Amicus Curiae Brief — W.R. Grace & Co. v. United States (No. 05-1363)

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Supreme

FILED —

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No. 05-1363 LOFFICE OF r.~ ~

In The

Supreme Court of the Gnited States

W.R. GRACE & CO., KOOTENAI DEVELOPMENT,

CORP., and W.R. GRACE & CO. —- CONN.,

Petitioners,

UNITED STATES OF AMERICA,

Respondent.

On Petition For Writ Of Certiorari

To The United States Court Of Appeals

For The Ninth Circuit

AMICUS CURIAE BRIEF OF MOUNTAIN

STATES LEGAL FOUNDATION IN

SUPPORT OF PETITIONERS

WILLIAM PERRY PENDLEY*

*Counsel of Record

RONALD W. OPSAHL

MOUNTAIN STATES

LEGAL FOUNDATION

2596 South Lewis Way

Lakewood, Colorado 80227

(303) 292-2021

Attorneys for Amicus Curiae

COCKLE LAW BRIEF PRINTING CO. (800) 225-6964

OR CALL COLLECT (402) 342-2831

QUESTION PRESENTED

Whether the Ninth Circuit erred, and created a

conflict with the Eighth and Tenth Circuits, by holding

that the Comprehensive Environmental Response, Com-

pensation, and Liability Act of 1980 (“CERCLA”), as

amended, 42 U.S.C. §§ 9601-9675, requires a responsible

party to pay the entire cost of an environmental response

action of potentially unlimited scope and duration, under-

taken without any consideration of cost or cost-

effectiveness, without being allowed to challenge whether

all or part of that action was necessary to contain or abate

an immediate environmental hazard?

TABLE OF CONTENTS

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CONGRESS EXPRESSLY CREATED A TWO-

CATEGORY SYSTEM OF HAZARDOUS SUB-

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PREHENSIVE ENVIRONMENTAL RESPONSE,

COMPENSATION, AND LIABILITY ACT

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COURTS HAVE PERMITTED, AND MUST

CONTINUE TO PERMIT, A POTENTIALLY

RESPONSIBLE PARTY (“PRP”) TO DISPUTE

ELEMENTS OF A RESPONSE ACTION THAT

ARE INCONSISTENT WITH THE NATIONAL

CONTINGENCY PLAN (“NCP”)........... eee

THE NINTH CIRCUIT'S DECISION IN THE

INSTANT CASE TOTALLY UNDERMINES

CONGRESS’S REMOVAL/REMEDIAL SCHEME,

EFFECTIVELY CREATING ONE CATEGORY

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TABLE OF AUTHORITIES

Page

CASES

Carroll v. Litton Sys., Inc., 1995 WL 56862 (4th Cir.

RITE ihascinsncadicivccecpickdhdaedsa aleeeuadeeintnagativamnqsibuiss 5

Exxon Corp. v. Hunt, 475 U.S. 355 (1986) ....0........e ee 3, 4

Gen. Elec. Co. v. Envtl. Prot. Agency, 360 F.3d 188

(Ed:G, Gin DOGO ci ticiacouniscuckaaaicnionsaase 3, 4

Minnesota v. Kalman W. Abrams Metals, Inc., 155

Ae RO Crete GAR SII siicesandcccssssnacedinassvsraaiciniancans 7,8

New York v. Shore Realty Corp., 759 F.2d 1032 (2d

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United States v. Hardage, 982 F.2d 1436 (10th Cir.

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United States v. W.R. Grace & Co., 429 F.3d 1224

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STATUTES

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TABLE OF AUTHORITIES — Continued

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REGULATIONS

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RULES

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RII: CONGUE RUAN 0 FF iniis ci sihocancrscrcdvesonsesvonanickeveneeels

OTHER AUTHORITIES

Jerry L. Anderson, Removal or Remedial? The Myth

of CERCLA’s Two Response System, 18 Colum. J.

Ee. Bs De 5 RD actieids caualiaioamvenbincesiadacioeccadscheuacnentes 4,5

AMICUS CURIAE BRIEF OF MOUNTAIN

STATES LEGAL FOUNDATION

Mountain States Legal Foundation (“MSLF”) respect-

fully submits this amicus curiae brief on behalf of itself in

support of Petitioners. Pursuant to Supreme Court Rule

37(2)a), this amicus curiae brief is filed with the written

consent of all the parties.’

IDENTITY AND INTEREST OF AMICUS CURIAE

MSLF is a non-profit, membership public interest law

foundation dedicated to bringing before the courts those

issues vital to the defense and preservation of individual

liberties, the right to own and use property, limited and

ethical government, and the free enterprise system.

MSLF’s members include businesses and individuals who

live and work in nearly every state of the country. A large

number of MSLF’s members work in businesses involved

in the utilization and development of natural resources

and, as a result, are involved actively in many environ-

mental issues. Moreover, MSLF and its members have an

interest in ensuring that federal laws and regulations,

including the Comprehensive Environmental Response,

Compensation, and Liability Act, are implemented and

enforced in a manner intended by Congress and consistent

with the Constitution of the United States.

* Copies of the consent letters have been filed with the Clerk of the

Court. In compliance with Supreme Court Rule 37(6), MSLF represents

that no counsel for any party authored this bref in whole or in part and

that no person or entity, other than MSLF, made a monetary contribu-

tion to the preparation or submission of this brief.

SUMMARY OF THE ARGUMENT

For decades, American factories, refineries, mines,

and other business enterprises disposed of hazardous

wastes in the cheapest possible manner, with little or no

concern for human health or the environment. In re-

sponse, Congress enacted the Comprehensive Environ-

mental Response, Compensation, and Liability Act of 1980

(“CERCLA”), 42 U.S.C. §§ 9601-9675, to fill the perceived

gap in environmental protection caused by inactive and

abandoned hazardous waste sites. The purpose of CER-

CLA is twofold: 1) to protect the public and the environ-

ment by forcing the prompt cleanup of hazardous waste

sites, and 2) to ensure that the costs of such cleanup

efforts are borne by responsible parties rather than by

American taxpayers. CERCLA is triggered if a release or

threatened release of a hazardous substance has occurred.

42 U.S.C. § 9604. Once triggered, CERCLA provides a

mechanism by which the Environmental Protection

Agency (“EPA”) can clean up the site using monies from

the “Superfund,” and then seek reimbursement from

potentially responsible parties (“PRPs”). Jd. §§ 9604

(providing for response actions by tie Federal govern-

ment), 9607(a)(4)(A) (providing liability for “all costs of

removal or remedial action incurred by the United States

Government ... not inconsistent with the national contin-

gency plan”), 9611 (establishing the “Superfund” to provide

federal monies for hazardous waste site cleanup).

In CERCLA, Congress created a two-category system

for the cleanup of hazardous waste sites: “removal” actions

and “remedial” actions. Although the statutory definitions

of “removal” and “remedial” are less than a picture of

clarity, removals generally have been thought of as short-

term, interim actions taken to prevent imminent harm

and to keep a release of contaminants from getting worse.

Exxon Corp. v. Hunt, 475 U.S. 355, 360 (1986); Gen. Elec.

Co. v. Envtl. Prot. Agency, 360 F.3d 188, 189 (D.C. Cir.

2004) (per curiam). Remedial actions, on the other hand,

are permanent remedies for a site, generally comprising

the long-term treatment or containment of the hazardous

substance. Jd. While courts have developed several tests in

their attempts to delineate “removal” and “remedial”

actions, the Ninth Circuit’s treatment of the issue in the

instant case completely obliterates any distinction in-

tended by Congress. Therefore, this Court should grant

Petitioners’ Petition for Writ of Certiorari in order to clarify

this important area of federal environmental law.

ARGUMENT

I. CONGRESS EXPRESSLY CREATED A TWO-

CATEGORY SYSTEM OF HAZARDOUS SUB-

STANCE CLEANUPS UNDER THE COMPRE-

HENSIVE ENVIRONMENTAL RESPONSE,

COMPENSATION, AND _ LIABILITY ACT

(“CERCLA”).

In CERCLA, Congress expressly created a _ two-

category system of hazardous substance response: removal

and remedial actions. “Removal” action is defined as any

measure taken to “prevent, minimize, or mitigate damage

to the public health welfare or to the environment.” 42

U.S.C. § 9601(23). Removals generally are thought of as

short-term, interim actions taken to prevent imminent

harm and to keep a release of contaminants from getting

worse. Exxon Corp., 475 U.S. at 360; Gen. Elec. Co., 360

F.3d at 189. “Remedial” action, on the other hand, refers to

the permanent remedy for a site, which generally com-

prises long-term treatment or containment of the hazard-

ous substance. Id.; 42 U.S.C. § 9601(24).

The distinction between a “remedial” action and a

“removal” action is significant in three principal contexts:

1) removals and remedies are subject to different require-

ments under the National Contingency Plan (“NCP”); 2)

remedial! actions financed by the Superfund require listing

on the National Priorities List (“NPL”) prior to action,

while removals do not; and 3) CERCLA provides for

different limitation periods for the recovery of remedial

and removal costs. See Jerry L. Anderson, Removal or

Remedial? The Myth of CERCLA’s Two Response System,

18 Colum. J. Envtl. L. 103 (1993) (providing an analysis of

the differing uses of “removal” and “remedial” actions

under CERCLA). Most applicable to the instant Petition

are the differing requirements under the NCP and the

listing requirements on the NPL.

The NCP tries to balance concerns for health, safety,

and the environment with fairness to PRPs and other

interested parties. Because an urgent response generally

is required for removals, the NCP places few restraints on

that type of action. See 40 C.F.R. § 300.700(c)(4). For

remedial actions, however, the goals of fairness and

efficiency may be served best by more careful contempla-

tion of risks and response alternatives; accordingly, the

NCP imposes greater requirements for remedial actions.

The NCP requires far more for remedial actions in terms

of planning, choice of action, and public comment than it

does for removal actions. For example, to be consistent

with the NCP, the remedial alternative selected will be

evaluated on its effectiveness, implementability, and cost

effectiveness. 40 C.F.R. § 300.430(e)(9)(iii), 300.430(i). “The

differences grow primarily from the assumption that

removal actions must be taken quickly, without the delay

associated with extensive study and public comment.”

Anderson, supra, 18 Colum. J. Envtl. L. at 112. Moreover,

CERCLA requires the NPL listing criteria be used “for the

purpose of taking remedial action and, to the extent

practicable taking into account the potential urgency of

such action, for the purpose of taking removal action.” 42

U.S.C. § 9605(a)(8(A). Courts have interpreted this language

to require NPL listing as a prerequisite for Superfund-

financed remedial actions, but not for removal actions.

See, e.g., New York v. Shore Realty Corp., 759 F.2d 1032,

1046-47 (2d Cir. 1985). Because the NPL is a feature of

the NCP, failure to list a site renders any remedial action

to clean up the site inconsistent with the NCP. Therefore,

the failure to list a site on the NPL bars any cost recovery

for Superfund-financed remedial actions. E.g., Carroll v.

Litton Sys., Inc., 1995 WL 56862, at *7 (4th Cir. 1995).

The distinction between removal and remedial actions

is, in part, to protect PRPs from unnecessarily broad

response actions, l.e., remedial actions guised as removals.

That is, the EPA’s authority to conduct short-term removal

actions must be balanced with the PRP’s interests in not

being forced to pay for response actions beyond that

necessary to prevent imminent harm to human health or

the environment. /

II. COURTS HAVE PERMITTED, AND MUST CON-

TINUE TO PERMIT, A POTENTIALLY RESPON-

SIBLE PARTY (“PRP”) TO DISPUTE ELEMENTS

OF A RESPONSE ACTION THAT ARE INCON-

SISTENT WITH THE NATIONAL CONTIN-

GENCY PLAN (“NCP”).

It is well established that the burden of proof is on the

defendant in a CERCLA cost recovery action to show that

the government’s costs are inconsistent with the NCP. In

order to show that a government response is inconsistent,

the defendant must show that the EPA acted arbitrarily,

capriciously, or otherwise not in accordance with law.

United States v. Hardage, 982 F.2d 1436, 1442 (10th Cir.

1992). CERCLA provides that the EPA may conduct a

removal action when “there is a substantial threat of

release into the environment ... which may present an

imminent and substantial danger to the public health or

welfare.” 42 U.S.C. § 9604(a)(1) (emphasis added). There-

fore, by extension, any action that is not in response to an

imminent and substantial danger cannot be in furtherance

of a “removal” action. Moreover, a removal action is limited

statutorily to a one-year, $2-million cap, unless the EPA

finds the response action is “immediately required to

prevent, limit or mitigate an emergency,” and that “there

is an immediate risk to public health or welfare or the

environment.” Id. § 9604(c)(1). Again, by extension, any

action that is not in response to an immediate risk, there-

fore, cannot be in furtherance of an “emergency removal.”

As a result, any action by the EPA that is not in

response to an immediate risk cannot be denominated a

“removal” or an “emergency removal” under CERCLA

without violating the arbitrary and capricious standard

because any such denomination would not be in accordance

with federal law. Therefore, those response costs cannot be

in accordance with the NCP and, accordingly, the EPA

cannot be awarded its response costs for those actions.

Moreover, a PRP must be allowed to evaluate and

dispute, if necessary, any response action by the EPA that

is not in response to an immediate threat to human health

or the environment. Despite the Ninth Circuit’s lament to

the contrary, see, e.g., United States v. W.R. Grace & Co.,

429 F.3d 1224, 1245, 1250 (9th Cir. 2005), courts should be

required to permit just this sort of in-depth probing into

the EPA’s response action. To otherwise hold, the PRP

would have no recourse at all and the EPA would have a

blank check to conduct whatever cleanup it alone deemed

necessary, even if the expense was grossly excessive and

the action itself was objectively unnecessary to protect

against an immediate risk.

This analysis was upheld expressly by the Eighth

Circuit in Minnesota v. Kalman W. Abrams Metals, Inc.,

155 F.3d 1019 (8th Cir. 1998). In Abrams Metals, Minne-

sota brought a cost-recovery action against a PRP for costs

incurred by the state in cleaning up lead-contaminated

soils. Because the site cleanup was permanent in nature

and the agency dealt with the problem in a “leisurely”

manner, the Eighth Circuit held the response action a

remedial! action, not a removal. Jd. at 1024. Further, the

Eighth Circuit held that some of the procedures utilized by

the State in its cleanup failed to meet NCP standards. As a

result, those costs were not permitted to be recovered from

the PRP. Jd. at 1024-1026 (“It is important to everyone

that necessary environmental remediation be timely

completed as cost effectively as possible. Therefore, the

kind of arbitrary and wasteful agency action that occurred

in this case cannot be rewarded.”) (emphasis added). Thus,

the Abrams Metals case stands as an illustration of a court

providing just the sort of hard look at the State’s cleanup

efforts compliance, on a cost-by-cost basis, that Petitioners

ask this Court to require of the Ninth Circuit.

Hil. THE NINTH CIRCUIT'S DECISION IN THE

INSTANT CASE TOTALLY UNDERMINES CON-

GRESS’S REMOVAL/REMEDIAL SCHEME, EF-

FECTIVELY CREATING ONE CATEGORY OF

RESPONSE.

“CERCLA provides that the selection of response

actions shall be upheld ‘unless arbitrary and capricious or

otherwise not in accordance with law.’” W.R. Grace, 429

F.3d at 1232 (quoting 42 U.S.C. § 9613(j)(2)). While the

District Court and the Ninth Circuit both deferred to the

EPA’s determination to “approve a time-critical removal

action,” the Ninth Circuit correctly took the analysis “one

step further:” Was the EPA’s response in Libby actually a

removal action? Jd. at 1232-1233. Although the Ninth

Circuit attempted to determine if the response action fell

within the requirements of a removal, the court failed to

analyze the individual components of the response. In-

stead, the court held that, so long as at least one element

of the response was correctly classified, the entire re-

sponse action could be denominated a “removal.” However,

by characterizing the entire response action in Libby as a

“removal,” the EPA circumvented the procedural safe-

guards statutorily allowed PRPs. A PRP is not permitted

pre-enforcement review, 42 U.S.C. § 9613(h), there are no

alternatives analyses for emergency removal actions, 40

C.F.R. § 300.415(b)(4), and, if the Ninth Circuit’s holding is

permitted to stand, a PRP has no recourse in court to

challenge individual removal action decisions.

Further, under the Ninth Circuit’s holding, there

would be no procedural protections to prevent the EPA

from finding a removal necessary in Libby, and then tying

cleanup efforts in other locations to that removal. Under

the EPA’s and Ninth Circuit’s reasoning, Grace would be

prevented from ever disputing an EPA decision that the

processing sites in Denver, Colorado, or Portland, Oregon,

or any of the multitude other sites (at its peak production,

the Libby mill produced up to 80 percent of the world’s

supply of vermiculite, much of which was used in commer-

cial or residential applications), should be cleaned up as

part of the “single, cohesive removal action.” W.R. Grace,

429 F.3d at 1237 (“We refrain from slicing and dicing the

EPA’s single, cohesive renoval action into a myriad of

fractured parts.”). After all, this is how the EPA included

homes and commercial spaces in Libby that contained

finished vermiculite insulation.

Moreover, under the Ninth Circuit’s reasoning, the

EPA has no incentive to list a site on the NPL ever. Indeed,

the EPA has an incentive to classify any response action as

a “removal,” and, so long as the courts can identify one

element as properly classified, the entire response action

can then proceed without any of the procedural safeguards

provided by Congress, an effect that Congress could not

have intended.

CONCLUSION

In this case, the Ninth Circuit clearly let an extraordi-

nary fact pattern drive its decision. A careful review of the

response action propounded by the EPA should have led the

court to determine that at least some of the activities

performed by EPA were not necessary or consistent with an

“emergency removal” of hazardous substances; for example,

there could not possibly be an imminent threat to human

health caused by asbestos-containing vermiculite located

under a parking lot or firmly contained within building

materials not subject to disturbance. Although “complete

exposure pathways” were identified, that alone is not

enough to extend the scope of a removal action to such a

broad extent as was done by the EPA in this case. The

result is that the EPA conducted a remediation of the entire

town of Libby, guised as a “removal action,” without observ-

ing any of the procedural safeguards provided by CERCLA,

safeguards provided, in part, to protect PRPs from just this

sort of action. While the EPA is free to conduct whatever

response action it deems necessary; it may not circumvent

statutory law and then be rewarded with all response costs.

That would be contrary to CERCLA and any reasonable

sense of substantial justice and fairness.

For the foregoing reasons, Mountain States Legal

Foundation respectfully requests that this Court grant

Petitioners’ Petition for Certiorari in order to determine

the proper delineation between “removal” and “remedial”

actions under CERCLA, an important question of federal

law that has not been, but should be, settled by this Court.

Respectfully submitted,