EPA Superfund Enforcement: The Question Isn't When to Negotiate and When to Litigate, But How to Do Either and How Often

Jeffrey G. Miller

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Mr. Miller is a partner in the Washington, D.C. law firm of Bergson, Borkland, Margolis & Adler and was an enforcement official in EPA for ten years.

[13 ELR 10062]

Congressional committees, the media, environmental groups and state officials are investigating and criticizing virtually all aspects of the Environmental Protection Agency's (EPA's) hazardous waste cleanup program under the Comprehensive Environmental Response, Compensation and Liability Act (Superfund). Citations for contempt of Congress, constitutional confrontations between the executive and legislative branches, and firing of the top EPA hazardous waste regulator add an element of high drama. Many of the charges in this controversy are leveled at EPA's efforts to detoxify hazardous waste sites. One repeated accusation is that EPA's propensity to negotiate settlements with the generators of the hazardous wastes found at the sites, rather than first filing suit, establishes that EPA is reluctant to enforce against the generators, who often are bastions of corporate America.

This charge evinces a basic misunderstanding of the litigation process generally and of large, multi-party hazardous waste cases in particular. EPA's true posture toward hazardous waste enforcement cannot be gauged by such a simple and misdirected inquiry. Concern over the "negotiate first" approach obscures questions more pertinent to the health of EPA's enforcement program and the viability of its multi-party hazardous waste case strategy.

The general outline of the criticized negotiation process is well established, although the process may vary considerably in individual cases. The process grows from EPA's conclusion that the liability of hazardous waste generators is joint and several. Once EPA identifies generators of hazardous wastes at a seriously leaking site, it invites them to negotiate a settlement, either by agreeing to clean the site themselves or to fund EPA's remedial action. EPA sets a short time limit on negotiating, enforced by the threat of filing suit to force the generators to take remedial action under Superfund § 106 or a later suit for reimbursement for government cleanup expenses under § 107. Often a large number of generators in involved and EPA may negotiate only with those with the greatest apparent potential liability or with a representative negotiating committee. Settlements may be for the entire remedial operation or only for a portion of it. If EPA does not settle with all of the generators, it generally sues some of the remaining generators. EPA attempts to shelter the settling generators from claims for contribution by the non-settling generators it ultimately sues.

This complex and shifting process recognizes the complications of the underlying cases, many of which involve hundreds of generators who may have individual defenses and cross claims for contribution, for which there is no entirely satisfactory method of apportioning liability. The situations often are further complicated by scientific [13 ELR 10063] dispute about the degree of hazard posed by the site and the corresponding level of remedial action justified.

In the abstract the EPA Superfund negotiation approach is a sensible way to proceed if the objective of the program is to obtain rapid remedial action at a large number of sites. Whether lawsuits are filed before the process is initiated is less significant than how often it is invoked, how it is handled, and whether the process is inherently viable. Indeed, there is nothing pernicious about negotiating to settle cases. Almost all civil cases are settled prior to trial. Commencing negotiations before filing lawsuits does not in itself indicate connivance with regulated industry.

When enforcing against protracted violations of other environmental statutes, it is often prudent to file a judicial action against the violator before trying to resolve the dispute through further negotiations. Starting with a lawsuit makes sense because violations usually are clear-cut and easy to prove, protracted violations have usually been subject to administrative efforts to achieve compliance, negotiations are often more fruitful inthe discipline of ongoing litigation, and some companies do not take enforcement seriously until taken to court. Indeed, as all litigators know, some companies will not settle until the eve of trial.

Quite the opposite situation exists in many multi-party hazardous waste cases. Easily proven violations of clear, established standards are replaced by novel questions of whether and how much remediation is warranted and who is liable. Single defendants are replaced by numerous contending parties, with no clearly established or entirely satisfactory method of apportionment of liability. Situations in which defendants have little incentive to negotiate seriously until they are sued are replaced by situations with incentives which make some generators eager to settle quickly and others unwilling to negotiate even after suit is filed. In such cases even the most aggressive enforcer may not always wish to sue before negotiating.

Obscured by this debate are the more important issues of whether EPA is maintaining a credible enforcement presence, whether it is handling its negotiations skillfully and with integrity, and whether the current negotiation process is too cumbersome to be fruitful.

Critics of EPA's Superfund enforcement would do better to look at the number of enforcement cases EPA is handling, regardless of whether it sues or negotiates first. Across all its programs, EPA case filings, administrative enforcement actions, and inspections have declined seriously in number. EPA's assurances that the states are taking up the slack are rebutted by EPA's own statistics and by published reports of state enforcement officials that they cannot take up the slack because of declining EPA financial support. On this measure, EPA enforcement appears dangerously close to becoming a paper tiger.

While negotiating first is not itself a detriment to effective enforcement in multi-party hazardous waste cases, there appear to be other reasons to question the way EPA is negotiating in some Superfund cases. Congressional investigations have revealed evidence of (1) improper disclosure of an EPA bottom line settlement position to a defendant before negotiations, (2) the timing of another settlement with elections in mind, and (3) relaxation of the degree of protection against additional cancer deaths sought by remedial action. These fragments of evidence from incomplete congressional review of EPA's Superfund enforcement program do not demonstrate that the overall program is flawed, but they do demonstrate that the manner in which negotiations are handled may be far more important than whether negotiations are preceded by the filing of a complaint.

Quite apart from the seriousness with which EPA enforces Superfund is the question of whether the large scale, multi-party cases are viable means of remedying hazardous waste site hazards. The multiplicity of the defendants and their defenses and the lack of an established or clearly appropriate principle of apportionment make these cases very difficult to administer. Potential joint and several liability should encourage settlement to avoid large liabilities in return for relatively modest prorated payments. But by their very nature such payments must be arbitrarily apportioned. Tailoring several hundred individual payments in a case to what each defendant perceives as fair would exhaust EPA's resources and delay cleanup. At the same time, any arbitrary apportionment will alienate some who believe the payment sought is out of all proportion to their contribution to the problem and will create scofflaws of others who cannot believe the government would actually sue them for the relatively small individual payments demanded. In either case generator refusals to participate in Superfund settlements erode their viability. If EPA does not sue all non-settlers, it encourages refusals to participate in later settlements. If it does sue non-settlers, they can file as third-party plaintiffs against all other generators for contribution, thus robbing the settling generators of the fruits of their negotiations.

This potential for turmoil has been fully realized. At Seymour, Indiana where EPA settled with 24 large generators for cleanup of surface contamination it estimated would cost $7.7 million, the remaining smaller generators cried foul when EPA offered to settle with them for cleanup of groundwater contamination, which it estimated would cost over $15 million. The battle between large and small generators at that site has continued on other issues. But at least cleanup is proceeding at Seymour. At the Chem-Dyne site in Hamilton, Ohio where EPA settled with many of the generators for their proportion of liability for surface cleanup and groundwater study (leaving for another day liability for groundwater cleanup), nine months have passed with no remedial work being accomplished, apparently because of red tape within the Corps of Engineers, the site cleanup manager. In the meantime EPA sued some but not all of the nonsettlers, who promptly proceeded against the settlers for contribution and asked the court to consider all liabilities, including groundwater cleanup, at the same time. While some may believe these applications of Murphy's law denote ineptness on the part of the government's enforcers, they more fairly reflect the endless complexities of the task at hand.

Focusing attention on whether EPA negotiates with hazardous waste generators for site cleanup before or after filing a lawsuit is largely irrelevant in this context. EPA's critics might better ask why EPA hasn't seriously engaged in negotiation and litigation to clean up more sites. All might better ask how the settlement and litigation processes could be better used to get on with the task of remedying the dangers of our past carelessness with hazardous wastes.