United States v. Witco Corp.

No. Civ. A. 91-022RRM (D. Del. November 16, 1999)

ELR Digest

The court holds that the U.S. Environmental Protection Agency (EPA) may collect oversight costs from a chemical corporation in accordance with a Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) consent decree entered into by the two parties, but may not collect penalties for the company's failure to pay those costs. The corporation seeks to modify the decree under Fed. R. Civ. P. 60(b). The court first holds that EPA's delay in demanding reimbursement costs was not a material breach of the consent decree. Although EPA was supposed to submit these demands to the corporation on an annual basis, the delay, if it caused any harm to the corporation at all, cannot be said to amount to a material breach of the contract that would relieve the corporation of its obligations under the decree. Additionally, the corporation benefitted from EPA's tardiness by retaining the money over a five-year period and has failed to show that the costs are inaccurate. The court next holds that the corporation failed to comply with the consent decree's dispute resolution procedures and, therefore, is barred under the terms of the decree from petitioning the court to release its obligation to repay EPA's oversight costs. The corporation failed to respond to EPA's request for reimbursement with respect to the period from 1990 to 1995 within the 10-day period embodied in the consent decree. The corporation, however, did file an objection in 1996, thereby preserving its claims for reimbursement costs incurred by EPA from 1996 through 1998.

The court additionally holds that because the corporation alleges that enforcement of the decree would abridge its constitutional rights, the court has the authority to review the decree, even absent express authority from the terms of the decree. The court further holds that the Third Circuit's decision in United States v. Rohm & Haas Co., 2 F.3d 1265, 23 ELR 21345 (3d Cir. 1993), does not warrant a modification of the decree under Fed. R. Civ. P. 60(b). Rohm & Haas prohibits EPA from collecting oversight costs in an action under § 107 of CERCLA when a private party has performed the cleanup operations under § 106, but says nothing about what nature of consideration EPA may demand in a consent decree for the settlement of a dispute. Here, the corporation agreed as a term of its settlement to reimburse oversight costs incurred by EPA, and once the decree was entered by the court, EPA's authority to recover its oversight costs derived from the terms of the consent decree, not from CERCLA § 107. Moreover, under the corporation's interpretation of Rohm & Haas, the change of law is insufficient to warrant a modification because the decree was not based on the parties' misunderstanding of the law. Finally, the court voids the penalty provisions of the consent decree that provide that penalties shall accrue during dispute resolution periods because they do not establish a reasonable measure of harm caused by noncompliance with the decree.

The full text of this decision is available from ELR (11 pp., ELR Order No. L-127).

Counsel for Plaintiff
Patricia C. Hannigan, Ass't U.S. Attorney
U.S. Attorney's Office
Chemical Bank Plaza
1201 Market St., Ste. 1100, Wilmington DE 19801
(302) 573-6277

Counsel for Defendant
Phebe S. Young
The Bayard Firm
222 Delaware Ave., Ste. 900, Wilmington DE 19899
(302) 655-5000

[30 ELR 20193]

[OPINION OMITTED BY PUBLISHER IN ORIGINAL SOURCE]