UNITED STATES ENVIRONMENTAL PROTECTION AGEV

                            WASHINGTON DC  2046G
                  JUN  20 1991
                              OSWER Directive No. 9833.2c
MEMORANDUM

SUBJECT:  Evaluation of,  and Additional Guidance on, Issuance  of
          Unilateral Administrative Orders  (UAOs) for RD/RA
FROM:
TO:
          Bruce M. Diamond, Director^x^;:-j
          Office of Waste Programs Enforcement
          William A. White
          Associate Enforcement Counsel
          Office of Enforcement/Superfund

          Director, Waste Management Division
               Regions I, IV, V, VII, and VIII
          Director, Emergency and Remedial Response Division
               Region II
          Director, Hazardous Waste Management Division
               Regions III and VI
          Director, Toxic and Waste Management Division
               Region IX
          Director, Hazardous Waste Division
               Region X
          Regional Counsel, Regions I-X
     The  purpose of this  directive is  to present you  with the
results of  a recent evaluation conducted  by  the Office of Waste
Programs  Enforcement  (OWPE)  of  the selection process EPA uses in
issuing UAOs  to  Potentially Responsible Parties (PRPs) for RD/RA
under  CERCLA; and,  based  on  the evaluation,  to give  further
guidance on the process we should use to select recipients of UAOs.

     The evaluation was requested by the Deputy Administrator, who
was concerned about criticisms expressed by some PRP groups about
which PRPs at a site receive UAOs.  There have been  complaints, for
example, that EPA unfairly singles out  "deep pockets" when issuing
UAOs.

     The  evaluation  consisted  both  of  interviewing  Regional
managers  to determine their  approach  to  issuing  orders,  and of
examining each order issued in FY 1990  to determine the numbers of
PRPs  issued general notice,  special  notice,  and UAOs,  and the
reasons for any discrepancies among these  numbers.

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Findings

     Overall, the process Regions are using to select PRPs for UAO
issuance  appears  to  be  reasonable  and  fair.    Not  all  PRPs
identified at a site are routinely  included when UAOs are issued,
but  the  reasons  for  selection appa^r ,->to..yelate to  legitimate
matters of enforceability and sound enforcement discretion.

     The evaluation found that  in the majority of cases, UAOs were
issued to fewer than all the PRPs given  general or special notice
at a site.   UAOs were issued to all PRPs  identified  for the site
at 10 out of the 44 sites for which UAOs for RD/RA were issued in
FY 1990.   For these 10 sites, the number  of PRPs is low (fewer than
10 PRPs).

     At the  other 34 sites, where UAOs  were  issued to  fewer PRPs
than were given either general or special notice,  the  difference
between the  number of PRPs given  notice and those issued orders
varies considerably.  In  some cases the discrepancy is very small;
for example,  at one site all but one of the ten PRPs issued special
notice received UAOs.  In other cases the difference is very large:
as few as a dozen PRPs may be given  orders out  of several hundred
PRPs given general notice.

     The results of both  the survey of FY 1990 UAOs and the survey
of  Branch Chiefs  are  consistent  regarding the most  important
factors in determining which PRPs receive UAOs.   Strength of the
liability case and financial viability were  given as  the two most
important factors by the  Branch Chiefs, and the individual surveys
of each site  revealed that these were the two most frequent reasons
given for PRP selection.  Also consistent between the  surveys is
the relative significance  of  these  two  factors: strength of the
liability case  is the foremost consideration for Branch Chiefs, and
it is given as a factor  at over twice  as many sites as  viability.
Overall,  strength of  the liability  case  is a determinative factor
in selecting among PRPs  to receive  orders in three-fourths of the
cases in which fewer than all PRPs  received  orders.1

     Other important  factors identified  both  in  the   survey  of
Branch Chiefs  and in individual orders include contribution  by
volume, administrative  practicality,  and separate  settlements.
Volumetric contribution was the third most frequently given factor
in explaining selection  at sites.   Clearly,  there is  a  connection
between this factor and  administrative practicality,  and both are
     1  This does not mean that  liability was not considered in the
remaining one-fourth of the cases.  Liability is always considered
in issuing UAOs, but  in a quarter of the cases other factors (e.g.,
viability or administrative practicality) were responsible for the
decision not to issue an order  to a  given PRP.

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consistent with EPA guidance on use of UAOs,  which suggests issuing
orders to the  largest manageable number of PRPs.  In addition, in
several cases  fewer PRPs were issued orders  than were given notice
because the remaining PRPs settled separately for a  portion of the
cleanup or costs  involved.

     The  evaluation  also  revealed  that  recipients  of  orders
generally are responsible for a large majority of the waste covered
by  the  orders.   Although not required under  CERCLA's  scheme of
joint and several liability,  EPA generally strives to include those
PRPs to whom the  bulk of  the waste at issue may be attributed.

Conclusions and Follow-up

     Our evaluation indicates that there  is not a serious problem
with the way Regions are using UAOs  for RD/RA work.  Consideration
of  such  factors  as liability, viability, and,  in certain cases,
volumetric contribution makes sense before we commit  to the serious
action of issuing unilateral orders.

     We have  initiated  some follow-up work  to determine whether
bias toward large, financially solvent responsible parties may be
built into the system earlier in the PRP search process.  There may
be  good  reasons  to consider  such PRPs,  who  tend  to  be  large
contributors and  for whom there are usually good records of waste
transactions.  We want  to be sure, however,  that during the PRP
search large,  solvent parties are  not arbitrarily singled out to
the exclusion of  other contributors or liable parties.  Preliminary
results of an examination of the PRP search process have indicated
that such a bias does not exist.

Additional Guidance

     Based  on  the  findings  of  the  evaluation,   we  are  not
recommending any essential changes  to  the  current  process by which
PRPs are  selected for  receiving  orders.   Regions  appear to be
selecting recipients of UAOs appropriately and in accordance with
the "Guidance  on  CERCLA Section  106(a)  Unilateral Administrative
Orders for Remedial Designs and Remedial Actions," OSWER Directive
No. 9833.0-la.

     We encourage you,  however, to  ensure that you  avoid a bias,
or  even the  appearance  of a bias, toward issuing orders only to
large,  "deep pocket" PRPs.   Although  many such PRPs may be large
contributors and may be  able to pay for response, we must continue
to  make  reasonable efforts  to  identify all parties with  CERCLA
liability at a site and to arrange  for  or compel cleanup from as
many of them  as  practicable.  On the other  hand, we must ensure
that we have  adequate evidence against all parties to whom we issue
orders, and we should consider the economic viability of order

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recipients.  Where it is necessary to select among liable, viable
PRPs, volumetric contribution is a  legitimate  factor in reducing
the  named  parties to  a  practicable number.   Other  factors,  of
course,  may also enter into a decision to select among PRPs.

     It is important to note that questions have also been raised
about issuing orders to parties at  the other end  of the spectrum
—  clearly  non-viable parties,  such  as  destitute  or  nearly
destitute  individuals, who  may  be  getting orders that  in formal
terms require  them to perform  cleanup work costing  millions  of
dollars.   Please  be  aware  that the  above-referenced  guidance
suggests  that  orders  involving  expenditures  of  money  should
generally  not  be  issued   to  PRPs  that  lack  any  substantial
resources.

     Again, this is general advice,  and site-specific factors may
make inclusion of persons of little means appropriate in individual
cases.    In particular, it  may  be  useful to  issue  UAOs  to site
owners regardless of their  financial circumstances.   However,  in
such cases it may  sometimes be preferable to issue separate orders
for  access or  cooperation  to  indigent  parties  rather  than  to
include them in an overall  response  order.

     Similar  caution  is  advisable  when  dealing  with  other
distressed or  disadvantaged individuals  who,  from  an  equitable
point of view, may not be appropriate recipients  of a unilateral
order.

Further Information

     If you have any questions about the  evaluation  and follow-up
or about the guidance presented here,  please call  us or have your
staff contact  Arthur Weissman  in  the Office  of  Waste  Programs
Enforcement  at  FTS  382-4826  or Leonard  Shen  in  the Office  of
Enforcement at FTS 382-3107.  We thank you for your cooperation in
this matter,  and for  your  sensitivity to  the important issues
involved.

Disclaimer

     The policies and procedures established in this document are
intended  solely  for  the  guidance  of  employees  of  the  U.S.
Environmental Protection Agency.  They are not intended and cannot
be relied  upon  to create  any rights, substantive or procedural,
enforceable by any party in litigation with the United States.  EPA
reserves the  right to act  at variance with  these  policies  and
procedures and to change them at any time without  public notice.

cc:  Regional Enforcement Branch Chiefs
     Regional Counsel Branch Chiefs

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