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SCA Servs. of Ind., Inc. v. Thomas

Citation: 17 ELR 20129
No. No. F 86-72, 634 F. Supp. 1355/24 ERC 1455/(N.D. Ind., 05/09/1986)

The court holds that the owner of a landfill was not denied due process by the Environmental Protection Agency's (EPA's) determination that the site qualified for listing on the national priorities list (NPL) without affording the owner an evidentiary hearing, and the agency's insistence on conditions before allowing the owner to conduct a remedial investigation/feasibility study (RI/FS) and the decision to begin an RI/FS prior to the site's listing on the NPL did not violate the separation of powers doctrine. The court first holds that it has subject matter jurisdiction over plaintiff's action alleging constitutional deficiencies in the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). The provisions of CERCLA § 113 are not directly applicable to this action, since plaintiff is challenging the statute's constitutionality and not specifically the propriety of EPA's actions under the statute. Moreover, § 113(b) gives the district courts jurisdiction over any controversies other than the promulgation of a regulation. Plaintiff is not challenging the merits of the NPL listing process or the way EPA was conducting the RI/FS, but rather challenges the constitutionality of the statute itself. The same analysis applies to EPA's argument that there can be no preen-forcement review of the RI/FS requirement.

The court next holds that the case is ripe for review. The court holds that the due process claim is ripe because plaintiff has sufficiently demonstrated injury to its business reputation as a result of the site's publicly being labelled a Superfund site, loss of business goodwill resulting from the damage to its business reputation, loss of property value that will be caused by plaintiff's projected inability to sell the site once it is listed on the NPL, and loss of use of the site during EPA's conducting of the RI/FS and subsequent remedial action. The separation of powers claim is ripe because EPA insisted that plaintiff sign a CERCLA § 106 consent order in order for plaintiff to conduct the RI/FS, and EPA has begun the RI/FS although the site has not yet been listed on the NPL. The court holds, however, that the issue of EPA's seeking access to the site to perform the RI/FS is not ripe until the agency has actually attempted to enter the site, is refused entry, and seeks a warrant to enter.

Turning to the merits, the court initially declines to rule on plaintiff's claim that CERCLA is unconstitutional on its face since it does not provide for post-deprivation hearings under § 106 or § 104 removal actions, since EPA has never sought to use its authority under either of those sections in this case. In a note, the court rejects the due process claim based on alleged damage to plaintiff's business reputation since there is no protectable property or liberty interest in reputation, but holds that there is a protectable interest for due process purposes in business goodwill. Assuming arguendo that the listing on the NPL is a non-emergency action subject to the general requirement of a pre-deprivation hearing, the court holds that plaintiff was given a "hearing" within the meaning of procedural due process. Plaintiff had a sufficient opportunity to be heard during the 60-day comment period subsequent to the publication of the proposed listing in the Federal Register, and employees of plaintiff informed EPA of the company's claim that the hazard ranking system (HRS) score assigned to the site was incorrect.

The court next holds that the notice and opportunity to be heard were constitutionally adequate. The timing of the notice and hearing was meaningful, since it came at the earliest possible time after EPA had indicated the site might be included on the NPL. Plaintiff had an opportunity to present its side of the story before injury to property value as a result of an NPL listing could occur. The comment period provided a meaningful opportunity to be heard, which plaintiff took full advantage of. The court rejects an argument that the hearing was inadequate because of alleged bias on the part of EPA. Using an alternative due process analysis expressed by the Supreme Court in Matthews v. Eldridge, the court concludes that the private interests at issue, loss of property value and goodwill, are not that strong under the circumstances of this case; that there is little risk of error in EPA's process for assigning HRS scores; and that the burden on the government of providing for additional hearing procedures for NPL listings would be severe.

Moreover, the court holds, plaintiff has sufficient post-deprivation remedies. The court holds that a listing on the NPL is a regulation within the meaning of CERCLA § 113(a), allowing plaintiff to obtain review of the listing in the District of Columbia Circuit. The court rejects plaintiff's argument that EPA's decision to apply the HRS standards to a specific site is an adjudication under the Administrative Procedure Act (APA). Although the process of listing a site on the NPL does not fit well under either the APA's definition of rule or its definition of adjudication, it is closer to the former than the latter since it is not a final determination as required for an adjudication. The listing does not determine liability, does not require a party to take any action, and does not, by itself, give EPA power to act against the site's owner. The court also holds that plaintiff has a second post-deprivation remedy in the form of a § 107 cost recovery action which would be brought by EPA. Plaintiff can challenge the listing as being inconsistent with the national contingency plan at that time.

The court holds that EPA's attempt to have plaintiff sign a § 106 consent order does not constitute a violation of the separation of powers doctrine. Plaintiff has no statutory right to perform the remedial work itself, and the power to set conditions is implicit in § 104(a)(1)'s requirement that EPA determine that any privately conducted response action will be done properly. EPA's condition that plaintiff submit a cleanup plan under which plaintiff's obligations could be changed at any time is also permissible, since the full extent of problems at the site have not yet been determined. Finally, the court holds that EPA's decision to begin the RI/FS even though the site had not yet been listed on the NPL also does not violate the separation of powers doctrine. The RI/FS is a removal, not a remedial, action, and therefore the requirement that remedial actions be limited to NPL sites is irrelevant.

Counsel for Plaintiff
Joseph V. Karaganis
Karaganis, Gail & White, Ltd.
150 N. Wacker Dr., Chicago IL 60606

Counsel for Defendants
Robert Schaefer, Regional Counsel
U.S. Environmental Protection Agency, Region 5
230 S. Dearborn, Chicago IL 60604
(312) 353-2000

Beth S. Ginsberg
Land and Natural Resources Division
Department of Justice, Washington DC 20530
(202) 724-6820