Court Turns Down EPA Policy On Municipality’s Cercal Settlements

Bowing to pressure from municipalities and congress, EPA adopted in 1998 the Policy for Municipality and Municipal Solid Waste CERCLA Settlements and National Priorities Lists Co-Disposal Sites. The policy recognized that many Superfund sites contain large volumes of municipal waste that typically includes small amounts of hazardous materials. Since many allocations for Superfund liability are volume driven, they result in potential large liabilities for municipalities. EPA's policy adopts a figure of $5.30 as the estimated cost per ton for remediation of municipal waste. This estimate is based upon costs for disposal at a RCRA SubtitleD landfill.

In the case of United States v. Allied Signal, No. 97-CV-0436 (N.D. NY Aug. 18, 1999), the United States District Court for the Northern District of New York was asked by EPA and certain settling municipal defendants to approve a Consent Decree. EPA had brought an action under Section 107 of CERCLA against certain non-municipal defendants, which brought third party complaints against the municipal defendants. Allied Signal objected to the Consent Decree. The Court determined that the Consent Decree was not "reasonable, fair and consistent with the purposes that CERCLA is intended to serve." It found that the $5.30 per ton estimated cost did not fairly represent the response costs that the municipal defendants could reasonably expect to pay for the cleanup of the landfill. The Court took issue with the EPA's use of an estimate based on costs at a hypothetical RCRA landfill, especially when real figures for the site in question were available. "Accordingly, upon reviewing the proposed Consent Decree, the Court will not ignore the realities of the conditions of the Site. Hence, 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 also objected to the disproportionate share of the costs of cleanup that would result to the non-municipal parties if the Consent Decree were approved. The Site consisted of approximately 74 acres, "yet, the cleanup costs attributed to [the municipalities] in the Consent Decree are insufficient to cap even one acre at the Site. Accordingly, the Consent Decree is not substantively fair."