U.S. v. E.I. Dupont De Nemours and Co. Inc.

• Citation: 432 F.3d 161
• Decision Date: 22 December 2005
• Docket Number: No. 04-4546.,04-4546.
• Parties: UNITED STATES of America, Appellant v. E.I. DUPONT DE NEMOURS AND COMPANY INCORPORATED; Ciba Specialty Chemicals Corporation.
• Court: United States Courts of Appeals. United States Court of Appeals (3rd Circuit)

Page 161

432 F.3d 161

UNITED STATES of America, Appellant v. E.I. DUPONT DE NEMOURS AND COMPANY INCORPORATED; Ciba Specialty Chemicals Corporation.

No. 04-4546.

United States Court of Appeals, Third Circuit.

Argued En Banc September 8, 2005.

December 22, 2005.

Katherine J. Barton, (Argued), United States Department of Justice, Environment & Natural Resources Division, Appellate Section, Washington, D.C., for Appellant.

Peter Buscemi, (Argued), Michael W. Steinberg, Morgan, Lewis & Bockius LLP, Washington, D.C., Raymond M. Ripple, E.I. DuPont de Nemours and Company, Legal Department, Wilmington, Delaware, for Appellees, E.I. DuPont de Nemours and Company and Ciba Specialty Chemicals Corporation.

Lois J. Schiffer, Baach Robinson & Lewis PLLC, Washington, D.C., for Amici Curiae-Appellees, American Chemistry Council American Petroleum Institute Chamber of Commerce of the United States of America Corporate Environmental Enforcement Council National Association of Manufacturers National Petrochemical and Refiners Association Superfund Settlements Project.

Before SCIRICA, Chief Judge, SLOVITER, ALITO, ROTH, RENDELL, AMBRO, FUENTES, SMITH, FISHER and NYGAARD, Circuit Judges.

ROTH, Circuit Judge, concurring in part.

RENDELL, Circuit Judge, dissenting, with whom Judge SMITH joins.

OPINION OF THE COURT

SCIRICA, Chief Judge.

At issue is whether the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA), 42 U.S.C. § 9601 et seq., authorizes the United States to recover costs incurred in the course of supervising a hazardous waste cleanup conducted by responsible private parties. We hold CERCLA provides for such recovery. Accordingly, we will overrule United States v. Rohm & Haas Co., 2 F.3d 1265 (3d Cir.1993), and reverse the order of the District Court.

I.

The material facts are undisputed. The DuPont Newport Superfund Site is an industrial site in Delaware, owned and operated at various times by appellees E.I. DuPont de Nemours and Company and Ciba Specialty Chemicals Corporation.¹ Because of severe contamination to the property and its groundwater, the site was identified in the early 1980s as a potential threat to human health. In February 1990, it was placed on CERCLA's National Priorities List. See 42 U.S.C. § 9605(a)(8)(B) (establishing the National Priorities List).

The EPA developed a remedial action plan, which called for various measures, including excavating and dredging contaminated soil, monitoring contaminated groundwater, and constructing treatment facilities. Because the parties could not agree on implementation, the EPA issued a unilateral administrative order directing DuPont to remediate the site in the manner set forth in the remedial action plan, subject to EPA oversight and approval. See § 9606 (authorizing administrative orders "as may be necessary to protect public health and welfare and the environment").

DuPont complied with the EPA's administrative order and executed a two-stage "private party cleanup action." The first stage—a "removal action" under CERCLA § 101(23), 42 U.S.C. § 9601(23)—consisted of developing project specifications and schedules tailored to the EPA's stated objectives. The second stage—a "remedial action" under CERCLA § 101(24), 42 U.S.C. § 9601(24)—consisted of the actual cleanup work, including soil excavation, remedial "cap" construction, groundwater barrier installation, groundwater monitoring and treatment, and wetland restoration. DuPont completed the project under budget, ahead of schedule, and to the EPA's satisfaction.

The EPA supervised both stages of the cleanup. Oversight of the first stage entailed reviewing and approving (1) project specifications, (2) treatment technologies, (3) testing and sampling methods, and (4) construction schedules. Oversight of the second stage entailed monitoring, reviewing, and approving (1) design plan implementation, (2) construction schedules, (3) health and safety issues, (4) field work, and (5) field change requests. The parties stipulate that, in supervising the first stage's removal action, the government incurred oversight costs of $746,279.77. They also stipulate that, in supervising the second stage's remedial action, the government incurred costs of $648,517.17. The total cost to the government was $1,394,796.94.

The government concedes Rohm & Haas, 2 F.3d 1265, bars recovery of oversight costs of a removal action, but asks that we reconsider that decision and allow the EPA to recover oversight costs incurred in supervising both the removal and remedial actions of DuPont's cleanup. Alternatively, the government contends Rohm & Haas does not control recovery of remedial action oversight costs and asks that we allow for recovery of its costs in supervising the remedial action component of DuPont's cleanup.

In a memorandum order and opinion, the District Court held the government's recovery of both "removal" and "remedial" action oversight costs is barred under Rohm & Haas. See United States v. E.I. du Pont de Nemours & Co., No. 02-1469, 2004 WL 1812704, at *6-9 (D.Del. Aug.5, 2004). Accordingly, the District Court granted summary judgment for Dupont on all relevant claims.

The government appealed and petitioned for initial hearing en banc. Because of the importance of the issue and several intervening decisions from our sister courts of appeals questioning or rejecting our analysis in Rohm & Haas, see, e.g., United States v. Lowe, 118 F.3d 399 (5th Cir.1997) (holding such costs recoverable), we granted the petition. See Fed. R.App. P. 35(b)(1)(B).

II.

The District Court exercised jurisdiction under 28 U.S.C. § 1331. We have jurisdiction under § 1291. Our review on summary judgment of this interpretation of federal statutory law is plenary. See Wheeling & Lake Erie Ry. Co. v. Pub. Util. Comm'n, 141 F.3d 88, 94 (3d Cir.1998).

III.

CERCLA is a broad remedial statute, enacted in 1980 to ensure that parties responsible for hazardous waste contamination "may be tagged with the cost of their actions." United States v. Bestfoods, 524 U.S. 51, 56, 118 S.Ct. 1876, 141 L.Ed.2d 43 (1998) (quoting S.Rep. No. 96-848, at 13 (1980), as reprinted in 1980 U.S.C.C.A.N. 6119). CERCLA is a product of Congress's judgment that "those responsible for problems caused by the disposal of chemical poisons [must] bear the costs and responsibility for remedying the harmful conditions they created." In re Tutu Water Wells CERCLA Litig., 326 F.3d 201, 206 (3d Cir.2003) (quoting FMC Corp. v. Dept. of Commerce, 29 F.3d 833, 843 (3d Cir.1994) (en banc)).

CERCLA grants the executive branch, acting primarily through the EPA, "broad power to command government agencies and private parties to clean up hazardous waste sites." Key Tronic Corp. v. United States, 511 U.S. 809, 814, 114 S.Ct. 1960, 128 L.Ed.2d 797 (1994). This "broad power" may be exercised through a government-conducted cleanup, 42 U.S.C. § 9604(a)(1),² followed by a cost recovery action, § 9607(a),³ or through a private party cleanup, § 9606.⁴ A private party cleanup typically begins with a cleanup plan developed by the EPA. §§ 9604(c)(4),⁵ 9621(a).⁶ The plan is implemented by responsible private parties, under either a consent agreement, § 9622,⁷ or a unilateral administrative order, § 9606(a).⁸ Throughout the cleanup, the EPA maintains responsibility for oversight and certification. See 40 C.F.R. § 300.400(h) (2005) ("EPA will provide oversight when the response is pursuant to an EPA order or federal consent decree"); see also §§ 9622(a), (f)(3), (f)(5) (contemplating EPA review and certification of private party cleanups). According to the EPA, private party cleanups comprise a significant percentage of all CERCLA removal and remedial actions. See U.S. EPA, Superfund: Building on the Past, Looking to the Future 72-74 (April 22, 2004) (reporting that private parties performed 49% of removal actions and 88% of remedial actions commenced in 2003).

In Rohm & Haas, we held the United States cannot recover "removal action" oversight costs incurred while supervising a private party cleanup. 2 F.3d at 1278. We reasoned that National Cable Television Ass'n, Inc. v. United States, 415 U.S. 336, 94 S.Ct. 1146, 39 L.Ed.2d 370 (1974), bars recovery of such costs "unless the statutory language clearly and explicitly requires that result." Rohm & Haas, 2 F.3d at 1274. Emphasizing the lack of any "explicit reference to oversight of activities conducted and paid for by a private party," id. at 1275, and "the dramatic and unusual effect of requiring regulated parties to pay a large share of the administrative costs incurred by the overseeing agency," id. at 1274, we held CERCLA lacked the requisite "clear statement." Id.

After we decided Rohm & Haas, every other court of appeals that addressed the issue either questioned or rejected our holding. See United States v. Lowe, 118 F.3d 399, 401, 404 (5th Cir.1997) (rejecting applicability of National Cable and holding CERCLA authorizes EPA recovery of private party response action oversight costs); United States v. Dico, Inc., 266 F.3d 864, 877-78 (8th Cir.2001) (same); Atl. Richfield Co. v. Am. Airlines, Inc., 98 F.3d 564, 568-69 (10th Cir.1996) (questioning applicability of National Cable and holding CERCLA provides for recovery of remedial action oversight costs).⁹

IV.

A.

We begin our analysis with the clear statement doctrine, established in National Cable, 415 U.S. 336, 94 S.Ct. 1146, 39 L.Ed.2d 370, and applied in Rohm & Haas, 2 F.3d at 1273-74. Under the clear statement doctrine, "Congress must indicate clearly its intention to delegate to the Executive the discretionary authority to recover administrative costs not inuring directly to the benefit of regulated parties by imposing additional financial burdens, whether characterized as `fees' or `taxes,' on those parties." Skinner v. Mid-Am. Pipeline Co., 490 U.S. 212, 224, 109 S.Ct. 1726, 104 L.Ed.2d 250 (1989) (explaining National Cable). Furthermore,...