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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
FEB24I989 9835,7
SUBJECT: Guidance on CERCLA section 106 Judicial Actions
FROM: Edward E. Reich
Acting Assistant Administrator for Enforcement
and Compliance Monitoring
£-• &&>
J. Winston Sorter
Assistant Administrator for Solid Waste
and Emergency Response
TO: Regional Administrators, Regions I - X
Regional Counsel, Regions I - X
Regional Hazardous Waste Management
Division Directors, Regions I - X
I. Background
EPA must consider all available enforcement tools,
including civil judicial actions, in its efforts to
encourage PRPs to enter into negotiations and settlement
agreements for cleanup of hazardous waste sites. Section
106(a) of the comprehensive Environmental Response,
Compensation, and Liability Act (CERCLA) provides that "when
the President determines that there may be an imminent and
substantial endangerment to the public health or welfare or
the environment because of an actual or threatened release
of a hazardous substance from a facility, he may require the
Attorney General to secure such relief as may be necessary
to abate such danger or threat." Such judicial enforcement
actions have an important role to play in the Superfund
cleanup process, and consideration of Section 106 judicial
actions should be an integral part of Superfund case
management planning.1
1 Section 106(a) Administrative Orders are also useful
in encouraging settlements. OWPE is preparing separate
guidance on the use of CERCLA Section 106(a) Administrative
Orders.
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This guidance provides criteria for consideration in
selecting and initiating Section 106 judicial actions. The
guidance also identifies and discusses issues that should be
considered in preparation of a Section 106 referral.
II . Role of Section 106 in Suoerfund, Enforcement
Section 106 judicial actions can be used as an
effective enforcement tool against recalcitrant or other
non-settling PRPS. EPA has found that many parties, when
faced with the threat of an action for injunctive relief,
have agreed to conduct response measures pursuant to a
consent agreement. Section 106 judicial actions may be
brought where either a group of PRPs refuse to participate
in negotiations on the remedial action or where negotiations
prove unsuccessful. In such cases, the Regions will need to
decide whether to issue a Section 106 administrative order
or whether to refer a Section 106 judicial action to the
Department of Justice as alternatives to a Fund-financed
response. (See Section IV below).
We realize that substantial resources are often needed
to support Section 106 judicial actions. However, the
passage of SARA has strengthened the government's position
that judicial review of any issue concerning the adequacy of
any selected response action is limited to the facts in the
administrative record. Record review will make litigation
of Section 106 cases more efficient, since, in reviewing the
Agency's decisions, courts will not generally allow a party
who challenges a decision to look beyond EPA's
administrative record by permitting discovery, hearings, or
additional fact finding. In particular, courts will not
likely permit persons challenging EPA's response decision to
depose Agency decision-makers, staff, or contractors on
deliberations which lead to the decision.
Ill . Criteria for Bringing Section 106 Judicial Actions
A. Financial Sfaillty of PRPs to conduct the c
The first criterion to consider in bringing a Section
106 judicial action is whether some or all identified PRPs
have the financial means to conduct a response action. As
part of the PRP search, the Regional office should assess
whether the responsible parties can pay for a private party
cleanup. In making this determination, the Region should,
as early as possible, issue a Super fund Section 104 (e)
information request to all identified PRPs. The Region may
also review the following sources. of financial data:
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o Financial information obtained on PRPS during
the initial PRP Search;
o Financial information obtained by NEIC;
o Financial information contained in a RCRA
permit application;
o Financial information required by the
Securities and Exchange Commission (SEC)
regarding financial statements of publicly
traded companies; and
o Financial information obtained by EPA in
conducting title searches of property owned
by PRPs.
_ For a more complete description of the performance of
financial assessments, the Regions should refer to the
August 1987 guidance. Potentially Responsible Party Search
Manual. (OSWER Directive 9834.6). Regional offices should
additionally contact their Regional civil investigators for
assistance in ascertaining the financial viability of
individual PRPs.
B. Avaiiabi 1 it-y of Superfund for response actions
A Section 106 judicial action should be considered in a
number of situations, including those where EPA may not be
able to use the Superfund to finance a response action.
Even in cases where the Agency might prefer to use the Fund
and subsequently pursue cost recoveryr it may be appropriate
to use Section 106 judicial actions where EPA planned to
conduct a remedial action, but may not be able to obtain
state agreement to pay for the required share of the
remedial action or where state funding for the particular
site is not available. In addition, some sites will go
without CERCLA Federal funding since only a limited number
of NPL sites can be addressed with available Fund resources.
Even where Fund money is available, the Regions should
consider issuing Section 106 AOs and, where appropriate in
light of the criteria set forth herein, filing Section 106
judicial actions.
C. Proof of PRP's Section 106 liability
To prove a Section 106 case against each PRP, there
must be evidence that each such PRP named in the 106 action
is liable under Section 106. Parties who are liable under
Section 106 include but are not limited to those classes of
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parties liable under Section 107. Before referring a
Section 106 case, therefore, the Region must evaluate each
PRP in light of the elements of Section 106 liability and
the potential defenses that may be raised pursuant to
Section 107(b).
D. Evidence of imminent and SUhstiflntial endanaerment
In a judicial action brought under Section 106, EPA
must also be able to prove that, because of a release or
threat of a release of a hazardous substance from a
facility, an imminent and substantial endangerment may exist
at that facility. In making this determination, the
Regional Office should review the adequacy of the
administrative record to support evidence of imminent and
substantial endangerment. The record to support such a
finding will likely include evidence obtained through
inspections and investigations.
An endangerment assessment or risk assessment, which is
part of the record, will provide documentation for proof of
an imminent and substantial endangerment, and may serve as
the basis for a Section 106 administrative order or Section
106 complaint. Where available, the assessment prepared by
the Agency should consider the results of any health
assessment prepared by ATSDR. For remedial actions, the
risk assessment or public health evaluation conducted by
EPA, the State, or PRPs at the site should generally be
adequate to support the finding of imminent and substantial
endangerment. The materials supporting the finding of an
endangerment should be carefully reviewed and incorporated
in the administrative record.
,. Case law on Section 106 imminent and substantial
endangerment provides the following additional guidance:
o Imminent and substantial endangerment may
be to the public health or welfare an the
environment;
o "Endangerment" is not actual harm, but a
threatened or potential harm;
o "Endangerment" is imminent if factors giving
rise to it are present, even though harm may
not be realized for years.
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o "Endangerment" is substantial if there is
reasonable cause for concern that someone or
something may be exposed to a risk of harm
by a release or threatened release of a
hazardous substance if remedial action is
not taken.
Sfifi Ethvl Corp. v. EPA. 541 F.2d 1 (D.C. Cir. 1976) (fin
bane) . cert, denied. 426 U.S. 941 (1976); B. F. Goodrich v.
Murtha. Civil No. N-87-52 (D. Conn. Oct. 24, 1988); United
States v. Ottati & Goss. Inc.. 630 F. Supp. 1361 (D. N.H.
1985); United States v. Conservation Chemical Co.f 619 F.
Supp. 162 (W.D. Mo. 1985); United States v. Seymour
Recycling Corp.. 618 F. Supp. 1 (S.D. Ind. 1984).
E. Strength of administrative record
Under CERCLA, judicial review of response selection
decTsions should be based on the administrative record
supporting the decision. Thus, it is essential that a
complete, thorough administrative record in support of all
pertinent Agency response decisions that will be subject to
litigation be compiled prior to referral. See "Admin-
istrative Records for Decisions on Selection of CERCLA
Response Actions," May 29, 1987, OSWER; Proposed National
Oil and Hazardous Substances Pollution Contingency Plan, 53
Fed. Reg. 51,394 (1988) (Subpart I) (to be codified at 40
C.F.R. Part 300).
F. Identification of required response action
It will generally be more efficient to bring a Section
106 action where a ROD has identified a specific response
action that the PRPs can implement. The Regional Office may
not want to pursue a case where it anticipates substantial
difficulties in describing in detail the activities
necessary to carry out the selected remedy. For example,
to enable EPA to request more specific relief in the
referral, it may be appropriate for EPA to use Fund money
for the remedial design (RD) prior to referring a Section
106 judicial action for remedial action (RA).
G. Relatively few responsible parties representing
fl SUl7STiftntial contribution
In deciding whether to refer a Section 106 case, it is
generally preferable to refer a case which does not involve
numerous PRPs, due to the complexities and resource
implications of litigation with multiple parties.
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However , where there are large numbers of PRPs
involved, litigation may be manageable where similar issues
or defenses would be raised by multiple PRPs. Thus, a large
number of PRPs should not necessarily defeat further
consideration of a Section 106 judicial action, particularly
if the Region believes that a Section 106 action may
encourage the PRPs to organize and coordinate a response
action. It is also generally preferable to bring the
Section 106 action against the group of PRPs whose
contributions represent a substantial percentage of the
quantities of hazardous substances at a site.
H. No circumstances indicating an immediate threat
lic health, welfare, or environment
Emergency circumstances which present an immediate
threat to health, welfare, or environment, such as a fire or
explosion, should generally not be the subject of a Section
I06_judicial action. These situations will likely arise
where EPA determines that it must conduct time-critical
removal actions. In some cases, however, EPA may still have
sufficient time to issue an administrative order, and then
decide to use the Fund if compliance is not achieved.
In addition, even where EPA has taken emergency action,
a Section 106 action could be initiated later to compel
remedial action. As noted above, OWPE is developing
guidance on the use of Section 106 administrative orders.
IV. Issues to be considered in Preparation of Section
106 Referrals
Once the Regional office has made a decision to prepare
a Section 106 referral, it needs to review the following
issues in particular: (l) which defendants to name in the
action; (2) when to bring a Section 106 judicial action; and
(3) the relation of Section 106 administrative orders to
Section 106 judicial actions.
A. Parties Named in Section 106 Judicial Action
A Section 106 referral may be brought against some or
all of the PRPs identified at a site. In determining which
parties to name in a Section 106 judicial action,
consideration should be given to the volume and nature of
the waste contributed by each party, the involvement of
parties such as prior owners, the financial position of each
party, and the strength of liability evidence against each
party. Where EPA has reached a settlement with some of the
parties to perform a portion of the response action, EPA
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will consider a Section 106 case to require the remaining
non-settling parties to perform some of the response work.
This process is sometimes referred to as a "carve-out"
settlement.
B. Timing of Section 106 Judicial Actions
The Section 106 case to require PRPs to perform
remedial work should generally be brought after the PRP
search has been completed and after the ROD has been signed.
A Section 106 complaint to require performance of a removal
action should be filed after an adequate administrative
record has been compiled to support the removal. The
administrative record in support of all EPA response
decisions should be completed prior to referral. In any
case, a Section 106 action should generally not be referred
until after PRPs have been given notice and an opportunity
to perform removal or remedial actions themselves, in order
to more fully integrate Section 106 judicial actions into
the-Superfund enforcement program, the Region should include
a strategy for use of a Section 106 judicial action in its
case management planning process.
C. Relation to Section 1Q6 Administrative Orders
The Region should generally issue a Section 106
administrative order before referring a Section 106 civil
judicial case. In drafting an order that may be enforced in
the event of noncompliance, the Regions should consider who
will be named in a judicial action. The order should be
specific as to the action to be taken, and the Region should
be prepared to defend the order in an enforcement
proceeding.^ A Section 106 administrative order will
generally take less time to prepare and serve than referral
and filing of a Section 106 complaint. Also, violation of a
Section 106 order will set up a punitive damage action under
Section 107 and/or a penalty action under Section 106. In
addition, enforcing an order rather than seeking to compel
injunctive action in the first instance should further
support record review, in cases where it is very likely
that a judicial action will follow the issuance of an order,
2 It has now been established that pre-enforcement
review of such an order is impermissible. Sfifi Section
113(h) of CERCLA, 42 U.S.C. Section 9613(h); Solid State
Circuits. Inc. v. EPA. 812 F.2d 383 (8th Cir. 1987); Waaner
Seed Co. v. Daaaett. 800 F.2d 310 (2d Cir 1986); Barnes v.
U.S. District Court for the W.D. Wash.. 800 F.2d 822 (9th
Cir. 1986).
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it may be worthwhile to plan in advance to prepare the order
to be issued and the referral simultaneously.
Where EPA does not achieve compliance with the
administrative order, it must decide whether to refer a
Section 106 action to the Department of Justice for judicial
action or to undertake a Fund-financed response and seek
cost recovery, penalties and treble damages later. In
making such a decision, the factors discussed in Section III
above should be considered.
V. Disclaimer
This memorandum and any internal procedures adopted
for its implementation are intended solely as guidance for
employees of the U.S. Environmental Protection Agency. It
does not constitute rulemaXing by the Agency and may not be
relied upon to create a right or a benefit, substantive or
procedural, enforceable at law or in equity, by any person.
The Agency may take action at variance with this memorandum
or its internal implementing procedures.
VI. Agency Contact
Please contact Belinda Holmes of OECM-Waste at (FTS)
382-2860 if you have any questions on this guidance.
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