9832, 9
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
' WASHINGTON. O.C 204*0
or
lltt I ? 1987 90UO WATT! AMD IMIMQINCT «|S*OMSt
MEMORANDUM
SUBJECT: Cost Recovery Actions/Statute of Limitations
PROM: Gene A. Lucero, Director M^JL
Office of Waste Programs enforcement
TO: .Director*, Wait* Management Division,
Regions I,XV,v,vxi,VXIX
Director, Emergency and Remedial Response Division,
Region XX
Directors, Hazardous Waste Manageaent Division,
Regions XXX, VI
Director, Toxic and Waste Management Division,
Region XX
Director, Hazardous Waste Division, Region X
• The purposes of this memorandum are to:
1. Update EPA's policy on timing of cost recovery action (This
memorandum supersedes Timing o* Cost Recovery Action, G.
Lucero, October 7, 1985).
2. Request that you bring your personal attention to the
accuracy of data being used to brief Congress on the status
of cost recovery ••ttorts at sites.
3. 'Request-the initiation of cost recovery action for those
sites where the statute of limitation*date is approaching.
It remains the Agency's goal, where appropriate, to seek recovery
of all monies expended at Superfund sites. Moreover, to promote cost
recovery and obtain interest, the Agency will transmit demand letters
as early as practicable. Additional guidance on the timing and content
of demand letters, including guidance on maximizing interest, will be
sent in the near future.
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9832. 9
I. Timing of Cost Recovery
Section 113(g)(2) of tht Comprehensive Environmental Response,
Compensation and Liability Act (CERCLA), as amended by the Superfund
Amendments and Reauthorixation Act (SARA), contains specific provisions
on the statute of limitations for cost recovery actions under section
107. This memorandum does not set forth the statute of limitations for
pre-SARA response actions. Section 113(9) requires that cost recovery
actions be commenced:
A. for removal actions, within three years after completion of
the removal action. Where the Agency has made a deter-
mination to grant a waiver under section 104(c)(l)(C) for
continued response action* the cost recovery action must be
brought within six years after this determination! and
B. for remedial actions, within six years after the initiation
of physical on-sitt construction of the remedial action. If
the remedial action is initiated within three years after
completion of the removal action* the removal costs .may be
recovered under the remedial action statute of limitations
for cost recovery (i.e. within six years after the initiation
of on-site construction of the remedial action).
The term "commenced" as used in section 113(g) means a
filed section 107 cost recovery action. As a matter of policy, the
Agency views completion of the removal action as the day the cleanup
contractor demobilizes at the site and completes the scope of work
identified in the original or modified action memorandum. The final
Pollution Report (POLREP) submitted by the OSC normally contains this
information. (See Superfund Removal Procedures* Revision 12*
August 20, 1984). Remedial investigations/feasibility studies (RX/PS)
may fall within the statutory definition of removal action. For
purposes of cost recovery they should be treated as a separate removal
action. Therefore, a cost recovery action should be commenced within
three years of completing the original removal (exclusive of the RZ/PS)
unless phys-i-oal on-site construction has started.
Although section 113(g)(2)(A) of CERCLA* as amended* allows three
years from completion of a removal to initiate cost recovery action* it
still remains our policy to begin cost recovery activity within one
year after completion of the removal. For remedial actions* Agerncy
policy requires that cost recovery activity be initiated within 18
months after the signing of the Record of Decision (ROD) or during the
later phase of construction of the remedial action* if the construction
is expected to take more than two years after the ROD is signed.
Adherence to these time frames will ensure that current, not stale,
evidence and knowledgeable witnesses will be available to support the
prosecution of the action and that the Agency will not be faced with
statute of limitation risks.
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At this point it is appropriate to clarify the Agency's position
on priorities for reaoval cost recovery referrals. Due to the resource
comaitaent of litigation, the Agency has established that cost recovery
cases where the costs exceed $200*000 should take priority for
referral. There is no prohibition on referring cases under 1200*000.
However* the judicious use of liBited resources dictates that the
Agency first address those sites which proaise a better return on the
Agency's tiae and Boney investaente. Where appropriate* eases under
1200*000 have been and should continue to be referred. Selection of
cases for referral is a Regional deteraination which should be based on
a variety of factors including strength of evidence* financial
viability of defendants and likely return to tbe Agency including
enforceaent costs.
Section 122(h) of CERCLA now provides the Agency with the
authority necessary to compromise claias for cost recovery actions
where the total of all response costs expended at a site la less than
$500,000. This new authority should assist the Agency in addressing
the lower dollar value cases without litigation where an appropriate
settlement can be made. The Agency is currently developing procedures
for settleaent of claias under $500*000.
II. Update of Inforaation
Attached for your-review is inforaation on coapleted reaovals for
each of your Regions. Please review this inforaation and* using the
coaaent field provided, indicate your schedule for referral of cost
recovery action. Cost recovery actions aay not be appropriate for some
sites: for example* where no PUP can be identified* or where the PUPS
are not financially viable. If you do not intend to refer tbe case*
please note this fact. Where you decide that cost recovery action is
inappropriate* you should explain the decision not to take cost
recovery action in a signed aeaorandua in your files. You should
assuae that there will eventually be audits of these cases* by
Headquarters* and perhaps tbe Inspector General and Congressionsl
Oversight Coaaittees.
Please use* tbe following cstegories when coapleting tbe coaaent-
field for sites where actions will not be referred:
1) Mo WlPs identified
2) P*Ps not financially viable
3) Questionable evidence
4) Questionable legal case
5) other (specify)
The accuracy and completeness of this inforaation is critical to
our ability to deaonstrate the effectiveness of EPA's cost recovery
prograa. The current data* which bas been provided in response to
Congressional requests* indicstes that IPA has initiated cost recovery
efforts at only 29% of tbe coapleted removal sites. (They account for
approxiaately 52% of the available obligations). To tbe extent
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information was available, tht above figure on cases subject to cost
recovery was determined by subtracting from the universe of completed
removals* those where it appeared that cost recovery' is inappropriate.
While we believe that our data base may not be current, the low
level of case initiation does point out the need for serious management
attention. A referral should be planned in this or next years
Superfund Comprehensive Accomplishments Flan (SCAP) and so indicated on
the attached reports. Where action is not appropriate* it is critical
that the data base be adjusted to so indicate. Please provide your
comments and schedule for activity on the attached material within two
weeks.
III. Initiation of Actions
If, after review of the attached site information, there are any
cases which require filing immediately or in the near future, please
advise OWpŁ,~OECM and the Environmental Enforcement Section of the
Justice Department immediately, so that we stay expedite the referral
and filing process. All planned referrals should be incorporated into
the Integrated SCAP.
We will provide you with updates of removal completions and
ongoing remedial actions (similar to the attached charts) on a
quarterly basis for your review and comment. We also solicit your
suggestions on the chart format and content.
Any questions on this memorandum or the attached information may
be addressed to Janet Parella of my staff. She may be r.eached on
PTS 312-2034.
ATTACHMENTS
cc: Edward E. Reich, OECM
David Buente, DOJ
Regional Counsels, Regions X-X
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