United States v. Hardage

No. CIV-86-1401-P (W.D. Okla. September 9, 1988)

The court holds that judicial review of the Environmental Protection Agency's selected remedy in an action under § 106 of the Comprehensive Environmental Response, Compensation, and Liability Act that was filed prior to the enactment of the Superfund Amendments and Reauthorization Act is not limited to the administrative record. The court affirms two previous rulings on this issue in this case, published at 17 ELR 20242 and 20741.

[Other opinions in this litigation are published at 17 ELR 20738 and 21082. An opinion in a related case is published at 13 ELR 20188.]

Counsel for Plaintiff
Steven K. Mullins, Ass't U.S. Attorney
4434 U.S. Courthouse & Federal Office Bldg., Oklahoma City OK 73102
(405) 213-5281

John R. Barker
Environmental Enforcement Section, Land and Natural Resources Division
Department of Justice, P.O. Box 7611, Ben Franklin Station, Washington DC 20044
(202) 633-5273

Counsel for Defendant
Jeffrey N. Martin
Hunton & Williams
2000 Pennsylvania Ave. NW, P.O. Box 19230, Washington DC 20036
(202) 955-1500

[19 ELR 20255]

Phillips, J.:

Order on Motion to Restrict Review

Before the Court is plaintiff United States' Motion to Restrict Review of the Environmental Protection Agency's ("EPA") Remedial Decision to the Administrative Record.¹ For the reasons set forth below, the motion is DENIED.

This case was filed June 25, 1986. Twice, on December 11, 1986 and again on April 19, 1987, the previous Judge assigned to this matter, The Honorable Lee R. West, rejected the Government's attempts to restrict review to an administrative record. On those two dates the Court entered written orders finding that § 106² injunction claims "must be resolved in traditional trials by federal district courts after full discovery." United States v. Hardage, 25 Env't Rep. Cas. (BNA) 1343, [17 ELR 20242] (W.D. Okla. 1986); United States v. Hardage, 663 F. Supp. 1280, 1283 [17 ELR 20741] (W.D. Okla. 1987). The instant motion is the Government's third attempt to limit the Court's discretion.

History of the Hardage Litigation

Defendant Royal N. Hardage ("Hardage") owned and operated a waste disposal site located in Criner, Oklahoma. This site was permitted by the Oklahoma State Department of Health for Industrial Hazardous Waste Land Disposal on or about September 15, 1972. The site began operations as a waste disposal site in September 1972 and closed in November 1980.

On or about September 8, 1980, the Government filed a Complaint against Hardage seeking injunctive relief under Section 7003 of the Resource Conservation and Recovery Act of 1976 ("RCRA"), 42 U.S.C. § 6973. ("Hardage I"). Following passage of CERCLA, the government amended and supplemented its Complaint in June 1982, to add claims for injunctive relief under Section 106 of CERCLA, 42 U.S.C. § 9606, and for cost recovery under Section 107 of CERCLA, 42 U.S.C. § 9607.

The Government in Hardage I did not seek to limit the Court's discretion to the review of an administrative record. It sought to try the case. In a Joint Status/Discovery Report filed on March 12, 1981, in that case, the Government represented that:

Plaintiff sees the unique issue here as the degree of cleanup to be provided. Plaintiff believes that while the threat of uncontrolled releases may present an imminent and substantial endangerment, there is considerable disagreement on the corrective actions which will be necessary to insure that such endangerment is permanently contained or removed. This may present a combined issue of law and fact for the Court to resolve: given endangerment, what must be done? If complete and scientifically proper measures prove to be beyond the financial ability of the defendant, how far must he go?

(emphasis added)

On December 13, 1982, the Court ruled that Hardage was liable under Section 7003 of RCRA and Section 106 of CERCLA but, because the remedial phase of the trial remained, the Court entered no judgment on the injunctive claims. United States v. Hardage, 18 Env't. Rep. Cas. 1687 [13 ELR 20188] (W.D. Okla. 1982). The Government chose not to proceed to a remedy trial. It knew that appropriate remedy measures might prove to be beyond the financial ability of Hardage.

On August 9, 1983, the Court entered a partial judgment under Section 107 against Hardage for $ 211,795, which represented government response costs incurred through December 1982. The Government thereafter sought to identify Hardage's assets and obtain payment under the partial judgment. Hardage, however, ultimately filed for bankruptcy on January 28, 1985, in the Bankruptcy Court for the Western District of Oklahoma, and received a discharge in bankruptcy on June 24, 1985.

Subsequent to the Court's liability ruling, the Government also began conducting investigations and administrative review aimed at determining the proper remedy to cleanup the site. In addition, the Government sought to identify other parties responsible for the contamination, particularly in light of Hardage's financial difficulties. For these purposes, the Government requested, and the Court on July 18, 1985 issued, an order administratively terminating the action in the clerk's records without prejudice to the rights of the parties to reopen proceedings by April 1, 1986 "for good cause shown, for the entry of any stipulation or order, or for any other purpose required to obtain a final determination of the litigation."

The Government on March 27, 1986, moved to reopen the proceedings and to amend its Complaint to add as party defendants various generators and transporters of the hazardous substances at the Hardage Site. The Court did not allow the government to add the generator and transporter defendants and dismissed the case on April 1, 1986. The dismissal was without prejudice to the Government's rights to collect the earlier judgment against Hardage, or to join Hardage in any subsequent action for purposes other than a money judgment deemed "necessary to allow EPA or its designees to remediate or respond to conditions at the Site and to take actions necessary to protect the public health, welfare or the environment."

The United States filed the instant action ("Hardage II") on June 25, 1986, against thirty-two (32) generators and three (3) transporters who sent hazardous substances to the site, as well as against Hardage for limited purposes consistent with the Court's earlier dismissal. As in Hardage I, the Complaint in Hardage II sought injunctive relief under Section 7003 of RCRA and Section 106 or CERCLA, and sought recovery of costs incurred by the Government, under Section 107 of CERCLA. Also, as in Hardage I, the Complaint did not state or imply that the Court's review should be limited to an administrative record. The Complaint called upon the Court "to issue an injunction" — an act traditionally requiring the exercise of a court's equitable discretion — and made no reference to an administrative record or the "arbitrary and capricious" standard of review.

At the time Hardage II was filed, there were no provisions in CERCLA (and no regulations implementing CERCLA) which specified, or even implied, that judicial review in any CERCLA action would be performed by review of an administrative record. Moreover, in June of 1986, there already were several decided cases in which courts had found that trials should be conducted to resolve remedy issues in CERCLA actions brought to compel parties to implement a remedy at a waste site. When Hardage II was filed, EPA had not assembled any sort of record to document the process it had followed to that point in attempting to select a preferred remedy. There were no regulations or procedures for preparing administrative records of remedy decisions.

The process that EPA followed to obtain a remedy for the Hardage site was litigation.

Section 113(j) of the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499 ("SARA" or "Superfund amendments") took effect on October 17, 1986. Section 113 of CERCLA, 42 U.S.C. § 9613, as amended by SARA, governs judicial review under the Act.

Only after the Superfund Amendments and the new record review provisions became law in October of 1986 did the Government begin to seek to limit the Court's review to an administrative record. Judge West rejected the Government's attempt at the first available opportunity.³

[19 ELR 20256]

The Government argues that Judge West's previous rulings were mere dicta, that the undersigned judge (to whom this case was assigned on June 22, 1987) need not follow Judge West's previous rulings, and finally that a change of circumstances warrants the undersigned's "independent review of the issue of record review." Government's Brief at pp. 16-20 (March 15, 1988). The Government then argues the same substantive points it has twice previously argued before Judge West.

The change of circumstances referred to by the Government are: (1) the Government's administrative record was filed contemporaneously with the filing of the instant motion, on March 15, 1988; and (2) also on March 15, 1988, the Government moved to voluntarily withdraw it's Section 7003 RCRA claim, which was granted July 14, 1988.

While these events are clearly "changes of circumstances," they are not of such effect as to warrant the Court's reversal of Judge West's rulings on the record review issue. With regard to filing of an administrative record, Judge West in his April 9, 1987 Order ruled that "[the Government's] late filing of a Record of Decision and its continuing failure to certify an administrative record to the Court . . . constitutes the proverbial 'too little too late'" to justify restricting judicial review to an administrative record. 663 F. Supp. at 1286.

This Court finds, likewise, that the Government's eventual filing of an administrative record, nearly two years after the Government filed the Hardage II action, is not sufficient to justify the Court's reversal on its third consideration of the issue.

Similarly, this Court finds that the Government's offer to dismiss its Section 7003 RCRA claim (and the subsequent dismissal thereof) is insufficient to warrant the Court's reversal on its third consideration of the issue. It was simply a change of litigation strategy intended to "avoid further unnecessary dispute over the question of the effect of the presence of the [Section 7003 RCRA claim] on the scope of review [issue]." United States' Brief in Support of Motion to Voluntarily Withdraw First Claim for Relief at p. 4 (Mar. 15, 1988).

Other jurisdictions have agreed with the reasoning and analysis of Judge West's decision. In United States v. Conservation Chem. Co., 661 F. Supp. 1416, 1424-31 (W.D. Mo. 1987) the court cited and largely adapted Judge West's decision on the record review issue. See also United States v. Ottati & Goss, Inc., No. C-80-225-L (D.N.H. Nov. 14, 1986); United States v. Ottati & Goss, Inc., No. 87-1003 (1st Cir. Feb. 4, 1987) (denying government's petition for writ of mandamus which alleged the court abused its discretion by refusing to limit review to EPA's administrative record); United States v. Ottati & Goss, Inc., No. C-80-225-L [18 ELR 20773] (D.N.H. Mar. 17, 1988).⁴

The Court has carefully considered the parties' four briefs with regard to the instant motion, the exhibits thereto, the December 11, 1986 Order and the April 9, 1987 Order issued by Judge West in this case, and pertinent other portions of the file.

Based on that consideration, the Court finds as follows:

The Government's motion to restrict review should be denied for the reasons stated in Judge West's thoroughly analyzed and well-reasoned Orders of December 11, 1986 and April 9, 1987. This Court finds as a matter of law that Section 106 claims must be resolved in traditional trials by federal district courts after full discovery, and that retroactive application of § 113(j) of SARA is improper.

This Court adopts and incorporates Judge West's Orders, copies of which are attached hereto. (Exhibit "A" is the December 11, 1986 Order; Exhibit "B" is the April 9, 1987 Order).

Conclusion

The United States' Motion to Restrict Review of EPA's Remedial Decision to the Administrative Record, filed March 15, 1988, should be and hereby is DENIED.

IT IS SO ORDERED THIS 9 DAY OF SEPTEMBER, 1988.

1. The Government's motion was filed March 15, 1988, and defendants responded April 28, 1988. The Government filed its reply brief May 23, 1988, and defendants responded to that brief on June 17, 1988.

2. Section 106 of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. § 9606 ("CERCLA" or "Superfund statute").

3. See the two Orders entered by Judge West on December 11, 1986 and April 9, 1987, referred to in the introductory language of this Order.

4. Two jurisdictions have distinguished Judge West's decision. In United States v. Seymour Recycling Corp., 679 F. Supp. 859, 861-63 [18 ELR 20245] (S.D. Ind. 1987), petition for appeal granted, No. 87-8045 (7th Cir. Aug. 24, 1987), the Court carefully distinguished Hardage II by noting that it was "in a much different posture than this case . . . trial preparation was . . . well-advanced. . . ." 679 F. Supp. at 864 n.6. The Seymour court concluded that it was appropriate to certify the issue for review by the Seventh Circuit. The court in United States v. Rohm & Haas Co., 669 F. Supp. 672, 676-77 [18 ELR 20221] (D.N.J. 1987), also distinguished Hardage II.