ELR Citation: ELR 20405
No(s). 89-2092 (6th Cir. Dec 5, 1991)

The court holds that the district court properly approved a consent decree under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) that provides for the flushing of contaminated subsurface soil at the Rose site in Michigan, and the decree does not violate state "applicable or relevant and appropriate requirements" (ARARs). The Environmental Protection Agency's (EPA's) original record of decision (ROD) for the site called for excavation and incineration of the contaminated soil. During negotiations with potentially responsible parties (PRPs), EPA was persuaded that soil flushing might be a less costly alternative to incineration and would still achieve all federal and state ARARs. In August 1988, EPA and 12 PRPs signed a consent decree that requires a combination of incineration and soil flushing that would save $12 million over the original remedy. The court first holds that the district court properly reviewed the decree under the standards of CERCLA §113(j), which provides for review on the administrative record under the arbitrary and capricious standard. EPA's decision to enter into a consent decree constitutes a selection of a remedy and is thus covered by §113(j). In addition to the arbitrary and capricious standard of §113(j), the court will also review the decree for fairness, reasonableness, and consistency with the statute. The court holds that the district court erroneously refused to consider an affidavit by a state hydrogeologist. CERCLA §121(f) provides that a state should be given a reasonable opportunity to review and comment on the remedial action. A court may consider materials outside the administrative record to determine the adequacy of the government's decision, even when the court's scope of review is limited to the administrative record. The court must decide whether the affidavit is significant enought to require EPA to reconsider its decision in light of the new evidence or whether it is insufficient to overcome the deference accorded to EPA's actions.

The court holds that EPA's decision to modify the ROD and the consent decree to include soil flushing as a remedy was not arbitrary and capricious. EPA's decision to experiment with soil flushing at the Rose site was supported by the scientific evidence in the record. The affidavit from the state hydrogeologists does not render EPA's conclusions on the soil permeability of the site inadequate or require EPA to reconsider its selection of remedies. Although there is no concrete data on precisely how effective soil flushing will be at the site, the court concludes that EPA will obtain sufficient information to decide whether to implement soil flushing. Further, the PRPs must demonstrate after five years that soil flushing will clean up the soil within 10 years or they must adopt some other method. The amended ROD also provides that soil flushing is to complement incineration, not substitute for the original remedy. The court next holds that the decree is fair, reasonable, and adequate. The decree was negotiated in good faith. If the decree is overturned, the parties will likely engage in a protracted legal battle over liability and the appropriate remedy, further delaying cleanup. The decree's failure to spell out an alternative remedy if soil flushing fails does not render the decree unreasonable. The decree provides for a cost effective remedy, but does not reveal evidence of a sweetheart deal between EPA and the settling defendants. The time required for the total cleanup of the site, although probably extended a few yearsbecause of the soil flushing remedy, is not unreasonable.

The court holds that Michigan's groundwater antidegradation law is an ARAR under CERCLA §121(d). The antidegradation law is legally enforceable and thus "promulgated" under CERCLA §121(d)(2)(A)(ii). The law is more stringent than federal standards. A state law is more stringent when there is no comparable federal requirement. The state law is not directly comparable to the federal Safe Drinking Water Act and is thus more stringent than federal law. The state antidegradation law is also legally applicable to the Rose site. Even if the state law is not applicable to the site, its consideration would certainly be relevant and appropriate to the remedial action selected. The court holds that EPA must determine before implementation whether a remedy will meet designated ARARs for a particular site or waive compliance with the ARAR. The court holds that EPA implicitly waived the ARARs for soil flushing based on its finding that the remedial action selected is only part of a total remedial action that will attain the ARARs when completed. The district court thus correctly allowed Michigan to intervene under CERCLA §121(f) before the entry of the decree to challenge EPA's waiver. The court holds that the state has failed to show by substantial evidence that EPA's waiver is unlawful. There is substantial evidence in the record to support EPA's conclusion that the remedial action as a whole will attain the ARARs for the Rose site. The court holds that implementation of soil flushing does not by definition violate Michigan's antidegradation law if it is used as a remedial action and is protective of human health and the environment.

The court holds that the consent decree's covenant not to sue does not violate CERCLA §122(f)(3), which prevents such covenants from taking effect before the remedial action is complete. The covenant not to sue is reasonable and in the public interest. The decree is written to ensure that the covenant not to sue takes effect only when the defendants have completed their work. Although EPA will continue to clean up the site using funds provided by the defendants, there is no reason to subject the defendants to further liability once they have completed their work. Further, the covenant's exceptions for expenses arising out of unknown conditions, natural resource damages, and other items ensure that the defendants will meet their obligations under the decree. The court holds that the decree need not comply with CERCLA §104(c)(3), which requires EPA and the state to enter into a federal-state cost-sharing and cleanup arrangement. Section 104 deals with remedies financed by the Superfund. It is unlikely that EPA will be required to use Superfund money. The court holds that entry of the consent decree bars Michigan from pursuing alternative state remedies that conflict with the decree. EPA must incorporate more stringent state environmental laws into federal consent decrees if relevant and applicable, but the state may not then seek other remedies that are at odds with the terms of the decree.

One judge concurs in the result, but would hold that the district court properly refused to consider the state hydrogeologist's affidavit. The judge would also hold that Michigan's antidegradation law is not an ARAR under CERCLA §121(d).

[The district court's decision is published at 20 ELR 20144.]

Counsel for Plaintiff-Appellee
J. Carol Williams
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

Robert P. Reichel, Jeremy Firestone
Michigan Attorney General's Office
Law Bldg., P.O. Box 30212, Lansing MI 48909
(517) 373-7780

Counsel for Defendants-Appellees-Cross-Appellants
Keith J. Lerminiaux
Dickinson, Wright, Moon, Van Dusen & Freeman
800 First National Bank Bldg., Detroit MI 48226
(313) 223-3500

Before: JONES, Circuit Judge; ENGEL and WELLFORD,^* Senior Circuit Judges.