# Petition for Writ of Certiorari — Employers Insurance v. Browner > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386012_2217%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 1996 - **Citation:** 516 U.S. 1042 ## Text (\) Supreme Court, U.S. PILED No, 95 4345EP 14 1995 OFFICc Ur jit ULicAn IN THE Supreme Court of the United States OCTOBER TERM, 1995 EMPLOYERS INSURANCE OF WAUSAU, A Mutual Company, Petitioner, V. CAROL M. BROWNER, Administrator of the United States Environmental Protection Agency, et al., Respondents. On Petition for a Writ of Certiorari to the United States Court of Appeals for the Seventh Circuit PETITION FOR A WRIT OF CERTIORARI WILLIAM J. ANAYA ROBERT M. WATTSON Counsel of Record SANDRA WALLACE DANIEL C. MURRAY Davip C. LINDER FREDERICK S. MUELLER ZELLE & LARSON JOHNSON & BELL, LTD. 33 South Sixth Street 222 North LaSalle Street Suite 4400 City Center Suite 2200 Minneapolis, MN 55402 Chicago, IL 60601 (612) 339-2020 (312) 372-0770 Attorneys for Petitioner Midwest Law Printing Co., Chicago 60611, (312) 321-0220 i QUESTIONS PRESENTED 1. Does Section 106(b\(2A) of the Comprehensive En- vironmental Response, Compensation and Liability Act (CERCLA) provide federal jurisdiction and a limited, defer- ential standard and scope of judicial review of agency action? 2. Does Section 106 of CERCLA authorize the United States Environmental Protection Agency to impose joint and several liability administratively, without qualification, through ex parte, unilateral cleanup orders? 3. Does the Due Process Clause of the Fifth Amendment authorize the denial of a judicial hearing on a party’s statu- tory liability following a coerced, administrative deprivation of the party’s property? ii LIST OF PARTIES The parties to the proceeding below were the Petitioner, Employers Insurance of Wausau, A Mutual Company, and respondents: William J. Clinton, in his official capacity as President of the United States; Carol M. Browner, as Ad- ministrator of the United States Environmental Protection Agency; the United States Environmental Protection Agen- cy; and, the United States of America.’ Pursuant to Supreme Court Rules 14.1(b) and 29.1, Peti- tioner states that Petitioner has neither a parent corpora- tion nor any non-wholly-owned subsidiary. 1 In addition, the following individuals were named as parties be- low in their official capacities: Valdas Adamkus, as Regional Ad- ministrator of Region V of the United States Environmental Pro- tection Agency; Bruce M. Diamond, as Director of the Office of Waste Programs Enforcement of the Environmental Protection Agency; and William E. Muno, as Acting Director of the Office of Waste Programs Enforcement of the United States Environmen- tal Protection Agency. TABLE OF CONTENTS QUESTIONS PRESENTED ...........---+-+- LIST OF PARTIES ........---eeeeeeeeeeeees TABLE OF CONTENTS ..........-+eeeeeeee: TABLE OF AUTHORITIES ..............+-- OPINIONS BELOW ...........--eeeeeeeeeees JURISDICTION ........ccccccccccceccccccces STATUTES INVOLVED ..........--eeeeeeees STATEMENT OF THE CASE ...........---- REASONS FOR GRANTING THE WRIT.... I. FEDERAL JURISDICTION AND THE SCOPE AND STANDARDS OF JUDICIAL INVOLVE- MENT IN CERCLA REIMBURSEMENT AC- TIONS ARE SERIOUSLY UNSETTLED IN THE DISTRICT AND CIRCUIT COURTS. THIS COURT SHOULD CLARIFY THE BASIS OF FEDERAL JURISDICTION AND THE SCOPE AND STANDARDS OF REVIEW IN REIMBURSEMENT ACTIONS BROUGHT PURSUANT TO CERCLA § 106(bX2XB) ..... A. In The Agency’s View, Federal Jurisdic- tion Is Provided By CERCLA § 106b) (2XB), Yet, That Federal Jurisdiction Is Limited By The Unilateral, Ex Parte Determinations Made By The Agency, Which Determinations Are Reviewable By A Federal Court Only Pursuant To A Deferential Standard And Scope Of PAGE ~- @ereeu =— = S. B as: B. iv In The District Court’s View, The Reim- bursement Statute Failed To Provide Federal Jurisdiction For A Limited Review Of Issues Determined By The Agency Pursuant To CERCLA § 106(b) (2XA), But Some Limited Judicial Review Is Available With Federal Jurisdiction Therefor Under The Administrative Pro- cedure Act Following A Deferential Stan- dard And Scope Of Review .......... In The Seventh Circuit’s View, The Re- imbursement Statute Provides Federal Jurisdiction At CERCLA § 106(bX2XA) For A Limited Review Of Issues Deter- mined Exclusively By The Agency Pur- suant To CERCLA § 106(bX2XA), And That Review Was Deferential To The ROGUE cide eee ea Ce 4 daa ebeee ene In The Eighth Circuit’s View, Congress “Quite Consciously” Provided Federal Jurisdiction Only At CERCLA § 106(bX2) (B), Which Provides A Federal Court With Full Jurisdiction To Hear All Issues De Novo, Completely Unaffected By The Issues Determined By The Agency In The Administrative Proceedings De- scribed at CERCLA § 106(bX2XA).... II. THE CIRCUITS ARE SPLIT ON APPROPRI- ATE POLICY CONCERNS AT ISSUE IN REIMBURSEMENT ACTIONS............. ITT. THIS COURT SHOULD RESOLVE CON- FLICTS AMONG THE CIRCUITS CONCERN- ING THE SCOPE OF CERCLA LIABILITY AND THE CONSTITUTIONALITY OF POST- DEPRIVATION PROCEDURES AFFORDED BY THE STATUTE 6. iiccccccccccdccvcces 11 13 14 19 Vv A. The Seventh Circuit’s Conclusion That The Agency Universally May Impose Joint And Several Liability Under CERCLA § 106(a) Conflicts With Rulings Of The Second, Third and Fifth Circuits Concern- ing The Scope Of CERCLA Liability .. B. The Seventh Circuit’s Deference To The Agency’s Administrative Liability Deter- mination Conflicts With The First Cir- cuit’s Conclusion As To The Constitu- tionality Of Post-Deprivation Procedures Afforded By CERCLA ...........--- CONCLUSION ......cccccccccscccccccccccens 21 vi TABLE OF AUTHORITIES CASES PAGE Adams Fruit Co. v. Barrett, 494 U.S. 638, 110 S.Ct. 1884, 108 L.Ed.2d 585 (1990)........ passim Barmet Aluminum Corp. v. Reilly, 927 F.2d 289 th GEe, TOE) acccecécncécvcnnteassases es 27, 29 Bethlehem Steel Corp. v. Bush, 918 F.2d 1323 (7th Che. SIR ciewccccdste we sabateasesewesesac. 11 Camp v. Pitts, 411 U.S. 138 (1973)........... 10 Chevron U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 887 (1984) .............. passim Connecticut v. Doehr, 501 U.S. 1 (1991) ....... 27, 30 Dickerson v. Environmental Protection Agency, 834 F.2d 974 (llth Cir. 1987) .............. 27 Dico v. Diamond, 821 F.Supp. 562 (S.D. Iowa WOOD < conecccckecsusandbe teceseseuiabiens 15 Dico v. Diamond, 35 F.3d 348 (8th Cir. 1994) .. occccchscdndesascReueeeneeenaeel 14, 15, 16, 19, 20 Fuentes v. Shevin, 407 U.S. 67 (1972) ......... 28 Gonzales v. United States, 348 U.S. 407 (1955) ... 29 Hodel v. Virginia Surface Mining & Reclam. yp, @ pees > Pere 30 In Re Bell Petroleum Services, Inc., 3 F.3d 889 Gi Cie. “Se cicavcconaceksceuctasutan 21, 24, 25 Kelley v. EPA, 15 F.3d 1100 (D.C. Cir. 1994), reh’g. denied, 25 F.3d 1088 (D.C. Cir. 1994), cert. de- nied, sub nom. American Banker’s Association v. Kelley, 115 S.Ct. 900 (1995) ............ passim vii Mathews v. Eldridge, 424 U.S. 319 (1976) ..... 27 Mitchell v. W.T. Grant Co., 416 U.S. 600 (1974). 28 O’Neil v. Picillo, 883 F.2d 176 (1st Cir. 1989), cert. denied sub nom., American Cyanamid Co. v. O’Neil, 498 U.S. 1071 (1990) .....-----++++> 24 Phillips v. Commissioner, 283 U.S. 589 (1931) ... 28 Solid State Circuits, Inc. v. EPA, 812 F.2d 383 (Sth Cir. 1987) ........ee cece cece cere eeeees 27, 29 South Macomb Disposal Auth. v. Environmental Prot. Agency, 681 F.Supp. 1244 (E.D. Mich. OU ci cncoceccuccvenbsncccsososerenesnes 29 United States v. Alcan Aluminum Corp., 964 F.2d 252 (8d Cir. 1992) ......-eeeeeeeeeeeeee 21, 24, 25 United States v. Alcan Aluminum Corp., 990 F.2d T11 (2d Cir. 1998) ....... cece eee eeeeeeeees 21, 24 United States v. Chem-Dyne Corp., 572 F.Supp. 802 (S.D. Ohio 1983) .......-.eeeeeeeeeeees 25 United States v. Fleet Factors Corp., 901 F.2d 1550 (11th Cir. 1990), cert. denied, 111 S.Ct. 752 (1991) 2... cece cece cece ccc ececceceecescoees 17 United States v. Monsanto Co., 858 F.2d 160 (4th Clr. WORE) ...ccccccccccccccccccccccccceeess 24 United States v. Reardon, 947 F.2d 1509 (1st Cir. DOES go cccacdccccccessccoesescenceeeses 26, 27, 28 Wi Electric v. Thomas, 612 F.Supp. 736 (D Mam, 19865) ....cccccccccccccccccccccccccces 9 Wagner Seed Co. v. Bush, 946 F.2d 918 (D.C. Cir. 1991), cert. denied, 112 S.Ct. 1584 (1992) . 10, 11, 17, 18 Wagner Seed Co. v. Daggett, 800 F.2d 310 (1986) . 27, 29 STATUTES BD Cas ee Wi cnc bos divi cdvecblewecebadeubes 5 TB UBER |... cléccccicwdimeredascakionnnca 1 Comprehensive Environmental Response, Compen- sation and Liability Act of 1980 (CERCLA) as amended by the Superfund Amendments and Reauthorization Act of 1986 (SARA), 42 U.S.C. GI Oe GON a Sic cccsctedsudeccunsaneaanees 2 CURR EE hnn.ee ccs tdnndecnngneviaceee 18, 26, 28 CARMAN ED ccdvccecudedeccseauwtbageat passim Ce I cis conc ucveaeeaseesteetadeny 1,18 CLG ED ocncccecesccaeenosesauuans 4, 29 Ce ID ooo nkccdpadseccuasenunben passim CORMEUGR: HOURS oc ccccedcccscccececcnen passim CRI GEO 6 bc be ve céciccsece deeees passim ei Ph B+ ree 5, 15, 19 Ce EE oe a cacccnnvsnnseedacdaen 5, 19 Ge TE eke ca es vesdacantdashonsvecsnee 21 CE I ae 6s 3c pda ccsaueeciaeakates 1, 3, 21, 30 CED «3 5d sau endeen se aseeen cues 3 ED abs cic dawdes cxneedednean cas 29 A IED rniidb0 £4 didn cide td da cceuneeeeann 27 COPE HANNO Kcdacccdchdsnacnaaadneunae 12, 26, 30 LEGISLATIVE HISTORY Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499, 100 Stat. 1613 et GO. cccccccccccccvescccsersenqaccscscsess 126 Cong. Rec. at $14964, S15004, H11787, H11799, 126 Cong. Rec. H9465 (Sept. 23, 1980) (remarks of Rep. Madigan), H9466 (Remarks of Rep. Stockman) ........cccceecccceceeeeeeesees Cong. Rec. S$14964, H11787, H11799 (Nov. 24, Og ds, cicccnccdcessaucesacdesetesetasves 1 Senate Comm. of Environment & Public Works, A Legislative History of the Comprehensive En- vironmental Response, Compensation & Liabil- ity Act of 1980, S. Doc. No. 97-14, 97th Cong., 2d Sess. 320 (1983) ........eeeeeeeeeeeeeee Reauthorization of Superfund: Hearings Before the Subcomm. on Water Resources of House Comm. on Pub. Works and Transp., 99th Cong., Ist Sess. 1985) ....cccccccccccccccccvcceess OTHER AUTHORITIES 40 C.F.R. § 300.1100 et seg. .....-eeeeeeeeeees Restatement (Second) of Torts .......-++-++++: 17 ee ee x or ee ee RY § IN THE Supreme Court of the United States OcTOBER TERM, 1995 2 oD al REE 8 BAN MBE SW 0H) BENE ts EMPLOYERS INSURANCE OF WAUSAU, A Mutual Company, Petitioner, Vv. CAROL M. BROWNER, Administrator of the United States Environmental Protection Agency, et al., Respondents. On Petition for a Writ of Certiorari to the United States Court of Appeals for the Seventh Circuit PETITION FOR A WRIT OF CERTIORARI se 1 OPINIONS BELOW The opinion of the United States Circuit Court of Appeals for the Seventh Circuit, dated April 12, 1995, is reported at 52 F.3d 656, and is reproduced at pages 1-18 of the Appen- dix to this Petition (Pet. App.). The relevant opinions of the United States District Court for the Northern District of Illinois are reported at 848 F. Supp. 1359 and 848 F. Supp. 1369, and are reproduced at Pet. App. 19-38 and 39-60, re- spectively. The Order of the United States Court of Appeals for the Seventh Circuit denying rehearing and denying rehearing en banc, dated May 17, 1995, is not yet reported and is reproduced at Pet. App. 74. JURISDICTION The judgment of the Court of Appeals was entered on April 12, 1995. Pet. App. 18. The Court of Appeals denied a timely Petition for Rehearing on May 17, 1995. Pet. App. 74. On August 2, 1995, Justice Stevens granted Petitioner an enlargement of time to file this Petition for a Writ of Certiorari until September 14, 1995. Pet. App. 75. This Court has jurisdiction pursuant to 28 U.S.C. § 1254(1). STATUTES INVOLVED This Petition primarily involves Section 106(b) of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (CERCLA), 42 U.S.C. § 9606(b).’ 2 See CERCLA § 106, 42 U.S.C. § 9606, at Pet. App. 62-64. CERCLA § 106(bX2), incorporating CERCLA § 106(a), and re- ferring to liability provisions at CERCLA § 107(a), was amended (continued...) 2 STATEMENT OF THE CASE Petitioner seeks review of a decision by the United States Court of Appeals for the Seventh Circuit in one of the most significant cases involving CERCLA, 42 U.S.C. §§ 9601 et seq., decided since the enactment of the Superfund Amend- ments and Reauthorization Act of 1986 (SARA).’ Within a matter of months, the Seventh and Eighth Circuits decided two remarkably similar cases involving CERCLA § 106(b)\2), each finding federal jurisdiction in two separate parts of the same provision. The Seventh Cir- cuit found federal jurisdiction for “judicial review” of Agency adjudicatory determinations under CERCLA § 106(b)(2)(A). Then, applying newly-created standards of judicial review, the Seventh Circuit held that Petitioner was not entitled to any judicial relief. On the other hand, the Eighth Circuit refused to read “judicial review” into CERCLA § 106(b)(2), finding instead that Congress provided potentially responsible parties with an independent cause of action pursuant to CERCLA §106(bX(2XB) to seek reimbursement and a determination of their disputed liability and a resolution of any other claims against the Agency based upon the Agency’s arbi- trary and capricious selection or enforcement of the remedy. The Eighth Circuit identified support for its interpretation in the plain reading of the statute and in two recent opin- ions decided by the D.C. Circuit. 2 (...continued) in 1986 by the Superfund Amendments and Reauthorization Act of 1986, Pub.L. No. 99-499, 100 Stat. 1613, et seq. * Hereafter, Petitioner will cite to CERCLA’s internal numbering system, CERCLA §§ 101 et seg., rather than the citation form of the United States Code, 42 U.S.C. §§ 9601 et seq. INT Ftc i at A tira ie Stat elm So stn slhetis ) AU SDL at Bia Sot Phy Le isaac vate hey wah Vals S BOG pened os ee 4 > 3 | 3 £2 Finally, the Seventh and the Eighth Circuits cited en- tirely different policy considerations. The Seventh Circuit analyzed the reimbursement provision as part of a “clean- up” statute, while the Eighth Circuit found that the reim- bursement statute had a “remedial” purpose to protect potentially responsible parties.‘ The facts of this case illustrate the significant legal issues at stake. Following a fire at its policyholder’s building in Wyan- dotte, Michigan, Petitioner paid $4,189.25 on behalf of its policyholder for the removal of PCB-free fluids from six, fire-damaged transformers. However, the policyholder’s dis- posal contractor co-mingled other fluids with the fluids from the PCB-free, fire-damaged transformers, and delivered all of the fluids to the CIW Site in Romulus, Michigan. One of CIW’s customers discovered the presence of PCBs. Thereafter, the United States Environmental Protection Agency (USEPA or the Agency) became involved in the in- vestigation at the CIW Site. The Agency unilaterally “deter- mined” that various parties, including Petitioner, were liable under CERCLA § 107(a), and issued the unilateral administrative order (the UAO) at issue here. The Agency unilaterally “determined” that Petitioner was liable under CERCLA § 107(a\(3), as a party who “arranged” for the dis- posal of PCBs, based upon the check to its policyholder. Petitioner denied all liability and demanded a prompt hearing. The Agency denied Petitioner’s request for a hear- ing, and further refused to disclose its evidence of Petition- 4 The Seventh Circuit’s ruling further endorsed the administra- tive imposition of joint and several liability in all cases under CERCLA § 106(a), contrary to recent decisions of the Second, Third and Fifth Circuits. The ruling, moreover, denied Petitioner judicial review of its statutory liability, in violation of the due process clause. + er’s alleged liability. Faced with the UAO and the penalties associated therewith (see CERCLA § 106(b\(1)), Petitioner proceeded to negotiate a work plan with the Agency to ad- dress the “emergency removal action” described in the UAO. No other recipient of the UAO responded. The UAO was written broadly to encompass numerous hazardous substances at the Site. Petitioner’s potential liability, however, was not as broad as the order, and was associated only with the alleged shipment of PCB-free transformer fluids from fire-damaged transformers, which, through no fault of Petitioner, had been contaminated by others with PCBs. In that context, Petitioner negotiated the “removal” action work plan with the Agency primarily limited to PCBs (and in good faith, following some compromise, to other activities associated with PCB-free hazardous waste). As soon as the Agency approved the work plan, Petitioner began imple- menting it. Almost immediately the Agency reneged on the work plan, and sought to enforce the broadly written UAO as if the owner/operator (with the broader scope of liability con- nected to every substance at the entire site) had been in- volved. Long after all of the work at the Site had been com- pleted, the Agency’s chief complaint with Petitioner’s clean- up activities rests not with the actions Petitioner per- formed, but rather with the activities Petitioner did not per- form solely involving PCB-free materials at the site. There is no question that Petitioner completed the emergency re- moval action associated with PCBs (and the hazardous wastes), and there is no question that Petitioner abated any “imminent and substantial endangerment” involving PCBs which may have justified the UAO. In short, the Agency simply claims that Petitioner is liable for more, and that it has the authority to impose joint and several liability, for 5 all materials at a site—even when, as here, the alleged harm at the Site is unquestionably divisible.* Following completion, and within the time prescribed by law, Petitioner filed an administrative petition seeking re- imbursement from the Superfund alleging that it was not liable, and that Petitioner was entitled to reimbursement either under CERCLA §§ 106(bX(2)(C) or (D). Pursuant to the reimbursement statute, the Agency reviewed Petition- er’s claim in its pre-litigation opportunity to resolve the issues. See CERCLA § 106(b)(2)(A). Following a tortured ad- ministrative “process,” in which the Agency afforded Peti- tioner no hearing (or other procedural protections) and fol- lowed no timetable to ensure a prompt resolution of Peti- tioner’s claims, the Agency denied the administrative peti- tion on the grounds that Petitioner had not “completed” all of the work specified in the UAO—specifically, certain work directed solely at PCB-free materials. Accordingly, because in the Agency’s view, Petitioner had not “complied” with the UAO, it was not entitled to reimbursement—regardless of whether Petitioner was innocent under CERCLA, or not. Following the Agency’s “refusal to grant” Petitioner's ad- ministrative claim, and within the time prescribed by law, Petitioner filed the instant action in the District Court for the Northern District of Illinois. Without allowing any dis- covery (and thus limiting its ruling to the Agency’s adminis- trative record), the District Court entered Summary Judg- ment against Petitioner. The District Court was unable to find federal jurisdiction for the limited judicial review sug- gested by Agency, and, instead, “defaulted” to the “judicial review” provisions found under the Administrative Proce- dure Act (APA), 5 U.S.C. § 706. In a related decision, the 5 The Circuit Court and the District Court candidly acknowl- that the Agency could not have enforced the order as such in court. See Pet. App. 4, 54-55 n.13. 6 District Court also entered judgment on the pleadings on Petitioner’s constitutional claims holding, that, even though the UAO was clearly broader than Petitioner's potential lia- bility (see Pet. App. 54-55 n. 13), Petitioner’s constitutional alternatives were either complete defiance of the UAO or complete compliance with the UAO. Petitioner timely filed an appeal and, on April 12, 1995, the Seventh Circuit affirmed the District Court’s rulings. The Circuit Court held that, even though the UAO was clearly unenforceable in court (Pet. App. 4), Petitioner’s failure to complete the unenforceable activities precluded any judicial relief. Pet. App. 17. Moreover, the Seventh Cir- cuit held that the Agency’s interpretation of its own cleanup orders—and “compliance” therewith—was entitled to defer- ential “judicial review.” While affirming the District Court’s ruling, the Seventh Circuit did not affirm the District Court’s finding of federal jurisdiction under the APA, but rather, interpreted federal jurisdiction within the statute at CERCLA § 106(bX2\A)—contrary to the finding of the District Court, the statutory reference pleaded by Petitioner at CERCLA § 106(b\(2)(B), and the law in the Eighth Cir- cuit. REASONS FOR GRANTING THE WRIT I. FEDERAL JURISDICTION AND THE SCOPE AND STAN- DARDS OF JUDICIAL INVOLVEMENT IN CERCLA REIM- TION AND THE SCOPE AND STANDARDS OF REVIEW IN REIMBURSEMENT ACTIONS BROUGHT PURSUANT TO CERCLA § 106(b)(2)(B). It suffice to say that there are, at least, four fully devel- oped interpretations of federal jurisdiction, and the closely 7 related questions involving the scope of judicial involvement and the standard and scope of review, in the statutory reimbursement statute provided at CERCLA § 106(b)(2): (1) the Agency’s view; (2) the District Court’s view; (3) the Sev- enth Circuit Court of Appeal’s view; and, (4) the Eighth Cir- cuit Court of Appeal’s view. Both the District Court and the Seventh Circuit Court of Appeals responded to the Agency’s view while the Eighth Circuit Court of Appeals flatly rejected it. Moreover, while neither the District Court nor the Seventh Circuit fully accepted the Agency’s statutory interpretation of the reim- bursement statute, both Courts affirmed the Agency’s ad- ministrative determinations. Therefore, it is necessary to sketch the details of the Agency’s arguments in hopes of persuading this Court to grant certiorari, and to allow the parties an opportunity to fully brief their respective argu- ments on federal jurisdiction. A. In The Agency’s View, Federal Jurisdiction Is Provided By CERCLA § 106(b)(2)(B), Yet, That Federal Jurisdic- tion Is Limited By The Unilateral, Ex Parte Determina- tions Made By The Agency, Which Determinations Are Reviewable By A Federal Court Only Pursuant To A Deferential Standard And Scope Of Review. In essence, the Agency argued that Petitioner had failed to “meet the statutory threshold requirement(s)” for filing an administrative petition for reimbursement. By the so- called “statutory threshold requirements,” the Agency referred to its interpretation of CERCLA § 106(b)(2)(A), and the Agency’s interpretation of the Agency’s administrative role in reviewing a Petition for Reimbursement. The Agency concluded that Congress had invested the Agency with authority to thwart a potentially responsible party seeking reimbursement, if that party had not “complied” with the Agency’s interpretation of the law and the Agency’s inter- 8 pretation of its order, and, in the final analysis, had not “completed” all of the activities ordered by the Agency based upon the Agency's interpretation of the law and the Agency’s interpretation of its order. According to the Agency, the punishment for “failing” to meet the Agency's interpretation of the “statutory threshold requirements” could be meted out by the Agency in the form of denying Petitioner access to the judiciary on Petitioner's claims (that is, the “merits” of the petition for reimbursement), whether those claims are in the nature of a claim alleging non-liability or arbitrary and capricious Agency action. The Agency conceded that it had “refused to grant” Peti- tioner’s administrative petition for reimbursement, and that the Agency’s action was final. Moreover, the Agency con- ceded that some judicial review was in order because Peti- tioner had timely filed an action in federal court seeking judicial review under CERCLA § 106(bX2XB). But, accord- ing to the Agency, the review provided by CERCLA § 106(b2)(B) was limited in three ways, none of which are provided for in the reimbursement statute. First, according to the Agency, the Agency’s substantive administrative decision denying the administrative Petition for Reimbursement based on the Agency’s determinations of “non-compliance” was entitled to the “familiar” deferen- tial standard of review, citing this Court’s opinion in Chev- ron U.S.A., Inc. v. Natural Resources Defense Council, 467 US. 837 (1984) as authority. Neither the District Court nor the Circuit Court agreed with this part of the Agency’s interpretation of Chevron, although both courts applied a deferential standard of review after finding significantly different bases for federal jurisdiction, both of which run ® Of course, the principles announced in Chevron do net apply to the Agency’s substantive adjudicatory determinations. 9 afoul of the principles articulated by this Court in Adams Fruit Co. v. Barrett, 494 U.S. 638 (1990). Second, without any statutory support, the Agency argued that the scope of the judicial review was also deferential, and was limited to the administrative record prepared ex- clusively by the Agency because: (1) CERCLA administra- tive orders are “complicated,” and the District Court should defer to the Agency’s perceived expertise; and that, (2) “as general rule” judicial review of agency action is confined to the administrative record, citing cases with administrative records prepared after formal (that is, adjudicatory adminis- trative proceedings), or informal “rule making” cases which obviously do not involve individual adjudicatory or liability issues.’ However, in this case the record was “informal,” and the proceedings involved substantive adjudications. Both the District Court and the Circuit Court applied a deferential standard and scope of review, but each was based on entirely different jurisdictional grounds. The Dis- trict Court found federal jurisdiction under the APA (and a deferential standard and scope of review thereunder—with no analysis of the scope of review). And, the Circuit Court, troubled by both the Agency’s approach and the District Court’s finding of jurisdiction under the APA, stubbornly found federal jurisdiction under CERCLA § 106(bX2)(A) (which, by its terms does not provide for final Agency action), and then pedantically applied a deferential stan- 7 See Wagner Electric Co. v. Thomas, 612 F.Supp. 736, 747 (D. Kan. 1985) (where the only District Court to review the very “in- formal” administrative process severely criticized that process, and held that judicial review would not be limited to the informal administrative record prepared exclusively by the Agency). The Agency too must concede that the administrative “process” was lacking, inasmuch as the Agency recently delegated some of the review function to the Environmental Appeals Board (EAB). In this case, nothing was resolved—every fact is in dispute. 10 dard and scope of judicial review under its own, newly- created cause of action. Third, and contrary to this Court’s analysis in Adams Fruit, the Agency argued that the District Court lacked jur- isdiction to review any issue which the Agency had not re- viewed in the administrative proceedings—which, in this case meant, that the District Court could not review Peti- tioner’s purported liability, because the Agency argued that it had not done so administratively (suggesting that the Agency had jurisdiction to decide liability in the “first instance” and, citing the D.C. Circuit Court’s opinion in Wagner Seed Co. v. Bush, 946 F.2d 918 (D.C. Cir. 1991), cert. denied, 112 S.Ct. 1584 (1992) as supporting authority), and suggesting also that the Agency, by its actions provided the federal court with federal jurisdiction. And, contrary to its concession of finality, the Agency argued, that should the Court find in favor of Petitioner, the Agency should have an opportunity to re-review Petitioner’s administrative petition on the merits (that is, pass on Petitioner’s liability), citing this Court’s opinion in Camp v. Pitts, 411 U.S. 138, 142-143 (1973) as authority. Both the District Court and the Circuit Court agreed with the Agency on this point, and limited their respective “review” to only the issue of com- pliance the Agency admitted reviewing in the adminis- trative process, and refused to review the Agency’s unilater- al, ex parte determination of Petitioner’s purported and denied liability, although neither court considered the prin- ciples articulated by this Court in Adams Fruit.° ® After reviewing this Court’s opinion Adams Fruit, the D.C. Cir- cuit Court of Appeals in Wagner Seed established the limits of its holding as follows: “If the EPA had attempted to determine the manner in which a person seeking reimbursement must ‘file an action’, or which is ‘the appropriate United States District Court’, under § 106(bX2)B), the rationale of Adams Fruit would seem to (continued...) 11 B. In The District Court’s View, The Reimbursement Statute Failed To Provide Federal Jurisdiction For A. Limited Review Of Issues Determined By The Agency Pursuant To CERCLA § 106(b)(2)(A), But Some Limited Judicial Review Is Available With Federal Jurisdiction Therefor Under The Administrative Procedure Act Fol- lowing A Deferential Standard And Scope Of Review. The District Court struggled first with federal jurisdiction under the Agency’s construction of the statute, candidly recognizing that: [TJhere is no explicit provision for review of the EPA’s determination that a party did not “comply” with the relevant Order, and is thus not entitled to consideration of its petition on the merits. Indeed, there is nothing in the statute to indicate that the drafters of CERCLA even contemplated that this may be an issue; rather, their sole focus was providing for review of the EPA’s ruling on the merits of a reimbursement petition. Pet. App. 29. Exactly. And in the context of federal jurisdiction, the District Court had no trouble correctly distinguishing the cases cited by the Agency in support of the Agency’s claim of Chevron deference for its substantive determinations, and found that both Wagner Seed and Bethlehem Steel Corp. v. Bush, 918 F.2d 1323 (7th Cir. 1990) “provide us with little guidance.” Pet. App. 29-30 n.9. Nonetheless, even after find- ing that the reimbursement statute did not provide for “judicial review” of the Agency’s determinations under ® (...continued) apply.” Wagner Seed, 946 F.2d at 923. Moreover, in Kelley v. EPA, 15 F.3d 1100, 1107-1108 (D.C. Cir. 1994) reh’g denied, 25 F.3d 1088, 1090-92 (D.C. Cir. 1994), cert. denied, sub nom. American Banker’s Association v. Kelley, 115 S.Ct. 900 (1995), the D.C. Cir- cuit Court amplified its previous holding in Wagner Seed, holding, inter alia, that the Agency did not have jurisdiction to determine liability in any event. 12 CERCLA § 106(b)(2)(A) (in this case, the Agency’s limited determination of “compliance’—as that term was inter- preted by the Agency), with no explanation, the District Court simply concluded that some judicial review must be available on the limited issue “determined” by the Agency, but, apparently, not in the context of the CERCLA § 106(b)(2)(B) cause of action pleaded by Petitioner. The District Court tried to fashion federal jurisdiction for the limited “judicial review” of CERCLA § 106(b\(2)(A) issues out of the reimbursement statute, but concluded that because the reimbursement statute offered “competing standards of review,” the court could not “infer the authori- ty for judicial review” from the statute. Pet. App. 30. But, because the District Court had concluded that some review must be available (but again, with no explanation or auth- ority to review the essentially unreviewable), the District Court simply “defaulted” to the APA. Pet. App. 31. Also, without analyzing Adams Fruit or its Chevron defer- ence, the District Court agreed with the Agency's construc- tion of the statute, and limited the APA judicial review to only the issues purportedly reviewed by the Agency—rather than to the obviously broader issues raised by Petitioner in the CERCLA § 106(b)(2)B) action then pending before the Court. In essence, the District Court created a new cause of action under the reimbursement statue, using the APA for federal jurisdiction, and, then simply applied a deferential standard and scope of review after he had candidly admit- ted that neither had been provided by Congress. The Dis- trict Court’s finding of federal jurisdiction under the APA is contrary to CERCLA § 113(h). See Pet. App. 70. 13 C. In The Seventh Circuit’s View, The Reimbursement Statute Provides Federal Jurisdiction At CERCLA § 106(b)(2)(A) For A Limited Review Of Issues Deter- mined Exclusively By The Agency Pursuant To CERCLA § 106(b)(2)(A), And That Review Was Deferen- tial To The Agency. On appeal, the Seventh Circuit Court of Appeals also struggled with the question of federal jurisdiction in re- viewing the Agency’s ostensibly unreviewable determina- tions made pursuant to CERCLA § 106(b\(2)(A). But, con- trary to the District Court, the Circuit Court construed the statute and found independent federal jurisdiction for “judi- cial review” under CERCLA § 106(b\(2)(A): The right of reimbursement extends to “any person who receives and complies with the terms of [any order],” and ripens into a right to petition and to sue “after com- pletion of the required action.” § 9606(b)(2)(A). Pet. App. 8 (emphasis added). And, like the District Court, the Circuit Court also limited the “judicial review” to only the issue “determined” by the Agency in the administrative proceedings, and re- fused to hear the broader issues (e.g., liability and the issues involving the arbitrary and capricious remedy selec- tion and enforcement issues) raised by Petitioner in the reimbursement action under CERCLA § 106(b)(2)(B), again, with no analysis of the principles announced by this Court in Adams Fruit. Pet. App. 7. In any event, the Circuit Court found federal jurisdiction for “judicial review” (limited to the Agency determinations) within the statute, while the District Court specifically held otherwise. Moreover, the Circuit Court rejected the District Court’s finding of federal jurisdiction under the APA. 14 D. In The Eighth Circuit’s View, Congress “Quite Con- sciously” Provided Federal Jurisdiction Only At CERCLA § 106(b)(2)(B), Which Provides A Federal Court With Full Jurisdiction To Hear All Issues De Novo, Completely Unaffected By The Issues Deter- mined By The Agency In The Administrative Pro- ceedings Described at CERCLA § 106(b)(2)(A). Also, two other federal Circuit Courts have confirmed the District Court’s conclusion that Congress did not intend for the judiciary to review the Agency’s actions under CERCLA § 106(bX2)A), except in the context of the de novo cause of action provided at CERCLA § 106(bX2)B). 1. In Dico v. Diamond, 35 F.3d 348 (8th Cir. 1994), the Eighth Circuit reversed the District Court’s entry of sum- mary judgment in favor of the Agency on the limited issues determined administratively by the Agency under CERCLA § 106(b)(2)(A). In that case, Dico, the potentially responsible party, was seeking reimbursement for the costs it reason- ably incurred in abating an alleged “imminent and substan- tial endangerment” associated with a release of trichloro- ethylene (TCE). Based upon its administrative determina- tions, the Agency had denied Dico’s administrative claim, and again, like here, and the Agency “did not reach the question” of the “merits” of the Petitioner’s claim (a/k/a Dico’s purported, and unreviewed liability), as if the Agency had jurisdiction to “determine” liability—which is obviously not a “technical” question entitled to deference. Jd. at 350. The District Court in Iowa, like the District Court here, construed the statute as argued by the Agency, and limited its review to the issue the Agency purported to “determine” administratively, and entered summary judgment in favor of the Agency, holding that Dico was not entitled to judicial relief. Also, like here, the potentially liable party contended that there was no genuine dispute that Dico could not have been held liable in court for the TCE associated with the “northern plume,” because it was not even physically con- 15 nected to Dico’s property and was physically up-gradient. (See Judge Posner’s “Cherynobl” example. Pet. App. 11-12.) Nonetheless, the Dico District Court held: Whether a factual dispute exists in this case over who is liable for the northern plume of contamination is not material to disposition of the motions for summary judgment. The court agrees with [the Agency’s] position that this case does not call for judicial review of the substance of Dico’s reimbursement claim under the standard set forth in section 9606(b2XC), but rather for judicial review of the statutory prerequisites for bringing such a claim; i.e., whether Dico is a “person who receive[d] and complie{d]” with an order under section 9606(b)\(2)(A). Dico v. Diamond, 821 F.Supp. 562, 568 (S.D. Iowa 1993) (emphasis added) (citing Wagner Seed, 946 F.2d at 921). Like the Seventh Circuit, the District Court in Iowa had found federal jurisdiction for judicial review under CERCLA § 106(bX(2\A). On appeal, however, the Eighth Circuit reversed the Dico District Court, finding first that the Agency’s statutory con- struction was not entitled to Chevron deference, and finding instead that the principles of Adams Fruit were appropri- ate.’ Moreover, the Eighth Circuit confirmed that there is no federal jurisdiction for “judicial review” at CERCLA § 106(bX2)A): The statute nowhere uses the word “arbitrary” or “ca- pricious” or any other words implying that “review” of ® See also Kelley, 25 F.3d at 1092 (“The structure of the [reim- bursement statute] is flatly inconsistent with Chevron”). It is cur- ious that any court would seriously consider deference to the Agency under the reimbursement statute. The burden of proof is on the potentially responsible party to prove non-liability (rather than on the Agency to prove liability). How could anyone infer de- ference to the party who has no burden? 16 an agency action “on the record” or “on the adminis- trative record” was intended by Congress. We decline to read language of judicial review into the section, partic- ularly in light of the fact that Congress is accustomed to including provisions for judicial review in statutes when that is what it intends. 35 F.3d at 351 (emphasis added). Moreover, in the context of analyzing the deference prin- ciples under Chevron and Adams Fruit, the Eighth Circuit recognized that: (The Agency] must construe the reimbursement provi- sion as a predicate to its action under § 106(b)(2)(A). However, that the EPA is given an opportunity to resolve the matter prior to litigation does not alter the language of § 106(b(2)(B) which “has expressly estab- lished the Judiciary . . . as the adjudicator of private rights of action arising under the [section][citing Adams Fruit, 494 U.S. at 649], and also does not provide a means by which the EPA may “bootstrap itself into an area in which it has no jurisdiction”. Id. at 352 (citing Adams Fruit, 494 U.S. at 650) (internal citations omitted). In other words, according to the Eighth Circuit: (1) there is no federal jurisdiction for “judicial review” under CERCLA § 106(bX(2A); and, (2) CERCLA § 106(b\(2)(A) is only a basic description of the Agency's purely administra- tive role, which is only part of the overall reimbursement statute (a pre-litigation, administrative opportunity to resolve the matter before it goes to the Judiciary); and, (3) the only federal jurisdiction available under the reimburse- ment statute is provided at CERCLA § 106(b2)(B); and, (4) that federal jurisdiction, consistent with Adams Fruit, is completely unaffected by anything the Agency does in the administrative proceedings, which provides an alleged potentially responsible party with an unfettered opportunity Oe 17 to be heard de novo in federal court on its claims asserting non-liability, or seeking reimbursement based on the Agen- cy’s arbitrary, capricious or unlawful selection or enforce- ment of the remedy. Clearly, the Eighth Circuit and the Seventh Circuit con- flict on every point. Only this Court is available to resolve these issues. 2. In addition to its analysis of Chevron factors and the principles of Adams Fruit on the issues involving the Agen- cy’s attempt to deny access to the judiciary, the Eighth Cir- cuit also relied on the D.C. Circuit’s recent analysis in Kelley. In the Kelley opinions, the D.C. Circuit was asked to review a challenge to the Agency’s so-called “Lender Lia- bility Rule,” (40 C.F.R. § 300.1100) ostensibly prepared by the Agency in response to some public pandering following the Eleventh Circuit Court of Appeals’ decision in United States v. Fleet Factors Corp., 901 F.2d 1550 (11th Cir. 1990), cert. denied, 111 S.Ct. 752 (1991). In the legislative regulation at issue in Kelley, the Agency purported to pro- vide some relief to the lending community, and established, by administrative regulation, “lender liability standards” and “safe harbors” from CERCLA liability. The Agency's legislative regulation was challenged by the State of Mich- igan and the Chemical Manufactures Association in the D.C. Circuit Court, wherein those petitioners alleged that the Agency had acted outside of the Agency’s administrative authority in purporting to establish liability principles when Congress had not chosen to do so, and when Congress had not authorized the Agency to do so. Central to the Agency’s argument in support of the “Lender Liability Rule,” was the Agency’s interpretation of its perceived auth- ority under Wagner Seed. In Kelley, the D.C. Circuit explained its previous holding in Wagner Seed, and criticized the Agency for overreading 18 it. 15 F.3d at 1105. According to the D.C. Circuit, Wagner Seed held that the Agency “had authority to interpret cer- tain language of § 106. . . that applied to EPA’s adminis- trative responsibilities.” Id. (some emphasis added). But, the Court emphasized, the language which the Agency had in- terpreted in Wagner Seed did not bear on liability issues, and, the Court suggested that since Congress provided de novo review of the Agency’s “particularized decision respect- ing liability”, deference as to those issues would be inappro- priate. Kelley, 15 F.3d at 1105. In the instant reimburse- ment action, there are no other “merits” to review, except Petitioner’s liability and the Petitioner’s claim against the Agency’s arbitrary and capricious selection and enforcement of the remedy—based on Petitioner’s putative liability. That is, there are no other technical questions for the Agency to review. Moreover, as in this case, because the Agency “attempted to define the manner in which a party sought judicial redress” the rationale of Adams Fruit clearly applies. Id. at 1105. Also, according to the D.C. Circuit, the strongest argu- ment made by the Agency was the same argument faced by Petitioner in this case and by Dico in the Eighth Circuit: “(The Agency’s] role in implementing the reimbursement provisions of section 106(b)(2) implies authority to define liability.” Id. at 1106. In response, the D.C. Circuit carefully analyzed CERCLA § 106(b) and disagreed. Jd. at 1106-1107. According to the D.C. Circuit, the reimbursement statute has two parts, one describing the administrative role of the Agency, and the second describing the proper role of the judiciary. Although a party must first petition EPA for reimburse- ment under subparagraph 106(bX2)A), that provision is completely silent as to what criteria EPA uses to grant reimbursement. If EPA denies reimbursement because the Agency contends the party is liable, the party has 19 a right to bring an action in federal court under sub- ph 106(b\2XB); if the party establishes that it is not liable by a preponderance of the evidence, under subparagraph 106(bX2XC), it prevails. EPA is, under that scenario, only a defendant; its preliminary conclu- sion that the party is liable is entitled to no consider- ation, let alone the deference afforded to the typical ad- ministrative agency adjudication. Id. at 1107 (some emphasis added). Moreover, according to the D.C. Circuit, Congress “quite consciously” distinguished the Agency’s role under the reimbursement statute, and while Congress obviously intended to allow deference to the Agency’s selection of the remedy pursuant to CERCLA § 106(b2XD), “it does not seem that Congress intended the same authority with respect to subparagraphs 106(b)(2)(B) and (C)”. Id. (emphasis added). Therefore, according to the Eighth Circuit in Dico, the D.C. Circuit supported the Eighth Circuit’s conclusion that CERCLA § 106(bX2)B) creates a “private right of action against EPA for reimbursement of response costs and expli- citly establishes the judiciary as the adjudicator of the rights of the parties”, making deference to the Agency on any issue inappropriate. Dico, 35 F.3d at 352 (citing Adams Fruit, 494 U.S. at 650). Il. THE CIRCUITS ARE SPLIT ON THE APPROPRIATE POLICY CONCERNS AT ISSUE IN REIMBURSEMENT ACTIONS. The difference between the Seventh and Eighth Circuits’ decisions is obviously the way each Court viewed the reim- bursement provision. The Seventh Circuit considered the “objective” of the reimbursement provision as “encouraging” prompt cleanups, although it is difficult to reconcile how a rule which encourages complete defiance of “broad” Agency 20 orders could ever be considered as encouraging prompt, privately-funded cleanup activity unless each order is tailored to each potentially liable party’s putative liabili- ty—just as Petitioner had requested.’ The Eighth circuit, on the other hand, considered the reimbursement provision as “remedial legislation” to be read “broadly to accomplish its goals” of protecting the potentially liable parties affected by unilateral, ex parte, arbitrary, capricious and unlawful Agency action. Dico, 35 F 3d at 353. The difference in perspective is monumental, and the policy question posed by these two perspectives can only be resolved by this Court. Clearly, Congress focused its concerns on the issues facing potentially responsible parties, while balancing concerns over “compliance with orders” and “expeditious cleanups.” If this Court grants certiorari, the parties will be free to brief this Court on Congress’ “inten- tions” in drafting the reimbursement provision. Il. THIS COURT SHOULD RESOLVE CONFLICTS AMONG THE CIRCUITS CONCERNING THE SCOPE OF CERCLA LIABILITY AND THE CONSTITUTIONALITY OF POST- DEPRIVATION PROCEDURES AFFORDED BY THE STAT- UTE. In evaluating this case under CERCLA § 106(b\(2)A) and deferring to the Agency, the Seventh Circuit approved the universal, administrative imposition of joint and several lia- 10 Moreover, based on its interpretation of the policy, the Seventh Circuit labeled as “absurd” Petitioner's argument that a non- liable party should always be reimbursed by a constitutional gov- ernment. Pet. App. 10-11. Rather, it is an absurd construction of the statute that would deny judicial access to a party who had in- curred only one cent in response costs. | ieee 21 bility pursuant to CERCLA § 106(a)"" and further rendered such Agency liability determinations effectively unreview- able. A. The Seventh Circuit’s Conclusion That The Agency Universally May Impose Joint And Several Liability Under CERCLA § 106(a) Conflicts With Rulings Of The Second, Third and Fifth Circuits Concerning The Scope Of CERCLA Liability. The Seventh Circuit’s determination that the Agency ad- ministratively may impose joint and several liability, with- out qualification, through a CERCLA § 106(a) unilateral order conflicts with recent decisions of the Second, Third and Fifth Circuits which hold that, where there are distinct harms at a site or where there is a reasonable basis for ap- portioning a single harm, a party’s CERCLA liability can extend only to that particular harm or portion of the harm that it caused. See In re Bell Petroleum Servs., Inc., 3 F.3d 889, 901-02 (5th Cir. 1993); United States v. Alcan Alumi- num Corp., 990 F.2d 711, 722-23 (2d Cir. 1993) (“Alcan- PAS”); United States v. Alcan Aluminum Corp., 964 F.2d 252, 268-70 (3d Cir. 1992) (“Alcan-Butler”). The Seventh Circuit’s rule, unlike that of its sister circuits, is inconsis- tent with both the legislative history and the policies of CERCLA. The Agency never has disputed that Petitioner's potential CERCLA liability with respect to the CIW Site extends, at most, to PCB contamination. See Pet. App. 4, 54-55 n.13. The Agency’s decision to order Petitioner to remove materi- als at the Site other than PCBs thus amounted to an ad- 1 CERCLA § 107(a) defines which parties may be liable under the statute. See Kelley, 25 F.3d at 1090 (noting that “the drafters always came back to the liability provisions of section 107, which calls for a judicial determination”); Kelley, 15 F.3d at 1106-07. 22 ministrative determination that Petitioner is jointly and severally liable for all alleged contamination at the Site by virtue of just being there—without any nexus to liability. The Agency’s subsequent conclusion that Petitioner did not “comply” with certain portions of the unilateral order that purportedly addressed non-PCB materials accordingly was not a “technical” decision but rather constituted a further embodiment of the Agency’s administrative determination of Petitioner’s joint and several CERCLA liability. Having held that “compliance” with a CERCLA § 106(a) order, as measured by “completion” of all work mandated by the Agency, is an “express statutory condition” to obtaining reimbursement under § 106(b)\2) (even for an entirely inno- cent party), see Pet. App. 6, the Seventh Circuit acknowl- edged that “compliance need not be a matter of all or noth- ing” but instead stated that “substantial compliance” would satisfy its statutory threshold. Jd. 10. The Court went on to indicate that the outer limits of “compliance” the Agency can demand are defined by the Agency’s “powers,” i.e., auth- ority. Id. 12. Specifically, where a clean-up order is so grotesquely broad as plainly to ex- ceed the agency’s powers, the party against whom it is directed can comply with the valid part of the order and disregard the rest as void, a nullity, and having com- plied with the valid part seek reimbursement for the costs of that compliance. An order so completely ultra vires is no order for purposes of deciding whether com- pliance and completion have been achieved; the valid and the void commands in the order can be separated, and the void discarded.” 2 Applying an economic analysis to the law, the Circuit Court identified two apparent limits on the Agency's authority under CERCLA § 106(a): where “impossibility,” “impracticability,” or “frustration,” based on a party’s financial resources, precludes (continued...) 23 Id. (citations omitted). In applying this standard to the present case, the Seventh Circuit, ignoring decisions from other Circuit Courts, held that the Agency in fact possesses authority under the statute to order a single potentially responsible party to conduct all cleanup deemed necessary at a site, even where the harm is unquestionably divisible. The Court reasoned as follows: The agency takes the position, which may or may not be correct but is not irrational, that a polluter who wants to take advantage of the reimbursement provision may be required to clean up not only his own mess, as it were, but other messes at the same site. . . . The re- quirement that the reimbursement-seeker clean up the entire site could rationally be believed to contribute to the Act’s central objective of promoting the clean-up of contaminated land. . . . EPA’s desire to have one pol- luter clean up the entire site is not so flagrantly unrea- sonable as to entitle the polluter to disregard an order embodying that desire on the ground that the order is so plainly beyond the agency’s power that it should be treated as a nullity.” 2 (continued) strict compliance; and where an order is “unreasonably, oppres- sively broad.” Pet. App. 10-11. Although the Court did not specify the source of these limitations (i.e., the statute or the Constitu- tion), it took pains to emphasize that neither was available to Petitioner. Jd. 10. 13 ‘The Circuit Court did note that “there would be problem of the tail wagging the dog if the polluter responsible for only a tiny fraction of the contamination of the site were ordered to clean up the whole thing, perhaps because he had the deepest pocket of all the responsible parties.” Pet. . 13. Even given the undisputed divisibility of the harm at the IW Site, the Court distinguished the an circumstance from the case at hand simply by stat- ing t “[i]t is not the situation here.” Id. 24 ‘Pet. App. 12-13. Because, in the Agency’s view (to which the Seventh Circuit deferred), Petitioner did not complete all work within the scope of the unilateral order directed at divisible, PCB-free materials, the Circuit Court found that Petitioner had no right to a hearing on its CERCLA liability as to any of the materials at the Site. See id. 14-17. However, in Alcan-Butler, the Third Circuit concluded that CERCLA neither mandates nor authorizes the uniform imposition of joint and several liability. See 964 F.2d at 268. To the contrary, that Court held that a responsible party only can be liable for the specific harm it caused either where there are distinct harms at a site or where there is a reasonable basis for determining the party’s contribution to (i.e., apportioning) a single harm. See id. at 268-69. In adopting this analysis, the Court relied on the approach of the RESTATEMENT (SECOND) OF TORTS to ensure a uniform federal common law under CERCLA. See id. at 268 n.26. Perhaps most importantly, however, the Third Circuit ruled that a responsible party is entitled to a judicial hearing to establish the divisibility of harm at a site, and thus the limits of its CERCLA liability. See id. at 269-70. In deci- sions rendered shortly after Alcan-Butler, the Fifth and Second Circuits adopted virtually identical analyses.'* See Bell Petroleum, 3 F.3d at 894-904; Alcan-PAS, 990 F.2d at 721-23. Both the legislative history of and policies underlying CERCLA reflect “Congress(’] inten(t] that the federal courts impose joint and several liability only in appropriate cases, 4 Two other Circuit Courts likewise have held that CERCLA lia- bility cannot be joint and several where the harm at a site is divisible. See O’Neil v. Picillo, 883 F.2d 176, 178-79, 183 (1st Cir. 1989), cert. denied sub nom. American Cyanamid Co. v. O'Neil, 493 U.S. 1071 (1990); United States v. Monsanto Co., 858 F.2d 160, 172-73 (4th Cir. 1988), cert. denied, 490 U.S. 1106 (1989). 25 applying common law principles.” Bell Petroleum, 3 F.3d at 901. The House and Senate each deleted, from its respec- tive version of the bill enacted as CERCLA, a provision that would have mandated imposition of joint and several lia- bility. As the Third Circuit explained: [T]he scope of liability and term joint and several lia- bility were deleted to avoid a mandatory legislative standard applicable in all situations which might pro- duce inequitable results in some cases. 126 Cong. Rec. at $14964, $15004, H11787, H11799, 126 Cong. Rec. H9465 (Sept. 23, 1980) (remarks of Rep. Madigan), H9466 (Remarks of Rep. Stockman). The deletion was not intended as a rejection of joint and several liability. 126 Cong. Rec. $14964, H11787, H11799 (Nov. 24, 1980). Rather, the term was omitted in order to have the scope of liability determined under common law principles, where a court performing a case by case evaluation of the complex factual scenarios associated with multi-generator waste sites will assess the propri- ety of applying joint and several liability on an individ- ual basis. Alcan-Butler, 964 F.2d at 268 (quoting United States v. Chem-Dyne Corp., 572 F. Supp. 802, 808 (S.D. Ohio 1983)). This flexible approach, accordingly, represents the balance between two competing goals of CERCLA: ensuring that those who cause environmental harm bear the costs of the harm; and protecting against harshness and unfairness to an individual defendant. See 1 Comm. on Envt & Pub. Works, A Legislative History of the Comprehensive Environ- mental Response, Compensation & Liability Act of 1980, S. Doc. No. 97-14, 97th Cong., 2d Sess. 320 (1983); Bell Petro- leum, 3 F.3d at 902 n.13. The Second, Third and Fifth Circuits all have recognized that the Agency has no authority to impose joint and several liability under CERCLA in a case, such as the present, where the harm at a site is divisible. The Seventh 26 Circuit’s decision, which allows the Agency universally to impose joint and several administrative liability in issuing CERCLA § 106(a) unilateral orders, thus conflicts with the reasoning of these other Circuit Courts as well as the legis- lative history and policies of CERCLA. B. The Seventh Circuit’s Deference To The Agency’s Ad- ministrative Liability Determination Conflicts With The First Circuit’s Conclusion As To The Constitution- ality Of Post-Deprivation Procedures Afforded By CERCLA. By deferring to the Agency’s “compliance” decision, the Seventh Circuit insulated the Agency’s administrative im- position of joint and several liability from judicial review, thus denying Petitioner the right to any hearing on its alleged CERCLA liability (as it relates to either PCBs or PCB-free materials). In this respect, the Seventh Circuit's ruling conflicts with the First Circuit’s conclusion that CERCLA’s administrative procedures cannot deny a party a timely judicial hearing on its alleged liability. See United States v. Reardon, 947 F.2d 1509, 1523-24 (1st Cir. 1991). As the First Circuit recognized, CERCLA must be inter- preted to ensure this fundamental due process right. The Agency concedes that Petitioner never has been afforded a hearing, in any forum, on its alleged CERCLA liability. See Pet. App. 25 n.6. The Seventh Circuit dis- missed Petitioner’s due process challenges to the Agency’s administrative liability determination, without analysis, simply by referring to one case in a line of decisions holding that, on their face, that CERCLA §§ 106 and 113(h) (the latter of which precludes pre-enforcement judicial review of 27 certain aspects of § 106(a) orders) are constitutional.'* See id. 11 (citing Solid State Circuits, Inc. v. United States Envtl. Prot. Agency, 812 F.2d 383, 389-92 (8th Cir. 1987)). The Circuit Court did not acknowledge the due process ramifications of denying, as it did, Petitioner any hearing on its liability after a coerced deprivation of its property. However, the First Circuit has held that a potentially re- sponsible party, administratively deprived of its property by the Agency, must be afforded a timely judicial hearing to address its CERCLA liability. In Reardon, the First Circuit found unconstitutional the CERCLA provision allowing the Agency to impose a lien on a potentially responsible party’s property without prior notice and without any hearing on the party’s liability under the statute until the Agency elects, in its discretion, to bring an enforcement action. Those principles are indistinguishable from this case. See 947 F.2d at 1523-24; CERCLA § 107(1). Applying Mathews v. Eldridge, 424 U.S. 319, 335 (1976), and relying significantly on Connecticut v. Doehr, 501 U.S. 1 (1991), the First Circuit began its analysis by noting that a CERCLA lien constitutes a deprivation of a significant property interest.’ See 947 F.2d at 1518-19. The First Cir- cuit then concluded that, although the “mere postponement of judicial enquiry is not a denial of due process if the op- 15 See also Barmet Aluminum Corp. v. Reilly, 927 F.2d 289, 294- 96 (6th Cir. 1991); Dickerson v. Administrator, Envtl. Prot. Agency, 834 F.2d 974, 977-78 (11th Cir. 1987); Wagner Seed Co. v. Daggett, 800 F.2d 310, 314-17 (2d Cir. 1986). These Courts reached this result, however, under the assumption that a poten- tially responsible party in fact would receive a judicial hearing on its alleged liability at an appropriate time. 16 The First Circuit indicated that “even [a] temporary or partial impairment{ ] to property rights . . . [is] sufficient to merit due process protection.” 947 F.2d at 1518 (quoting Doehr, 501 U.S. at 12). 28 portunity given for ultimate judicial determination of lia- bility is adequate,” id. at 1519 (quoting Phillips v. Commis- sioner, 283 U.S. 589, 596 (1931)), CERCLA’s lien provision “throws the ‘ultimate judicial determination’ so far into the future as to render it inadequate.” Id. at 1519. The First Circuit thus equated the lien provision with the replevin statutes at issue in Fuentes v. Shevin, 407 U.S. 67 (1972), where this Court held that a party may not be “left in limbo to await a hearing that might or might not ‘eventually’ occur.” 947 F.2d at 1520 (quoting Mitchell v. W.T. Grant Co., 416 U.S. 600, 618 (1974) (discussing Fuentes)). Finally, the First Circuit found that, because the property owners subject to the lien disputed their CERCLA liability, the gov- ernment had no “present, recognized interest in the proper- ty.” Id. at 1521. While conceding that “additional procedural requirements are likely to place significant . . . administra- tive burdens on the government,” the First Circuit held that “EPA has [no] legitimate interest in exceeding the limits of its authority under CERCLA” and that there is “nothing wrong with requiring EPA to delay filing notice of a lien until it can show that the statutory prerequisites for filing the notice [including establishing a party’s liability] have been satisfied.” Jd. at 1523. The First Circuit, accordingly, concluded that the CERCLA lien provision, by not provid- ing, at the very least, notice and a pre-deprivation hearing, violated the due process clause. See id. at 1523-24. That the First Circuit’s reasoning applies equally to a coerced, administrative deprivation of property pursuant to CERCLA § 106(a) is confirmed by the government’s state- ments during congressional hearings preceding the enact- ment of § 106(b)(2). Although the Seventh Circuit construed CERCLA § 106 in a manner that denies an innocent party a judicial hearing on its alleged liability, it goes without saying that, 29 if Congress completely proscribe[s] the federal courts from hearing a particular type of action, and no other relief [is] available, the action . . . violate[s] the Due Process Clause of the Fifth Amendment. Parmet Aluminum, 927 F.2d at 295 (quoting South Macomb Disposal Auth. v. Environmental Prot. Agency, 681 F. Supp. 1244, 1251 (E.D. Mich. 1988)). The government, indeed, never intended that § 106(b)\(2) be interpreted in this man- ner. To “protect against any due process violation,” the gov- ernment has acknowledged that § 106 must “provide for a full and fair day in court .. . before any party's monetary liability becomes fixed.” Reauthorization of Superfund: Hearings Before the Subcomm. on Water Resources of the House Comm. on Pub. Works and Transp., 99th Cong., 1st Sess. (1985) (comments of the Department of Justice) (em- phasis added). Consistent with the First Circuit’s ruling in Reardon, and as the government expressly has recognized, due process thus requires, at a minimum,” that a potential- ‘7 Two Circuit Courts have upheld the denial of a pre-deprivation hearing to the recipient of a CERCLA § 106(a) order given that such a party can refuse to comply with the order, challenge its liability in an ensuing enforcement action, and avoid statutory penalties by establishing in the enforcement action that it had “sufficient cause” justifying its refusal to comply. See Solid State Circuits, 812 F.2d at 390-92; Wagner Seed, 800 F.2d at 315-17; see also CERCLA §§ 106(bX1), 107(cX3). Neither Court, however, considered a case, such as the present, where the Agency delib- erately refused to disclose the evidence allegedly supporting its administrative liability determination during the limited time period the Agency allowed a recipient to evaluate whether that party in fact had “sufficient cause” to ignore an order. See Gon- zales v. United States, 348 U.S. 407, 415 (1955). In addition to a full ivation judicial hearing, due process also must re- quire that the Agency disclose its liability evidence to an order re- cipient and consider any rebuttal evidence prior to the time the order takes effect. See Solid State Circuits, 812 F.2d at 391; cf. Pet. App. 14 (misstating Petitioner’s position as seeking “to inval- (continued...) 30 ly responsible party who brings a reimbursement action be afforded a judicial hearing with respect to its alleged lia- bility under CERCLA § 107(a).”* CONCLUSION The writ of certiorari should be granted. Respectfully submitted, WILLIAM J. ANAYA RoBertT M. WATTSON Counsel of Record SANDRA WALLACE DANIEL C. MURRAY Davip C. LINDER FREDERICK S. MUELLER ZELLE & LARSON JOHNSON & BELL, LTD. 33 South Sixth Street 222 North LaSalle Street Suite 4400 City Center Suite 2200 Minneapolis, MN 55402 Chicago, IL 60601 (612) 339-2020 (312) 372-0770 Attorneys for Petitioner 7 (...continued) idate the limitations that section [113(h)] places” on pre-enforce- ment judicial review of § 106(a) orders). 18 Due process also mandates that a post-deprivation hearing be “prompt.” See Doehr, 501 U.S. at 22 (plurality), Hodel v. Virginia Surface Mining & Reclam. Ass’n, 452 U.S. 264, 303 (1981). At least in this case, there was nothing prompt about the procedures available to Petitioner for pursuing a reimbursement action. APPENDIX INDEX TO APPENDIX APP. PAGE Seventh Circuit Opinion .........-.+eseeeeeees 1 Clinton Opinion—District Court ............++-- 19 Browner Opinion—District Court ...........+-- 39 U.S. Constitution; Amendment V ............-. 61 MT aa cca gnaeaecse ses 62 42 U.S.C. § 107(a), (b) and (C) .....-. ee eeeeeeeees 65 42 U.S.C. § 113(h), (j) and (k) ........- eee ee eees 70 Order denying Rehearing ...........-++++++++: 74 Letter confirming: extension of time to file Petition for Writ of Certiorari ............eeeeeeees 75 a eter ss App. 1 IN THE UNITED STATES COURT OF APPEALS FOR THE SEVENTH CIRCUIT Nos. 94-2005, 94-2006, 94-2081 EMPLOYERS INSURANCE OF WAUSAU, a mutual company, Plaintiff-Appellant, v. Caro. M. Browner, Administrator of the United States Environmental Protection Agency, et al., Defendants-Appellees. Appeals from the United States District Court for the Northern District of Illinois, Eastern Division. Nos. 91 C 4254, 98 C 1366—Marvin E. Aspen, Judge. ARGUED JANUARY 4, 1995—Dectpep Aprit 12, 1995 Before Posner, Chief Judge, CuDAHY, Circuit Judge, and GRANT, District Judge.* PosNER, Chief Judge. We have consolidated the ap in two intimately related cases that arise under the m- Prremag Environmental Response, Compensation, and iability Act of 1980, as amended, 42 U.S.C. $§ 9601 et seq. The Act, also known (in its current, amended form) as the Superfund law, requires that sites contaminated by toxic wastes be cleaned up by or at the expense of * Hon. Robert A. Grant of the Northern District of Indiana. App. 2 the persons responsible for the contamination. In one of the cases, Employers Insurance of Wausau, an insurance company that the EPA had ordered to clean up a contam- inated site, sued the President of the United States, in- voking a 1986 amendment to the Superfund law that pro- vides that “any person who receives and complies with the terms of any order” issued by the EPA to clean up a contaminated site may “after completion of the required action” petition the President for reimbursement of “the reasonable costs of such action”—“response costs,” as they are called—and if the — is turned down may, within sixty days, sue the sident in federal district court. 8§ 9606(bX2XA), (B). The petitioner can obtain judicial relief either by proving by a preponderance of the evi- dence that it is not liable for response costs (and that the costs it incurred for which it seeks reimbursement were not excessive), § 9606(bX2XC), or that the particular re- sponse action ordered was arbitrary and capricious, or otherwise unlawful. § 9606(bX2XD). The district judge dismissed the suit on the ground that Employers Insur- ance had failed to complete the clean-up ordered by the EPA. Employers Ins. of Wausau v. Clinton, 848 F. Supp. 1359 (N.D. Ill. 1994). In the other suit, Employers Insurance sued the Admin- istrator of the EPA, to whom the President has delegated the task of responding to petitions for reimbursement, contending primarily that the statutory procedures for challenging clean-up orders are constitutionally inadequate. This suit was filed under 28 U.S.C. § 1331 as a “nonstat- utory” review proceeding (of which more later), an ac- cepted method of challenging the procedures used by an agency. Marozsan v. Un States, 852 F.2d 1469, 1474 (7th Cir. 1988) (en banc). The district judge thought the statutory procedures adequate, rejected the plaintiff's other contentions, and dismissed the suit. Em Ins. of Wausau v. Browner, 848 F. Supp. 1369 (N.D. Ill. 1994). e constitutional challenge is baseless; as we shall see, the remedies that the Superfund law creates against in- valid clean-up orders fully satisfy the requirements of due ————————————e ee eee ee eS” App. 3 process. Between them, the two suits (and a third, whose dismissal we affirmed in Employers Ins. of Wausau v. United States, 27 F.2d 245 (7th Cir. 1994)) fire what we are constrained to describe as a noisy and largely incom- large broadside of charges the majority of which , at least so far as we are able to understand them, sufficient merit to warrant discussion. How did it come about that an insurance company was ordered to clean up contaminated land? Employers Insur- ance had issued a fire insurance policy to the occupant of a building in a The building caught fire and several electrical ormers were damaged. In a settle- ment with its insured, Employers Insurance agreed to have certain oils and other fluids drained from the trans- formers and removed from the insured’s premises. Accord- ing to the EPA—Employers Insurance denies this—the in- surance company arranged for the transportation of some seven hundred gallons of these fluids to an oil recycling facility elsewhere in Michigan. Shortly afterward, the facil- ity was found to be contaminated with PCBs (polychlori- nated biphenyls) and VOCs (volatile organic compounds), and the PCB contamination was traced to the fluids that had come from the transformers. The EPA designated Employers Insurance as a potentially responsible party within the meaning of the Act—responsible, that is, for the contamination and hence for cleaning it up—and it ordered the insurance company, along with several other alleged contributors to the contamination of the recycl- ing facility, to participate in the clean-up. After initial resistance, Employers Insurance to participate, and it submitted a plan, which the EPA approved, detailing its participation. Neither the order that the EPA issued, nor the plan of compliance that Employers Insurance sub- mitted, is limited in so many words to the elimination of the PCB contamination. But after Employers Insurance finished that part of the clean-up, it stopped work, claim- ing that it was not responsible for, and therefore would not clean up, any contamination not caused by PCBs. It petitioned the EPA (nominally the President) for reimburse- cai App. 4 ment of the costs that it had incurred in the clean-up—an amount in excess of $2 million. The EPA turned the in- surance company down (precipitating these two suits) on the ground that the company had not completed the job. Employers Insurance claims that it is not responsible for any of the contamination at the recycling facility, not even the PCB contamination, because it had not, as the EPA thought it had, arranged for the transportation of the noxious fluids, which would have made it a — ble party. § 9607(aX3); Amcast Industrial Corp. v. Corp., 2 F.3d 746, 751 (7th Cir. 1993). It also denies that its petition for reimbursement was premature; it had, it contends, completed the clean-up that it was ordered to do; and it argues that it is entitled to the independent judgment of the district court on whether or not this is 30. The EPA concedes that if the insurance company did not arrange for the transportation of the fluids, the com- pany is entitled to full reimbursement—but not until it complies fully with the clean-up order. And, the agency argues further, its determination that the company did not comply fully with the order may be set aside by a court only if that determination is found to be unreason- able (“arbitrary and capricious”) in a separate judicial proceeding—not in a reimbursement p ing, which the agency insists is premature. After Employers Insurance abandoned the clean-up, the EPA stepped in and arranged for the completion of the job at a cost of several hundred thousand dollars. The agency has not yet tried to recover this expense or any part of it from Employers Insurance. Indeed, there is no reason to think the company was responsible for any of the contamination that it re to clean up. And it is only responsible parties who are required by the Superfund law to pay the costs of cleaning up con- taminated sites. The concern of Employers Insurance is not with the money that the EPA spent to complete the clean-up and might conceivably though improbably seek to recover from the company, but with the million that the meget spent and is unable to get reimbursed be- cause it did not complete the job. i i ak a oe a Al al alll . Oty re Pe TI hale Pe ee re en es ©) ie - ty App. 5 Without the provision authorizing suits for reimburse- ment of response costs, a param potentially responsible for toxic-waste pollution who was served with a clean-up order would have just two choices: omy with the order, or refuse to comply, in which event the EPA could either seek a mandatory injunction against the refuser, § 9606(a), or hire someone to clean up the polluted site at the EPA’s ex- pense and then seek to recover that expense by a suit against the person it had ordered to do the clean-up. § 9613(hX1). The defendant would have an opportunity in that suit to put the EPA to its proof that the Superfund law really did require the defendant to clean up the site. United States v. Princeton Gammea-Tech, Inc., 31 F.3d 138, 141-43 (3d Cir. 1994). But it could not challenge the order in ad- vance of having to comply; that route is, as we shall see, closed. Its choice would be to comply or to run the risk of being found to have violated a valid order. This would be a hard choice because there are heavy sanctions for disobeying a valid clean-up order, ec large civil fines and treble damages. $§ 9606(bX1), 9607(cX3). We stress “valid”; it is of course a good defense to a suit to collect these amercements that the order is invalid. Even if it is valid, the district court in which sanctions are sought can abate them in whole or in part if persuaded that the party had a reasonable though erroneous basis for believ- ing that the clean-up order was invalid. So at least Solid State Circuits, Inc. v. EPA, 812 F.2d 383, 391-92 (8th Cir. 1987), eicgad ubyox the defense to treble-damages liability for those who have “sufficient cause” to disobey such an order. § 9607(cX3). Still, there is a risk that the court will not find that the party acted reasonably, and this risk places pressure on the party to comply even if it has serious doubts whether the order is valid. Solid State Cir- cuits, Inc. v. EPA, supra, 812 F.2d at 388-89. For if it loses it may end up bearing much more than just the re- sponse costs for which the EPA sued. The provision for reimbursement trims the horns of this dilemma by offering a party served with a clean-up order a third way. Id. at 389 n. 9; Dico, Inc. v. Diamond, 35 cia iia a, App. 6 F.3d 348, 349 (8th Cir. 1994). It need not disobey the order and risk heavy sanctions. It need not obey and swallow the heavy costs of compliance. It can obey and then when it has completed the clean-up required by the order sue for the return of its expenses on the ground that it was not a responsible party within the meaning of the statute after all. But what happens when, as in the present case, a party takes what we are calling the third way but does not com- plete the clean-up? Completion of the action required by the EPA is an express statutory condition for seeking re- imbursement. Does this mean that if for reasons utterly beyond a party’s control it fails to complete the clean-up ordered by the agency it forfeits all right to seek reim- bursement for expenses that it incurred, even if it turns out that it was never liable under the Superfund law? And even if it turns out, as here, that the clean-up has been completed, albeit by someone else? Cf. North Shore Gas Co. v. EPA, 930 F.2d 1239, 1244-45 (7th Cir. 1991). That is the EPA’s position. Its lawyer told us at argument that, should the agency unreasonably refuse to acknowledge the completion of the clean-up, this would be final agency ac- tion which, because it harms the party by (in the EPA’s view) blocking the party’s right to seek reimbursement yet is not subject to a special statutory procedure pre- scribing the method of judicial review, is judicially reviewable by means of a suit for declaratory judgment brought in federal district court. Reviewable, that is, b the so-called “nonstatutory review” route, the catch- remedy for persons ieved by final agency action for which no statute aeales a path of judicial review. Ab- hott Laboratories v. Gardner, 387 U.S. 136 (1967); Maz- on Marine, Inc. v. Director, Office of Workers’ Compen- sation Programs, 39 F.3d 144, 146 (7th Cir. 1994). But it would not be reviewable, in the EPA’s view, by means of a suit for reimbursement. We may assume without having to decide that the agen- cy’s refusal to acknowledge the completion of the clean- up is reviewable by the nonstatutory-review route; for App. 7 while the Superfund law prescribes and explicitly makes exclusive the routes for obtaining judicial review of clean- up orders, § 9613(h), the agency action that we are dis- ing—a refusal to acknowledge compliance with such an order—is not itself a clean-up order, not quite anyway. Even so, we do not see why such an action could not also be reviewed in a suit for reimbursement. If the party ordered to clean up a contaminated site claims to have completed the work, he has a claim for reimburse- ment, the reimbursement provision being available to “any person who receives and complies with the terms of any” Superfund clean-up order. if 9606(bX2XA). If the EPA turns down the claim on the ground that the clean-up has not been completed (or if completed, not completed by the party ordered to complete it, and therefore the agen- cy’s order was not complied with), the party has a night to sue and the agency can defend by showing that the clean-up has not been completed and thus that a condi- tion of maintaining such a suit has not been fulfilled. The district court will adjudicate this ground for dismissal ex- actly as it would do in a separate proceeding to challenge the agency’s refusal to acknowledge the completion of the clean-up. The only difference—because in a suit for reim- bursement, as in the ordi nonstatutory-review pro- ceeding, judicial review is confined to the record compiled in the administrative dpa, 4 § 9613(jX1); First Na- tional Bank v. Comptroller of Currency, 956 F.2d 1360, 1362 (7th Cir. 1992)—will be the “pape the suit will be against the Administrator of the EPA rather than against the President—a distinction without a difference, because the President has delegated his authority under the reim- bursement provision to the EPA. Ordinarily the refusal to acknowledge completion of the clean-up and the denial of the petition for reimbursement (the denial that the party has sixty days to challenge by bringing a suit for en will be contained in the same order; they were here. A more troublesome case is where the agency takes steps to postpone completion, making it impossible for the App. 8 party to argue that it has completed the action required of it by the agency. Employers Insurance argues that it complied fully with the clean-up order, which it interprets as os limited to PCB contamination, but that when it finished the EPA told it to do more. Like the miller’s daughter in “Rumpelstiltskin,” the company worries that if it did the more the EPA would find something else for it to do, thus postponing indefinitely the time when it could obtain reimbursement. The EPA’s response (at oral argument, so possibly ill-considered) is that the party can challenge each of the successive orders in a nonstatutory review p ing. We are surprised by this response. The successive orders would be clean-up orders, and, with exceptions not material to this case, the Superfund law allows these to be challe only in p ings by the agency to enforce the order (either by injunction or by a suit to recover the expense of the clean-up or to im- pose penalties for noncompliance with the clean-up order) or proceedings by the allegedly responsible person to seek reimbursement of the costs incurred in complying with the order. $§ 9613(hX1)3). Even if a nonstatutory review proceeding were possible, the party’s right to reimbursement could (in principle any- way) still be delayed indefinitely, each successfully chal- lenged order being succeeded b another order. That can- not have been the intention of the statute’s draftsmen, as we can show by pe ge carefully to the statutory language. The right of reimbursement extends to “any person who receives and com lies with the terms of [any order],” and ripens into a right to petition and to sue “after completion of the required action.” § 9606(b 2A). Obviously “required” means “required by the order.” Once a party completes whatever action is required by the terms of any order, it can seek reimbursement for the costs of that action. The fact that the agency issues another order (which the party is free to ignore if it is — to run the risk of being made the defendant in an enforcement action) does not diminish inish the party’s rights to challenge the previous order. © : ‘ a _ ‘g ‘ i oh AAS CER LLORES App. 9 The EPA does not acknowledge having issued a second order, an order that a Insurance clean up con- tamination unrelated to . It claims that the broader scope was implicit in the original order. The dispute is thus over the interpretation of the order rather than over the agency’s right to issue successive orders and deny re- imbursement until the last one (if there is a last one) is complied with fully. If the EPA is wrong about the mean- ing of the original order, this means that the order has been complied with fully—the action required by it com- pleted—and Employers Insurance is entitled to proceed with its suit for reimbursement. The interpretive ques- tion, like the question whether a party has completed whatever action the agency wanted him to take, is one that the district court can decide in the reimbursement suit—with what weight given to the agency’s view of the matter we shall consider shortly. The most difficult case is where the party cannot com- seca the required action for reasons beyond its control. uppose it simply runs out of money and cannot borrow more. United States v. Parsons, 723 F. Supp. 757, 764 (N.D. Ga. 1989), aff'd on other grounds, 936 F.2d 526 (11th Cir. 1991), thought this irrelevant, at least in the i circumstances presented there. We are not sure it s ould never be relevant. Or mig the cost of the clean-up turns out to be so much higher than anyone reasonably anticipated that the party—who by hypothesis believes him- self not to be liable at all, which is why he wants to pre- serve his right to seek reimbursement for the expenses that he incurs in the clean-up—abandons it half way through. Is he, in either case, forced to write off the costs that he has incurred even though they have reduced the level of contamination and so the costs to the taxpayer of com- — the clean-up, and even though he could prove that e was not a responsible party after all? (We set to one side, as inessenti to our point, the statutory right of con- tribution from other sources, if any, of the contamination. § 9613(f).) An affirmative answer would be harsh. It would also retard the cleaning up of contaminated sites— App. 10 one of the objectives of the reimbursement provision. Bethlehem Steel Corp. v. Bush, 918 F.2d 1323, 1324 (7th Cir. 1990); Dico, Inc. v. Diamond, supra, 35 F.3d at 349. It would have this effect by inducing more firms to defy clean-up orders and thus put the agency to its proof of statutory responsibility. And it is not compelled in the teeth of reason by the of the statute. The statute requires compliance with the clean-up order, but com- pliance need not be a matter of all or nothing. In con- tract law, substantial compliance with contractual duties is often compliance enough. Hardin, Rodriguez & Boivin Anesthesiologists, Ltd. v. Paradigm Ins. Co., 962 F.2d 628, 636 (7th Cir. 1992); Jacob & Young’s, Inc. v. Kent, 129 N.E. 889 (N.Y. 1921) (Cardozo, J.). The doctrines of impossibil- ity, impracticability, and frustration, which operate as im- plied terms in contracts, sometimes excuse noncompliance with contractual duty altogether. These familiar defenses, along with a concept of substantial compliance as suffi- cient when to require more would be unreasonable, could be considered—we need not decide whether they are— implied terms in EPA orders as well. The notion of sub- stantial compliance is not wholly foreign to environmental law. See, e.g., Louisiana-Pacific Corp. v. ASARCO Inc., 94 F.3d 1565, 1575-76 (9th Cir. 1994). And remember that one ground for reimbursement is that “the President’s de- cision in selecting the response action ordered was arbitrary and capricious.” § 9606(bX2XD). If the term “selecting” is allowed to extend forward in time from the initial order, unreasonable insistence on full compliance might be thought a ground for invoking the provision. Employers Insurance does not e, however, that it would have been infeasible or unduly burdensome for it to shell out another couple of hundred thousand dollars to complete the clean-up project on which it had nt in excess of $2 million. It is a company wi thousands of employees, and its annual revenues from premiums exceed $1 billion. It does argue, absurdly as it seems to us, that if it spent $1, or indeed 1¢, on clean- ing up the contaminated site, it would be entitled to sue App. 11 for reimbursement of that expense and use the suit as a vehicle for obtaining an adjudication of its claim not to be a responsible party. The terms “compliance” and “com- pleted” in the statute cannot be tortured long or hard enough to yield authorization for such a procedure, which is inspired not by anything in the Superfund law but by the provision for refund suits in the Internal Revenue Code—which anyway requires (with immaterial exce tions) yment in full before the suit is filed. Flora v. United States, 357 U.S. 68, 75-76 (1958), aff'd on rehearing, 362 U.S. 145 (1960); Thomas v. United States, 755 F.2d 728, 729 (9th Cir. 1985). If a party ordered to clean ¢ bgsomly want to spend any money, it can refuse to obey order, wait to be sued, and use that suit as the vehicle for ob- taining a determination of its liability. The risk of losing and being made to pay heavy sanctions, a risk mitigated by the defense of sufficient cause as glossed in Solid State ircuits, would not violate the Constitution even if there were no reimbursement provision, 812 F.2d at 389-92; it certainly does not violate it given the additional if im- perfect remedy which that provision grants. The energy that Employers Insurance devoted in its briefs to attempt- ing to create constitutional qualms about the remedial structure of the Superfund law was misdirected. The most difficult question presented by this case is whether the EPA is authorized to gut the provision for reimbursement by issuing unreasonably, ry vse shibal broad orders. Suppose the order had ame gern bag Insurance to clean up the recycling facility and, w ile it was at it, also to clean up the residual contamination in Chernobyl from the nuclear disaster there in 1986. If the insurance company cleaned up just the recycling facility it would not be complying with the order and if the EPA is right it would never be able to seek reimbursement. Our actual case is less extreme. But according to Em- ployers Insurance, the EPA was completely unreasonable in ordering it (if that is what the agency actually did in the original order—this is the interpretive question that we mentioned) to clean up not only PCB contamination App. 12 for which it would be responsible if it did for the transportation of the fluids from its ins ’s trans- formers, but also unrelated contamination at the site, for which it could not possibly bear any responsibility. We imagine that in a case, illustrated by our Chernobyl hypothetical, in which the clean-up order is so grotesquely broad as plainly to exceed the agency’s powers, the par- ty against whom it is directed can comply with the vali art of the order and disregard the rest as void, a null- ity, and having complied with the valid part seek reim- bursement for the costs of that compliance. An order so completely ultra vires is no order for purposes of decidi whether compliance and completion have been achieved; International, Inc. v. General Fire Extinguisher Corp., 14 F.3d 1163, 1166 (7th Cir. 1994); United States v. oard of Education, 11 F.3d 668, 672 (7th Cir. 1993); Kowale- viocz v. Local 333, 942 F.2d 285, 289 (4th Cir. 1991). (We have emphasized the need for flexible interpretation of the reimbursement B pssens: before. North Shore Gas Co. v. EPA, supra, 930 F.2d at 1244-45.) But that is not our case. The agency takes the posi- tion, which may or may not be correct but is not irra- tional, that a polluter who wants to take advantage of the reimbursement provision may be required to clean up not only his own mess, as it were, but 0 messes at the same site. The agency’s position is at least consistent with the design of the reimbursement provision, which is to defer liability issues until after the clean-up is completed—that is, until the reimbursement proceeding. Kelley v. EPA, 15 F.3d 1100, 1106 (D.C. Cir. 1994). The requirement that the reimbursement-seeker clean up the entire site could rationally be believed to contribute to the Act’s central objective ot promoting the clean-up of contaminated land. And the burden on the party targeted by the order will in most cases be bearable, since he can certainly get reim- bursement for the costs that he is asked to incur not as a responsible party. The alternative—each polluter at a App. 13 site just removing the contaminants for which he is re- sponsible—may be inefficient, for the polluters may stumble over each other to remove separate pollutants. The pollutants may hay mat ty the same spot by the pect ge make two separate trips for the two sets of keys? This is just an analogy, and analo ies can lead ju astray. But our only point is that the PA’s desire to have one polluter clean up the entire site is not so flagrantly unreasonable as to entitle the polluter to dis- regard an order embodying that desire on the ground that the order is so plainly beyond the agency’s power that it should be treated as a nullity. This is not to deny that there would be a problem of the tail wagging the dog if the polluter responsible for only a tiny ion of the contamination of the site were ordered to clean up the whole thing, perhaps because he had the deepest pocket of all the responsible parties. That might begin to approach our Chernobyl hypothetical. It is not the situation here. Employers Insurance was be- ing asked to = pes only about 10 percent more to clean up the non-PCB contamination than it had spent to clean up the PCB contamination for which (if it was the ar- ranger) it was indeed a responsible party. In the suit that names the Administrator of the EPA as the defendant rather than the President, the insurance company argued in the district court that the agency lacks statutory authority to condition reimbursement on the cleaning up of pollution for which the party ordered is not responsible. Employers Ins. of Wausau v. Clinton, supra, 848 F. Supp. at 1367. Insofar as the company sought merely to vacate or narrow the order as inconsis- tent with the authorizing statute, it ran afoul c7 section App. 14 9613(h), the provision that provides the exclusive methods of challenging clean-up orders—and they do not include a suit for injunctive or declaratory relief by the person ordered to perform a clean-up. In any event, the company abandoned its attempt to invalidate the order as over- broad in its opening brief in this court. Its attempt to revive the attempt in its reply brief came too late; the argument had been waived. v. Greer, 896 F.2d 252, 254 (7th Cir. 1990); United States v. Rodriguez, 888 F.2d 519, 524 (7th Cir. 1989). In any event, the main thrust of the suit against the Administrator was not that the order was overbroad; it was that the Superfund law does not give a party ordered to clean up a toxic-waste site an adequate opportunity to challenge the order. The relief sought was to invalidate the limitations that section 961 places on the pos- sible routes for challenging such orders. Such relief could be obtained only in a suit against the Administrator and therefore the suit is not precluded by those limitations; it is, as we suggested at the outset of this opinion, a proper invocation of nonstatutory review. As such it mere- ly had no merit, while insofar as it sought a declaration that the clean-up order was too broad it strayed outside the permissible bounds of such a suit and was barred by the exclusive-remedies provision. The company is left to argue that it did comply with the order and that the agency is mistaken to think other- wise—the agency has misinterpreted its own order. We must consider first what our standard of review is. The relevant section, § 9606(bX2XA) (“any n. who receives and complies. . .”), does not say. two other provi- sions potentially involved in this case, (C) and (D), imply different standards of review—plenary in (C) (the “pre- ponderance of evidence” provision), deferential in (D) (the “arbitrary and capricious” provision). Dico, Inc. v. Dia- mond, supra, 35 F.3d at 351-52; Kelley v. EPA, supra, 15 F.3d at 1107. Ordinarily the interpretation of a docu- ment (the clean-up order) is considered a question of law, App. 15 and appellate review is plenary. United States v. Ad- ministrative Enterprises, Inc., 46 F.3d 670, 674 (7th Cir. 1995). But when the document is an order, the court or agency that issued it is, sensibly enough, considered to have He gee insight into its meaning, so review is deferential. Martin v. Occupational Safety & Health Review Comm’n, 499 U.S. 144, 150-51 (199); Udall v. Tallman, 380 U.S. 1, 16-17 (1965); In re Weber, 25 F.3d 413, 416 (7th Cir. 1994); In re Chicago, Rock Island & Pacific R.R., 865 F.2d 807, 810-11 (7th Cir. 1988). An ad- ditional consideration in this case is that the question of compliance with the EPA’s order depends not only on what the order says and means but also on what the target of the order, the insurance company, did. The agen- cy’s opinion turning down the petition for reimbursement is based not only on a purely interpretive determination that the clean-up order was not limited to PCBs but also on a factual determination that the measures which Em- ployers Insurance took to comply with the order did not succeed in eliminating the other contaminants. This raises issues of a purely technical nature on which the agency’s determination is entitled to the usual deference that is ‘ven to administrative determinations. Cf. Wagner Seed Co. v. Bush, 946 F.2d 918, 921 (D.C. Cir. 1991). And the order itself is full of technical terms, and we think the EPA is entitled to some scope in interpreting their mean- ing as well. It is, to repeat, its own order. Which makes the case for deference stronger than in Wagner Seed, where the majority’s conclusion that the EPA’s interpretation of the meaning of the statutory lan- “receives and complies” is entitled to deference w a spirited dissent from Judge Williams. Jd. at 925. Stro too than in Kelley and Dico, which held that no deference is to be given to the EPA’s judgment on whether the person seeking reimbursement is actually liable for response costs. The Superfund law does not give the EPA responsibility for administering the reimburse- ment provision; it has that 3 9 only by virtue of delegation by the President. So it is by no means clear App. 16 that it was to have authority to interpret the provision— authority to which Chevron U. S.A. Inc. v. Natural Re- sources Defense Council, Inc., 467 U.S. 887 (1984), would require the courts to defer. But the agency does have statutory authority to issue clean-up orders, and that authority carries with it, we should think, the authority to interpret those orders, and specifically to determine in this case whether its order required the cleaning up of contaminants for which the party ordered had no re- sponsibility. Employers Insurance points out that the procedure by which the EPA made this determination was not hedged about with the usual safeguards of the adjudicative proc- ess, and it argues that the absence of those saf justifies a more searching judicial review. The petition for reimbursement was in handled informally, by officials who have none of the trappings or protections of judicial officers, cf. Fishgold v. Sullivan Drydock & ir Corp., 154 F.2d 785, 789 (2d Cir.) (L. Hand, J.), , 328 U.S. 275 (1946), and the petitioner, while given ample oppor- tunity (which it took) to submit documents in support of its position, did not have most of the rights of parties to an adjudication, such as the right of cross-examination. The compan — that findings made in so maimed a proceeding should not receive any deference from a court. But the principles that require judicial deference to ad- ministrative findings are not limited to findings made in adjudications. Indeed the broadest deference is given to the findings made in rulemaking proceedings, most of them “informal” in the same sense as the papery, in this case. See, e.g., Morales v. Yeutter, 952 F.2d 954 (7th Cir. 1991). The degree of deference is tied not to the for- mality or elaborateness of the procedures used by the ee but to the character of the issue in relation to Ww er ) gear were employed ts resolve it. Packers Trading Co. v. CFTC, 972 F.2« 144, 145 (7th Cir. 1992); Central National Bank v. U.S. Dept. of Treasury, 912 F.2d 897, 904 (7th Cir. 1990). The issue of compliance with the EPA’s clean-up order in this case was technical in App. 17 character and was addressed in a proceeding that pro- vided for a full exchange of evidence and argument before the agency made its final decision, which it set forth at length in a reasoned, and as it seems to us reasonable (though not necessarily correct), opinion. There is no in- dication that it is the kind of issue that would have been illuminated by cross-examination. We conclude that the EPA’s finding that Employers In- surance failed to comply with the clean-up order must be upheld unless it is arbitrary or capricious, or in the equivalent terminology of civil suits unless it is clearly erroneous. And it is not. The order by its terms embraces all hazardous substances at the recycling facility, regard- less of the icular type of hazardous substance. No doubt the EPA could have given the order a narrower reading, interpolating a limitation to hazardous substances for whose presence at the site Employers Insurance was responsible. But it chose not to do so and we cannot say that it acted unreasonably in refusing. We have already pointed to the reasons why the EPA might want to im- pose on a source of one pollutant the responsibility for cleaning up the entire site that had been contaminated by that pollutant, even if the site had been contaminated by other pollutants as well. So broad an order might or might not be proper, but, Employers Insurance having waived that issue, the only issue left is what the EPA meant. We think it meant, or more precisely could reason- ably be understood to have meant, that Employers Insur- ance could not stop its clean-up efforts when the last of the PCBs was removed. Employers Insurance is therefore entitled to no judicial relief. AFFIRMED. A true Copy: Teste: Clerk of the United States Court of Appeals for the Seventh Circuit App. 18 UNITED STATES COURT OF APPEALS For the Seventh Circuit Chicago, Illinois 60604 JUDGMENT — WITH ORAL ARGUMENT Date: April 12, 1995 BEFORE: Honorable Richard A. Posner, Chief Judge Honorable Richard D. Cudahy, Circuit Judge Honorable Robert A. Grant, District Judge* Nos. 94-2005, 94-2006 and 94-2081 EMPLOYERS INSURANCE OF WAUSAU A MUTUAL CoMPANY, a mutual insurance corporation, Plaintiff-Appellant Vv. CAROL M. BROWNER, as Administrator of the United States Environmental Protection Agency, VALDAS V. ADAMKUS, as Regional Administrator of Region V of the United States Environmental Protection Agency, WILLIAM E. Muno, as Acting Director of the Office of Waste Programs Enforcement of the United States Environmental Protection Agency, et al., Defendants-Appellees Appeals from the United States District Court for the Northern District of Illinois, Eastern Division Nos. 91 C 4254, 93 C 1366—Marvin E. Aspen, Judge The judgment of the District Court is AFFIRMED, with costs, in accordance with the decision of this court entered on this date. * The Honorable Robert A. Grant, District Judge for the North- ern District of Indiana, is sitting by designation. App. 19 EMPLOYERS INSURANCE OF WAUSAU, a Mutual Company, a mutual insurance corporation, Plaintiff, v. WILLIAM J. CLINTON, in his official capacity as President of the United States, et al., Defendants. No. 93 C 1366 United States District Court N.D. Illinois, E.D. March 4, 1994. MEMORANDUM OPINION AND ORDER ASPEN, District Judge: Plaintiff Employers Insurance of Wausau brings this three count action to recover the funds that it expended cleaning up a contaminated oil recycling facility in Rom- ulus, Michigan. Presently before the court is defendants” motions for summary judgment and a protective order. For the reasons set forth below, defendants’ motion for 1 For the purposes of this opinion, “defendants” shall refer to the United States Environmental Protection Agency and each of the individual defendants (William J. Clinton, Carol Brown- er, Valdas V. Adamkus, and Bruce M. Diamond) in their offi- cial capacities. eects App. 20 summary judgment is granted and motion for a protec- tive order is denied as moot. L Factual Background’ On August 24, 1987, fire struck and destroyed a build- ing located in Wyandotte, Michigan. The building’s occu- pant held a policy with plaintiff Employers Insurance of Wausau (“Wausau”), which covered certain perils, in- cluding fire, as well as the expense of debris removal re- sulting from such perils. At the Wyandotte property, this debris included several electrical transformers. In a set- tlement with the policyholder, Wausau agreed to have certain fluids and oils drained from the transformers and removed from the site. In April, 1989, seven hundred gal- lons of fluids were removed from the transformers and transported to an oil recycling facility in Romulus, Mich- 2 We set forth the facts only as relevant to the issues raised in the present motions. For a more detailed recitation of the facts underlying this action, see this Court’s opinion in the related case Employers Insurance of Wausau v. Bush, 791 F.Supp. 1314 (N.D.IIl. 1992). We also note at this juncture that defendants failed to submit a statement of material facts as required by Rule 12(m) of the General Rules of the United States District Court for the Northern District of Illinois, which alone would justify our denial of the motion. We will nonetheless consider defendants’ motion for several reasons. First, both parties have included extensive factual information in the briefs submitted to this court, ing a 12(m) state- ment essentially duplicative. Second, defe ts have indi- cated that if we were to deny their motion on this ground, they would resubmit the motion with the statement of facts. Our action would therefore simply delay consideration of an other- wise fully briefed and annotated motion. Finally, and perhaps most importantly, Wausau has not objected to defendants’ fail- ing in this regard. While we do not condone defendants’ failure to comply with the rules of this district, we choose to exercise our discretion and consider this motion. App. 21 igan, where the fluids were placed in process tanks for recycling. The following month, it was discovered that the Romulus facility was contaminated with polychlorinated biphenyls (“PCBs”) and volatile organic compounds (“VOCs”). The source of the PCB contamination was traced to the oil which had been used in the transformers at the Wyandotte building. On September 11, 1989, the Environmental Protection Agency (“EPA”) designated Wausau as a potentially responsible party under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”), as amended by the Superfund Amendments and Reauthorization Act of 1986 (“SARA”), 42 U.S.C. § 9601 et seq.,° and demanded Wausau’s participation in the cleanup. Wausau did not respond, and in November, 1989, the EPA issued a uni- lateral administrative order directing Wausau and the other involved parties to begin emergency cleanup mea- sures. Wausau strenuously objected, claiming that the EPA’s characterization of Wausau’s role in the transpor- 3 PCBs are a group of chemicals used primarily as coolants in electrical equipment. They are “among the most hazardous man-made chemical substances.” Environmental Transp. Sys- tems, Inc. v. Ensco, Inc., 969 F.2d 503, 505 n. 1 (7th Cir. 1992). ‘ VOCs are “vapors emitted from substances such as gasoline and solvents.” Motor Vehicle Mfrs. Ass’n v. New York State Dep’t of Envtl. Conservation, 810 F.Supp. 1331, 1337 (N.D.N.Y. 1993). They include benzene and methylene chloride, and cause adverse human health effects such as cancer. See Natu- ral Resources Defense Council, Inc. v. EPA, 824 F.2d 1211 (D.C.Cir. 1987). 5 We shall refer to the relevant sections of CERCLA as “CERCLA § __”, using the section employed in the United States Code rather than those used in CERCLA’s internal number system. App. 22 tation and disposal of the fluids was “materially incor- rect,” “erroneous, arbitrary and wrongful.” After some further wrangling, the EPA filed an administrative action against Wausau under the Toxic Substance Con- trol Act, 15 U.S.C. § 2601 et seq., in an effort to force Wausau to comply with the order. Without admitting any responsibility, Wausau relented and submitted and Emergency Response Action Plan (“ERAP”), setting forth the manner in which it would comply with the order. The EPA approved Wausau’s ERAP on February 26, 1990. The Order itself listed thirty-three findings which detailed the various parties’ involvement in the PCB con- tamination at the Romulus facility. It further specified that “hazardous substances” were present at the site, both due to the PCB contamination and because there existed waste in drums which contained high levels of VOCs. Accordingly, the Order required the potentially re- sponsible parties to: a. Provide site security and develop and implement a site safety plan. b. Pump, treat, test, and discharge contaminated water as necessary. c. Pump and consolidate all contaminated oils and in- cinerate them off site. d. Pump out sludges and dispose of them properly. e. Excavate contaminated soils and dispose of them properly. f. Pump and treat liquids in the dikes on site. . Treat lagoon water and discharge. 4 h. Sample, characterize, and dispose of drums of waste on site. i. Conduct post cleanup sampling. App. 23 In addition, the order specified requirements for the dis- posal and treatment of “{aJll materials containing haz- ardous substance, pollutants or contaminants removed pursuant to this Order.” These requirements of the Order were not limited to PCB-contaminated areas. The ERAP, drafted by Wausau and approved by the EPA, was expressly designed to “comply with the Order to the extent technically feasible under climatic condi- tions existing at the Site ... .” The ERAP is somewhat more PCB specific, setting forth particular requirements with respect to PCB contamination. However, it also con- tains several broad statements about Wausau’s obliga- tions at the Site. These statements include: Forty-eight drums are reportedly located at the Site. Immediately following or concurrent with tank sampling, samples will be collected from each drum _... The objective of drum sampling and analysis is to ascertain the compatibility of the drum contents and to characterize compatible waste streams to the extent necessary for ultimate treatment and/or dis- posal. Once compatible waste groups have been identified, representative composite samples will be generated in the laboratory for waste characteriza- tion testing. Surface water bodies on Site will be sampled, in accordance with the Sampling and Analysis Plan. Each discrete surface water body will be sampled im- mediately following completion of tank and drum waste sample collection. Sediment samples will be collected from on and off- Site lagoons, drainage wales and other surface water bodies that are potential receptors of contaminated materials. App. 24 Immediately following, or concurrent with, sample collection, laboratory chemicals potentially present in the former laboratory building will be inventoried for disposal. When necessary, containers will be sampled for characterization. The Contractor will transfer contaminated oils from the storage tanks to approved hazardous waste liquid tankers. Liquids will be removed from the tanks util- izing a vacuum truck, portable or in-line pumps. Following identification of unique waste streams, compatible drummed wastes will be blended and re- moved off Site for treatment or disposal in strict accordance with State and Federal regulations. The final disposal mode selected for each waste stream will be based on an assessment of the characteriza- tion data and acceptance by approved treatment or disposal facilities. Empty drums will be crushed and disposed of as RCRA hazardous waste bulk solids. Finally, the ERAP expressly amended the Order to allow Wausau 180 days to complete its cleanup activities. Following the EPA’s approval of the ERAP, Wausau began its cleanup. However, in several telephone calls and letters to the EPA, Wausau indicated that it did not believe that it would be responsible for cleaning up any non-PCB contamination under the Order and the ERAP. In response, the EPA consistently maintained that both the Order and the ERAP were worded broadly and were not limited to PCB contamination, and that Wausau was required to clean up all hazardous substances located at the Site. However, Wausau persisted in its interpretation of the Order and ERAP, and claimed that it completed x App. 25 the prescribed cleanup on January 24, 1991, some 331 days after approval of the ERAP, or 151 days late. At no time did Wausau submit a written request for an exten- sion of time, as required by the Order. [1] On March 22, 1991, Wausau submitted a petition for reimbursement of its response costs, which exceeded $2,000,000, pursuant to CERCLA § 9606(b\(2)(A). The EPA, however, informed Wausau that it had not com- pleted the cleanup required, and detailed those tasks which remained undone. Wausau submitted a supple- mental report in support of its claim that it had fulfilled its obligation at the Site. Disagreeing, the EPA finished the cleanup on October 25, 1991. On June 2, 1992, the EPA issued a preliminary decision denying Wausau’s petition for reimbursement based upon Wausau’s failure to complete the required cleanup, and invited Wausau to respond. Wausau submitted forty-five pages of comments and hundreds of pages of exhibits on September 14. After reviewing these comments and documents, the EPA, on January 28, 1993, issued its final decision denying Wau- sau’s petition for reimbursement. Wausau then filed the present case, seeking review of the EPA’s decision deny- ing its petition for reimbursement, and requesting reim- bursement of its cleanup costs.° 6 Wausau would also have us consider its reimbursement peti- tion on the merits, determining whether Wausau is a liable party, and if so, to what extent. Even if we concluded that the EPA had erred in refusing to consider Wausau’s petition, how- ever, we would remand the case to the EPA for consideration of the petition on the merits, as the EPA has not previously considered the merits of Wausau’s reimbursement claim, and that determination is initially the province of the EPA. See, e.g., Camp v. Pitts, 411 U.S. 138, 142-43, 93 S.Ct. 1241, 1244, 36 L.Ed.2d 106 (1973). App. 26 Il. Statutory Background [2] Enacted in 1980, “CERCLA was designed ‘to bring order to the array of partly redundant, partly inadequate federal hazardous substances clean up and compensation laws.’ ” Voluntary Purchasing Groups, Inc. v. Reilly, 889 F.2d 1380, 1386 (5th Cir. 1989) (quoting New York v. Shore Realty Corp., 759 F.2d 1032, 1040 (2d Cir. 1985)). The primary purpose of CERCLA is “the prompt cleanup of hazardous waste sites.” J.V. Peters & Co. v. EPA, 767 F.2d 263, 264 (6th Cir. 1985). To this end, upon a determination that there is an actual or threatened release of a hazardous substance,’ CERCLA gives the EPA the authority (1) to take direct response action to clean up a site and later seek reimbursement from re- sponsible parties, 42 U.S.C. § 9604(a) (1988), or (2) to require those responsible parties to conduct the cleanup themselves.® Jd. § 9606(a); see also Bethlehem Steel Corp. v. Bush, 918 F.2d 1323, 1324 (7th Cir. 1990). In order to “encourage potentially responsible parties to conduct a cleanup expeditiously and postpone litigation about responsibility to a late time,” Bethlehem Steel, 918 F.2d at 1324, Congress amended CERCLA to give those par- ties that “receive and comply” with a cleanup order the right to petition the EPA for reimbursement. 42 U.S.C. 7 CERCLA’s definition of “hazardous substances” is broad, and includes hazardous wastes listed under five other federal environmental statutes, including the Resource Conservation ono Recovery Act, 42 U.S.C. § 6901 et seq. See CERCLA 1(14). 8 We note that most of the authority granted under CERCLA is explicitly imparted to the President. However, the President has delegated administration of CERCLA to the Administrator of the EPA. See Exec. Order No. 12580, 50 Fed.Reg. 2923 (1987), reprinted in 42 U.S.C. § 9615 (Supp.1991). Le Ne App. 27 § 9606(b2)(A) (Supp. 1991). To obtain reimbursement, a petitioner must establish (1) “by a preponderance of the evidence that it is not liable for response costs under sec- tion 9607(a) of [CERCLA] and that the costs for which it seeks reimbursement are reasonable in light of the action required by the relevant order,” id. § 9606(b)(2)(C), or (2) “on the administrative record, that the [EPA’s] decision in selecting the response action ordered was arbitrary and capricious or was otherwise not in accordance with law.” Id. § 9606(bX(2XD). If the EPA refuses to grant all or part of a § 9606(b)(2) petition for reimbursement, “the petitioner may within 30 days of receipt of such refusal file an action . . . in the appropriate United States dis- trict court seeking reimbursement.” Id. § 9606(b)(2)(B). Ill. Discussion _ [8] The first issue we must consider is whether the EPA’s determination that Wausau failed to comply with the Order is properly subject to review by this court, and if so, what the appropriate standard of review is. As noted above, CERCLA § 9606(b)(2) provides the authority for reimbursement actions. That section reads, in rele- vant part: (A) Any person who receives and complies with the terms of any order issued under subsection (a) of this section may, within 60 days after completion of the required action, petition the President for reimburse- ment from the Fund for the reasonable costs of such action, plus interest... (B) Ifthe President refuses to grant all or part of a petition made under this paragraph, the petitioner may within 30 days of receipt of such refusal file an action against the President in the appropriate App. 28 United States district court seeking reimbursement . from the Fund. (C) Except as provided in subparagraph (D), to obtain reimbursement, the petitioner shall establish by a preponderance of the evidence that it is not liable for response costs under section 9607(a) of this title and that costs for which it seeks reimbursement are reasonable in light of the action required by the relevant order. (D) A petitioner who is liable for response costs under section 9607(a) of this title may also recover its reasonable costs of response to the extent that it can demonstrate, on the administrative record, that the President’s decision is selecting the response action ordered was arbitrary and capricious or was other- wise not in accordance with the law. Reimbursement awarded under this subparagraph shall include all reasonable response costs incurred by the petitioner pursuant to the portions of the order found to be arbitrary and capricious or otherwise not in accor- dance with law. In addition, CERCLA § 9613(j), entitled “Judicial re- view,” provides: (1) Limitation In any judicial action under this chapter, judicial review of any issues concerning the adequacy of any response action taken or ordered by the President shall be limited to the administrative record. Other- wise applicable principles of administrative law shall govern whether any supplemental materials may be considered by the court. (2) Standard In considering objections raised in any judicial action under this chapter, the court shall uphold the President’s decision in selecting the response action App. 29 unless the objecting party can demonstrate, on the administrative record, that the decision was arbitrary and capricious or otherwise not in accordance with law. It is thus apparent that CERCLA provides for judicial review under certain circumstances. That is, a party may obtain review of the EPA’s determination regarding its liability pursuant to CERCLA § 9606(b)(2)(C), as well as the proper scope of that liability pursuant to CERCLA $§ 9606(bX2)(D) and 9613(j). However, there is no explicit provision for review of the EPA’s determination that a party did not “comply” with the relevant Ord [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386012_2217%3A1. Public record. Not legal advice.