U.S. v. Witco Corp.

• Decision Date: 16 November 1999
• Docket Number: No. Civ.A. 91-022RRM.,Civ.A. 91-022RRM.
• Citation: 76 F.Supp.2d 519
• Parties: UNITED STATES of America, Plaintiff, v. WITCO CORPORATION, Defendant.
• Court: U.S. District Court — District of Delaware

76 F.Supp.2d 519

UNITED STATES of America, Plaintiff, v.WITCO CORPORATION, Defendant.

No. Civ.A. 91-022RRM.

United States District Court, D. Delaware.

November 16, 1999.

COPYRIGHT MATERIAL OMITTED

Carl Schnee, United States Attorney, Patricia C. Hannigan, Assistant United States Attorney, Wilmington, DE, Lois J. Schiffer, Assistant Attorney General, Matthew W. Morrison, Trial Attorney, Environment and Natural Resources Division, U.S. Department of Justice, Washington, D.C., for plaintiff.

Phebe S. Young, The Bayard Firm, Wilmington, DE, Kenneth J. Warren, Robert D. Fox, Manko, Gold & Katcher, LLP, Bala Cynwyd, PA, for defendant.

OPINION

McKELVIE, District Judge.

This is an environmental remediation case.Plaintiff is the United States, on behalf of the U.S. Environmental Protection Agency(EPA).Defendant is Witco Corporation, a Delaware corporation with its principal place of business in New York, New York.

Witco has owned a site in Delaware known as the New Castle Spill Site since 1969.On September 8, 1983, the EPA placed the site on the National Priorities List pursuant to the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA).The EPA named Witco as a potentially responsible party for cleanup costs.As a settlement of the EPA's claim against Witco, the parties entered into a court-approved consent decree on April 19, 1991 whereby Witco agreed to remediate the contaminated site and to reimburse the EPA for the agency's oversight costs.The decree provides that the EPA shall demand reimbursement payments from Witco on an annual basis.The decree also authorizes the EPA to impose penalties on Witco for delays in payment.

On August 12, 1993, the United States Court of Appeals for the Third Circuit decided United States v. Rohm and Haas Co.,2 F.3d 1265(3d Cir.1993), and ruled that the constitutionally based non-delegation doctrine prohibits the EPA from recovering oversight costs under § 107 of CERCLA when private parties perform the remediation.

On July 31, 1996, the EPA for the first time submitted a demand for oversight costs from Witco.Witco advised the EPA that Rohm & Haas precludes the agency from collecting such costs.The EPA responded that the consent decree has contractually bound Witco to pay the costs, Rohm & Haas notwithstanding.

On February 12, 1999, Witco filed a motion to preclude the EPA from collecting the oversight costs.Witco alleges that the EPA's tardiness in demanding the costs constitutes a breach of the EPA's obligations under the consent decree, relieving Witco of its duty to reimburse the EPA.Witco also asks the court to modify the consent decree in light of the Rohm & Haas decision pursuant to its authority under Rule 60(b) of the Federal Rules of Civil Procedure.In particular, Witco asks the court to delete from the consent decree Witco's obligation to reimburse the EPA for oversight costs.

On August 26, 1999, Witco filed a petition to bar the EPA from collecting penalties that have accrued during the pendency of this dispute.Witco asserts that imposition of such penalties is inconsistent with the provisions of the consent decree and with basic principles of due process.

The parties have completed briefing on the motions.This is the court's decision on Witco's motions.

I.FACTUAL BACKGROUND

The site at issue comprises approximately six acres and is located approximately 0.5 miles west of the Delaware River on New Castle Avenue approximately 0.5 miles north of New Castle, Delaware.Witco, known until 1985 as Witco Chemical Corporation, purchased the site in 1969.Hazardous substances were allegedly released at the site during Witco's ownership of the facility, and investigations have detected contamination in the site's groundwater.One such contaminant is tris (2-chloropropyl)-phosphate.

On September 8, 1983, the EPA listed the site on the National Priority List, also known as the Superfund List.The EPA identified Witco as a potentially responsible party for the release of contaminants at the site.Witco denied responsibility for any release of contaminants.Nonetheless, it agreed to perform a Remedial Investigation/Feasibility Study, which it published on August 1, 1989, to determine the nature and extent of any contamination at the site and to evaluate potential remedial alternatives.The EPA, in concurrence with the State of Delaware, issued a final Record of Decision on September 28, 1989 embodying a plan for remedial action.The EPA's complaint, which was filed on January 14, 1991, sought relief under § 106and§ 107 of CERCLA to compel Witco to remediate the site and to reimburse the EPA for its costs associated with the cleanup.

A.The Consent Decree

Witco agreed to settle the dispute with the EPA.On October 1, 1990, after four months of negotiations, the parties executed a consent decree.Among its provisions, the decree specifies the remediation work to be performed by Witco, and requires that Witco reimburse the EPA for its "Oversight Response Costs" incurred in overseeing the remediation.The costs include all direct and indirect costs "incurred by the United States in overseeing the Work, including, but not limited to, the costs of reviewing or developing plans, reports and other items pursuant to [the] Consent Decree and verifying the proper performance of the Work."Decreeat 7.The consent decree provides that the "EPA shall send Witco a demand for payment of such costs on an annual basis, with each demand to be made as soon as practicable after the anniversary date of the entry of this Consent Decree."Decreeat 38.

The decree stipulates dispute resolution procedures.In particular, Witco is obliged to notify the EPA in writing of its objections within ten working days of any difference of opinion or of receipt of the notice or decision giving rise to a dispute.The EPA, in turn, is to reply to Witco within ten days.In the event that Witco contests the EPA's ruling, the decree provides for a negotiation period, after which Witco may petition the court for redress.

The decree limits the extent to which Witco may challenge the costs demanded by the EPA, allowing Witco to invoke the dispute resolution procedures to contest the costs "solely on the grounds that the costs are not within the definition of Further Response Costs or Oversight Response Costs, that the costs were incurred inconsistently with the NCP [National Contingency Plan] or that the mathematical calculations used to determine costs were performed improperly."Decreeat 39.

The decree also stipulates that the EPA may impose penalties upon Witco for any failure to comply with any requirement set forth in the decree, unless excused by force majeure or by written agreement with the EPA.Under the terms of the decree, penalties begin to accrue on the first day of Witco's non-compliance, and continue through the final day of correction of non-compliance.Separate penalties accrue for each separate violation.The decree stipulates that the following penalties shall be imposed for failure to comply with provisions such as the Oversight Response Costs requirements: 1) $2000 per violation per day for the 1st through 14th day; 2) $4,000 per violation per day for the 15th through 30th day; and 3) $12,000 per violation per day for the 31st day and beyond.In the event that Witco challenges its obligations and does not prevail, the decree provides that Witco must pay all penalties and interest that accrued prior to, during and after the dispute resolution period.

The decree provides that the court's authority to supervise or modify the decree is not limited by the terms of the consent decree.

The EPA filed its complaint on January 14, 1991.On January 15, 1991, the EPA lodged the consent decree with this court.The agency also published a Notice of Lodging in the Federal Register on February 11, 1991.Following a thirty-day public comment period during which no comments were received on the proposed settlement, the court entered the consent decree on April 1, 1991.

Witco performed its cleanup obligations satisfactorily, and the EPA removed the site from the Superfund List on June 12, 1996.

B.The EPA's Costs

To oversee the remediation, the EPA incurred oversight costs which total $204,288.67 for the period from March 20, 1990 through December 31, 1998.The agency, however, failed to submit reimbursement demands to Witco in each year from 1991 to 1995.The EPA attributes this tardiness to a lack of resources.Witco states that $122,593.86 of the total costs due are attributed to the period through from 1990 through 1994 during which the EPA was delinquent in demanding payment.

On August 12, 1993, the United States Court of Appeals for the Third Circuit decided Rohm & Haas,2 F.3d at 1265, and ruled that the constitutionally based nondelegation doctrine prohibits the EPA from recovering oversight costs in conjunction with private cleanups.The Third Circuit explained that CERCLA provides essentially two separate mechanisms for cleaning up waste sites: a government conducted cleanup under § 104 of CERCLA followed by a cost recovery action under § 107, and a private party cleanup, ordered by the EPA, pursuant to § 106.Rohm & Haas,2 F.3d at 1270.Following a government cleanup, the recovery of expenses from responsible parties under § 107 is termed a "removal action."While the statute expressly authorizes the EPA to bring a § 107 removal action in conjunction with a government cleanup conducted under § 104, the statute does not expressly allow the agency to bring a § 107 removal action following a private cleanup under § 106.The Third Circuit held that the government had no statutory authority under § 107 to bring a removal action to recoup costs in a private cleanup, and that the EPA had violated the non-delegation doctrine by recovering funds in a manner not authorized by Congress.Id. at 1278;see alsoUnited States v. Chemical Leaman Tank...