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United States v. Power Eng'g Co.

ELR Citation: 31 ELR 20335
Nos. No. 97-B-1654, 125 F. Supp. 2d 1050/51 ERC 1756/(D. Colo., 11/24/2000) Summary judgment for gov't on financial assurances granted

The court rejects the Eighth Circuit's holding in Harmon Industries, Inc. v. Browner, 191 F.3d 894, 29 ELR 21412 (8th Cir. 1999), and holds that the Resource Conservation and Recovery Act (RCRA) does not prohibit the federal government from bringing an enforcement action against a metal refinisher for failing to obtain financial assurances even though Colorado, an authorized state under RCRA, filed a state enforcement action against the refinisher. Colorado brought suit against the refinisher for various RCRA and state-law violations. The federal government asked the state to enforce RCRA's financial assurance requirements in its suit against the refinisher, and when the state declined, the federal government brought its own enforcement action. The refinisher argued that in light of Harmon, the federal government did not have the authority to "overfile" the state's enforcement action. According to the Eighth Circuit, the federal government can initiate an enforcement action, after providing notice to the state, only if the authorized state fails to initiate an enforcement action or if the federal government withdraws the state's authorization.

The court first holds that it has subject matter jurisdiction under 28 U.S.C. §§1331 and 1345. The court then holds that the federal government's action in this case does not constitute an "overfiling." The federal government's action does not duplicate the action undertaken by the state of Colorado. Thus, Harmon's factual distinctions arguably have no bearing on the applicability of the Eighth Circuit's legal interpretation of RCRA to this case. The court, therefore, turns to the Harmon court's interpretation of RCRA and holds that the Eighth Circuit's interpretation of RCRA is incorrect. The plain language of RCRA §3006's "in lieu of" language does not support the Eighth Circuit's conclusion that an authorized state program supplants the federal hazardous waste program in all respects—including enforcement. It is true that RCRA allows for the state administration of RCRA to replace federal administration, but the administration and enforcement of RCRA are not "inexorably intertwined." The court then holds that the scope of RCRA §3006(d) is limited to the permitting process. Such an interpretation gives effect to every word of the statute and does not necessitate "harmonizing" §3008 by adding restrictions on the U.S. Environmental Protection Agency's (EPA's) enforcement powers not found in the plain language of that section. The court next holds that the statutory language, EPA's interpretation of RCRA, and the Act's legislative history support the view that the federal government has the power to overfile. Thus, because the federal government notified the state prior to commencing its enforcement action, RCRA does not prohibit the action.

In addition, the court holds that the federal government's case is not barred by res judicata because the financial assurances issue was never before the court in the state action. Finally, even though the metal refinisher claims to no longer be in violation of RCRA and asserts that tremendous progress has been made in remediating contamination at and around the property, the court holds that financial assurances are required. Nothing in RCRA indicates that the owners and operators of hazardous waste facilities are exempt from providing financial assurance requirements before remediation and closure is accomplished.

[Prior decisions in this litigation are published at 28 ELR 21325, 29 ELR 20058, and 30 ELR 20067.]

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

Counsel for Defendants
John F. McBride
Zodrow et al.
Independence Plaza
1050 17th St., Ste. 1700, Denver CO 80265
(303) 572-0243