On June16, 1997, the United States Environmental Protection Agency's (EPA) Environmental Appeals Board approved a settlement of a contested administrative matter which requires the Superfund to pay money back to four clients of Honigman Miller Schwartz and Cohn (HMS&C) that conducted a removal action at a Superfund site in Romulus, Michigan. This is the first time that EPA has ever agreed to reimburse even a portion of cleanup costs incurred by companies under a Unilateral Administrative Order (UAO).
The settlement agreement approved by EPA requires the Superfund to pay $143,535 to HMS&C's clients. In addition, EPA Region V has agreed to drop all efforts to force them to pay EPA's outstanding oversight costs of $209,000. The total value of the settlement, $352,535, is modest compared with the $5,300,000 which the petitioners spent in performing the cleanup. Nonetheless, the settlement provides the petitioners some measure of satisfaction and vindicates, to some extent, their position that they were not liable.
The case concerns a seven-acre parcel of property in Romulus, Michigan, which was once owned by an individual who, at one time, was a contract driver for one of the petitioners. During an interview with an EPA attorney regarding other sites in Wayne County, the driver made statements that allegedly connected the petitioners to the property in Romulus. On the basis of these statements, and responses to EPA information request letters, EPA issued a UAO to Environmental Waste Control, Inc., General Motors Corporation, Ford Motor Company, and The Budd Company in late 1992. These companies performed the removal action required by the UAO in 1993, and in April 1994, they filed a Petition for Reimbursement with EPA pursuant to Section 106(b) of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). In June 1994, EPA Region V demanded that the petitioners reimburse EPA for its costs of overseeing the cleanup, which ultimately amounted to $209,000. The petitioners declined to pay USEPA's oversight costs because of the pending petition in which they were asserting that they were liable.
Section 106(b) of CERCLA provides that a party that has complied with a UAO may recover its costs from the Superfund provided that it can prove either: (1)that it is not liable under CERCLA for the site, or (2)that the cleanup ordered by EPA was arbitrary and capricious. A petitioner has the burden of proof in such a proceeding, which makes it very difficult to prevail.
At least 35 petitions for reimbursement have been filed with EPA since 1986, when Congress amended CERCLA to add Section106(b). Until now, none of these petitions has prevailed. Several have been withdrawn by the parties who filed them, and EPA has denied most of the rest. A few of the petitions denied by EPA have been appealed to the appropriate federal court. Approximately 15 such petitions are now pending before EPA.
This article was written by Christopher J. Dunsky, a partner in our Environmental Law Department, and previously appeared in the June 1997 edition of Michigan Environmental Compliance Update, our monthly newsletter published by M. Lee Smith Publishers.