Application of EPA's Municipal Settlement Policy in the Wake of the AlliedSignal Decision

Philip H. Gitlen, Alan J. Goldberg, and Andrew J. Dalton

Editors' Summary: The Municipal Settlement Policy, an EPA guidance that addresses CERCLA settlements with municipalities that owned co-disposal landfills or were generators or transporters of waste disposed of at such sites, has been the subject of considerable opposition from industry groups. Although a federal district court rejected a facial challenge to the policy based on EPA's statements that it did not intend to apply it inflexibly, in the first decision examining the policy "as applied" a district court recently rejected the proposed settlement. The extent to which the policy can and should be applied in light of the decision in United States v. AlliedSignal, Inc. is discussed in this Dialogue.

Philip Gitlen and Alan Goldberg are partners with Whiteman, Osterman & Hanna, Albany, New York, counsel to AlliedSignal, Inc. and Amphenol Corporation in the AlliedSignal litigation discussed in this Dialogue. Andrew Dalton is an associate with the firm.

[30 ELR 10049]

In February 1998, the U.S. Environmental Protection Agency (EPA) released its final Policy for Municipality and Municipal Solid Waste; CERCLA Settlements at NPL Co-Disposal Sites (MSP),¹ which is intended to govern and guide settlements with municipalities that are either owner/operators of co-disposal landfills listed on the national priorities list (NPL), or generator/transporters of municipal solid waste (MSW) disposed of at such sites.² This Dialogue examines EPA's adoption of the MSP (over significant industry criticism), the arguments EPA made in its successful defense of an industry-initiated lawsuit seeking to invalidate the MSP, and the judicial rejection of the first actual settlement based on the MSP in United States v. AlliedSignal, Inc.³

The MSP establishes a presumptive 20-35 percent settlement liability cap for municipal owners or operators, and states that settlements with municipal generators or transporters will be based on a calculation that multiplies the number of tons of MSW disposed of by $ 5.30 per ton.⁴ According to the MSP, the $ 5.30 figure is intended to be representative of the costs of closure costs at a "representative" landfill under Subtitle D of the Resource Conservation and Recovery Act (RCRA).⁵ EPA's stated intention was that the MSP would "provide a fair, consistent, and efficient settlement methodology for resolving the potential liability under CERCLA"⁶ for municipal owner/operators and generator/transporters.

After its proposal and submission for public comment in 1997, the MSP was finalized in 1998 notwithstanding substantial critical comments submitted to EPA by numerous industry-related parties. Those commenters principally argued that the proposed policy constituted an unfair and unlawful attempt by EPA to favor municipal potentially responsible parties (PRPs) over other PRPs by allowing them to extinguish their Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) response cost liability at a given site for an artificially low amount, leaving the remaining "industry" PRPs to pay more than their fair share. The industry commenters attacked the factual assumptions underlying the proposed policy, including the presumed costs of closing an MSW landfill. They argued that the proposal was unsound and inconsistent with the objectives of CERCLA, because it was designed to shift the costs of cleaning up a co-disposal site from municipal parties to private PRPs. In effect, they contended, the proposed policy would provide municipalities with a shield from liability by allowing them to settle with EPA on preestablished, standardized, and highly favorable terms which fail to account for the site-specific conditions that typically drive cleanup costs. Additionally, because the MSP would generate increased orphan shares, which private parties would be forced to shoulder, the industry commenters argued that the proposal contradicted the fundamental principle [30 ELR 10050] of CERCLA that each responsible party must be liable for its fair share of the costs of a cleanup.

Following EPA's 1998 adoption of the final MSP (which made only minor changes to the 1997 proposal) a group of industry-related plaintiffs challenged the Agency in Chemical Manufacturers Ass'n v. Environmental Protection Agency.⁷ They attacked the MSP on multiple grounds, most of which were closely related to the criticisms expressed during the 1997 public comment period. The court, however, dismissed the challenge, based on its finding that the MSP was not final agency action and was therefore unripe for review. Its decision was based in large measure on EPA's assertions that the MSP was nonbinding and its representations that before entering any settlement it would "carefully consider and address any public comments . . . that question[] the settlement's fairness, reasonableness, or consistency with the statute."⁸

When the time came for the MSP's first application in an actual settlement, EPA's ardent assertions in the Chemical Manufacturers Ass'n case—that it would only apply the MSP with due regard to site-specific factors—were put to the test. In AlliedSignal, a CERCLA cost recovery action concerning the Sidney Landfill site (SLF) in New York State, EPA proposed a settlement with four third-party defendant municipalities that employed the MSP's $ 5.30 per ton calculation without any adjustment. Third-party plaintiffs AlliedSignal, Inc. and Amphenol Corporation challenged the settlement as patently unfair, arguing, among other things, that $ 5.30 per ton did not adequately represent typical landfill closure costs in the state, and ignored a number of site-specific factors that resulted in the far-higher actual projected closure costs for the SLF. The court rejected the proposed municipal settlement, finding that "the $ 5.30 figure does not fairly represent the response costs the municipal defendants could reasonably expect to pay for the closure of the SLF."⁹

The SLF decision establishes that, notwithstanding the MSP, proposed municipal settlements will be closely scrutinized to ensure both that they account for site-specific factors, suchas actual cleanup costs, and that they result in a municipal share of response costs that reasonably approximates the municipal defendant's proportionate share of liability.

Municipal Liability Under CERCLA

Under CERCLA, parties that owned or operated a landfill, or who can be shown to have transported or arranged for the disposal of waste containing hazardous substances, can (under some circumstances) be held jointly and severally liable for response costs of cleaning up the landfill, irrespective of fault.¹⁰ In an effort to mitigate CERCLA's somewhat draconian liability scheme, Congress enacted a statutory right of contribution that allows any party who is deemed liable for response costs to sue other PRPs to recover the costs of the cleanup that are in excess of the first party's equitable share.¹¹

Municipalities are subject to CERCLA's liability scheme to the same degree as any other PRP,¹² and courts have found that MSW can contain hazardous substances that are just as harmful to the environment as any other types of waste.¹³ Even before the MSP, however, EPA had adopted its Interim Policy on CERCLA Settlements Involving Municipalities and Municipal Wastes (1989 Interim Policy),¹⁴ which attempted to mitigate CERCLA's impact on municipalities in at least two ways. First, EPA determined that, except in rare circumstances, it would not generally seek to recover any response or cleanup costs from municipal generator/transporters of MSW.¹⁵ By shielding such municipalities from direct actions by the government, EPA has significantly reduced the circumstances in which a municipality may be held jointly and severally liable under CERCLA § 107(a) for the entire cost of a response action.¹⁶

Second, EPA allowed municipal owner/operators to make delayed payments or provide in-kind services in lieu of monetary payments to satisfy all or a portion of their fair share of overall cleanup costs.¹⁷ While both of the foregoing policies offered special treatment to municipalities, neither permitted municipal PRPs to pay less than their equitable share of CERCLA response costs at a given site.

Development of the MSP

In the MSP, EPA, for the first time, attempted to standardize municipal settlement payments to the United States for remediation costs associated with co-disposal sites. Under the final MSP, municipal generator/transporters are to pay a set amount of $ 5.30 per ton of MSW disposed of at a site¹⁸; with respect to municipal owner/operators, the MSP sets a presumptive baseline settlement amount of 20 percent of total [30 ELR 10051] cleanup costs, which may be adjusted to as high as 35 percent based on specified factors.¹⁹ EPA's intention is that by payment of these amounts, municipal PRPs will "resolve their potential Superfund liability and obtain contribution protection pursuant to Section 113(f) of CERCLA."²⁰

1997 Proposed MSP

On July 11, 1997, EPA issued its Announcement of and Request for Public Comment on Municipal Solid Waste Settlement Proposal (1997 Proposal).²¹ The 1997 Proposal marked a substantial departure from EPA's 1989 Interim Policy, and clearly indicated that it was intended to provide municipalities with an enhanced level of protection from CERCLA claims. EPA stated its concern in the 1997 Proposal that, notwithstanding the 1989 Interim Policy, municipal generator/transporters of MSW were still being drawn into CERCLA contribution litigation.²² To mitigate this trend, the 1997 Proposal employed a settlement calculation for municipal generator/transporters that multiplied the number of tons of MSW for which the municipality was responsible at a site by a fixed amount of $ 3.05 per ton. The $ 3.05 figure was based on EPA's estimate of the closure and post-closure costs of a "closed, unlined, 55.53 acre" MSW-only landfill.²³

EPA sought to justify its proposal by asserting that (1) "numerous studies" (which EPA did not identify) have demonstrated that MSW normally contains very low concentrations of hazardous substances, (2) the "overwhelming majority" of MSW-only landfills do not require remedial action under CERCLA, and (3) even where remedial actions are necessary, it is less expensive to remediate MSW than other waste.²⁴ EPA expressed further concern that many municipal owner/operators only took on that status "in connection with their obligation to provide necessary sanitation and trash disposal services to residents and businesses."²⁵ According to the 1997 Proposal, EPA believed that this factor, when coupled with the nonprofit status of municipalities and the "unique fiscal planning considerations" municipalities face, justified the implementation of a uniform "national settlement policy."²⁶

The 1997 Proposal employed a settlement calculation for municipal generator/transporters that multiplied the number of tons of MSW for which the municipality was responsible at a site by a fixed amount of $ 3.05 per ton. The $ 3.05 figure was based on EPA's estimate of the closure and post-closure costs of a "closed, unlined, 55.53 acre" MSW-only landfill.²⁷ The $ 3.05 per ton could also be increased to a maximum of $ 3.25 per ton if certain aggravating conditions existed at the site.²⁸

The proposed policy also established a presumptive baseline municipal owner/operator settlement amount of 20 percent of total response costs, which could be increased to a maximum of 35 percent based on the consideration of three factors: (1) whether the municipality exacerbated environmental contamination or exposure; (2) whether the municipality received operating revenue greater than the presumptive share; and (3) whether a municipal officer or employee was convicted of a criminal offense related to the operation of the landfill.²⁹

EPA believed that the 1997 Proposal would provide "a fair, reasonable and efficient means of completing settlements with MSW [generator/transporters] that reflects a reasonable approximation of the cost of remediating MSW [and would further provide municipal owner/operators with] consistent and equitable settlements."³⁰ The comments submitted in response to the 1997 Proposal vividly demonstrated, however, that many parties disagreed with EPA's conclusions.

Public Comments Criticizing EPA's 1997 Proposal

Several parties submitted comments to EPA opposing adoption of the 1997 Proposal.³¹ These comments generally followed four basic themes: (1) EPA should not attempt to limit municipal liability at co-disposal sites; (2) the proposed policy understates the impacts of MSW on NPL sites; (3) the fixed unit price of $ 3.05 per ton for MSW generator/transporters is unreasonably low; and (4) the presumptive baseline 20 percent liability share, and 35 percent cap, for municipal owner/operators is unsubstantiated. Each of these themes is explored in the sections that follow.

[30 ELR 10052]

Limiting Municipal Liability at Co-Disposal Sites

Many commenters argued that it was fundamentally unfair for EPA to offer municipal PRPs the option to settle on uniform, highly favorable terms, regardless of their actual degree of responsibility or actual conditions that existed at a given site. According to these commenters, the rationales EPA offered to support the 1997 Proposal were inconclusive at best, and were in derogation of CERCLA's statutory scheme, which makes no distinction between municipalities and other PRPs.³²

Commenters attacked EPA's rationales for allowing municipal PRPs to settle on more favorable terms. They argued that neither the "fiscal planning constraints" municipalities may face, nor their nonprofit status, warranted treatment different from that given to commercial or industrial PRPs, which often face similar financial constraints (particularly small business).³³ In addition, commenters argued that, even assuming that municipalities have a "unique public health obligation . . . to provide waste disposal service,"³⁴ such an obligation should not excuse them from their fair share of CERCLA liability, especially when municipalities often determined the location, design and operating practices of their own landfills.

The commenters also argued that the 1997 Proposal unfairly singled out municipal PRPs for preferential treatment vis-a-vis other PRPs, all of whom contributed waste to a given site. These commenters noted that only municipal PRPs were permitted to make a one-time payment to cut off liability, and that the payments under the 1997 Proposal would not include a premium—normally factored into settlement agreements with EPA—to account for the risks of cost overruns, recalcitrant PRPs or larger-than-expected orphan shares.³⁵

Some commenters contended that the 1997 Proposal exceeded EPA's statutory authority, because the determination and allocation of CERCLA liability is the role of the judicial branch, rather than EPA.³⁶ One commenter also suggested that, even if EPA had such authority, the 1997 Proposal's highly preferential treatment of municipal PRPs demonstrated EPA's inability serve as a fair and impartial arbiter.³⁷ Several expressed concern that if EPA allowed municipal PRPs to settle under the terms outlined in the 1997 Proposal, the resulting settlements would be for far less than the "fair share" that should have been borne by settling municipal parties, thus creating a larger orphan share of liability which would then fall on the remaining, private PRPs.³⁸

Comments Asserting That the 1997 Proposal Understated the Impacts of MSW on NPL Sites

Commenters also disputed the basic premise underlying the 1997 Proposal: that MSW has little impact on the costs of cleaning up NPL co-disposal sites.³⁹ For example, commenters noted EPA's own conclusion that when the leachate from MSW-only landfills (household garbage) and RCRA Subtitle C hazardous waste facilities (highly toxic substances) are compared, there are not "significant differences in the number of toxic constituents and their concentrations in the leachates"⁴⁰ from either type of landfill. The courts have also held that MSW does in fact contain hazardous substances.⁴¹ Commenters also pointed out that the only case allocating liability allocation at a co-disposal site, United States v. Atlas Minerals & Chemicals, Inc.,⁴² rejected the premise that industrial [30 ELR 10053] waste necessarily contributes more to the cost of a cleanup than does MSW.⁴³

Similarly, commenters noted EPA's recognition that groundwater contamination is present at the overwhelming majority of MSW-only landfills.⁴⁴ Nevertheless, the 1997 Proposal assumed that groundwater contamination is not present at co-disposal facilities.⁴⁵ Commenters were concerned that although groundwater contamination greatly increases the costs of a cleanup, when fixing the unit prices and costs per ton under the proposed policy, EPA either underestimated, or simply disregarded, this significant component of a cleanup at co-disposal sites.⁴⁶

Comments That the Fixed Unit Price of $ 3.05 Per Ton for Municipal Generator/Transporters Was Unreasonably Low

One commenter argued that the "$ 3.05 per ton figure is easily the single most pernicious element of the Proposal."⁴⁷ Commenters were particularly concerned because EPA failed to clearly explain how EPA arrived at the $ 3.05 figure, thereby depriving them of the right to meaningfully comment on its factual basis.⁴⁸ Apart from identifying the three factors used in EPA's model—that the hypothetical or representative landfill was "closed, unlined and 55.53 acres" in size—the 1997 Proposal did not explain how EPA arrived at the $ 3.05 per ton figure.⁴⁹

Perhaps most importantly, commenters argued that the proposed $ 3.05 per ton settlement figure for municipal generator/transporters was inherently arbitrary and unfair because that amount is inconsistent with actual MSW-related cleanup costs at actual co-disposal sites, which are largely driven by site-specific conditions.⁵⁰ To demonstrate this point, the Chemical Manufacturers Association (CMA) noted the results the 1997 Proposal would have at three actual co-disposal NPL sites: the Lowry Landfill in Colorado; the GEMS Landfill in New Jersey; and the Dorney Road Landfill in Pennsylvania.

At the Lowry Landfill, EPA determined that the site contained 143 million gallons of waste, of which 16.6 million gallons (11.5 percent of the total waste) was attributable to 4 municipal generator/transporters.⁵¹ Based on EPA's total estimated cleanup cost of $ 94 million, the municipal PRPs would be assessed a fair share of $ 10.8 million.⁵² Under the 1997 Proposal, however, the municipal PRPs would be able to settle their liability and receive contribution protection for only $ 210,000, a mere .22 percent of the total estimated cleanup cost of $ 94 million, leaving the remaining PRPs at the site to shoulder a newly created orphan share of $ 10.6 million.⁵³

Similarly, at the GEMS Landfill, 88 percent of the waste at the site was MSW, attributable to various municipal parties. Based on the estimated cleanup cost of $ 60 million, the municipal PRPs would be responsible for $ 53 million.⁵⁴ Under the proposed policy, however, the municipal parties would only be responsible for roughly $ 717,000, shifting in excess of $ 52 million in cleanup costs to other PRPs as an orphan share.⁵⁵

Finally, at the Dorney Road Landfill, a co-disposal site involving a court-ordered allocation of liability, the municipal PRPs share equated to approximately $ 58 per ton of MSW, an amount far in excess of the $ 3.05 per ton that would have been used under the 1997 Proposal.⁵⁶

Comments That the Presumptive 20 Percent Baseline Share and 35 Percent Cap for MSW Owner/Operators Are Unsubstantiated

Several commenters criticized the 1997 Proposal's 20-35 percent cap on liability for municipal owner/operators. They asserted that often municipal owner/operators were the parties having the greatest level of control over the siting, design, operation, and closure of landfills.⁵⁷ Under the 1997 Proposal, however, municipal owner/operators would have a presumptive baseline liability of only 20 percent; and even in cases where the municipality engaged in reckless or criminal conduct, the settlement figure would only increase to 35 percent.⁵⁸ Moreover, commenters noted that the 20 percent presumptive liability cap was contrary to both actual settlements EPA has reached with municipal owner/operators in the past⁵⁹ and numerous court mandated allocations,⁶⁰ whereby municipal owner/operators were held liable for up to 100 percent of the response costs. Accordingly, commenters argued that the proposed policy was inconsistent with EPA's past settlement practices, and was contrary to established case law on CERCLA liability allocation.

[30 ELR 10054]

The Final MSP

The final MSP neither acknowledged that comments had been received in response to the 1997 Proposal, nor addressed the substance of those comments. Nevertheless, EPA, without explaining why, did make two significant changes to the 1997 Proposal.

First, the final MSP increased the per ton figure to be used for calculation of settlements with municipal generator/transporters from $ 3.05 per ton to $ 5.30 per ton. EPA again stated that it was basing its "approximation" of the costs of remediating MSW on the costs of closure and post-closure activities at a "representative" MSW-only landfill and emphasized that it had used the RIA cost models in calculating the per ton settlement figure.⁶¹ EPA also increased the size of the "representative" landfill from 55.53 acres to 69 acres (the average size of co-disposal sites on the NPL) and for the first time identified some of the variables in used in running the RIA cost model.⁶² EPA did not, however, provide any explanation as to why its original assumptions were no longer reasonable, or how it had arrived at the new $ 5.30 per ton figure.⁶³

Second, the final MSP expressly noted that "settlements under this policy are appropriate only at sites where there are multiple, viable non-de minimus non-MSW generators/transporters."⁶⁴ EPA thus appears to have established a clear double standard: if EPA can only recover response costs from municipalities, then municipalities are liable for their full share of the cleanup; if, however, EPA can recover its response costs from viable private parties, then EPA will use the MSP to resolve the municipalities' liability, and will then seek to shift the cost of the cleanup to private parties.

The Challenge to the MSP

After the MSP was adopted in 1998, the CMA sued EPA, seeking a declaration that the MSP was unlawful and a permanent injunction barring EPA from implementing the MSP in future settlement negotiations.⁶⁵ The CMA challenged the MSP as violating both the substantive commands of Congress in CERCLA, as well as the requirements of the Administrative Procedure Act,⁶⁶ and relied primarily on arguments that were substantively similar to those raised by parties, including the CMA, that commented on the 1997 Proposal.

In its motion to dismiss the CMA's lawsuit, EPA argued at great length that the MSP was in no way binding, and that the MSP would only be applied when site-specific factors indicated that it would yield a fair and equitable result. EPA asserted that:

The 1998 settlement policy is clear on its face that it discusses non-binding guidelines for the terms of settlement with MSW generators and transporters ($ 5.30 per ton) and with municipal owners and operators (20% to 35% of total site costs). . . . The settlement policy does not mandate settlement terms from which EPA may not deviate; rather, it provides guidelines and guidance predicated on EPA's 18 years of experience in cleaning-up CERCLA sites, and in settling and taking enforcement actions related to those sites. The settlement policy specifically cautions against settlements that would be inequitable and makes clear that it is non-binding.⁶⁷

In dismissing the CMA's complaint, the U.S. District Court for the District of Columbia reasoned that because the MSP does not "require 'EPA to apply the policy's presumptive settlement approach' [and was only intended to] guide future settlements,"⁶⁸ the MSP was not a final agency action as EPA was not bound to any pre-determined course of action. To support its conclusion, the court quoted two distinct passages from the MSP. The first states that "the United States will not apply this policy where, under the circumstances of the case, the resulting settlement would not be fair, reasonable, or in the public interest"; and the second provides that certain contributors of MSW "may not be eligible for a settlement pursuant to this policy if EPA determines . . . that application of this policy would be inequitable."⁶⁹ In the final analysis, the court's finding that EPA retained "ample discretion" to deviate from the terms of the MSP was one of the principle bases on which it granted EPA's motion to dismiss.⁷⁰

Thus, in the CMA litigation, EPA took upon itself the obligation to reasonably exercise the discretion reserved under [30 ELR 10055] the MSP, and to evaluate the specific circumstances of each individual site to ensure that any settlements negotiated under the MSP are, in fact, fair, reasonable, and in the public interest. As discussed in the next section, that commitment was put to the test in the Sidney Landfill litigation, with the result that the court rejected EPA's first proposed settlement under the MSP.

Rejection of EPA's Proposed Sidney Landfill Settlement

After surviving the CMA's challenge, the first test of how EPA would actually implement the MSP came in litigation concerning the SLF in Delaware County, New York. The SLF site was listed on the NPL in 1989. EPA's remedial investigation and feasibility study (RI/FS) concluded that there were various hazardous substances present at the SLF. In September 1995, EPA issued a record of decision (ROD) for the SLF requiring: (1) consolidation of waste masses and "capping" in accordance with current New York State Department of Environmental Conservation (DEC) requirements for "closing" municipal solid waste landfills (landfill closure), and (2) groundwater extraction and treatment to address a "hot spot" of groundwater contamination identified in the RI/FS. In July 1996, EPA then issued a unilateral administrative order (UAO) under CERCLA § 106(a)⁷¹ directing AlliedSignal, Inc. and Amphenol Corporation (as the successors to Bendix Corporation) to implement the remedial design and remedial action selected in the ROD. In 1997, the government filed a CERCLA cost recovery action against AlliedSignal and Amphenol, seeking recovery of $ 2.69 million of EPA's past SLF response costs. AlliedSignal and Amphenol then commenced (over strenuous objection by the government) a third-party cost recovery and contribution action against four municipalities—the village of Sidney and the towns of Sidney, Masonville, and Tompkins—on grounds which included that they arranged for their residents' and business' MSW to be disposed of at the SLF. The third-party action sought contribution with respect to any judgment obtained by the United States in its cost recovery case, as well as with respect to costs incurred by AlliedSignal and Amphenol in compliance with the UAO.

The government immediately negotiated and proposed a settlement with the four municipalities that applied the $ 5.30 per ton figure in the MSP without any modification to account for the actual projected remedy costs at the SLF site. Under the settlement, the four municipalities were to resolve any and all liability concerning the SLF site, i.e., liability with respect to both the government's costs, and with respect to independent costs incurred by AlliedSignal and Amphenol to implement the SLF remedy, for a total payment of only $ 62,868.60. If approved, this settlement would have left AlliedSignal and Amphenol with sole responsibility for essentially all of the estimated $ 12 million in projected SLF landfill closure and cleanup costs.

AlliedSignal and Amphenol challenged the proposed settlement, arguing, among other things, that EPA's application of the MSP's $ 5.30 per ton figure, without any modification to account for either the actual costs of landfill closure in New York generally, or the actual projected closure costs at the SLF, would lead to a patently unfair and unreasonable result. The court agreed, and rejected the settlement.

Background of the SLF Site

Beginning in late 1967 and continuing until its closure in October 1972, the SLF was operated as a sanitary landfill, first by Devere Rosa (Rosa), and then by James Bartlett.⁷² During that entire period, Rosa, and then Bartlett, were under contract with the village of Sidney (Village) and the town of Sidney (Town).⁷³ Under the agreements, the Village and Town arranged "for disposal . . . of all garbage and refuse generated"⁷⁴ within their boundaries (including residential, commercial, industrial, and municipal waste) to be accepted for disposal at the SLF. In essence, the SLF was used as the Town/Village landfill.

In the early 1960s, prior to the opening of the SLF, Rosa had purchased a garbage route in the town of Sidney, New York, which included a parcel of land known as the Richardson Hill Road Landfill (RHRL). On July 9, 1964, the Town entered into a five-year contract with Rosa for use of the RHRL, including the disposal "of all garbage and refuse from that portion of the Town of Sidney located outside the corporate limits of the Village of Sidney, as well as used residue oil as disposed of by the Scintilla Division of the Bendix Aviation Corporation, located at Sidney, New York."⁷⁵ On October 31, 1964, the Town and Village contracted with Rosa, on terms substantially similar to the July 1964 agreement for the use of the RHRL, except that the residents of the Village were also permitted to use the RHRL. In 1966, after a brook near the RHRL caught fire as a result of an oil discharge from the RHRL, the New York State Department of Health (DOH) ordered Rosa "to cease disposing oil from Bendix at the RHRL."⁷⁶

In November 1967, Rosa purchased (in a tax foreclosure sale) the SLF property, which was located across the road from the RHRL. In December 1967, Rosa began dumping waste at the SLF. Also in December of 1967, the DOH inspected the SLF, found numerous environmental deficiencies, and ordered Rosa to cease all dumping at the SLF. At some point, however, Rosa resumed dumping atthe facility and a DOH inspection in June 1968 revealed that dumping had resumed at both the RHRL and the SLF.⁷⁷ In February 1970, another written agreement was entered into between Rosa, the Town and the Village, which was substantively similar to the 1964 agreements, providing that Rosa would dispose of all garbage and refuse from within their borders, but excluded any reference to waste oil from Bendix. After buying the SLF in early 1971, Bartlett continued to perform under the 1970 agreement until he closed the SLF in October 1972.⁷⁸

The government has argued in the SLF litigation that Bendix (and its successors) are responsible for the SLF cleanup because, in the government's view, Bendix disposed [30 ELR 10056] of significant quantities of waste oil at the SLF. AlliedSignal and Amphenol have argued, however, that Bendix stopped sending oil to the RHRL when ordered to do so in 1966, that it then returned to its prior practice of disposing waste oil and solvents in a pit on its own property (the Hill site), and that it continued discarding waste oil and solvents at the Hill Site until 1969 when it acquired an incinerator for thermal destruction of the waste oils and solvents. Thus, AlliedSignal and Amphenol contend that Bendix never disposed of anything other than routine plant trash at the SLF site.⁷⁹ In addition, they contend that the landfill closure portions of the SLF remedy are the result of MSW and the failure to properly close the landfill when its operations ended in 1972. The government has disputed all of these positions.⁸⁰

The Proposed Settlement and the Challenge

The $ 62,868.60 settlement proposed by EPA was the result of a strict application of the MSP, and calculated the settlement amount for the four municipalities by multiplying the number of tons of MSW the municipalities claimed were generated within their borders and disposed of at the SLF by $ 5.30 per ton.⁸¹ In return for this payment, the proposed Consent Decree purported to provide the municipalities with complete protection from all contribution claims concerning the SLF, leaving AlliedSignal and Amphenol with sole exposure for essentially all of the over $ 12 million in projected SLF landfill closure and cleanup costs.

AlliedSignal and Amphenol challenged the proposed settlement, arguing, among other things, that closure costs under RCRA Subtitle D, on which the MSP is based, are not representative of the higher cost of closing landfills under applicable New York State regulations. They presented a survey of comparable New York landfills indicating a closure cost range of between $ 4.60 and $ 40.83 per ton and noted that the actual projected costs of landfill closure at theSLF are far higher. Based on their experts' determination that $ 9,164,600 of the projected SLF site costs were landfill closure costs attributable solely to MSW, they argued that the actual per ton SLF closure costs ranged from $ 64.00 per ton to $ 772.60 per ton, depending on which EPA estimate of SLF waste volume one employed.⁸² Moreover, the Village contributed at least 32 percent of the accounted for waste at the SLF, and the Town contributed at least 7.4 percent of that waste. Yet under the proposed settlement, the Village and Town would have paid $ 46,597.60 and $ 10,812.00, respectively. Those figures represented only approximately .005 percent and .001 percent of the net estimated cost of the landfill closure of the SLF.

The Decision

At the outset of his decision, Chief Judge Thomas J. McAvoy of the U.S. District Court for the Northern District of New York noted that although the court would not review the terms of a contemplated settlement de novo, any settlement agreement between EPA and a municipal party must nevertheless be "substantively fair."⁸³ In order to be substantively fair, "a CERCLA settlement must be based upon, and roughly correlated with, some acceptable measure of comparative fault, apportioning liability among the settling parties according to rational (if necessarily imprecise) estimates of how much harm each PRP has done,"⁸⁴ and must also include a consideration of the effects the settlement will have on nonsettling parties.

The court noted that the proposed settlement between EPA and the four municipalities was based on only two factors: (1) EPA's estimates of the amounts of MSW deposited in the SLF by the four municipalities; and (2) multiplication of that tonnage by the $ 5.30 per ton unit cost specified in the MSP.⁸⁵ The court also acknowledged EPA's position that site-specific factors at the SLF, which were resulting in far higher actual closure costs, had not been considered because EPA contended that the cleanup costs were being driven only by the industrial waste oil allegedly disposed of at the SLF.⁸⁶

The court, however, rejected EPA's arguments, holding that the $ 5.30 per ton "figure is not fair or reasonable in light of the factual circumstances of this case and the known remediation costs of the site [and] does not fairly represent the response costs the municipal defendants could reasonably expect to pay for the closure of the SLF."⁸⁷ Specifically, the court found that the costs of closing an MSW-only land-fill are greater under New York regulations than they are under federal regulations. Accordingly, Judge McAvoy noted that the MSP, which merely accounts for costs under the federal requirements for MSW-only (Subtitle D) landfills, does not fairly represent the costs associated with closing an MSW landfill in New York State.⁸⁸

Judge McAvoy also rejected EPA's assertion that notwithstanding the more expensive landfill closure requirements of the New York regulations, the closure costs for [30 ELR 10057] comparable landfills in New York only ranged from $ 3.22 to $ 3.51 per ton, noting that EPA's experts' unexplained conclusion on this issue was based on 1991 dollars that were not adjusted to 1998 dollars and failed to include post-closure monitoring, operation and maintenance costs.⁸⁹ The court noted that the government's failure to include post-closure costs in its analysis was particularly damaging because the proposed settlement covered all response costs, including operation and maintenance costs, rather than just closure costs. Therefore, because the proposed settlement included all response costs (including operation and maintenance costs), but EPA's landfill closure cost analysis omitted operation and maintenance costs, the settlement did not offer an accurate basis to support the use of the $ 5.30 figure.⁹⁰

Perhaps most importantly, the court found that, because the projected cleanup costs for the SLF were known when the parties negotiated the Consent Decree, "there is no need to utilize a model to set the per unit cost of cleanup."⁹¹ Indeed, the court stated that the use of "allegedly representative models" in proposed settlements "may be capricious when the actual conditions of the Site and estimated remediation costs are known."⁹² Holding that

any potential consent decree must take into consideration the actual conditions of the Site and must attempt to reasonably apportion liability according to the parties' relative fault, [the court found that] even a cursory review of the cleanup costs at the Site reveals that the Consent Decree does not approximate the municipal defendants' proportionate share of liability.⁹³

The court agreed with AlliedSignal's and Amphenol's view that the majority of the waste at the SLF came from the four municipalities, and that Bendix's proportion of waste at the SLF was small in comparison. Moreover, the court noted that MSW "can contain hazardous waste that, due to its greater volume and reduced toxicity, may cost more to cleanup than industrial waste,"⁹⁴ and that the volume and shallow depth of the waste at the SLF was a driving force behind the need for four separate landfill closure caps, driving up the cost further.

Finally, the court concluded that whether the SLF remedy was being driven by MSW or by waste oils was irrelevant to its consideration of the proposed settlement, because the Town "may be partially responsible for the disposal of such waste at the Site."⁹⁵ The court reached this conclusion by first noting that the Consent Decree was "based on the premise that the municipal defendants are liable for having arranged for the disposal of waste by [their] residents at the SLF."⁹⁶ Bendix was a resident of the Town, and because the 1964 agreement with Rosa specifically included residue waste oil disposal, the court concluded that the Town "arguably is liable for having arranged for the disposal of Bendix's hazardous waste oils at the SLF."⁹⁷

As a result of its analysis, the court rejected the proposed SLF municipality settlement as substantively unfair based on its use of the $ 5.30 per ton closure cost figure specified in the MSP.⁹⁸

Conclusions

The judicial rejection of EPA's first MSP-based settlement is instructive for several reasons. First, the decision in AlliedSignal demonstrates that the courts will require that EPA consider and account for site-specific factors with respect to each case before it can apply the MSP. The court's statements that, where projected cleanup costs are known, "there is no need to utilize a model to set the per unit cost of cleanup, [and that the use of] allegedly representative models [in proposed settlements] may be capricious when the actual conditions of the Site and estimated remediation costs are known,"⁹⁹ portend that the $ 5.30 per ton figure in the MSP may be of little consequence in the majority of cases, since actual landfill closure cost estimates will undoubtedly be available. Thus, the court's reasoning calls into question any application of the MSP after the RI/FS and ROD have been completed. At that point, because the actual conditions of the site are known and estimated costs of the cleanup are available, there is no reason to use the MSP's cost model, because actual data is a far more accurate means by which to calculate a settlement.¹⁰⁰

Second, the court's decision confirms that to the extent that a municipality, such as those in the SLF case, may be liable for having arranged for the disposal of alleged industrial wastes in addition to MSW, the MSP will not apply.¹⁰¹

Third and most importantly, the judicial rejection of the SLF settlement makes quite clear that settlements will be scrutinized, and will stand or fall based on whether they can be justified on their own merits as fair, reasonable, and consistent with CERCLA's statutory objectives.

1. 63 Fed. Reg. 8197 (Feb. 18, 1998); Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended (CERCLA), 42 U.S.C. §§ 9601-9675, ELR STAT. CERCLA §§ 101-405.

2. A co-disposal facility is a facility that received both industrial waste and MSW.

3. No. 97-CV-0436, 1999 U.S. Dist. LEXIS 13225, 29 ELR 20055 (N.D.N.Y. Aug. 18, 1999).

4. 63 Fed. Reg. at 8199-200.

5. Id. at 8198-99; 42 U.S.C. §§ 6901-6992k, ELR STAT. RCRA §§ 1001-11011.

6. 63 Fed. Reg. at 8198.

7. 26 F. Supp. 2d 180, 29 ELR 20306 (D.D.C. 1998).

8. Id. at 185, 29 ELR at 20308.

9. AlliedSignal, 1999 U.S. Dist. LEXIS 13225, at *16, 29 ELR at 20057.

10. 42 U.S.C. § 9607(a), ELR STAT. CERCLA § 107(a).

11. Id. § 9613(f), ELR STAT. CERCLA § 113(f).

12. Id. § 9601(21), ELR STAT. CERCLA § 101(21); B.F. Goodrich Co. v. Murtha, 958 F.2d 1192, 1206, 22 ELR 20683, 20690 (2d Cir. 1992); New Jersey Dep't of Envtl. Protection v. Gloucester Envtl. Management Servs., 821 F. Supp. 999, 1004-05, 23 ELR 21420, 21422 (D.N.J. 1993); see also Lisa M. Schenck, Liability of Municipalities Under the Comprehensive Environmental Response. Compensation, and Liability Act (CERCLA): Is This a Legal Hazard to the Environment?, 23 SETON HALL LEGIS. J. 1, at 9-11 (1998).

13. Murtha, 958 F.2d at 1206, 22 ELR at 20690; Gloucester Envtl. Management Servs., 821 F. Supp. at 1005-06, 23 ELR at 21422; Transportation Leasing Co. v. California, 861 F. Supp. 931, 955, 25 ELR 20231, 20234 (C.D. Cal. 1993). For a discussion of the Murtha decisions and liability for disposing of MSW, see James J. Reardon Jr., Limiting Municipal Solid Waste Liability Under CERCLA: Toward the Toxic Cleanup Equity and Acceleration Act of 1993, 20 B.C. ENVTL. AFF. L. REV. 533, 552-58 (1993).

14. 54 Fed. Reg. 51071 (Dec. 2, 1989) (OSWER Directive No. 9834.13); see also 63 Fed. Reg. at 8198-99; Reardon, supra note 13, at 550-52, Schenck, supra note 12, at 21-22. For discussions on the pros and cons of the 1989 Interim Policy from both an industry and municipal perspective, see Diana Ng, Debating the Wisdom of Placing Superfund Costs on Municipalities, 69 S. CAL. L. REV. 2193, 2197-99 (1996); Joseph M. Manko & Madeleine H. Cozine. The Battle Over Municipal Liability Under CERCLA Heats Up: An Analysis of Proposed Congressional Amendments to Superfund, 5 VILL. ENVTL. L.J. 23, 31-37 (1994).

15. 54 Fed. Reg. at 51071; 63 Fed. Reg. at 8198 (citing 1989 Interim Policy).

16. Of course, municipalities could still be sued in appropriate circumstances by private parties under CERCLA § 107(a), and were also subject to contribution actions under § 113(f). 42 U.S.C. §§ 9607(a) & 9613(f), ELR STAT. CERCLA §§ 107(a) & 113(f).

17. 54 Fed. Reg. at 51071; 63 Fed. Reg. at 8198 (citing 1989 Interim Policy).

18. 63 Fed. Reg. at 8198-99.

19. Id. at 8199-200.

20. Id. at 8198, citing 42 U.S.C. § 9613(f)(2), ELR STAT. CERCLA § 113(f)(2). As discussed below, EPA took the position in the SLF litigation that such settlements can provide contribution protection not only with respect to claims for costs incurred by the United States at a site, but also with respect to response costs incurred independently by private parties.

21. 62 Fed. Reg. 37231 (July 11, 1997).

22. Id. at 37231.

23. Id. at 37233. The $ 3.05 per ton cost was derived from the cost model used in U.S. EPA, REGULATORY IMPACT ANALYSIS FOR THE FINAL CRITERIA FOR MUNICIPAL SOLID WASTE LANDFILLS (RIA) (1997). The closure costs included a final cover system that minimizes erosion and infiltration and the post-closure costs included cover maintenance and monitoring, and the maintenance and operation of a leachate collection system, a groundwater monitoring system and a gas monitoring system, all to be conducted for a period of 30 years. 62 Fed. Reg. at 37233. The $ 3.05 cap could also be increased to a maximum of $ 3.25 per ton if certain aggravating conditions, including a shallow aquifer beneath the landfill, unusually high rainfall, cold ambient temperatures, the groundwater beneath the landfill is a drinking water source, or that the availability of low-permeability cover material is limited onsite, existed at the site. 62 Fed. Reg. at 37233. No other conditions were identified that would allow the EPA Regions to increase the per ton cost, and no provision was made to increase the per ton cost above $ 3.25.

24. 62 Fed. Reg. at 37231-32.

25. Id. at 37231, 37233.

26. Id. at 37233.

27. Id. at 37233. The $ 3.05 per ton cost was derived from the cost model used in EPA's RIA. The closure costs included a final cover system that minimizes erosion and infiltration and the post-closure costs included cover maintenance and monitoring, and the maintenance and operation of a leachate collection system, a groundwater monitoring system, and a gas monitoring system for a period of 30 years. Id.

28. Id. at 37233. These conditions included: a shallow aquifer beneath the landfill, unusually high rainfall, cold ambient temperatures, groundwater beneath the landfill is a drinking water source, or is limited low-permeability cover material onsite. No other conditions were identified that would allow the Regions to increase the per ton cost and no provision was made to increase the per ton cost above $ 3.25.

29. Id. at 37234. Regions were also given the discretion to reduce the 20 percent presumptive baseline settlement amount if a municipality took steps to mitigate environmental harm after the risk of harm was discovered, or based on other equitable factors.

30. Id. at 37232, 37233.

31. All of the comments referenced in this Dialogue are on file with the authors.

32. Comments of Browning-Ferris Industries (Browning-Ferris Comments), Aug. 25, 1997, at 14-15; Comments of the Chemical Manufacturers Association (CMA Comments), Aug. 25, 1997, at 7-13 (citing Kelley v. EPA, 15 F.3d 1100, 24 ELR 20511 (D.C. Cir. 1994), reh'g denied, 25 F.3d 1088, 24 ELR 21204 (D.C. Cir. 1994), cert. denied, 513 U.S. 1110 (1995); United States v. Atlas Minerals & Chems., Inc., No. CIV.A. 91-5118, 1995 WL 510304, *87, 95-96 (E.D. Pa. Aug. 25, 1995), aff'd mem., No. 95-2030 (3d Cir. July 31, 1996); Comments of Laurel Park Coalition and Beacon Heights Coalition (Coalition Comments), Aug. 22, 1997, at 2-5 (citing Murtha, Transportation Leasing, Kelley and Gloucester Envtl. Management Servs. for proposition that both municipalities and private parties fall within the definition of "person" under CERCLA); Comments of Rockwell International Corporation (Rockwell Comments), undated, at 5-8 (citing Atlas Mining, 1995 WL 510304, at *81, 94-96); Comments of Putnam, Hayes & Bartlett, Inc. (Putnam Comments), Aug. 22, 1997, at 3-4.

33. CMA Comments, at 9-11; see also Browning-Ferris Comments, at 14-15.

34. CMA Comments, at 11-12; Comments of Great American Industries, Inc., Grumman Corporation, Kollmorgen Corporation, Konica Imaging, U.S.A., Inc., Lin Pac Group, Ltd., Long Island Lighting Company, Marmon Group, Inc. and Occidental Chemical Corporation (Great American et al. Comments), Aug. 25, 1997, at 4. One commenter argued that the settlement terms of the proposed policy were so favorable that they may give municipalities "a financial incentive not to comply with their obligations under solid waste laws." Browning-Ferris Comments, at 2.

35. Browning-Ferris Comments, at 8; CMA Comments, at 5, 22-23.

36. Coalition Comments, at 3-4; CMA Comments, at 7-8; Putnam Comments, at 4-6; Browning-Ferris Comments, at 13.

While USEPA may have the right to assess the circumstances of individual cases, settle its claims with PRPs, and thereby grant some measure of contribution protection, the statute does not authorize the agency to promulgate rules which establish a presumptive allocation applicable to contribution cases generally. . . . USEPA's attempt to reduce allocation decisions to a calculation also disregards the fact that CERCLA contemplates that allocation decisions be based on equitable principles, not a rigid formula.

37. See generally CMA Comments, at 8 ("EPA lacks the single most important tool needed to perform successful allocations of liability—Neutrality."). The CMA also cited to a study by EPA, U.S. EPA, OFFICE OF SITE REMEDIATION ENFORCEMENT, DEVELOPING ALLOCATIONS AMONG POTENTIALLY RESPONSIBLE PARTIES FOR THE COSTS OF SUPERFUND SITE CLEANUPS-2 (Sept. 30, 1994), to support its position. CMA Comments, at 8 n.8.

38. CMA Comments, at 7 ("By entering into uniquely favorable settlements with municipal PRPS, EPA will leave the remaining PRPS holding a large bag of liability that properly rests with the municipal PRPS."); Great American Industries et al. Comments, at 5-6 (courts have consistently found that it is appropriate to assign some of the burden of orphan shares to municipalities); Browning-Ferris Comments, at 1, 2; Comments of Waste Management, Inc. (Waste Management Comments), Aug. 20, 1997, at 6-7.

39. CMA Comments, at 13, 15-19 (citing 62 Fed. Reg. at 37232); Rockwell Comments, at 10-11; Coalition Comments, at 5-6; see also Browning-Ferris Comments, at 7-8.

40. CMA Comments, at 16 n.16 (citing 56 Fed. Reg. 50982 (Oct. 9, 1991)).

41. Coalition Comments, at 3 (citing B.F. Goodrich Co. v. Murtha, 754 F. Supp. 960, 972, 21 ELR 20777, 20780 (D. Conn. 1991), aff'd, 958 F.2d 1192, 22 ELR 20683 (2d Cir. 1992).

42. No. CIV.A 91-5118, 1995 WL 510304 (E.D. Pa. Aug. 25, 1995), aff'd mem., No. 95-2030 (3d Cir. July 31, 1996).

43. CMA Comments, at 11 (citing Atlas Minerals, 1995 WL 510304, at *87); Rockwell Comments, at 8; Putnam Comments, at 6-7 (citing Richard Lane White, EPA's New Municipal Liability Proposal Side Steps Equitable Allocation by Courts, 12 Toxics L. Rep. (BNA) 312 (Aug. 13, 1997).

44. Putnam Comments, at 6 n.11 (citing 53 Fed. Reg. 33314, 33319 (Aug. 9, 1988) (a study by EPA of 163 MSW-only landfills revealed that 146 of those sites were contaminated with groundwater); CMA Comments, at 16 n.16 ("significant ground water contamination is pervasive at MSW-only landfills," also citing 53 Fed.Reg. at 33319).

45. See CMA Comments, at 11, 16-17; Putnam Comments, at 6.

46. CMA Comments, at 19; Rockwell Comments, at 15; Putnam Comments, at 7.

47. CMA Comments, at 23. The proposed policy did allow for a small increase up to $ 3.25 per ton based on site-specific conditions. As the CMA noted, however, that only allows the Regions to make an "upward adjustment of roughly 6.5% to a fixed unit price that has no technical, legal, or policy support to begin with." Id. at 34 (citing 62 Fed. Reg. at 37233).

48. CMA Comments, at 23; Browning-Ferris Comments, at 17-20; Coalition Comments, at 6; see Waste Management Comments, at 3 (the $ 3.05 figure substantially departed from EPA's 1992 estimates of the relative costs required to remediate MSW at co-disposal sites without explanation).

49. Browning-Ferris Comments, at 17 (EPA claimed it used the cost model contained in the RIA. The RIA, however, has hundreds of variables that significantly impact the result of the modeled cost analysis. EPA did not indicate which variables were used in its calculations other than the three mentioned).

50. Waste Management Comments, at 3; CMA Comments, at 29-33. As is discussed below, this criticism ultimately was the primary basis on which the court in AlliedSignal rejected the first settlement proposed under the MSP.

51. CMA Comments, at 29.

52. Id. at 30.

53. Id.

54. Id. at 31.

55. Id. at 31.

56. Id. at 32.

57. Id. at 36; Great American Industries et al. Comments, at 4.

58. CMA Comments, at 37; Great American Industries et al. Comments, at 4.

59. CMA Comments, at 37-39; see Waste Management Comments, at 6.

60. CMA Comments, at 36 n.54, 39; Browning-Ferris Comments, at 20 n.4; Great American Industries et al. Comments, at 4; Waste Management Comments, at 6.

61. The 1997 proposed policy had stated:

The unit cost methodology is based on the costs of closure/post-closure activities at a "clean" MSW landfill (i.e. a RCRA subtitle D landfill, not subject to RCRA corrective action or CERCLA response authorities) and increased slightly if certain site conditions exist. EPA's estimate of the cost per unit of remediating MSW at an MSW-only landfill is $ 3.05 per ton.

62 Fed. Reg. at 37233. Similarly, the MSP stated: "This policy's unit cost methodology is based on the costs of closure/post-closure activities at a representative RCRA subtitle D landfill. EPA's estimate of the cost per unit of remediating MSW at a representative Subtitle D landfill is $ 5.30 per ton." 63 Fed. Reg. at 8198-99.

62. Id. at 8199.

63. Id. at 8198-99.

64. Id. at 8200 (emphasis added). In comparison, the 1997 proposal stated that "although this proposal has its most direct application at co-disposal sites with multiple, viable non-de minimus G/Ts, EPA may elect to apply all or part of a final policy to other appropriate sites." 62 Fed. Reg. at 37232.

65. Chemical Manufacturers Ass'n v. Environmental Protection Agency, 26 F. Supp. 2d 180, 182, 29 ELR 20306 (D.D.C. 1998) [hereinafter CMA v. EPA].

66. 5 U.S.C. §§ 500-596, available in ELR STAT. ADMIN. PROC.

67. EPA's Memorandum in Support of Defendants' Motion to Dismiss Plaintiffs' Complaint, CMA v. EPA, No. 98-CV-01255-LFO (D.D.C.) at 8-9 (emphasis added); see also 63 Fed. Reg. at 8201

This guidance and any internal procedures adopted for its implementation are intended exclusively as guidance for employees of the U.S. Government. This guidance is not a rule and does not create any legal obligations. Whether and how the United States applies the guidance to any particular site will depend on the facts at the site.

(Emphasis added.) Moreover,

the United States will not apply this policy where, under the circumstances of the case, the resulting settlement would not be fair, reasonable, or in the public interest. Regions should carefully consider and address any public comments on a proposed settlement that questions the settlement's fairness, reasonableness, or consistency with the statute.

Id. at 8200 (emphasis added).

68. CMA v. EPA, 26 F. Supp. 2d at 182-83, 29 ELR at 20307.

69. Id. at 185 & 183, 29 ELR at 20308, 20308 (citing 63 Fed. Reg. at 8200, 8198, respectively).

70. Id. at 186, 29 ELR at 20308 (holding the MSP was not final agency action).

71. 40 U.S.C. § 9606(a), ELR STAT. CERCLA § 106(a).

72. United States v. AlliedSignal, Inc., 1999 U.S. Dist. LEXIS 13225, at *5-*7, 29 ELR at 20055.

73. Id. at *4, *7-*8, 29 ELR at 20056.

74. See id. at *3-*4, *7 n.4, 29 ELR at 20056 n.4.

75. Id. at *2-*3, 29 ELR at 20055.

76. Id. at *4-*5, 29 ELR at 20055.

77. Id. at *5-*7, 29 ELR at 20056.

78. Id. at *8, 29 ELR at 20056.

79. As such, whether the SLF is even a co-disposal site under the terms of the MSP—i.e., a site that received both MSW and non-MSW industrial wastes—remains in question.

80. 1999 U.S. Dist. LEXIS 13225, at *7, 29 ELR at 20056.

81. Further, as noted by Judge McAvoy, the proposed settlement with the four municipalities would have covered all future cost overruns and other unexpected expenses. Id. at *11, 29 ELR at 20057. Nevertheless the $ 62,868.60 settlement did not include a premium charge for this risk.

82. Using EPA's RI/FS estimate of 238.679 cubic yards of waste at the SLF, converted to tons by the 1,200 pounds/yard conversion factor specified in the MSP, the cost of SLF landfill closure is projected to be $ 64.00 per ton, over 12 times more than the supposedly "representative" per ton number on which the proposed settlement in this case is based. In the proposed Consent Decree, however, EPA abandoned the RI/FS volume estimate and asserted that the 11,862 tons covered by the Consent Decree constitute all of the MSW at the SLF. Dividing that number by the total closure cost amount yielded $ 772.60 per ton.

83. 1999 U.S. Dist. LEXIS 13225, at *12-*13, 29 ELR at 20056 ("The court must 'satisfy itself that the settlement is reasonable, fair, and consistent with the purposes that CERCLA is intended to serve.' United States v. Cannons Eng'g, 899 F.2d 79, 87 [20 ELR 20845, 20847] (1st Cir. 1990)." [other citations omitted]).

84. Id. at *13-*14, 29 ELR at 20057 (quoting Cannons Eng'g, 899 F.2d at 87, 20 ELR at 20847).

85. Id. at *14, 29 ELR at 20057.

86. Id. at *23-*24, 29 ELR at 20058.

87. Id. at *16, 29 ELR at 20057 ("the [Municipal Settlement] Policy should not be followed blindly, particularly when doing so would lead to inequity").

88. Id. at *17, 29 ELR at 20057 (federal regulations simply establish the "minimum national criteria for closing MSW landfills." Cf., 40 CFR § 258.60 and 6 NYCRR Part 360). For a description of the EPA regulations, see John H. Turner, Off to a Good Start: The RCRA Subtitle D Program for Municipal Solid Waste Landfills, 15 TEMP. ENVTI. L. & TECH. J. 1 (1996).

89. AlliedSignal, Inc., 1999 U.S. Dist. LEXIS 13225, at *18, 29 ELR at 20057.

90. Id. at *18-*22, 29 ELR at 20057-58 (the definition of "response costs" is broader than the definition of "remedial action" and includes operation and maintenance costs). Judge McAvoy also noted that if the proposed settlement had only extended to remedial actions taken by EPA or other PRPs, and not to all "response costs" incurred, AlliedSignal and Amphenol would have retained the right to seek contribution for operation and monitoring costs, a result the settling parties clearly did not intend. Id. at *22, 29 ELR at 20057.

91. Id. at *27, 29 ELR at 20058.

92. Id. at *23, 29 ELR at 20058.

93. Id. at *25, 29 ELR at 20058.

94. Id. at *26-*27, 29 ELR at 20058.

95. Id. at *24, 29 ELR at 20058.

96. Id. at *25, 29 ELR at 20058.

97. Id. The court also noted that "the Policy was not intended to apply to municipalities who arranged for the disposal of non-MSW containing a hazardous substance. Thus, to the extent the municipalities may be responsible for arranging for the disposal of Bendix's industrial waste, the Policy is inapplicable." Id. at *25 n.8, 29 ELR at 20058 n.8.

98. Accordingly, the court did not have to resolve the parties' disputes over the amount of MSW disposed of by the municipalities to the SLF. Id. at *28 n.9, 29 ELR at 20058 n.9.

99. Id. at *27 & *23, 29 ELR at 20058.

100. This aspect of the AlliedSignal decision could potentially prompt municipal PRPs at newly listed NPL co-disposal sites to seek settlement under the MSP early, before actual site conditions and cost estimates are fully known. Such a result could make it more difficult for private PRPs to challenge such settlements, because they may not have access to the information that was available to AlliedSignal and Amphenol in their challenge to the SLF settlement.

101. For a discussion of draft EPA guidance addressing the disposal of nonhazardous industrial wastes, see Jonathan J. Greenberg. The U.S. EPA Draft Guide for Industrial Waste Management—Too Little, Too Late?, 29 ELR 10764 (Dec. 1999).