections to the statement of
facts in EPA's written statement, and, if
so. a counter-statement of facts;
(2) Any objections to EPA's position
on the liability of the answering
participating PRP pursuant to section
107(a) of CERCLA, 42 U.S.C. 9607(a], a
description of the evidence in support of
the defenses to liability of the answering'
participating PRP which are specifically
enumerated in section 107(b) of
CERCLA, 42 U.S.C 9607{b) (/> that the
release or threat of release of a
hazardous substance at the facility was
caused solely by an act of God, an act of
war, an act or omission of an unrelated
third party, or any combination thereof).
and any supporting documentation
thereof;
(3) Any objections to the response
action taken by EPA at the facility
based upon any documents which
formed the basis for the selection of the
response action;
(4) Any objections to EPA's summary
and supporting documentation for all
response costs incurred and to be
incurred by the United Stales in
connection with the response action
taken by EPA at the facility;
(5) Any documentation which the
participating PRP deems relevant to the .
allocation of responsibility for payment
of EPA's award.
(6) A recorr.rr.ended location for the
pre-hearing conference and the arbitral
hearing: and
(7) Any ether statement or
documentation that the participating
PRP deems accessary to support its
claim.
(d) EPA may file a response to any
participating PRP's answer within
twenty days of receipt of such answer.
Two copies cf any such rsspor.se shall
be served upon ths Arbitrator, and a
copy of any such response shall be
served upon ai! parties.
(e) If EPA files a response, any
participating PRP may file a reply
thereto within ten days after receipt of
such response. Two copies of acy such
reply shall be served upon the
Arbitrator, and a copy of any such reply
shall be served upon all parties.
§ 304.31 Pre-hearing conference.
(a) The Arbitrator and the parties
shall exchange witness lists (with a brief
summary of the testimony of each
witness) and any exhibits or documents
that the parties have not submitted in
their pleadings pursuant to § 304.30 of
this part, within 110 days after the
appointment of the Arbitrator [see
§ 304.22 of this part) or within 10 days
prior to the pre-hearing conference,
whichever is earlier.
(b) The Arbitrator shall select the
location, date, and time for the pre-
hearing conference, giving due
consideration to any recommendations
by the parties.
(c) The pre-hearing conference shall
be held within one hundred twenty days
after the appointment of the Arbitrator
(see §304.22 of this part).
(d) The Arbitrator shall mail to each
party notice of the pre-hearing
conference not later than twenty days in
advance of such conference, unless the
parties by mutual agreement waive such
notice.
(e) Any party may be represented by
counsel at the pre-hearing conference. A
party who intends to be so represented
shall notify the other parties and the
Arbitrator of the name, address and
telephone number of counsel at least
three days prior to the date set for the
pre-hearing conference. When an
attorney has initiated the arbitration by-
signing the joint request for arbitration
on behalf of a party, or when an
attorney has filed a pleading on behalf
of a party, such notice is deemed to
have been given.
(f) The pre-hearing conference may
proceed in the absence of any party
who, after due notice, fails to appear.
(g) (1) At the pre-hearing conference.
the Arbitrator and the parties shall
exchange witness statements, a
stipulation of uncontested facts, a
statement of disputed issues, and any
other documents, including written
direct testimony, that will assist in
prompt resolution of the dispute and
avoid unnecessary proof.
(2) The Arbitrator and the parries
shall consider the settlement of all or
part of the claim. The Arbitrator may
encourage further settlement discussions
among the parties. Any settlement
reached may be set forth in a proposed
decision in accordance with § 304.33 of
this part. If such a settlement is not set
forth in a proposed decision, the
settlement shall be treated as an
administrative settlement pursuant to
section 122(h)U) of CERCLA, 42 U.S.C.
9622(h)(l), and shall be subject to public
comment pursuant to section 122(i) of
CERCLA. 42 U.S.C. 9622(i).
§ 304.32 Arbitral hearing.
(a) The Arbitrator may, in his sola
discretion/schedule a hearing with the
parties on one or more of the disputed
issues identified in the statement of
disputed issues pursuant to § 304.31(g)(l)
cf this part.
(b) The Arbitrator shall select the
locaticn. date, and time for the arbitral
hearing, giving due consideration to any
recommendations by the parties.
(c) The hearing shall commence
within forty-five days after the pre-
hearing conference (see 5304.31 of this
part). The Arbitrator may, upon a
showing by the parties that settlement is
likely, extend the date for the hearing
for up to thirty additional days, if further
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23185
settlement discussions have been held
pursuant to §304.31(g)(2) of this part.
(d) The Arbitrator shall mail to each
party notice of the hearing not later than
twenty days in advance of the hearing,
unless the parties by mutual agreement
w<~:ive such notice. Such notice shall
include a statement of the disputed
issues to be addressed at the hearing.
'i!:« Arbitrator n?ed not mail a second
::::;o= to the parties if the da to for !hr?
hvririr.o is extended pursuant to
paragraph (c) of this section.
(e) Any party may be represented by
counsel at the hearing. A party who
intends to be so represented shall notify
(he other partiss and the Arbitrator of
the name, address and telephone
number cf counsel at least three days
prior to the date set for the hearing.
VYhen an attorney has initiated the
arbitration by signing the joint request
or. behalf of a party, or when an
ut'.orney has filed a pleading on behalf
of a party, or when notice has been
given pursuant to § 304.31(e) of this part,
such notice is deemed to have been
given.
(f) The Arbitrator shall make the
necessary arrangements for the making
of a true ar.d accurate record of the
arbitral hearing.
(g) The Arbitrator shall make the
necessary arrangements for the services
of an interpreter upon the request of one
or more of the parties.
(h) The Arbitrator may take
adjournments upon the request of any
par'.y cr upon the Arbitrator's own -
initiative and shall take such
adjournient when all of the parties
agree thereto.
(i) The Arbitrator shall administer
oaths to all witnesses before they testify
at the arbitral hearing.
(j) (1) A hearing shall be opened by
the recording of the location, date, and
time of the hearing, the prese.nce of the
Arbitrator and the parties, and counsel
if any, and by the Arbitrator's
acknowledgment for the record of all
pleadings and all other documents that
have been Hied by the parties.
(2) The hearing shall be conducted in
accordance with the Arbitrator's
jurisdiction as defined by § 304.20 of this
part.
(3) The Arbitrator may, at any time.
require oral statements clarifying the
issues to be addressed at the hearing.
(4) The Arbitrator may require the
parties to present witnesses for
questioning by the Arbitrator and for
direct and cross-examination by the
parties on any of the disputed issues.
except for any disputed issues
concerning the selection or adequacy of
the response action, which shall be
governed by paragraph (j)(6) of this
section.
(5) The Arbitrator shall define the
scope of oral testimony. A party may
present oral direct testimony only upon
a showing of good cause why such
testimony could not have been
submitted in written form, or upon
consent of all of the parties.
(6) Notwithstanding §§ 304.2()(e)(l)
and 304.20iej: -1} of this part, the
Arbitrator may permit any party to
supplement the documents which
formed the basis for the selection of the
response action (with additional
documents, affidavits, or oral
testimony), if any party demonstrates
that supplementation is appropriate
based upon applicable principles of
administrative law.
{k} (1) Except a.s provided in
paragraph (j)(6) of this section, exhibits
and other documentary evidence not
included in a party's pleadings, not
exchanged prior to the pre-hearing
conference pursuant to § 304.31 (a) of this
part, or not exchanged at the pre-hearing
conference pursuant to § 304.31(g)(l) of
this part, may be introduced at the
hearing only upon a showing of good
cause by the moving party or upon
consent of all of the parties.
(2) Except as provided in paragraph
(j){6) of this section, witnesses not
identified in a party's witness list may
be presented at the hearing only upon a
showing of good cause by the moving
party or upon consent of all of the
parties.
(3) The Arbitrator shall be the judge of
the relevance and materiality of the
evidence offered during the proceeding
and of the applicability of legal
privileges. Conformity to legal rules of
evidence shall not be required.
(4) The Arbitrator may make such
orders as may be necessary for in
camera consideration of evidence for
reasons of business confidentiality as
defined by 40 CFR 2.201 (e} and as
consistent with section 104[e)(7) of
CERCLA, 42 U.S.C. 9604(e)(7J.
(1) The hearing may proceed in the
absence of any party who, after clue
notice, fails to appear or fails to obtain
an adjournment. If a party, after due
notice, fails to appear or fails to obtain
an adjournment, such party will be
deemed to have waived the right to be
present at the hearing.
(m) After all disputed issues have
been heard by the Arbitrator, the
Arbitrator may permit the parties to
make'Closing statements, after which the
Arbitrator shall declare the hearing
closed.
(n) The hearing shall be completed
within two weeks, unless the Arbitrator
extends the hearing for good cause.
(o) The Arbitrator may perrr.it the
parties to submit proposed findings of :
fact, rulings, or orders within ten'duys
after-receipt of the hearing transcript or
such longer time upon a finding of good
cause.
(p) The parties may provide, by
written agreement, for the waiver of the
hearing.
§ 304.33 Arbitral decision and-public
comment.
(a) The Arbitrator shall render a
proposed decision within forty-five days
after the hearing is closed, or within
forty-five days after the pre-he?irina
conference if no hearing is he-Id. unl?:s?
the parties have settled the dispute prior
to the rendering of the proposed
decision.
(b) (1) The proposed decision sha!! be
in writing and shall be signed by the
Arbitrator. It shall be limited in
accordance with the Arbitrator's
jurisdiction, as defined by § 304.20 of this
part, and shall, if such issues have been
jointly submitted by the parties for
resolution, contain the Arbitrator's
determination of:
(i) Which participating PRPs, if any.
are liable pursuant to section 10"(a) cf
CERCLA. 42 U.S.C. 9807(a):
(ii) The dollar amount of response
costs, if any, to be awarded to EPA; end
(iii) The allocation of responsibility
for payment of EPA's award, if any,
among the participating PRPs.
(2) The proposed decision shall also
assess arbitration fees and expenses
(see § 304.41 of this part) in favor of any
party, or combination of parties, and, in
the event any administrative fees or
expenses are due the Association, in
favor of the Association.
(c) If the parties settle their dispute
during the course of the proceeding, the
Arbitrator may, upon the parties'
request, set forth in the terms of the
agreed settlement in a proposed
decision. Except as provided in
| 304.20(b) of this part, a proposed
decision which embodies an agreed
settlement shall be subject to all
applicable provisions of this part.
including, but not limited to. paragraph
(e) of this section and § 304.40 of this
part.
(d) The parties shall accept as legal
delivery of the proposed decision the
placing in the United States mail of a
true copy of the proposed decision, sent
by certified mail, return receipt
requested, addressed to each party's last
known address or each party's
attorney's last known address, or by
personal service.
(e) (1) Pursuant to section 122(i) of
CERCLA, 42 U.S.C. 9622(i), notice of the
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231C6 Federal Register / Vol. 54. No. 102 / Tuesday. May 30. 1989 / Rules and Regulations
proposed decision shall be published
promptly by EPA in the Federal Register.
Such notice shall include the name and
location of the facility concerned, the
n;:mes of ihe parties to the proceeding,
and a brief summary of the proposed
decision, and shall provide persons who
are not parties to the proceeding a
thirty-day period in which to file written
comments relating to the proposed
decision. Any filed comments shall be
made available to the participating PRPs
and to the public. The participating PRPs
sh.ill have ten days from the close of the
public comment period in which to
submit to EPA in writing their views on
the merits of any comments filed. EPA
shall consider any comments filed, and
shall, within thirty days after the close
of the ten-day period during which the
participating PRPs may submit their
views on any comments filed, provide
written notice to the Arbitrator and the
participating i:RFs. The written notice
shall be made available to the public
and shall include:
(i) A summary of any comments filed;
[ii) R^sponsc-s to any comments filed:
(iii) A discussion of whelhor any
comn-.enls filed disclose to EPA feels or
considerations which indicate th-3
proposed decision is inappropriate.
improper or inadequate; and
(iv) EPA's determination as to
xvhether modification of the proposed
decision or withdrawal from the arbitral
proceeding is necessary b 3=ed upon
such comments.
(2) If EFA's '/.Titter, nciice does not
stale '.hat modification or withdrawal is
necessary based upon public common is,
thjii the proposed decision shall become
final thirty days after the date of
issuance of EPA's written notice. If
EPA's written notice states that
modification or withdrawal is
necessary, the parties shall have thirty
days from the date of issuance of EPA's
v.-ril'.iin notice to modify the proposed
decision so '.hat it is no longer
inappropriate, improper cr inadequate
and to set forth the proposed decision,
as modified, in an agreed settlement. If
an agreed settlement is reached, such
agreed settlement shall be the final
decision. If the parties do not modify the
proposed '.i.-ciiion in i:n a.rraed
settlement wiinin thirty days, the
proposed decision shall be null and void
and of no legal effect, EPA shall
withdraw from the proceeding, and the
Arbitrator shall assess such
administrative fees and expenses (see
§ 304.41 of this part) against the parties
as the Arbitrator deems appropriate.
(f) Payment of EPA's award, if any,
and any fees or expenses due pursuant
to the final decision, shall be made
within thirty days after the date of the
final decision.
(g) The Arbitrator shall, upon written
request of any party, furnish to such
party certified facsimiles of all papers in
the Arbitrator's possession that may be
required in judicial proceedings relating
to the arbitration pursuant to § 304.40 of
this part.
Subpart 0Other Provisions
§ 304.40 Effect and enforcement of final
decision.
(a) Pursuant to section 122(h}(4) of
CERCLA. 42 U.S.C. 9622(h}(4), any '
participating PRP who has resolved his
or her liability for an EPA claim through
a final decision reached pursuant to the
procedures established by this part shall
not be liable for claims for contributions
regarding matters addressed by the final
decision.
(b) The final decision shall be binding
and conclusive upon the parties as to
issues that were jointly submitted by the
parties for resolution and addressed in
the decision.
(c) (1) If any award made in the final
decision is not paid within the time
required by § 304.33[f) of this part, the
final decision may be enforced as a
settlement under section 122(h) of
CERCLA. 42 U.S.C. 9622(h), by the
Attorney General on behalf of EPA in
any appropriate Federal district court
pursuant to section 122(h)(3) of
CERCLA, 42 U.S.C. 9622(h)(3). Pursuant
to section 122(h)(3] of CERCLA, the
terms of the final decision shall not be
subject to review in any such action.
(2) In any such enforcement action
initiated by the United States, the final
decision may be challenged by any
party if:
(i) It was achieved through fraud.
misconduct, or partiality on the part of
the Arbitrator
(ii) It was achieved through fraud cr
misconduct by one of the parties
affecting the result;
(iii) The Arbitrator exceeded his or
her jurisdiction under 5 304.20 of this
part or failed to decide the claim within
the bounds of his or her authority under
this part or
(iv) It violates public policy.
(3) Except as necessary to show such
fraud, misconduct, partiality, excess.of
jurisdiction or authority, or violation of
public policy, in any such enforcement
action, a pa;ty may not raise, for the
purpose of overturning or otherwise
challenging the final decision, issues
arising in the claim that were not
submitted for resolution by arbitration.
(d) Except as provided in paragraph
(c) of this section, and except as
necessary for a participating PRP to
defend against an action seeking
contribution for matters addressed by
the final decision, no final decision shall
be admissible as evidence of any issue
of fact or law in any proceeding brought
under any provision of CERCLA or any
other provision of law.
(e) Neither the initiation of an arbitral
proceeding nor the rendering of a fiiuil
decision on an EPA claim shall preclude
or otherwise affect the ability of the
United States, including EPA, to:
(1) Seek ir.junctive relief against any
participating PRP for further response
action at the facility concerned pursuar.i
to CERCLA or any other applicable
statute, regulation or legal theory; or
(2) Take further response action at the
facility concerned pursuant to CERCLA
or any other applicable statute,
regulation or legal theory; or
(3) Seek reimbursement from any
participating PRP for any costs not the
subject of the arbitral proceeding
pursuant to CERCLA or any other
applicable statute, regulation or legal
theory; or
(4) Seek any relief for any violation of
criminal law from any participating PRP:
or
(5) Seek damages for injury to,
destruction of, or loss of natural
resources from any participating PRP; or
(6) Seek any relief, civil or criminal,
from any person not a party to the
arbitral proceeding under CERCLA or
any other applicable statute, regulation
or legal theory.
§ 304.41 Administrative fees, expenses,
and Arbitrator's fee..
(a) The Association shall prescribe an
Administrative Fee Schedule and a
Refund Schedule, which shall be subject
to the approval of EPA. The schedule in
effect at the time of filing or the time of
refund shall be applicable.
(b) Expenses of witnesses shall be
borne by the party producing such
witnesses. The expense of the
stenographic record and all transcripts
thereof shall be prorated equally among
all parties ordering copies, unless
otherwise agreed by the parties, or
unless the Arbitrator assesses such
expenses or any part thereof against any
specified party in the decision. The
expense of an interpreter shall be borne
by the party requesting the interpreter.
(c) The Association shall establish the
per diem fee for the Arbitrator, subject
to the approval of EPA. prior to the
commencement of any activities by the
Arbitrator. Arrangements for
compensation of the Arbitrator shall be
made by the Association.
(d) The Association shall make
appropriate arrangements to pay the
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Federal Register / Vol. 54. No. 102 / Tuesday. May 30. 1939 / Rules and Regulations
23187
Arbitrator's foe and the administrative
fee-, and shall render an accounting to
th-j parties in accordance with the
Arbitrator's award, within thirty days
af-.er the date of the final decision.
(e) In any arbitration conducted prior
to the selection of the Association (see
I 304.2i[e) of this part), all fees and
expenses of the arbitral proceeding.
including the Arbitrator's fee, shall be
,-::vic:vJ. equally among all parties.
:\-c;;::'. ;hst expenses of witnesses shall
' ~: ?!::'"; bv th? c?..~;v r\jJ^c;::- ;:;ch
witnesses, expenses of an interpreter
shall be borne by the party requesting
such interpreter, and the expense of the
s'.er.ographic record and all transcripts
thiTeof shall be prorated equally among
all parties ordering copies.
5 304.42 Miscellaneous provisions.
(a) Any party who proceeds with the
arbitration knowing that any provision
or requirement of this part has not been
complied with, and who fails to object
thereto either orally or in writing in a
timely manner, shall be deemed to have
waived the right to object.
(b) The original of any joint request
for arbitration, modification to any joint
request for arbitration, pleading, letter,
or other document filed in the
proceeding (except for exhibits and
other documentary evidence) shall be
sicned by the filing party or by his or her
(c) All papers associated with the
proceeding that are served by a party to
an opposing party shall be served by
personal service, or by United States
first class mail, or by United States
certified mail, return receipt requested,
addressed to the party's attorney, or if
the party is not represented by an
attorney or the attorney cannot be
located, to the last known address of the
.party. All papers associated with iho
proceeding that are served by the
Arbitrator or by the Association shall !:o
served by personal service or by United
State.s certified mail, return receipt
requested, addressed to the party's
attorney, or if the party is not
represented by an attorney or the
attorney cannot be located, to the List
known address of the party.
(d) If any prevision of this part, or the-
upc'.icsticn of any provision, of this pr.rt
to any person or circumstance, is held
invalid, the application of such provision
to other persons or circumstances and
the remainder of this part shell not be
affected thereby.
{FR Doc. 69-12792 Filsd 5-26-89: 8:45 am]
BILLIK3 CODE «5c3-W-M
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