Environmental -- 2005



United States v. E.I. DuPont de Nemours and Co.   (3rd Circuit)

EPA’s power to recover oversight costs at Superfund sites (en banc)

The Environmental Protection Agency charges companies for remedial planning and remedial action monitoring costs that the EPA incurs, either themselves or through government contractors, while monitoring clean-up activities at Superfund hazardous waste sites. Since its 1993 Rohm and Haas decision, the U.S. Court of Appeals for the Third Circuit (covering Pennsylvania, New Jersey and Delaware) has not allowed such cost shifting from the EPA to manufacturers. That favorable ruling has now been overruled. It held that Congress conferred power on the EPA with an intelligible principle governing the exercise of such power, namely, that the remedial action be “not inconsistent” with the National Contingency Plan, which sets forth methods and criteria for determining the appropriate extent of removal, remedy and other measures. Other provisions also guide and constrain the EPA in its ability to impose oversight costs on responsible parties.

The NAM joined with the American Chemistry Council, the American Petroleum Institute, the Chamber of Commerce, the Corporate Environmental Enforcement Council, the National Petrochemical and Refiners Association and the Superfund Settlements Project in an amicus brief 7/13/05 in support of DuPont. We argued that Congress never intended for EPA to finance its oversight activities by assessing the costs against those whom it regulates. Such a scheme must be authorized by a “clear statement” from Congress, particularly to avoid the many serious problems with the administration of the program. Our brief provided a detailed look at the history of (1) EPA performing more oversight than necessary, (2) EPA relying too heavily on contractors, (3) EPA not managing its contractors effectively, (4) EPA not negotiating effectively with its contractors, (5) contractors charging for excessive support costs, (6) and contractors having incentives to operate inefficiently.

In addition, we warned that (1) EPA’s poor documentation and billing practices further reduce accountability, (2) the money collected is placed into special accounts with little accountability to Congress, and (3) an adverse ruling in this case could allow the EPA to assess similar costs under the Clean Air Act and the Clean Water Act. The EPA has been able to reduce its program support costs on an aggregate basis recently.