U.S. v. Vertac Chemical Corp.

• Decision Date: 23 October 1998
• Docket Number: No. LR-C-80-109.,LR-C-80-109.
• Citation: 33 F.Supp.2d 769
• Parties: UNITED STATES of America, Plaintiff, v. VERTAC CHEMICAL CORP., et al., Defendants.
• Court: U.S. District Court — Eastern District of Arkansas

33 F.Supp.2d 769

UNITED STATES of America, Plaintiff, v. VERTAC CHEMICAL CORP., et al., Defendants.

No. LR-C-80-109.

United States District Court, E.D. Arkansas, Western Division.

October 23, 1998.

COPYRIGHT MATERIAL OMITTED

Sam Blesi, Department of Justice, Land & Natural Resources Division, Washington, DC, A. Douglas Chavis, III, United States Attorney's Office, Eastern District of Arkansas, Little Rock, AR, for the United States.

Charles L. Moulton, Attorney General's Office, Little Rock, AR, for the State of Arkansas.

V. Robert Denham, Jr., Powell, Goldstein, Frazer & Murphy, Atlanta, GA, Charles L. Schlumberger, Wright, Lindsey & Jennings, Little Rock, AR, for Hercules, Inc.

Steven W. Quattlebaum, Williams & Anderson, Little Rock, AR, for Uniroyal Chemical.

MEMORANDUM OPINION AND ORDER

GEORGE HOWARD, JR., District Judge.

After eighteen years of litigation, and the expenditure of over $102,000,000.00 to date, the United States of America is ready to recover its costs associated with the cleanup of the Vertac Site pursuant to Section 107 of the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), 42 U.S.C. § 9607.¹ The United States has filed a motion for summary judgment on the issue of costs. The two parties found to be jointly and severally liable, Uniroyal Chemical, Ltd. (Uniroyal) and Hercules Incorporated (Hercules), object and argue that the United States is not entitled to recovery of costs as the actions of the United States Environmental Protection Agency (EPA) were arbitrary, capricious and not in accordance with law. They have filed motions for summary judgment with regard to EPA's claims.²

The Vertac Plant Site (site) is located in Jacksonville, Arkansas. The site was used for the manufacture of herbicides and other chemicals since the 1940s. As a result of the production, the land, buildings, equipment, groundwater, sewer lines, two sewage treatment plants, and flood plains and adjacent creeks became contaminated with 2,3,7,8-TCDD (dioxin) and other chlorinated carbon compounds. In 1983, EPA placed the site on the National Priority List (NPL) of Superfund cleanup sites established pursuant to Section 105 of CERCLA.

In carrying out the response measures, EPA divided the site into five units Off-Site Areas, Operable Units 1,2 and 3, and the Incineration response action. There were several removal actions that consisted of removing the immediate threat posed by the thousands of drums of waste containing hazardous substances left on the site when it was abandoned. Four remedial actions addressed the long-term solutions for the rest of the site and the surrounding area affected by the site. For each of the remedial actions, the National Contingency Plan (NCP) required the EPA (1) to conduct a "remedial investigation" (RI) of the site conditions, including an "endangerment assessment" (EA) of the threats posed by the contamination at the site; (2) to perform a "feasibility study" (FS) examining the various technical alternatives for remediating the site; (3) to take public comment on EPA's proposed remedial action plan based on the alternatives discussed in the FS; (4) to compile an administrative record for remedial action decision making; and (5) to issue a written ROD explaining the agency decision-maker's (the Regional Administrator) reasoning in selecting the final remedial action plan, and responding to the public comments received. The Court will first discuss the response actions at each of the units and second the arguments raised by the parties.

FACTUAL BACKGROUND

Incineration Response Action

When Vertac abandoned the site, it left behind more than 28,500 drums containing 2,4-D (Dichlorophonoxyacetic Acid) and 2,4,5-T (Trichlorophenoxyacetic Acid) still bottom wastes, dioxin and other hazardous and toxic substances. In addition, bulk storage tanks containing process materials and substantial quantities of contaminated trash remained on-site. According to an August 19, 1987 Action Memorandum, the drums were leaking potentially hazardous material, were stored in deteriorated sheds, on uncurbed concrete pads, and in open fields. Over 15,000 drums were stored outside exposed to the elements. Drums were stacked three high on deteriorating wooden pallets. EPA determined that the wastes on the site posed a threat to public health and welfare and the environment. Residents in the area could be exposed to hazardous substances and should a large release occur, in the event of a tornado, fire, or continued poor maintenance, the toxic waste would contaminate the environment. EPA initiated a removal action in 1987 to stabilize the drums and tanks and to provide site security. By February, 1989, the failed drums had been placed inside new, larger drums (overpacked) and the tanks had been stabilized. However, the corrosive materials in the drums and tanks continued to cause deterioration and drum and tank inspection and maintenance were an ongoing project.

The drummed material was considered acutely hazardous waste and was characterized as "F-listed" waste under applicable Resource Conservation and Recovery Act (RCRA) regulations, 40 C.F.R. Part 261, App. VII.. Because of the characteristics of the wastes involved, EPA chose to dispose of the wastes by incineration. The Arkansas Department of Pollution Control and Ecology (ADPC & E or the State) entered into a contract for the drum incineration, and planned to fiance the cleanup with $10.7 million provided by Vertac.³

EPA proposed to conduct a removal action to support the State's incineration efforts. This removal action was performed as a "non-time critical" removal action. EPA performed an Engineering Evaluation/Cost Analysis (EE/CA) in 1989 with regard to the non time-critical action to provide support for the State's incineration project.⁴ After the EE/CA was completed, EPA conducted a public meeting and solicited public comments on its proposed support measures.

ADPC & E signed a contract with MRK, Inc. in July, 1989, for the incineration of the 28,500 drums of still bottom wastes. MRK, Inc. subsequently entered into a joint operating agreement with Morris-Knudsen, Inc., creating the venture known as Vertac Site Contractors (VSC). VSC erected a conventional rotating kiln incinerator. The first trial burn was completed in December, 1990. In April, 1991, ADPC & E notified VSC that the trial burn would have to be repeated because of, among other reasons, data gaps, and unacceptable laboratory procedures. After numerous delays, a second trial burn was conducted in October, 1991.⁵ Approval of the second trial burn and certification to incinerate dioxin wastes were announced by the State on January 2, 1992.⁶

A dispute developed between the State and VSC regarding compensation for "downtime." Claims by VSC would have used up the amount available from the trust fund. Eventually, the State and VSC signed an agreement for the continued incineration of the wastes. The State agreed to pay VSC for certain "downtime," and also agreed to increase the compensation rate from approximately $850.00 per ton to $2,800.00 for continued incineration until the trust fund was depleted.

The State managed the incineration until June 3, 1993, when the State notified EPA that it was terminating its incineration contract with VSC. Prior to that time, EPA's role had been to support the State by maintaining the drummed waste, moving drums from storage facilities on-site to the incinerator, conducting ambient air monitoring around the site and in residential areas, testing salt and ash residuals and disposal of the delisted ash residue.

When it became apparent that the State was not going to be able to complete the incineration of the drummed waste with the funds it had available, EPA began considering its options for the disposal of the remaining drummed waste. On September 28, 1992, the EPA Regional Administrator for EPA Region VI requested approval of a federal removal action and an exemption from the statutory $2 million ceiling increase and one year time limit for removal actions under CERCLA. 42 U.S.C. § 9604(c)(1)(C). The Regional Administrator determined that immediate federal removal action was necessary to complete the incineration as the state's trust funds were insufficient to complete the incineration and there was the risk of exposure to the population by the threat of release, fire or explosion if the wastes were not incinerated. EPA determined that an imminent threat to the community existed given that over 16,000 drums remained containing highly corrosive and hazardous wastes.⁷

In its September 28, 1992, Action Memorandum, EPA evaluated alternative responses to the threat to public health, welfare, and the environment posed by the onsite drums. EPA evaluated seven options including continued drum maintenance without treatment, on-site incineration, off-site incineration, and stabilization and on-site landfilling of the wastes. Continued drum maintenance was ruled out because it did not eliminate the threat. On-site landfilling was eliminated because it could not be done in compliance with RCRA regulations banning land disposal of F-listed wastes and, in any event, the waste could not be effectively stabilized for landfilling. Off-site incineration was ruled out because the only facility in the country permitted to incinerate dioxin waste was unable to do so because of a limited permit. EPA determined that on-site incineration of the wastes, after also considering the costs, was the preferred method of addressing the threat posed by the drummed wastes.

EPA therefore took over the on-site incineration of the drums to mitigate the threat presented and to avoid any delay in the disposal process. By conducting the incineration as a time-critical removal action, EPA was able to resume incineration of the drummed waste on June 8, 1993.

In August, 1994, EPA continued to find that the on-site drums presented a...