Appendix 13 Revised Settlement Policy and Contribution Waiver Language re Exempt De Micromis and Non-Exempt De Micromis Parties

• Author: Allison Rumsey/Michael Daneker
• Pages: 399-423

Page 399

TAB 1

Page 400 Superfund Deskbook

On January 11, 2002, President Bush signed into law the Small Business Liability Relief

and Brownfields Revitalization Act (SBLRBRA), Public Law No. 107-118. Among its

provisions the law added a new Section 107(o) to the Comprehensive Environmental Response,

Compensation, and Liability Act (CERCLA), 42 U.S.C. § 9607(o), which provides a qualified

exemption from liability for de micromis parties, as defined therein. Section 107(o) provides a

statutory exemption for de micromis parties that is similar, but not identical, to the protection

previously afforded by the United States Environmental Protection Agency (EPA) and United

States Department of Justice (DOJ) policy regarding settlements with de micromis parties at

Superfund sites. The purpose of this memorandum is to revise that policy in light of this

statutory change. This policy also revises the model contribution waiver language that has been

used in CERCLA agreements to waive private contribution claims against parties that

contributed only very small amounts of waste.

This settlement policy addresses the United States’ position regarding those parties that

fall within the statutory definition of de micromis (referred to herein as “exempt de micromis

parties”), and those parties that fall outside the statutory definition, but who may be deserving of

similar treatment based on case-specific factors (referred to herein as “non-exempt de micromis

parties”). Non-exempt de micromis parties fall outside the protection of the de micromis

exemption under Section 107(o), even though their waste volume is extremely small compared

to the traditional de minimis party’s volume addressed by Section 122(g). EPA believes such

non-exempt de micromis parties should not be pursued or otherwise compelled to expend

transaction costs to resolve potential CERCLA liability. For these parties, the administrative

costs of determining and verifying the party’s share, if any, and the cost of collecting the small

payment, usually far exceed that share. Therefore, as a matter of national policy, EPA intends to

use its enforcement discretion, as necessary, to achieve settlements that provide appropriate

relief for those non-exempt de micromis parties that are being sued in contribution or threatened

with a suit by responsible parties.

This policy supersedes the “Revised Guidance on CERCLA Settlements with De

Micromis Waste Contributors” (June 3, 1996), and “Inclusion of Contribution Waiver by Private

Parties in CERCLA Administrative and Judicial Settlements” (October 2, 1998).1 It consists of a

1 In 1995, EPA announced Superfund Administrative Reform 3-14: Revised De

Micromis Guidance. The intent of the reform was to discourage responsible parties from

bringing contribution litigation against the smallest volume waste contributors at Superfund sites

(referred to as de micromis waste contributors) by entering into settlements with de micromis

parties, when appropriate, to resolve their liability, and provide them with contribution

protection. For de micromis waste contributors covered by EPA reform policies, the Agency

recognized that legal and other transaction costs may actually exceed a party’s settlement share

of response costs. Under the reform, if private parties sued or threatened to sue these parties,

EPA would consider entering into settlements providing contribution protection. To implement

this reform, EPA and DOJ jointly issued guidance on how to help protect these parties from