ELR Citation: ELR 20856
No(s). s. 89-4340 (JBS), -4380 (JBS) (D.N.J. Oct 31, 1995)

The court holds that the unreasonableness, excessiveness, duplicativeness, impropriety, and non-cost-effectiveness of response costs are not defenses to a cost recovery action under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) if defendants fail to prove that such costs are inconsistent with the national contingency plan (NCP). The court first holds that it is the law of the case that arguments that response costs are unreasonable, excessive, duplicative, improper, and non-cost effective do not allege inconsistency with the NCP and do not provide a defense to a CERCLA cost recovery action. The plain language of an opinion rendered by the late district court judge from whom the case was reassigned indicates that the judge struck these arguments as they applied to cost recovery. The court does not find any extraordinary circumstances to modify the judge's ruling.

The court next holds that the defendants' arguments do not provide a defense to cost recovery as a matter of law. Within CERCLA §107(a) there is no limitation on cost recovery other than that the costs have arisen from removal or remedial actions that are not inconsistent with the NCP. No factor of reasonableness or necessity of individual remedial costs is explicitly or implicitly required. Had Congress wished to limit recovery to reasonable, necessary, cost-effective items, it could easily have done so in §107(b), but it did not. The court further holds that CERCLA's definitions of "removal" and "remedial" do not impose a requirement of reasonableness of costs incurred. In addition, the definitions do not require or imply that all removal or remedial costs must be necessary. The court finds that allowing defendants to challenge the reasonableness of individual costs fits with CERCLA's design of giving potentially responsible parties (PRPs) an incentive to clean up a site themselves and promotes more complete reimbursement to the Superfund. Also, the fact that Congress did not amend CERCLA's cost recovery provisions when it had both the knowledge and the opportunity to do so indicates Congress' preference that PRPs, not taxpayers, bear the risk that the U.S. Environmental Protection Agency's response actions may be more expensive than a private party's. Furthermore, plaintiff has presented several persuasive cases in which courts have held that individual costs could not be challenged as unreasonable, unnecessary, improper, not cost-effective, and excessive. The court concludes that the government may recover under §107 all costs of the remedy provided that it demonstrates that it incurred them in connection with the particular site and defendants do not establish that the remedial action giving rise to the costs is inconsistent with the NCP.

[A prior decision in this litigation is published at 21 ELR 20879.]

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

Counsel for Defendants
William H. Hyatt Jr.
Pitney, Hardin, Kipp & Szuch
Park Avenue at Morris County
P.O. Box 1945, Morristown NJ 07962
(201) 966-6300