United States
Environmental Protection
Agency
Office of
Solid Waste and
Emergency Response
oEPA
DIRECTIVE NUMBER: 9S32.3
TIMING OF CERCLA COST RECOVERY ACTIONS
APPROVAL DATE: OCTOBER 7, 1985
EFFECTIVE DATE: OCTOBER i, 1985
ORIGINATING OFFICE: OWPE
IS FINAL
D DRAFT
STATUS:
REFERENCE (other documents):
OSWER OSWER OSWER
VE DIRECTIVE DIRECTIVE Dl
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oEPA
United States Environmental Protection Agency
Washington. DC 20460
OSWER Directive Initiation Request
Interim Directive Number
9832.3
Originator Information
Name of Contact Person
Janet
Lead Office
D OERR
D OSW
D OUST.
H3 OWPE
D AA-OSWER
Mail Code
WH-527
Telephone Number
Signature of Office Di/epjor
Approved for Review
Date
Title
Timing of CERCTA Cost Recovery Actions
Summary of Directive
Provides guidance on when cost recovery actions should be
initiated under §107 of the CERCIA. It will also provide
the foundation for an orderly planning and management
process for cost recovery.
Timely initiation of such actions will facilitate early
replenishment of the Hazardous Substance Response Fund (the '
Fund) and will assure that negotiations and litigation take
place while evidence is fresh and witnesses are available.
Also, this guidance is not intended to limit any action by EPA
pursuant to §107 of CERCLA, and is only intended to assist EPA
Regional offices in the management of cost recovery actions.
Key Words: timing, cost recovery, guidance, actions
ype of Directive (Manual. Policy Directive. Announcement, etc.)
Guidance Memorandum
Status
Draft
Final
D New
I—I Revision
Does this Directive Supersede Previous Directives)? | | Yes |X| No Does It Supplement Previous Directive(s)? (_J Yes [ | No
f "Yes" to Either Question, What Directive (number, title)
Review Plan
CD AA-OSWER
D OERR
D OSW
D OUST
C OWPE
I—I Regions
OECM
D OGC
n
Other (Specify)
This Request Meets OSWER Directives System Format
Signature of Lead Office^irectives Ojficer
Date •. .• •
f- 30
Signature of OSWER directives Officer
Date
EPA Form 1315-17(10-85)
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OSWER # 9832.3
} UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
- WASHINGTON. D C 20460
OCT T 1985
MEMORANDUM
SUBJECT:
FROM:
Timing of CERCLA Cos
Recovery Actions ^
r\ney
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OSWER # 9832.3
remedial cost recovery actions should be consolidated according
to the timetable listed for remedial actions below.
For Remedial Actions
«
Cost recovery actions should be initiated as soon as
practicable after the signing of the ROD, usually within 18 months
of that time. However, cost recovery action should not begin
until the Remedial Design (RD) stage has been completed. In most
instances, cost recovery action will be initiated about mid-way
through the construction phase of a remedial action, which would
be about 18 months after the ROD is signed. At that time, costs
should be fully known through the RD phase and most if not all
of the construction costs should be available by the time the
§107 action is filed.
In certain limited instances, completion of the RD may be
delayed beyond 18 months after the ROD is signed. Since any cost
recovery is predicated on both incurred costs and an estimate of
the costs for the remedy which is provided by the RD, cost recovery
should not be initiated before completion of the RD phase. i
I
TIMING OF DEMAND LETTERS
The purpose of demand letters in CERCLA cost recovery actions
is to inform potential defendants of the Agency's costs of a CERCLA
cleanup and to make demand for payment of those costs. Under
current policy, demand letters are typically sent by the Regions
prior to referral of a case to EPA Headquarters and the Department
of Justice (DOJ).
Since the policy set out in this document calls for initiation
of some cost recovery actions prior to the completion of the
remedial cleanup (and, therefore, prior to expenditure of all
costs), demand letters sent in those cases will necessarily make
demand for costs that have yet to be incurred. Under those circum-
stances, the letter should explicitly reference actual past costs
and provide an estimate of future costs as delineated in the RD.
Similarly, in the event the case is referred and. subsequently
filed before the remedial action is completed, the complaint will
contain a request for a declaratory judgment as to future costs.
MANAGEMENT OF THE PROCESS
Regions are responsible for tracking all CERCLA response
actions to identify when cost recovery action should be
initiated. Yearly plans for cost recovery actions, including
determination of the number of cost recovery actions to be
initiated, and the identification of specific cost recovery
sites, will take place through the SCAP process.
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OSWER # 9832.3
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Cost recovery does not take place in a vacuum. At times,
other enforcement activity may be underway at a site when a cost
recovery action is due to be initiated. Negotiations with
potentially responsible parties for future cleanup work may be in
process,"for example. In such instances, close cooperation
between Regional staff handling cost recovery and the case manage-
ment or litigation team is essential to assure all actions,
including cost recovery, are part of a coordinated enforcement
strategy. lining of cost recovery actions, including issuance of
demand letters and case referrals, should take into account other
aspects of the enforcement activity at the site.
THE STATUTE OF LIMITATIONS
CERCLA, as currently enacted, does not contain mention of a
statute of limitations (SOL) for §107 actions. It is the position
of the Agency and DOJ that there is no SOL but if there were,
it- would be six years from the completion of a response action.
Congress is considering such a six year SOL as part of the
reauthorized CERCLA. Pending any explicit SOL legislation, it
is important that timely cost recovery actions be taken to minimise
the chances that an adverse Court ruling might result in loss of ?
monies to the Fund. The timetables established in this memorandum
seek to strike a balance between the realities of the remedial
action process and the more conservative views of how Courts
might rule on the SOL. In this context, it should be noted that
the U.S. District Court for New Hampshire has upheld the Agency's
view that there is currently no SOL for §107 actions.
The primary burpose of this memoranda is to assure timely
return of expended monies to the Fund. Even if a six year SOL
should be enacted, it would not affect the timetables described
in this document.
RELATIONSHIP TO PREVIOUS GUIDANCE
This guidance supplants Charter IV, Paragraph A, Timing of
Cost Recovery Proceeding, in the Guidance on Pursuing Cost Recovery
Actions Under CERCLA issued by Courtney M. Price, Special Counsel
for Enforcement and Lee M. Thomas, Assistant Administrator for
Solid Waste and Emergency Response, on August 26, 1983. It also
modifies Paragraph B, Statute of Limitations, of that document.
The referenced material is found on Pages 16-18 of the above
mentioned issuance which, with the exception of the referenced
material supplanted by this guidance, represents current policy
guidance on CERCLA cost recovery.
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QSWER #9832.3
-4-
The Cost Recovery Procedures Manual issued on January 30, 1985,
by Gene A. Lucero, Director, Office of Waste Programs Enforcement,
provides detailed information and instructions on -the development
of cost recovery documentation packanes prior to case referral to
Headquarters. *
In addition, on July 12, 1985, a memorandum titled Small Cost
Recovery Referrals w^s issued by Frederick p. Stiehl, Associate
Enforcement Counsel for Waste, Office of Enforcement and Compliance
Monitoring and Gene A. Lucero, Director, Office of Waste Programs
Enforcement, Office of Solid Waste and Emergency Response. This
memorandum discusses instances when cost recovery cases involving
less than 5200,000 should be referred. The Interim CERCLA Settle-
ment Policy issued by Courtney M. Price, Lee M. Thomas and F. Henry
Habicht II on December 5, 1984 also addresses the setting of
priorities for cost recovery and other CERCLA cases.
CONCLUSION
Initiation of cost recovery actions according to an established
predictable timetable is a critical step in the implementation of
an efficient and effective cost recovery program. CERCLA cost
recovery will involve hundreds of cases over the next several years,
many of them highly complex with voluminous Documentation reguired.
With this tirc.table , plans can be made, resources allocated, and
the program implemented in a way which will meet the goals of timely
negotiation and litigation and, most important, early replenishment
of the Fund to permit the Agency to address additional uncontrolled
hazardous waste sites.
Your cooperation in implementation of the time schedules
provided in this memorandum is appreciated. Questions should
be addressed to Janet Farella, Office of Waste Programs Enforcement
(WH-527). Ms. Farella may be reached at 382-2016.
cc: Morgan Kinghorn, Comptroller
William N. Hedeman Jr., OERP
Gene A. Lucero, OWPE
John J. Stanton, OWPE
Frederick F. Stiehl, OECM
RCRA/CERCLA Branch Chiefs, ORC
Regional Superfund Branch Chiefs, Regions I-X
Regional Superfund Enforcement Section Chiefs, Regions I-X
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