24 ELR 10316 | Environmental Law Reporter | copyright © 1994 | All rights reserved


"Unringing the Bell": Overturning EPA Placement of a Site on the National Priorities List

David L. Abney

Mr. Abney is the Special Assistant to Chief Justice Stanley G. Feldman of the Arizona Supreme Court. He has practiced in complex commercial and tort litigation. This Dialogue expresses only the author's views and opinions.

[24 ELR 10316]

Even if it is wrong, the U.S. Environmental Protection Agency's (EPA's) listing of a site on the national priorities list (NPL) can destroy its value, making it nearly unmarketable, and saddle present, past, and future owners and operators with huge evaluation, cleanup, and legal costs.1 If EPA has acted arbitrarily and capriciously, a prompt legal challenge may succeed in overturning EPA placement of a site on the NPL.2 Moreover, there may be other ways to avoid or remove an NPL listing, and evade the stigma and other costs of a Superfund designation.

Judicial Review of an NPL Listing

About twice a year, through an informal notice and comment rulemaking process, EPA lists additional sites on the NPL, according to a score generated by the Hazard Ranking System (HRS).3 The HRS is a set of complex criteria measuring the risk of harm caused by migration of hazardous substances from a site by way of three routes: groundwater, surface water, and air. A site's HRS score reflects "the potential for releases of uncontrolled hazardous substances to cause human health or environmental damage."4

EPA places sites with an HRS score of 28.5 or more on the NPL.5 Because the NPL represents only a "rough list" of priority sites, and because the NPL listing itself has no "official" consequences,6 the judiciary has tolerated some EPA "imprecision" in HRS calculations.7

The Administrative Procedure Act (APA)8 applies to EPA's listing of new sites on the NPL. The APA gives the public both a right to comment on a proposed site and, in conjunction with the judicial review provision of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA),9 provides the public with a chance to challenge the listing before a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit within 90 days after EPA promulgates the listing.10 The APA requires a reviewing court to ascertain whether an agency's decision was "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law."11 When analyzing the propriety of a listing, the D.C. Circuit determines "whether the decision is consistent with CERCLA and with the policies underlying the [National Oil and Hazardous Substance Contingency Plan], NPL, and HRS."12

EPA's First "Arbitrary and Capricious" NPL Listings

Before 1992, the D.C. Circuit had never vacated any EPA listing on the NPL.13 In a series of recent decisions, however, [24 ELR 10317] the court has recognized that there are definite limits to the deference it can accord EPA in its NPL listing decisions.14 The first case was Tex Tin Corp. v. EPA (Tex Tin I),15 in which EPA had used arsenic at a tin slag site in Texas City, Texas, as the basis for a high HRS air route score. However, according to the uncontradicted evidence, it was a "metallurgical impossibility" for arsenic in the slag to migrate by air. The court did not actually vacate the listing decision, but it did remand the matter to EPA "for a reasoned explanation for its conclusion that the arsenic is reasonably likely to be transported via the air route," because EPA had "failed to exercise its expertise or to explain the path it has taken."16

In May 1992, two decisions decisively marked the end of the court's prior generous deference to EPA's NPL listings. In Kent County v. EPA,17 the court vacated EPA's placement of Delaware's Houston Landfill on the NPL, because EPA's decision to rely on a single unfiltered groundwater sample was arbitrary and capricious. Documents showed that EPA's own experts had advisedusing both filtered and unfiltered groundwater samples, and EPA never asserted that conducting both tests would be too burdensome.18 Likewise, in Anne Arundel County v. EPA,19 the court vacated EPA's order placing Maryland's Glen Burnie Sanitary Landfill on the NPL, because EPA had acted arbitrarily and capriciously by using only unfiltered samples to test the site's groundwater, in contravention of EPA's own internal policies.20

The next opinion overturning an NPL listing came in June 1992. National Gypsum Co. v. EPA,21 concerned Salford Quarry, a Pennsylvania site containing boron oxide waste. EPA tests had revealed the presence of boron in a monitoring well at the site and in a nearby spring. EPA then calculated the site's HRS "waste characteristics score" by using the toxicity and persistence values for elemental boron and assorted highly toxic boron compounds, instead of boron oxide, the only boron compound known to have been deposited at the quarry. Based on these calculations, EPA placed the site on the NPL.

The quarry owners petitioned for review of this decision, arguing that EPA had never attempted to learn whether the boron in the groundwater at and near the quarry was boron oxide, which has a low toxicity value, or some highly toxic boron compound, or even boron in its very toxic elemental state. Moreover, EPA insisted that the boron oxide should have the high persistence score given metals, despite the fact that boron oxide is a metalloid, with markedly different characteristics.22

There were other challenges to this listing, but EPA's arbitrary assessment of the site's toxicity and persistence scores convinced the court that the site's listing should be vacated. The court remanded the matter to EPA. On remand, if EPA continued to refuse to perform further groundwater tests to determine which boron compounds, if any, were present, the court directed EPA to identify which boron compounds it assumed existed at the site, and offer a "reasoned explanation for its assumption."23

The National Gypsum court showed strong dissatisfaction with the way EPA was justifying its NPL listings. As Chief Judge Abner J. Mikva said in the opening sentence: "The EPA seems unwilling to support its decisions with the necessary scientific findings."24 National Gypsum's lead counsel, Stephen N. Shulman, reports that after the judge in National Gypsum's subsequent bankruptcy proceedings assigned a value of zero to EPA's claim,25 EPA apparently dropped attempts to list the site on the NPL.

What Happens If a Listing Is Remanded or Overturned?

If the published cases are a reliable indication, EPA may be inclined simply to drop a site's NPL listing temporarily, or permanently shelve it, if the D.C. Circuit overturns an NPL listing and remands for further Agency action. However, that is not always the case.

For instance, following the 1991 remand in Tex Tin I, EPA drafted two more analyses to justify its initial conclusion that the tin slag was reasonably likely to emit toxic arsenic dust into the air. In Tex Tin Corp. v. EPA (Tex Tin II), the company again challenged, arguing that [24 ELR 10318] EPA had failed to respond adequately to the court's remand order.26

The court agreed that EPA had again only proffered "conclusory statements" to combat Tex Tin's "specific scientific evidence."27 EPA's unsupported assumptions were insufficient justification for the listing decision, and the court ordered the facility "deleted from the NPL."28

Other Avenues to Avoid or Remove an NPL Listing

Negotiation is always a possibility. However, EPA will probably sense no pressure to negotiate unless timely, direct, and persuasive comments are filed objecting to the listing decision. If an error can be properly communicated, EPA does occasionally agree to remove a site from the NPL, even after commencement of a court challenge.29

A partial solution to EPA's listing on the NPL is to seek site management under the Resource Conservation and Recovery Act (RCRA).30 In order to conserve Superfund resources and promote private cleanups, EPA has long followed a policy of managing facilities potentially subject to both CERCLA and RCRA under RCRA, and not listing such sites on the NPL, unless the owner or operator is unable or unwilling to take corrective action.31

However, if it is not clear to EPA that a site's owners or operators can adequately address the site's cleanup under RCRA, EPA may still decide to list the site on the NPL. In Apache Powder Co. v. EPA,32 petitioner argued that EPA had abused its discretion by listing a St. David, Arizona, explosives plant on the NPL, when EPA could have addressed the site under RCRA, thus avoiding the additional cleanup costs to the government associated with a Superfund site. Petitioner also contended that an NPL listing carried a number of disadvantages, including: "the stigma, including harm to business reputation and good will, harm to the owner's credit, and difficulties in selling or mortgaging the site."33

Largely because the owner had refused to make a "binding commitment to clean up its site under RCRA," the court held that EPA had not acted arbitrarily or capriciously in refusing to handle the site's cleanup under RCRA.34 The court implied that EPA's refusal to defer NPL listing in favor of the RCRA corrective action program might be "arbitrary and capricious," if the site's owner or operator had in fact made a binding commitment to clean up the site.35 In any event, since the petitioner was unable to produce "specific reasons to discredit the EPA's factual findings," the court deferred to EPA's listing decision.36

Several weeks later, the D.C. Circuit used Apache Powder as the basis for upholding an NPL listing decision in Allied-Signal, Inc.v. EPA.37 In that case, Allied-Signal opposed EPA's decision to place its Prestolite Battery site on the NPL, instead of deferring the listing in favor of RCRA corrective action. EPA contended that NPL listing was proper because it was unclear whether the atmospheric deposition of lead on the site was subject to RCRA action.

The court held that the uncertainty over RCRA's applicability justified EPA's listing decision. Because this situation was "closely analogous," the court found that Apache Powder controlled the outcome, and denied the petition for review. The court did "express concern, however, as to the EPA's recent tendency in such cases to fail to determine whether matters can be fully resolved under RCRA before invoking the tougher CERCLA statute, in spite of the Agency's claim that it tries to do just that." In a final comment, the court approved the parties' continuing efforts to negotiate a RCRA cleanup.

Evolving Principles in NPL Challenges

Recent cases suggest that the D.C. Circuit has developed some basic principles concerning NPL listings. First, in this area at least, the era of uncritical deference to EPA is over. Second, when making a listing decision, EPA must follow its own policies and procedures, and cannot ignore them when convenient to secure a high HRS score. Third, if challenged, EPA must defend a listing with specific technical and scientific information, and cannot simply rely on unsupported assumptions and conclusory statements.

From a petitioner's point of view, a more critical judicial examination of NPL listings offers hope that a relatively short administrative and judicial review process38 may correct an unjust and improper NPL listing before owners and operators suffer the costs and stigma of Superfund designation. In order to benefit from this development, however, owners and operators must: learn promptly of a new NPL listing; employ knowledgeable attorneys and technical experts to evaluate the site and EPA's HRS score; submit well-supported, specific objections (comments) to EPA within 90 days after promulgation of the new NPL listing; and, if EPA will not compromise or relent, retain experienced appellate counsel able to make a focused, scientific, [24 ELR 10319] and technical attack on EPA's listing decision, challenging both EPA's adherence to its policies, and the scientific and technical basis for the listing itself.

All of this means that an attack on an NPL listing is no longer doomed to fail. Given the unfortunate ramifications of an NPL listing, the possibilities of negotiation, and the relatively inexpensive costs of a legal challenge to EPA's listing, site owners and operators should carefully weigh the situation before resigning themselves to an NPL listing. Financing a listing challenge may, in the final analysis, be a very cost-effective and rational investment.

Looking Ahead

On February 7, 1994, the Administration-sponsored "Superfund Reform Act of 1994" (SRA) was introduced in Congress.39 Several SRA provisions could limit or end the D.C. Circuit's review of EPA's NPL listing decisions. For instance, SRA § 206(a) would amend CERCLA to provide that the NPL, and any modifications to it, "may be adopted administratively, and without rulemaking."40

However, it is unclear what this language means. For many years, EPA used an informal rulemaking process to make and promulgate NPL listing decisions.41 An EPA rule or regulation adopted without "rulemaking" would have the same negative impact on site owners and operators as one made by the earlier informal, nonstatutory process. Even under the SRA, EPA would presumably still issue NPL-related notices in the Federal Register,42 and periodically publish the cumulative NPL list in the Code of Federal Regulations.43 In the future, EPA might use a title for its NPL listing decisions that avoids the words "rule" or "regulation," but a mere change in descriptive title should not end the right of judicial review.44

SRA's § 206(b) would change CERCLA to: require EPA to publish a notice proposing a facility for NPL listing and give the public an opportunity to comment before a final determination is made on the listing; afford the same opportunity for public notice and comment before EPA could remove a facility from the NPL; and require EPA to establish a procedure allowing anyone to request that a facility be considered for listing on or removal from the NPL.45 The last sentence of SRA § 206(b) provides that: "The Administrator has the sole discretion to list or remove a facility on the National Priorities List."

This sentence is intriguing. In its present version, CERCLA technically confers only on the "President" the power and discretion to make NPL listing decisions.46 In fact, the EPA Administrator (or designee) has long exercised "sole discretion" over these matters. Thus, the last sentence of SRA § 206(b) may merely codify this practice. On the other hand, the "sole discretion" sentence may seek to end judicial review of EPA's listing decisions by giving "sole" power over the decision to the EPA Administrator. However, since the intent is unclear, courts would probably choose to preserve the existing right of judicial review.47

The SRA would make no relevant changes to 42 U.S.C. § 9613(a), the clause now allowing the D.C. Circuit to conduct judicial review "of any regulation promulgated" under CERCLA.48 If NPL listing decisions are still regulations, even if called something else under the SRA, this section should continue to allow judicial review of such determinations.49

What actually happens to the right to judicial review of EPA's NPL listing decisions depends on the scope and cogency of the legislative history that lawmakers provide for the SRA, and on the nature of amendments that may clarify the judicial role, if any, in reviewing EPA's Superfund site designations.

Conclusion

Given the terrible adverse effect of an NPL listing, and the recent cases indicating a judicial willingness to address EPA's major lapses in this area, potential litigants would be well-advised to note, Congress would be sensible to retain, and the courts would be wise to preserve, the right to judicial review of NPL listing decisions.50

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1. Some argue that listing a site on the NPL can constitute a taking of property and require compensation under the federal Constitution. But see Daniel R. Hansen, Environmental Regulation and Just Compensation: The National Priorities List as a Taking, 2 N.Y.U. ENVTL. L.J. 1 (1993) (arguing that NPL listing is merely identification of a nuisance, an act never compensable, even under the common law).

2. The final section of this Dialogue discusses the possible impact on judicial review of the Superfund Reform Act of 1994, S. 1834, 103d Cong., 2d Sess. (1994), sponsored by the Clinton Administration and introduced in Congress on February 7, 1994. The Act's effect on judicial review is still unclear.

3. 42 U.S.C. § 9605(a)(8)(B), ELR STAT. CERCLA § 105(a)(8)(B); Velsicol Chemical Corp. v. Enenco, Inc., 9 F.3d 524, 526 n.1, 24 ELR 20107, 20108 n.1 (6th Cir. 1993).

4. 40 C.F.R. pt. 300, app. A, § 1.0 (1993).

5. Tex Tin Corp. v. EPA (Tex Tin I), 935 F.2d 1321, 1322, 21 ELR 21112 (D.C. Cir. 1991).

6. However, "placement on the NPL has serious consequences for a site's owner," including damage to business reputation and loss of property value. Kent County v. EPA, 963 F.2d 391, 394, 22 ELR 21175, 21176 (D.C. Cir. 1992).

7. Tex Tin Corp. v. EPA (Tex Tin II), 992 F.2d 353, 354, 23 ELR 20823 (D.C. Cir. 1993).

8. 5 U.S.C. §§ 500-596, 701-706 ELR STAT. ADMIN. PROC. §§ 500-596, 701-706.

9. 42 U.S.C. §§ 9601-9675, ELR STAT. CERCLA §§ 101-405.

10. 42 U.S.C. § 9613(a), ELR STAT. CERCLA § 113(a).

11. 5 U.S.C. § 706(2)(A), ELR STAT. ADMIN. PROC. § 706(2)(A).

12. Anne Arundel County v. EPA, 963 F.2d 412, 415, 22 ELR 21171, 21172-73 (D.C. Cir. 1992).

13. Since 1991, the D.C. Circuit Court has apparently upheld EPA's listings on the NPL in only four opinions, three published and one not. However, the court has still occasionally expressed concern over EPA's listing decisions and/or methods. See Bradley Mining Co. v. EPA, 972 F.2d 1356, 1359, 22 ELR 21493, 21494 (D.C. Cir. 1992) (noting that deference to EPA "is not limitless," and upholding EPA's listing of the Sulphur Bank Mine, an inactive mercury mine, on the NPL based on observed release of mercury into surface water); B&B Tritech, Inc. v. EPA, 957 F.2d 882, 22 ELR 20681 (D.C. Cir. 1992) (upholding EPA's listing decision despite seemingly unfair effects of overly formalistic approach EPA followed in making listing decision); Apache Powder Co. v. EPA, 968 F.2d 66, 70-71, 22 ELR 21301, 21303 (D.C. Cir. 1992) (EPA decision to list site on the NPL, instead of seeking corrective action under the Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901-6992k, ELR STAT. RCRA §§ 1001-11012, was not arbitrary and capricious, given owner's refusal to make a binding commitment to clean up the site under RCRA, and the petitioner's failure to produce "specific reasons to discredit the EPA's factual findings"); Allied-Signal, Inc. v. EPA, No. 90-1003 (D.C. Cir. Oct. 1, 1992).

14. At least one state court has relied on cases from the D.C. Circuit in resolving the propriety of a site listing by a state environmental agency on the state equivalent of the NPL. Gurley v. Mathis, 856 S.W.2d 616, 620-21 (Ark. 1993) (upholding action of state Pollution Control and Ecology Commission in placing site on state Remedial Action Trust Fund Act priority list).

15. 935 F.2d 1321, 21 ELR 21112 (D.C. Cir. 1991).

16. Id. at 1324, 21 ELR at 21113.

17. 963 F.2d 391, 22 ELR 21175 (D.C. Cir. 1992).

18. Id. at 397, 22 ELR at 21178.

19. 963 F.2d 412, 22 ELR 21171 (D.C. Cir. 1992).

20. According to the lead attorney for petitioners in both cases, William R. Truitt, EPA dropped further efforts to relist these sites, because of a consent decree in Anne Arundel, and due to an apparent inability to find a high enough HRS score in Kent County. Telephone Interview with William R. Truitt, Piper & Marbury (Feb. 14, 1994).

21. 968 F.2d 40, 22 ELR 21270 (D.C. Cir. 1992).

22. Id. at 42-45, 22 ELR at 21271-73.

23. Id. at 47, 22 ELR at 21274.

24. Id. at 41, 22 ELR at 21170. The author ofa lengthy analysis of National Gypsum concluded that the D.C. Circuit had "incorrectly required the EPA to provide additional scientific explanations that ultimately will delay results," frustrated NPL's "quick and inexpensive" process, and "effectively undercut" CERCLA's protective goals. Gayle A. Baumgarten, Note, Environmental Law: Determining What Degree of Deference Is Afforded EPA Decisions to Place Hazardous Waste Sites on the National Priorities List: National Gypsum Co. v. EPA, 968 F.2d 40 (D.C. Cir. 1992), 66 TEMP. L. REV. 1123, 1144 (1993).

Viewed another way, the court simply required EPA to supply specific technical and scientific justification, in the course of a prompt judicial review action, for its momentous decision to list the site on the NPL. When EPA failed this simple task, delisting followed. It is unclear how requiring EPA to follow its own policies and give concrete support for its actions frustrates or undercuts any legitimate government goals.

25. In re National Gypsum Co., No. 390-37213-SAF-11 (Bankr. N.D. Tex. June 24, 1992). National Gypsum's bankruptcy resulted from asbestos-related liability, not from EPA's listing of the Salford Quarry on the NPL. See In re National Gypsum Co., 139 B.R. 397, 22 ELR 20783 (N.D. Tex. 1992).

26. Tex Tin II, 992 F.2d 353, 23 ELR 20823 (D.C. Cir. 1993).

27. Id. at 354, 23 ELR at 20823.

28. Id. at 356, 23 ELR at 20824.

29. See, e.g., Hexcel Corp. v. EPA, No. 90-1568 (D.C. Cir. Nov. 1, 1993) (directing EPA to vacate its action placing Hexcel Corporation's Livermore, California, facility on the NPL); General Signal Corp. v. EPA, No. 90-1560 (D.C. Cir. Apr. 16, 1993) (granting EPA's motion to vacate listing of the Hevi-Duty Electric Co. on the NPL); LeHigh Portland Cement Co. v. EPA, No. 90-1549 (D.C. Cir. Oct. 26, 1992) (vacating EPA rule adding LeHigh Portland Cement Company's Mason City, Iowa, facility to the NPL). See also Murray Ohio Mfg. Co. v. EPA, No. 90-1542 (D.C. Cir. June 4, 1992) (directing EPA to vacate its NPL listing of petitioner's Horseshoe Bend Dump).

30. 42 U.S.C. §§ 6901-6992k, ELR STAT. RCRA §§ 1001-11012.

31. See, e.g., RCRA/NPL Listing Policy, 51 Fed. Reg. 21054, 21057-59 (June 11, 1986). See also United States v. Rohm and Haas Co., 2 F.3d 1265, 1268 n.1, 23 ELR 21345, 21346 n.1 (3d Cir. 1993) (explaining this policy); United States v. Colorado, 990 F.2d 1565, 1573 n.14, 23 ELR 20800, 20802 n.14 (10th Cir. 1993) (explaining this policy), cert. denied, 127 L. Ed. 2d 216 (Jan. 24, 1994).

32. 968 F.2d 66, 22 ELR 21301 (D.C. Cir. 1992).

33. Id. at 69, 22 ELR at 21302.

34. Id. at 70, 22 ELR at 21303.

35. Id.

36. Id. at 71, 22 ELR at 21303. Long before the opinion against Apache Powder appeared, some of the company's attorneys had written a long law review article about the case, recommending that Congress act to end the "overlap of RCRA and CERCLA authorities at contaminated hazardous waste facilities." J. Stanton Curry et al., The Tug-of-War Between RCRA and CERCLA at Contaminated Hazardous Waste Facilities, 23 ARIZ. ST. L.J. 359, 408 (1991).

37. No. 90-1003 (D.C. Cir. Oct. 1, 1992).

38. The time from NPL listing until final appellate court decision has generally been less than two years, reasonably fast by judicial standards.

39. S. 1834, 103d Cong., 2d Sess., 140 CONG. REC. S1058-1077 (daily ed. Feb. 7, 1994).

40. The amendment would be to 42 U.S.C. § 9605(a)(8)(B), ELR STAT. CERCLA § 105(a)(8)(B). See 140 CONG. REC. at S1064.

41. See ALFRED R. LIGHT, CERCLA LAW AND PROCEDURE § 3.2.3 (1991) (describing EPA's informal NPL listing process).

42. For example, on Jan. 18, 1994, EPA published the NPL's 16th revision in the Federal Register, adding 26 new sites to the 1,192 already there. 59 Fed. Reg. 2568-601 (Jan. 18, 1994).

43. For the latest cumulative version of the NPL in the Code of Federal Regulations, see 40 C.F.R. pt. 300, app. B (1993).

44. See, e.g., Ligon Specialized Hauler, Inc. v. ICC, 587 F.2d 304, 314 (6th Cir. 1978) (court had jurisdiction to review ICC "flagging orders" under the APA, despite title indicating such orders were procedural and interlocutory, since "courts are not bound by descriptive titles placed upon orders of an administrative agency").

45. SRA § 206 would add a new subparagraph "C" to 42 U.S.C. § 9606(a)(8), ELR STAT. CERCLA § 106(a)(8). All but the last sentence of SRA § 206 would seem simply to codify EPA's existing NPL listing practices.

46. See 42 U.S.C. § 9606(a)(8)(A) & (B), ELR STAT. CERCLA § 106(a)(8)(A) & (B).

47. The strong presumption that Congress intends to allow judicial review of administrative actions can only be overcome by clear and convincing evidence of a contrary legislative intent. See, e.g., Bowen v. Michigan Academy of Family Physicians, 476 U.S. 667, 670-73 (1986).

48. SRA § 405 would make only minor changes to 42 U.S.C. § 9613(a), ELR STAT. CERCLA § 113(a). See 140 CONG. REC. at S1066.

49. 42 U.S.C. § 9613(a), ELR STAT. CERCLA § 113(a) does not define "regulation." In this context, it may have the ordinary meaning of "a rule or order issued by an executive authority or regulatory agency of a government and having the force of law." MERRIAM-WEBSTER'S COLLEGIATE DICTIONARY 985 (10th ed. 1993). See also WEBSTER'S THIRD NEW INTERNATIONAL DICTIONARY OF THE ENGLISH LANGUAGE UNABRIDGED 1913 (1965) ("regulation" includes "an administrative order issued by an executive department or a regulatory commission of the U.S. government to apply and supplement broad congressional legislative enactments"). If this is what is meant, then an NPL listing decision would seem to be a "regulation" subject to judicial review under 42 U.S.C. § 9613(a), ELR STAT. CERCLA § 113(a), despite SRA's hints to the contrary.

50. A recent state court decision recognized a common-law right of judicial review over an environmental agency's decision to place a landfill site on the state's equivalent of the NPL, despite the fact that there was no statute authorizing such judicial review. States Land Improvement Corp. v. Illinois Environmental Protection Agency, 596 N.E.2d 1164 (Ill. 1992).


24 ELR 10316 | Environmental Law Reporter | copyright © 1994 | All rights reserved