ELR Citation: ELR 20511
No(s). 92-1312 (D.C. Cir. Feb 4, 1994)

The court vacates the U.S. Environmental Protection Agency's (EPA's) lender liability rule, holding that EPA lacks authority to restrict by regulation private rights of action arising under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). Conflicting judicial interpretations as to the scope of CERCLA §101(20)(A)'s secured creditor exemption led EPA to promulgate the rule to limit lender liability under CERCLA. The rule was to provide guidance as to when participation by lenders in the management of a facility might cause them to forfeit their secured creditor exemption from CERCLA liability. Reviewing the rule as a legislative, or substantive rule and in the alternative as an interpretive rule, the court holds that defining and limiting the scope of liability is not among the responsibilities and powers Congress delegated to EPA under CERCLA. By providing for private rights of action under CERCLA §107, Congress designated the courts and not EPA as the adjudicators of CERCLA's scope of liability. Moreover, the rule barely resembles a traditional interpretive regulation, because EPA has not defined specific statutory terms but rather devised a comprehensive regulatory regimen to address the liability problems facing secured creditors.

[The appellate briefs to this action are digested at ELR PEND. LIT. 66219, 66281, and 66285.]

Counsel for Petitioners
Jeremy M. Firestone, Ass't Attorney General
Attorney General's Office
Law Bldg.
525 W. Ottawa St., P.O. Box 30212, Lansing MI 48909
(517) 373-1110

Counsel for Respondents
Bradley M. Campbell, Michael A. McCord
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

Silberman, J. (before Mikva^* and Henderson, JJ.