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Montrose Chem. Corp. of Cal. v. EPA

ELR Citation: 28 ELR 20495
Nos. No. 96-1334, 132 F.3d 90/(D.C. Cir., 01/13/1998)

The court holds that two internal memoranda of the U.S. Environmental Protection Agency (EPA) do not constitute a regulation amending the national priorities list (NPL) and, therefore, are not subject to the Comprehensive Environmental Response, Compensation, and Liability Act's (CERCLA's) notice-and-comment requirements. The memoranda announced that EPA would manage response activities at a preexisting NPL site located in Torrence, California, in conjunction with response activities at a separate unlisted offshore area, the Palos Verdes shelf. The court first notes that the record does not provide a definitive answer to the factual question of EPA's intent. Read most favorably to EPA, the memoranda does not seem an act of amendment so much as an act of internal agency management: a proposal for a joint administrative approach in which a single bureaucratic structure would oversee response activities at the shelf and EPA's ongoing activities with regard to the NPL site itself. Even if it is not entirely clear what "joint management" means, it is clear that under CERCLA §104(d)(4) the Agency may treat related noncontiguous sites as one for the purpose of response activities, whether or not one or more of the sites is unlisted. At the same time, EPA's characterizations of the shelf's NPL status have been inconsistent.

The court then holds that even if EPA intended to promulgate a regulation through the memoranda, it could not, as a matter of law, have done so. The internal memoranda do not satisfy the necessary criteria used for determining whether certain regulatory determinations constitute regulations subject to judicial review. EPA insists that the memoranda did not promulgate a valid regulation, the memoranda were never published in the Federal Register or the Code of Federal Regulations, and the memoranda have no legally binding effect on any party. Thus, because the memoranda are not regulations, the court further holds that EPA cannot later rely on the memoranda to assert that the shelf is on the NPL. The court next holds that it will not grant an injunction prohibiting EPA from conducting response activities at the shelf that cost more than $2 million or that last over one year. These limits already apply under CERCLA, absent some new rulemaking by EPA that places the shelf on the NPL. The corporation challenging the memoranda can argue this point when and if EPA attempts to recover costs exceeding those limits. Last, the court holds that as long as EPA does not take any actions with regard to the shelf that would require NPL listing, it may administer response activities at the shelf in conjunction with its ongoing activities at the NPL site. The corporation's claim is therefore dismissed for lack of jurisdiction.

Counsel for Petitioner
Karl S. Lytz
Latham & Watkins
505 Montgomery St., Ste. 1900, San Francisco CA 94111
(415) 391-0600

Counsel for Respondent
H. Michael Semler
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

Before Ginsburg and Sentelle, JJ.