ELR Citation: ELR 21419
No(s). 93 C 1366 (N.D. Ill. Mar 4, 1994)

The court, applying the arbitrary and capricious standard set forth in 5 U.S.C. §706(2)(A) of the Administrative Procedure Act (APA), upholds a U.S. Environmental Protection Agency (EPA) determination that an insurance company's failure to comply with an order and emergency response action plan (ERAP) requiring it to remediate a hazardous waste site precludes EPA's consideration of its reimbursement petition. The court first holds that the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) does not provide for judicial review of this type of administrative action and the court defaults to the APA. The court rejects the company's argument that §706(2)(F) contains the proper standard of review, because EPA compiled a voluminous record on site cleanup activities and the company submitted extensive documentation supporting its position that it complied with the order and the ERAP. Reviewing EPA's determination under §706(2)(A), the court holds that EPA did not make a clear error of judgment in concluding that the company failed to comply with the order. The court finds entirely supportable EPA's conclusion that the order and the ERAP applied to all hazardous wastes, not just those which showed high levels of PCB contamination. The court also notes that both the order and CERCLA's definition of hazardous waste are broadly worded. Although the ERAP prescribes actions relating exclusively to PCB contamination, it also includes broad remedial directives in other areas. Further, in extensive post-ERAP approval correspondence with the insurance company, EPA repeatedly articulated that the scope of the order and ERAP included all hazardous wastes, not merely those contaminated by PCBs. The court, therefore, holds that EPA did not make a clear error of judgment by interpreting the order and the ERAP to require the company to clean up all hazardous wastes at the site, not just PCB-contaminated wastes. The court notes that CERCLA evidences Congress' decision to have hazardous waste sites cleaned up as quickly and as thoroughly as possible, and defer liability issues until after remedial actions have been completed. The court holds, therefore, that it is not inconsistent with the broad goals of CERCLA to require a party potentially responsible for some contamination at a particular site to clean up the entire site and then petition the government for reimbursement for those costs attributable to any portion of the contamination for which the party is not actually responsible. The court next holds that the company failed to comply with the order and the ERAP. It is clear from the insurance company's response action report, filed with EPA after its putative completion of the cleanup, that certain hazardous substances and wastes remained on the site. Finally, the court holds that the company's failure to comply with the order and the ERAP precludes it from seeking reimbursement from the Superfund.

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

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