ELR Citation: ELR 20624
No(s). 90-6325 (10th Cir. Dec 21, 1992)

The court holds that the district court did not err in granting summary judgment to the government in an action under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) §107 to recover response costs incurred to that time, even though the court subsequently ordered implementation of the remedy proposed by the defendants rather than that of the government. The court first addresses whether, under United States v. NEPACCO, 17 ELR 20603, the government was entitled to summary judgment regarding response costs. In NEPACCO the Eighth Circuit ruled that the burden of proof of inconsistency with the National Contingency Plan (NCP) rests with the defendant when the government seeks to recover response costs, that inconsistency is proven by showing that the government's response action giving rise to that cost is inconsistent with the NCP, and that inconsistency with the NCP is proven by showing that the Environmental Protection Agency acted arbitrarily and capriciously in selecting the response action at issue. The court agrees with the lower court's determination that the government had established a prima facie case of entitlement to recovery of such costs, because it submitted extensive documentation of its incurred costs. The defendants failed to identify any response actions by the government that were inconsistent with the NCP. The court notes that a challenge to an individual cost as excessive or unreasonable does not demonstrate its inconsistency with the NCP, because the issue to be resolved is whether the government acted arbitrarily or capriciously by failing to consider costs or by selecting a remedial alternative that was not cost-effective, rather than whether a given cost item is reasonable. Although CERCLA mandates that the NCP assure cost-effectiveness for remedial actions, it contains no corresponding mandate for removal actions. The court also holds that the district court properly rejected the affidavits of the defendant's experts on the issue of whether the government's costs were actually incurred, because the affidavits amounted to no more than a denial that the government's documentation establishes a prima facie case that it is entitled to recover response costs.

The court next holds that the district court's subsequent rulings in the remedy phase of the case, in which it ordered the defendants' remedy to be implemented and declared that the government's proposed remedy does not satisfy the NCP, are not a basis for reversing the partial summary judgment. The defendants may not attempt at the remedy phase of the trial to give retroactive effect to the district court's determination that the excavation component of the government's trial remedy is inconsistent with the NCP. The lower court's subsequent remedy-phase trial determination is irrelevant to the prior entry of summary judgment on the response cost issue. The court next reverses the judgment of the district court to the extent that the entry of declaratory judgment by that court prevents the defendants from contesting future government costs on the basis that the underlying government response actions giving rise to the costs are themselves inconsistent with the NCP. Though the entry of judgment on the issue of liability for future response costs is appropriate, CERCLA does not contemplate preventing challenges to future costs, submitted under the declaration of liability. The court also rejects the defendants' claim that CERCLA §122(e)(6) was erroneously applied to disallow its claim for response costs, because that section was never applied by the lower court. Finally, the court holds that the district court properly disallowed certain of the defendants' response costs as litigation related. Applying a clearly erroneous standard to the district court's factual determinations, to which the lower court had correctly applied the "necessary and consistent with the NCP" standard, the court holds that the defendants' litigation related costs were not necessary to the containment and cleanup of hazardous releases at the site and are therefore unrecoverable. Given the context of this litigation it was not clearly erroneous for the lower court to determine that costs incurred by the defendants to defend against the government's CERCLA §106(a) injunction action were not necessary to the containment and cleanup of the releases.

[Previous decisions in this litigation are published at 17 ELR 20242, 20738, 21082, and 20741, 19 ELR 20254, 20 ELR 21307, 21 ELR 20706, 20714, and 20721.]

Counsel for Plaintiff-Amicus Curiae
David C. Shilton, Anna L. Wolgast, John T. Stahr
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

Counsel for Defendants-Appellees
Jeffrey N. Martin, Hether C. MacFarlane
Hunton & Williams
2000 Pennsylvania Ave. NW, P.O. Box 19230, Washington DC 20036
(202) 955-1500

Counsel for Third-Party Defendants-Appellants
Arthur A. Schulcz, Timothy L. Harker
The Harker Firm
5301 Wisconsin Ave. NW, Washington DC 20015
(202) 966-7900

Before TACHA, and BALDOCK, Circuit Judges, and BROWN, District Judge.^*