Who decides who's liable under CERCLA? EPA slips a bombshell into the CERCLA reauthorization process.

• Author: Johnston, Craig N.
• Position: Superfund Reauthorization

The Superfund reauthorization debate has focused primarily on four large-scale issues: (1) whether and to what extent Congress should replace joint and several liability with a "fair share" allocation scheme; (2) whether Congress should revise the approach that both it and the Environmental Protection Agency (EPA) have taken to remedy-selection matters; (3) whether EPA/state relations should be modified to allow the states a more prominent role in the implementation of the program; and (4) whether citizens and affected communities should be provided more effective voices in site-specific decision making processes.(1)

While these are important questions, they are not the only ones deserving of attention. The emphasis they have received has served to obscure other significant issues. This essay will address an extremely important issue that thus far has attracted little attention: Whether EPA should be able to write binding rules interpreting the CERCLA liability scheme.(2) EPA is seeking this authority in response to the D.C. Circuit's opinion in Kelley v. EPA,(3) in which that court determined that it is the judiciary - and not EPA - that is to be the final interpreter of section 107. The Court further determined that EPA's views regarding who is liable are entitled to no deference from the courts.(4) Flustered by the decision, EPA now seeks a legislative "fix" that would constitute an extraordinary expansion of EPA's authority under CERCLA. EPA's chosen fix survives intact in the latest Senate markup (referred to herein as the Lautenberg bill).(5)

Kelley itself involved the State of Michigan's challenge to EPA's lender liability rule,(6) which had established a complex and lender-friendly definition of CERCLA's secured creditor exemption.(7) By invalidating the rule, the court caused the law to revert to its pre-rule state, which was marked by judicial discord and, at the extreme, the expansive language of the notorious Fleet Factors opinion.(8) In the wake of Kelley, the lending community renewed its call for congressional relief Congress has responded in its draft reauthorization efforts: The Lautenberg bill contains elaborate provisions addressing lender liability, provisions that are in many ways similar to EPA's invalidated rule.(9)

It is one thing for Congress to agree that the issue of lender liability under CERCLA needs further resolution, or even to agree with EPA's proposed resolution. It is quite another for Congress to give EPA carte blanche authority to interpret CERCLA's entire liability scheme. When EPA is involved in CERCLA actions in which the liability scheme is at issue, its capacity is invariably that of a plaintiff - an enforcer of the liability scheme. Given this dynamic, to provide EPA with interpretive authority would be akin to providing criminal prosecutors (as opposed to the courts) with the ultimate authority to interpret the enforcement provisions they implement.(10) While Congress may have power to create such a scheme, to do so would be profoundly unwise.

It is important to distinguish between EPA's various roles under CERCLA. In some contexts, such as in its establishment of the National Contingency Plan (NCP),(11) EPA acts as a typical regulatory agency, establishing both the substantive and procedural requirements that apply in the remedy-selection process. In this setting it is clear that Congress intended for EPA, as the expert agency, to develop rules that would be binding with respect to all CERCLA cleanup actions, regardless of whether EPA is involved in a particular cleanup or not.'2 Here EPA is wearing its impartial expert hat, establishing rules that bind it in much the same way they bind private parties; the NCP constitutes the yard stick by which even EPA's cleanup decisions are measured when it seeks cost-recovery under section 107.

In other contexts, EPA's decisions are entitled to deference even though it may be an interested party in any disputes attendant thereto. EPA's cleanup determinations provide the best example. Assuming EPA has developed an adequate record, section 113(j)(2) requires the courts to uphold EPA's cleanup decisions unless they are found to be "arbitrary and capricious or otherwise not in accordance with law."(13) Here the need to defer to the Agency's expertise outweighs any concerns about a bias toward excessive remedies.

EPA's role under section 107 is quite different. Under that section, EPA (or, more accurately, the federal government) is lumped together with States, Indian tribes, and other "person[s]" as just another potential plaintiff under the statute. The statute provides EPA with no special role or deference; the courts, not EPA, are charged with interpreting the liability scheme. This makes eminent sense because, as compared with the remedy-selection process, the balance of interests in the liability context tips toward judicial resolution of any statutory ambiguities. Here, concerns about agency bias outweigh any competing tendency to defer to any purported agency expertise. While EPA is no more an interested party than it is when it litigates...