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United States v. Burlington N. R.R.

Citation: 30 ELR 20281
No. Nos. 97-1328 et al., 200 F.3d 679/49 ERC 1897/(10th Cir., 12/29/1999) Aff'd in part, rev'd in part & remanded sub nom.

The court affirms in part and reverses in part a district court's decision to reduce the amount a potentially responsible party (PRP) must pay to the U.S. Environmental Protection Agency (EPA) for remediation costs incurred under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) at the Broderick Woods Products site in Adams County, Colorado. The court first reverses the district court and holds that EPA's decision to remediate the site to a 1 in 100,000 cancer risk level was not arbitrary and capricious. EPA's consideration of impoundment sludge in the baseline risk assessment did not cause an overestimation of risk presented by the site. The purpose of the risk assessment is to evaluate the site as if no remedial action had been taken, which would include considering the presence of the impoundment sludge. In addition, the risk assessment's consideration of a potential future use of the site as a day care center or residential community did not render the cancer risk level arbitrary and capricious. The ultimate cancer risk level and remediation plan adopted for the site was based on an industrial use scenario, and EPA's consideration of unlikely possibilities is not incompatible with the requirement that the risk assessment consider future uses of the site. Further, EPA's decision to remediate to a 1 in 100,000 cancer risk level is not arbitrary and capricious per se simply because there are not 100,000 people living or working at the site.

The court next reverses the district court's holding that EPA was arbitrary and capricious in failing to amend the record of decision (ROD) for operable unit one when it encountered unexpected rock content in the impoundment sludge. While the use of a gravity settling tank was not specifically part of the ROD, its use did not fundamentally alter the remedial plan with respect to scope, performance, or cost. The costs associated with the gravity settling tank are therefore recoverable. The court, however, then holds that the need for additional liners and the need for the removal of tar heels altered the remedy fundamentally with respect to scope and cost. EPA, therefore, acted arbitrarily and capriciously in failing to propose an amendment to the ROD. Nevertheless, the court further holds that proof that EPA's remedial actions were inconsistent with the hazardous substance contingency plan is not a complete defense to liability for the cost of remediating the site. On remand, therefore, the district court must consider whether EPA's remedial actions resulted in demonstrable excess costs that would not have otherwise been incurred.

With respect to a previous settlement entered into by EPA and other defendants in connection with the site, the court holds that the district court correctly determined that the PRP should receive credit only for the part of the settlement attributable to the property for which both the other defendants and the PRP were jointly and severally liable. It is undisputed that the other defendants' settlement resolved liability for both the eastern and western portion of the site, but the PRP is only liable for the western portion of the site. Accordingly, the PRP cannot receive credit for the portion of the defendants' settlement attributable to the eastern portion. Last, the court declines to reach the issue of whether EPA's failure to timely notify a PRP could be a defense to the recovery of costs because the PRP's request for guidance in future cases is tantamount to a request for an advisory opinion.

[Prior decisions in this litigation are published at 25 ELR 20462 and 27 ELR 20874 and 21267.]

Counsel for Plaintiff
John T. Stahr
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

Counsel for Defendant
Gary E. Parish
LeBoeuf, Lamb, Greene & MacRae
633 17th St., Ste. 2800, Denver CO 80202
(303) 291-2600

Before Tacha and Murphy, JJ.