Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-96-01350/USCOURTS-caDC-96-01350-0/pdf.json

Parties Involved:
Chris-Craft Industries, Inc.
Petitioner
Environmental Protection Agency
Respondent

Document Text:

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued November 7, 1997 Decided January 13, 1998 

No. 96-1334

MONTROSE CHEMICAL CORPORATION OF CALIFORNIA,

PETITIONER

v.

ENVIRONMENTAL PROTECTION AGENCY,

RESPONDENT

Consolidated with 

Nos. 96-1341, 96-1350, 96-1355, 96-1371

On Petitions for Review of an Order of the 

Environmental Protection Agency

Karl S. Lytz argued the cause for petitioners, with whom 

Paul B. Galvani, Frank Rothman, Jose R. Allen, Charles B. 

Cohler and Jeffrey F. Silverman were on the joint briefs. 

David M. Rosenberg-Wohl entered an appearance.

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H. Michael Semler, Attorney, U.S. Department of Justice, 

argued the cause for respondent, with whom Lois J. Schiffer,

Assistant Attorney General, and Alan Carpien, Attorney, 

Environmental Protection Agency, were on the brief.

Before: GINSBURG, SENTELLE and ROGERS, Circuit Judges.

Opinion for the Court filed by Circuit Judge ROGERS.

ROGERS, Circuit Judge: The issue presented is whether two 

internal memoranda of the Environmental Protection Agency 

("EPA") constitute a regulation reviewable by this court 

under the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"). Under CERCLA, 

EPA must maintain and revise annually the National Priorities List ("NPL") of hazardous waste sites most in need of 

long-term remedial attention, see 42 U.S.C. § 9605(a)(8)(B) 

(1988); 40 C.F.R. § 300.5 (1996), but can change the list only 

through notice-and-comment rulemaking. See 42 U.S.C. 

§ 9605(a). In two July 1996 memoranda, EPA announced 

that it would manage response activities at a preexisting NPL 

site, the Montrose Chemical National Priorities List Superfund Site ("Montrose NPL Site"), in conjunction with an 

investigation and response activities at a separate unlisted 

offshore area, the Palos Verdes Shelf ("the Shelf"). Petitioners contend that this decision constitutes a regulation amending the NPL, without the required notice-and-comment procedures, and request the court to vacate those memoranda and 

to order the agency to cease taking actions inconsistent with 

CERCLA's rulemaking procedures. While conceding that 

these memoranda could not validly amend the NPL, EPA 

maintains that it never sought to amend the NPL or engage 

in rulemaking and, thus, this court is without jurisdiction to 

review the memoranda under CERCLA. See id. § 9613(a), 

(h) (1988). We agree with both parties that the memoranda 

could have no effect on the NPL, and with the agency that 

the memoranda do not constitute a regulation amending the 

NPL; hence, we dismiss the petitions for lack of jurisdiction.

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I.

Our consideration of the petitions for review focuses on 

three sections of CERCLA: sections 104, 105, and 113. 

Section 105 establishes the list of the national priorities for 

hazardous waste remedial actions. See 42 U.S.C. 

§ 9605(a)(8)(B); see also 40 C.F.R. §§ 300.5, .425(b) (1996). 

The sites on the list are presumed to be those most in need of 

remedial attention, and "listing drastically increases the 

chances of costly activity" and liability for the potentially 

responsible parties. Mead Corp. v. Browner, 100 F.3d 152, 

155 (D.C. Cir. 1996). Consequently, under section 105, EPA 

can add a site to the NPL only after providing interested 

parties notice and an opportunity for comment. See 42 

U.S.C. § 9605(a).

At the same time, the actual substantive impact, as distinct 

from practical impact,1of listing is limited. EPA is under no 

obligation to take actions with regard to listed sites, see 40 

C.F.R. § 300.425(b)(2); Mead, 100 F.3d at 155, and section 

104 of CERCLA makes clear that EPA may take response 

actions at hazardous waste sites regardless of whether they 

are listed on the NPL. See 42 U.S.C. § 9604(a)(1) (1988). 

EPA can always take response actions that neither demand 

more than $2 million from the Superfund 2nor last longer 

than one year at either listed or unlisted sites. See id.

§ 9604(c)(1); 40 C.F.R. §§ 300.415(b)(5), .425(b)(1).3 The lim-

__________

1

See Mead, 100 F.3d at 155; Board of Regents of Univ. of 

Wash. v. EPA, 86 F.3d 1214, 1217 (D.C. Cir. 1996).

2 The Superfund is the general federal fund for hazardous 

waste management under CERCLA. See 42 U.S.C. § 9611 (1988 & 

Supp. V 1993).

3 There are two kinds of response actions: "removal actions" 

and "remedial actions." See 42 U.S.C. § 9604(a)(1). The category 

of "removal actions" includes a broad range of monitoring, investigative, and cleanup activities "as may be necessary to prevent, 

minimize, or mitigate damage," id. § 9601(23) (1988), while "remedial actions" are more comprehensive actions that are intended as 

permanent remedies, see id. § 9601(24). EPA can take removal 

actions without regard to listing, see 40 C.F.R. § 300.415(b)(5), but 

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ited substantive importance of listing is further underscored 

by section 104(d)(4) of CERCLA, which provides that regardless of NPL status, "[w]here two or more noncontiguous 

[hazardous waste sites] are reasonably related on the basis of 

geography, or on the basis of the threat, or potential threat to 

the public health or welfare or the environment, the President 

may, in his discretion, treat these related facilities as one for 

purposes of [section 104]." 42 U.S.C. § 9604(d)(4); see also 

id. § 9601(9) (1988). Although this provision does not empower EPA 4

to expand preexisting NPL sites without satisfying CERCLA's procedural and substantive requirements for 

listing new sites, see Mead, 100 F.3d at 155, section 104(d) 

authorizes the agency to take response actions with regard to 

unlisted sites that are "reasonably related" to listed ones, 

within the $2 million and one year limits.

Section 113(a) of CERCLA governs judicial review of listing decisions, authorizing review of "any regulation" promulgated under CERCLA. 42 U.S.C. § 9613(a). The listing of a 

site on the NPL constitutes promulgation of a regulation 

subject to judicial review under this provision. See Washington State Dep't of Transp. v. EPA, 917 F.2d 1309, 1311 (D.C. 

Cir. 1990). By contrast, section 113(h) of CERCLA bars 

judicial review over EPA investigative activities in anticipation of rulemaking, with certain exceptions not relevant here. 

See 42 U.S.C. § 9613(h).

__________

can take remedial actions only at sites on the NPL, see id.

§ 300.425(b)(1). All removal actions other than investigative and 

monitoring activities are limited to $2 million from the Superfund 

and one year in length, with exceptions not at issue here, see 42 

U.S.C. § 9604(c)(1); 40 C.F.R. § 300.415(b)(5), whereas there is no 

such limitation on the cost or length of remedial actions, see id.

§ 300.425(b)(2). Thus, EPA generally can take response actions 

(other than investigative and monitoring activities) that cost more 

than $2 million or take longer than a year only at listed sites.

4 The President has delegated his authority under CERCLA to 

various federal agencies. See 40 C.F.R. § 300.100 (1996).

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II.

From 1947 through 1982, the Montrose Chemical Corporation ("Montrose") plant in Torrance, California, manufactured 

the pesticide dichloro-diphenyl trichloroethane ("DDT"). As 

a consequence, EPA asserts, large quantities of DDT contaminated the soil, surface water, and groundwater at the plant. 

EPA also claims that the discharge of DDT into the plant's 

wastewater resulted in massive contamination at the wastewater's point of release: the Palos Verdes Shelf, a large area 

of the ocean floor about 1.5 kilometers off the coast of Los 

Angeles, California. Following an investigation that began in 

1982, on October 15, 1984, EPA proposed listing the immediate area of the Montrose plant on the NPL. Although EPA 

knew of DDT contamination on the Shelf as well as on the 

plant grounds, the Montrose NPL site as finalized on October 

4, 1989, did not include the Shelf.

In June 1990, the Department of Justice ("the Department") sued Montrose in the United States District Court for 

the Central District of California. The government brought 

two claims under section 107(a) of CERCLA, 42 U.S.C. 

§ 9607(a) (1988): first, a claim for natural resource damages 

caused by the contamination of the Shelf; and second, a claim 

for reimbursement of the agency's response costs in connection with the Montrose NPL site. See United States v. 

Montrose Chem. Corp., 883 F. Supp. 1396, 1397 (C.D. Cal. 

1995), rev'd sub nom. California v. Montrose Chem. Corp.,

104 F.3d 1507 (9th Cir.1997). The district court dismissed 

the natural resource damages claim on statute-of-limitations 

grounds, see id. at 1406-07, and the Department appealed.

In an effort to address the statute-of-limitations problem, 

the Department forwarded to the Ninth Circuit the two 

internal EPA memoranda that are the focus of the current 

petitions for review. The Department claimed that these 

memoranda, which EPA had approved that very day, "expand[ed] the area of EPA response activity with respect to 

the Montrose [NPL site] to include the Palos Verdes shelf." 

Further, the Department argued that, if the Shelf was then 

on the NPL, a different statute of limitations would apply and 

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the district court's ground for dismissal was invalid. See 42 

U.S.C. § 9613(g)(1); Montrose Chem. Corp., 883 F. Supp. at 

1398. The Ninth Circuit did not, however, mention the 

memoranda in concluding for other reasons that the statute of 

limitations had not expired, and thus reversing the district 

court's dismissal of the natural resource damages claim. See 

Montrose Chem. Corp., 104 F.3d at 1512-14.

The effect, if any, of the memoranda on the NPL is unclear. 

These two documents, dated July 9, 1996, and approved the 

next day, were entitled "Engineering Evaluation and Cost 

Analysis Approval Memorandum for Addressing Contaminated Marine Sediments on the Palos Verdes Shelf" and "Management of EPA Superfund Response Activities as Part of 

EPA Response Actions Taken in Connection With the Montrose Chemical NPL Site." In the former, EPA described the 

contamination on the Shelf and recommended that the agency 

initiate an engineering evaluation and cost analysis, a study to 

determine the need for and feasibility of future response 

actions. In the latter, EPA recommended that the engineering and cost study and other response activities concerning 

the Shelf be managed "as part of the response activities being 

conducted by EPA in connection with the Montrose [NPL] 

Site." The latter memorandum did not specify what joint 

management would entail, explaining only that: "Management of EPA's response activities with respect to the Palos 

Verdes shelf contamination as part of EPA's response activities for the Montrose NPL Site will help to facilitate EPA 

administrative, funding, staffing and enforcement activities."

Although EPA did not explicitly announce an amendment 

to the NPL in either memorandum, EPA took a number of 

actions that implied that it thought the Shelf had become part 

of the Montrose NPL site. In an appendix to the joint 

management memorandum, EPA called the Shelf the "Palos 

Verdes Shelf Operable Unit" of the "MONTROSE CHEMICAL CORPORATION SUPERFUND SITE." In a press 

conference on July 10, 1996, EPA announced that the Montrose NPL site had been expanded to include the Shelf. 

Although EPA stipulated for the purposes of the district 

court litigation in California that the Montrose NPL site did 

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not include the Shelf, an internal agency document soon 

thereafter referred to "EPA's expansion of the Montrose 

NPL site to include the Palos Verdes Shelf" without questioning that such expansion had occurred. And in an earlier 

consent decree in the Ninth Circuit litigation, EPA settled 

response cost claims based on the assumption that the site 

did include the Shelf.

Many of these references appear inconsistent with EPA's 

position before this court that it never intended to amend the 

NPL in its July 1996 memoranda. At oral argument, however, counsel for EPA explained that EPA took the position 

from 1989 onward that it could consider the Shelf effectively 

to be part of the Montrose NPL site, and it only began to 

question that conclusion when this court decided Mead Corp. 

v. Browner on November 12, 1996. In Mead, the court 

invalidated EPA's "aggregation policy," whereby the agency 

listed noncontiguous parcels as a single NPL site under 

certain circumstances even when EPA had not satisfied 

CERCLA's procedural and substantive requirements for listing as to the individual parcels. See Mead, 100 F.3d at 154-

57. Thus, EPA maintains that prior to Mead, it acted as if 

the Shelf was part of the Montrose NPL site not because of 

the two memoranda, but because of its aggregation policy. 

After Mead, the agency continues, it realized that the Shelf 

could not be part of the site without a separate notice-andcomment rulemaking process, and EPA has accordingly initiated a rulemaking proceeding to add the Shelf to the NPL in 

accordance with CERCLA's requirements. See National Priorities List for Uncontrolled Hazardous Waste Sites, Proposed Rule, 62 Fed. Reg. 44,430, 44,430 (1997).

Notwithstanding EPA's explanations for its actions, the 

inconsistency of the agency's approach has caused understandable concern among interested parties. Montrose and 

others 5petition this court for review of EPA's alleged decision to expand the Montrose NPL site to include the Shelf.

__________

5 Chris-Craft Industries, Inc., Rhone-Poulenc Inc., Atkemix 

Thirty-Seven, Inc., Stauffer Management Co., Zeneca Holdings 

Inc., and Westinghouse Electric Corp. also sought review. Their 

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III.

Concessions by the parties establish that there is a single 

dispositive issue before us. If there was a "regulation" within 

the meaning of section 113(a) of CERCLA, EPA does not 

dispute that it was improper and invalid.6If there was no 

such regulation, Montrose does not dispute that the court 

would be without jurisdiction to review any agency action 

because, to the extent that EPA has not enacted a regulation, 

its actions are merely response actions over which section 

113(h) specifically bars judicial review. See 42 U.S.C. 

§ 9613(h). Of course, the court has jurisdiction to determine 

whether there is jurisdiction to make a ruling on the merits, 

see In re Thornburgh, 869 F.2d 1503, 1510 (D.C. Cir. 1989), 

and although EPA maintains that its memoranda did not 

constitute a regulation subject to review, that is an issue for 

us to decide. See American Portland Cement Alliance v. 

EPA, 101 F.3d 772, 776 (D.C. Cir. 1996).

The record does not provide a definitive answer to the 

factual question of EPA's intent. Although conceding that 

EPA's decision in the engineering and cost analysis memorandum to begin taking response actions at the Shelf was 

unobjectionable,7 Montrose contends that the decision in the 

second memorandum to manage the Shelf jointly with the 

Montrose NPL site was an improper rulemaking intended to 

__________

petitions have been consolidated with Montrose's, and we refer to 

petitioners collectively as Montrose.

6 Montrose contends that if there was a regulation, it did not 

satisfy the procedural or substantive requirements for an addition 

to the NPL, and was arbitrary and capricious as well. Given EPA's 

concession that it did not follow the proper procedures for amending the NPL, there is no need to address these arguments.

7 The first memorandum, notably, only proposes further investigative action for the purpose of determining what the proper 

future course of action would be; the memorandum even states that 

"EPA will compare the feasibility of [various] cleanup alternatives 

to the no-action option." EPA emphasizes that "[n]othing in the 

... memorandum suggests that EPA was seeking to amend the 

NPL or otherwise engage in rulemaking."

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put the Shelf on the NPL. Montrose points to the agency's 

contemporaneous and subsequent actions that corroborate 

this conclusion and further contends that the agency is contemplating response actions that would exceed $2 million and 

one year and thus could only be taken with regard to listed 

sites. It is, however, not apparent from the record whether 

"joint management" necessarily entails an amendment to the 

NPL; the memorandum only speaks tersely to greater efficiency in terms of "administrative, funding, staffing and enforcement activities." Read most favorably to EPA, the 

memorandum does not seem an act of amendment so much as 

an act of internal agency management: a proposal for a joint 

administrative approach, in which a single bureaucratic structure would oversee response activities at the Shelf and EPA's 

ongoing activities with regard to the Montrose NPL site 

itself. Even if it is not entirely clear what "joint management" means, it is clear that under section 104(d)(4) the 

agency may treat related noncontiguous sites as one for the 

purpose of response activities, whether or not one or more of 

the sites is unlisted. See 42 U.S.C. § 9604(d)(4). Thus, the 

identification of the Shelf as the "Palos Verdes Shelf Operable 

Unit" of the "MONTROSE CHEMICAL CORPORATION 

SUPERFUND SITE," would not necessarily be as portentous as Montrose would have the court believe. Nor does the 

fact that EPA may now be considering response actions at 

the Shelf that would cost more than $2 million or last more 

than one year cause the court to doubt the agency's contention that the memoranda did not put the Shelf on the NPL; 

given the current rulemaking to list the Shelf, the agency 

could reasonably consider actions it may take if the Shelf is 

eventually properly added to the NPL.8

At the same time, EPA's characterizations of the Shelf's 

NPL status have been inconsistent, and the agency's explanation at oral argument was not completely convincing. If, as 

counsel asserted, EPA had considered since 1989 that the 

__________

8 Although EPA urges the court to stay consideration of these 

petitions for review in light of the ongoing rulemaking proceeding, 

we see no need to do so given our disposition.

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Shelf was part of the Montrose NPL site and only reevaluated that view after the decision in Mead, it remains unexplained why the Justice Department's letter to the Ninth 

Circuit indicated that the July 1996 memoranda "expand[ed]" 

the site and why the Department did not argue in the district 

court that the Shelf was part of the Montrose NPL site.

Even if EPA intended to promulgate a regulation through 

these memoranda, it could not, as a matter of law, have done 

so. In American Portland Cement Alliance v. EPA, the 

court looked at three criteria to determine whether certain 

"regulatory determinations" constituted regulations subject to 

review: (1) the agency's own characterization of the action; 

(2) whether the agency published such actions in the Federal 

Register or the Code of Federal Regulations; and (3) whether the action had binding effects on either private parties or 

the agency. See American Portland Cement Alliance, 101 

F.3d at 776; see also McLouth Steel Prods. Corp. v. Thomas,

838 F.2d 1317, 1320-22 (D.C. Cir. 1988); Telecommunications 

Research & Action Ctr. v. FCC, 800 F.2d 1181, 1186 (D.C. Cir. 

1986); Brock v. Cathedral Bluffs Shale Oil Co., 796 F.2d 533, 

539 (D.C. Cir. 1986). The two internal memoranda did not 

satisfy these criteria: EPA insists that the memoranda did 

not promulgate a valid regulation; the memoranda were 

never published; and the memoranda, EPA concedes, have no 

legally binding effect on any party. Thus, EPA cannot rely 

later on the memoranda to assert that the Shelf is on the 

NPL; lest the memoranda might be interpreted to contain an 

agency decision affecting the Shelf's NPL status, we vacate 

that decision. We are, however, unpersuaded of the need to 

grant Montrose's request for an injunction or declaratory 

judgment to the effect that EPA may not exceed the one-year 

and $2 million limits except on investigative work, since those 

limits would appear to apply by default absent some new 

rulemaking placing the Shelf on the NPL or some renewed 

and prevailing claim that the 1989 Montrose NPL listing 

included the Shelf. See 42 U.S.C. § 9604(c)(1); 40 C.F.R. 

§§ 300.415(b)(5), .425(b)(1). Montrose can argue this point 

when and if EPA in some later proceeding attempts to 

recover costs from the company for operations exceeding 

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those limits. See 42 U.S.C. § 9607(a)(4)(A). To obtain the 

substantive effects of listing, EPA must adhere to CERCLA's 

procedures, as it appears to have recognized in initiating a 

rulemaking proceeding to add the Shelf to the NPL.9

Of course the need to adhere to CERCLA's substantive 

and procedural requirements does not mean that EPA cannot 

address listed and unlisted sites in a coordinated fashion. 

Although Montrose apparently seeks to preclude EPA from 

administering the Shelf in conjunction with its ongoing activities with regard to the Montrose NPL site, it makes no 

persuasive legal argument why EPA could not do so, as long 

as the agency does not take any actions with regard to the 

Shelf that would require NPL listing. We are not persuaded 

that a joint management approach need have the same substantive effects as the amendment of an NPL site. Indeed, 

statutory approval of the joint management approach appears 

implicit in section 104(d) of CERCLA, which allows EPA to 

treat "two or more noncontiguous facilities"regardless of 

listing status"as one for purposes of" EPA's response authority. 42 U.S.C. § 9604(d)(4). Given the potential increase 

in the efficiency of internal agency administration from such 

an approach, the court has no basis on which to declare joint 

management to be tantamount to amendment.

Accordingly, until EPA, pursuant to CERCLA's rulemaking procedures, properly amends the Montrose NPL site to 

include the Shelf, EPA cannot rely on the July 1996 memoranda to support any later claim that the Shelf is on the NPL, 

and because we conclude that the EPA memoranda did not 

constitute a "regulation" amending the NPL, we dismiss the 

petitions for lack of jurisdiction.

__________

9 At oral argument, counsel for EPA sought to preserve the 

possibility that even though the memoranda had no effect on the 

NPL, some earlier, unidentified action of the agency may have had 

the effect of listing the Shelf. Because the petitions only sought 

review of the two memoranda, the question whether the Shelf is on 

the NPL is not before this court, only the question whether the 

memoranda put the Shelf there, which we answer in the negative.

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