Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-94-05249/USCOURTS-caDC-94-05249-0/pdf.json

Parties Involved:
Kennecott Utah Copper Corporation
Appellant
Office of the Federal Register
Appellee
United States Department of the Interior
Appellee

Document Text:

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 20, 1996 Decided July 16, 1996

No. 93-1700

KENNECOTT UTAH COPPER CORPORATION,

PETITIONER

v.

UNITED STATES DEPARTMENT OF THE INTERIOR,

RESPONDENT

AMERICAN IRON AND STEEL INSTITUTE,

INTERVENOR

-

Consolidated with

94-1462, 94-1467, 94-1468, 94-1470, 94-1472,

94-1474, 94-5249

On Petitions for Review of an Order of the

United States Department of the Interior

and Appeal from the District Court

-

Angus Macbeth and Richard B. Stewart argued the cause for

petitioners Kennecott Utah Copper Corporation ("Kennecott") and the

Industry and Sanitation Districts ("Industry Petitioners"). James

L. Connaughton, and Dennis D. Hirsch were on the briefs for

Kennecott and Industry Petitioners. Robin S. Conrad, Jan Amundson,

Phillip D. Brady, Kathy D. Bailey, Cynthia H. Evans, Phyllis B.

Levine, Roderick T. Dwyer, Christopher Harris, G. William Frick,

Philip A. Cooney, David F. Zoll, Ronald Shipley, Barbara A. Hindin,

Maurice H. McBride, Robert Brager, Nancy D. Tammi, Karl S.

Bourdeau, Karl S. Lytz, Kimberly M. McCormick, David J. Barrett,

Paul B. Galvani, Roscoe Trimmier, Frank Rothman, Peter Simshauser

and Lloyd S. Guerci were also on the briefs for Industry

Petitioners.

Charles E. Magraw argued the cause and filed the briefs for

petitioner State of Montana.

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Naikang Tsao and Greer Goldman, Attorneys, United States Department

of Justice, argued the cause for appellee. With them on the brief

was Lois J. Schiffer, Assistant Attorney General, Natalie M. Duval,

Attorney, United States Department of Justice, and Steven K.

Linscheid, United States Department of the Interior. Jacques B.

Gelin and John A. Bryson, Attorneys, United States Department of

Justice, entered appearances.

Gordon J. Johnson argued the cause for the State intervenors. With

him on the briefs were Dennis C. Vacco, Scott Harshbarger, William

Pardee, Karen McGuire, Joseph P. Mazurek, Charles E. Magraw, Tom

Udall, Charles De Saillan, Betty D. Montgomery, Margaret A. Malone,

Richard Blumenthal, and Brian J. Comerford. Barton C. Green and

Jack A. Kley entered appearances.

Richard B. Stewart, James L. Connaughton, Robin Conrad, Jan

Amundson, Phillip D. Brady, Kathy D. Bailey, Cynthia H. Evans,

Phyllis B. Levine, Roderick T. Dwyer, G. William Frick, Philip A.

Cooney, David F. Zoll, Ronald Shipley, Barbara Hindin, Maurice H.

McBride, Robert Brager, Nancy D. Tammi, Karl S. Bourdeau, Karl S.

Lytz, Kimberly M. McCormick, David J. Barrett, Paul B. Galvani,

Roscoe Trimmier, Frank Rothman, Peter Simshauser and Lloyd S.

Guerci filed a brief for Industry Petitioners as intervenors.

Before: GINSBURG, RANDOLPH and TATEL, Circuit Judges.

TABLE OF CONTENTS

I. BACKGROUND.............................................. 4

II. ANALYSIS................................................ 9

A. Procedural Challenges............................... 9

1. Kennecott's Freedom of Information Act claim.. 10

2. Kennecott's Federal Register Act claim........ 13

3. Kennecott's APA claim......................... 19

4. Industry Petitioners' APA claim............... 20

B. Substantive Challenges............................. 23

1. Statute of limitation......................... 23

2. Time bar to substantive challenges............ 31

3. Protocols and procedures...................... 35

4. Cost effectiveness............................ 39

5. Gross disproportionality...................... 41

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6. Consistency with response..................... 42

7. Services...................................... 44

8. Acquisition of federal lands.................. 47

9. Cultural and archaeological resources......... 48

10. Indirect costs................................ 52

11. Reasonableness of assessment costs............ 54

12. Interim services.............................. 57

13. Priority of remedies.......................... 62

III. CONCLUSION............................................ 68

Opinion for the Court by GINSBURG, RANDOLPH and TATEL, Circuit

Judges.

GINSBURG, RANDOLPH, and TATEL, Circuit Judges: In these

consolidated cases we once again consider challenges to the

Department of the Interior's "Type B" Natural Resource Damage

Assessment regulations. Under both the federal Superfund statute

and the Clean Water Act, federal and state officials, acting as

trustees for the public, may recover money damages for the harm

that the release of hazardous substances into the environment

causes to certain natural resources. Type B NRDA regulations set

forth a process that trustees may follow not only in calculating

the monetary value of that injury to natural resources, but also in

collecting and spending the funds they recover.

Interior first published final Type B NRDA regulations almost

a decade ago. We invalidated portions of those regulations in Ohio

v. United States Department of the Interior, 880 F.2d 432 (D.C.

Cir. 1989). In response to Ohio, Interior finally released revised

regulations in March 1994.

Today we address four arguments that the Government violated

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various procedural requirements in promulgating the 1994

Regulations and twelve arguments that the regulations are

substantively defective. The procedural challenges come to us

through: Kennecott Utah Copper Corporation's appeal of a summary

judgment order issued by the United States District Court for the

District of Columbia; a separate petition filed by Kennecott; and

petitions filed by fifteen trade associations, seven corporations,

and two county sanitation districts, collectively referred to as

Industry Petitioners. The substantive challenges include eleven

arguments presented in petitions filed by Industry Petitioners and

one argument raised in a petition filed by the State of Montana.

In Part I we provide the factual and procedural background for

this case. In Part II.A we address and reject each of the

procedural challenges. In Part II.B we consider the substantive

issues, rejecting Montana's challenge and all but two of Industry

Petitioners' arguments. We therefore affirm the district court's

order, deny Montana's petition, and grant in part Industry

Petitioners' petitions for review.

I. BACKGROUND

The federal Superfund statute, more formally known as the

Comprehensive Environmental Response, Compensation, and Liability

Act of 1980 or "CERCLA," Pub. L. No. 96-510, 94 Stat. 2767 (1980)

(amended by the Superfund Amendments and Reauthorization Act of

1986, Pub. L. No. 99-499, 100 Stat. 1613), makes specified classes

of partiesincluding past and present owners and operators of

hazardous waste sites, transporters of hazardous substances, waste

generators, and others who arrange for the disposal, treatment, or

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transport of hazardous substancespotentially liable for the

expenses that the federal and state governments, as well as Indian

tribes, incur in responding to the release of hazardous substances

into the environment. See 42 U.S.C. § 9607(a)(1)-(4)(B). These

include expenses not only for the "removal" of hazardous wastes

themselves, but also for more permanent "remedial action[s]," such

as destroying or recycling hazardous substances, repairing leaking

containers, and establishing a protective perimeter around

hazardous waste sites. See § 9601(23)-(24).

In addition, and at the heart of this case, responsible

parties are financially liable for "injury to, destruction of, or

loss of natural resources, including the reasonable costs of

assessing such injury, destruction, or loss," caused by the release

of hazardous substances. 42 U.S.C. § 9607(a)(4)(C). The term

"natural resources" means all "land, fish, wildlife, biota, air,

water, ground water, drinking water supplies, and other such

resources belonging to, managed by, held in trust by, appertaining

to, or otherwise controlled by the United States[,] ... any State

or local government, any foreign government, any Indian tribe, or,

if such resources are subject to a trust restriction on alienation,

any member of an Indian tribe." § 9601(16). Section 107 of CERCLA

authorizes federal and state officials, acting as public trustees,

to sue responsible parties to recover damages for the harm to

natural resources caused by the release of hazardous substances.

§ 9607(f)(1). Trustees may use the funds they recover "to restore,

replace, or acquire the equivalent of such natural resources." Id.

Section 311 of the Clean Water Act also authorizes federal and

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state officials to sue as public trustees to recover "any costs or

expenses incurred by the Federal Government or any State government

in the restoration or replacement of natural resources damaged or

destroyed as a result of a discharge of oil or a hazardous

substance" in navigable waters. 33 U.S.C. § 1321(f)(4). Trustees

suing under § 311 of the Clean Water Act may use recovered funds

"to restore, rehabilitate or acquire the equivalent of such natural

resources." § 1321(f)(5).

Once a trustee suing under either § 107 of CERCLA or § 311 of

the Clean Water Act determines the amount of damages in accordance

with federal regulations promulgated under § 301(c) of CERCLA, 42

U.S.C. § 9651(c), the trustee's assessment enjoys a rebuttable

presumption in administrative proceedings and in court. §

9607(f)(2)(C). Section 301(c), in turn, requires the federal

government to issue regulations that "specify[:] (A) standard

procedures for simplified assessments" in situations requiring

"minimal field observation" (Type A regulations); "and (B)

alternative protocols for conducting assessments in individual

cases" requiring more detailed evaluations (Type B regulations).

§ 9651(c)(2). The statute further provides that

[s]uch regulations shall identify the best available

procedures to determine such damages, including both

direct and indirect injury, destruction, or loss and

shall take into consideration factors including, but not

limited to, replacement value, use value, and ability of

the ecosystem or resource to recover.

Id. The government must review these regulations every two years,

revising them as appropriate. 42 U.S.C. § 9651(c)(3). 

As in Ohio v. United States Department of the Interior, we are

concerned here only with Type B regulations. In Ohio, we

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considered the Type B regulations that the Department of the

Interior initially issued in August 1986, 51 Fed. Reg. 27,674

(1986), and later revised in February 1988, 53 Fed. Reg. 5,166

(1988). See Ohio, 880 F.2d at 440. Addressing eleven issues, we

granted the petition for review with respect to two and remanded a

third to the agency, instructing Interior to proceed in issuing new

regulations in conformity with our opinion "as expeditiously as

possible." Id. at 481. In response, in April 1991, Interior

proposed new regulations, which left most of the prior rules in

place, but changed specific sections to address the concerns we

raised in Ohio. See 56 Fed. Reg. 19,752 at 19,767-73 (1991).

Although the public comment period on those proposed regulations

ended in mid-July of 1991, see 56 Fed. Reg. 30,367 (1991), Interior

had still not approved or issued final rules by the time of the

November 1992 Presidential election.

In mid-January 1993, shortly before President Clinton's

inauguration, Interior's Assistant Secretary for Policy, Management

and Budget approved a set of Type B regulations, which differed

from those proposed in April 1991, and directed a subordinate to

send the document to the Office of the Federal Register ("OFR") for

publication as final regulations. The OFR received an original and

two copies of these signed regulationswhich we shall call the

"1993 Document"sometime after 2:00 p.m. on January 19, 1993, the

final full day of the Bush Administration. On January 21just two

days after the OFR received the 1993 Document, and before the OFR

filed the document for public inspectionan Interior employee, at

the direction of the new acting Assistant Secretary for Policy,

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Management and Budget, telephoned the OFR to withdraw the document.

The employee confirmed the request in writing later the same day.

In accordance with its regulations and internal guidelines, the OFR

stopped processing the 1993 Document and returned all three copies

to Interior, recording the action in the "Kill Book," a handwritten

ledger the OFR maintained to keep track of documents withdrawn by

agencies.

Several months later, in July 1993, Interior reopened the

public comment period on the regulations it had proposed in April

1991, while also suggesting further revisions to those proposed

rules. 58 Fed. Reg. 39,328 at 39,329 (1993). Interior issued

final regulations in March 1994, 59 Fed. Reg. 14,262 (1994). These

regulations are the subject of the challenges before us today.

Like their predecessors, the 1994 Regulations provide a

four-stage framework for trustees to follow in assessing natural

resource damages. Compare 56 Fed. Reg. 19,752 at 19,754 (proposed

April 1991 Regulations); 51 Fed. Reg. 27,674 at 27,677-80 (final

August 1986 Regulations) with 59 Fed. Reg. 14,262 at 14,262-63

(final 1994 Regulations). In the first stage, trustees conduct a

"pre-assessment screen," in which they review readily available

information to determine whether there is a reasonable probability

that a claim would be successful, thus justifying the expense and

effort of conducting a full assessment. 43 C.F.R. §§ 11.23-25

(1995). In the second stage, the trustee develops an "assessment

plan," which describes in some detail how the trustee expects to

determine the monetary value of injury suffered by the natural

resources, including but not limited to stating whether the trustee

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intends to conduct a Type A or Type B assessment. 43 C.F.R. §§

11.30-11.35; 59 Fed. Reg. at 14,281-83. During the third stage,

the trustee conducts the assessment, which in the case of Type B

assessments involve three phases: an "injury determination phase,"

when the trustee ascertains whether the release of a hazardous

substance has, in fact, caused injury to natural resources, 43

C.F.R. §§ 11.60-11.64; a "quantification phase," when the trustee

determines the extent of the physical injury, as compared to the

baseline conditions that would have existed if the hazardous

substances had not been released into the environment, 43 C.F.R. §§

11.70-11.73; 59 Fed. Reg. at 14,283; and the crucial "damage

determination" phase, when the trustee determines the amount of

money it will seek to compensate for the injuries to the natural

resources. 43 C.F.R. §§ 11.80-11.84; 59 Fed. Reg. at 14,283-87.

Having conducted the assessment, the trustee proceeds to the fourth

stage, the "post-assessment" phase, during which the trustee

prepares a report describing the assessment; presents a demand to

potentially responsible parties for their share of the damages,

filing suit if appropriate; and if successful in recovering funds,

develops a plan to restore the injured natural resources. 43

C.F.R. §§ 11.90-11.93; 59 Fed. Reg. at 14,287-88.

Both Kennecott and Industry Petitioners challenge the validity

of the 1994 Regulations based on the process the Government used in

withdrawing the 1993 Document and issuing the 1994 Regulations.

Claiming that both the Freedom of Information Act, 5 U.S.C. § 552,

and the Federal Register Act, 44 U.S.C. §§ 1504-05, required the

Government to publish the 1993 Document, Kennecott sued in the

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United States District Court seeking an injunction requiring the

1993 Document's publication. Because the district court concluded

that it lacked authority to order publication under the Freedom of

Information Act, and found no violation of the Federal Register

Act, it granted summary judgment for the Government. Kennecott

Utah Copper Corp. v. United States Department of the Interior, No.

93-2223 (D.D.C. Jun. 30, 1994). Kennecott now appeals the district

court's order. Kennecott has also filed a petition for review in

this court pursuant to § 113 of CERCLA, 42 U.S.C. § 9613(a),

arguing that certain actions taken by Interior during 1993

improperly rescinded the 1993 Document without complying with the

notice and comment provisions of the Administrative Procedure Act,

5 U.S.C. § 553(b)-(c). Industry Petitioners make a similar, though

not identical argument. They contend that Interior's very issuance

of the 1994 Regulations improperly repealed the 1993 Document in

violation of the notice and comment requirements of the APA. As a

remedy for these procedural violations, Kennecott and Industry

Petitioners ask us to declare the 1993 Document valid and to direct

the Government to publish it.

In addition to these procedural arguments, Industry

Petitioners raise eleven substantive challenges to the 1994

Regulations, claiming that the regulations not only exceed the

agency's authority under CERCLA and the Clean Water Act, but also

constitute arbitrary and capricious action. In its petition for

review, the State of Montana argues that the 1994 Regulations do

not go far enough in requiring trustees to restore natural

resources to their untainted condition.

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We consider each of the procedural and substantive issues in

turn.

II. ANALYSIS

A. Procedural Challenges

At the outset, Interior urges us to find all procedural

challenges to the 1994 Regulations moot. Because we agree with

Interior that for other reasons we lack jurisdiction over

Kennecott's Freedom of Information Act and APA claims, we need not

consider whether those claims are moot. As for the two remaining

claimsKennecott's Federal Register Act claim and Industry

Petitioners' APA claimwe consider and reject Interior's mootness

arguments. Nonetheless, we agree with the agency that both claims

fail on the merits.

1. Kennecott's Freedom of Information Act claim

The district court rejected Kennecott's Freedom of Information

Act claim, ruling that because the Act did not authorize it to

order the relief Kennecott requestedpublication of the 1993

Document in the Federal Registerit lacked jurisdiction. Reviewing

the district court's ruling de novo, see Cope v. Scott, 45 F.3d

445, 450 (D.C. Cir. 1995), we affirm.

The Freedom of Information Act divides agency documents into

three categories. The first includes "substantive rules of general

applicability adopted as authorized by law." 5 U.S.C. §

552(a)(1)(D). The statute provides that agencies "shall ...

currently publish" such documents. § 552(a)(1). The second

category includes agency opinions, policy statements not previously

published in the Federal Register, and administrative staff

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manuals, § 552(a)(2), which agencies must either "promptly publish[

]" in the Federal Register or "make available for public inspection

and copying." The third category includes all other records, which

the agency must "make ... promptly available" upon request. §

552(a)(3). The statute's remedial provision, § 552(a)(4), governs

judicial review of all three types of documents, see S. REP. NO.

854, 93d Cong., 2d Sess. 9 (1974) (The "judicial review provisions

apply to requests for information under subsections (a)(1) and

(a)(2) of section 552 as well as under subsection (a)(3).");

American Mail Line v. Gulick, 411 F.2d 696, 701 (D.C. Cir. 1969),

granting district courts "jurisdiction to enjoin the agency from

withholding agency records and to order the production of any

agency records improperly withheld from the complainant," 5 U.S.C.

§ 552(a)(4)(B).

Kennecott argues that the 1993 Document falls into the first

categorya "substantive rule of general applicability" that upon

the signature of the Bush Administration Assistant Secretary, was

"adopted as authorized by law." According to Kennecott, as soon as

the Assistant Secretary signed the document, § 552(a)(1) imposed a

legal obligation on the agency to publish it. Because we agree

with the district court that § 552(a)(4)(B) does not authorize

district courts to order publication of such documents, we need not

decide whether the 1993 Document was "adopted" by virtue of the

Assistant Secretary's signature, and thus whether § 552(a)(1)

imposed a duty to publish the document.

While it might seem strange for Congress to command agencies

to "currently publish" or "promptly publish" documents, without in

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the same statute providing courts with power to order publication,

we think that is exactly what Congress intended. Section

552(a)(4)(B) authorizes district courts to order the "production"

of agency documents, not "publication." The question, then, is

whether Congress intended "production" to include "publication."

The dictionary does not resolve the matter. "Production" could

mean either providing the document to an individual or broadcasting

it to the broader public. See WEBSTER'S THIRD NEW INTERNATIONAL DICTIONARY

1810 (1993). Nor is this a situation where only one interpretation

comports with the statute's purpose. The statute imposes "a

general obligation on the agency to make information available to

the public," see Chrysler Corp. v. Brown, 441 U.S. 281, 292 (1979),

an obligation that could be fulfilled either by handing the

document over to an individual or by publishing it in the Federal

Register. We think it significant, however, that § 552(a)(4)(B) is

aimed at relieving the injury suffered by the individual

complainant, not by the general public. It allows district courts

to order "the production of any agency records improperly withheld

from the complainant," not agency records withheld from the public.

5 U.S.C. § 552(a)(4)(B) (emphasis added). Providing documents to

the individual fully relieves whatever informational injury may

have been suffered by that particular complainant; ordering

publication goes well beyond that need.

Moreover, Congress has provided an alternative means for

encouraging agencies to fulfill their obligation to publish

materials in the Federal Register. As amended in 1974, § 552(a)(1)

protects a person from being "adversely affected by" a regulation

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required to be published in the Federal Register unless an agency

either published the regulation or the person had actual and timely

notice of it. 5 U.S.C. § 552(a)(1); see also Morton v. Ruiz, 415

U.S. 199, 232-36 (1974). This gives agencies a powerful incentive

to publish any rules they expect to enforce. See Morton, 415 U.S.

at 233 n.27 (quoting H.R. REP. NO. 1497, 89th Cong., 2d Sess. 7

(1966) and citing S. REP. NO. 813, 89th Cong., 1st Sess. 6 (1965)).

We thus conclude that § 552(a)(4)(B) does not authorize federal

courts to order publication.

To support its contrary interpretation, Kennecott cites

Merrill v. Federal Open Market Committee of the Federal Reserve

System, 413 F. Supp. 494 (D.D.C. 1976), aff'd, 565 F.2d 778 (D.C.

Cir. 1977), vacated on other grounds, 443 U.S. 340 (1979), where

the district court held that certain directives issued by the

Federal Reserve System were statements of general policy that,

under § 552(a)(1), must be published promptly in the Federal

Register. Merrill, 413 F. Supp. at 506. Although we affirmed

that conclusion, Merrill, 565 F.2d at 787, neither the district

court nor we addressed the separate issue now before us: the power

of district courts to order publication of documents under §

552(a)(4)(B). Indeed, the plaintiff in Merrill sought only a

declaratory judgment that the Federal Reserve violated the Freedom

of Information Act by delaying the "public release" of these

documents, not an injunction requiring publication. Merrill, 413

F. Supp. at 499. Moreover, the district court ordered "production"

of these records, not publication. Id. at 507.

Although Kennecott also argues that both the APA, 5 U.S.C. §

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706(1), and the Mandamus and Venue Act of 1962, 28 U.S.C. § 1361,

authorize the district court to order publication of the 1993

Document for an alleged violation of the Freedom of Information

Act, it did not make these arguments in district court.

Ordinarily, we will not consider issues or legal theories

appellants failed to raise in district court. See, e.g., District

of Columbia v. Air Florida, Inc., 750 F.2d 1077, 1084 (D.C. Cir.

1984). Kennecott has not suggested any circumstances justifying

our departure from this rule. Finding that the Freedom of

Information Act did not authorize the district court to order

publication, we affirm summary judgment for Interior.

2. Kennecott's Federal Register Act claim

Kennecott next argues that the Federal Register Act required

publication of the 1993 Document and that, by returning the

document to Interior, the Office of the Federal Register violated

the Act. Before addressing the merits of this argument, we

consider Interior's contention that we lack jurisdiction to hear

this claim. Although Interior characterizes its argument as one

involving mootness, we think that, because Interior claims that

Kennecott never suffered any injury traceable to the agency's

failure to publish the 1993 Document, its argument is more properly

viewed as a challenge to Kennecott's standing. To have standing,

Kennecott "must have suffered an "injury in fact,' " Lujan v.

Defenders of Wildlife, 504 U.S. 555, 560 (1992) (quoting Allen v.

Wright, 468 U.S. 737, 756 (1984)); "there must be a causal

connection between the injury and the conduct complained of"; and

"it must be "likely,' as opposed to merely "speculative,' that the

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injury will be "redressed by a favorable decision,' " id. 560-61

(quoting Simon v. Eastern Kentucky Welfare Rights Org., 426 U.S.

26, 38, 43 (1976)).

Kennecott contends that the Government's failure to publish

the 1993 Document, as required by the Federal Register Act, is

causing it economic harm. Pointing to its current settlement

negotiations with the State of Utah regarding the release of

hazardous wastes in the Salt Lake City area, see Utah v. Kennecott

Corp., 801 F. Supp. 553 (D. Utah 1992), appeal dismissed, 14 F.3d

1489 (10th Cir. 1994), Kennecott argues that if the Government

published the 1993 Document in the Federal Register, it would be

relevant to the parties and ultimately to a court in determining

whether the proposed settlement is " "reasonable, fair, and

consistent with the purposes that CERCLA is intended to serve.' "

Id. at 567 (quoting United States v. Cannons Eng'g Corp., 899 F.2d

79, 85 (1st Cir. 1990) (in turn quoting H.R. REP. NO. 253, 99th

Cong., 1st Sess., pt. 3, 19 (1985)). In particular, Kennecott

suggests that because the 1993 Document, unlike current

regulations, would restrict the use of a technique for calculating

liability known as "contingent valuation methodology," see Ohio,

880 F.2d at 475, publishing the 1993 Document would likely reduce

its liability in an eventual settlement.

Interior responds that "there is no [legal] basis for

Kennecott's professed entitlement to a specific [regulatory]

provision." Interior Br. at 42. Although its meaning is not

entirely clear, Interior seems to argue that Kennecott has not

alleged an injury in factthat is, an invasion of an interest

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protected by the Federal Register Act. See Lujan, 504 U.S. at 560

(defining an " "injury in fact' " as "an invasion of a legally

protected interest"). To support its point, Interior relies on

American Association of Retired Persons v. EEOC, 823 F.2d 600 (D.C.

Cir. 1987), and Estate of Smith v. Heckler, 747 F.2d 583 (10th Cir.

1984), for the proposition that individuals are not entitled to

specific regulations, only reasonable ones. We disagree.

To begin with, the two cases relied on by Interior are

irrelevant to this case. American Association of Retired Persons

and Estate of Smith address whether the APA entitles a person to a

particular regulation, see American Ass'n of Retired Persons, 823

F.2d at 604-05; Estate of Smith, 747 F.2d at 591, not whether the

Federal Register Act requires an agency to issue a particular

regulation. The Federal Register Act clearly imposes a duty upon

the OFR to publish specific regulationsthat is, to publish those

documents that it receives from agencies and makes available for

public inspection. See 44 U.S.C. § 1503 (requiring the OFR to

"transmit ... to the Government Printing Office for printing ...

each document required or authorized to be published by" 44 U.S.C.

§ 1505, which lists documents to be published in the Federal

Register).

In our view, moreover, the economic injury Kennecott alleges

is "arguably within the zone of interests ... protected" by the

Federal Register Act. Association of Data Processing Serv. Orgs.,

Inc. v. Camp, 397 U.S. 150, 153 (1970). Congress enacted the

statute to address the disorderly way in which the federal

government was maintaining and distributing its regulations. As

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the House Judiciary Committee observed,

[A]dministrative rules and pronouncements oftentimes

cannot be found. As to their publication and

distribution, there is utter chaos. These rules and

regulations frequently appear in separate paper

pamphlets, some printed on single sheets of paper and

easily lost. Any attempt to compile a complete private

collection of these rules and regulations would be

wellnigh impossible.... Officials of the department

issuing them frequently do not know all of their own

regulations.

H.R. REP. NO. 280, 74th Cong., 1st Sess. 2 (1935). We thus

understand the Federal Register Act to protect regulated entities

from harmincluding economic injurythey might suffer because of

the government's failure to publish duly-approved regulations.

Accordingly, we believe that Kennecott has suffered injury to an

interest protected by the Federal Register Act.

Interior also argues that, because the State of Utah has

decided not to avail itself of Interior's current regulations for

assessing natural resources damages in its suit against Kennecott,

see Utah v. Kennecott Corp., 801 F. Supp. at 567, there is no

causal connection between Interior's failure to publish the 1993

Document and Kennecott's position in its negotiations with Utah.

Again, we disagree. Even though the 1993 Document would not have

a binding effect on Utah, if published, the document would likely

serve as a useful guide to the parties and, importantly, to a court

in determining whether a consent decree is fair and reasonable.

See, e.g., United States v. Charles George Trucking, Inc., 34 F.3d

1081, 1087 (1st Cir. 1994) (in assessing reasonableness of

settlement, court must assess potential liability of parties). We

see this as a "fairly traceable" connection between the

Government's failure to publish the 1993 Document and Kennecott's

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potential liability in the Utah litigation. Lujan, 504 U.S. at 560

(1992) (quoting Simon, 426 U.S. at 41) (internal quotation marks

and brackets omitted). Kennecott therefore has standing to bring

its Federal Register Act claim.

Turning to the merits, we agree with the district court and

with Interior that the OFR adopted a permissible construction of

the Act and, therefore, that the agency did not violate the statute

by allowing Interior to withdraw the document. The Federal

Register Act establishes a process for maintaining the government's

rules and regulations and for publishing them in the Federal

Register. Section 1 of the Act charges the Archivist of the United

States, acting through the OFR, with "custody" of all documents

required to be published in the Federal Register and, along with

the Public Printer, with responsibility for "the prompt and uniform

printing and distribution of " such documents. 44 U.S.C. § 1502.

Section 2 describes the procedures the OFR must follow in

maintaining and publishing documents. First, federal agencies

"shall cause to be transmitted for filing" with the OFR the

original and two copies of a document. § 1503. After transmittal,

the original and copies "shall be filed with the Office." Id.

The OFR must note "the day and hour of filing" on the original and

both copies. Id. While the Archivist maintains the original

"under regulations prescribed by the Archivist," at least one copy

"[u]pon filing ... shall be immediately available for public

inspection in the Office" and another copy "shall [be]

transmit[ted] immediately to the Government Printing Office" for

printing in the Federal Register. Id.

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Pursuant to statute, see 44 U.S.C. § 1506, a committee chaired

by the Archivist issued regulations in 1989 providing for a

"confidential processing" period to take place after an agency

transmits a document to the OFR and before the OFR makes the

document available for public inspection. 54 Fed. Reg. 9,670 at

9,680 (1989); 1 C.F.R. §§ 17.1-17.2 (1996). The regulations

provide that documents received after 2:00 p.m. are usually made

available for public inspection three days later and sent to the

Government Printing Office for publication on the fourth day. 1

C.F.R. § 17.2. During this three-day confidential processing

period, the OFR reviews and edits documents to ensure that they are

properly formatted for publication in the Federal Register. In an

emergency, an agency may request faster processing; and when there

are technical difficulties or a document is unusually long, as it

was in this case, the OFR may take longer than three days. See §§

17.3-17.7 (1996). The OFR's "Document Drafting Handbook," issued

in 1991 pursuant to regulations, see § 15.10 (1996), permits an

agency to withdraw a document by telephone at any time before the

OFR made the document available for public inspection, provided

that the agency follows up with a letter confirming the withdrawal.

OFFICE OF THE FEDERAL REGISTER, NATIONAL ARCHIVES AND RECORDS ADMINISTRATION,

DOCUMENT DRAFTING HANDBOOK 66 (1991 Ed.).

Kennecott does not suggestnor could itthat the OFR violated

its own rules by allowing Interior to withdraw the 1993 Document:

The OFR clearly followed its rules when it honored Interior's

request to withdraw the 1993 Document, a request made two days

after the OFR received the document, well within the established

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three-day processing period. Rather, Kennecott argues that in

adopting the rules, the Government misconstrued the statute to

allow agencies to withdraw documents at all. According to

Kennecott, Congress has unequivocally required that, once the OFR

receives a document, it must make it available for public

inspection, unless an attack or threatened attack on the United

States makes it impractical to publish the Federal Register. See

44 U.S.C. § 1505(c). 

We review the OFR's interpretation under the two-step analysis

set forth in Chevron, U.S.A. Inc. v. Natural Resources Defense

Council, Inc., 467 U.S. 837, 842-43 (1984). Applying Chevron step

one, we find that Congress has not "directly spoken to the precise

question at issue": whether the OFR may confidentially process a

document prior to making it available to the public and allow an

agency to withdraw the document during this period. Id. at 842.

The statute provides only that, at some point after an agency

transmits documents to the OFR, the documents "shall be filed"

(including being stamped with the day and time) and, upon filing,

the document shall "immediately" be made available to the public.

The statute says nothing about the OFR's power to review or return

documents either between the time of transmittal and "filing"

(i.e., being stamped with the date and time) or between the moment

of filing and the time "immediately" thereafter when the document

is made available for public inspection. Nor does the legislative

history indicate that Congress considered the details of the OFR's

role in processing documents, including its authority to return

documents to the issuing agency before they are made public. See

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H.R. REP. NO. 280 at 3.

Proceeding to Chevron step two, we ask whether the OFR has

adopted a "reasonable interpretation" of the statutethat is

"whether "the agency considered the matter in a detailed and

reasoned fashion' " and whether "the interpretation is arguably

consistent with the underlying statutory scheme in a substantive

sense." Rettig v. Pension Benefit Guaranty Corp., 744 F.2d 133,

151 (D.C. Cir. 1984) (quoting Chevron, 467 U.S. at 865). Because

Kennecott does not object to the manner in which the agency reached

its interpretation of the statute, we consider only whether it is

substantively reasonable. We think it is.

Allowing agencies to withdraw documents during the relatively

brief processing period is consistent with the statute's

purposeestablishing an orderly process for filing and publishing

government regulations. By permitting agencies to correct mistakes

and even to withdraw regulations until virtually the last minute

before public release, the government's approach helps assure that

regulations appearing in the Federal Register are as correct as

possible in both form and substance. It thereby avoids the

needless expense and effort of amending regulations through the

public comment process when those corrections could have been made

more easily before the documents' publication. At the same time,

by providing a relatively tight time frame for processing

documents, the government imposes discipline on agencies and on the

OFR, thereby assuring that the work of publishing the government's

regulations proceeds in an orderly fashion. Because interpreting

the Federal Register Act to allow agencies to withdraw documents

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during the confidential processing period is reasonable, we affirm

summary judgment for Interior on Kennecott's Federal Register Act

claim.

3. Kennecott's APA claim

We agree with Interior that we lack statutory jurisdiction to

consider Kennecott's APA claim under § 113(a) of CERCLA. Section

113(a) provides for review in this court of any "regulation

promulgated" under CERCLA. 42 U.S.C. § 9613(a). We have

interpreted "regulation" to mean a statement that has " "general

applicability' " and that has the " "legal effect' " of "binding"

the agency or other parties. See Brock v. Cathedral Bluffs Shale

Oil Co., 796 F.2d 533, 537-539 (D.C. Cir. 1986) (quoting 44 U.S.C.

§ 1510).

Kennecott points to three actions the agency took in

withdrawing the 1993 Document that it claims amount to

"regulation[s]" promulgated under CERCLA. The first is the July

1993 notice that reopened the comment period on the proposed 1991

Regulations. Although this action invited comment on proposed

regulations, it is not a regulation because it did not impose

substantive obligations on either the agency or other parties.

Kennecott also relies on a letter the agency sent to the

Atlantic Richfield Corporation explaining the agency's decision not

to publish the 1993 Document. We think that the letter does not

help Kennecott's claim any more than the July 1993 notice. Because

the letter neither lifted nor imposed legal duties on anyone, it

too was not a regulation.

Citing Natural Resources Defense Council, Inc. v. EPA, 683

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F.2d 752 (3d Cir. 1982) and Environmental Defense Fund, Inc. v.

Gorsuch, 713 F.2d 802, Kennecott finally claims that the agency's

"indefinite postponement" of the 1993 Document qualifies as a

regulation. We disagree. In the cases cited by Kennecott, the

government had promulgated a final regulation and then either

explicitly postponed its effective date, Natural Resources Defense

Council, 683 F.2d at 761, or took action that resulted in

postponing the effective date of its duly promulgated regulations,

Environmental Defense Fund, 713 F.2d at 814-17. In finding that

the agency's actions constituted regulations under the APA, we

emphasized the immediate substantive impact of the agency's

postponement decision on the parties' legal obligations under duly

promulgated regulations. Id. at 816. In contrast, the agency here

never issued the 1993 Document. Because its decision to withdraw

the document did not alter substantive legal obligations under

previously published regulations, the agency's decision to withdraw

the document did not constitute a "regulation" within the meaning

of § 113 of CERCLA.

4. Industry Petitioners' APA claim

We turn finally to Industry Petitioners' somewhat different

attack on the withdrawal of the 1993 Document. Unlike Kennecott,

they contend that the agency's final 1994 Regulations themselves

repealed and modified the 1993 Document without offering the

opportunity for notice and comment required by the APA. Because

Industry Petitioners base their challenge on regulations

promulgated under CERCLA, they satisfy § 113(a)'s jurisdictional

requirement. We thus consider Interior's other jurisdictional

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argumentthat Industry Petitioners' challenge is moot.

An issue becomes moot if intervening events leave the parties

without "a legally cognizable interest" in our resolution of those

issues. Powell v. McCormack, 395 U.S. 486, 496 (1969). Interior

has the burden of proving that, because "interim relief or events

have completely and irrevocably eradicated the effects of the

alleged violation," Industry Petitioners lack such an interest.

County of Los Angeles v. Davis, 440 U.S. 625, 631 (1979). In other

words, Interior must demonstrate either that Industry Petitioners

no longer suffer a legally cognizable injury traceable to the

alleged violations, see Penthouse Int'l, Ltd. v. Meese, 939 F.2d

1011, 1018-19 (D.C. Cir. 1991) (noting that a case is

constitutionally moot if there is no longer "some trace of a

continuing injury"), or that the court can no longer provide

Industry Petitioners with any meaningful relief, see Burlington

Northern R. Co. v. Surface Transp. Bd., 75 F.2d 685, 688 (D.C. Cir.

1996) (noting that a case is moot if "intervening events make it

impossible to grant the prevailing party effective relief ").

In claiming that Interior withdrew the 1993 Document in

violation of the notice and comment provisions of the APA, Industry

Petitioners assert that the Government has deprived them of a

procedural right protected by that statutethe right that we have

recognized under the APA "to participate in the rulemaking

process," Natural Resources Defense Council v. Nuclear Regulatory

Commission, 680 F.2d 810, 814 (D.C. Cir. 1982). Although agreeing

that Industry Petitioners claim a violation of a procedural right,

the agency argues that the "reopening of the comment period in July

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1993 and the subsequent publication of the 1994 ... regulation[s]"

gave Industry Petitioners all the procedural relief to which they

are entitled, thereby rendering their challenges moot. Interior

Br. at 72.

In support of its argument, Interior relies on two cases

involving significantly different facts than we face here. In

Natural Resources Defense Council v. Nuclear Regulatory Commission,

we found that, by promulgating a second rule in accordance with the

notice and comment requirements of APA, the agency had rendered

moot petitioners' claim that the agency had failed to promulgate an

earlier rule in conformity with the APA. 680 F.2d at 813-15. We

extended this principle in Save Our Cumberland Mountains, Inc. v.

Clark, 725 F.2d 1422, 1432 (D.C. Cir.), reh'g granted and opinion

vacated (1984), finding that an agency's promulgation of a later

rule in compliance with the APA completely eradicated any harm the

petitioners may have suffered when the agency suspended an earlier

published rule without providing opportunity for notice and

comment. Id. at 1432-33. Because we vacated that opinion, while

its reasoning may persuade, it does not bind us. See Save Our

Cumberland Mountains, Inc. v. Lujan, 963 F.2d 1541, 1548 (D.C. Cir.

1992).

Interior urges us to extend these cases even further by

holding that the agency's later promulgation of a rule in

compliance with the APA eradicates any harm petitioners may have

suffered from the agency's failure to allow comment when

withdrawing an unpublished document. Even assuming that the

opportunity to comment when agencies promulgate rules is comparable

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to the opportunity to comment on the withdrawal of unpublished

documents, Interior's argument fails because the two sets of

regulations before us did not cover all of the same issues. Unlike

the other two cases, where the later regulations were "essentially

the same" as the earlier one, Natural Resources Defense Council,

680 F.2d at 813, and "cover[ed] precisely the same subject matter

as the withdrawn regulation," Save Our Cumberland Mountains, Inc.

v. Watt, 558 F. Supp. 22, 24 n.3 (D.D.C. 1982), the 1994

Regulations did not address trustees' use of a contingent valuation

methodology in the damage determination phase of their assessments,

59 Fed. Reg. at 14,266, an issue discussed extensively in the 1993

Document. Interior's reopening the comment period in July 1993 and

publishing final regulations in 1994 thus did not give Industry

Petitioners an opportunity to participate in the rulemaking process

equivalent to the opportunity they would have had if the agency had

withdrawn the 1993 Document.

Although Industry Petitioners' challenge thus presents a live

controversy, we agree with Interior that their argument is without

merit. For one thing, their argument lacks a factual foundation.

Contrary to their claims, the 1994 Regulations did not repeal or

modify the 1993 Document for the simple reason that the 1993

Document never became a binding rule requiring repeal or

modification. Rather, the 1994 Regulations replaced certain

provisions in the then-current version of the Code of Federal

Regulations.

The Industry Petitioners' argument also lacks legal

foundation. Under their view, whenever agencies propose rules,

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receive comments from the public, and internally approve a draft

version of the final regulations, the APA would prevent agencies

from discarding those documents without again requesting public

comment. They point to nothing in the text of the APA, its

legislative history, or case law suggesting that Congress intended

such an unlikely result. In fact, the APA only requires an agency

to provide public notice and comment when "formulating, amending,

or repealing a rule." 5 U.S.C. §§ 551(5), 553(b)-(c). A rule, in

turn, is defined as "an agency statement of general or particular

applicability and future effect." § 551(4). In discarding the

1993 Document, the agency was in no sense "formulating" a rule.

Instead, it rejected a document that had not yet been published.

Nor did the agency "amend[ ]" or "repeal[ ]" a rule because the

1993 Document never became a rule subject to amendment or repeal.

Accordingly, all of the procedural challenges to the 1994

Regulations fail.

B. Substantive Challenges

1. Statute of limitation

Section 113(g)(1) of the CERCLA provides that "no action may

be commenced for damages ... unless that action is commenced within

3 years after the later of the following: (A) The date of

discovery of the loss and its connection with the release in

question. (B) The date on which regulations are promulgated under

section 301(c)." 42 U.S.C. § 9613(g)(1). Interior in its 1994

Regulations, § 11.91(e), specified that for purposes of clause (B),

the date on which regulations are promulgated under

section 301(c) of CERCLA is the date on which the later

of the revisions to the type A Rule and the type B Rule,

pursuant to State of Colorado v. United States Department

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of the Interior, 880 F.2d 481 (D.C. Cir. 1989) [Type A],

and State of Ohio v. United States Department of the

Interior, 880 F.2d 432 (D.C. Cir. 1989) [Type B], is

published as a final rule in the Federal Register.

The Industry Petitioners raise three objections to this

provision. First, they contend that the Congress did not authorize

Interior to define the term "promulgated" within the meaning of §

113(g)(1)(B). Second, they argue that § 11.91(e) cannot in any

event survive step one of Chevron because (1) § 113(g)(1)(B)

expressly provides that damage claims are barred if filed more than

three years after Interior promulgated its regulations under §

301(c); and (2) those regulations were promulgated in 1986 and

1987; and (3) the term "promulgated" is unambiguous. Third,

according to the Industry Petitioners, even if the statute is

ambiguous, Interior's interpretation is not a permissible one under

step two of Chevron because it would authorize Interior to work an

indefinite postponement of the limitation period simply by delaying

its promulgation of the regulations.

First. Section 301(c) of the CERCLA authorizes Interior to

"promulgate regulations for the assessment of damages for injury to

... natural resources." 42 U.S.C. § 9651(c). In § 113(g)(1)(B),

the Congress linked the start of the statutory period for filing

damage actions to the promulgation of those regulations. The

Department suggests that this linkage implicitly delegates to

Interior authority to interpret when the three-year statute of

limitation begins to run.

The Industry Petitioners point out that nothing in § 301(c) of

the CERCLA expressly authorizes Interior to set the period of

limitation. On the contrary, they contend, because the period at

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issue controls the business of the courts, the resolution of any

ambiguity in the statute is implicitly entrusted to the judicial

branch. The Industry Petitioners claim to be aware of no instance

where an executive branch department or agency has been granted

authority to establish the period of limitation for bringing an

action in court. And it would be remarkable, they observe, for the

Congress to have placed such authority in the hands of Interior,

which is frequently a plaintiff itself asserting damage claims in

its capacity as a natural resource trustee.

Prior to amending the CERCLA in 1986, the Congress had

specified a date certain (December 1980) for the opening of the

limitation period, 42 U.S.C. § 9612(d) (1982), but because Interior

took longer than anticipated to promulgate the regulations, in 1986

the Congress substituted an indefinite future date tied to the

promulgation of the overdue regulations. This amendment, according

to the Department, demonstrates that the Congress necessarily

intended to delegate to Interior authority over the start of the

three-year limitation period. Only in that manner could the

Congress ensure that trustee complainants would have available

legally effective protocols and procedures for assessing damages.

Indeed, the amendment resurrected damage claims that would

otherwise have been time-barred, which suggests that the Congress

was more concerned with achieving the remedial objectives of the

statute than with granting repose to defendants.

This view finds support in the legislative history of the 1986

amendment. The Conference Committee noted that public trustees

were hampered by Interior's "failure ... to promulgate

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regulations.... These amendments are intended to revive causes of

action for natural resource damages that may have been foreclosed

by the running of the statute." H.R. CONF. REP. NO. 962, 99th

Cong., 2d Sess. 223 (1986), reprinted in 1986 U.S.C.C.A.N. 3276,

3316. Therefore it seems clear to us that the Congress linked the

statutory period of limitation to the date upon which the

regulations were to be promulgated in order to assure that public

trustees could avail themselves of the rebuttable presumption

provided under 42 U.S.C. § 9607(f)(2)(C). We are less comfortable

in concluding that any ambiguity surrounding the term "promulgated"

was to be resolved by Interior rather than by the courts. The mere

linkage of the statutory period to the date of promulgation says

little about the locus of responsibility for the interpretation of

the statute.

We have dealt at least tangentially with this problem before.

In National Grain & Feed Ass'n, Inc. v. OSHA, 845 F.2d 345 (D.C.

Cir. 1988), we intimated that an agency may construe the provision,

in a statute entrusted to its administration, that establishes the

time for bringing an action in court. There the OSHA had moved to

dismiss a petition for review as untimely pursuant to 29 U.S.C. §

655(f), which provided that an OSHA standard may be challenged "at

any time prior to the sixtieth day after such standard is

promulgated." The disputed issue was the starting date of the 60-

day period, which turned upon the meaning of the statutory term

"promulgated." We said that

OSHA may well have the power to equate the date of

promulgation with the date of issuance, but it has not

done so.... Based on the plain meaning of 29 U.S.C. §

655(f), the ordinary usage of the term promulgate, and

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the lack of any specific regulation defining the date of

promulgation, we conclude that an OSHA standard is

promulgated on the date that it is published in the

Federal Register.

845 F.2d at 346.

Thus, in National Grain we acknowledged that the agency "may

well have the power" by regulation to define, i.e., to command

judicial deference to its definition of, the date upon which a

statutory period would commencenotwithstanding that the period

applies to judicial and not to administrative proceedings. The

Second Circuit reached the same conclusion in United Technologies

Corp. v. OSHA, 836 F.2d 52, 53 (2d Cir. 1987) ("The agency is

certainly entitled to adopt a definition of "promulgated,' and it

may well have the power to equate "promulgated' with "issued,' if

it chooses to do so. However, it has not yet done so").

Because there was no agency interpretation to which deference

could be paid in those cases, however, the quoted statements were

mere dicta. Moreover, both cases were decided before Adams Fruit

Co. v. Barett, 494 U.S. 638 (1990), in which the Court held that a

"precondition to deference under Chevron is a congressional

delegation of administrative authority" over the enforcement scheme

affected by an agency's regulation. Id. at 649. In this case, the

agency has been delegated authority to promulgate regulations that

determine the scope of liability but enforcement occurs in federal

district court, not before the agency.

The dispute over Interior's authority to construe §

113(g)(1)(B) is, in our judgment, a close call. In light of our

conclusion that the Department's interpretation of "promulgate"

cannot survive even with the aid of Chevron deference, however, we

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need not resolve whether Interior is in fact entitled to that

deference. Rather, we shall assume without deciding that the

Congress has authorized the Department to define the term

"promulgate" as it is used in § 113(g)(1)(B) of the CERCLA.

Second. The Industry Petitioners argue under Chevron step one

that the Congress has "directly spoken to the precise question at

issue." 467 U.S. at 842. To "promulgate," they say, means "[t]o

publish; to announce officially; to make public as important or

obligatory." Black's Law Dictionary 1093 (5th ed. 1979).

According to the Industry Petitioners, Interior published the 1986

and 1987 Regulations, announced them officially, and made them

obligatorythereby establishing the date upon which the statutory

limitation period would begin to run. Thus the Industry

Petitioners' argument is that the statute is plain on its face and

affords no support for Interior's putatively "tortured" view that

a regulation is not promulgated until it has been judicially

challenged, revised by the agency as necessary, and become final in

the sense that there is no further possibility of

judicially-mandated revision.

For the moment, we defer comment upon the validity of

Interior's view. Our concern at this stage in our analysis is

whether the statutory text is precise, not whether the agency's

construction of that text is reasonablea question to which we

shall turn shortly. In order to determine whether "promulgated"

has a precise meaning, we look to the manner in which it has been

used and the extent to which those who must apply it have

encountered interpretive difficulties. In Colorado we referred to

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the 1986 Type A Regulations as having been "promulgated ... in

compliance with the statutory requirements" of § 301(c) of the

CERCLA. 880 F.2d at 485. Two years later Interior itself,

referring to both the 1986 Type A Regulations and its 1987 Type B

Regulations, stated that "[t]he Department ... has promulgated

various final rules for the assessment of damages for injuries to

natural resources." 56 Fed. Reg. at 19,754. Clearly, both court

and agency have, at least for certain purposes, regarded the 1986

and 1987 Regulations as having been "promulgated." That is not to

say, however, that the term itself is unambiguous or that we have

defined its contours by our use of it.

Interior points us to cases in which other courts have

grappled with a related issue arising under § 113(g)(1)(B)whether

both Type A and Type B regulations must have been promulgated

before the limitation period begins to run. See, e.g., United

States v. City of Seattle, 33 Env't Rep. Cas. 1549, 1551 (W.D.

Wash. 1991); United States v. Montrose Chem. Corp., 883 F. Supp.

1396, 1402 (C.D. Cal. 1995). These cases involve, albeit in a

broader sense, the same question that we face here: Is "[t]he date

on which regulations are promulgated under section 301(c)"

unambiguous? Is it apparent, for example, that a rule is

promulgated when it is issued or formally announced by an agency?

Or must the rule be filed with the Office of the Federal Register?

Or published in the Federal Register?

In National Grain, 845 F.2d at 346, we entertained these

several possibilities. While we concluded that "an OSHA standard

is promulgated on the date that it is published in the Federal

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Register," accord, United Technologies, 836 F.2d at 54, our opinion

surely suggests that the term "promulgated," as used in 29 U.S.C.

§ 655(f), is far from unambiguous. Here we must deal with similar

ambiguity in the context of an Interior regulation promulgated

under the CERCLA. This ambiguity is sufficient to preclude our

disposition of this case pursuant to Chevron step one.

Third. Turning to step two of Chevron, therefore, the

Industry Petitioners argue that Interior's interpretation of §

113(g)(1)(B) is neither reasonable nor consistent with the purpose

of the statute. See 467 U.S. at 844. Statutes of limitation grant

repose to potential defendants, protecting them from the prejudice

and uncertainty that can occur when a plaintiff files its claims

only after an extended time. According to the Industry

Petitioners, the effect of § 11.91(e), as Interior interprets it,

could be to toll the limitation period indefinitely, thereby

perpetuating stale claims and denying repose to defendants.

Furthermore, the Industry Petitioners contend that Interior's

interpretation is self-servingboth in extending the time during

which Interior itself can pursue damage claims, and in permitting

the agency to be dilatory with impunity.

The Industry Petitioners' concern about an unlimited

limitation period is more than idle speculation. At one point, by

imposing a deadline of 1982 for promulgating regulations, 42 U.S.C.

§ 9651(c)(1), the Congress effectively made 1985 the deadline for

filing pre-1982 claims, and imposed a three-year limitation period

for claims arising after 1982. The regulations were not issued,

however, until four and five years after the deadlineType B

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regulations in 1986 and Type A regulations in 1987. When another

three years had elapsed, both sets of regulations were set aside in

part, in the Ohio and Colorado decisions, respectively. We

directed Interior to revise its regulations "as expeditiously as

possible," Ohio, 880 F.2d at 481; but the Department allowed more

than five additional years to pass before it issued revised Type B

regulations, and it still had not completed its revision of the

Type A regulations.

Interior insists that its interpretation of § 11.91(e) is

permissible under Chevron notwithstanding the demonstrated

potential for indefinite delay inherent therein. The Department

observes that no valid damage formula existed prior to 1994, when

Interior revised its Type B regulations in response to the court's

remand in Ohio. Without a final formulation of the regulations

governing damage assessments, trustees could not avail themselves

of the rebuttable presumption afforded under the CERCLA.

Therefore, according to the Department, § 11.91(e) of the 1994

Regulations furthers a purpose of the CERCLA by preserving for

public trustees the ability to initiate litigation until three

years after final and valid regulations have been promulgated.

Only with final regulations in place, states Interior, can a

trustee who elects to follow the regulations be assured that he can

prosecute a damage action under § 301(c) armed with the rebuttable

presumption that the Congress made available.

Interior's claimthat trustees would be unduly prejudiced

unless the provisions of § 11.91(e) of the 1994 Regulations are

implementedis unconvincing. Before the decision in Ohio, a

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trustee could have complied with the Type B regulations then in

effect. Since that decision, a trustee has had three choices, none

of which would run afoul of the limitation period: continue to

follow the 1986 Regulations, modified as necessary to comply with

our decision in Ohio; file his damage claim in court and seek a

stay pending the issuance of revised rules; or proceed without

complying with the damage assessment rules (thereby foregoing the

rebuttable presumption). Many state trustees apparently elected

the first option. In their motion to intervene in this case, the

States indicated that each of them "has performed or is performing

natural resource damage assessments in accordance with the former

rule, as modified by Ohio, when seeking natural resource damages."

We can not discern any prejudice here that would justify exposing

defendants to the endless prospect of litigation for alleged

infractions many years or even decades past.

The 1986 CERCLA amendment adding § 113(g)(1)(B) was intended

to accommodate Interior's delay in issuing its regulations, which

had been due in 1982 and were then imminent. At the same time, in

order to foreclose further delay, the Congress amended § 301(c) to

require that the President promulgate regulations no later than "6

months after October 17, 1986." Once those regulations were

issued, in 1986 and 1987, the work of both amendments was done.

Therefore, even assuming that Interior is entitled to the

deference we extend to an agency when it construes a statute that

the Congress has entrusted to its administration, we are compelled

to hold that Interior's interpretation of the term "promulgate" in

§ 113(g)(1)(B) lies beyond the bounds of the permissible. While

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there may be uncertainty about the precise date upon which a

regulation is promulgated, it is surely either the date of issuance

or other formal announcement by the agency, the date of filing with

the Office of the Federal Register, or the date of publication in

the Federal Register. Those were the options we considered in

National Grain, 845 F.2d at 346, and in Environmental Defense Fund,

713 F.2d 802, 812 (D.C. Cir. 1983), and the Second Circuit

considered in United Technologies, 836 F.2d at 54. For an agency

to so stretch the word "promulgate" that a regulation might not be

deemed promulgated until several years after the last of these

events is simply not a reasonable attribution of intent to the

Congress.

In summary, we (1) assume without deciding that Interior is

authorized to interpret the term "promulgate" in § 113(g)(1)(B) of

the CERCLA; on that assumption (2) conclude that the text of the

statute is not so clear as to preclude Interior's interpretation

under Chevron step one; and (3) hold that § 11.91(e) of the

Department's 1994 Regulations is not a reasonable interpretation of

the statute, viewed with an eye to its structure and purposes.

Therefore, the date on which regulations were "promulgated" under

§ 301(c) was, at the latest, the date on which the Type B

regulations were published in the Federal Register in 1987.

2. Time bar to substantive challenges

Interior contends that six of the substantive issues raised by

the various petitioners were resolved in the 1986 proceedings and,

because judicial review was not sought at that time, are now

time-barred. The six issues relate to: (1) the identification of

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protocols and best available procedures; (2) the consistency of

restoration measures with response actions; (3) the restoration of

services to non-human resources such as wildlife; (4) the

restrictions on acquisition of federal land; (5) the definition of

reasonable assessment costs; and (6) the limitation of damages

under the Clean Water Act. Because each issue that is potentially

barred requires a separate, fact-dependent inquiry, we shall take

up the time bar question as we examine the six issues individually

below. At this point, however, we review the legal principles

common to all six.

Section 113(a) of the CERCLA requires that judicial review of

regulations promulgated under that Act must be sought if at all

"within 90 days from the date of [their] promulgation." 42 U.S.C.

§ 9613(a). There are several exceptions to the time bar rule of §

113(a), see Eagle-Picher Indus. v. EPA, 759 F.2d 905, 909 (D.C.

Cir. 1985), two of which are relevant here. First, judicial review

of a long-standing regulation is not barred when an agency reopens

an issue covered in, or changes its interpretation of, that

regulation; e.g., if an agency in the course of a rulemaking

proceeding solicits comments on a pre-existing regulation or

otherwise indicates its willingness to reconsider such a regulation

by inviting and responding to comments, then a new review period is

triggered. Ohio v. EPA, 838 F.2d 1325, 1328-29 (D.C. Cir. 1988).

But when the agency merely responds to an unsolicited comment by

reaffirming its prior position, that response does not create a new

opportunity for review. Massachusetts v. ICC, 893 F.2d 1368, 1372

(D.C. Cir. 1990). Nor does an agency reopen an issue by responding

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to a comment that addresses a settled aspect of some matter, even

if the agency had solicited comments on unsettled aspects of the

same matter.

In American Iron & Steel Inst. v. EPA, 886 F.2d 390, 398 (D.C.

Cir. 1989) (AISI), for example, the EPA sought comments on proposed

refinements to its regulation allowing "permits-by-rule." The

petitioner commented, in part, that a permit-by-rule should not be

treated as a permit. The EPA acknowledged receipt of the comment,

reaffirmed its contrary prior position, and briefly restated its

reasoning. We dismissed the petition for review as time-barred,

stating: "The "reopening' rule of Ohio v. EPA is not a license for

bootstrapping procedures by which petitioners can comment upon

matters other than those actually at issue, goad an agency into a

reply, and then sue on the grounds that the agency had re-opened

the issue." Id. at 398.

The Industry Petitioners assert a second exception to the time

bar rule, namely, that limits upon the period for judicial review

apply only to procedural challenges and not to substantive claims

that the agency has exceeded its authority or violated an

applicable statute. Public Citizen v. Nuclear Regulatory Comm'n,

901 F.2d 147, 152-53 (D.C. Cir. 1990). In Public Citizen, we

recited

this circuit's long-standing rule that although a

statutory review period permanently limits the time

within which a petitioner may claim that an agency action

was procedurally defective, a claim that agency action

was violative of statute may be raised outside a

statutory limitations period, by filing a petition for

amendment or rescission of the agency's regulations, and

challenging the denial of that petition.

Id. at 152. We went on to observe that such a circuitous process

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would be a waste of time and resources; accordingly, "where an

agency reiterates a rule or policy in such a way as to render the

rule or policy subject to renewed challenge on any substantive

grounds, a coordinate challenge that such a rule or policy is

contrary to law will not be held untimely because of a limited

statutory review period." Id. at 152-53.

The Industry Petitioners misread Public Citizen to stand for

the proposition that the substantive invalidity of a previously

adopted regulation can always be asserted upon review of a later

rulemaking on the same general subject even though the statutory

time period for review has expired. To the contrary, we expressly

stated in that opinion that the appropriate way in which to

challenge a longstanding regulation on the ground that it is

"violative of statute" is ordinarily "by filing a petition for

amendment or rescission of the agency's regulations, and

challenging the denial of that petition." Id. at 152.

Only if the agency in another rulemaking (or perhaps

elsewhere) reiterates its previously adopted rule "in such a way as

to render [it] subject to renewed challenge on a[ ] substantive

ground[ ]," id., is it unnecessary for the petitioner to return to

"Go." To have the agency say yet again that it adheres to the

regulation it only recently reaffirmed would be pointless; absent

such a reaffirmation, however, the usual reasons for requiring

exhaustion of administrative remedies apply.

This prerequisite brings us back to the "reopening" rule of

Ohio v. EPA and its progeny, which in fact we adopted in Public

Citizen. Consistent with those prior cases, we held:

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If in proposing a rule the agency uses language that can

reasonably be read as an invitation to comment on

portions the agency does not explicitly propose to

change, or if in responding to comments the agency uses

language that shows that it did in fact reconsider an

issue, a renewed challenge to the underlying rule or

policy will be allowed.

Id. at 150. For purposes of the present case, therefore, in

determining whether an issue is time-barred we will apply Ohio v.

EPA as qualified by Massachusetts v. ICC and AISI. There is,

however, one extension of that rule upon which we comment briefly.

It covers a possible circumstance in which an issue might be deemed

to have been constructively reopened even though it was not

actually reopened within the literal meaning of the three cases.

In Ohio we considered the validity of regulations that set the

amount of damages at the lesser of (a) "restoration or replacement

costs" or (b) the "use value" of the damaged resources. 880 F.2d

at 441. Because the "use value" is essentially the market value of

the injured property, id. at 442, and because the market value of

a natural resource is almost always less than the cost of restoring

it, id. at 446 n.13, the Department's approach virtually assured

that a trustee could not recover enough money to restore, replace

or acquire equivalent land, id. at 446. We therefore held that

those regulations were inconsistent with the remedial structure and

the purpose of the CERCLA.

If trustees and defendants had insufficient notice of the

impending change, they might have foregone judicial review of

related regulations that were of little consequence as long as the

"lesser of " rule was in effect. That is, our invalidation of that

rule might have changed the stakes of a court challenge. In this

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situation, we would likely hold that Interior's adherence to its

resolution of certain issues that arose in the course of the 1986

proceeding was, even if not expressly reopened in its 1994

rulemaking, constructively reopened by the change in the regulatory

context. For us to foreclose review of the agency's decision to

adhere to the status quo ante under changed circumstances, on the

ground that the agency had not evidenced a willingness to

reconsider the issue, would be to deny the significance of our own

earlier ruling.

That said, we do not think that there is a constructive

reopening on the facts of this case because, with one exception,

the parties had adequate notice of a forthcoming change that might

alter their incentive to seek judicial review. The complainants in

Ohio challenged the "lesser of " rule shortly after it was

promulgated in 1986; our decision upholding that challenge was not

issued until 1989. Accordingly, potential litigants were on notice

by the petition for review that restoration cost rather than market

value could become the predominant basis for damage assessments.

In light of that possibility, they had an ample incentive at that

time to protest any provision that might inflate restoration costs.

Indeed, in Ohio itself the environmental groups, the states, and

the industry petitioners promptly contested many such aspects of

the 1986 Regulations. We have no difficulty, therefore, in

concluding that actual rather than constructive reopening within

the meaning of Ohio v. EPA is properly applied on these facts.

The single exception, where we do apply constructive

reopening, is in evaluating Interior's contention that the Industry

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Petitioners are time-barred from challenging § 11.15(a) of the 1994

Regulations, which authorizes trustees to recover damages for the

value of lost interim services under the Clean Water Act. There,

as we shall see in Part II.B.12, the new and potentially more

onerous provisions of 43 C.F.R. §§ 11.80-84, incorporated by

reference into § 11.15(a), constructively reopened § 11.15(a) even

though its text was unchanged and Interior evidenced no willingness

to reconsider its content.

3. Protocols and procedures

Industry Petitioners argue that three provisions of the 1994

Regulations do not conform to § 301(c)(2) of CERCLA, the section

requiring the Interior Department to issue regulations specifying

alternative protocols for conducting assessments in

individual cases to determine the type and extent of

short-and long-term injury, destruction, or loss. Such

regulations shall identify the best available procedures

to determine such damages, including both direct and

indirect injury, destruction, or loss and shall take into

consideration factors including, but not limited to,

replacement value, use value, and ability of the

ecosystem or resource to recover.

42 U.S.C. § 9651(c)(2)(B).

Petitioners say the three regulatory provisions, next

described, are not "protocols" within the meaning § 301(c)(2)

because they give too much discretion to the decision-maker.

One of the three contested provisions is § 11.82(d). This

governs the selection of the restoration option and requires

trustees to evaluate each possible option "based on all relevant

considerations," including ten listed factors. 43 C.F.R. §

11.82(d). Petitioners think § 11.82(d) does not conform to §

301(c)(2) of CERCLA because it does not establish any threshold

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standards, it does not establish a hierarchy among the listed

factors, and it allows trustees to consider any factor they deem

"relevant."

The two other challenged provisions are contained in § 11.83,

which requires trustees to select methods for determining the costs

of the selected restoration option, and the value of the services

lost to the public. 43 C.F.R. § 11.83. Section 11.83(b)(2)

describes several cost-estimating methodologies and authorizes

trustees to choose among them. Section 11.83(b)(3) states that

"[o]ther cost estimating methodologies that are based upon standard

and accepted cost estimating practices and are cost-effective are

acceptable methodologies...." Section 11.83(c)(2) describes

several valuation methodologies and authorizes trustees to choose

among them. Section 11.83(c)(3) states that "[o]ther methodologies

that measure compensable value in accordance with the public's

[willingness to pay], in a cost-effective manner, are acceptable

methodologies...." Petitioners view the catch-all provisions in §

11.83(b)(3) and (c)(3) as inconsistent with Interior's statutory

mandate to specify "protocols."

As to the catch-all provisions in § 11.83(b)(3) and §

11.83(c)(3), Interior claims the complaint is time-barred because

a nearly identical provision appeared in the 1986 Regulations as §

11.82(d)(7). 51 Fed. Reg. at 27,750. The 1986 Regulations

established a hierarchy of valuation methodologies. The rules

favored market-based methodologies and allowed trustees to use non

market-based methodologies (including the catch-all provision) only

when market-based methodologies were inappropriate. This court

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invalidated the 1986 provision in Ohio v. Interior. 880 F.2d at

462-64. In response to the Ohio decision, Interior eliminated the

hierarchy. The new rules place no limits on when the catch-all

provisions may be invoked, thus increasing the significance of

those provisions. The question of the validity of the catch-all

provisions was therefore reopened through the current rulemaking

and petitioners' challenges to these provisions are timely.

On the merits, petitioners construe the word "protocols" in §

301(c)(2)(B) to mean a set of rules narrowly circumscribing the

decision-maker's discretion. To support this reading, petitioners

refer to several passages in the report of the Senate Committee on

Environment and Public Works. S. REP. NO. 848, 96th Cong., 2d Sess.

(1980). The Report states that agencies should "standardize a

process" for assessing natural resources damages. Id. at 85. "The

protocols ... should provide uniform instructions that will allow

for thorough site investigation in a cost effective manner." Id.

at 86. Procedures for assessing damages should be "clearly

defined" and "enumerated." Id. Agencies should select "the most

accurate and credible damage assessment methodologies available."

Id. The structure of the statute also highlights the need for

regulations that will produce accurate natural resource damages

assessments. Assessments conducted in accordance with the

regulations are given the benefit of a rebuttable presumption of

validity. 42 U.S.C. § 9607(f)(2)(C). As petitioners see it, this

concern for accuracy underscores the need for protocols narrowly

confining trustee discretion.

These are good arguments, but we are still back where we

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startedwith the task of determining whether the regulations

constitute "protocols." That single word hardly represents a clear

statement of the degree of discretion the Type B protocols meant to

leave to trustees. The many definitions of the word are not much

help. Even the most analogous definitiona "plan" for a medical or

scientific experimentis no more precise on the issue of the

decision-maker's discretion than the word "protocol." The wording

of CERCLA § 301(c)(2) also is not of much assistance; it speaks of

rules that merely "identify the best available procedures" and

"take into consideration factors." Brief passages in the Senate

Report support petitioners' position, indicating that the protocols

should "standardize a process" and "provide uniform instructions,"

but the Report never states exactly what the writer had in mind in

referring to "protocols." A particularly unilluminating passage

proclaims that "the rulemaking should produce a range of products"

and that "protocols [should] be designed to accommodate the

majority of potential release sites." S. REP. NO. 848, supra, at

86.

It seems to us that each of the challenged provisions can be

considered a "protocol" as § 301(c)(2)(B) uses this imprecise term.

As we have said, § 11.82 governs the selection of the restoration

option and requires trustees to develop several options ranging

from no action to intensive action. 43 C.F.R. § 11.82(b)(1), (c).

The trustee must evaluate each option based on ten listed factors

and "all relevant considerations." § 11.82(d). The trustee must

describe all of the options in the Restoration and Compensation

Determination Plan and state his or her reasons for choosing the

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one selected. § 11.81(a)(1). The Restoration and Compensation

Determination Plan is subject to public review and comment. §

11.81(d). Interior recognized that this provision leaves a good

deal of discretion to the decision-maker, but decided that the wide

range of settings in which the rules would be used made it

infeasible to list each pertinent factor or to make any one factor

determinative. The decision embodied in the final rule was to give

trustees some leeway and to curb their discretion by requiring them

to document their choices in a plan subject to public review and

comment. 59 Fed. Reg. at 14,273. To this extent the instructions

are standardized and they are uniform. They are procedurally

confining, although not to the degree petitioners would prefer.

The requirement that trustees evaluate "all relevant

considerations" is also limiting, in the same way the rule

permitting the introduction only of relevant evidence at a trial is

limiting. If "protocol" means a standard method of evaluation,

which is what Interior reasonably seems to believe it means, §

11.82 is within the rulemaking authority CERCLA § 301(c)(2) gave to

the Department.

Much the same may be said of § 11.83 and the methods it

specifies for choosing cost-estimating and valuation methodologies.

Trustees must define the objective to be achieved by the

methodology and determine that the methodology meets four criteria:

(1) that it is feasible and reliable; (2) that it can be performed

at reasonable cost; (3) that it avoids double-counting; and (4)

that it is cost-effective. 43 C.F.R. § 11.83(a)(2)(ii), (a)(3).

Trustees must document this determination in the Report of the

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Assessment. In addition, if a trustee invokes the catch-all

provision, the selected methodology must meet the acceptance

criterion of the catch-all provision. Cost-estimating

methodologies must be "based upon standard and accepted cost

estimating practices and [be] cost-effective." § 11.83(b)(3).

Valuation methodologies must "measure compensable value in

accordance with the public's [willingness to pay], in a

cost-effective manner." § 11.83(c)(3). The trustee must describe

his selection of methodologies and objectives in the Restoration

and Compensation Determination Plan, which is subject to public

review and comment. § 11.81(a)(1), (d).

Thus, while each challenged provision leaves considerable

discretion to the decision-maker, they are part of a set of rules

establishing a step-by-step process for making decisions. The

rules require the decision-maker to develop and consider options,

to evaluate the options based on certain criteria, and to document

the rationale for the choice among them in a plan subject to public

review and comment. We conclude that Interior's decision to leave

some discretion to trustees, while confining their discretion in

other ways, is based on a permissible reading of the word

"protocols."

4. Cost effectiveness

The 1986 Regulations required trustees to choose the most

cost-effective restoration option as the measure of damages. 43

C.F.R. § 11.82(f)(1) (1986); 51 Fed. Reg. at 27,749. The 1994

Regulations eliminated this provision. The new rules require

trustees to evaluate each option on the basis of its

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cost-effectiveness, but also to consider nine other listed factors

and "all relevant considerations."

Industry Petitioners argue that Interior's decision not to

require trustees to select the most cost-effective option violates

CERCLA, ignores this court's decision in Ohio, and is arbitrary and

capricious.

CERCLA contains no provision requiring, or even suggesting,

that trustees select the most cost-effective restoration option.

Both the legislative history, and this court's decision in Ohio

indicate that cost-effectiveness is an important goal. S. REP. NO.

848, supra, at 85 ("actions to restore, rehabilitate, or replace

natural resources under the provisions of this Act [should] be

accomplished in the most cost-effective manner possible"); Ohio,

880 F.2d at 456 ("the Act requires that ... the restoration of

injured resources take place as cost-effectively as possible").

Yet there is no reason to suppose that the only way to accomplish

this objective is to make cost- effectiveness the determinative

criterion for selecting a restoration option. The Senate Report on

which petitioners rely merely indicates that Congress sought to

promote cost-effectiveness by requiring trustees to develop a

step-by-step plan for restoring the injured resources, not by

requiring trustees to choose the least expensive option. See S.

REP. NO. 848, supra, at 85.

At any rate, Interior has not written this criterion out of

the 1994 Regulations. Section 11.82(d)(1) requires trustees to

evaluate each option based on its cost-effectiveness. The trustees

must describe the options in the Restoration and Compensation

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Determination Plan and state the rationale for choosing the one

selected. 43 C.F.R. § 11.81(a)(1). The Plan is subject to public

review and comment. § 11.81(d).

Interior offered a good explanation for not treating

cost-effectiveness as determinative. Cost-effectiveness compares

options producing the same level of benefits. Since the level of

benefits associated with different options is often unquantifiable,

cost-effectiveness is not necessarily a useful method of evaluating

those different options. 58 Fed. Reg. at 39,343. Furthermore,

there will often be tradeoffs between compensable use value and

restoration costs. For example, a fast-paced recovery might cost

more than a slower recovery, but would result in lower interim lost

use values. Since the total damages are the sum of restoration

costs and compensable value, requiring trustees to select the least

expensive restoration option might result in higher total damages.

59 Fed. Reg. at 14,274. We conclude that Interior's decision was

reasonable, consistent with CERCLA, and with this court's decision

in Ohio.

5. Gross disproportionality

The 1986 Regulations allowed trustees to recover "the lesser

of" the cost of restoring the injured resource and the lost use

value of the resource. The Ohio court invalidated the "lesser-of"

rule, stating that "Congress established a distinct preference for

restoration cost as the measure of recovery in natural resource

damage cases." 880 F.2d at 459. The court recognized that CERCLA

might permit Interior to create exceptions to the general rule in

favor of restoration costs. For example, the court explained, when

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restoration is technically impossible, or when the costs of

restoration are "grossly disproportionate" to the use value of the

resource, Interior might establish use value as the measure of

damages. Id. at 443 n.7, 459.

Industry Petitioners argue that Ohio required Interior to

adopt a "gross disproportionality" standard to prevent trustees

from selecting a restoration option if its costs were grossly

disproportionate to the use value of the injured resource. The

argument is based on a misreading of Ohio. The court there held

that restoration costs were the preferred measure of damages. But

the court also held that Interior had authority to apply a

different measure of damages in certain cases. Rather than

requiring Interior to do so, however, the court stated that under

CERCLA Interior had "some degree of latitude in deciding what

measure shall apply." 880 F.2d at 443 n.7.

Interior's decision not to adopt a gross disproportionality

rule is a permissible response to the Ohio decision. The 1994

Regulations require trustees to develop a range of restoration

options, from no action to intensive action. 43 C.F.R. §

11.82(b)(1), (c). The trustees must evaluate each option based on

factors such as cost-effectiveness and the relationship between

expected costs and expected benefits. § 11.82(d)(2), (d)(3). These

evaluations and the trustee's rationale for choosing the selected

option must be documented in the Restoration and Compensation

Determination Plan, which is subject to public review and comment.

Interior reasonedand we see no reason to disagreethat these

procedural safeguards would take the place of the gross

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disproportionality test and ensure that trustees do not select

options that are excessively costly. 56 Fed. Reg. at 19,765; 58

Fed. Reg. at 39,333-34, 39,343; 59 Fed. Reg. at 14,264, 14,271.

6. Consistency with response

In those instances in which a damaged resource requires both

cleanup and restoration, § 11.82(d)(4) of the 1994 Regulations

directs trustees to select a restoration alternative only after

considering the cleanup ("response") remedy chosen by the EPA or

other authorized agency for the same resource. The Industry

Petitioners object because the rule does not mandate "consistency"

between the restoration alternative and the response action.

Interior points out, however, that the statute requires only

"coordination," 42 U.S.C. § 9604(b)(2), not consistency, and

asserts that the 1994 Regulations satisfy that standard.

We first examine, as a threshold matter, Interior's contention

that this dispute is time-barred because it was resolved during the

1986 rulemaking and not thereafter reopened by the Department. As

adopted in 1986, the regulation required trustees to take into

account mitigation of injury as a result of EPA-directed response

actions. 43 C.F.R. §§ 11.15(a)(1)(ii), 11.84(c)(2). The only

change made in 1994 was to add § 11.82(d)(4), which elaborated upon

the "coordination" requirement in the statute by directing trustees

to consider actual or planned response actions. There was no

consistency mandate in either the new rule or the old.

Some of those commenting upon the proposed 1994 Regulations

attempted to re-argue the consistency issue, but Interior answered

the comments simply by reiterating its position and stating that

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"[f]urther clarification of the issue is beyond the scope of this

rulemaking." 58 Fed. Reg. at 39,357. Interior maintains that this

response did not indicate a willingness to reconsider the issue.

See AISI, 886 F.2d at 398 (rule not reopened where agency responds

to comment about matter not actually at issue). The Industry

Petitioners remind us, however, that Interior did not simply

re-adopt the 1986 regulation; it created a new provision which,

they argue, implicitly reopened the subject.

We agree. By adding new terms to the old rule, Interior once

again raised the issue of the relationship between restoration and

response actions. Consistency between the two remedies is arguably

one aspect of that relationship; it cannot be presumed settled

while other intertwined aspects of the same relationship remain in

dispute. Although Interior omitted a consistency requirement from

both the 1986 and the 1994 Regulations, the revised explanation of

the coordination provision in the new Notice of Proposed Rulemaking

in effect reopened the debate about consistency.

Turning to the merits, we see that the CERCLA authorizes

response actions by the EPA, the States, and private parties to

remove hazardous substances and to remedy their release. 42 U.S.C.

§ 9604-07. According to the Industry Petitioners, the cleanup

remedy that is selected for a site can have a significant impact

upon the need for other measures to redress injuries to natural

resources at the same site. For example, the removal of all

contaminants may reduce the extent of any restoration needed

thereafter. Because the two types of remedies may overlap or at

least interact, the Industry Petitioners contend that not only

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coordination but also consistency is imperative. In support, they

cite three different provisions of the CERCLA, providing first that

the EPA must "promptly notify ... trustees of potential damages ...

and ... coordinate the assessments, investigations and planning,"

42 U.S.C. § 9604(b)(2); second, that trustees may not sue for

damages before the EPA has selected a cleanup remedy, id. §

9613(g)(1); and third, that double recovery is prohibited, id. §

9607(f)(1).

The Industry Petitioners concede that the 1994 Regulations

promote coordination and require that information be shared. See

43 C.F.R. §§ 11.23(f), 11.82(d)(4). Because the rule does not

mandate consistency between the two regimes, however, the Industry

Petitioners are concerned that trustees may ignore EPA response

actions and adopt restoration procedures that are unduly costly.

Interior's response is twofold: first, none of the statutory

provisions cited by the Industry Petitioners demands consistency;

second, the EPA and the trustees are charged with a different

responsibilityto curb the release of hazardous substances and to

restore natural resources, respectively.

While these two functions will assuredly benefit from

coordination, there appears to be nothing in their nature that

logically compels consistency. As Interior suggests, it seems

eminently reasonable that trustees be granted the flexibility and

discretion to accommodate their solutions to the unique

circumstances of each case. Indeed, a certain degree of

inconsistency might be necessary, particularly where short-term and

long-term considerations dictate seemingly conflicting responses

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(e.g., grass to prevent erosion, followed by reforestation, which

kills the grass).

Therefore we conclude that the 1994 Regulations sensibly

promote coordination, rather than requiring consistency, between

restoration remedies and response actions. 43 C.F.R. §

11.31(b)(3). Section 11.82(d) also requires that trustees consider

response actions as one of ten factors in their decision making.

This is not an unreasonable way in which to implement a statute

requiring only "coordination" of responses. Therefore we defer

under Chevron to the agency's interpretation.

7. Services

In the 1986 Regulations, Interior developed a concept called

"services" for measuring the level of restoration of an injured

resource. The resulting rules quantified the damages to the

injured resource in terms of "the extent to which natural resource

services have been reduced as a result of the injuries." 43 C.F.R.

§ 11.71(a)(1). Under the services approach, the restoration level

of an injured resource is measured by looking at the level of

services the resource provided rather than the physical and

biological characteristics of the resource. 51 Fed. Reg. at

27,686. See 43 C.F.R. § 11.81(c)(1) (1986) ("Restoration or

replacement measures are limited to those actions that restore or

replace the resource services to no more than their baseline.").

The 1994 Regulations measure damages differently, in terms of

"the cost of restoration, rehabilitation, replacement, and/or

acquisition of the equivalent of the injured natural resources and

the services those resources provide." 43 C.F.R. § 11.80(b)

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(emphasis added); see also §§ 11.81(a)(1), (a)(2), 11.82(a),

(b)(1)(iii), (c)(1), 11.83(a)(1). Industry Petitioners argue that

by creating a dichotomy between restoration of the resource itself

and restoration of the services, the rule abandons the services

approach. According to petitioners, the new rule requires trustees

both to restore the services and to do something else. Since

restoring the services by definition fully restores the resource,

the only other thing to do is to replicate the physical and

biological characteristics of the injured resource.

In the preamble to the 1994 Regulations, Interior defended the

services approach, arguing that it makes "the public whole." 59

Fed. Reg. at 14,273. Interior also disavowed any requirement of

replication in every case, stating that Congress did not intend

that trustees "would, could, or should always replicate the exact

same injured resources." Id. at 14,272. The trouble is that the

regulatory language, which seems to require trustees to restore

both the services and the resource itself, is not consistent with

the preamble's explanation. If Interior meant to adopt the

services approach in the regulations, one would have expected it to

define the measure of damages as "the cost of restoration ... of

the services provided by the injured resource." The language

actually used suggests that Interior contemplates some other

approach. But it has never explained what that approach might be

or what it is requiring trustees to do.

In invalidating the regulations, we do not mean to suggest

that CERCLA requires or forbids any particular measure of damages.

The problem here is not with the standard adopted, but with the

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inconsistency between the language of the regulations and the

preamble's explanation of what Interior did. An agency's failure

adequately to explain its action renders the action arbitrary and

capricious under § 706(2)(A) of the Administrative Procedure Act.

Public Citizen, Inc. v. FAA, 988 F.2d 186, 197 (D.C. Cir. 1993).

So here. Because the 1986 Regulations were repealed only to the

extent that they were successfully replaced with inconsistent 1994

Regulations, our invalidation of the "resources and services"

provisions of the 1994 Regulations has the effect of reinstating

the "services" approach under the 1986 Regulations.

Industry Petitioners also challenge the definition of

services. Interior defines services to include services provided

not just to humans but to other resources as well. Petitioners

argue that this broad definition of services is inconsistent with

CERCLA. We do not reach the issue, however, because petitioners'

challenge is time-barred.

The 1986 Regulations defined "services" as "the physical and

biological functions performed by the resource including the human

uses of those functions," § 11.14(nn), and stated that services

"include provision of habitat, food and other needs of biological

resources ...." § 11.71(e). The preamble to the 1986 Regulations

explained that "a service refers to any function that one resource

performs for another or for humans." 51 Fed. Reg. at 27,686.

Interior also stated that the definition of services "[did] not

preclude the consideration of non-human services where the

authorized official deems consideration appropriate." Id. at

27,697. See also id. at 27,687.

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Interior did not propose or make any changes to § 11.14(nn) or

§ 11.71(e) in 1994 nor did it solicit comments on the definition of

services. Some commenters criticized the services approach,

arguing that it would not fully compensate the public because it

focused on loss of services to humans. Although Interior

responded, it did so merely by reiterating its position that the

existing definition of services includes resource-to-resource

services. See 58 Fed. Reg. at 39,339 (services "as defined in §

11.14(nn) of the existing rule, include functions performed by one

resource for another or for humans"); id. at 39,340; and 59 Fed.

Reg. at 14,273 ("Section 11.71(e) which was not affected by this

rulemaking, allows trustee officials to consider inter-resource

services when quantifying an injury.").

Because Interior did not reconsider the meaning of "services"

in §§ 11.14(nn) and 11.71(e) of the 1994 Regulations, petitioners

cannot now challenge Interior's definition of that term.

8. Acquisition of federal lands

The 1994 Regulations foreclose the acquisition of federal land

as a means of relief if any alternative restoration measure is

available. See 43 C.F.R. § 11.82(e). The Industry Petitioners

argue that this provision bars trustees from using a remedy that is

specifically authorized by the CERCLA, see 42 U.S.C. § 9607(f)(1),

and violates the cost-effectiveness mandate established in Ohio,

see 880 F.2d at 456 & n.39, by prohibiting what could in some

circumstances be a more economical solution. Here too, as a

threshold matter, Interior maintains that the issue is time-barred

because essentially the same provision appeared in the 1986

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Regulations, 51 Fed. Reg. at 27,748-49, and was neither challenged

then nor reopened subsequently by Interior.

The 1986 Regulations permitted "the acquisition of land for

Federal management ... only if this acquisition would represent the

sole viable method of obtaining the lost services." 51 Fed. Reg.

at 27,748. No petitioner sought review of that restriction. In

its 1991 notice of proposed rulemaking, Interior merely re-worded

the provision to permit "[a]cquisition of equivalent land for

Federal management where restoration, rehabilitation, and/or other

replacement of land is not possible." 56 Fed. Reg. at 19,771. The

Department explained that "Federal trustees should generally

consider first restoration, rehabilitation, or replacement actions,

looking to the acquisition of land ... when restoration,

rehabilitation, or replacement are not feasible." Id. at 19,762.

We think it fair to conclude that there is no meaningful difference

between the 1986 and the 1994 provisions.

Commenters raised the question whether the restriction upon

the acquisition of federal land applies only to federal trustees;

Interior responded that it does. 58 Fed. Reg. at 39,345. There

were also comments on the substantive merits of the restriction.

Instead of responding directly to those comments, however, Interior

reiterated its view that trustees lack congressional authorization

for such acquisitions. Id. Ultimately, the Department adopted the

text of the proposed rule, concluding that "[f]urther revision is

beyond the scope of the rulemaking." 59 Fed. Reg. at 14,275.

Because Interior re-proposed virtually the same regulation

that was already in effect, and declined to reconsider any aspect

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of that regulation pertaining to the merits of the restriction upon

federal land acquisition, we conclude that it did not reopen the

issue. Therefore, the current petition for review is in this

respect time-barred. See Massachusetts v. ICC, 893 F.2d at 1371-72

(issue not reopened when agency responds to unsolicited comments

and reaffirms prior position).

9. Cultural and archaeological resources

One purpose of the damage assessment process is to fashion a

remedy for natural resource injuries that are not compensable

through private litigation. See 132 Cong. Rec. S14930-31 (daily

ed. Oct. 3, 1986) (remarks of Sens. Baucus and Stafford); 132

Cong. Rec. H9613 (daily ed. Oct. 8, 1986) (remarks of Rep. Jones).

Because § 107(f)(1) of the CERCLA precludes double recovery,

however, and because state tort law already provides a private

remedy for injury to archaeological and cultural resources, see,

e.g., Exxon Valdez Litigation, No. 3AN-89-2533CI (Alaska Sept. 24,

1994), the Industry Petitioners contend that those types of

resources are not within the purview of the Act, 59 Fed. Reg. at

14,269. Indeed, the CERCLA specifically authorizes recovery for

injuries to "natural resources," see 42 U.S.C. § 9607(a)(4)(C),

which are defined as "land, fish, wildlife, biota, air, water,

ground water, drinking water supplies, and other such resources,"

42 U.S.C. § 9601(16). The Industry Petitioners observe that

non-natural resources, such as archaeological and cultural

resources, are conspicuous by their absence.

Therefore, assert the Industry Petitioners, Interior exceeded

its authority when in the preamble to its final 1994 Regulations,

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59 Fed. Reg. at 14,262, the agency purported to authorize recovery

for injury to archaeological and cultural resourcesor more

generally for loss of the "services provided by a natural

resource," id. at 14,269. By way of illustration, Interior

indicated that if land contained artifacts, then "that land might

provide the service of supporting archaeological research"; and

"[i]f an injury to the land causes a reduction in the level of

service (archaeological research) that could be performed, trustee

officials could recover damages for the lost services." Id. This

reasoning, claims the Industry Petitioners, knows no bounds; since

virtually all human activities are supported in some form by land

and other natural resources, the rule would expose defendants to

liability for harms that lie well beyond the stated reach of the

CERCLA. Applying Interior's rationale, trustees could recover for

consequential losses associated with the temporary incapacity of

farms, factories, residences, office buildings, highways, and on

and onnone of which is within the CERCLA's coverage of natural

resources.

Interior offers three arguments in response. First, the

Department argues that a preamble is nonbinding, explanatory

material with no independent legal effect. Therefore, like the

policy statements and guidance documents at issue in American Hosp.

Ass'n v. Bowen, 834 F.2d 1037, 1056 (D.C. Cir. 1987), a preamble is

not reviewable unless and until it is actually applied in a

concrete case. Second, even if a preamble may have the force of

law, Interior argues that the petitioners' challenge to the

preamble in this case is not now ripe for review. According to

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Interior, the concerns of the Industry Petitioners are hypothetical

and abstract, and they have shown neither "the fitness of the

issues for judicial decision" nor that there will be "hardship to

the parties" if review is withheld. Abbott Labs v. Gardner, 387

U.S. 136, 148 (1967). Third, on the merits, Interior contends that

recovery for loss of archaeological and cultural resources is

authorized by the CERCLA.

On the ripeness issue, the Industry Petitioners reply that

because they are current or potential defendants in damage recovery

litigation, there is nothing speculative about their exposure; and

that this issue of statutory interpretation is purely a matter of

law and needs no further factual development. The Industry

Petitioners also argue that Interior's characterization of the

preamble as nonbinding and explanatory is contradicted by the

Department's express declaration in the preamble itself that "the

rule does allow trustee officials to include the loss of

archaeological and other cultural services provided by a natural

resource in a natural resource damage assessment." 59 Fed. Reg. at

14,269.

Considering the various arguments, we conclude below that a

preamble may under some circumstances be reviewable; because the

issue presented in the 1994 preamble is conjectural, however, and

because a more complete understanding of its ramifications must

await a concrete application, its consistency with the CERCLA is

not ripe for review in this case. We do not decide, therefore, the

substantive question whether recovery for injury to non-natural

resources is permitted within the meaning of the Act.

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At the outset, we cannot agree with Interior that there is a

categorical bar to judicial review of a preamble. See Center for

Auto Safety v. Federal Highway Admin., 956 F.2d 309, 313 (D.C. Cir.

1992) (preamble to FHA regulations stated that four years between

bridge inspections "is suggested" but longer intervals might be

approved under "very unique [sic] and special circumstances";

court held that text not reviewable because too general). The

question of reviewability hinges upon whether the preamble has

independent legal effect, which in turn is a function of the

agency's intention to bind either itself or regulated parties.

Absent an express statement to that effect, we may yet infer that

the agency intended the preamble to be binding if what it requires

is sufficiently clear.

In this instance, the recoverability of damages for harm to

non-natural resources was raised by commenters on the proposed

rule. Interior responded to the comments in the preamble to the

final rule, but did not then represent that the preamble was

intended as a binding regulation and now denies that the preamble

is anything more than an explanatory preface with no independent

legal effect. The preamble is neither so general as to imply a

mere guideline or policy statement, nor so precise as to remove any

doubt about its being intended to have legal force.

Even if we were to determine that the preamble to the 1994

Regulations is reviewable, however, we would not think it fit for

review at this time. Interior has indicated only that a trustee

could recover damages for an injury to land that reduces

archaeological research. This is no more definitive than the

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preamble in Center for Auto Safety; it does not represent an

interpretation of an identified statutory provision, nor a

clarification of an otherwise binding regulation. The guidance

offered is hypothetical and non-specific; it is not crafted as a

concrete rule that can be applied under identified circumstances.

Instead, Interior has merely advised that recovery could be

available for injury to non-natural resources, and illustrated one

type of injury that would qualify. For all we can tell, under the

preamble some consequential damages arising from an injury to land

may be per se non-recoverable; others may generally be

recoverable, but too remote to warrant recovery on the facts of a

specific case; still others may be reconcilable with the statute

and its regulations.

In short, the Industry Petitioners have not demonstrated that

the 1994 preamble has a direct and immediate rather than a distant

and speculative impact upon them. Abbott Labs, 387 U.S. at 152-53.

We must await a concrete case where we can probe the limits of the

rule in the context of a live controversy involving actual events.

Unless and until Interior or another trustee invokes the preamble

in an attempt to affect the outcome of a real dispute, there is

little need for and no factual basis to inform our inquiry into its

validity. Moreover, by awaiting a concrete case, we will then be

able to ascertain with assurance that Interior intended to bind a

party and that the party was thereby aggrieved. Thus will the

issues of reviewability and ripeness converge. For now, we hold

only that the question whether a trustee may recover under the

CERCLA for injury to archaeological and cultural resources is not

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ripe.

10. Indirect costs

CERCLA authorizes the recovery of "damages for injury to,

destruction of, or loss of natural resources ... resulting from" a

release. 42 U.S.C. § 9607(a)(4)(C). The regulations define the

measure of damages as the costs of restoring the injured resource

and the value of services lost to the public until the resource is

fully restored. 43 C.F.R. § 11.80(b). Costs are "the amount of

money determined by the authorized official as necessary to

complete all actions identified in the selected alternative." §

11.83(b)(1). These costs include direct and indirect costs. Id.

Indirect costs are "costs of activities or items that support

the selected alternative, but that cannot practically be directly

accounted for as costs of the selected alternative." 43 C.F.R. §

11.83(b)(1)(ii). This includes costs that "are not readily

assignable to the selected alternative without a level of effort

disproportionate to the results achieved." Id. The regulations

state that the simplest example of indirect costs is traditional

overhead. Id.

Industry Petitioners argue that indirect costs are not

recoverable under CERCLA because they do not "result from" the

release. They concede that CERCLA might allow recovery of indirect

costs such as overhead in some cases, but argue that the statute

forbids recovery of costs that are not directly attributable to

restoration actions at a given site. They also argue that the

regulations fail to develop adequate protocols to guide the

trustees' discretion in calculating indirect costs.

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CERCLA left it to Interior to define the measure of damages in

natural resources damage assessment cases. See Ohio, 880 F.2d at

443; 42 U.S.C. § 9651(c)(2). While the statutory language

requires some causal connection between the element of damages and

the injurythe damages must be "for" an injury "resulting from a

release of oil or a hazardous substance"Congress has not specified

precisely what that causal relationship should be. We believe that

the regulations represent a reasonable interpretation. All costs

must be "necessary" to the selected restoration option. And

indirect costs must "support" the selected option. The regulations

thus require at least "but for" causation for indirect costs.

Allocating indirect costs that cannot be directly accounted

for as costs of a specific project is a well-established accounting

practice. Courts have allowed the recovery of indirect costs in

response actions under CERCLA and, in doing so, have used language

almost identical to Interior's regulatory definition of indirect

costs. In United States v. Ottati & Goss, Inc., 900 F.2d 429, 444

(1st Cir. 1990), the court held that CERCLA authorized recovery of

those costs "not readily allocable to one specific, rather than

some other specific, cleanup site." In United States v. R.W.

Meyer, Inc., 889 F.2d 1497, 1502 (6th Cir. 1989), the court

authorized recovery of indirect costs "necessary to operate the

Superfund program and to support cleanup efforts at specific sites,

but that [could not] be linked directly to the efforts at any one

particular site." If potentially responsible parties believe

certain costs are outside the regulatory definition, they may

litigate the issue when a trustee brings a recovery action.

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The regulations provide procedural safeguards to ensure that

indirect costs are determined accurately. When choosing a

methodology for estimating indirect costs, the authorized official

must describe his selection and the objectives to be achieved in

the Restoration and Compensation Determination Plan, which is

subject to public review and comment. 43 C.F.R. §

11.83(a)(2)(iii). In addition, the official must determine that

the chosen methodology: (1) is feasible and reliable; (2) can be

performed at a reasonable cost; (3) avoids double counting; and

(4) is cost-effective. § 11.83(a)(3). This determination is

documented in the Report of the Assessment.

The regulations also give authority to trustees to calculate

indirect costs using an indirect cost rate in cases "where the

benefits derived from the estimation of indirect costs do not

outweigh the costs of the indirect cost estimation." When a

trustee uses an indirect cost rate, he must document the

"assumptions from which that rate has been derived." 43 C.F.R. §

11.83(b)(1)(iii). Petitioners argue that the provision does not

give trustees enough guidance on how to develop and apply the cost

rate. We do not believe that any additional guidance is necessary.

An indirect cost rate is a fairly straightforward concept. The

regulation identifies the criterion for permitting an indirect cost

rate, limiting it to those situations in which the costs of

estimating indirect costs outweigh the benefits. The regulation

also requires trustees to document the assumptions forming the

basis for the cost rate. These two requirements provide adequate

guidance to trustees and to courts. See also R.W. Meyer, 889 F.2d

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at 1503-04 (allowing recovery of costs calculated by using an

indirect cost rate).

Therefore, we conclude that the indirect cost provisions are

based on a permissible reading of CERCLA, and that they provide

adequate guidance to trustees, potentially responsible parties, and

courts.

11. Reasonableness of assessment costs

Preliminary estimate of damages. CERCLA authorizes the

recovery of "the reasonable costs of assessing" natural resource

damages. 42 U.S.C. § 9607(a)(4)(C). According to the regulations,

assessments costs are reasonable when, among other things, "the

anticipated cost of the assessment is expected to be less than the

anticipated damage amount." 43 C.F.R. § 11.14(ee). One of the

first steps of the assessment is the preliminary estimate of

damages. The preliminary estimate is a rough estimate, based on

existing data, of the ultimate amount of damages. The purpose of

the preliminary estimate is to determine the proper scope of the

assessment. The smaller the estimated damages, the more modest the

assessment. The preliminary estimate is also used to ensure that

"the requirements of reasonable cost" are met, § 11.35(b), that is,

to ensure that the cost of the assessment is lower than the

anticipated damage amount. Trustees are not required to disclose

the preliminary estimate until after the assessment is complete.

§ 11.35(d)(3).

Industry Petitioners argue that Interior has not adequately

explained its decision to use the preliminary estimate to determine

the reasonableness of assessment costs, and that Interior's

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decision is arbitrary and capricious because the preliminary

estimate is too tentative and cannot be relied on to ensure that

assessment costs are reasonable. Interior has described the

preliminary estimate as a "back-of-the-envelope" estimate that

"will be very rough." 58 Fed. Reg. at 39,337. The regulations

require trustees to base the preliminary estimate on existing data

and state that trustees "should not undertake significant new data

collection or perform significant modeling efforts at this stage."

43 C.F.R. § 11.35(d).

We see no basis for questioning Interior's decision. The

definition of reasonable assessment costs is based on "anticipated

costs" and "anticipated damages." Therefore any determination of

the reasonableness of assessment costs will necessarily be based on

less than complete information. Interior concluded that trustees

needed to make some initial estimate of damages to determine the

proper scope of the assessment and to ensure that assessment costs

are reasonable. Interior recognized that the estimate would be

rough. But the regulations create certain safeguards to mitigate

any dangers this might cause. The regulations state a preference

for completing the preliminary estimate before completing the

Assessment Plan phase, but allow this to be delayed "[i]f there is

not sufficient data to make the preliminary estimate" at that time.

43 C.F.R. § 11.35(d)(2). The regulations also require trustees to

review and revise the preliminary estimate "as appropriate" at the

end of the Injury Determination and Quantification phases. §

11.35(e). Trustees must also review the Assessment Plan at the end

of the Injury Determination phase to ensure that the methodologies

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selected for the subsequent phasesthe Quantification and Damage

Determination phases"remain consistent with the requirements of

reasonable cost," that is, to ensure that the chosen methodologies

are not too costly in light of the anticipated damages. And the

regulations require trustees to include the preliminary estimate,

along with its assumptions and methodology, in the Report of the

Assessment made after the assessment is complete. Interior has

balanced the need for an early, rough estimate of damages against

the danger of that estimate being too rough. We must defer to the

agency's decision about how to strike that balance unless it is

unreasonable, which it is not. See Small Refiner Lead Phase-Down

Task Force v. EPA, 705 F.2d 506, 535 (D.C. Cir. 1983).

Interior decided that the preliminary estimate need not be

disclosed in the Assessment Plan. The Plan is made available for

public review and comment before the assessment begins. 43 C.F.R.

§ 11.32(c)(1). Several commenters argued that trustees should not

be required to disclose the preliminary estimate evereither in the

Assessment Plan or in the Report of the Assessment, which is

released after the assessment is complete. § 11.90. These

commenters argued that disclosing the preliminary estimate would

make it harder for trustees to settle the case or prepare for

litigation. 58 Fed. Reg. at 39,336-37.

Interior agreed that trustees need not disclose the

preliminary estimate in the Assessment Plan. 58 Fed. Reg. at

39,337. Interior thought that, even without knowing the

preliminary estimate, the public still would have a "meaningful

opportunity to comment on the reasonableness of assessment costs."

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Id. The public could comment on other aspects of reasonableness,

such as whether each element of the assessment directly contributes

to the calculation of the damages amount. Id. Interior decided,

however, that the preliminary estimate should be included in the

Report of the Assessment in order to allow the public, potentially

responsible parties, and the courts a basis for evaluating the

reasonableness of the assessment costs. Id. The record shows that

Interior balanced the benefits of not requiring trustees to

disclose the preliminary estimate against the benefits of

disclosure. Interior's decision was reasonable and we decline to

overturn it.

Disaggregation of assessment costs. Some commenters asked

Interior to amend the definition of reasonable assessment costs to

require that the reasonableness of assessment costs be evaluated on

a component-by-component basis. Under this approach, the cost of

each component of the assessment would have to be less than the

expected damages amount to be determined by that component.

Interior responded, correctly in our view, that revision of the

definition of reasonable costs was beyond the scope of the

rulemaking. 59 Fed. Reg. at 14,270. The Ohio court upheld

Interior's current definition of reasonable costs. 880 F.2d at

468. Interior did not propose any changes to the current

definition or solicit any comments on the subject. In response to

unsolicited comments, Interior consistently stated that the subject

was beyond the scope of the rulemaking. 58 Fed. Reg. at 39,338;

59 Fed. Reg. at 14,270. Therefore, Industry Petitioners' challenge

to the current definition is time-barred.

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12. Interim services

Under the Clean Water Act, responsible parties are liable for

the "actual costs of removal" of oil or hazardous substances

discharged into navigable waters. 33 U.S.C. § 1321(f). "Costs of

removal" are defined in § 311(f)(4) to "include any costs or

expenses incurred by the Federal Government or any State government

in the restoration or replacement of natural resources damaged or

destroyed." Id. § 1321(f)(4). The CWA does not identify as a

recoverable item the value of services lost to the public during

the time in which resources are being restored or replaced. For

that reason, the Industry Petitioners contend that § 11.15(a) of

the 1994 Regulations, which purports to authorize trustees to

recover damages for the value of lost interim services, is beyond

Interior's authority under the CWA. See 43 C.F.R. § 11.15(a),

incorporating by reference 43 C.F.R. §§ 11.80-84.

The Department argues that the present challenge is

time-barred. Section 11.15(a) was originally adopted in 1986; it

applies in "an action filed pursuant to section 107(f) or 126(d) of

CERCLA, or sections 311(f)(4) and (5) of the CWA," and it provides

that trustees may recover damages in accordance with §§ 11.80-84 of

the regulations. Section 11.15(a) was not challenged in Ohio, and

Interior did not propose to change the section during the current

rulemaking. When the 1994 Regulations were proposed, some

commenters observed that the CWA did not authorize recovery of

"compensable value," i.e., the value of interim lost services, even

if the CERCLA did authorize such recovery. Interior responded:

"Although the specific issue ... was not remanded ... and is not

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within the scope of this rulemaking, the Department believes that

compensable values are recoverable under CWA." 59 Fed. Reg. at

14,271.

The Industry Petitioners respond to the time bar argument by

pointing out that the 1994 Regulations amended §§ 11.80, 11.82, and

11.83, each of which is incorporated by reference into § 11.15(a).

Because these provisions control damage recovery under the CWA,

because Interior modified them as a result of our remand in Ohio,

and because the modifications expanded the remedies for lost use

values, the Industry Petitioners assert that Interior's extensive

changes to the underlying sections had the effect of reopening §

11.15(a). We agree. Although the dispute surrounding § 11.15(a)

is centered upon the question whether damages under the CERCLA and

the CWA are coextensivea matter independent of the validity of §§

11.80-84the revision of those underlying regulations significantly

alters the stakes of judicial review.

Simply put, §§ 11.80-84 may not have been worth challenging in

1986, but the 1994 Regulations gave them a new significance. The

incorporation by reference into § 11.15(a) of the new and

potentially more onerous provisions of §§ 11.80-84 constructively

reopens § 11.15(a) within the broader meaning of Ohio v. EPA, 838

F.2d at 1328-29, as discussed in Part II.B.2 above. We hold,

therefore, that judicial review of § 11.15(a) is not time-barred.

On the merits, the Industry Petitioners argue that the broad

scope of damage recovery provided in the CERCLA"for injury to,

destruction of, or loss of natural resources," 42 U.S.C. §

9607(a)(4)(C)stands in sharp contrast to the narrower scope of

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recovery specified in the CWAto "include costs or expenses

incurred by the Federal Government ... in the restoration or

replacement of natural resources," 33 U.S.C. § 1321(f)(4).

According to the Industry Petitioners, Interior's assertion that

"compensable values would be recoverable under CWA as "costs

incurred ... in the restoration or replacement of natural

resources,' " 58 Fed. Reg. at 39,335, is a loser on no fewer than

four scores: (1) lost services are not "costs or expenses

incurred"; (2) if incurred by anyone, they are not incurred "by

the Federal Government"; (3) they have nothing to do with

"restoration or replacement"; and (4) Interior separately defined

restoration costs (§ 11.83(b)) and compensable value (§ 11.83(c)).

The latter term refers to "the amount of money required to

compensate the public for the loss in services provided by the

injured resources" until they are restored to their baseline

condition. Id. Because Interior differentiates between the two

grounds for recovery, the Industry Petitioners suggest, restoration

costs must not encompass compensable value.

Interior correctly responds that the terms are not mutually

exclusive. The cost of restoration under § 11.83(b) is "the amount

of money ... necessary to complete all actions identified in the

selected alternative for restoration." Nothing in this definition

suggests that it could not include compensable value. That

restoration cost and compensable value are separately defined in

the regulation does not mean that one is not a component of the

other.

Interior also points to several provisions of the CERCLA from

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which the agency would have the court infer that the remedies of

that Act are coextensive with those of the CWA. Section 301(c)

authorizes the President to "promulgate regulations for the

assessment of damages for injury to, destruction of, or loss of

natural resources ... for the purposes of [the CERCLA] and section

1321(f)(4) and (5) of Title 33 [the CWA]." 42 U.S.C. § 9651(c).

A virtually identical provision appears in § 107(f)(2) of the

CERCLA, 42 U.S.C. § 9607(f)(2). More important, a damage

assessment "shall take into consideration factors including, but

not limited to, replacement value, use value, and ability of the

ecosystem or resource to recover," id. § 9651(c); and if "any

provision of section 1321 of Title 33 [the CWA] is determined to be

in conflict with any provisions of [the CERCLA], the provisions of

[the CERCLA] shall apply," id. § 9654(c).

Interior's argument in a nutshell is that the CERCLA either

implicitly amended the scope of allowable recovery under the CWA so

that the two are coextensive or, if a conflict remains, then the

CERCLA takes precedence. The Industry Petitioners reply, first,

that while the CERCLA authorizes the promulgation of damage

assessment regulations for CWA claims, it does not define the

measure of damages under the CWA; any regulation promulgated to

implement the CWA must take into account the more limited scope of

recovery provided in that statute. Second, the Industry

Petitioners insist that there is no "conflict" between the two

statutes, merely a difference in their respective scopes of

recovery; therefore the preemption provision of § 9654(c) of the

CERCLA is not relevant to the present issue.

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The Industry Petitioners are of course correct that § 301(c)

authorizing Interior to implement damage assessment regulations

does not, by itself, alter the statutory provisions of the CWA.

Nor can the resultant regulations, if in contravention of the CWA,

be justified on the ground that they comply with the CERCLA. The

Industry Petitioners are also correct that there is no conflict

between the two statutes that would trigger the preemption

provision of § 9654(c). They are compatible, however, not because

the remedies under the CERCLA and the CWA are simply different

rather than contradictory, as the Industry Petitioners argue.

Rather, there simply is no irreconcilable difference between them.

Because § 311(f)(4) of the CWA provides that damages are to

"include" restoration cost, it necessarily implies that CWA damages

may include other items as well; therefore the definition of

restoration cost under the CWA, no matter how restrictive, does not

logically foreclose the recovery of compensable value. That is,

the answer to the Industry Petitioners' best argument is that even

if the value of lost services is not a cost "incurred by the

Federal Government," and does not therefore qualify as an element

of restoration cost within the meaning of § 311(f)(4), such value

may nonetheless be an element of the damages recoverable under the

CWA. Those damages "include" but are not necessarily limited to

restoration costs.

Next we must determine whether a statutory construction that

allows for the recovery of compensable value, while not precluded

by the CWA, is a reasonable interpretation of that Act. We have

seen that Interior is authorized in the CERCLA to promulgate

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regulations that apply also to §§ 311(f)(4) and (5) of the CWA, and

that recovery of compensable value falls within the scope of the

CERCLA and is not foreclosed by the terms of the CWA.

Consequently, our analysis of the validity of § 11.15(a) rests upon

a conventional step two inquiry under Chevron: Does the regulation

that permits recovery for the lost value of interim services

represent a permissible interpretation of the CWA in light of the

text, structure, and goals of that statute? If so, then Interior's

interpretation is entitled to our deference.

Persuaded in part by the Ninth Circuit's reasoning in Alaska

Sport Fishing Ass'n v. Exxon Corp., 34 F.3d 769 (9th Cir. 1994), we

conclude that the Department's interpretation of the CWA is a

permissible one. In the Alaska case, the plaintiffs argued that

government trustees are not authorized to recover lost use damages

under either the CWA or the CERCLA and, for that reason, sport

fishermen should be allowed a private right of action. Id. at 772.

The court disagreed, pointing to the restorative purpose of both

statutes, and the correlative need to funnel damage recovery

through public trustees rather than to private litigants.

[I]f we were to accept plaintiffs' argument, the result

would be to severely limit the amount of damages

government trustees could recover on behalf of the public

in future environmental disasters. Given the restorative

purposes behind the CWA and the CERCLA, it simply makes

no sense to reserve a portion of lost-use damages for

recovery by private parties. Unlike trustees, private

parties are not bound to use recovered sums for the

restoration of natural resources, or the acquisition of

equivalent resources. See § 311(f)(5), 33 U.S.C. §

1321(f)(5).

Like the Ninth Circuit, we think that to disallow recovery for

interim lost services would be to rely upon "a strained and

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hypertechnical reading" of the statutes in disregard of the broad

public policy underlying them. Id.

Here, the Congress established under the CERCLA a natural

resource damage assessment process that grants to trustees under

both the CERCLA and the CWA remedial options not previously

available to them. Perhaps most important, § 107(f)(2)(C) provides

that a damage assessment made under the two statutes is entitled to

a rebuttable presumption of validity if specified procedures were

followed. Under this statutory structure, Interior has determined

that damages may include the value of services lost while awaiting

restoration of the resources. This interpretation fits easily

within the broad provisions of the CERCLA, and is not incompatible

with the CWA. We find no overriding policy or other reason to

reject the agency's determination that the two remedial schemes are

coextensive insofar as both authorize the recovery of compensable

value.

13. Priority of remedies

In its petition, Montana claims that CERCLA requires trustees,

when calculating the monetary value of the harm caused by release

of hazardous substances into the environment during the "damage

determination" phase of a Type B assessment, to prefer

"restoration," "rehabilitation," and "replacement" of natural

resources, over the "acquisition of equivalent resources."

The 1994 Regulations require trustees, in the "damage

determination" phase, to calculate the amount of monetary damages

owed by responsible parties based on the cost of implementing the

most appropriate remedial strategy. 43 C.F.R. § 11.81. To

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determine the most appropriate strategy, in turn, the regulations

require trustees to develop a reasonable number of possible

strategies involving the "restoration, rehabilitation, replacement

and/or acquisition of the equivalent of the injured natural

resources and the services those resources provide." §§ 11.81-

11.82. Interior defines "restoration" and "rehabilitation" as

synonyms, defining them as "actions undertaken to return injured

resources to their baseline condition." § 11.82(b)(1)(i). It

likewise defines "replacement" and "acquisition of the equivalent"

as synonymous, meaning "the substitution for injured resources with

resources that provide the same or substantially similar services."

§ 11.82(b)(1)(ii). Based on eleven factors, trustees must choose

the appropriate strategy that would either return the resources to

their previous condition (through restoration or rehabilitation),

or substitute resources that provide substantially similar services

(through replacement or acquisition of equivalent resources) or

some combination of the two. See § 11.82. Except when a strategy

would require a federally authorized official to acquire land that

the federal government would have to manage, the regulations do not

establish a preference for one strategy over another. See §

11.82(e).

In Montana's view, the statute requires Interior to favor

restoration, rehabilitation, and replacement of natural resources,

because they "result in a net benefit to the nation's natural

resources," whereas "acquiring equivalent resources simply

transfers into public ownership uninjured resources that are

comparable to the injured resources." Montana's Br. at 2. While

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Montana's argument may have merit as a matter of policy, our task

under Chevron is to determine if Interior's interpretation is

permissible. Unlike Montana, we conclude that it is.

Beginning with Chevron step one, we think Congress has not

clearly expressed a preference for physically restoring resources

over acquiring comparable resources for the public's benefit.

Montana relies on § 107(f) of CERCLA, which Congress amended in

1986 to read:

Sums recovered by the United States Government as trustee

under this subsection shall be retained by the trustee

... for use only to restore, replace, or acquire the

equivalent of such natural resources. Sums recovered by

a State as trustee under this subsection shall be

available for use only to restore, replace, or acquire

the equivalent of such natural resources by the State.

The measure of damages in any action ... shall not be

limited by the sums which can be used to restore or

replace such resources.

Pub. L. No. 99-499, § 107(d) (amending § 107(f) of CERCLA); 100

Stat. 1613, 1630 (codified at 42 U.S.C. § 9607(f)(1)). As Montana

concedes, this passage does not explicitly establish a preference

for restoration and replacement. In discussing how federal and

state governments can use the funds they recover, the first two

sentences list three alternatives, expressing no preference among

them. The third sentence merely states that damages recovered may

exceed the cost of restoring or replacing resources, thus

recognizing that a trustee may recover damages not only to restore

an injured resource physically, but also to compensate the public

for the lost use of resources during the interim period between the

discharge of hazardous substances and the final implementation of

a remedial plan. Ohio, 880 F.2d at 448; 43 C.F.R. § 11.80(b).

Montana argues, nonetheless, that the third sentence

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implicitly establishes a hierarchy. In making this argument, it

relies on Ohio's interpretation of the third sentence to mean that

"restoration cost will serve as the basic measure of damages in

many if not most CERCLA cases." 880 F.2d at 446 (emphasis added).

According to Montana, because acquiring natural resources does not

involve actual restoration of an injured resource, our

interpretation of the statute precludes trustees from using

acquisition as the "basic measure of damages" during the damage

determination phase of an assessment.

Placed in its proper context, our statement in Ohio provides

scant, if any, support for Montana's position. In Ohio, we

reviewed challenges to Interior's 1986 Type B Regulations that had

distinguished between "restoration or replacement costs" on the one

hand, and the "use value" of injured resources on the other. Id.

at 441. The regulations required trustees to use the lesser of the

two values in setting the amount of damages. Id. Because "use

value" was essentially the market value of the injured property,

and because market value would almost always be less than the cost

of restoring the natural resources, Interior's approach virtually

assured that trustees could never recover enough money to restore,

replace or acquire equivalent resources. Id. at 442-446. We thus

rejected those regulations as inconsistent with the statute's

remedial structure and purpose. In arriving at that conclusion, we

never considered, let alone established, a hierarchy among the

statute's three remedial strategiesrestoration, replacement, and

acquisition of equivalent resources. To the contrary, we treated

all of them as equivalent, generally using "restoration" as a

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shorthand way of referring to all three. Id. at 441, 445.

Montana also points to a report issued by the House Merchant

Marine and Fisheries Committee, which drafted the 1986 amendments

to § 107(f) of CERCLA. Noting that the third sentence of § 107(f)

had "been the source of some confusion," the committee explained:

It is clear from this language that the primary purpose

of the resource damage provisions of CERCLA is the

restoration or replacement of natural resources damaged

by unlawful releases of hazardous substances. However,

... a situation could arise in which the amount of

damages caused by a release of hazardous substances is in

excess of the amount that could realistically or

productively be used to restore or replace those

resources....

The Committee therefore intends [that] any excess

funds recovered shall be used, in such an instance, for

the third purpose spelled out in the language of the

amendment, which is to "acquire the equivalent of the

damaged resource.' ... The Committee expects that any

such acquisition would provide resources of an equivalent

nature at a location as near as reasonably possible to

the site at which the damages occurred.

H.R. REP. NO. 253, 99th Cong., 1st Sess., pt. 4, at 50 (1985).

We agree with Montana that this report's language suggests

that trustees should first consider spending the money they recover

on restoring or replacing resources, and then, if doing so is

neither realistic nor productive, on acquiring equivalent

resources. Although these spending priorities may, in turn, imply

a hierarchy in the way trustees should assess damages in the first

place, we do not find the committee report a sufficiently clear

statement of Congressional intent necessary to resolve this issue

under Chevron step one. The report never explicitly establishes a

hierarchy among the remedial alternatives: it does not expressly

state that trustees may acquire equivalent resources only when

funds could not be well spent in restoring the injured resource,

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nor does it otherwise state that acquisition must be considered a

less favorable alternative. Moreover, a later report by another

House committee discusses the three statutory remedies without

suggesting any hierarchy among them. See H.R. REP. NO. 253, 99th

Cong., 1st Sess., pt. 5, at 17 (1985) (stating that "[t]he sums

recovered are available for use to restore, rehabilitate, or

acquire the equivalent of, such natural resources."). If Congress

had intended to establish the kind of hierarchy Montana urges, it

could easily have said so, either in the statute or in a committee

report.

In light of the ambiguous statutory language and the absence

of legislative history directly on point, we conclude that Congress

has not clearly expressed a preference for restoration and

replacement over the acquisition of equivalent resources.

Proceeding to step two of Chevron, we find Interior's

interpretation of § 107(f) reasonable. Because Montana does not

object to the process Interior followed in arriving at its

interpretation, we consider only whether the agency's

interpretation is substantively reasonable, " "one that Congress

would have sanctioned.' " Chevron, 467 U.S. at 845 (quoting United

States v. Shimer, 367 U.S. 374, 383 (1961)). According to Montana,

Interior's interpretation is inconsistent with the "paramount

restorative purpose" of the legislation. Ohio, 880 F.2d at 444-45.

We disagree. As Interior has explained, acquiring equivalent

resources may do more to promote recovery of an injured resource

than spending money directly to restore that resource. For

example, acquiring land next to a damaged property may serve as a

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buffer to prevent nearby development from further harming the

injured property, thereby increasing its chance of recovery.

Moreover, although not establishing an automatic preference for

restoration and replacement, Interior's regulations do not neglect

the goal of restoring injured resources themselves. They require

trustees, when choosing the most appropriate alternative, to

consider the benefits and costs of each approach (and, in

particular circumstances, a trustee may determine that restoration

provides greater benefits than acquisition); consistency with

federal, state and tribal policies (which may favor restoration);

as well as the potential risk of additional injury to the

particular injured resources under each alternative. See 43 C.F.R.

§ 11.82(d)(2), (5), (9). We think it important to remember, as

well, that fulfilling the "restorative purpose" of the statute is

not entirely dependent on trustees' efforts to recover damages for

harm to natural resources. Their efforts are in addition to the

"response" actions, which clearly serve a restorative purpose in

removing hazardous waste and "prevent[ing] or minimiz[ing] the

release of hazardous substances" into the environment. 42 U.S.C.

§ 9601(23)-(25).

We are equally unpersuaded by Montana's argument that

Interior's interpretation is unreasonable in light of other

statutes authorizing officials acting as public trustees to recover

damages for natural resources. Montana points to two statutory

provisions currently on the books: § 58(g) of the Clean Water Act

of 1977, Pub. L. No. 95-217, § 58(g), 91 Stat. 1566, 1596,

(codified at 33 U.S.C. § 1321(f)(4)-(5)), and § 1006(d) of the Oil

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Pollution Act of 1990, Pub. L. No. 101-380, § 1006(d), 104 Stat.

484, 496 (codified at 33 U.S.C. § 2706(d)). It also cites

provisions, since repealed, of two other statutes: the Deepwater

Port Act of 1974, Pub. L. No. 93-627, § 18(i)(3), 88 Stat. 2126,

2144 (1975) repealed by Oil Pollution Act of 1990, § 2003(a)(2),

104 Stat. at 507, and the Outer Continental Shelf Lands Act

Amendments of 1978, Pub. L. No. 95-372, § 303(b)(3), 92 Stat. 629,

674-75, repealed by Oil Pollution Act of 1990, § 2004, 104 Stat. at

507. Montana does not suggest that any of these four statutes

directly conflict with Interior's regulations, but only that the

legislative histories of these statutes establish that Congress has

consistently preferred restoration and replacement to the

acquisition of equivalent resources. Even if Montana were correct

about the legislative history of each of these statutes, and

legislators expressed a preference in connection with statutes

enacted in 1975, 1977, 1978, and 1990, Interior could still

reasonably conclude that Congress did not intend such a preference

when it enacted entirely different statutes in 1980 and 1986. See

Mackey v. Lanier Collection Agency & Serv., Inc., 486 U.S. 825, 840

(1988) (noting that the intention of the Congress that enacted the

statute is controlling). We thus find Interior's interpretation

reasonable.

III. CONCLUSION

For the reasons set forth above, we grant the Industry

Petitioners' petition for review with respect to Interior's

interpretation of the statute of limitation (Part II.B.1) and with

respect to Interior's use of "resources and services" as the

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measurement of damages (Part II.B.7), deny the petitions in all

other respects, and affirm the judgment of the district court.

So ordered.

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