Reardon v. United States

No. 90-1319 (922 F.2d 28, 32 ERC 1482) (1st Cir. December 20, 1990)

The court holds that § 113(h) of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) does not preclude preenforcement judicial review of a challenge to a lien imposed under CERCLA § 107(l). The Environmental Protection Agency (EPA) imposed the lien on plaintiffs' property to secure funds for cleanup costs at a hazardous waste site in Massachusetts. The landowners then sued EPA, alleging that they are innocent landowners under CERCLA § 107(b) and that EPA exceeded its authority in placing the lien on the entire property instead of only the parcels affected by the cleanup. The court holds that CERCLA § 113(h), which bars preenforcement review of removal or remedial actions, does not bar judicial review of these statutory challenges. The imposition of a CERCLA lien, which is a step in the cost recovery process, is not a removal or remedial action, which are on-site actions taken by EPA to respond to hazardous waste. The imposition of a CERCLA lien is also not an enforcement activity related to a removal or remedial action. Enforcement under CERCLA refers to the measures that may be imposed to force compliance with EPA-ordered removal and remedial actions and not to any activity related to EPA's duties. The court's result does not conflict with CERCLA's purpose of ensuring prompt cleanup of hazardous waste sites, since this suit will not delay cleanup of the site.

[The district court's decision is published at 20 ELR 20698.]

Counsel for Appellants
Lynn Wright
Edwards & Angell
430 Park Ave., New York NY 10022
(212) 308-4411

Counsel for Appellees
Jacques B. Gelin
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

Before TORRUELLA and CYR, Circuit Judges, and RE,^* Judge.

[21 ELR 20640]

TORRUELLA, Circuit Judge.

Paul D. Reardon and John E. Reardon appeal from the February 6, 1990 decision of the United States District Court for the District of Massachusetts denying relief against a lien imposed pursuant to § 107(l), 42 U.S.C. § 9607(l), of the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), as amended by the Superfund Amendments and Reauthorizations Act of 1986, 42 U.S.C. § 9601 et seq. The district court dismissed appellants complaint and denied their motion for an injunction to enjoin imposition of a CERCLA lien on their property until a due process hearing could be held.

After due consideration, we find that the district court erred in denying the injunctive relief sought by appellants without holding a hearing on the merits of their statutory claims. Correctly construed, CERCLA does not preclude judicial review of a challenge toa lien imposed to recover response costs. We therefore reverse and remand to the district court for a hearing.

I. BACKGROUND

This action arises out of an investigation and cleanup conducted by the United States Environmental Protection Agency ("EPA") and the Massachusetts Department of Environmental Quality Engineering ("DEQE") in 1983 on the property of Grant Gear, which adjoins the property owned by the Reardons. As the issues, and the related facts, are identical with those argued at the district court level, we only summarize the relevant facts, referring the interested reader to Reardon v. United States, 731 F. Supp. 558 (D.Mass.1990), for a more detailed exposition.

In their investigation, the EPA and DEQE learned that industrial waste from the Grant Gear property had contaminated adjoining areas of the parcel owned by the Reardons. The EPA removed 518 tons of contaminated soil from the Reardon property. In March 1989, the EPA filed a notice of lien on the Reardon property pursuant to § 107(l) of CERCLA,¹ and sent a letter to the Reardons stating that they could settle the issue for $ 336,709.

Instead of settling, the Reardons filed a three count complaint against the United States and the EPA seeking declaratory and injunctive relief. Count I alleged that they were "innocent landowners" under CERCLA § 107(b), 42 U.S.C. § 9607(b), and were not, therefore, liable for cleanup costs. Count II averred that the imposition of the § 107(b) lien constituted deprivation of a significant property interest without due process of law in violation of the Fifth Amendment. Count III alleged that the EPA had exceeded its statutory authority by placing the lien on the entire property, rather than just on the parcels affected by the cleanup.

The district court declined to address the statutory challenges to the lien in Counts I and III, finding that it was without jurisdiction because § 113(h) of CERCLA, 42 U.S.C. § 9613(h), precludes judicial review until the EPA seeks to enforce the § 107(l) lien. As to Count II, however, the court found that although it had jurisdiction to consider the constitutional issue, the due process claim was without merit. It therefore denied the Reardons' motion for a preliminary injunction and dismissed the complaint.

The Reardons limited their appeal to that portion of the district court's opinion which held that the imposition of a federal lien under § 107(l) of CERCLA does not constitute deprivation of a substantial property interest in violation of the Fifth Amendment.² Nevertheless, the appeal is, more broadly, from the judgment of the district court denying the sought-after relief. Although Rule 3(c), Fed.R.App.P., requires that an appellant "designate the judgment, order or part thereof appealed from," we do not believe that the various parts of this judgment can or should be so readily severed. See C. A. May Marine Supply Co. v. Brunswick Corp., 649 F.2d 1049, 1056 (5th Cir.) ("where claims or issues are inextricably entwined, each may be reviewed even though not referred to in the notice of appeal"), cert. denied, 454 U.S. 1125, 102 S. Ct. 974, 71 L. Ed. 2d 112 (1981). We also hesitate to undertake a constitutional review of a statute when a statutory analysis will resolve the issue. See Gomez v. United States, 490 U.S. 858, 109 S. Ct. 2237, 2241, 104 L. Ed. 2d 923 (1989) ("It is our settled policy to avoid an interpretation of a federal statute that engenders constitutional issues if a reasonable alternative interpretation poses no constitutional questions."). For these reasons, our review of this case encompasses the entire judgment of the district court.

II. SUBJECT MATTER JURISDICTION

The question of subject matter jurisdiction is, of course, preliminary to any other, see Turner v. Bank of North America, 4 U.S. (Dall.) 8, 1 L.Ed. 718 (1799), and in this case we need go no further. The statute here at issue, CERCLA § 113(h), 42 U.S.C. § 9613(h),³ purports to deprive federal courts of jurisdiction to hear pre-enforcement⁴ challenges to CERCLA. The [21 ELR 20641] district court concluded that § 113(h) precluded judicial review of the Reardons' statutory claims.

The Supreme Court has set forth the method for determining whether a statute precludes judicial review:

Whether and to what extent a particular statute precludes judicial review is determined not only from its express language, but also from the structure of the statutory scheme, its objectives, its legislative history, and the nature of the administrative action involved.

Block v. Community Nutrition Inst., 467 U.S. 340, 345, 104 S. Ct. 2450, 2453, 81 L. Ed. 2d 270 (1984). It is presumed that Congress does not intend to proscribe completely judicial review of administrative actions. See, e.g., Abbott Laboratories v. Gardner, 387 U.S. 136, 140, 87 S. Ct. 1507, 1511, 18 L. Ed. 2d 681 (1967). By this time, however, it is clear and incontrovertible that, in enacting CERCLA § 113(h), Congress intended to bar all pre-enforcement judicial review of the EPA's choice of removal or remedial actions. See Voluntary Purchasing Groups, Inc. v. Reilly, 889 F.2d 1380, 1387-88 (5th Cir.1989); Alabama v. United States EPA, 871 F.2d 1548, 1557-58 (11th Cir.), cert. denied, — U.S. —, 110 S. Ct. 538, 107 L. Ed. 2d 535 (1989); Lone Pine Steering Comm. v. United States EPA, 777 F.2d 882, 886 (3d Cir. 1985), cert. denied, 476 U.S. 1115, 106 S. Ct. 1970, 90 L. Ed. 2d 654 (1986); South Macomb Disposal Authority v. EPA, 681 F. Supp. 1244, 1249-51 (E.D.Mich.1988). The statute cannot be read otherwise.

Congress did build into § 113(h) provisions allowing judicial review in certain circumstances. As the district court noted, none of these provisions apply directly to the instant case. The closest is § 113(h)(1) which allows review of "an action under section [107] of this title to recover response costs or damages for contribution." 42 U.S.C. § 9613(h)(1). Although a lien is certainly part of the cost recovery process, it is not an "action" to recover response costs. Rather, § 107(l)(4) states that the lien is itself only enforceable by an action in rem after the lien is created. 42 U.S.C. § 9607(l)(4).

We agree, therefore, with the conclusion of the district court that if a CERCLA lien is a removal or remedial action, § 113(h) would preclude judicial review of a challenge to a lien. Where we part company with the districtcourt is in its determination that imposition of the CERCLA lien can be categorized as a removal or remedial action. Of course, if the lien is not a removal or remedial action, then § 113(h) poses no jurisdictional obstacle.

Liability under CERCLA extends to the costs of any "response" actions taken by the United States. 42 U.S.C. § 9607(a). Response actions include both "removal" and "remedial" actions. 42 U.S.C. §§ 9601(25). Removal actions generally are short-term or interim measures taken to abate an immediate threat to the public. 42 U.S.C. § 9601(23). Remedial actions, on the other hand, are those associated with a long-term or permanent cleanup of the site. 42 U.S.C. § 9601(24). Response actions, including both removal and remedial actions, "include enforcement activities related thereto." 42 U.S.C. § 9601(25).

The statute thus does not purport to bar judicial review of all activities relating to removal or remedial actions, but only "enforcement" activities related thereto, as well as, of course, the removal or remedial actions themselves. 42 U.S.C. §§ 9601(25), 9613(h). It is clear from the definitions of removal and remedial actions that the imposition of a CERCLA lien does not fall directly within either term. Both types of actions refer to on-site action taken by the EPA to contain, control, and dispose of hazardous materials, and to protect the public from the effects of the pollutant. A lien, by contrast, is a step in the cost-recovery process. Review of a challenge to a lien, therefore, is not barred unless it can be said that the lien constitutes an enforcement activity related to a removal or remedial action.

"Enforcement activities" are not specifically defined by the statute. We note, however, that CERCLA § 117(c)(2), 42 U.S.C. § 9617(c)(2), titled "public participation," refers to "enforcement action under section 9606 of this title."⁵ In turn, CERCLA § 106, 42 U.S.C. § 9606, "abatement actions," sets forth various measures to be taken in an emergency situation. Section 106(a) authorizes the President to order "such relief as may be necessary to abate such danger or threat," and states that the President may "take other action under this section including, but not limited to, issuing such orders as may be necessary to protect public health and welfare and the environment." 42 U.S.C. § 9606(a). Section 106(b) authorizes the district court to impose a fine on persons who willfully violate an order of the President under subsection (a). 42 U.S.C. § 9606(b)(1). Section 106(b) also allows a person who complies with a § 106(a) order to receive reimbursement for costs incurred. 42 U.S.C. § 9606(b)(2).

Nowhere in § 106 is the issue of the recovery of response action costs incurred by the EPA addressed. To the contrary, that subject is covered in CERCLA § 107, "liability," which also authorizes the imposition of liens. 42 U.S.C. § 9607. Our reading of the language of these provisions, and our understanding of the way the statute is structured, lead us to conclude that "enforcement" in CERCLA is not a broad term meaningany activity related to the duties of the EPA. Rather, it appears specifically to refer to the measures that may be imposed to force compliance with EPA-ordered removal and remedial actions. We find, therefore, that a CERCLA lien is neither a removal nor a remedial action, nor an enforcement activity related thereto.

Available case law does not compel a different result. Apparently, Voluntary Purchasing Groups, 889 F.2d 1380, is the only case to date dealing in any depth with whether a pre-enforcement legal action, which does not "stall the cleanup portion of the removal action," id. at 1388, is subject to judicial review. The case stemmed from an EPA letter indicating that the EPA believed that Voluntary Purchasing Groups were liable for costs. The letter demanded payment, but no actual cost recovery action had begun. The Fifth Circuit ruled that Voluntary Purchasing Groups' request for declaratory relief was barred by CERCLA § 113(h).

We are not persuaded by the authority of Voluntary Purchasing Groups. First, the Fifth Circuit simply concluded, without any statutory analysis, that the letter demanding payment was "part of the enforcement process." Id. at 1388. As we have demonstrated, the statute itself simply does not offer much comfort for that proposition.

Second, the cases cited by the Voluntary Purchasing Groups court as precedent deal with attempts to seek injunctive relief or to otherwise delay cleanup action by the EPA. See, e.g., Wagner Seed Co. v. Daggett, 800 F.2d 310 (2d Cir.1986); Barnes v. United States Dist. Court for the W.Dist. of Wash., 800 F.2d 822 (9th Cir.1986); Wheaton Ind. v. United States EPA, 781 F.2d 354 (3d Cir.1986); Lone Pine Steering Committee, 777 F.2d 882. There is little doubt that the precise objective of CERCLA § 113(h) is to eliminate judicial review in circumstances where it will "delay remedial and removal cleanup activities." Voluntary Purchasing Groups, 889 F.2d at 1387. Yet, as we note infra pp. 32-33, a challenge to the imposition of a lien in this case does not have the effect of delaying clean-up efforts.

A third reason for placing little reliance on Voluntary Purchasing Groups is a factual distinction between that case and the situation confronting the Reardons. The EPA in Voluntary Purchasing Groups had merely sent a payment demand letter; [21 ELR 20642] no lien had been imposed. Such a letter has no legal force and did not affect any rights Voluntary Purchasing Groups may have had. The imposition of a lien clearly affects a legal right and is in more urgent need of prompt judicial review.

Finally, the Fifth Circuit's analysis relied primarily on legislative history and the overall "philosophy" of CERCLA. Voluntary Purchasing Groups, 889 F.2d at 1388. Although we do not discount the importance of these factors in discerning congressional intent to preclude judicial review, we maintain that the primary focus of attention must be the statute itself. Both the language of CERCLA § 113(h) and the structure of the statute as a whole support the position that a CERCLA lien is not part of the enforcement process.

We turn from our parsing of the language of CERCLA to the other inquiry relevant to our determination of whether § 113(h) precludes judicial review of a challenge to a lien: statutory purpose. The prohibition of pre-enforcement judicial review was enacted to ensure prompt cleanup of hazardous waste sites — the promptness of which would obviously be thwarted by litigation. The Senate Judiciary Committee reported as follows:

This amendment is to expressly recognize that pre-enforcement review would be a significant obstacle to the implementation of response actions and the use of administrative orders. Pre-enforcement review would lead to considerable delay in providing cleanups, would increase response costs, and would discourage settlement and voluntary cleanups.

S.Rep.No. 11, 99th Cong., 1st Sess. 58 (1985) (quoted in South MaComb Disposal Auth., 681 F. Supp. at 1250-51).

We are unable to perceive that the result we reach here does any violence to CERCLA's purpose. The clean-up of the property is substantially complete, so litigation will cause no delay. To the extent that the EPA is still involved in developing remedial plans for the site, litigation over the cost of the completed cleanup effort should not affect that activity. The present action does not in any way threaten or attempt to delay either physical cleanup of the environmental hazard or ancillary corrective and containment efforts.

Furthermore, although litigation always involves expenditure of resources, the EPA concedes that CERCLA lienees are entitled to their day in court at some time. In terms of financial burden, then, can it matter whether the EPA is required to defend the lien now or later? Finally, the Reardons have apparently already engaged in voluntary cleanup of the site, so allowing this action to proceed will not hinder their impulses in that regard.

III. CONCLUSION

In this case, resolution of the jurisdictional question completes our review. We hold that CERCLA § 113(h) does not preclude pre-enforcement judicial review of a challenge to a lien imposed pursuant to § 107(l). We therefore remand the case to the district court for further proceedings consistent with this opinion.

Remanded.

* The Honorable Edward D.Re, Chief Judge of the United States Court of International Trade,sitting by designation

1. Section 107(l) of CERCLA authorizes the imposition of a federal lien on property on which the United States has spent funds to effect a cleanup. 42 U.S.C. § 9607(l). That section states, in pertinent part:

(1) In general

All costs and damages for which a person is liable to the United States under subsection (a) of this section . . . shall constitute a lien in favor of the United States upon all real property and rights to such property which —

(A) belong to such person; and

(B) are subject to or affected by a removal or remedial action.

(2) Duration

The lien imposed by this subsection shall arise at the later of the following:

(A) The time costs are first incurred by the United States with respect to a response action under this chapter.

(B) The time that the person referred to in paragraph (1) is provided (by certified or registered mail) written notice of potential liability.

Such lien shall continue until the liability for the costs (or a judgment against the person arising out of such liability) is satisfied or becomes unenforceable through operation of the statute of limitations provided in section 9613 of this title.

42 U.S.C. § 9607(l.)

2. They do, however, assert in their brief that the district court's conclusion that it had no jurisdiction to review their statutory claims was erroneous.

3. CERCLA § 113(h) provides:

Timing of Review:

No Federal court shall have jurisdiction under Federal law other than under section 1332 of Title 28 (relating to diversity of citizenship jurisdiction) or under State law which is applicable or relevant and appropriate under section 9621 of this title (relating to cleanup standards) to review any challenges to removal or remedial action selected under section 9604 of this title, or to review any order issued under section 9606(a) of this title, in any action except one of the following:

(1) An action under section 9607 of this title to recover response costs or damages or for contribution.

(2) An action to enforce an order issued under section 9606(a) of this title or to recover a penalty for violation of such order.

(3) An action for reimbursement under section 9606(b)(2) of this title.

(4) An action under section 9659 of this title (relating to citizens suits) alleging that the removal or remedial action taken under section 9604 of this title or secured under section 9606 of this title was in violation of any requirement of this chapter. Such action may not be brought with regard to a removal where a remedial action is to be undertaken at the site.

(5) An action under section 9606 of this title in which the United States has moved to compel a remedial action.

42 U.S.C. § 9613(h).

4. We adopt the district court's definition of "pre-enforcement judicial review": "judicial review of EPA actions prior to the time that the EPA or a third party undertakes a legal action to enforce an order or to seek recovery of costs for the cleanup of a hazardous waste site." Reardon, 731 F. Supp. at 564 n. 8. The statute does not use the phrase "pre-enforcement judicial review," and we wish to avoid any confusion between that phrase and the term "enforcement activity" used both in the statute and in this opinion.

5. We recognize that "enforcement action" and "enforcement activity" are not necessarily synonymous. Nevertheless, as neither term is defined by the statute, we shall treat "enforcement" as the operative portion of each.