Opposition Brief — Advance Chemical Co. v. United States

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No. 92-1995

Jn the Supreme Court of the United States

OCTOBER TERM, 1993

ADVANCE CHEMICAL COMPANY, ET AL., PETITIONERS

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE TENTH CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

DREw S. Days, III

Solicitor General

MYLES E. FLINT

Acting Assistant Attorney

General

DAVID C. SHILTON

GERALD H. YAMADA STEVEN NOVICK

Acting General Counsel JOHN T. STAHR

CHARLES DE SAILLAN Attorneys

Attorney Department of Justice

Environmental Protection Washington, D.C. 20530

Agency (202) 514-2217

Wushington, D.C. 20460

pe)

QUESTIONS PRESENTED

Section 107(a)(4)(A) of the Comprehensive Environ-

mental Response, Compensation, and Liability Act of

1980 (CERCLA) subjects parties that are responsible for

the threatened or actual release of hazardous substances

to liability for “all costs of removal or remedial action

incurred by the United States Government or a State or

an Indian tribe not inconsistent with the national

contingency plan.” 42 U.S.C. 9607(a)(4)(A). The ques-

tions presented are:

1. Whether a responsible party may avoid liability for

the costs of remedial or removal actions that are not

inconsistent with the national contingency plan on the

ground that the costs are unreasonable.

2. Whether the court of appeals erred in declining to

reopen the district court’s prior grant of partial sum-

mary judgment awarding the United States certain

response costs for the hazardous waste site.

(I)

TABLE OF CONTENTS

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TABLE OF AUTHORITIES

Cases:

Glaros v. H.H. Robertson Co., 797 F.2d 1564 (Fed. Cir.

1986), cert. dismissed, 479 U.S. 1072 (1987) ...........ccc0000.

Goodman v. Lukens Steel Co., 482 U.S. 656 (1987) ...........

Holley v. Northrop Worldwide Aircraft Services, Inc.,

GE |__|

Interstate Power Co. v. Kansas City Power & Light Co.,

ee | aa

J.V. Peters & Co. v. Administrator, EPA, 767 F.2d 263

No sods cdoumiessivns

Lone Pine Steering Committee v. United States Environ-

mental Protection Agency, 777 F.2d 882 (3d Cir. 1985),

cert. denied, 476 U.S. 1115 (1986) .................ccccccccssseeees

Nissho-Iwai American Corp. v. Kline, 845 F.2d 1300 (5th

I ate dn dled sencndctencacaickdbkesuncbrksseSesesussnesnenavesess

O'Neil v. Picillo, 682 F. Supp. 706 (D.R.1. 1988), aff’d,

883 F.2d 176 (1st Cir. 1989), cert. denied, 493 U.S. 1071

SN Tail cuh cel uctudabhbbadhnahestatisbinessttuncenanahvincesvencaes

Peterson v. Lindner, 765 F.2d 698 (7th Cir. 1985) ..000.......

Roper v. Edwards, 815 F.2d 1474 (11th Cir. 1987) ..........

Stuckey v. Northern Propane Gas Co., 874 F.2d 1563

a acai ies diwedesnsskuanbeknaonss

Trustees of Indiana University v. Aetna Casualty &

Surety Co., 920 F.2d 429 (7th Cir. 1990) ........ ee

United States v. Deseri Gold Mining Co., 433 F.2d 713

TR GRIESE SASTRY SSDS A oo nC

16, 17

Cases—Continued: Page

United States v. Northeastern Pharmaceutical & Chem-

ical Co., 810 F.2d 726 (8th Cir. 1986), cert. denied, 484

Ce Oe rE isi sc eee nena 12, 13, 14

United States v. R.W. Meyer, Inc., 889 F.2d 1497 (6th

Cir. 1989), cert. denied, 494 U.S. 1057 (1990) .......000.000.. 3, 13

United States v. Reilly Tar & Chemical Corp., 546 F.

SP: DU CED. Ti. ROI scence pssinseereeccccinusecsertcssveiins 2

Voutour v. Vitale, 761 F.2d 812 (1st Cir. 1985), cert.

NO, SHO. TER. BID GED sav eccarsctvccssenccscevaversetsssccseias 16

Walls v. Waste Resource Corp., 823 F.2d 977 (6th Cir.

PTT ve ceuchtnsuocsiundcgcaastaae vuisiatehdvetadesmdbacidiedihs eset tiuaticdkes 2

Wenzel v. Boyles Galvanizing Co., 920 F.2d 778 (11th Cir.

STERE Sonpunnctetincablasbndateiildedatuersnbdcaapsnerainasieed cae taaada deeds 16

Statutes, regulations and rule:

Comprehensive Environmental Response, Compensation,

and Liability Act of 1980, 42 U.S.C. 9601 et seq. ............ 2

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FP Se Sa, MID aah ia ccccsbxesenceoboninessnccnmadsvhenccecenasees 4

ny Se WI, WD ea cepa nhctssicenencsstaenudeseseduncinentseces 5

ry, See ERA NE tarde cisnncrankcaxcccsessceavnveseens 3, 5

§ 107(a)(4)(A), 42 U.S.C. 9607(a)(4)(A) ...... eee eee ee passim

§ 107(a)(4)(B), 42 U.S.C. 9607(a)(4)(B) ............ 4,-5, 8, 11, 15

Superfund Amendments and Reauthorization Act of

1986, Pub. L. No. 99-499, 100 Stat. 1618 ................cc00e0 3

Exec. Order No. 12,580, 3 C.F.R. 193 (1988) ..............0.00 3

40 C.F.R. (1989):

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40 C.F.R. 300.400-300.435 (1990) .......... cc ecccceeeeeceeeeeeeeeeee

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Rule—Continued:

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Miscellaneous:

H.R. Rep. No. 1016, 96th Cong., 2d Sess. Pt. I (1980) ......

Jn the Supreme Court of the United States

OCTOBER TERM, 1993

No. 92-1995

ADVANCE CHEMICAL COMPANY, ET AL., PETITIONERS

Vv.

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE TENTH CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

OPINIONS BELOW

The opinion of the court of appeals (Pet. App. la-

25a) is reported at 982 F.2d 1436. The opinions of the

district court (Pet. App. 28a-25la, 252a-285a) are

reported at 750 F. Supp. 1460 and 733 F. Supp. 1424.

JURISDICTION

The judgment of the court of appeals was entered on

December 21, 1992. A petition for rehearing was

denied on February 17, 1993. Pet. App. 26a-27a. On

May 4, 1993, Justice White extended the time for

filing a petition for a writ of certiorari to and includ-

ing June 17, 1993, and the petition was filed on that

date. The jurisdiction of this Court is invoked under

28 U.S.C. 1254(1).

(1)

STATEMENT

The Comprehensive Environmental Response,

Compensation, and Liability Act of 1980 (CERCLA),

42 U.S.C. 9601 et seq., subjects parties that are

responsible for the threatened or actual release of

hazardous substances to liability for “all costs of

removal or remedial action incurred by the United

States Government or a State or an Indian tribe not

inconsistent with the national contingency plan.” 42

U.S.C. 9607(a)(4)(A). Petitioners, who are responsible

parties at the Hardage waste disposal site, present an

interlocutory challenge to the court of appeals’

determination that the United States is entitled to

recover response costs that the government has

incurred to remedy conditions at that site.

1. Congress enacted CERCLA in 1980 to “estab-

lish a comprehensive response and financing mech-

anism to abate and control the vast problems

associated with abandoned and inactive hazardous

waste disposal sites.” H.R. Rep. No. 1016, 96th Cong.,

2d Sess. Pt. I, at 22 (1980). Congress intended that

the government be given “the tools necessary for a

prompt and effective response to problems of national

magnitude resulting from hazardous waste disposal,”

and that “those responsible for problems caused by

the disposal of chemical poisons bear the costs and

responsibility for remedying the harmful conditions

they created.” Walls v. Waste Resource Corp., 823

F.2d 977, 980 (6th Cir. 1987), quoting United States v.

Reilly Tar & Chemical Corp., 546 F. Supp. 1100, 1112

(D. Minn. 1982).'

' Congress conferred the powers granted under CERCLA

to the President, who has delegated authority to the Adminis-

CERCLA provides EPA with two principal meth-

ods for achieving cleanup of hazardous waste sites.

First, Section 104 of CERCLA authorizes EPA to

perform removal or remedial actions, known as

response actions, using the Hazardous Substance

Superfund. 42 U.S.C. 9604; see 42 U.S.C. 9601(23)

(defining a removal action); 42 U.S.C. 9601(24) (defin-

ing a remedial action). See also United States v. R.W.

Meyer, Inc., 889 F.2d 1497, 1500 (6th Cir. 1989), cert.

denied, 494 U.S. 1057 (1990). Second, Section 106(a) of

CERCLA empowers EPA to issue an administrative

order or to obtain a judicial injunction requiring the

responsible parties to undertake response actions. 42

U.S.C. 9606(a).

If EPA performs the response action, then the

United States may the government’s re-

sponse costs by bringing a cost recovery action

against responsible parties pursuant to Section 107(a)

of CERCLA. 42 U.S.C. 9607(a). Private parties that

undertake response actiohs may also recover costs

from responsible parties tp the extent that they can

show that the costs were “necessary.” 42 U.S.C.

9607(a). Specifically, Sedtion 107(a)(4) states that

responsible parties are lialle for

(A) all costs of removal or remedial action

incurred by the United: States Government or a

State or an Indian tribe not inconsistent with the

national contingency plan;

trator of the Environmental Protection Agency (EPA). See

Exec. Order No. 12,580, 3 C.F.R. 193 (1988). Congress has re-

vised CERCLA through the Superfund Amendments and

Reauthorization Act of 1986 (SARA). Pub. L. No. 99-499, 100

Stat. 1613.

(B) any ether necessary costs of response

incurred by any other person consistent with the

national contingency plan|.|

42 U.S.C. 9607(a)(4)(A) and (B) (emphasis added). The

national contingency plan (NCP), which EPA has

promulgated as a regulation pursuant to Section 105

of CERCLA, 42 U.S.C. 9605, prescribes methods for

investigating, planning, and undertaking response

actions. See 40 C.F.R. Pt. 800. The NCP sets out a

framework for selecting response actions and pro-

vides guidance as to what types of response actions

are appropriate. See 40 C.F.R. 300.64-800.71 (1989); 40

C.F.R. 300.400-300.435 (1990). See generally Pet. App.

8a-10a.

2. In September 1972, Royal Hardage began accept-

ing hazardous substances for disposal at a site near

Criner, Oklahoma. The Hardage site operated from

September 1972 until November 1980, during which

time more than 20 million gallons of waste were

transported to the site and treated, stored, or disposed

of at that location. Pet. App. 6a, 40a. Since 1980, EPA

has conducted extensive investigations and admin-

istrative review to determine the extent of con-

tamination at the Hardage site, the liable parties, and

possible remedial actions to clean up the site. Jd. at

40a-4 la.

On June 25, 1986, the United States filed this

action, on behalf of the EPA, against 32 generators

and three transporters, each of whom purpertedly

shipped between 100,000 and 1.7 million gallons of

hazardous wastes to the site. Pet. App. 48a. The

complaint requested injunctive relief under Section

106(a) of CERCLA to require defendants to clean up

the site. The complaint also sought recovery under

Section 107(a)(4)(A) of response costs incurred by the

United States. Pet. App. 48a. -

Most defendants named in the complaint organized

themselves as the Hardage Steering Committee

(HSC), and on September 8, 1986, the HSC defendants

filed an answer and a counterclaim against the United

States contending that several federal agencies, as

entities also responsible for contamination at the site,

were liable for response costs incurred by HSC,

pursuant to Section 107(a)(4)(B) of CERCLA. Pet.

App. 20a. HSC ultimately stipulated as to liability

under Sections 106 and 107(a), and the proceedings

then continued as to response cost claims and remedy.

Pet. App. 48a.

3. On September 11, 1989, the United States moved

for partial summary judgment pursuant to Section

107(a)(4)(A) for past response costs—specifically, for

Department of Justice expenses incurred through the

end of the second fiscal quarter of 1989 (March 31,

1989) and for EPA expenses incurred through the end

of the first fiscal quarter of 1989 (December 31, 1988).

See Pet. App. 2538a. The United States requested

direct costs totalling $5,441,201, including, among

other things, payroll and travel costs, the costs of

studies and investigations for the Hardage site,

installation of monitoring wells, the collection of

samples and laboratory analysis, and other response

activities. /d. at_259a-262a, 267a, 275a. The United

States requested indirect costs totalling $850,864,

attributable to the Department of Justice’s enforce-

ment program, but not allocated to specific cases. Jd.

at 275a-276a. The United States also requested a

declaratory judgment that defendants are liable for

future response costs. Jd. at 279a.

In response, HSC made no assertion that the

United States’ response costs were inconsistent with

requirements of the NCP, and its brief opposing

summary judgment contained no citation to any

provision of the NCP. See Pet. App. 267a-285a.

Rather, HSC asserted that the United States’ costs

were “unnecessary” or “improperly performed,” that

data were “unacceptable or unusable,” or that the

results were “not useful to remediation of Hardage.”

Id. at 269a. HSC also contended that certain costs

were incurred in violation of federal procurement

regulations, and that the United States failed to

document that some costs were incurred at the

Hardage site. /d. at 271a.

The district court granted partial summary judg-

ment to the United States for all direct response

costs, denied summary judgment as to indirect costs,

and granted a declaratory judgment for future costs.

Pet. App. 254a-255a. As to direct costs, the court

found that the United States had “submitted exten-

sive documentation” demonstrating a prima facie

ease, including affidavits and summaries of cost data,

and that the burden shifted to HSC to demonstrate

inconsistency with the NCP. /d. at 267a-268a. The

court held that HSC “totally failed to meet this

burden.” Jd. at 275a. As to claims that costs were

unreasonable or unnecessary, the court found that,

under the plain statutory language, the United States

“is entitled to recover all response costs at the

Hardage site not inconsistent with the N.C.P.” and

HSC “failed to produce any evidence” demonstrating

inconsistency with any provision of the NCP. 7d. at

269a-270a (emphasis in original). As to federal

procurement regulations, the court found neither

authority as to their relevance to the NCP nor “any

evidence” that there was a violation of such regula-

tions. /d. at 271a. The court also held that assertions

that costs were not incurred at the Hardage site were

“conclusionary” and “without merit.” Jd. at 272a.

The court ruled that indirect costs may be recov-

ered under Section 107(a)(4)(A) and that the United

States had established a prima facie case, but that the

record at that time was insufficient to warrant

summary judgment. Pet. App. 279a. The court also

granted the United States a declaratory judgment

“for liability for future response costs associated

with the Hardage site except the DOJ indirect costs.”

Id. at 280a.

4. The district court conducted a trial from

November through December 1989. It issued an opin-

ion on August 9, 1990, addressing additional response

cost claims and the selection of a cleanup remedy.

With respect to costs, the court granted the United

States’ request for supplemental direct costs of

$925,684, covering claims within the same categories

of direct cost awarded on summary judgment, but

generally updated through the end of the second fiscal

quarter of 1989 (March 31, 1989). Pet. App. 113a-114a.

The court aiso awarded the United States indirect

costs through that period, totalling $1,516,245, finding

that HSC failed to prove that such costs were

inconsistent with the NCP. /d. at 112a, 117a, 122a.

See id. at 127a.

At trial, HSC and the United States presented the

court with alternative remedies. The HSC and the

United States alternatives contained common ele-

ments, but the United States alternative contained

two additional components. Pet. App. 76a-77a & n.30.

The HSC remedy consisted of a series of on-site

trenches and recovery wells, a water treatment

system, and groundwater and surface monitoring, id.

at 76a-77a, all of which the United States accepted, id.

at 59a. In addition, the United States proposed partial

excavation and removal offsite of materials in ceriain

areas of the site and soil vapor extraction to remove |

highly toxic and mobile compounds from the subsur-

face. Ibid.”

The court adopted the HSC remedy with modifica-

tions providing for additional liquid recovery wells.

Pet. App. 76a. The court found that HSC had demon-

strated that this remedy “satisfies the section 106(a)

standards for health and welfare and the environ-

ment,” and is “most consistent” with the NCP. /d. at

90a. The court recognized that EPA’s additional

measures—excavation and soil vapor extraction—are

effective methods for remediating hazardous waste

sites, but the court concluded that the government

had failed to demonstrate that they were appropriate

remedies at the Hardage site. /d. at 59a, 7la-76a.

The court also ruled on HSC’s counterclaim for

response costs. The court concluded that $3.7 million

of HSC’s claimed $9.5 million in costs were “nec-

essary costs of response” under Section 107(a)(4)(B).

Pet. App. 129a. The court found that the remaining

* The government began development of its excava-

tion/vapor extraction remedies in the spring and summer of

1989, in conjunction with so-called “clean slate” remedy negoti-

ations with HSC. EPA issued the Record of Decision for that

remedy in November 1989. See Pet. App. 57a. Thus, the

United States’ pretrial response cost claims, which extended

only through March 1989, did not include costs associated with

those remedies.

costs were not “necessary” because they were

duplicative and vague, id. at 15la, lacked adequate

documentation, id. at 15la-152a, were litigation

oriented, id. at 150a-154a, and included “extravagant”

charges such as a $1000 dinner for HSC’s expert

panel, id. at 154a-155a.

The court entered a judgment pursuant to Fed. R.

Civ. P. 54(b), directing HSC to implement the remedy

determined at trial and awarding the United States

its response costs. Appellants’ C.A. Br. App. A 2-3, 9-

10, 14. The court also declared that the defendants

would be liable for future response costs, defined as

costs incurred from April 1, 1989, for Department of

Justice expenses, and from January 1, 1989, for EPA

expenses. /d. at 10.

5. HSC appealed the district court’s determination

that the United States was entitled to response costs,

and the court of appeals rejected that challenge. The

court explained that Section 107(a)(4)(A) of CERCLA

allows the United States to recover “all costs” for

response actions not inconsistent with the NCP. Pet.

App. 18a (emphasis added by the court). Notwith-

standing the plain language of the statute, “HSC

failed to identify any response actions by the

government that were inconsistent with the NCP”

and instead asserted only that individual costs were

unreasonable or excessive. /bid.

The court of appeals specifically declined to reopen

the district court’s order of partial summary judg-

ment on the pretrial response cost issues. Pet. App.

15a-17a. The court held that the “time at which HSC

was required to establish the existence of a genuine

issue of inconsistency with the NCP, as to the

particular response costs submitted by the govern-

ment at summary judgment, was long past when the

remedy phase of the trial began.” Jd. at 17a. Thus,

“{tlo defeat the government’s claim for those response

costs, HSC was required to establish a genuine issue

of inconsistency with the NCP at the summary judg-

ment phase, when recoverability of those particular

government response costs was at issue.” Jbid.

Finally, the court clarified that the declaratory

judgment, holding HSC liable for future response

costs, does not bar HSC from opposing the recover-

ability of those costs as inconsistent with the NCP.

Pet. App. 18a. The court held that “a defendant who is

declared liable for future response costs may still

challenge those costs as unrecoverable because the

underlying response actions giving rise to the costs

are inconsistent with the NCP.” Jbid.

ARGUMENT

Petitioners challenge the court of appeals’ affir-

mance of a district court judgment awarding the

United States costs it has incurred in responding to

threatened and actual releases of hazardous sub-

stances at the Hrdage site. Contrary to petitioners’

arguments, the court of appeals’ decision is correct, it

does not conflict with any decision of this Court or of

another court of appeals, and it raises no issue

warranting review by this Court.

1. The United States is entitled to response costs

under CERCLA pursuant to Section 107(a)(4)(A),

which states that the parties responsible for site

contamination are liable for

all costs of removal or remedial action incurred by

the United States Government or a State or an

Indian tribe not inconsistent with the national

contingency plan.

42 U.S.C. 9607(a)(4)(A). As the court of appeals

explained, this language authorizes the United States

“to recover ‘all costs’” for response actions, provided

that those actions are not inconsistent with the NCP.

Pet. App. 13a (emphasis added by the court). By

contrast, private parties may recover only “necessary

costs” (42 U.S.C. 9607(a)(4)(B)) for response actions

that are “consistent” with the NCP. Pet. App.

10a-1la.

Petitioners attack the court of appeals’ interpreta-

tion of CERCLA’s cost recovery provisions, charging

that the court “rewrote” Section 107(a)(4)(A) by pre-

cluding defendants from challenging the govern-

ment’s costs per se and by requiring them to

challenge the government’s response actions. Pet. 8.3

Petitioners’ argument reveals their continuing

misunderstanding of the role of the NCP. The NCP

does not contain standards for evaluating costs per se.

Rather, the NCP prescribes the standards for inves-

tigating, planning, choosing and undertaking “re-

moval or remedial action.” As the court of appeals

explained:

The NCP regulates choice of response actions,

not costs. See 40 C.F.R. §§ 300.65, 300.68 (1989).

Costs, by themselves, cannot be inconsistent with

the NCP. Only response actions—i.e., removal or

* Significantly, petitioners quote Section 107(a)(4)(A), but

they submerge beneath ellipses the words “removal or remedial

action.” See Pet. 8 (stating that the United States may recover

“all costs ... incurred ... not inconsistent with” the NCP);

compare 42 U.S.C. 9607(a)(4)(A) (quoted in the text above).

remedial actions—can be inconsistent with the

NCP, which can be demonstrated by a showing

that the government’s choice of response action

was arbitrary and capricious. As long as the gov-

ernment’s choice of response action is not incon-

sistent with the NCP, its costs are presumed to

be reasonable and therefore recoverable.

Pet. App. 18a-14a, citing United States v. Northeast-

ern Pharmaceutical & Chemical Co. (NEPACCO),

810 F.2d 726, 747-748 (8th Cir. 1986), cert. denied, 484

U.S. 848 (1987).

Like the current NCP, the NCP in effect during

the time period relevant to this case contained

criteria and procedures for determining whether a

short-term removal action is appropriate at a particu-

lar site, see 40-C.F.R. 300.65 (1989), and for assessing

and selecting a permanent remedy, see 40 C.F.R.

300.68 (1989), but it contained no criteria for evaluat-

ing how much a selected remedy should cost to

implement. Thus, as the court of appeals correctly

explained, the government’s costs in implementing a

remedy could be inconsistent with the NCP only if

the underlying “removal or remedial action” was

inconsistent with the NCP. Pet. App. 13a-14a. The

court of appeals affirmed the district court’s con-

clusion that petitioners failed to make that showing

here, 7d. at 14a-15a, and that factbound question dves

not warrant review by this Court. Cf. Goodman vy.

Lukens Steel Co., 482 U.S. 656, 665 (1987).

Petitioners’ contention (Pet. 8-12) that the court of

appeals’ decision conflicts with the decisions of other

courts of appeals is without merit. The courts have

uniformly held that Section 107(a)(4)(A) of CERCLA

authorizes the United States “to recover all costs”

not inconsistent with the NCP and that responsible

parties have the burden of demonstrating inconsis-

tency. See United States v. R.W. Meyer, Inc., 889

F.2d at 1504; NEPACCO, 810 F.2d at 747-748; O'Neil

v. Picillo, 682 F. Supp. 706, 728-729 (D.R.I. 1988), aff’d,

883 F.2d 176 (1st Cir. 1989), cert. denied, 493 U.S. 1071

(1990). The cases that petitioners cite as conflicting

authority present no conflict whatsoever.

Petitioners first cite (Pet. 8-9) the decisions in

Lone Pine Steering Committee v. United States

Environmental Protection Agency, 777 F.2d 882, 887-

888 (3d Cir. 1985), cert. denied, 476 U.S. 1115 (1986),

and J.V. Peters & Co. vy. Administrator, EPA, 767

F.2d 263, 266 (6th Cir. 1985). Those cases, however, do

not even involve Section 107(a)(4)(A) cost recovery

actions. Instead, they address only whether respon-

sible parties may obtain judicial review of an EPA

response action prior to its enforcement. See Lone

Pine, 777 F.2d at 883; J.V. Peters, 767 F.2d at 264.

While those decisions contain dicta properly noting

that responsible parties may challenge the govern-

ment’s costs once a cost recovery action is brought,

they neither address nor contradict the court of

appeals’ interpretation of Section 107(a)(4)(A).

Petitioners next rely (Pet. 10-11) on the Kighth

Circuit’s decision in NEPACCO, supra. NEPACCO

did involve a cost recovery action, but the court of

appeals explicitly followed that decision in this case.

Pet. App. 10a-lla. The Eighth Circuit, like the court

of appeals here, held that responsible parties cannot

contest the “reasonableness” of the government’s

costs, but instead must show that the costs are

inconsistent with specific provisions of the NCP. See

NEPACCO, 810 F.2d at 747-748 (“‘all costs’ incurred

by the government that are not inconsistent with the

NCP are conclusively presumed to be reasonable”).

The Eighth Circuit’s application of that principle in

NEPACCO is cutirely consistent with the court of

appeals’ decision here. The Eighth Circuit consid-

ered the defendants’ challenge to the government’s

“choice of a particular cleanup method” and held that

the choice was consistent with the NCP, stating that

the defendants had “failed to show that the EPA acted

arbitrarily and capriciously in choosing the par-

ticular method it used to clean up the * * * site.” 7d.

at 748. Compare Pet. App. 11a.‘

2. Petitioners also raise (Pet. 12-15) policy objec-

tions to the court of appeals’ decision, contending that

the court of appeals’ construction of Section

107(a)(4)(A) will result in government “waste and

abuse.” Pet. 13. Petitioners suggest that the gov-

ernment may employ “gold plated bulldozers” and

“throw lavish parties at the close of each day’s work”

and then “send the bills for these excessive charges

to liable parties.” Pet. 14. Petitioners’ rhetoric

overlooks the fact that it was the petitioners—who

are responsible for creating the hazardous conditions

at the Hardage site—that attempted to bill the

government for a $1000 dinner and other “extra-

vagant” charges as “necessary” response costs. See

Pet. App. 154a-155a.

In any event, Congress has considered the possibil-

ity of “unnecessary” expenditures, but has concluded

4 Accord O'Neil, 682 F. Supp. at 729 (“defendants have the

burden of demonstrating that the clean-up, because of some

variance from the [NCP], resulted in demonstrable excess costs

for which they should not be responsible”).

that the courts should not be pressed into service as

inspectors general for government cost recovery

actions. Section 107(a)(4) instructs the courts to

examine site clean-ups for consistency with the NCP.

but it directs that the courts shall not otherwise

engage in second-guessing the government’s judg-

ment as to what constitute “necessary” costs for

cleaning up a hazardous waste site. Compare 42

U.S.C. 9607(a)(4)(A) (stating that the responsible

parties are liable for “all costs” that the government

incurs for response actions that are “not inconsistent

with” the NCP) with 42 U.S.C. 9607(a)(4)(B) (allowing

private parties to recover “necessary costs” that are

“consistent with” the NCP). Instead, Congress itself

has carefully policed the CERCLA program for waste

and abuse. See Pet. 13 n.6 (citing various GAO

reports). There is no need for already overburdened

courts, which have limited technical and accounting

resources and expertise, to carry out that task.

3. Petitioners contend (Pet. 15-21) that the court

of appeals incorrectly declined to reopen the pretrial

award of partial summary judgment for response

costs incurred prior to trial. Petitioners assert that

the court of appeals should have reviewed the district

court’s pretrial award in light of the evidentiary

record developed at trial concerning the government’s

proposed remedy. They assert that had the court of

appeals done so, that court would have disallowed the

award of pretrial response costs, and that failure to do

so raises a conflict with the Seventh, Ninth and

Eleventh Circuits concérning the “scope of appellate

review of an interlocutory order shown to be

erroneous.” Pet. 15.

Petitioners are wrong in asserting that the court

of appeals’ decision gives rise to a conflict among the

courts of appeals. As petitioners acknowledge (Pet.

16), the court of appeals’ statement that review of a

grant of partial summary judgment “is confined to an

examination of the materials before the court at the

time the ruling was made,” Pet. App. 16a, is consis-

tent with the First Circuit’s decision in Voutour v.

Vitale, 761 F.2d 812, 817 (1985), cert. denied, 474 U.S.

1100 (1986); and the Federal Circuit’s decision in

Glaros v. H.H. Robertson Co., 797 F.2d 1564, 1569

(1986), cert. dismissed, 479 U.S. 1072 (1987). See also

Nissho-Iwai American Corp. v. Kline, 845 F.2d 1300,

1307 (5th Cir. 1988).

The cases that petitioners cite (Pet. 17-18) as

conflicting authority, moreover, are not to the

contrary. Two of those cases do not involve summary

judgment at all.” The remaining Eleventh Circuit

cases, which represent petitioners’ primary line of

authority (Pet. 18), all involve the denial of a motion

for summary judgment. Wenzel v. Boyles Galvaniz-

ing Co., 920 F.2d 778, 782 (11th Cir. 1991); Stuckey v.

Northern Propane Gas Co., 874 F.2d 1563, 1567 (11th

Cir. 1989); Holley v. Northrop Worldwide Aircraft

Services, Inc., 835 F.2d 1375, 1378 (11th Cir. 1988).

® In Peterson v. Lindner, 765 F.2d 698 (7th Cir. 1985), the

court addressed only whether the declaratory judgment that

issued in that case was an interlocutory order, allowing a

transferee judge to reconsider it prior to final judgment. /d. at

704. Similarly, in Interstate Power Co. v. Kansas City Power &

Light Co., 992 F.2d 804 (8th Cir. 1993), the court addressed

only whether the district court had abused its discretion in

certifying final judgment under Fed. R. Civ. P. 54(b). 992

F.2d at 805, 806-807.

See also Trustees of Indiana University v. Aetna

Casualty & Surety Co., 920 F.2d 429, 433 (7th Cir.

1990). Those cases apply the unexceptional principle

that if the district court has denied summary

judgment, concluding that material issues of fact are

in dispute, a party cannot appeal that ruling and

ignore the facts later found at trial. The Eleventh

Circuit has expressly limited that principle to cases

involving the denial of motions for summary judg-

ment, stating:

We hold only that a party may not rely on the

undeveloped state of the facts at the time he moves

for summary judgment to undermine a fully-

developed set of trial facts which militate against

his case.

Holley, 835 F.2d at 1378. That principle does not apply

to a grant of summary judgment, which rests on a

judicial finding that no material fact is in dispute.

Indeed, the Eleventh Circuit's decision in Holley

explicitly distinguished a case that “involved an

appeal from a grant rather than a denial of summary

judgment.” bid. (citing Roper v. Edwards, 815 F.2d

1474 (11th Cir. 1987)). Accord Stuckey, 874 F.2d at

1567. Thus, the Eleventh Circuit decisions pose no

conflict with the decision in this case.®

® The sole case that petitioners cite (Pet. 17) involving a

grant of summary judgment, United States v. Desert Gold

Mining Co., 433 F.2d 713 (9th Cir. 1970), is not on point. That

case held only that a district court judge did not abuse his

discretion in reconsidering a grant of partial summary judg-

ment by a previous judge in the same case and on the same

summary judgment record, where no final judgment had been

Even if the purported conflict existed, there would

be no occasion to resolve it in this case, because

petitioners have made no showing that the district

court’s post-trial remedy ruling undermined the prior

grant of summary judgment. Petitioners simply

assume—without explanation or citation—that the

United States’ pretrial response costs were associ-

ated with the portion of the government remedy that

was rejected at trial. See Pet. 18. In fact, the pretrial

response costs that the United States requested in

its summary judgment motion were for expenditures

that would have been incurred regardless of the

remedy chosen.’ Petitioners made no attempt below

to show that the pretrial response costs were

associated with the proposed-but-rejected excavation

or soil vapor extraction remedies. Indeed, the United

States’ motion sought only costs incurred through

the second fiscal quarter of 1989 (ending March 31,

entered pursuant to Fed. R. Civ. P. 54(b). 483 F.2d at 714-715.

In the absence of a Rule 54(b) determination or direction, the

district court may revisit its prior grant of partial summary

judgment “at any time before the entry of judgment adjudicat-

ing all the claims and the rights and liabilities of all the

parties.” Fed. R. Civ. P. 54(b). But as we explain in the text

that follows, petitioners provided the district court in this case

with no reason to reconsider its pretrial summary judgment

ruling, and that factbound question would not in any event

warrant review by this Court.

7 Those costs included expenditures for collecting samples

of contaminated soil and groundwater, for laboratory analysis,

for other studies and investigations for the Hardage site, and

for payroll and travel costs. See Pet. App. 259a-262a, 267a.

Such general expenditures would be recoverable from respon-

sible parties irrespective of what remedy was ultimately

selected.

1989) for Department of Justice expenses, and

through the first fiscal quarter of 1989 (ending

December 31, 1988) for EPA expenses. See pp. 5-7,

supra; Appellants’ C.A. Br. App. A 10. The United

States did not begin development of its trial remedy

until the spring and summer of 1989, and it did not

issue a Record of Decision for that remedy until

November 1989. See Pet. App. 57a. And even if

petitioners now contest the character of the pretrial

expenses, that factbound matter would not warrant

review by this Court.’

* Pursuant to the district court judgment entered on

August 9, 1990, all costs incurred by the Department of Justice

after April 1, 1989, and by EPA after January 1, 1989, are

defined as “future response costs.” Appellants’ C.A. Br. App.

A 10. As the court of appeals has made clear, petitioners may

contest claims for such future costs, if and when presented, on

the ground that the underlying response actions are inconsist-

ent with the NCP. Pet. App. 17a-20a.

CONCLUSION

The petition for a writ of certiorari should be

denied.

Respectfully submitted.

GERALD H. YAMADA

Acting General Counsel

CHARLES DE SAILUAN

Attorney

Environmental Protection

Agency

SEPTEMBER 1993

DREW S. DAys, III

Solicitor General

MYLES E. FLINT

Acting Assistant Attorney

General

DAVID C. SHILTON

STEVEN NOVICK

JOHN T. STAHR

Attorneys

ee ne eT

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