ELR Citation: ELR 21298
No(s). 91 C 4254 (N.D. Ill. Apr 27, 1994)

The court holds that the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) did not violate the procedural and substantive due process and equal protection rights of an insurance company designated as a potentially responsible party (PRP), and that CERCLA §113(h) review provisions preclude review under the Administrative Procedure Act (APA) of an administrative enforcement order that the U.S. Environmental Protection Agency (EPA) issued. After a fire destroyed one of its insured's buildings, an insurance company reimbursed the insured for the cost of removing fluids containing polychlorinated biphenyls (PCBs) that the fire revealed. After the site where the fluids were taken for recycling was abandoned because of PCB contamination, EPA designated the insurance company a PRP and issued an enforcement order against it. The insurance company tried to obtain an administrative hearing on the order's propriety, but EPA refused. The court first holds that EPA's refusal to grant a hearing did not deny the company procedural due process since monetary deprivation does not demand the strictest level of due process; there is minimal risk of erroneous deprivation of that interest because judicial review is available before enforcement and liability could be reduced if resistance to the order was in good faith; and more procedural safeguards would give limited benefit and seriously compromise the government's interest in the prompt cleanup of hazardous waste. The court rejects the company's argument that it was prevented from determining a good-faith basis for refusing to comply with the order because EPA failed to provide it with documents supporting its designation as PRP. The company could have spoken with other PRPs about the site. Also, nondisclosure at the preenforcement stage did not violate the company's due process rights because CERCLA §106(b)(2) provides for judicial review of a party's liability at the postenforcement stage. Further, delaying remedial action by exposing the preenforcement process to extended debates and discovery on the merits of an administrative order would frustrate CERCLA's goal to address promptly health risks associated with the improper disposal of hazardous waste. The court next holds that CERCLA's failure to limit the time EPA may have to consider a reimbursement petition does not violate procedural due process because the rule requiring "prompt" postdeprivation review only applies if CERCLA's preenforcement procedures did not satisfy due process requirements. The court finds the company precluded from arguing that EPA's failure to disclose liability evidence during the reimbursement proceeding was a violation of due process because the company never compiled with the enforcement order and was not entitled by consideration of its reimbursement petition on the merits. Accordingly, the company's constitutional challenge to this provision is unripe. The court next holds that EPA did not unreasonably interpret CERCLA and the enforcement order by requiring the company to clean up all hazardous waste at the site, rather than just the PCB contamination. EPA's interpretation did not affect the company's procedureal due process rights because it could either have challenged the order's overbreadth by resisting it and presenting arguments at a preenforcement court hearing or by recovering cleanup costs through reimbursement proceedings. The court holds, however, that the company's failure to exercise its earlier option for a preenforcement hearing precludes it from asserting a due process claim in the current proceeding. Deferring to EPA's interpretation, the court rejects the company's argument that the term "complies" as used in §106(b)(2)(A) means that once a site is completely cleaned up and the parties are at the postenforcement stage, reimbursement should be available to any party who participated in the cleanup regardless of who completed the work.

The court next holds that the company's substantive due process claim lacks merit. Even if EPA's actions were arbitrary and irrational, the company's failure to show a separate constitutional violation defeats its substantive due process claim. The court also rejects the company's equal protection claim. Even assuming that PRPs are a cognizable class, the company thwarts its own equal protection claim by arguing it was treated differently than other members of that class rather than arguing it was treated differently because of its membership in that class. Finally, the court rejects the company's attempt to have the court review EPA's issuance of the enforcement order under the APA, holding that CERCLA §113(h) is the exclusive means by which EPA's enforcement orders are subject to judicial review.

Counsel for Plaintiff
Daniel C. Murray, Daniel A. Dupre
Johnson & Bell
222 N. La Salle St., Ste. 2200, Chicago IL 60601
(312) 372-0770

Counsel for Defendants
Alan D. Greenberg, Elizabeth A. Strange
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000