Reforming CERCLA's Natural Resource Damage Provisions: A Challenge to the 105th Congress From the Clinton Administration

Leslie M. Turner

Leslie M. Turner is Of Counsel at Washington, D.C.'s Akin, Gump, Strauss, Hauer & Feld, L.L.P., specializing in international trade/business development in Pacific Rim nations and international environmental law and policy. In January 1993, President Clinton appointed Ms. Turner Assistant Secretary for Territorial and International Affairs, U.S. Department of the Interior. From October 1995 until January 1997, Ms. Turner served as Counselor to the Secretary of the Interior and Director, Office of Intergovernmental Affairs.

[27 ELR 10121]

The Comprehensive Emergency Response, Compensation, and Liability Act (CERCLA) authorizes designated trustees¹ to recover damages² for injury to natural resources³ caused by a hazardous substance release.⁴ Under its delegated authority, the U.S. Department of the Interior (DOI) has promulgated regulations governing the assessment of natural resource damages (NRDs).⁵ The regulatory scheme, however, has posed tremendous difficulties for all interested parties. Litigators from both the government and the private sector, members of the regulated community, environmental organizations, and the designated trustees have wrestled with the interpretation and implementation of the NRD assessment regulations.

Long delays, false starts, and internal inconsistencies regarding appropriate regulatory procedures have plagued the DOI's rulemaking activities.⁶ Potentially responsible parties (PRPs) question the fairness of the administrative process, because the existing regulations give the trustees absolute discretion to use all, some, or none of the published NRD regulatory procedures.⁷ Criticism has also been leveled at the trustees for failing to use the most cost-effective restoration methods.⁸ Finally, there is widespread perception within industry, the environmental community, and among some lawmakers that the NRD program is a disincentive to the cleanup and the reuse of hazardous sites.⁹ This perception is based on the continued liability of a PRP for NRD claims after funds already have been expended to address the cleanup of the same site.¹⁰

Overall, the NRD assessment regulations have been entangled by evolving economic theories, litigation-driven science, and court challenges concerning the valuation of environmental resources.¹¹ Some commentators assert that [27 ELR 10122] these difficulties result from using a market-based compensation scheme for a nonmarket commodity—natural resources.¹²

Given this backdrop, reform of the NRD provisions of CERCLA appears to be long overdue and inevitable. Reform, however, that embraces cost-containment, programmatic efficiency, and realistic restoration planning has the best chance of addressing the concerns of environmental organizations, affected communities, private industry, and impacted PRPs. The 104th Congress failed in its attempts to overhaul the Superfund program. The majority Republican Congress—committed to reform of retroactive liability under CERCLA—appears to have misinterpreted the widespread dissatisfaction over certain problems in the Superfund program as a call for a drastic rollback of the protections provided under CERCLA as a whole, and the NRD provisions in particular.

On October 7, 1996, in a bold effort at reform, the DOI and the National Oceanic and Atmospheric Administration (NOAA) transmitted to Congress a proposal for amending CERCLA's NRD provisions.¹³ With these proposed amendments, the Clinton Administration has seized the opportunity to shape the framework for NRD reform and promote the continued growth of industry and commerce in a responsible and resource conscious manner. As the reform debate unfolds, time will tell whether the Administration's proposed amendments will lead to bipartisan supported reform measures or to continued stalemate. This Dialogue analyzes the proposal and considers how effectively the amendments would address long-standing concerns regarding liability exposure, cost-containment, a science-based approach to restoration planning, and procedural fairness in the administrative and judicial review processes.

The Administration's Starting Point for NRD Reform

The Clinton Administration placed a marker for the parameters of NRD reform when the DOI and NOAA transmitted their proposed amendments to Congress.¹⁴ These amendments identify the Administration's issues of primary concern or, at least, the issues for which the Administration believes that bipartisan legislative support can be cultivated.

This section will analyze six aspects of the proposed amendments: (1) an extended statute of limitations period for NRD claims; (2) mandatory requirements for the trustee to select "a cost-effective" restoration method and to base liability on "facility-specific" conditions; (3) liability for the costs incurred by the trustees in recovering NRDs; (4) relinquishment of the rebuttable presumption evidentiary standard in favor of record review in NRD cases; (5) provision for increased use of the regulatory assessment procedures; and (6) a requirement for revised assessment regulations.¹⁵

Proposed Extension of the Limitations Period for NRD Claims

CERCLA imposes a general limitations period for NRD claims.¹⁶ Such a claim must be filed within three years after the latter of the following: "(A) the date of the discovery of the loss and its connection with the release in question" or "(B) the date on which [the NRD assessment] regulations are promulgated."¹⁷ Congress assumed, mistakenly, that it had clearly legislated the limitations period for NRD claims. One court, however, when faced with the task of determining when the limitations period was triggered, called the language of CERCLA "anything but a model of lucid legislation."¹⁸

Significant confusion exists as to when the regulations were "promulgated" for purposes of triggering the limitations period under CERCLA § 113(g)(1). Noting this confusion, the DOI included a "clarification" in the 1994 amendments to the NRD regulations.¹⁹ The DOI identified the date of promulgation as the date on which final rules revising both the type A and type B rules were published [27 ELR 10123] in the Federal Register.²⁰ At present, however, the United States Courts of Appeals for the D.C. and Ninth Circuits are split over the issue. The D.C. Circuit rejected the reasoning behind the DOI's 1994 "clarification" and ruled that the date of promulgation was "at the latest the date on which the Type A regulations were published in the Federal Register in 1987."²¹ In contrast, the Ninth Circuit held that the statute of limitations does not begin to run until the DOI promulgates both type A and type B regulations.²²

The need for reform of the limitations provisions of CERCLA is beyond dispute—particularly since the DOI, the federal NRD trustee given responsibility for promulgating the NRD regulations, has acknowledged the existing confusion.²³ Clarification of the limitations period would eliminate the need for the courts to "construct and extract meaning from the cryptic statute."²⁴

The Administration proposes changing the limitations provisions of CERCLA, stating that "uncertainty concerning the current statute of limitations period has often compelled trustees to file litigation prematurely, before restoration planning has been completed and restoration costs are more certain."²⁵ Unfortunately, the Administration's proposed limitation's period is not workable. Under the Administration's proposed amendments, the limitations period would be extended for a significant period of time. The period would begin to run after the completion of a damage assessment conducted according to the regulations, or, if the trustee chose not to use the assessment regulations, after the adoption of a restoration plan.²⁶ The first sentence of CERCLA § 107(g)(1) would be stricken and the following language added before the remaining paragraph:

(A) Except as provided in Subparagraph (B) and paragraphs (3) and (4), no action may be commenced for damages (as defined in section 9601(6) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended) under this Act, unless that action is commenced within 3 years after the date of completion by an authorized trustee of a damage assessment in accordance with the regulations promulgated under section 9651 of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, or, if the trustee elects not to use the regulations, of a plan for restoration of natural resources adopted after adequate public notice, opportunity for comment, and consideration of all public comments.²⁷

While these proposed changes address the trustees' need for sufficient time to make an adequate assessment of NRDs and, if necessary, initiate a claim for damages consistent with the actual harm, the proposal raises serious concerns for both proponents and opponents of the NRD process. It proposes no time limits within which trustees who followed the assessment regulations would be required to complete their assessment. Moreover, if the trustees chose not to use the assessment regulations, the limitations period would be tolled until a restoration plan was adopted.²⁸ But there would be no limitation on the amount of time within which the restoration plan had to be adopted.

Under the proposed changes, a PRP's liability exposure could remain open for an undetermined length of time. The trustee would have absolute control over when to pursue an NRD claim and face no repercussions for dilatory behavior. From the perspective of legal counsel for industry, this approach would heighten the concerns regarding finality in NRD liability.²⁹ When would a company close the book on possible expenditures for NRDs, insurance coverage, and litigation fees? For the environmental community and those actually affected by the damage to natural resources, questions would arise as to when the trustee must initiate and complete assessment activities or adopt a restoration plan and, from that point, proceed to an NRD claim against a responsible party. Without greater certainty regarding when the three-year limitations period begins to run, the proposed amendment is unlikely to satisfy anyone other than the trustees.

Mandatory Requirement for the Selection of a Cost-Effective Method of Restoration

In 1994, the DOI eliminated the 1986 NRD assessment rule that required trustees to choose the most cost-effective method of restoring injured resources.³⁰ The 1994 replacement rule establishes cost-effectiveness as a consideration rather than a determinative factor in selecting a restoration [27 ELR 10124] method.³¹ Now, the Administration is proposing to merge the benefits of the 1986 rule and the 1994 rule by including cost-effectiveness as a mandatory component of any restoration plan that the trustee selects. The proposed revision to CERCLA § 107(f) would add the following:

(3) SELECTION OF RESTORATION METHOD. -

(A) In General. - When selecting among the appropriate restoration measures that achieve primary and compensatory restoration, a trustee shall select a cost-effective method of achieving restoration.³²

This proposed change reflects the Administration's recognition of the growing concern over the tremendous liability costs that have arisen under the Superfund Program.³³ Further, the proposal is consistent with the Administration's commitment to conduct its activities in a more cost-effective and business-like manner.³⁴ Nevertheless, restoration planning would not be sacrificed for the sake of cost-containment measures. The trustees would be required to ensure that the least expensive plan selected for implementation under CERCLA provided an acceptable level of primary and compensatory restoration benefits.³⁵ Overall, the changes would address issues significant to PRPs regarding cost-containment and simultaneously reinforce the trustees' restoration responsibilities under the statute.

Attorneys Fees and Litigation Costs

The proposed changes to CERCLA would expand a responsible party's liability to include "the reasonable costs of recovering [natural resource] damages."³⁶ CERCLA § 107(a)(4)(C) would be amended to include the following language:

(C) Damages for injury to, destruction of, or loss of natural resources, including the reasonable costs of assessing such injury, destruction, or loss resulting from a release and the reasonable costs of recovering such damages ….³⁷

The proposed amendments do not identify the kinds of costs that could be sought by the trustees in recovering NRD damages. These "costs" could include attorneys fees, litigation expenses, the trustees' lodging and travel expenses, and other recovery-related expenditures. The broad and ambiguous nature of the new language is likely to result in unnecessary litigation if the final reform language does not provide greater specificity.

CERCLA currently authorizes the recovery of costs for certain delineated matters,³⁸ including "the reasonable costs of assessing" NRD damages.³⁹ There is no mention, however, of nonassessment costs (i.e., those associated with recovering NRD damage claims) particularly litigation costs and attorneys fees. Moreover, the limited amount of litigation involving NRD liability claims provides little to no legal guidance.⁴⁰

Previous assertions by the DOI suggest some limitation as to the kinds of costs that a designated trustee can currently recover under CERCLA. For example, in response to public comments supporting the trustees' recovery of attorneys fees and urging revision of the NRD assessment regulations toward that end, the DOI said that "trustees may only recover those costs associated with actual assessment and that satisfy the definition of 'reasonable costs.'"⁴¹ In comments concerning the 1994 rules, the DOI stated that 43 C.F.R. § 11.60(d)(2) "does not address the recovery of attorneys fees incurred in litigation over the results of the damage assessment, as opposed to those incurred during the assessment itself."⁴² Consequently, the designated trustees' authority to recoup attorneys fees and other undefined "costs" in a recovery action is subject to challenge under the current statutory scheme. Wary of this possible challenge, the authorization for the costs of recovering NRDs may be a preemptive move by the Administration to create a tighter framework. Some proponents of CERCLA reform may also view the imposition of the proposed costs as a means of promoting settlements with PRPs and protecting taxpayer dollars by forcing the responsible party to bear the costs incurred by the trustees in recovering NRD damages. However, opponents of CERCLA reform may interpret this new provision as an attempt by big government to reach even deeper into pockets that are already tapped by Superfund tax bills⁴³ and hefty insurance premiums due to the costs associated with the cleanup side of the Superfund program.

[27 ELR 10125]

If this new cost recovery proposal is implemented, PRPs should factor this increased liability into the costs of doing business. Depending upon the size of the NRD claim, this additional liability may become a significant factor in a PRP's decision to settle a dispute or to pursue aggressive litigation. Litigators, experienced in handling NRD claims and familiar with the regulatory procedures of the designated trustees, would be in the best position to advise PRPs on the likelihood of a successful defense to an NRD claim or the appropriateness of reducing business costs and settling the dispute without incurring recovery-related costs.

Record Review of Restoration Plans

CERCLA establishes a rebuttable presumption on behalf of the trustee for any NRD determination or assessment conducted in accordance with the regulations promulgated by the DOI.⁴⁴ With its suggested amendments to CERCLA, the Administration proposes to eliminate the rebuttable presumption and explicitly define the level of judicial review of an NRD restoration plan.⁴⁵ The standard of review of the trustees' decisionmaking is significant because it determines the level of deference granted to the trustees' decisionmaking. The Administration urges that judicial review of a restoration plan developed in accordance with the regulations be limited to the administrative record.⁴⁶ With respect to actions taken or ordered by trustees, a record review standard would mean that challenges to the trustees' actions would succeed only if the challenger could demonstrate arbitrary, capricious, or unlawful behavior, or an abuse of discretion.⁴⁷

In its current form, CERCLA squarely addresses the standard of review in response actions,⁴⁸ but is curiously silent with respect to NRD actions. The Administration's proposed amendments to CERCLA would end the silence. The proposal would add the following judicial review provision to CERCLA § 113(j):

(D) JUDICIAL REVIEW. Judicial review of any restoration plan developed in accordance with the procedures required by [other provisions of this amendment], with participation by all affected trustees, unless an affected trustee(s) elects not to participate, shall be limited to the administrative record. Otherwise applicable principles of administrative law shall govern whether any supplemental materials may be considered by the court. In considering objections to such a restoration plan, the court shall uphold the participating trustee or trustees' decision in selecting the plan unless the objecting party can demonstrate on the administrative record, that the decision was arbitrary and capricious or otherwise not in accordance with law.⁴⁹

Subparagraphs "A" through "C" of the proposed amendment to CERCLA § 113(j) would establish procedures for the creation of an administrative record and participation by the public, the PRPs, and the trustees in the development of the record.⁵⁰ Notably, the establishment of an administrative record would be left to the trustees' discretion.⁵¹ However, one would expect to see more frequent development of an administrative record in cases of significant natural resource injury. The assurance of judicial deference to the trustees' assessment of injury and allocation of damages would shield the trustees from protracted litigation and second-guessing of complex restoration decisions.

Use of the NRD Assessment Regulations and Site-Specific Evaluation Procedures

Although the trustees currently enjoy the option of earning a rebuttable presumption, the General Accounting Office (GAO) has found that they rarely invoke this option because they "seldom fully implement" the assessment regulations.⁵² Further, NOAA asserts that the presumption is of "limited value" because the trustees still have to prove their cases.⁵³

As many practitioners know from their experience in handling NRD cases, the published NRD regulations often do not reflect how damages are actually assessed and allocated. According to the trustees, the time and expense associated with the use of the type B regulations preclude their widespread use.⁵⁴ In addition, full implementation of the regulations has not occurred, since most NRD cases are settled without being fully litigated.⁵⁵ The trustees report that they use an abbreviated type B procedure, replacing the site-specific surveys and analyses required under the regulations with "readily available off-the-shelf literature and other information" to value the damages to natural resources.⁵⁶ The type A regulations are also rarely used because they are appropriate only for "small, one-time incidents."⁵⁷ The trustees characterize the discretionary use of the regulations as providing flexibility and allowing for fast resolution of NRD issues, which facilitates combined settlements of cleanup costs and natural resource damages.⁵⁸

[27 ELR 10126]

The Administration is proposing an amendment to CERCLA that would increase the use of the assessment regulations. The rebuttable presumption provision of CERCLA § 107(f)(2)(C) would be replaced with the following:

(C) DAMAGE ASSESSMENT.-

(i) REGULATION.—A natural resource damage assessment conducted for the purposes of this Act made by a Federal, State, or tribal trustee shall be performed, to the extent practicable, in accordance with

(I) the regulation issued under section 301(c); and

(II) generally accepted scientific and technical standards and methodologies to ensure validity and reliability of assessment results.

(ii) FACILITY SPECIFIC CONDITIONS. - Injury determination, restoration planning, and quantification of restoration costs shall, to the extent practicable, be based on facility-specific information.⁵⁹

Such an approach may impose a measure of accountability and consistency on the trustees' implementation of the NRD program. The assessment and restoration activities of the trustees would have to be grounded in reality. Damage assessments and valuations would be done on a site-specific basis. Thus, this approach would address complaints that the trustees have used abstract, theoretical models and unsubstantiated assumptions in the NRD valuation process.

The Administration's push for a facility-specific approach, however, is curious given the trustees' complaints about the expense and time involved in engaging in site-specific determinations.⁶⁰ The rationale may lie in the substitution of record review for the rebuttable presumption. The trustees' increased expenditure of time and resources would be rewarded by an increase in deference from the courts.

The proposed amendments do not, however, clearly specify the level of discretion that would be accorded to trustees in deciding whether to follow assessment regulations. The proposed changes to CERCLA § 107(f)(2)(C) would mandate use of the assessment regulations "to the extent practicable." Where use of the NRD assessment process and/or a facility-specific evaluation was impracticable, the trustees would have authority to deviate from the specified assessment procedures. If the amendments are enacted, therefore, the meaning of "practicable" is likely to be litigated. In addition, the amendments fail to specify whether or how the courts should sanction trustees for failing to follow "practicable" regulatory procedures when conducting assessments.

Revised NRD Assessment Regulations

The Administration proposes a simplification of the NRD assessment regulations. The proposed amendments would replace the current type A and B regulations with a single set of regulations. The single set of regulations would be, in essence, the type B rules that establish protocols for conducting assessments in individual cases. The new language for CERCLA § 301 would be as follows:

REGULATIONS FOR DAMAGE ASSESSMENTS.

(1) IN GENERAL.-The President, acting through Federal officials designated by the National Contingency Plan under section 107(f)(2), shall issue a regulation for the assessment of damages and costs for injury to, destruction of, or loss of natural resources resulting from a release of a hazardous substance for the purposes of this Act.

(2) CONTENTS.- The regulation under paragraph (1) shall

(A) specify protocols for conducting assessments in individual cases to determine the injury, destruction, or loss of natural resources;

(B) identify the best available procedures to determine damages for the cost of restoration and assessment; and

(C) take into consideration the ability of a natural resource to recover naturally and the availability of replacement or alternative resources;

(3) BIENNIAL REVIEW.- The regulation under paragraph (1) shall be reviewed and revised as appropriate every two years.⁶¹

This streamlined regulatory approach is consistent with the proposed mandate for facility-specific assessment and damage analyses. Furthermore, it mirrors elements of the type B rules which were upheld in Kennecott Utah Copper Corp. v. U.S. Department of the Interior.⁶²

Simplifying the regulatory procedures may increase the trustees' willingness to actually use the processes for NRD assessment if such usage results in reducing the costs and the amount of time that it takes to conduct NRD assessment activities. Equally important, industry, environmental organizations, and communities have a strong interest in knowing that the trustees are following regulatory procedures that reflect public comment and participation. The trustees' adherence to the regulatory process would ensure some measure of accountability to the public and protect the due process rights of impacted PRPs.

In the Meantime…

Whether and when Congress will act to reform NRD provisions is of course uncertain. In the meantime, all parties involved in assessments must work together to make the process as fair and efficient as possible. PRPs who are concerned about the reliability of the trustees' assessment activities and decisionmaking as to the extent of the NRD injuries and the necessary restoration actions that must be undertaken, ought to take an active role in the assessment activities conducted by the trustees.⁶³ There is a need, however, [27 ELR 10127] to balance the divergent interests of the parties and PRPs' concerns over the preservation of defenses, should the joint efforts break down. Such concerns may necessitate the formulation of guidelines or a memorandum of understanding to establish mutually acceptable ground rules. Finally, the parties to the assessment process should not rule out the possible benefits of using alternative dispute resolution (ADR) procedures rather than resorting to litigation. Indeed, because the fundamental purpose of ADR is to minimize conflict, there may be real value in convening an inclusive, representative national stakeholder forum to consider the way NRD assessments and decisionmaking have been done to date and to explore ways that ADR and collaborative problem solving could address some of the problems. By involving ADR experts with NRD trustees, environmental organizations, litigators, and industry representatives, a facilitated discussion might be helpful in resolving some of the major problems that have caused the existing NRD process to be so cumbersome.

Conclusion

CERCLA reform in the 105th Congress could address some, all, or none of the changes that the Administration proposes. Indeed, some of the more acrimonious areas of possible NRD reform are not even addressed by the Administration.⁶⁴ Overall, the proposal suggests an approach to NRD reform that could be satisfactory to all the interested parties. Surely, clarity and unmistakable standards of conduct are preferable to ambiguity and unfettered discretion.

1. Federal and state officials, and designated trustees of Native American tribes that hold treaty rights are the "designated trustees" and the only entities with standing to seek recovery for natural resource damages under CERCLA. 42 U.S.C. § 9607(a), (f), ELR STAT. CERCLA § 107(a), (f); see also Artesian Water Co. v. Government of New Castle County, 851 F.2d 643, 649, 18 ELR 21012, 21014 (3d Cir. 1988) (Private entities do not have standing to assert CERCLA natural resource damage claims.).

2. Five executive agencies—the Departments of the Interior, Commerce, Agriculture, Defense, and Energy—now have the authority, along with the U.S. Environmental Protection Agency, to order abatement actions under CERCLA § 106 to address injury to natural resources under their respective trusteeship. Exec. Order No. 13016, 61 Fed. Reg. 45871-72 (Aug. 30, 1996), ELR ADMIN. MAT. II 45087.

3. CERCLA defines "natural resources" as "land, fish, wildlife, biota, air, water, ground water, drinking water supplies, and other such resources belonging to, managed by, held in trust by, appertaining to, or otherwise controlled by the United States …, any State or local government, any foreign government, any Indian tribe." 42 U.S.C. § 9601(16), ELR STAT. CERCLA § 101(16). Government ownership of the resource, however, is not the defining limit of CERCLA's grasp, since the D.C. Circuit Court of Appeals stated that "a substantial degree of government regulation, management or other form of control over property would be sufficient" to trigger the application of the natural resource damages liability provisions. Ohio v. U.S. Dep't of the Interior, 880 F.2d 432, 461, 19 ELR 21099, 21114 (D.C. Cir. 1989).

4. 42 U.S.C. § 9607(a)(1)-(4)(C), ELR STAT. CERCLA § 107(a)(1)-(4)(C); see also Exec. Order No. 12316, 46 Fed. Reg. 42237 (Aug. 20, 1981).

5. In accordance with its delegated authority, the DOI devised an administrative process for conducting NRD assessments and promulgated two types of technical rules for quantifying natural resource injury and damages. The type A rules provide standard simplified procedures for assessment activities and require minimal field investigation. 43 C.F.R. §§ 11.40-.44 (1996). The second set of procedures, known as the type B rules, establish protocols for site-specific data collection in individual cases. Id. §§ 11.60-.84.

6. The DOI's type B rules were issued on August 1, 1986, four years after the required statutory deadline. 51 Fed. Reg. 27674 (Aug. 1, 1986). The type A rules were first issued on March 20, 1987. 52 Fed. Reg. 9042 (Mar. 20, 1987). Both rules were amended by the DOI: (1) in response to litigation; (2) to conform with the Superfund Amendments and Reauthorization Act of 1986; and (3) to reflect refined thinking within the agency itself. See Ohio, 880 F.2d at 459, 19 ELR at 21113; Colorado v. U.S. Dep't of the Interior, 880 F.2d 481, 19 ELR 21127 (D.C. Cir. 1989); DOI, Natural Resource Damage Assessments, 53 Fed. Reg. 5166 (Feb. 22, 1988); DOI, Natural Resource Damage Assessments, 59 Fed. Reg. 14262 (Mar. 25, 1994) [hereinafter DOI, Natural Resource Damage Assessments]; DOI, Natural Resource Damage Assessments—Type A Procedures, 60 Fed. Reg. 20560 (May 7, 1996). On July 16, 1996, the DOI issued an advance notice of proposed rulemaking and solicited comments on whether the type B rules should be further streamlined to conform with the regulations published by the National Oceanic and Atmospheric Administration under the Oil Pollution Act of 1990. DOI, Natural Resource Damage Assessments—Type B Procedures, 61 Fed. Reg. 37031-32 (July 16, 1996).

7. See Montauk Oil Transp. Corp. v. Steamship Mut. Underwriting Ass'n, No. 90 CIV. 5702, 1996 WL 340000 at *5 n.9 (S.D.N.Y. June 19, 1996) (government's compliance with assessment procedures is optional); Ohio, 880 F.2d at 439, 19 ELR at 21132 (trustees are not required to resort to the type A or type B procedures); 43 C.F.R. § 11.10 (use of the assessment procedures is not mandatory).

8. Kenneth R. Dickerson & Warren L. Dean, Procedure for Measuring Damages to Resources Is a Taint Upon Superfund, NAT'L L.J., Oct. 14, 1996, at C1.

9. Id.

10. Id.

11. See generally Robert E. Unsworth & Richard C. Bishop, Assessing Natural Resource Damages Using Environmental Annuities, 11 ECOLOGICAL ECON. 35, 36-40 (1994); RAYMOND J. KOPP & V. KERRY SMITH EDS., VALUING NATURAL ASSETS, THE ECONOMICS OF NATURAL RESOURCE DAMAGE ASSESSMENT (1993); Peter M. McManus, Natural Resources Damages From Rachel Carson's Perspective: A Rite of Spring in America, 37 WM. & MARY L. REV. 381, 446-51 (1996); Dickerson & Dean, supra note 8, at C1 (citing Ken Miller, How Much Is a View Worth? Commerce Agency Wants to Know, Gannett News Serv. (Feb. 6, 1993)); Douglas R. Williams, Valuing Natural Environments: Compensation, Market Norms and the Idea, 27 CONN. L. REV. 365, 366-98 (1995).

12. See McManus, supra note 11, at 446-51.

13. See Correspondence from DOI and NOAA on Proposal for NRD Reform (Oct. 7, 1996) [hereinafter Correspondence] (on file with author). The correspondence is from Edward B. Cohen, Deputy Solicitor, DOI, and Douglas K. Hall, Assistant Secretary for Oceans and Atmosphere, U.S. Department of Commerce, to the ranking minority members of the Senate Committee on Environment and Public Works, the House Committee on Transportation and Infrastructure, the Senate Subcommittee on Superfund, Waste Control and Risk Assessment, the House Subcommittee on Water Resources and Environment, and the House Subcommittee on Commerce, Trade, and Hazardous Materials. Messrs. Cohenand Hall stated that they realized that the proposed bill attached to their letter would not be introduced in the 104th Congress but suggested that the bill could provide a basis for discussion and consensus regarding Superfund reauthorization in the 105th Congress.

14. See Draft of Administration's Proposed Bill to Reform CERCLA NRD Provision (1996) [hereinafter Draft of Administration's Proposed Bill] (on file with author).

15. Other proposed revisions to CERCLA's NRD provisions include: (1) adding and defining new terms; (2) making structural changes; (3) clarifying and conforming amendments; (4) introducing contribution protection for NRD claims; (5) forcing consistency between response actions and resource restoration; and (6) coordinating the work of the trustees for response and restoration activities, including consulting with affected trustees regarding the placement of a particular site on the national priorities list. See Draft of Administration's Proposed Bill, supra note 14. According to Messrs. Cohen and Hall, these changes provide greater clarity and structure to the statute. Correspondence, supra note 13.

16. 42 U.S.C. § 9613(g)(1), ELR STAT. CERCLA § 113(g)(1). The provision establishes a special limitations period for NRD claims occurring on national priorities list sites, at federal facilities, and at other sites where a remedial action under CERCLA is scheduled. For these sites, a three-year statute of limitations period begins to run after the remedial action is completed (excluding operation and maintenance activities). In addition, damage claims for these sites cannot be instituted until after the remedy for the site has been selected, provided the President is diligently proceeding with a remedial investigation or feasibility study. Id.

17. Id. The original limitations period for NRD claims under CERCLA was three years from the date of the statute's enactment (i.e., Dec. 11, 1980). The Superfund Amendments and Reauthorization Act of 1986 revived any NRD claims that may have expired under the original limitations period. Idaho v. Turbine Component Co., 814 F.2d 1376, 1378-79, 17 ELR 20659, 20661 (9th Cir. 1987).

18. United States v. Montrose Chem. Corp., 883 F. Supp. 1396, 1399, 25 ELR 20809, 20811 (C.D. Cal. 1995), rev'd, No. 95-55725, slip op. (9th Cir. Jan. 17, 1997).

19. DOI, Natural Resource Damage Assessments, supra note 6, 59 Fed. Reg. at 14266.

20. Id.

21. Kennecott Utah Copper Corp. v. U.S. Dep't of the Interior, 88 F.3d 1191, 1213, 26 ELR 21489, 21497 (D.C. Cir. 1996).

22. Montrose, slip op. at 527.

23. See DOI, Natural Resource Damage Assessments, supra note 6, 59 Fed. Reg. at 14266.

24. United States v. Montrose Chem. Corp., 883 F. Supp. 1396, 1399, 25 ELR 20809, 20811 (C.D. Cal. 1995). In addition to the confusion over the promulgation prong of the statute, litigation has also occurred over the "discovery prong" of the limitations period and the "connection of the loss to the release." These issues involve the level of knowledge of the trustees and the evidentiary basis for connecting the harm to the release of hazardous substances. See, e.g., id. at 1402-05, 25 ELR at 20812-14.

25. Correspondence, supra note 13. The Administration also advocates the "orderly presentation" of claims, and proposes language which would permit NRD claims after an action for any other relief under CERCLA. Draft of Administration's Proposed Bill, supra note 14, at 8.

26. Draft of Administration's Proposed Bill, supra note 14, at 11.

27. Id.

28. If the past is any indication, the trustees would be likely to resolve NRD claims without full adherence to the regulations. See U.S. GENERAL ACCOUNTING OFFICE, SUPERFUND: OUTLOOK FOR AND EXPERIENCE WITH NATURAL RESOURCE DAMAGE SETTLEMENTS 8, 10 [hereinafter GAO REPORT]. According to the DOI, it is not necessarily costly or time-consuming to use the type B procedures for relatively minor cases. Overall, however, trustees usually conduct abbreviated assessment procedures. Federal officials reported to the General Accounting Office that they did not believe that a full type B assessment had ever been conducted. They also reported that the type B procedures have been most fully pursued at five sites: Montrose, California; Blackbird Mine, Idaho; Coeur D'Alene (Bunker Hill) Idaho; Commencement Bay, Washington; and New Bedford, Massachusetts. Id. at 10 n.13. It is not clear from the proposed amendments what impact the partial use of the regulations would have on the running of the limitations period. If the trustees chose not to use a substantial part of the regulations, would the statute of limitations be tolled until after the adoption of a restoration plan? What would constitute substantial use of the regulations and which aspects of the assessment procedure would have to be conducted "in accordance with the regulations" to trigger the running of the limitations period? Given the current level of confusion over the limitations period, Congress ought to ensure that any revisions to CERCLA § 113(g)(1) are clear.

29. See generally Kennecott Utah Copper Corp. v U.S. Dep't of the Interior, 88 F.3d 1191, 1211, 26 ELR 21489, 21496 (D.C. Cir. 1996) (limitations periods protect potential defendants from the prejudice and uncertainty of stale claims).

30. 43 C.F.R. § 11.82(f)(1) (1986).

31. Id. § 11.82(c)(2)(3); see also DOI, Natural Resource Damage Assessments, supra note 6, 59 Fed. Reg. at 14274 (explaining the relationship between costs and benefits in the trustee's selection of a restoration plan). The 1994 rule was upheld in Kennecott, 88 F.3d at 1216-17, 26 ELR at 21499.

32. See Draft of Administration's Proposed Bill, supra note 14, at 5 (emphasis added).

33. Federal officials estimate that as many as 20 sites may have NRD claims, each exceeding $ 50 million. Forty additional sites may have claims totaling between $ 5 million and $ 50 million each. GAO REPORT, supra note 28, at 2.

34. REPORT OF THE NATIONAL PERFORMANCE REVIEW, PUTTING CUSTOMERS FIRST: STANDARDS FOR SERVING THE AMERICAN PEOPLE 5 (1994).

35. The proposed bill defines "cost-effective" as "the least costly activity among 2 or more measures that provide the same or a comparable level of benefits, in the judgment of the trustees." Draft of Administration's Proposed Bill, supra note 14, at 5.

36. Id. at 3.

37. Id. (emphasis added).

38. Trustees can recover "all costs of removal or remedial action … not inconsistent with the national contingency plan," "any other necessary costs of response," and "the cost of any health assessment or health effects studies." 42 U.S.C. § 9607(a)(4)(A), ELR STAT. CERCLA § 107(a)(4)(A).

39. Id.

40. See Idaho v. Hanna Mining Co., 882 F.2d 392, 19 ELR 21358 (9th Cir. 1989) (Referring only to the silence of CERCLA with respect to attorneys fees and the absence of any legal precedent, the court declined to award attorneys fees to the trustee.); cf. Key Tronic v. United States, 114 S. Ct. 1960, 24 ELR 20955 (1994) (holding that a private litigant's attorneys fees incurred in bringing a CERCLA § 107 action are generally not recoverable).

41. 58 Fed. Reg. 39338 (July 22, 1993).

42. DOI, Natural Resource Damage Assessments, supra note 6, 59 Fed. Reg. at 14270. See also DOI, Natural Resource Damage Assessments, 59 Fed. Reg. 52749 (Oct. 19, 1994) (The DOI reiterated its position that attorneys fees associated with assessment activities were recoverable. The agency also solicited comments on whether additional guidance on this issue was needed.).

43. The Superfund taxed producers and many users of certain chemicals. The tax revenue was placed in a trust fund to offset the costs associated with cleanup activities. The Oil Spill Liability taxes expired after December 31, 1994, and the Hazardous Substance Superfund taxes expired after December 31, 1995. Reinstatement of these taxes turns on congressional reauthorization of CERCLA. Given the introduction of a leadership bill that reinstates those taxes, and the high priority given the bill by Majority Leader Trent Lott, renewal of the tax program to help replenish the trust fund seems likely.

44. 42 U.S.C. § 9607(f)(2)(C), ELR STAT. CERCLA § 107(f)(2)(c).

45. See Draft of Administration's Proposed Bill, supra note 14, at 6-7, 9-10.

46. Id.

47. See, e.g., United States v. Bell Petroleum Serv., Inc., 718 F. Supp. 588, 20 ELR 20533 (W.D. Tex. 1989) (holding that the appropriate standard for reviewing remedial decisions is arbitrary and capricious); In re Acushnet River & New Bedford Harbor, 722 F. Supp. 888, 891 & nn.8-9, 20 ELR 20202, 20203 & nn.8-9 (D. Mass. 1989) (CERCLA § 107 cost recovery actions are reviewed under the arbitrary and capricious standard. The courts are divided, however, on the application of § 113(j) to § 106 actions.).

48. 42 U.S.C. § 9613(j)(1)-(3), ELR STAT. CERCLA § 113(j)(1)-(3).

49. Draft of Administration's Proposed Bill, supra note 14, at 9. The standard for reviewing consent decrees in NRD settlements that do not utilize the regulatory process remains unaffected by the proposed statutory changes. In these cases, the varying levels of review from deference to stricter review would be likely to continue. Compare In re Acushnet River & New Bedford Harbor, 712 F. Supp. 1019, 1027-32, 19 ELR 21210, 21214-17 (D. Mass. 1989) (traditional deference to agency applied to the settlement decree) with Utah v. Kennecott Corp., 801 F. Supp. 553, 567-72, 23 ELR 20257, 20264-66 (D. Utah 1992) (court rejected the settlement after applying a searching inquiry into the trustee's assessment procedures).

50. Draft of Administration's Proposed Bill, supra note 14, at 9.

51. Id.

52. GAO REPORT, supra note 28, at 2.

53. Id. at 9.

54. Id. at 11.

55. Id. (relying on data current through April 1995).

56. Id.

57. Id.

58. Id.

59. Draft of Administration's Proposed Bill, supra note 14, at 6 (emphasis added).

60. Id. at 7.

61. Id.

62. 88 F.3d 1191, 26 ELR 21489 (D.C. Cir. 1996).

63. One study has documented the significant reduction in costs when the trustees and the involved parties engage in early negotiations and collaborative efforts to assess NRDs. Sara L. Inderbitzin et al., The Use of Alternative Dispute Resolution in Natural Resource Damage Assessments, 20 WM. & MARY ENVTL. L. & POL'Y REV. 1, 28-31 (1995).

64. For example, the Administration has not addressed the conflicting judicial decisions as to the scope of retroactive liability. One can only speculate that the Administration prefers to continue fighting this battle in the courts rather than in the legislative arena.