Search

To:

Members, Affiliates, & Legal Affairs Committee

From:

National Office

Date:

December 10, 1998

Reference:

Legal Alert 98-8

EPA's Municipal Settlement Policy - Challenge by Industrial Groups Dismissed by U.S. District Court

The U.S. District Court for the District of Columbia has granted a motion to dismiss a recent law suit by several industrial groups and the U.S. Chamber of Commerce challenging EPA's municipal settlement policy for liability claims under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA). See Chemical Manufacturers Association v. Environmental Protection Agency (Civil Action No. 98-1255-LFO). AMSA has voiced strong support for EPA's “Policy for Municipality and Municipal Solid Waste CERCLA Settlements at NPL Co-Disposal Sites ” because it restricts liability for potential municipal parties. In the context of this recent legal challenge, AMSA supported the efforts of the American Communities for Cleanup Equity (ACCE) which, together with the American Public Works Association, the National Association of Counties, the National League of Cities, the International City/County Management Association, the International Municipal Lawyers Association, and the Solid Waste Association of North America defended EPA's policy.

The policy establishes appropriate settlement contributions for municipal owner/operators and generators/transporters of municipal sewage sludge and municipal solid waste at co-disposal landfills on the National Priority List (NPL). EPA's policy recommends a $5.30 per ton unit cost methodology that calculates costs of closure/post-closure activities at facilities regulated under Subtitle D of the Resource Conservation and Recovery Act (RCRA). The policy recognizes the generally insignificant amount of hazardous substances found in municipal biosolids and the unlikelihood that landfills at which only municipal biosolids are disposed will be listed on the NPL. The policy is completely voluntary for those publically owned treatment works (POTWs) that wish to resolve their potential liability. In response to AMSA's earlier concerns that the policy would not cover POTWs which received certain industrial discharges (see Regulatory Alert RA 98-9, April 1998), EPA clarified that it is the Agency's intent to apply the policy "to municipal sewage sludge that includes residue removed, all or in part, during the treatment of wastewater from manufacturing or processing operations, if such residue has essentially the same characteristics as residue removed during the treatment of domestic sewage." According to a recent joint Water Environment Federation/AMSA/EPA survey, approximately 20 percent of surveyed POTWs dispose of biosolids through a primary landfill (see Regulatory Alert RA 97-21, August 1997). The number of member POTWs which dispose of biosolids in landfills that are listed under the NPL is currently unknown.

The plaintiffs, the Chemical Manufacturers Association, the American Automobile Manufacturers Association, the American Petroleum Institute, the Electronic Industries Alliance, the National Association of Manufacturers, and the U.S. Chamber of Commerce, asserted that the policy improperly shifts financial responsibility at Superfund sites from the municipal entities to the industrial entities. The plaintiffs contended that the policy establishes rigid standards from which EPA may not deviate in brokering settlements with potentially liable parties, ignoring the facts and equitable considerations peculiar to individual disposal sites, and therefore increasing the liability of all other potentially liable parties. Plaintiffs sought a declaration that the policy is unlawful and a permanent injunction to prevent EPA from relying on the settlement policy in future negotiations.

The U.S. District Court judge granted the defendants' motion to dismiss plaintiffs' challenge and dismissed the plaintiffs' action as moot. The District Court agreed with the defendants' three grounds for their motion to dismiss. First, the subject matter jurisdiction was lacking because the settlement policy was not a final agency action and therefore was not reviewable. Second, this case was not justiciable because the settlement policy was not ripe for review. Third, the plaintiffs had failed to state a claim upon which relief could be granted with respect to their argument that EPA failed to use "reasonable decisionmaking" in developing the settlement policy.

Please contact Greg Schaner at 202/296-9836 if you should have any questions or if you would like a copy of the November 16, 1998 ruling.

ATTACHMENT: