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United States v. Chromalloy Am. Corp.

ELR Citation: 29 ELR 20165
Nos. 97-50818, 158 F.3d 345/(5th Cir., 11/04/1998)

The court affirms a district court order requiring parties responsible for chromium contamination at a manufacturing facility to reimburse the U.S. Environmental Protection Agency (EPA) for costs incurred in overseeing the cleanup of the site. The court first holds that consent decrees are to be construed only by reference to the four corners of the order itself. The court then notes that the parties do not dispute that the express terms of a consent decree between EPA and the responsible parties obligates the parties to fully reimburse EPA for its oversight costs. Review of the consent decree reveals three provisions in which the parties expressly assumed responsibility for oversight costs. And the entry of the consent decree necessarily implies that the litigants have assented to all of its significant provisions.

The court next holds that EPA's failure to follow the Economy Act of 1932 does not preclude imposition of oversight costs to the responsible parties. Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) §107(a)(4) clearly states that "notwithstanding any other provision of law," a private party will reimburse the United States for all costs incurred. On its face, this language indicates that CERCLA operates exclusive of the Economy Act. In addition, the absence of ambiguity with regard to CERCLA §107(a)(4) makes the case against applying the Economy Act more compelling. The court next holds that any defects in an interagency agreement between EPA and the Bureau of Reclamation does not dissolve the parties' obligation to pay the oversight costs because that obligation arises under the express terms of the consent decree and CERCLA. In addition, the court is not satisfied that EPA's apparent failure to comply with its internal procedures or policies regarding interagency agreements creates cognizable rights in the responsible parties. Furthermore, nothing in the national contingency plan (NCP) requires EPA to conform to the Economy Act or to otherwise address interagency agreement certification of indirect costs. The court then rejects the parties' challenge to the payment of indirect costs. The indirect costs were incurred in connection with the site and the parties have failed to show any inconsistency with the NCP. Moreover, they have not asserted any defense cognizable under CERCLA for payment of the costs, but instead rely on the substance of the interagency agreement.

The court next holds that the district court had an adequate basis on which to find the oversight costs reasonable and necessary. EPA submitted detailed cost summaries supporting its oversight expenses. Although the parties' expert supported assertions that less oversight was necessary, his testimony does not overcome the deference accorded to EPA's expertise. Moreover, the parties have not show any inconsistency with the NCP. The court further holds that the district court made the correct decision when viewed under the arbitrary and capricious standard. Neither the consent decree nor the district court's order defines arbitrary and capricious, and, despite their duty to elaborate on the standard, the responsible parties failed to do so. The parties similarly did not show any inconsistency with the NCP. Furthermore, they never argued that the costs were arbitrary and capricious but argued that EPA may only recover those costs that are reasonable and necessary. And the district court implicitly rejected the parties' argument by crediting the detailed documents bearing upon EPA's costs.

Counsel for Plaintiff
Marta Hoilman
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2757/514-2000

Counsel for Defendants
James B. Harris
Thompson & Knight
1700 Pacific Ave., Ste. 3300, Dallas TX 75201
(214) 969-1144