Superfund: Litigation Has Decreased and EPA Needs Better Information on Site Cleanup and Cost Issues to Estimate Future Program Funding Requirements
Published: 2009-07-15T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Under the Superfund program, the Environmental Protection Agency (EPA) places the most seriously contaminated sites on the National Priorities List (NPL). EPA may compel site cleanups by parties responsible for contamination, or conduct cleanups itself and have these parties reimburse its costs. The program is funded by a trust fund, which is largely supported by general fund appropriations. GAO was asked to examine (1) EPA's enforcement action outcomes and the factors parties consider in reaching these outcomes; (2) any trends in litigation to resolve Superfund liability; and (3) the program's status and costs. GAO obtained and analyzed Superfund program data from EPA, as well as data on Superfund litigation from cases filed in U.S. district courts. GAO also interviewed EPA officials and other Superfund experts
section_title: What GAO Found
paragraphs: Through fiscal year 2007, 80 percent of EPA's completed enforcement actions resulted in agreements with responsible parties, and these actions yielded an estimated $29.9 billion in recovered costs, work commitments, and other results. While most of this value came from work commitments, responsible parties more often agreed to reimburse EPA for its cleanup costs than to conduct site work. EPA, the Department of Justice, and responsible parties make settlement decisions on the basis of site-specific characteristics, but generally also take into account (1) site cleanup costs, (2) the strength of the evidence of a party's liability for site contamination, and (3) the number and types of responsible parties identified, among other considerations. Superfund litigation--as measured by the number, duration, and complexity of cases--decreased from fiscal years 1994 through 2007, the period for which data were available. Over this period, the number of Superfund cases filed annually in U.S. district courts decreased by almost 50 percent. Also, litigation in federally-initiated cases decreased as settlements prior to filing cases in court were reached more often, shortening court time. Furthermore, cases became less complex as fewer defendants were involved. Litigation costs can be substantial, according to experts, and such costs may have decreased as a result of these trends. Litigation decreased because (1) fewer sites were listed on the NPL, and, as cleanups progressed, fewer sites required cleanup and parties had less reason to go to court; (2) EPA promoted settlements with responsible parties; and (3) the courts clarified several legal uncertainties. As of fiscal year 2007, EPA or responsible parties completed construction of remedial actions at about 70 percent of the nonfederal NPL sites, with program appropriations averaging about $1.2 billion annually. However, GAO identified Superfund program trends that make it difficult to predict future program costs. The number of sites added to the NPL each year has declined; EPA added over 400 sites in fiscal year 1983, but only 20 sites a year, on average, for fiscal years 1998 through 2007. The types of sites have also changed, as mining sites--among the most expensive sites to clean up--have been added to the NPL in greater numbers. At the same time, because of limitations in EPA's data, the extent to which NPL sites do not have viable parties to assist with cleanups and how this may impact EPA's cost recovery efforts are unclear. Further, while remedial actions have been completed or are underway at most NPL sites, data limitations make it difficult to quantify the amount of work remaining. Also, NPL sites that have not yet been cleaned up may be more complex and expensive. Finally, program appropriations and expenditures are declining, while EPA's costs for individual sites are increasing. However, EPA does not provide the Congress with sufficient information to make program funding decisions. For example, EPA does not provide aggregated information on the status and cost of work at sites not yet cleaned up or the extent to which it cannot identify viable parties. As a result, it is unclear how much funding for future cleanup activities will have to come from trust fund appropriations rather than from responsible parties.

section_title: Letter
paragraphs: The Comprehensive Environmental Response, Compensation, and  Liability Act (CERCLA) of 1980 established the Superfund program to  protect human health and the environment from the effects of hazardous  substances. Under the Superfund program—the federal government’s  principal program to clean up hazardous waste sites—the Environmental  Protection Agency (EPA) has the authority to compel parties responsible  for contaminating these sites to clean them up, or to conduct cleanups  itself and then seek reimbursement from the responsible parties. In the  past, EPA’s approach for enforcing CERCLA was criticized as leading to  lengthy negotiations and protracted litigation, resulting in high costs for  the government, as well as the responsible parties.
EPA places some of the most seriously contaminated sites on the  National Priorities List (NPL), and cleanups of these sites are   typically expensive and lengthy. Cleanup actions are managed by   EPA’s Office of Solid Waste and Emergency Response (OSWER) and  progress through several steps: investigation and study; selection and  design of the cleanup method; and implementation of the cleanup,  known as the remedial action. Remedial actions—or remedies—are  generally long-term cleanups that aim to permanently and significantly  reduce contamination. EPA can also take removal actions at any time;  these actions are generally short-term or emergency cleanups to  mitigate immediate threats. When the remedial action phase is  complete, all immediate threats have been addressed, and all long-term  threats are under control, EPA generally considers the site to be  “construction complete.” Most sites then enter into an operation and  maintenance phase in which the responsible party or the state  maintains the remedy while EPA conducts periodic reviews to ensure  that the remedy continues to protect human health and the  environment. As of the end of fiscal year 2007,  there were 1,569 NPL  sites.  The Superfund program is funded by annual appropriations from  a trust fund; historically, the trust fund was financed primarily by taxes  on crude oil and certain chemicals, as well as an environmental tax on  corporations. Since the authority for these taxes expired in 1995,  however, the general fund has been the largest source of revenue for  the trust fund.
EPA’s Office of Enforcement and Compliance Assurance (OECA) is  responsible for Superfund enforcement, including identifying responsible  parties and taking enforcement actions against these parties to compel  them to clean up sites or reimburse EPA’s costs. During its enforcement  actions, EPA attempts to reach an agreement—known as a settlement— with responsible parties about who will perform and/or pay for site  cleanups. The Department of Justice (DOJ) assists EPA in its efforts to  enforce CERCLA by negotiating and, when necessary, litigating on EPA’s  behalf. To begin litigation, DOJ will file a complaint in U.S. district court  against one or more responsible parties, initiating a case against them.  CERCLA cases may require only minimal court involvement, as when EPA  seeks a court’s approval for a previously negotiated settlement.  Alternatively, cases may be lengthy and complex; however, EPA may still  reach an agreement with the parties after some litigation. While many  CERCLA cases are filed by the federal government, states, private parties,  and others may also initiate litigation under the act for a variety of  reasons, including compelling others to contribute toward site cleanup  costs.
In this context, you asked us to (1) identify the outcomes of EPA’s  enforcement actions, and the factors federal and private parties consider  in reaching these outcomes; (2) examine the trends, if any, in litigation to  resolve Superfund liability; and (3) determine the status and  implementation costs of the Superfund program. You also asked that we  examine the costs of EPA’s efforts to enforce and administer the  Superfund program, and we provided you with detailed data on these  activities in July 2008.
To understand the Superfund enforcement process, we reviewed  applicable statutes, regulations, and EPA guidance. We also interviewed  officials responsible for implementing and enforcing the Superfund  program, including officials in OSWER and OECA, and in DOJ’s  Environment and Natural Resources Division. To provide information on  the outcomes of EPA’s Superfund enforcement actions, as well as on the  program’s status, we obtained and analyzed data from EPA’s  Comprehensive Environmental Response, Compensation, and Liability  Information System (CERCLIS). Also, to provide information on the cost  of implementing the Superfund program, we analyzed program  expenditure data from EPA’s Integrated Financial Management System  (IFMS), and interviewed officials with EPA’s Office of the Chief Financial  Officer. We converted all dollar figures in the data we collected from the  CERCLIS and IFMS databases into constant 2007 dollars. To examine  trends in litigation to resolve Superfund liability, we conducted a  comprehensive analysis of cases filed under CERCLA in 88 out of the 94  U.S. district courts. We identified these cases by searching the Public  Access to Court Electronic Records (PACER) system for cases filed for  fiscal years 1994 through 2007, and as a result, developed a database of  almost 2,300 cases. We qualitatively analyzed the docket—or record of  activity—for each of these cases to obtain data on their duration and  outcome, as well as on the number and types of parties involved. The  purpose, source, time frame, and scope of the data we collected and  analyzed for this report are shown in table 1.
In addition, to obtain more detailed information on how the Superfund  enforcement process is implemented at individual sites, as well as the  factors that influence parties’ decisions, we reviewed EPA enforcement  documentation from a nonprobability sample of 10 Superfund sites. We  selected these sites on the basis of a variety of characteristics, such as  geographic location, site type, number of responsible parties, and value of  enforcement actions taken. Finally, to help identify contributing factors  for the trends we found in our analysis of data on EPA’s enforcement  actions, litigation to resolve Superfund liability, and the program’s status  and costs, as well as to obtain information on the factors that influence  parties’ decisions, we interviewed Superfund program experts, including  EPA and DOJ officials, attorneys that represent responsible parties, and  other subject matter experts. We selected these individuals on the basis of  a number of factors, such as referral from other interviewees, the past  efforts of these individuals (or the organizations they represent) related to  the Superfund program or CERCLA enforcement, and representation of a  variety of perspectives. We also obtained and reviewed information on  recent legal decisions and ongoing cases that experts identified as  significant to CERCLA liability issues.
We evaluated the reliability of the data used in our analyses and identified  some potential limitations in the data used for this report. For example, we  found certain limitations in the extent to which EPA data on the value of  its enforcement actions represent the actual value of these actions. Also,  EPA noted that the agency currently has ongoing data correction and  updating efforts that could result in changes to the data we analyzed for  this report. In addition, we found evidence that not all U.S. district court  cases filed under CERCLA were categorized as such—with a CERCLA  cause of action—in the PACER system. Despite these limitations, we  determined that these data were sufficiently reliable for presenting  information on overall trends; we also corroborated the overall trends  through discussions with experts. Where necessary, we note the potential  limitations of these data in the report. Appendix I provides a more detailed  description of our scope and methodology.
We conducted this performance audit from August 2007 to July 2009, in  accordance with generally accepted government auditing standards. Those  standards require that we plan and perform the audit to obtain sufficient,  appropriate evidence to provide a reasonable basis for our findings and  conclusions based on our audit objectives. We believe that the evidence  obtained provides a reasonable basis for our findings and conclusions  based on our audit objectives.
subsections: section_title: Background
paragraphs: CERCLA was passed in late 1980, in the wake of the discovery of toxic  waste sites such as Love Canal, where housing was built upon a former  landfill for toxic chemicals, and residents began developing cancer and  other illnesses from the residual waste. Unlike some environmental  statutes, CERCLA did not regulate activity in order to prevent  contamination of the environment; rather, CERCLA created a mechanism  for responding to contamination that already exists. CERCLA established  a trust fund from which EPA receives annual appropriations for Superfund  program activities. The Superfund trust fund has received revenue from  four major sources: taxes on crude oil and certain chemicals, as well as an  environmental tax assessed on corporations based upon their taxable  income; appropriations from the general fund; fines, penalties, and  recoveries from responsible parties; and interest accrued on the balance of  the fund. In the program’s early years, dedicated taxes provided the  majority of revenue to the Superfund trust fund. However, in 1995, the  authority for these taxes expired and has not been reinstated. Since that  time, appropriations from the general fund have constituted the largest  source of revenue for the trust fund, as table 2 shows.
Since CERCLA was enacted, the Congress and EPA have made some  significant changes to the program, including the following:    The Superfund Amendments and Reauthorization Act of 1986 gave EPA  additional enforcement authorities and statutory direction concerning  settlements, and required greater state and public participation in site  cleanup activities. The act also increased the potentially available funds  for the program by allowing additional taxes to be collected for the  trust fund, and by increasing the authorized level of funding that the  Congress could appropriate from the trust fund to the Superfund  program.
In the mid-1990s, EPA undertook 62 reforms—collectively known as  the Superfund administrative reforms—to respond to criticism of the  Superfund program. These 62 reforms were intended to cover a range  of activities, such as (1) selecting more technologically advanced and  cost-effective cleanup remedies, (2) providing technical assistance so  that communities and tribes located near sites could better participate  in cleanup decisions, and (3) reducing the costs associated with  enforcing Superfund by, for example, expediting settlements with  certain types of responsible parties, such as those that contributed  small amounts of hazardous substances.
A 1999 amendment to CERCLA defined the term “recyclable material”  and exempted certain parties who arranged for the recycling of these  materials from Superfund liability, provided certain conditions are met.  According to the amendment, one purpose of these exemptions was to  remove impediments to recycling that were unintended consequences  of the Superfund provisions.
In 2002, the Small Business Liability Relief and Brownfields  Revitalization Act, among other things, limited the liability of certain  types of responsible parties and established the Brownfields program— a federal grant program to assist with the redevelopment of certain  sites polluted (or potentially polluted) by hazardous contaminants.
subsections: section_title: EPA’s Process for Listing Superfund Sites on the NPL and Cleaning Them Up
paragraphs: Potentially hazardous sites are usually reported to EPA by a state  environmental agency, but sometimes local or tribal governments, other  federal agencies, individuals, or community groups also identify such sites.  The EPA regional office, often in conjunction with a state environmental  agency, evaluates the site to verify that hazardous substances are present  and to determine whether the site could be addressed by other programs,  such as state hazardous waste programs or other federal authorities.  Regional officials may decide not to include a site for further assessment  for a number of reasons, such as if the site could be addressed by other  programs, or if the officials make a determination that no further cleanup  action is necessary at the site. Also, as part of the evaluation process, EPA  uses its Hazard Ranking System to numerically assess the potential of sites  to pose a threat to human health or the environment—sites that score at  least 28.5 under the Hazard Ranking System are eligible for NPL listing.  EPA regions then submit sites to EPA headquarters for possible listing on  the NPL on the basis of a variety of factors, including the severity of the  contamination and the urgency of the threat it poses. In 2002, EPA  established a committee of regional and headquarters personnel to review  regional submissions as part of the selection process. This committee  primarily considers risks to human health and the environment and the  urgency of the need for response; it also considers program management  factors, such as projected costs to the Superfund program and the timing  of funding needs. As a matter of policy, EPA also seeks concurrence from  the government of the state in which a site is located. Sites that EPA  decides to list on the NPL are proposed for listing in the Federal Register  for a 60-day public comment period. Final listing decisions are also  published in the Federal Register.
Once EPA selects a site for the NPL, it initiates a process to understand  the extent of the contamination, decide on the actions that will be taken to  address that contamination, and implement those actions. This process  can take many years—or even decades—to complete. Figure 1 outlines the  process EPA typically follows, from listing a site on the NPL through  through  deletion of the site from the NPL.  deletion of the site from the NPL.
After a site is listed, EPA or a responsible party will conduct a two-part  study of the site: (1) remedial investigation, to characterize site conditions  and assess the risks to human health and the environment, among other  actions; and (2) feasibility study, to evaluate various options to address the  problems identified through the remedial investigation. For example, EPA  may determine that the soil at a site is polluted with a hazardous chemical  during the remedial investigation and decide during the feasibility study  that removing the soil for off-site treatment represents the best way to  clean the site. These findings and decisions are documented in a record of  decision.
Next, either EPA or a responsible party may initiate the remedial action  that was documented in the record of decision. Like the site study,  implementation of the remedial action is divided into two parts: (1)  remedial design, a further evaluation of the best way to implement the  chosen remedy; and (2) remedial action, the implementation of the remedy  selected. When physical construction of all remedial actions is complete  and other criteria are met, EPA deems the site to be “construction  complete.” Most sites then enter into the operation and maintenance  phase, when the responsible party or the state maintain the remedy, while  EPA conducts periodic reviews to ensure that the remedy continues to  protect human health and the environment. For example, at a site with soil  contamination, the remedial action could consist of building a cap over the  contaminated soil, while the operation and maintenance phase would  consist of monitoring and maintaining the cap. Eventually, when EPA  determines, with state concurrence, that no further remedial activities at  the site are appropriate, EPA may delete the site from the NPL. Although  most sites progress through the cleanup process in roughly the same way,  EPA may take different approaches based on site-specific conditions.
While appropriated resources from the Superfund trust fund are available  for remedial actions at sites that have been listed on the NPL, EPA can  also use these resources to conduct removal actions to address site  contamination at any site where there is an actual or threatened release of  a hazardous substance. CERCLA defines removal actions to include  necessary (1) actions in the event of a release or threatened release of  hazardous substances into the environment; (2) actions to monitor, assess,  and evaluate the release or threatened release of hazardous substances;  (3) disposal of removed material; and (4) actions to otherwise prevent,  minimize, or mitigate damage to public health, welfare, or to the  environment. CERCLA limits EPA removal actions paid for with  appropriations from the trust fund to actions lasting 12 months or less and  costing $2 million or less, although these limits can be exceeded if EPA  determines that conditions for an exemption are met. Most removal  actions have occurred at sites not on the NPL.
section_title: Liability Under CERCLA
paragraphs: Under CERCLA, liability stems from the release (or threatened release) of  hazardous substances into the environment from a facility. Many of these  concepts are defined broadly. For example, under CERCLA, a “facility”  includes, among other things, buildings, pipelines, lagoons, ditches,  storage containers, motor vehicles, or any sites where a hazardous  substance has come to be located. EPA also has to establish some other  facts to successfully recover costs or require cleanup actions. To recover  its costs, EPA’s expenditures must not be inconsistent with the National  Contingency Plan. This plan, which was revised pursuant to CERCLA,  establishes the procedures and standards for responding to releases of  hazardous substances. To compel cleanup, EPA must show that an  “imminent and substantial endangerment” may exist at the site that  requires action on the part of the responsible parties.
Parties may also be held liable under CERCLA for damages related to the  loss, injury or destruction of natural resources. The National  Contingency Plan designates the secretaries of several departments— as the Department of the Interior or the Department of Agriculture—who  manage or hold federal lands as “natural resource trustees.” State and  tribal officials are also designated as trustees. These trustees are  authorized to sue, through the Attorney General, responsible parties for  the costs of assessing the damages to natural resources, as well as the  costs of restoration. EPA is not a natural resource trustee; rather, the  agency’s role with respect to natural resource damages is generally to  notify and coordinate with the trustees.
CERCLA explicitly identifies four types of parties that can be held liable at  a site, as well as some exemptions for parties meeting certain  characteristics. The four types of parties are (1) owners or operators of a  site; (2) former owners or operators of the site at the time hazardous  wastes were disposed of; (3) those who arranged for disposal of hazardous  substances (often called generators); and (4) transporters of hazardous  waste to the site. Exempted parties include, among others: landowners  who acquire contaminated property without knowing, after appropriate  research, about the hazardous substances at the site; landowners who,  after appropriate research, knowingly acquire contaminated property and  take reasonable steps to prevent any further release of hazardous  substances and cooperate fully with any response actions; generators and  transporters who contribute extremely small amounts of waste to a site,  known as de micromis parties; parties involved in recycling certain  materials; and parties who have obtained certain federal permits to release  hazardous substances. In addition, releases comprised solely of crude oil,  petroleum, pesticides, and other specifically exempted substances are not  subject to liability. However, in some cases, cleanups of these substances  may be taken under other authorities, such as the Oil Pollution Act of  1990. Finally, CERCLA’s liability provisions are focused on releases of  hazardous substances, although EPA also has the authority to respond to  releases of pollutants and contaminants which may pose an imminent and  substantial danger.
Courts have held responsible party liability under CERCLA to be strict,  joint and several, and retroactive. Under strict liability, a party may be  liable for cleanup even though its actions were not considered negligent.  Because liability is joint and several, when the harm done is indivisible,  one party can be held responsible for the full cost of the remedy even  though other parties may have contributed to the release of hazardous  substances at the site. Retroactive liability means that liability applies to  actions that took place before CERCLA was enacted.
Parties held responsible by EPA or sued by other parties can challenge  their CERCLA liability. Specifically, CERCLA provides responsible parties  with three statutory defenses to Superfund liability when hazardous  substances are released solely because of (1) an act of God; (2) an act of  war; and (3) the actions of a third party (other than an agency or a party  in a contractual relationship with the responsible party), although the  responsible party must have taken due care and reasonable steps to  prevent a release. Responsible parties may also claim that too much time  has passed for EPA to bring an enforcement action against them. CERCLA  establishes specific statutes of limitations—that is, time limits—for filing  actions against responsible parties. Liable parties may also seek to  reduce their costs by arguing that they are not subject to joint and several  liability when the site contamination is divisible among responsible  parties, or that EPA’s costs were inconsistent with the regulations in the  National Contingency Plan.
section_title: EPA’s Enforcement Process
paragraphs: EPA enforcement begins with the identification of potentially responsible  parties, usually early in the cleanup process; continues throughout site  cleanup; and often does not conclude until after the site is declared  construction complete, such as when the agency pursues parties to  recover its costs for implementing the site cleanup. Although the process  varies from site to site, the typical stages of enforcement for an NPL site  are shown in figure 2.
Search for responsible parties. EPA identifies responsible parties by,  among other actions, reviewing documentation related to the site;  conducting interviews with government officials or other knowledgeable  parties; performing historical research on the site, such as searching for  previous owners of the property; sampling soil or groundwater at the site;  and requesting additional information from relevant parties. In addition to  identifying the names of potentially responsible parties, EPA attempts to  obtain information on the type and amount of hazardous substances  shipped to a site by each party and any financial constraints faced by the  identified parties. These details help EPA establish whether any parties  should qualify for special types of settlements, such as a de minimis  settlement for a party who contributed small amounts of waste, or an  “ability to pay” settlement for parties facing financial difficulties. The  search should also provide EPA with the evidence to establish the  potential liability of each party. Although the search typically begins no  later than EPA’s efforts to list a site on the NPL, the discovery of new  parties at a site can occur at any point during, and even after, the cleanup  process is completed.
Negotiations. As with the search for responsible parties, negotiations  typically take place early in the site cleanup process, but can resume at  various points during the enforcement process. Formal negotiations begin  when EPA sends a “special notice letter” to parties. This letter typically  includes information about the site, the work necessary to study or clean  up the site, other responsible parties, and also provides a draft settlement  document to be used as a basis for negotiations. The special notice letter  also initiates a “negotiation moratorium,” or a period of time during which  EPA is prohibited from starting the site study or remedial action. EPA and  the responsible parties may use this time to reach agreement about how  the necessary site work will be conducted.
If negotiations are successful and parties settle with EPA to conduct site  work or reimburse agency costs, CERCLA authorizes EPA to provide  several benefits to the settling parties. EPA has the discretion to provide  parties with a “covenant not to sue,” in which the federal government  promises not to pursue additional enforcement actions against the parties  for matters addressed by the settlement. In most cases, settlements also  include “reopeners,” which allow EPA to take new enforcement actions if  it discovers new evidence of liability or contamination after the initial  settlement. CERCLA also provides “contribution protection” to parties  that settle with EPA. That is, other parties cannot sue the settling parties  for the costs affiliated with the matters addressed by the settlement.
In cases involving the performance of site work, where EPA and the  responsible parties are unable to reach agreement, EPA may order the  parties to conduct the cleanup action. If the parties do not comply with  such orders, or for enforcement actions related to matters other than site  work, EPA may refer the case to DOJ for litigation. DOJ officials then  renew efforts to negotiate with responsible parties. These efforts are  known as “pre-filing negotiations” and are required prior to all civil  litigation the federal government brings. Negotiations continue after DOJ  files a CERCLA case, even during a trial.
section_title: Litigation Under CERCLA
paragraphs: The federal government can litigate against responsible parties for many  reasons, including the following:    Some parties may refuse to allow EPA access to a contaminated site or  may not provide EPA with information to assist in identifying  responsible parties or site hazards. CERCLA requires parties affiliated  with a site (whether responsible for contamination or not) to provide  EPA with access to the site and site information.
EPA can litigate when parties refuse to comply with EPA  administrative orders, such as orders directing responsible parties to  conduct site work.
EPA may use litigation to recover its costs, including those associated  with site work and program administration, as well as the interest that  has accrued on agency costs.
Because certain agreements related to remedial actions, among others,  must be confirmed by the court, EPA must initiate a case in court to  file these agreements.
Parties other than the federal government—states, local governments,  private citizens, businesses, and others—can also initiate CERCLA  litigation. Many of these cases are known as “contribution claims,” where  a responsible party sues other identified parties to recover some of the  money it has spent to reimburse EPA for cleaning up a site. In addition to  these contribution claims, responsible parties incurring cleanup costs may  sue other responsible parties to recover some of those costs. Because  these suing parties are responsible, in part, for the contamination, they  cannot usually recover all of their costs, but may recover an amount  determined by the courts to be equitable. In some instances, state  governments, private parties, and others may also initiate litigation under  CERCLA against federal agencies, and DOJ defends the federal agencies in  such cases.
Litigation can take place over a considerable period of time, and during  any phase of the process, the parties to the litigation can decide to reach a  settlement. For example, during the discovery phase of litigation, when  parties to a lawsuit request and obtain information from each other, such  as the evidence that supports their claims or defenses, parties may decide  that, given the evidence and the potential costs and risks of trial, it would  be financially preferable to reach a settlement rather than to proceed to a  trial. A case may be broken into several phases, including: (1) liability, or  whether parties meet the legal standard of having contributed to the  release of hazardous waste; (2) selection of a remedy, such as whether  actions were consistent with the National Contingency Plan; and (3)  allocation of costs among parties for contribution claims.
section_title: Documenting EPA Enforcement Actions
paragraphs: Completed EPA enforcement actions can be documented in one of four  ways:    Administrative orders on consent document the agreements EPA and  responsible parties reached to pay for cleanup actions or conduct site  work, such as site study and removal actions. These can contain  penalties for noncompliance and may be enforced by a judge.
Consent decrees also document agreements between EPA and  responsible parties, but must be approved by the court. CERCLA  requires that agreements on conducting a remedial action take the form  of a consent decree.
Unilateral administrative orders may require responsible parties to  conduct site work, among other things. These documents describe the  liability of the parties, the actions that must be taken, and the penalties  for noncompliance. CERCLA authorizes fines for each day of  noncompliance with a unilateral administrative order, as well as  damages of up to three times any funds spent by EPA as a result of the  parties’ noncompliance, in addition to the costs of cleanup.
Judgments result from cases filed in court, when a judge or a jury  determines the liability of a responsible party.
We have categorized enforcement actions as having consensual or  nonconsensual outcomes—that is, whether or not EPA was able to settle  with the responsible party. In addition, some outcomes are achieved  through either an administrative or judicial process. While courts are  involved in judicial actions, EPA can take administrative actions on its  own. Table 3 describes these categories.
section_title: EPA Resolves Most Enforcement Actions through Settlements with Responsible Parties, and Site- Specific Conditions Influence the Negotiation Process
paragraphs: Most of EPA’s enforcement actions are resolved through a settlement  between the agency and responsible parties. In reaching these settlements,  EPA’s and responsible parties’ decisions are influenced by site-specific  characteristics and other key considerations, such as the expected cost of  site cleanup, the strength of EPA’s evidence of responsible party liability,  and the number and type of other responsible parties identified.
subsections: section_title: Most EPA Enforcement Actions Result in Agreements with Responsible Parties for Conducting Site Work or Reimbursing the Agency’s Costs
paragraphs: Over the life of the Superfund program, according to EPA data, the agency  has completed at least one enforcement action at 1,160 sites, or 71 percent  of all proposed, final, or deleted NPL sites. At many sites, EPA has taken  multiple enforcement actions. While the median number of enforcement  actions per site is 3, EPA has taken as many as 68 enforcement actions at  one site. At one site we reviewed—an abandoned recycling facility—EPA  files show that the agency used multiple enforcement tools. According to  agency documentation, EPA issued a unilateral administrative order for a  removal action to maintain a stormwater treatment plant; an  administrative order on consent for site study work; two additional  administrative orders on consent to recover past and anticipated future  site costs from parties that contributed small amounts of waste to the site;  a consent decree for the performance of the remedial action; and three  additional enforcement actions for other aspects of site work or cost  recovery. EPA had identified 528 parties responsible for contamination at  this site.
From fiscal years 1979 through 2007, EPA completed 4,642 enforcement  actions at NPL sites, of which 3,682, or 80 percent, were consensual.  Moreover, EPA resolved negotiations with responsible parties through  administrative—rather than judicial—actions more than 60 percent of the  time. See figure 3.
CERCLA explicitly encourages the government to settle with responsible  parties, “whenever practicable and in the public’s interest.” EPA and DOJ  officials, as well as attorneys we spoke with, agreed that reaching a  settlement is the preferred approach for resolving liability. For example,  some attorneys said that their clients tend to settle with EPA because  responsible parties are unlikely to succeed in avoiding liability in litigation  against the federal government.
As table 4 shows, administrative orders on consent are the most frequently  used enforcement action at NPL sites, accounting for 43 percent of actions  completed over the period, followed by consent decrees at 37 percent.
As the table shows, EPA and the responsible party were often able to  reach agreement prior to a final judgment, with only one percent of  enforcement actions resulting in a final judgment since 1979. However,  EPA may have to go to court in many more instances, and the agency and  responsible parties may litigate for extended periods of time before  reaching a settlement. For example, according to EPA documentation, the  agency and two responsible parties were engaged in litigation over liability  for over 7 years at one site we reviewed. After the judge issued an interim  ruling in EPA’s favor, the responsible parties decided to settle with EPA,  and the settlement was documented as a consent decree.
subsections: section_title: Enforcement Actions Often Result in the Performance of Site Work or Recovery of Agency Costs
paragraphs: As figure 4 shows, a majority of EPA’s enforcement actions at NPL sites  resulted in commitments from responsible parties either to reimburse  agency costs or to conduct site work, with only 22 percent related to both.
Both (1,005)
Site work (1,473)
As the figure shows, 10 percent of enforcement actions did not result in  cost recovery or the responsible party’s agreement to conduct site work.  Rather, EPA took these actions for other objectives, such as to ensure  access to a site or obtain requested information about a facility to assist in  the search for responsible parties. However, a few of these actions—7 out  of 469—did result in penalties levied against the responsible party.
The likelihood of reaching a consensual enforcement action may be  influenced by whether EPA is seeking to recover its costs or to require  responsible parties to conduct site work. As table 5 shows, enforcement  actions seeking the recovery of EPA’s costs were almost always  consensual. In part, the consensual nature of EPA’s enforcement actions  for cost recovery may stem from EPA’s policy toward de minimis parties,  those who contributed small amounts of waste to a site. EPA policy  indicates that agency officials focus their negotiations with de minimis  parties on obtaining past or anticipated future site costs from these  parties, rather than requiring site work. Of the 1,695 cost recovery actions  completed over the course of the Superfund program at NPL sites, at least  438 were with de minimis parties, and all 438 were consensual.  Additionally, EPA noted that it may not be prudent and cost-effective to  attempt to recover costs when the evidence of responsible party liability is  tenuous. Thus, the outcomes of the enforcement actions that EPA does  take are more likely to be consensual because experts told us that when  EPA’s evidence of liability is strong, parties may be more likely to settle  their liability.
While almost all enforcement actions requiring both site work and cost  recovery resulted in consensual outcomes, only about one-half of the  enforcement actions requiring only site work were achieved through  consensual outcomes. If EPA is unable to reach an agreement with a  responsible party to both conduct site work and recover its costs, the  agency may issue a unilateral administrative order, which typically only  requires site work. Only 16 of EPA’s 901 unilateral administrative orders  issued at NPL sites—less than 2 percent—included requirements related to  recovering agency costs. EPA may then attempt to recover any costs  through a separate enforcement action.
Finally, about one-half of the enforcement actions that required neither  site work nor reimbursement of agency costs were consensual. These  enforcement actions are more likely to be nonconsensual than some other  types of actions because of the types of issues these actions address. For  example, according to EPA policy and processes, the agency should try to  obtain initial oral or written consent for site access or site information  prior to taking enforcement actions. Consequently, EPA may take  enforcement action only when the party refuses EPA’s request.  Approximately 75 percent of the 218 enforcement actions taken at NPL  sites that involved only site access or information requests were  nonconsensual. When parties deny access or information, it may be less  likely that EPA can resolve issues through consensual agreements. For  example, according to EPA documentation for one site we reviewed, EPA  had to sue two responsible parties for access to the site and information  about the facility. The parties refused to settle with EPA prior to a trial. On  appeal, the court eventually ruled that EPA should be granted access to  the site. However, this decision came nearly 5 years after EPA had  proposed the site for the NPL. Agency documentation indicated that, in the  meantime, EPA’s ability to clean up the site and identify other responsible  parties was delayed.
The type of site work to be performed and/or funded as a result of an  enforcement action may also affect the likelihood of achieving a  consensual outcome, as table 6 shows. Of the different enforcement  outcomes related to site work, those related to site study were consensual  more often than those related to other types of site work. EPA officials  indicated that they did not want to force reluctant parties to conduct site  studies because their work can influence the selection of an appropriate  remedial action. Therefore, when EPA cannot reach agreement with  responsible parties to conduct site study work, the agency may choose to  do the work itself, rather than issue a unilateral administrative order.  Over the life of the Superfund program, only 3 percent of enforcement  actions related to site study were unilateral administrative orders.
As table 7 shows, according to EPA estimates, the agency’s enforcement  actions at NPL sites have returned benefits valued at an estimated $29.9  billion to the Superfund program. Although only 53 percent of  enforcement actions required responsible parties to conduct site work,  these enforcement actions resulted in commitments to conduct site work  worth an estimated $22.5 billion, or 75 percent of the value of EPA’s  enforcement actions. Furthermore, EPA’s recoveries of past costs, as well  as penalties assessed, help to replenish the Superfund trust fund. Since the  authority to collect dedicated taxes for the trust fund expired in 1995,  fines, penalties, and recoveries have provided the second largest source of  income for the trust fund—about 19 percent of trust fund revenues—after  appropriations from the general fund. Moreover, according to EPA’s  estimates, the agency has recovered approximately 36 percent of its site- specific costs over the life of the Superfund program. Responsible  parties’ payments for future site costs have also, in some cases, meant that  EPA could use its appropriation for work at other sites.
section_title: Site-Specific Characteristics and Key Considerations Influence EPA and Responsible Parties’ Decisions about How to Resolve Superfund Liability
paragraphs: According to agency officials and Superfund experts, site-specific  characteristics affect decisions about how to resolve Superfund liability.  For example, significant public concern over the cleanup of one site we  reviewed limited EPA’s ability to recover a majority of its past costs,  according to agency documentation. Local communities strongly  advocated that the responsible party meet more stringent standards in  cleaning up the site than were originally proposed by EPA. As a result, in  its negotiations with the responsible party, EPA placed more emphasis on  meeting these standards than on recovering its past costs. At another site,  according to EPA documentation, responsible parties manufactured  munitions and explosives, packaged and distributed chemicals, recycled  waste solvents, and disposed of asbestos at various times during the 40  years before the site was placed on the NPL. This complex history, with  several different sources of contamination, made it difficult for EPA to  negotiate with responsible parties, according to agency documents.  Although some of these parties agreed to conduct the site cleanup, they  did not agree to clean up the site’s asbestos contamination; other parties  reimbursed only a portion of EPA’s past costs at the site, arguing that they  were not responsible for this contaminant. Finally, at a third site,  according to EPA documentation, some of the responsible parties  challenged EPA’s decision to list the site on the NPL. This led to additional  litigation by these parties, and a judge’s order compelling EPA to expedite  its negotiations with other responsible parties.
While site-specific characteristics generally influence how Superfund  liability is resolved, we identified some key considerations that the parties  routinely take into account: (1) site cleanup costs, (2) the strength of  EPA’s evidence, (3) the number and type of other responsible parties, and  (4) other considerations that agency officials and Superfund experts cited  less frequently as affecting negotiations.
subsections: section_title: Cost of Site Cleanup
paragraphs: In 7 of the 12 interviews we conducted with Superfund experts, the  experts identified anticipated site costs as an important consideration  during negotiations over Superfund liability. Some said high site costs  could lead to more difficult negotiations because both EPA and the  responsible parties have a lot at stake in the negotiations. EPA places a  higher priority on cases in which it hopes to recover more than $200,000.  However, at one site we reviewed, EPA was ultimately willing to forgo  suing a party for approximately $13 million of its past costs, in part,  because the responsible party was conducting a related cleanup action  anticipated to cost several hundred million dollars.
Several experts also noted that uncertainty about the costs or scope of the  cleanup could lead to more difficult negotiations. According to attorneys  at one law firm, sites with long-term operation and maintenance  requirements create “open-ended” liability for their clients. Additionally,  these attorneys said that disagreements about the level of cleanup  necessary—such as whether the site will be used as an industrial park or a  residential neighborhood, which can affect the cleanup standards—create  uncertainty. One state official we spoke with agreed that responsible  parties are less likely to litigate over Superfund liability when they are  certain about the costs of cleanup at a site. As a result, state officials said  that many states have developed different approaches for identifying site  cleanup requirements, such as creating a list of standard approaches for a  variety of site contamination problems. In their view, these approaches  have helped reduce uncertainty about the scope of cleanup and the  associated costs.
Finally, EPA policy directs agency officials to evaluate the value of a  proposed settlement and determine how, if at all, the agency plans to  recoup any unreimbursed costs that remain after settlement. Attorneys  who represent responsible parties explained that, in deciding whether to  settle with EPA, these parties also evaluate whether they will be able to  recover some of their costs from parties not settling with the agency.
section_title: Strength of EPA’s Evidence Regarding Liability
paragraphs: According to the attorneys we spoke with, the strength of EPA’s evidence  is important to consider in negotiations over site liability. For example,  two attorneys told us a responsible party may choose not to engage in  early negotiations with EPA if the agency’s evidence is inconclusive;  instead, the party may decide to wait for EPA to find additional evidence.  One attorney said that he typically advises clients to resolve their liability  with EPA as quickly as possible, but pointed out that it could be  worthwhile for responsible parties with tenuous connections to Superfund  sites to fight liability.
Similarly, EPA officials consider the strength of the agency’s evidence  when negotiating with responsible parties. In EPA’s key internal  enforcement documentation, officials must provide information about the  evidence the agency has tying each party to the site; the risks EPA could  face in litigation; and whether the agency’s evidence could withstand the  scrutiny of a trial. EPA’s documentation for some sites stated a preference  for settling with responsible parties—rather than pursuing litigation  against them in the hope of obtaining additional site work commitments or  recovering costs—because the evidence against the parties was  questionable or there were other risks to litigation. For example, at one  site, EPA documentation explained that there was evidence of a particular  contaminant; however, some parties identified as associated with this site  produced a similar, but distinctively colored, contaminant that had not yet  been found at the site. EPA believed this distinction could be a risk in  litigation. At another site, EPA documentation noted that a contractor  performing work at the site stopped and re-started the work several times.  Because of CERCLA’s provisions limiting the time EPA has to file cases  against responsible parties, responsible parties could try to use the first  date at which site work stopped in order to raise questions about EPA’s  claim for all site costs. In both of these instances, EPA was able to reach  agreements with the responsible parties and avoid the risks of litigation.  EPA documentation for other sites showed the agency’s confidence in the  strength of its evidence. For example, at one site, EPA documents noted  that the hazardous substances sent to the site were well-documented in  records maintained by site owners, which ensured that EPA had strong  evidence against the responsible parties contributing these substances.  According to agency documentation, this evidence limited litigation risks  and likely strengthened EPA’s negotiating position. In the responsible  parties’ settlement with EPA, the parties committed to conducting one  remedial action and reimbursing EPA’s costs for another remedial action  at the site, as well as other related costs.
section_title: Number and Type of Other Responsible Parties
paragraphs: DOJ officials and attorneys we spoke with both identified the number and  type of responsible parties implicated at a site as important considerations  in how they approach negotiations on Superfund site liability. For  example, one attorney explained that the number of parties identified is  important because, at sites with few responsible parties, each party will be  responsible for a greater share of site cleanup costs and higher expected  costs could make it more difficult to resolve liability. On the other hand,  DOJ officials noted that it can be difficult for a large number of  responsible parties to organize themselves to reach agreement with EPA.  To assist in organization, EPA encourages responsible parties to form  steering committees to expedite negotiations. In some instances,  responsible parties will form multiple groups of similar parties, such as  those who contributed large amounts of waste to a site and those who  contributed only a small amount.
The involvement of certain types of responsible parties at a site can also  make a difference in negotiations with EPA. For example, some experts  noted that de minimis parties may have little experience with Superfund,  and early settlements to remove such parties from the discussions can  simplify future negotiations. In addition, DOJ officials said parties facing  bankruptcy may complicate negotiations because it may be harder to  negotiate with the remaining parties. For example, bankrupt owners of  one site were largely responsible for site contamination, but could  contribute only a minimal amount toward a cleanup action expected to  cost tens of millions of dollars. According to agency documentation, some  of the other responsible parties proposed a settlement in which they were  only responsible for a small percentage of site costs, given the actions of  the site owner and other identified parties. Agency documents showed  EPA rejected this proposal, but identified the bankruptcy of the site  owners as a significant inequity at the site.
Finally, having local governments as responsible parties may affect  negotiations. According to one attorney, these governments can own  landfills or contribute to the contamination of rivers. In light of local  governments’ unique responsibilities to provide sanitation services, and  the challenges they face in funding a cleanup action, EPA policy  establishes that, at certain types of sites, the regions may seek between 20  and 35 percent of estimated site costs from local governments; although,  under joint and several liability, local governments who are responsible  parties could be held liable for all site costs. One attorney criticized EPA’s  approach for holding these parties liable because it may lead to  confrontation with other responsible parties, who may believe that the  local government also bears responsibility for site contamination.
section_title: Other Considerations May Affect Liability Negotiations
paragraphs: Experts—as well as our review of site documentation—identified four  other considerations that may less frequently affect EPA’s and the  responsible parties’ approaches to negotiations over Superfund site  liability. Specifically:    The potential for the settlement to set a precedent for future  negotiations. EPA explicitly considers precedent in its enforcement  actions. With regard to a few of the sites we reviewed, EPA  documentation noted that collecting all past site costs or all anticipated  future costs for oversight of site cleanup set a positive precedent.  Additionally, at one site, EPA documentation indicated that responsible  parties’ agreements to implement a remedial action earlier than  required were important for their impact on EPA’s future negotiations  with other responsible parties. Responsible parties can also be  concerned about the precedent of a settlement. For example, at one  site we reviewed, EPA documentation indicated that both the  responsible party identified at the site and the broader industry to  which that party belonged were interested in seeing how liability was  resolved, as an indication of how such cases were likely to be resolved  across the country.
Public perception of a responsible party. Experts said responsible  parties may be concerned about their reputation in the local  community. In particular, experts from one professional organization  noted if a company plans to continue business in the area, it may not  want to appear recalcitrant; therefore, it would be more likely to enter  into an agreement to settle its liability. Also, these experts said  litigation over site liability adds additional stigma that parties might be  interested in avoiding. Finally, one attorney explained that some  responsible parties want to appear as “good corporate citizens,” and  may be more likely to settle with EPA.
Enforcement under other federal laws. Federal laws other than  CERCLA were important for understanding how site liability was  resolved at many of the sites we reviewed. For example, according to  EPA documentation at one site, a responsible party filed for  bankruptcy and EPA was one of the claimants for penalties stemming  from a violation of a federal law other than CERCLA. This party had  also negotiated a consent decree for groundwater monitoring with EPA  under a different law. According to EPA documentation, agency  officials believed that, in litigation, the responsible party would  challenge EPA’s ability to pursue liability under CERCLA because of  these situations, though the documentation indicated that the EPA  officials disagreed with the party’s potential argument. As a result of  these complicating factors, the agency took several additional  enforcement actions and, ultimately, settled for a reduced amount of its  past costs under CERCLA. At another site, EPA documentation noted  that negotiations were complicated by pending legislation that would  forgive a portion of the site costs for the site’s largest responsible  party. Finally, at a third site, a party resolved its liability under  CERCLA at the same time that it conducted work for related violations  not under CERCLA.
Likelihood that EPA will take on site work itself. Experts said  responsible parties have less incentive to settle if they believe that they  will not incur any costs by refusing. They will not incur costs if EPA  does not issue a unilateral administrative order or does not proceed to  conduct the site work itself. However, if EPA does issue an order and a  responsible party refuses to comply with it, the responsible party may  be subject to penalties of up to three times EPA’s costs to conduct site  work. If the agency conducts the site work itself, experts said the costs  may be higher than if the responsible parties had conducted the work.  The parties in this instance would likely be responsible for reimbursing  EPA’s costs. Some experts explained that as the level of the Superfund  trust fund has fallen in recent years, EPA has lost some leverage in  negotiations with responsible parties. Without a healthy trust fund from  which the Congress may appropriate funds to EPA to conduct site  work itself, experts said, parties may have less incentive to take on the  needed site work. In recognition of this perceived leverage, EPA  officials noted that the agency allocates a portion of its appropriation  each year to be used in instances where responsible parties are  recalcitrant in order to induce such parties to settle.
section_title: Superfund Litigation Decreased Due to a Number of Factors, According to Experts
paragraphs: Superfund litigation—as measured by the number, duration, and  complexity of CERCLA cases—decreased from fiscal years 1994 through  2007, the period for which reliable data were available. These decreases in  litigation may have led to a decrease in associated costs. According to  experts, litigation decreased because fewer sites had cleanups underway,  EPA changed its enforcement process to further encourage settlements,  and court decisions clarified several initial legal uncertainties, making  parties less inclined to litigate. However, some experts indicated that  recent or upcoming court decisions may raise issues that could affect the  likelihood of litigation in the future.
subsections: section_title: The Number, Duration, and Complexity of Superfund Cases Decreased
paragraphs: According to our analysis of CERCLA cases, the number of cases filed  decreased by 48 percent, from 214 cases filed in fiscal year 1994 to 111  cases filed in fiscal year 2007. While the number of cases filed by the  federal and state governments remained relatively constant over the  period, the number of cases filed by other types of plaintiffs, such as  businesses or private individuals, decreased by 69 percent—from 142 to 44  cases. These cases accounted for the majority of cases we reviewed.  Attorneys and EPA officials we spoke with confirmed this decreasing  trend. Figure 5 shows trends in the number of cases filed during this  period, and table 8 shows the percentage of cases filed by different types  of plaintiffs.
Regardless of the type of party filing a case, the majority of cases were  filed against private parties: 96 percent of cases brought by the federal  government and 93 percent of cases brought by state governments had  private parties as defendants. The remaining cases were filed against  parties such as local governments, nonprofit organizations, and state and  federal agencies.
The duration of cases also decreased, in part, because a growing  proportion of the cases the federal government filed involved only minimal  litigation—and, therefore, less time—according to agency officials,  experts, and our analysis of the data. Court approval is required for certain  types of settlements, but to improve the efficiency of Superfund  enforcement and litigation, EPA and DOJ will often negotiate settlements  with responsible parties prior to filing such cases in court. These cases  increased from 51 percent of cases filed by the federal government in  fiscal year 1994 to 77 percent in fiscal year 2007. Figure 6 shows the  percentage of federal cases filed with previously negotiated settlements  over this period. Cases with previously negotiated settlements typically  required less time in court. The median length of time cases with  previously negotiated settlements were before the court was  approximately 3 months, compared with nearly 16 months for cases in  which settlements were not reached prior to filing.
Finally, the complexity of CERCLA cases, represented by the number of  defendants in cases and the number of cases in which defendants pursued  additional parties, decreased from fiscal years 1994 through 2007. The  average number of defendants per case decreased from approximately 23  defendants to 6, as shown in figure 7. In addition, the percentage of cases  in which one or more defendants pursued additional parties to bring them  into the case decreased from approximately 18 percent to less than 5  percent, as shown in figure 8.
One factor in the decrease in the complexity of cases—based on the  number of cases where defendants bring additional defendants into the  case—is the growing proportion of cases filed with previously negotiated  settlements. From fiscal years 1994 through 2007, only 1 percent of such  cases had defendants pursuing additional parties, compared with 15  percent of cases that were not filed with such settlements. Cases with  previously negotiated settlements also rarely result in outcomes other than  the previously negotiated settlement, such as a court dismissal or  nonconsensual judgment, that could have extended the length of litigation;  less than 10 percent of cases filed with a previously negotiated settlement  resulted in such outcomes. See appendix II for more detailed information  on the outcomes of CERCLA cases we analyzed.
These decreases in the amount, duration, and complexity of CERCLA  litigation suggest that the costs associated with such litigation—which can  be substantial, according to both DOJ officials and responsible party  attorneys—have decreased. However, comprehensive data on CERCLA  litigation costs are not available, particularly for costs incurred by  responsible parties and, therefore, we cannot directly quantify changes in  the costs associated with this litigation. Nevertheless, attorneys with two  firms noted that because responsible parties are increasingly likely to  settle out of court, a decline in the number of cases filed by these parties  has contributed to the decrease in the number of new CERCLA cases. This  decrease may have resulted in lower overall CERCLA litigation costs.  Furthermore, the decreasing duration of cases as a result of previously  negotiated settlements has probably contributed to a decrease in costs.  The time spent in out-of-court negotiations, either among responsible  parties or with EPA, is typically less costly than the time spent in court,  according to attorneys we spoke with. For example, EPA and DOJ officials  and private attorneys said that the costs of the discovery phase of  litigation—when parties to a lawsuit may request and obtain information  from each other, such as evidence that supports their claims or defenses— are particularly high. Finally, the decreasing complexity of CERCLA  cases—in particular, the decreasing number of parties involved—has  likely contributed to a decrease in total litigation costs. EPA’s  expenditures for litigation, which decreased by 50 percent, from more  than $50 million in fiscal year 1999 to $25 million in fiscal year 2007,  provide further evidence of this trend.
section_title: Superfund Litigation Has Decreased for Several Reasons
paragraphs: According to agency officials and attorneys we interviewed, the number,  duration, and complexity of CERCLA cases decreased because of: (1)  fewer site cleanups and fewer enforcement actions over time, (2) changes  to EPA’s enforcement process that promoted settlement with responsible  parties, and (3) court rulings that have clarified uncertainties about how  the law should be interpreted and applied.
subsections: section_title: Fewer Site Cleanups and Fewer Enforcement Actions Led to Less Litigation
paragraphs: From fiscal years 1994 through 2007, litigation decreased, in part, because  the government and private parties had fewer reasons to go to court,  according to experts. For example, some attorneys noted that fewer sites  were progressing through the Superfund cleanup process as the number of  new sites added to the NPL declined. Between fiscal years 1994 and 2007,  320 sites were listed on the NPL, compared with 1,244 sites for fiscal years  1983 through 1993. Furthermore, as cleanups continued at sites, the  number of active NPL sites—those sites that had yet to reach construction  complete—decreased by about one-half from fiscal years 1994 through  2007.
In addition, the number of Superfund enforcement actions EPA completed  decreased by 44 percent between fiscal years 1994 and 2007. According to  EPA officials, with fewer sites being cleaned up, there were fewer sites  where EPA needed to take an enforcement action. The officials also cited  a slow but steady decline in the agency’s enforcement budget as a factor  that may have contributed to fewer enforcement actions. Furthermore,  they noted that the agency was more likely to take certain types of actions,  such as enforcement actions against parties that contributed small  amounts of waste, earlier in the program. Additionally, over time, some  types of parties have received exemptions to liability through amendments  to CERCLA, which could reduce the number of enforcement actions  taken. EPA officials specifically cited the exemptions included in the  Superfund recycling equity amendments of 1999 as contributing to the  decrease in CERCLA litigation.
section_title: Changes to EPA’s Enforcement Process Have Led to Less Litigation
paragraphs: Litigation also decreased because, through its Superfund administrative  reforms and other changes to its enforcement process, EPA further  promoted settlements with responsible parties, especially settlements  negotiated prior to filing a case in court. Before EPA initiated its reforms  in fiscal year 1993, 74 percent of its enforcement actions were resolved  consensually. In comparison, after fiscal year 1997, when EPA’s  implementation of many of these reforms peaked, 84 percent of  enforcement actions were consensual. In particular, unilateral  administrative orders, which were the most common nonconsensual  action EPA took against parties, decreased from about 25 percent of EPA’s  enforcement actions prior to fiscal year 1993 to approximately 14 percent  after fiscal year 1997.
Agency officials said that changes in EPA’s enforcement of the Superfund  program, such as those made through its administrative reforms,  encouraged parties to settle more often and earlier in the enforcement  process. According to agency documentation, EPA instituted the following  reforms, among others, to make the Superfund program work faster, more  fairly, and more efficiently:    Orphan share compensation. When a responsible party cannot be  found or is insolvent, that share of the site cost is known as an orphan  share. In some instances, EPA offers settling parties compensation for  a portion of this share, which the parties would otherwise have to pay,  so that they are more willing to settle.
De minimis settlements. These settlements provide protection from  additional liability for small waste contributors. EPA promoted the  early use of these settlements so that such parties could quickly resolve  their liability and avoid further involvement in site cleanup or litigation.  Eliminating these parties facilitates settlements among the remaining  parties at the site, according to EPA guidance and attorneys  representing responsible parties.
Ability to pay settlements. EPA promoted the early use of these  settlements, which resolve the financial liability of responsible parties  at a reduced amount for those who demonstrate that they cannot pay  their full share of cleanup costs.
Equitable issuance of unilateral administrative orders. Through this  reform, EPA expected to increase the likelihood of settlement and  reduce litigation by ensuring that unilateral orders were issued  equitably. EPA attempted to ensure this by requiring regions to  document that unilateral administrative orders had been issued to all  appropriate parties after considering their liability and financial  viability, as well as the extent to which they contributed to the  contamination at the site.
Responsible party search pilots. EPA tested several techniques to  expedite and improve the process of searching for responsible parties.
Several of EPA’s reforms, such as the promotion of de minimis  settlements, encouraged the increased use of tools that the agency was  already equipped with; while others, such as orphan share offers, were  new tools for EPA to use to encourage settlements.
According to attorneys we spoke with, EPA’s Superfund enforcement is  fairer because of the administrative reforms. As a result, several attorneys  said that responsible parties were more likely to settle with EPA to  conduct or fund site cleanup. However, two attorneys said that the amount  of compensation EPA offers to cover orphan shares is too small to be  effective in many cases. That is, the agency provides compensation to  settling parties for only a percentage of the costs it has already spent  cleaning up the site, or the total past and future oversight costs (whichever  is less). Therefore, whatever portion of the orphan share is left to be  cleaned up must be paid for by the settling parties. One attorney noted  that, because the amount EPA spends cleaning up a site is likely to  increase over time, its policy of only offering compensation for past costs  can actually discourage early settlements since responsible parties may  want to wait for the amount of the offer to increase as EPA spends more  money on cleanup.
In addition, through reforms, such as the equitable issuance of unilateral  administrative orders and the responsible party search pilot, as well as  efforts to share information regarding site contamination among all  responsible parties at a site, EPA encouraged identification of and  enforcement against all responsible parties. Attorneys from two firms and  DOJ officials said such changes in EPA’s enforcement process promoted  less complex cases. According to attorneys we spoke with, EPA’s  responsible party search process has become more thorough, and the  process is fairer now than in the program’s earlier years, when EPA was  more likely to pursue only a few large responsible parties. When EPA  targets more of the potentially responsible parties at a site, the parties may  be less resistant to settling because they are less likely to be held  responsible for cleaning up waste contributed by parties not included in  the settlement.
While changes to EPA’s enforcement process promoted more frequent  settlements, DOJ officials we spoke with also attributed the increase in  settlements negotiated prior to going to court to an executive order issued  in 1991. This order requires all federal agencies and their counsel to  make reasonable efforts to achieve a settlement with parties before fil complaint in civil court. DOJ officials said that they send letters to all  parties in CERCLA cases offering them the opportunity to participate in  negotiations prior to filing a case, and that parties who take advantage of  this offer can have significantly lower costs associated with negotiation  and litigation than those who do not. In addition, they noted that when a  party waits to settle, the department has more time to build a case against  it, which can result in less favorable outcomes for the party.
section_title: Court Decisions Clarifying the Application of CERCLA Have Led to Less Litigation
paragraphs: Court decisions that clarified initial issues concerning the application of  CERCLA created more certainty among responsible parties about the  extent of their liability and led to fewer lawsuits, according to experts.  EPA and DOJ officials, as well as several attorneys, told us that parties are  less likely to enter into protracted litigation when they are more certain of  the probable outcomes, and that the courts have reduced uncertainty by  deciding on some disputed aspects of Superfund liability. In particular,  DOJ officials and attorneys representing responsible parties noted that the  government’s ability to recover all of its cleanup costs at a site from one  responsible party when the harm from contamination is indivisible— known as joint and several liability—was established by federal courts in  the early years of the Superfund program. Consequently, parties can  assess with some certainty whether they could be held liable for all  cleanup costs at a site and, according to attorneys and agency officials,  they often decide to settle because of the threat of joint and several  liability. Similarly, courts have ruled that CERCLA liability is strict, that is,  the government and private parties can hold responsible parties liable for  the contamination they caused, regardless of whether their conduct was  negligent. Finally, courts have consistently upheld the retroactive nature  of CERCLA liability, which means that parties can be held liable for the  cleanup of contamination from actions that occurred prior to the  enactment of CERCLA. DOJ officials attributed the success of the  Superfund program to the principles of joint and several, strict, and  retroactive liability.
However, several of the experts we spoke with indicated that recent or  upcoming court decisions may affect the certainty regarding some issues  and, thus, could affect future litigation trends. In particular, some  attorneys noted several unresolved issues concerning the circumstances  under which one responsible party can sue another for contribution or  cost recovery. They said that if parties believe their ability to sue other  parties for contribution or cost recovery is in question, parties may be  more reluctant to voluntarily clean up contamination or be less willing to  settle with the government. A few attorneys also raised concerns about the  scope of contribution protection under CERCLA, and the extent to which  CERCLA settlements protect parties from liability under certain CERCLA  provisions, as well as other laws. While EPA settlements establish  contribution protection as a way to encourage parties to settle, parties  may have less incentive to settle if they have doubts about the  effectiveness of the protection. EPA officials stated that their key concern  with decisions in cases involving these issues is whether these decisions  maintain the benefits of settling with the government for responsible  parties. In addition, following a recent Supreme Court decision regarding  the conditions under which site contamination is divisible under  CERCLA—and, therefore, the liability is capable of being apportioned  among different parties, rather than each party being held jointly and  severally liable—parties may reassess their willingness to litigate over  divisibility issues, which could affect future trends in Superfund  litigation. Furthermore, DOJ officials expressed concern about the  potential implications of a challenge to EPA’s use of unilateral  administrative orders.
Finally, successor and parent company liability are also unsettled issues.  According to a few experts, the circumstances under which successor  companies—companies that legally acquire or merge with another  company—can be held liable for contamination created by the companies  they succeed is still being debated in the courts. The liability of parent  companies, or companies that own and control another company, is  similarly unresolved, according to DOJ officials and a few attorneys. The  DOJ officials and one of the attorneys noted that the requirements for  establishing a parent company’s liability for the contamination caused by a  company that it owns are challenging.
section_title: Differences in the Types of Sites on the NPL and Other Factors Make It Difficult to Assess the Status of Superfund Site Cleanups and Program Costs
paragraphs: While the number of sites added to the NPL each year has declined  significantly since the Superfund program’s early years, the types of sites  added in recent years are more costly to clean up, and may not have viable  responsible parties to perform or pay for the work. Furthermore, even  though remedial actions at most sites are completed or underway, the  amount of work remaining is unclear; and, given the nature of sites that  are not yet construction complete, the remaining work may be more  complex or costly. These changes have occurred even as Superfund  appropriations and expenditures have declined. However, EPA does not  provide the Congress with sufficient information to make decisions about  future funding needs of the Superfund program.
subsections: section_title: The Number and Types of Sites Added to the NPL Have Changed Over Time, but Trends in Sites without Viable Responsible Parties Are Unclear
paragraphs: We identified three factors that could affect EPA’s ability to fund and  conduct site cleanups: (1) the number of sites on the NPL has declined  over time; (2) the types of sites added to the NPL may require greater EPA  expenditures for cleanup; and (3) fewer sites may have responsible parties  who can contribute to cleanup, although EPA data do not clearly indicate  the number of sites without viable responsible parties or the value of the  orphan shares at sites.
subsections: section_title: The Number of Sites Added to the NPL Has Declined Due to Several Factors
paragraphs: As figure 9 shows, the number of nonfederal sites added to the NPL has  declined over time. In 1983, the first year of the NPL, EPA added over 400  sites, but EPA added only an average of 20 new sites annually for fiscal  years 1998 through 2007.
The decrease in the number of sites added to the NPL has occurred for the  following reasons:    Legal requirements have changed. When the Superfund program  began, EPA was required under CERCLA to list, to the extent  practicable, at least 400 individual sites. However, the Superfund  Amendments and Reauthorization Act of 1986 struck that requirement.  Later, appropriations laws for fiscal years 1995 and 1996 effectively  prohibited EPA from proposing or listing a site on the NPL unless the  governor of the applicable state concurred. As a matter of policy, EPA  continues to request state support for listing sites on the NPL.
Other cleanup programs have been used to clean up sites. According  to EPA officials and Superfund experts representing responsible  parties, state programs or other federal programs have been developed  to clean up sites. In the early years of Superfund, few other means were  available to address hazardous waste sites, particularly abandoned  sites. In 2003, we reported that EPA regional and state officials  considered the NPL a “last resort” for sites that cannot be addressed  through other programs. Most states have established programs to  help address hazardous waste sites, and EPA’s policy is to defer NPL  listing for sites that can be effectively cleaned up under these  programs. Federal programs that assist with cleaning up hazardous  waste sites and that potentially reduce the need for sites to be listed on  the NPL include the Superfund Alternative Approach, the Resource  Conservation and Recovery Act (RCRA) Corrective Action program,  and the Brownfields program, according to EPA officials.
Removal actions may have helped clean up sites. According to a  responsible party attorney and a representative of a public interest  group, removal actions may address contamination issues at some sites  without listing the sites on the NPL. As of the end of fiscal year 2007,  the agency or responsible parties had started over 10,000 removal  actions at sites, and 72 percent of these actions were at sites that had  not been listed on the NPL, according to EPA data.
Waste handling practices may have helped prevent new sites from  being created. One Superfund legal expert and several responsible  party attorneys suggested that the number of sites listed on the NPL  may have declined because fewer new contaminated sites have been  created. The attorneys attributed this decline in the number of new  sites, at least partly, to improvements in waste handling practices.
Funding constraints may have restrained EPA from listing sites.  Experts representing public interest groups, an association of state  agencies, and responsible parties stated that funding constraints may  have affected EPA’s willingness to list a larger number of sites in recent  years. In particular, state agency representatives indicated that, after  EPA formed a headquarters group to review regional recommendations  for new NPL site listings, the number of sites listed on the NPL each  year decreased. The state agency representatives attributed this  decrease to the group’s consideration of whether funds would be  available to clean up a proposed site. EPA officials, however, told us  that the cost of a site’s cleanup has not played a role in deciding  whether to list a site on the NPL.
section_title: Types of Sites Now Added to the NPL May Require Greater EPA Cleanup Expenditures Than in the Past
paragraphs: The types of sites added to the NPL have changed. EPA places sites into  the following six broad categories:    Manufacturing sites. Wood preservation and treatment, metal  finishing and coating, electronic equipment, and other types of  manufacturing facilities.
Mining sites. Mining operations for metals or other substances.  “Multiple” sites. Sites with operations that fall into more than one of  EPA’s categories.  “Other” sites. Sites that often have contaminated sediments or  groundwater plumes with no identifiable source.
Recycling sites. Battery, chemical, used oil recovery, or other types of  recycling operations.
Waste management sites. Landfills and other types of waste disposal  facilities.
From fiscal years 1983 through 2007, more than 70 percent of the  nonfederal sites added to the NPL were either manufacturing or waste  management sites. In addition, about 11 percent of the sites added to the  NPL were megasites—sites at which actual or expected total cleanup  costs, including removal and remedial action costs, are expected to  amount to $50 million or more. Mining and “multiple” sites represented  the smallest categories of sites on the NPL, but were also the categories of  sites with the highest percentage of megasites. Table 9 shows the number  and percentage of sites, as well as the number and percentage of sites  designated as megasites, in each of EPA’s six categories.
While recycling and “multiple” sites have represented a relatively  consistent percentage of sites added to the NPL over time, other types of  sites have fluctuated as a percentage of the sites added to the NPL. For  example, during the 1980s, 47 percent of the sites added to the NPL were  waste management sites, but the percentage of such sites added to the  NPL decreased to 23 percent of all sites added in the 1990s and 11 percent  of all sites added since fiscal year 2000. Conversely, mining and “other”  sites, which totaled 14 and 12 percent of sites added in the 1980s and  1990s, respectively, together grew to 44 percent of the sites added to the  NPL since fiscal year 2000. Figure 10 shows the changes in the percentages  of the different types of sites added to the NPL between fiscal years 1983  and 2007, while table 10 provides information on the number of sites in  each site type included in these percentages.
The changes in the types of sites added to the NPL since fiscal year 2000 were   most significant for mining sites, as well as for certain subcategories of sites  included in EPA’s “other” site type. Over 60 percent of the NPL mining sites  were added between fiscal years 2000 and 2007. In addition, the number of  sites listed on the NPL in EPA’s “other” category increased since fiscal year  2000. Within this category, two types of sites were listed in greater numbers.  Specifically, groundwater plume and contaminated sediment sites with no  identifiable source together increased from 51 percent of the “other” sites  added to the NPL from fiscal years 1990 through 1999, to 57 percent of the  “other” sites added between fiscal years 2000 and 2007.
Because EPA’s costs differ depending on the type of site, changes in the  types of sites listed on the NPL since fiscal year 2000 could affect  Superfund program costs. For example, the amount EPA spent at  individual nonmegasites through fiscal year 2007 averaged over $5.3  million. However, the amount EPA spent at individual megasites through  fiscal year 2007 averaged around $48.1 million. Mining sites, which are  among the types of sites added to the NPL more frequently in recent years,  are also more likely to be megasites. Through fiscal year 2007, EPA had  spent, on average, more than three times the amount per site at mining  sites as at the next most expensive type of site—manufacturing sites. In  addition, while the number of sites involving contaminated sediments with  no identifiable source is a small portion of sites on the NPL (eight sites),  four of these sites were megasites, and four of the eight sites were listed  on the NPL during or after fiscal year 2000. Table 11 shows EPA’s  average expenditures per site for different types of sites, as well as overall  for nonmegasites and megasites through fiscal year 2007.
According to EPA’s data on responsible parties, the agency has identified  responsible parties at most sites. However, 13 percent—or 183 of the 1,397  nonfederal NPL sites—did not have any responsible parties identified in  EPA’s data as of fiscal year 2007. Table 12 provides information on the  extent to which EPA has identified responsible parties at sites.  Specifically, recycling and “multiple” sites had the highest average number  of responsible parties—201 and 123 parties per site, respectively; while  manufacturing and mining sites had the lowest average number of  responsible parties—10 and 13 parties per site, respectively. Alternatively,  “other” sites and mining sites most often had no responsible parties  identified—25 and 18 percent, respectively.
Moreover, we found some evidence that the number of sites without  responsible parties may be increasing. Specifically, for fiscal years 1983  through 1989, 1990 through 1999, and 2000 through 2007, the percentage of  sites without responsible parties identified in EPA’s enforcement data  increased from 10 to 14, and then 27 percent, respectively. However, the  usefulness of these data is limited, in part, because the extent to which the  data represent the actual number of sites without viable responsible parties  is unclear. For example, EPA’s data identifying individual sites without  responsible parties do not indicate whether the agency has not been able to  identify parties at these sites despite significant search efforts, or whether  EPA’s search efforts are still in their early stages. This distinction is  important because the absence of responsible parties in EPA’s data may not  indicate that the agency will never identify responsible parties for a site.  EPA may take longer to identify and take enforcement action against  responsible parties at one site than at another. If EPA knows that a  responsible party might be liable for a site’s cleanup, but the agency has not  taken certain actions against that party, the responsible party would not be  identified in EPA’s database. Furthermore, recent advances in forensic  auditing of insurance claims and chemical fingerprinting analyses may help  to link responsible parties to sites where previously it was not possible to do  so. As a result, EPA may eventually identify responsible parties at some of  the sites where they are not currently identified. At the same time,  however, EPA typically starts its search for responsible parties no later than  when a site is listed on the NPL. Moreover, some of the changes EPA made  to its enforcement process as part of its administrative reforms were  designed to identify responsible parties earlier in the search process.  Therefore, the longer a site has been on the NPL without identifying any  responsible parties, the less likely it may be that EPA will identify parties for  the site in the future.
In addition, we identified other problems with the comprehensiveness and  reliability of EPA’s data on the responsible parties associated with sites.
Although EPA’s data showed that the agency has identified responsible  parties at most sites, it does not have complete data on how many sites  have parties that were ultimately not viable or were unable to pay for  some of their cleanup costs. For example, EPA has collected some data on  the extent to which individual parties are not viable or had limited ability  to pay for their Superfund site liability, but these data are incomplete. For  some of these data, EPA only collected the information to evaluate the  implementation of its administrative reforms, and according to the agency,  the data are not reliable prior to fiscal year 1996 or after fiscal year 2004.  EPA collects other data that provide information on the extent to which  there are not viable responsible parties at sites, but these data are only  reliable for sites that had a remedial action started since fiscal year 2004,  according to the agency. Furthermore, at 27 sites, EPA’s data did not  identify any responsible parties, although the data showed that EPA had  taken enforcement actions. These sites represent an additional 15  percent of sites for which EPA’s data did not identify any responsible  parties. According to an OECA official, EPA headquarters has been  working with the regions to improve the quality of the responsible party  data.
Finally, whether or not EPA identifies responsible parties at sites, its data cannot be used to determine the total value of the orphan share at sites.  For example, even when a responsible party declares bankruptcy, EPA  and DOJ officials noted, the federal government may still be able to  recover some of the money the party owes. However, EPA does not record  the balance this bankrupt party owes. For example, EPA noted that it  records the amount the bankrupt party owes as determined by the  bankruptcy court, rather than the difference between the amount sought  by the agency in the “proof of claim” it files with the bankruptcy court and  the amount allowed by the court. In addition, EPA places a cap on the  value of the orphan share it records at sites. According to EPA officials,  the total orphan share at a site is all the orphan shares of individual  nonviable parties. However, because EPA’s policy is to limit offers to  compensate for orphan shares to a maximum value of 25 percent of the  future costs at a site, the orphan share value that EPA records in its data is  capped at this 25 percent maximum value. As a result, if the site’s total  orphan share exceeds 25 percent of future site costs, EPA’s data would not  account for the full value of this share.
The extent to which EPA’s ability to identify viable responsible parties to  help fund or conduct site cleanups changes over time could significantly  affect the program. As noted earlier, EPA’s cost recoveries from  responsible parties have provided the second largest source of funding for  the Superfund trust fund, in addition to providing billions of dollars in  estimated commitments for site work. If EPA cannot identify responsible  parties for an increasing number of sites, or if an increasing number of  parties identified at sites are not financially viable, a greater proportion of  cleanup activities may need to be funded by EPA using its Superfund  appropriation. Also, if the trust fund receives less in reimbursements from  cost recovery actions against responsible parties, appropriations from the  general fund would need to increase in order to sustain the same level of  cleanup activity. According to both DOJ and EPA officials, as well as a  number of other Superfund experts we spoke with, the number of sites  without viable responsible parties or where parties cannot pay for all of  their cleanup costs is likely to increase, particularly as a result of poor  economic conditions. They pointed to a recent growth in the number of  cases filed in bankruptcy courts as evidence of this trend. The DOJ  officials also noted an increase in the number of settlement agreements in  which responsible parties state that financial issues limit their ability to  pay for all of their cleanup costs. In addition, DOJ officials said that NPL  sites are more likely to include sites without viable responsible parties  because states with active cleanup programs often take on sites with  responsible parties that are willing to conduct cleanup efforts. Other  experts also noted that the longer a site remains on the NPL, the more  likely it is that EPA will not be able to identify viable responsible parties.
section_title: NPL Site Cleanups Are Progressing, but the Amount of Work Remaining Is Unclear and May Be More Complex or Costly
paragraphs: Although cleanup actions have been initiated at many sites, some sites  require additional efforts to address contamination, and the amount of  work remaining at sites where actions to construct a remedy have not  been completed is unclear. Furthermore, the sites that are not  construction complete may require more complex or costly cleanup  activities.
subsections: section_title: Remedial Actions Have Been Implemented or Are Underway at Most NPL Sites, but the Amount of Work Remaining Is Unclear
paragraphs: Remedial actions to address site contamination have been completed or  begun at most of the sites listed on the NPL since the beginning of the  Superfund program, according to EPA’s data. As of fiscal year 2007,  approximately 70 percent of the 1,397 nonfederal NPL sites had reached  EPA’s construction complete milestone. In addition, about one-half of the  422 sites that were not construction complete had some remedial action  underway at the end of fiscal year 2007.
However, data on the construction complete status of sites do not provide  a clear picture of the amount of work remaining at sites. For example,  according to one Superfund expert, sites with groundwater contamination  can take a long time to clean up when the remedy is to pump and treat the  water or to simply allow contaminants to degrade over time. Once a site  reaches construction complete, decades may still be required until  remedial actions clean up groundwater contamination to the selected  standards, and continued federal funding may be necessary to implement  these actions. At sites where the federal government, rather than a  responsible party, implemented the groundwater remedial action, and  where continued operation of the remedy is necessary to complete  cleanup of ground or surface water, sites may receive federal funding for  up to 10 years after the groundwater remedy is determined to be  operational and functional. In such situations, after 10 years of remedy  operation or upon completion of the remedial action (whichever is  earlier), responsibility for the site and any additional implementation  costs, are transferred to the state.
The progress of cleanup is even less clear for sites that are not  construction complete. Sites are often divided into smaller units (operable  units), by geography, pathways of the contamination (e.g., groundwater),  or type of remedy. These operable units may move through the Superfund  cleanup process at different speeds, depending upon the scope of work or  type of remedy selected for each operable unit. In addition, operable units  may encompass significantly different scopes of work even within the  same site. For example, an operable unit might be defined to account for  certain activities not directly related to site cleanup, such as community  outreach or providing alternative drinking water supplies in instances  where a community’s drinking water has been contaminated.  Alternatively, one Superfund expert noted that an operable unit might be a  large stretch of river or a small parcel of land.
As a result of differences in the potential scope of work and remedies  selected at operable units, it is difficult to aggregate data on the status of  cleanups at individual operable units at sites to provide information on the  status of cleanups at NPL sites overall. For example, one way that EPA  records the progress of cleanup at sites is according to the least and most  advanced cleanup stages of sites’ operable units. Of the 422 nonfederal  sites that were not construction complete at the end of fiscal year 2007,  184 had 1 operable unit, while 238 had multiple operable units, ranging in  number from 2 to 23. However, even at sites with only 1 operable unit, it is  difficult to use EPA’s data on the least and most advanced stages of  cleanup to determine the amount of work remaining at the site.  According to EPA’s data, of the 184 sites with 1 operable unit, the agency  had not begun remedial assessment at 10 sites, study was underway at 80  sites, a remedy had been selected or design was underway at 38 sites, and  remedial construction was underway at 28 sites. While these data provide  some information on the status of cleanup actions at these sites, they  provide limited information on the amount of work remaining. In addition,  multiple cleanup actions may occur at a single operable unit and,  therefore, the least and most advanced stages of cleanup might be  different. In fact, at least 28 of the 184 sites with only 1 operable unit had  multiple actions ongoing at their operable units as of the end of fiscal year  2007. These differences make it difficult to use information on the least  and most advanced stages of cleanup to provide overall information on the  status of cleanups at these sites. Table 13 shows the status of the least and  most advanced stages of cleanup at the nonfederal NPL sites with one  operable unit, as of fiscal year 2007.
Similarly, for the 238 sites that were not construction complete but had  multiple operable units, it is difficult to aggregate EPA’s data on the least  and most advanced stages of cleanup at sites to provide information on the  overall status of cleanups at sites. Table 14 provides information on the  least and most advanced stages of cleanup at nonfederal NPL sites with  multiple operable units, as of fiscal year 2007. As shown in the table, many  of the sites whose most advanced operable unit was in the construction  underway stage had operable units at earlier stages in the cleanup process.  For example, at 26 sites, the status of cleanup at the most advanced  operable unit was construction underway, but the status of cleanup at the  least advanced operable unit was remedial assessment not begun.  Additionally, at 65 sites, the status of cleanup at the most advanced  operable unit was construction underway, but the status of cleanup at the  least advanced operable unit was study underway. As the table shows,  there were only 18 of the 238 sites where the least and most advanced  stages of cleanup of the operable units at these sites was construction  underway.
Furthermore, according to EPA officials, the agency is likely to complete  cleanup actions at the easiest operable units at a site first. As a result, sites  with operable units at early stages in the cleanup process (or operable  units with individual cleanup actions at early stages in the cleanup  process) could represent sites with more difficult operable units or  actions. These operable units or actions could require relatively greater  amounts of cleanup work in the future. As a result of these differences, the  data on the status of cleanup at operable units, without details on the  scope of the operable units and the remedies selected, provide only  limited information about the work remaining at sites.
section_title: Sites That Are Not Construction Complete May Be More Complex and Costly Than Sites That Are Construction Complete
paragraphs: According to past EPA testimony, in the earlier years of the Superfund  program, the agency focused resources on sites that needed less  construction work and that were farther along in the cleanup process.  Consequently, the sites that have been on the NPL the longest without  reaching construction complete are likely to be more complex and costly.  About one-half of the 422 sites that were not construction complete—219  sites—were listed on the NPL prior to 1994; and 108 of these were added  in fiscal years 1983 and 1984. Figure 11 shows the number of sites that had  not yet reached construction complete, as of fiscal year 2007, according to  cal year 2007, according to  the year in which the sites were listed.  the year in which the sites were listed.
By the end of fiscal year 2007, fewer mining, sediment, and groundwater  sites—those sites that EPA and other experts indicated are among the  most complex and costly to address—had reached construction complete  than other types of sites. For example, mining sites had the lowest  percentage of sites reaching construction complete, about 21 percent,  although many of these sites were listed more recently. Among  contaminated sediment and groundwater plume sites with no identifiable  source, only about 55 percent had reached construction complete. For  sediment sites in particular, one Superfund legal expert stated, the scope  of a site’s cleanup makes a significant difference in the length of time it  takes to address contamination at the site because it is often difficult to  understand the link between the contamination and the environmental  damage at such sites. As a result, the scope of the cleanup at these sites  often expands to address a variety of issues, which increases the length of  the cleanup effort.
Moreover, megasites reached construction complete less often than  nonmegasites. Approximately 74 percent of nonmegasites had reached  construction complete while only 37 percent of megasites had reached  construction complete through 2007. In addition, the median length of  time for nonmegasites to progress from site listing to construction  complete was 10 years, compared with a median of about 15 years for  megasites. As a result of these differences, the percentage of NPL sites  that were not construction complete and that were megasites increased  over time, from 12 percent of sites active at the end of fiscal year 1989 to  23 percent of sites active at the end of fiscal year 2007. Table 15 shows the  number, percentage, and median length of time it took for individual types  of sites, nonmegasites, and megasites to reach construction complete.
EPA has recognized the challenges posed by certain types of sites and has  taken a number of steps to address them. For example, EPA implemented  special procedures to track certain large sediment sites because of the  significant challenge these sites can pose during the cleanup process. Of  the 48 nonfederal sediment sites EPA was tracking using these  procedures, almost one-half were megasites. Through the end of fiscal  year 2007, EPA had spent an average of $31.3 million at each of these sites;  however, only 9 of these sites had reached construction complete. In  addition, because of the challenges mining sites pose to the Superfund  program, EPA established the Abandoned Mine Lands Team to identify  and coordinate alternative approaches to cleaning up these sites.  However, the extent to which EPA is unable to identify viable responsible  parties to assist with the cleanup of these and other NPL sites that are not  construction complete could affect the agency’s ability to maintain  continued cleanup progress.
section_title: Program Funding Has Decreased, While EPA’s Site Costs Have Increased; and Agency Reporting on Key Cost Indicators Is Insufficient
paragraphs: Overall, both EPA’s Superfund appropriation and program expenditures  have declined. As we reported in July 2008, since fiscal year 1981, the  annual appropriation to EPA’s Superfund program has averaged  approximately $1.2 billion in nominal dollars. In recent years, however,  congressional appropriations for the Superfund program have declined  when adjusted for inflation. Figure 12 shows appropriation levels in  on. Figure 12 shows appropriation levels in  nominal and constant dollars since fiscal year 1981.  nominal and constant dollars since fiscal year 1981.
Similarly, EPA’s expenditures on Superfund program activities declined by  29 percent, or $1.8 billion to $1.3 billion, between fiscal years 1999 and  2007. During this period, EPA used approximately 77 percent of its  Superfund expenditures for remedial and removal activities. Most of the  remainder of EPA’s Superfund expenditures was spent for enforcement  and administration-related activities. However, EPA’s expenditures on its  remedial program declined by 37 percent from fiscal year 1999 through  2007, and accounted for the majority of the decline in Superfund program  expenditures during this period. Figure 13 shows EPA’s Superfund  expenditures for fiscal years 1999 through 2007.
While EPA’s Superfund appropriation and expenditures have declined  over time, the average amount EPA spent for individual sites has increased  in recent years. For example, EPA spent an average of approximately  $7.5 million at sites that reached EPA’s construction complete mileston fiscal year 1999. EPA’s expenditures increased to an average of about  $10.2 million in total expenditures per site at sites reaching construction  complete in fiscal year 2007. Although the average amount EPA spent at  sites reaching construction complete between fiscal years 1999 and 2007  increased in some years and decreased in others, overall, EPA’s site  expenditure data showed an average annual increase of 13 percent per  year during the period.
In addition to increases in the amount EPA spends at individual sites that  have reached construction complete in recent years, reports by EPA and  its Inspector General indicate that the agency has consistently spent a  relatively large percentage of its funds for site cleanup work at a relatively  small number of sites since fiscal year 2003. For example, in 2004, the  Inspector General reported that approximately one-half of EPA’s fiscal  year 2003 funding for remedial actions, non-time critical removals, and  long-term response actions went to 8 sites out of a total of 94 sites  receiving funding. Similarly, according to EPA annual reports for fiscal  years 2004 through 2008, the agency spent about one-half of its Superfund  obligations for construction and post-construction activities at roughly 12  to 13 sites per year. It should be noted that not all sites require funding for  remedial action construction in any particular year, and EPA may still be  taking enforcement actions at a site to try to obtain a responsible party  commitment to conduct the remedial action. Nevertheless, these data  show that individual sites may require a significant commitment of agency  resources on an annual basis.
In addition to the greater complexity of cleanup for sites that have not  reached construction complete or were added more recently to the NPL,  Superfund experts cited a number of factors that have contributed to  EPA’s increased site expenditures. For example:    With scientific advances, EPA may be able to conduct more thorough  remedial investigation efforts, which could lead to more thorough  remedial actions and potentially higher costs.
New contaminant issues or remedial technologies could lead to  increased site costs. For example, the intrusion of vapors into buildings  from contaminants is a new issue that could increase costs at some  sites.
Rising construction costs have contributed to higher EPA  expenditures. In particular, according to an OSWER study, Superfund  site construction costs escalated by 37 percent in recent years.
The number of sites for which EPA cannot identify viable responsible  parties to help pay for site cleanup activities has increased, according  to DOJ officials.
Because of these trends, EPA may be hampered in its efforts to start new  remedial actions at some sites or maintain the progress of cleanup at  others, according to EPA’s Inspector General, the National Advisory  Council for Environmental Policy and Technology (NACEPT), and EPA’s  own annual Superfund accomplishment reports. In 2004, the Inspector  General estimated that the Superfund program had a funding shortfall of  $174.9 million in fiscal year 2003. Furthermore, according to the  Inspector General’s report, while EPA regions indicated they had funding  for the majority of sites for fiscal year 2003, they did not have sufficient  funding for some sites. For example, two regions were only able to initially  fence sites rather than complete the removal of contaminated material,  and construction activities did not begin at 11 sites. According to the  Inspector General, when funding is insufficient, construction at NPL sites  cannot begin; cleanups are performed in a less than optimal manner;  and/or activities are stretched over longer periods of time.
Similarly, in April 2004, NACEPT reported that some NPL sites had  completed remedial designs, but that remedial actions at these sites had  slowed or had not yet begun because of insufficient funding, according to  information provided by EPA. For example, the New Bedford Harbor  megasite in New Bedford, Massachusetts, was ready for remedy  construction in April 2004, but because of funding constraints, remedial  action might be stretched out over 25 years, which was not optimal in  terms of achieving a cost-effective remedy or for protecting public health  and the environment.
NACEPT identified four key categories of information that would help  identify Superfund program trends: the (1) types of site conditions that are  driving EPA remedy decisions at NPL sites; (2) impediments to cleanup  progress at older sites, especially those listed on the NPL in the early  1980s; (3) number and type of potential future NPL sites; and (4) program  expenditures and potential future costs. It noted that these data were  particularly important for megasites because of the impact these sites  could have on program funding needs and priorities. To this end, NACEPT  recommended that EPA improve the information and data on the  Superfund program and publish an annual report that presents key data  on, among other things, program progress, expenditures, and anticipated  costs. In addition, a 2004 EPA working group stated that to more  completely measure program success, EPA should compare dollars  actually recovered with dollars potentially recoverable at sites with viable  responsible parties. According to the working group’s report, as  responsible parties continually press the agency to exclude some past  costs from recovery by, for example, applying the agency’s ability to pay or  orphan share compensation policies, EPA needs some way of ensuring  that it is not compromising too much on past cost claims.
In response, in part, to the NACEPT recommendations, EPA began  publishing annual reports of its Superfund program accomplishments,  starting in fiscal year 2004. In these reports, EPA partially addressed the  NACEPT recommendations. Specifically, EPA reported that it was able to  fund all 19 new construction projects that were ready for funding in fiscal  year 2007, but it reported a lack of funding in other years since fiscal year  2005. For fiscal years 2005, 2006, and 2008, respectively, EPA reported that  9 out of 26, 6 out of 24, and 10 out of 26 new construction projects that  were ready for funding each year did not receive funding due to resource  constraints. These reports also provide information on program outputs,  such as the number of construction projects started or continued; and  program outcomes, such as the amount of responsible party commitments  EPA secured for site work, cost recovery, and oversight costs; the number  of sites with human exposure under control; and the number of sites that  are ready to return to productive use.
While these reports provide some information on program progress and  financial constraints, they do not provide information on key indicators of  future program costs, or other data that would help EPA more fully  respond to the NACEPT report’s recommendations. In particular, these  reports do not provide information on the number and cleanup status of  megasites (especially mining and sediment sites), which could help  indicate the types of conditions that are driving EPA’s remedy decisions at  sites that were listed more recently, as well as the impediments to cleanup  progress at older sites. Additionally, these reports do not provide  information on the number of sites where responsible parties are  financially unable to help pay for cleanup activities, or the potential  impact on EPA’s ability to carry out cleanup activities when it cannot  obtain reimbursement for agency cleanup costs from responsible parties.  Such information could help indicate the factors that are driving program  expenditures and potential future costs.
section_title: Conclusions
paragraphs: EPA’s Superfund enforcement actions have generally resulted in  agreements with responsible parties that provided significant value to the  program, particularly in terms of responsible parties’ commitments to  conduct site work. In addition, EPA’s cost recoveries—historically,  amounting to roughly one-third of the agency’s site expenditures—help  replenish the Superfund trust fund so that EPA has funds to clean up other  sites. Since the taxes dedicated to supporting the Superfund trust fund  expired, these recoveries—including fines and penalties—have provided  almost 20 percent of trust fund revenues. However, EPA’s ability to  continue to recover its costs may be affected by the extent to which  responsible parties are able to pay for site cleanups. A robust trust fund,  whether replenished through cost recoveries or other sources of funding,  has helped EPA to conduct cleanup activities on its own while continuing  to use enforcement actions to encourage responsible parties to settle their  liability. Additionally, CERCLA-related litigation and, potentially, its  associated costs have declined in recent years. In part, this downward  trend resulted from EPA’s changes to the enforcement process to, among  other things, encourage parties to settle by providing compensation for  orphan shares at sites. However, an increasing number of sites with  orphan shares, as well as potential adjustments in parties’ decision making  about how to resolve liability following recent or upcoming court  decisions, could make it more difficult for EPA to reach settlements with  responsible parties to pay for or conduct cleanup work.
Although a strong trust fund is important for EPA’s continued ability to  enforce the Superfund program and clean up sites, EPA and others have  reported financial constraints on these efforts. To help assess these  financial constraints, EPA needs comprehensive and reliable data that can  be aggregated to provide information on key issues, such as the (1) status  and cost of cleanups at sites that are not construction complete,  particularly sites where cleanup is likely to be complex and expensive; (2)  extent to which sites lack responsible parties capable of paying for some  or all of a site’s cleanup activities; and (3) financial impacts of having EPA  shoulder these sites’ cleanup costs. However, EPA’s current data on these  issues are not consistently comprehensive, reliable, or capable of being  aggregated to provide clear program-wide information. For example,  EPA’s data on the status of individual site cleanups cannot be aggregated  to provide clear information on the amount of work remaining at sites  overall. In addition, because EPA does not have comprehensive and  reliable data on how many individual sites lack viable responsible parties  or the total value of the orphan share at sites, the agency cannot aggregate  its data to provide clear information on trends in the extent to which sites  lack viable responsible parties. Also, without this information, EPA cannot  determine the financial impacts that the absence of viable parties could  have on the agency’s future cost recovery efforts. Information on these key  issues is important for EPA to effectively plan the future course of the  Superfund program, and the Congress needs such data to help it make  more informed decisions about program funding and policy issues.
section_title: Recommendations for Executive Action
paragraphs: To assist the Congress in making decisions about funding the Superfund  program, we are recommending that the Administrator, EPA, assess the  comprehensiveness and reliability of the data the agency collects and,  where necessary, improve the data for the purpose of providing  aggregated information on the following issues:  the status and cost of cleanups at individual sites, particularly complex  and expensive sites;  the extent to which there are viable responsible parties at NPL sites;  and  the potential financial impacts from EPA’s inability to obtain  reimbursement for agency cleanup costs from nonviable responsible  parties.
We are also recommending that the Administrator, EPA, aggregate these  data, as appropriate, to provide clear and complete information on these  issues, and provide this information to the Congress in the agency’s annual  accomplishment reports.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided EPA, DOJ, and the Administrative Office of the U.S. Courts  with a draft of this report for review and comment. DOJ and the  Administrative Office of the U.S. Courts had no comments on the draft  report, although the Administrative Office of the U.S. Courts provided one  technical clarification which we incorporated into the report. In its written  comments, EPA agreed with our recommendation to review the agency’s  data on site cleanup status and costs and determine what additional  aggregate information would be meaningful to provide to the Congress;  however, EPA disagreed with our recommendations to provide aggregate  data on the extent to which there are viable responsible parties at sites  and the potential financial impacts of EPA’s inability to obtain  reimbursement for agency cleanup costs from nonviable responsible  parties. EPA did not specifically address our recommendation to provide  any additional aggregated information to the Congress in its annual  accomplishment reports.
In commenting on our recommendation to provide aggregated data on site  cleanup status and costs, EPA recognized that both site-specific and  aggregate information are necessary to support congressional decision  making. EPA indicated that it has made significant efforts to provide  information to the public on individual site cleanups through the  Superfund site profile pages available on the agency’s Web site. EPA also  noted that there are limitations in the extent to which site-specific data  can or should be aggregated because of the complexity and diversity of  individual site cleanups. We agree that EPA’s Superfund site profile pages  provide valuable information about individual sites. However, this  information cannot be used to evaluate programmatic trends without a  labor intensive process of collecting and analyzing data from potentially  over 1,000 individual sites. Moreover, certain data central to understanding  the status and future cost of Superfund site cleanups (particularly EPA-led  cleanups)—such as estimates of the amount of work or funding needed to  reach cleanup goals—are not available on EPA’s Web site. EPA noted that  some of this information may be sensitive on a site-specific basis.  However, even data that is on EPA’s Web site, such as the cleanup status  of sites’ operable units, cannot be easily aggregated to provide information  on program trends. Therefore, to assess programmatic trends as it makes  future funding decisions, it is important that EPA provide the Congress  with aggregated data beyond what is available on the agency’s Web site. In  this report, we recognize that there are challenges to compiling aggregated  data on cleanup status, given the differences between sites and the way  response actions are carried out. We also recognize that EPA has made  progress in developing measures that provide information on the extent to  which contamination at sites has been addressed. At the same time,  additional improvement in EPA’s measures is necessary to provide the  Congress with data to understand the amount and cost of remaining site  work.
In disagreeing with our recommendations to provide aggregated data on  the extent to which there are viable responsible parties and the potential  financial impacts of nonviable responsible parties, EPA stated that such  data would likely be of limited value because they are subject to change  throughout the cleanup and enforcement process, and that information on  compromises made pursuant to the agency’s orphan share policy alone  does not allow it to make accurate predictions of future cost recoveries.  We disagree with EPA’s comment that this information would be of limited  value. The Congress needs a more comprehensive understanding of EPA’s  future funding liabilities for site cleanups as it considers various  proposals, such as whether to reinstate taxes to support the Superfund  program. Key determinants of EPA’s future funding liabilities include both  the amount of work remaining at sites and estimates of how much of this  work EPA will likely need to pay for using its Superfund appropriation.  Furthermore, the private sector and other federal agencies have taken  steps to estimate their environmental liabilities; we believe that a better  understanding of EPA’s future Superfund funding needs is essential as  well.
In this regard, data on the extent to which sites that lack viable  responsible parties and the potential financial impacts to EPA when  responsible parties cannot pay for some or all of their cleanup obligations  are critical elements for estimating EPA’s future funding needs. We  recognize in this report that the Superfund enforcement process is a  complex, lengthy, and iterative process. However, this does not preclude  efforts to collect and aggregate these data, as many of the data elements  EPA currently collects and reports on other aspects of the Superfund  program also change and must be updated regularly. In addition, while  future economic conditions and enforcement outcomes are uncertain,  EPA already has or could develop certain information that would form the  basis of such a data collection effort. For example, at some sites, cleanup  actions have been completed and the statute of limitations on cost  recovery and other enforcement efforts may have passed. Data on the  number of nonviable responsible parties and unrecovered costs at these  sites could form the basis of an historical trend analysis. Also, as part of  the enforcement process, EPA collects information from responsible  parties about whether they claim to have a limited ability to pay for  cleanup costs. This information, among other data, such as better data on  the value of compromises made pursuant to EPA’s orphan share policy  and the outcome of actions pursued against parties in bankruptcy courts,  could help the agency estimate future potentially unrecoverable costs. We  recognize that these data would be sensitive at the site-specific level and,  therefore, we recommend that they be published only on an aggregated  basis. We also recognize that aggregated data on the issues would—at  best—be estimates and would likely need to be presented in terms of  ranges to account for the uncertainties associated in the underlying data  and methodological assumptions. However, we believe that on an  aggregated level, these data would serve as important indicators of EPA’s  potential funding needs to continue to ensure cleanup at nonfederal NPL  sites.
EPA stated that it agreed with our findings with respect to trends in  Superfund enforcement and litigation. However, EPA suggested that we  clarify language in the report discussing the number of enforcement  actions that result in responsible party work commitments or cost  recovery, as compared to the estimated monetary value of these outcomes.  EPA noted that the estimated value of responsible parties’ work  commitments substantially exceeds that of the agency’s cost recoveries.  We agree with EPA’s comment, and while our methodology was focused  on evaluating the frequency with which different outcomes were achieved,  we made a number of changes to reflect that the value of responsible  parties’ work commitments was greater than EPA’s recovered costs.
EPA also stated that the report inaccurately describes the relationship  between the Superfund trust fund and the level of annual appropriations  for Superfund program activities. We agree with EPA that the balance of  the trust fund has not significantly affected appropriations to the  Superfund program. However, we disagree with EPA’s comment that we  have mischaracterized the relationship between the trust fund and  appropriations to the Superfund program. When we refer to the balance of  the trust fund in this report, we refer to the dedicated amount potentially  available to be appropriated to the Superfund program. Since the balance  of the trust fund has diminished to almost zero, it would be difficult for the  Congress to increase the level of funding for the Superfund program  because any additional appropriations must compete with other programs  or uses of the general fund. Conversely, if the trust fund balance was  substantial, the Congress could increase the Superfund program  appropriation without increasing use of the general fund. The lack of a  substantial trust fund balance may also present challenges in negotiations  with recalcitrant responsible parties because of a perception that, due to  competition for funds, the Congress is unlikely to substantially increase  the level of the Superfund appropriation, which would allow EPA to take  on additional cleanup work.
In addition, EPA suggested that we clarify references to the experts from  which we gathered information for this report. In this report, we  sometimes refer to these individuals collectively as Superfund experts,  while in other instances, we refer to the experts more specifically,  depending upon their positions and backgrounds if we determined that  these might have significant bearing on the information they provided. We  believe this approach is appropriate, given that all of the individuals we  spoke with were, in various ways, experts on the Superfund program  and/or CERCLA enforcement, and many were attorneys. Also, because of  the variety of experts that we contacted, if we referred to the specific  background of each individual for each statement he or she made, we  believe the report would be unnecessarily cumbersome to read.
Finally, EPA provided a number of other technical comments and  clarifications, which we incorporated, as appropriate. EPA’s written  comments are presented in appendix III.
As agreed with your offices, unless you publicly announce the contents of  this report earlier, we plan no further distribution of it until 30 days from  the date of this report. At that time, we will send copies of this report to  the Administrator of EPA, the Attorney General of the United States, the  Director of the Administrative Office of the U.S. Courts, and appropriate  congressional committees. In addition, the report will be available at no  charge on our Web site at http://www.gao.gov.
If you or your staffs have any questions about this report, please contact  me at (202) 512-3841 or stephensonj@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on the  last page of this report. Key contributors to this report are listed in  appendix IV.
section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: This appendix provides information on the scope of work and the  methodology used to examine the (1) outcomes of the Environmental  Protection Agency’s (EPA) enforcement actions, and the factors  considered by federal and private parties in reaching these outcomes; (2)  trends, if any, in litigation to resolve Superfund liability; and (3) status and  implementation costs of the Superfund program. As requested, we also  provided detailed information on the costs of Superfund enforcement and  administration activities in July 2008.
To identify the outcomes of EPA’s enforcement actions, we first reviewed  EPA’s process for enforcing the Superfund program, including applicable  statutes, regulations, and EPA guidance. We also interviewed officials  responsible for implementing and enforcing the Superfund program,  including officials in EPA’s Office of Solid Waste and Emergency  Response (OSWER), and Office of Enforcement and Compliance  Assurance (OECA); as well as officials with the Department of Justice’s  (DOJ) Environment and Natural Resources Division.
We obtained and analyzed data for fiscal years 1979 through 2007 on the  outcomes of EPA’s enforcement actions from EPA’s Comprehensive  Environmental Response, Compensation, and Liability Information System  (CERCLIS). We generally limited our analyses to the results of completed  actions taken at sites proposed for, listed on, or deleted from the National  Priorities List (NPL), as of the end of fiscal year 2007. We collected data  starting from fiscal year 1979 because the earliest Superfund enforcement  action with a monetary value was achieved in that year. An EPA official  told us that, although this outcome occurred before the Superfund  program began, it was included among EPA’s Superfund enforcement  outcomes because it concerned a site that was later listed on the NPL. Key  variables for which we collected these data included  the site at which the enforcement action was taken;  the type of action taken, such as whether EPA settled with or issued an  order to a responsible party;  the date when the action was completed;  the type of outcome that resulted from the action, such as whether the  action included cost recovery or site work (and what type of site  work);    EPA’s estimated value of the action, such as the amount of costs to be  recovered or the estimated value of site work to be performed; and  the responsible parties identified for individual sites.
To analyze these data, we worked with OECA officials to determine  whether the processes used to take different types of actions should be  considered administrative or judicial processes, and whether the  outcomes of different types of actions should be considered consensual or  nonconsensual. On the basis of this classification, we developed  information on the extent to which EPA has used different types of  processes and actions and achieved different types of outcomes  concerning parties’ liability for Superfund site cleanups. Additionally, we  used EPA data on the estimated value of its enforcement actions at NPL  sites to calculate the value of EPA’s enforcement outcomes for fiscal years  1979 through 2007. These data included the values of past costs recovered,  future costs obtained, responsible parties’ work commitments, and  penalties that resulted from individual enforcement actions, although we  did not evaluate the accuracy of EPA’s estimates. During the course of  our review, EPA told us that it continually corrects and updates its  Superfund enforcement outcome data. The version of the data that we  analyzed for this report was updated through June 2008. However,  because of EPA’s ongoing effort to update the data, future analysis of this  database may not match our results.
To obtain information on the factors that parties consider in resolving  liability, we conducted 12 interviews with a variety of Superfund experts.  We selected these experts on the basis of a number of factors, such as  referrals from other interviewees, the past efforts of the individuals (or the  organizations they represent) related to the Superfund program or  Comprehensive Environmental Response, Compensation, and Liability Act  (CERCLA) enforcement, and representation of a variety of perspectives. In  addition to EPA and DOJ officials, the Superfund experts we interviewed  included representatives of  two professional organizations with knowledge of Superfund litigation  and practice—the American Bar Association and the Environmental  Law Institute;  three law firms that represent responsible parties in Superfund  litigation;  three public interest groups—Earthjustice, the Natural Resources  Defense Council, and Resources for the Future;    one industry group—the Superfund Settlements Project; and    an organization of state waste officials—the Association of State and  Territorial Solid Waste Management Officials.
To obtain additional information on the types of actions EPA has taken to  enforce the Superfund program, as well as to gain greater insight into the  factors that influence EPA’s and other parties’ decisions on how to resolve  CERCLA liability, we reviewed key documents detailing the decision- making process behind enforcement actions, as well as parties’ responses  to these actions, from a nonprobability sample of 10 Superfund sites. To  select these sites, we identified a pool of sites (1) that were not federal  facilities, (2) where EPA had identified one or more responsible parties,  and (3) which had reached construction complete during or after 1995.  From this pool, we selected sites on the basis of the highest, average, and  lowest values in terms of the number of responsible parties identified and  the ratio of the monetary value of the enforcement outcome to  enforcement expenditures. We then requested enforcement  documentation for our sample of sites based on the number and type of  enforcement actions taken at the sites; the extent to which the sites  represented a variety of site types (e.g., recycling, manufacturing, or  mining); site location (by EPA region); date the site reached construction  complete; and total EPA spending at the site.
To examine trends in litigation to resolve Superfund liability, we created a  database of litigation related to CERCLA, using data collected from the  Public Access to Court Electronic Records (PACER) system. We  conducted this effort because one of the congressional requesters’ original  interests was in the amount of funds, including legal fees, spent by EPA  and the private sector related to enforcing CERCLA. However,  comprehensive data on the costs of litigation would be difficult to obtain,  particularly because data for the private sector would be proprietary.  Therefore, we determined that data on trends in the extent of CERCLA  litigation would be the best information we could obtain for indicating the  overall direction of trends in the cost of such litigation. We determined  that the PACER system provided access to the most comprehensive set of  cases that we could use to identify trends.
We searched the PACER system for civil cases filed in U.S. district courts  under a CERCLA cause of action. We collected data for 88 of the 94 U.S.  district courts, which represented nearly all of the courts for the 50 states and  the District of Columbia. We searched district court records on a monthly  basis, from the beginning of fiscal year 1994 through fiscal year 2007. We  confined our data collection effort to this period because, after analyzing the  date ranges for each court’s PACER-accessible data, we determined that  fiscal year 1994 was the first full fiscal year for which almost all district  courts’ records were searchable through the PACER system.
As a result of our monthly searches of the PACER system, as well as data  provided by the Administrative Office of the U.S. Courts and district court  officials, we compiled a database of 2,281 cases filed under a CERCLA  cause of action in U.S. district courts from fiscal years 1994 through 2007.  We then analyzed the docket—or record of activity—for each of these  cases to obtain basic information about the cases, as well as data on their  duration, complexity, and outcome. The case information we collected  included (1) data on the docket number and case title, the district court in  which the case was filed, and the cause of action and nature of suit under  which the case was filed; (2) the dates when the case was filed and then  closed or terminated; (3) the number of parties involved in the case as  plaintiffs and defendants, and whether the parties were federal, state,  local government, private, other, or unknown entities; (4) whether parties  in the case filed a third party complaint against other parties; and (5)  whether parties in the case appealed an issue to a U.S. Court of Appeals.  Table 16 provides examples of how we categorized parties listed in the  case dockets we analyzed.
Information we collected on the outcomes of cases included whether the  case docket contained evidence of any of the following types of  outcomes:    settlement (concurrent)—parties reached a settlement and the docket  included evidence of the settlement concurrently with (or within a  week of) the case filing;    settlement (nonconcurrent)—parties reached a settlement and the  docket included evidence of the settlement more than a week after the  case filing;    dismissal (court)—the court dismissed parties or claims, not as a result  of a settlement, such as when a court granted a defendant’s motion to  dismiss claims against it;    dismissal (voluntary)—a plaintiff dismissed parties or claims  voluntarily and not as a result of a settlement;    nonconsensual judgment—the court or jury made a judgment on  liability (not accompanied by a settlement), or the court granted a  motion for summary judgment or declared a party to be in default;  and  remand—the court remanded a case or individual claims to a state or  local court.
Furthermore, we collected other information on case outcomes, such as  whether (1) evidence indicated that parties may have reached a settlemen on issues of liability but evidence was unclear about a final settlement  the case docket (possibly indicating an out-of-court settlement) or (2)  there was minimal evidence of litigation activity prior to a nonco settlement. We then analyzed the data we collected to develop  information on trends in CERCLA litigation. See below for a discussio the limita tions in the collection and analysis of data from the PACER  system.
To help identify contributing factors for the trends in litigation, we  discussed our preliminary findings with Superfund experts, focusing on  why the number, duration, and complexity of CERCLA cases decreased  from fiscal years 1994 through 2007. In particular, we obtained informatio n  on how certain factors, such as EPA efforts to promote settlements with  responsible parties before filing a case in court, as well as court rulings o CERCLA liability issues, affected CERCLA litigation. We also discussed  how trends in the amount, duration, and complexity of CERCLA litigation  relate to the costs of such litigation. Finally, we discussed how certain k court decisions have affected CERCLA litigation, as well as how some  ongoing cases could affect CERCLA litigation in the future.
To determine the status of the Superfund program, we collected and analyzed data on final and deleted nonfederal NPL sites from EPA’s  CERCLIS database. These data included the dates of NPL site listings to identify trends in the number of sites that were added to the NPL from  fiscal years 1983 through 2007, and data on site types to identify changes in  the types of sites added to the NPL over time. Although the Superfund  program began in fiscal year 1981, the first sites were not listed on the N until fiscal year 1983 and, therefore, we considered this to be the initial time frame for NPL site data we obtained and analyzed. In addition, to  analyze the status of site cleanups, we used data on key milestones for  operable units and sites identified in EPA’s CERCLIS database, including  remedial assessment not begun, study underway, remedy selected, design  underway, construction underway, and construction complete. Final ly, to  gain insight into the status of the Superfund program, we compared  CERCLIS enforcement data on the number of sites at which EPA identified responsible parties with CERCLIS data on NPL sites.
To analyze the costs of implementing Superfund program activities, we  obtained EPA data on overall program expenditures—also referred to  outlays—from the agency’s Integrated Financial Management System  (IFMS) database. EPA budget staff grouped expenditures into major  categories, such as remedial and removal, based on their knowledge of the  program. We limited our scope to fiscal years 1999 through 2007 because  EPA changed the way it accounted for certain budget items in fiscal year 1999, which made it difficult to obtain consistent data prior to that year.  EPA also updated its system in fiscal year 2004 and, because of this, EPA  budget officials created a crosswalk between the two time periods to  ensure expenditure data were consistent.
In addition, we obtained and analyzed IFMS data on EPA’s site-specific  expenditures at final and deleted nonfederal NPL sites for fiscal years 1990  through 2007. Site-specific expenditures prior to fiscal year 1990 were  not readily available by fiscal year. For these expenditures, EPA  incorporated data as a single amount when it went to the current IFMS  system. As a result, we developed an approach to adjust pre-fisc al year  1990 expenditures for inflation, which resulted in a range of values expenditures at Superfund sites. For the minimum value, we assumed that  all pre-fiscal year 1990 expenditures were made in fiscal year 1989. For the  maximum value, we assumed that all pre-fiscal year 1990 expenditures  were made in the year the site was proposed for the NPL. these values to present information on site expenditures in this report.
To determine the sources of funding that support the Superfund trust fund,  we reviewed the President’s Budget Appendices for fiscal years 1983  through 2009. These documents contain actual budget information from  fiscal year 1981—the first year of the Superfund program—through fiscal  year 2007. We reviewed these data with EPA budget experts to confirm their  accuracy. We use nominal dollars when we refer to appropriated amounts.  It is our policy to present what has actually been enacted or proposed at the  time, what is reported in budget documents, or both. In contrast, for our  analyses of the value of outcomes from EPA’s enforcement activities, as  well as EPA’s Superfund program and site-specific expenditures, we  converted all dollar figures into constant 2007 dollars.
There were some NPL sites that were not proposed for listing prior to fiscal year 1990, but  had expenditures during this earlier period. At these sites, we assumed expenditures prior  to fiscal year 1990 were made in fiscal year 1989. information related to recent legal decisions and ongoing cases identified  by experts; and interviewed agency officials in the Office of the Chief  Financial Officer (OCFO).
To ensure the reliability of the data we used for this report, we reviewed  the two relevant EPA databases: (1) CERCLIS, from which enforcement  outcome and NPL site data were drawn, and (2) IFMS, from which  expenditure data were drawn. For both data sources, we interviewed EPA  officials about the methods the agency uses to ensure data reliability,  manually and electronically reviewed the data, and compared the data  with other published sources. For example, we compared expenditure  data provided by EPA with agency obligation data and found that the data  were somewhat similar for the years in which we had both sets of data— obligations ranged from 5 percent higher than expenditures to 16 percent  lower than expenditures during fiscal years 2004 through 2007. We also  followed up with EPA officials from OSWER, OECA, and OCFO with  specific questions resulting from this review.
To understand the reliability and completeness of the data we collected  from the PACER system, we interviewed officials with the Administrative  Office of the U.S. Courts, as well as officials with seven federal district  courts that collectively accounted for more than 25 percent of the cases  identified during our review. We asked these officials about the  collection, processing, and maintenance of case file data available through  the PACER system. On the basis of these interviews, we determined that  the information in case dockets would provide a complete and accurate  record of the proceedings in a case, and we did not evaluate the accuracy  of the entries to the individual dockets we collected and analyzed.
While the district court officials agreed that the PACER system provides  complete, reliable access to case data, some officials also thought it  possible that searching for cases by cause of action could miss certain  cases if a CERCLA-related case was labeled with a non-CERCLA cause of  action. To evaluate the extent to which this might occur, we tested our  PACER search methodology by searching for all cases filed under an  “Environmental Matters” nature of suit, and then examining non-CERCLA  cases to determine if the words “CERCLA” or “Superfund” appeared in the  text of the case docket. Using this methodology, we searched a  nonrandom sample of 14 months out of the study period, from fiscal years  1994 through 2007 (or 8.3 percent of the 168-month study period). On the  basis of this test, we estimate that our search methodology may  undercount the number of CERCLA cases by about 15 percent because the  cases were not listed in PACER as having a CERCLA cause of action.  However, we did not evaluate whether these other cases, in which the  words “CERCLA” or “Superfund” appeared, actually were CERCLA cases.
DOJ officials indicated that while the trends we identified through our  review of CERCLA litigation represented their understanding of the  trends in litigation based on their professional experience, the number of  federal cases we identified in recent years was lower than was  represented in data maintained by the department. As a result, we  performed an additional test of the reliability of our PACER search  methodology. We collected data from DOJ on federal CERCLA cases  filed from fiscal years 1998 through 2007 and found that our database did  not include approximately 30 percent of the cases in DOJ’s data. To  determine why these cases were not listed with a CERCLA cause of  action in the PACER system, we reviewed case documents for cases filed  from fiscal years 2005 through 2007. The average percentage difference  in the number of cases in DOJ’s data, compared with our data, was  slightly higher over this 3-year period, at about 32 percent. However,  through our review of case documents and additional information DOJ  officials provided, we found that almost one-half of the cases that were  in DOJ’s data but not in ours for fiscal years 2005 through 2007 should  not have been identified as a result of our search of the PACER system  because they (1) were filed in district courts for the U.S. territories, (2)  were filed in bankruptcy court, or (3) involved other differences in the  way DOJ collects its data compared with our methodology for identifying  CERCLA cases. For the remaining cases that were in DOJ’s data but not  in ours for the 3-year period, it appeared as though either the court or the  attorney filing the case had made an error in labeling the cause of action,  based on information in case documents. From these tests, we  determined that it is likely that our search methodology did not identify  all of the cases related to CERCLA that were filed in U.S. district courts  for fiscal years 1994 through 2007.
Furthermore, while the courts or attorneys may have made errors that  caused CERCLA cases to be listed in PACER without a CERCLA cause of  action, courts or attorneys may also have made errors that resulted in  cases being listed under a CERCLA cause of action that were not actually  related to CERCLA. To evaluate the likelihood that this occurred, we  assessed the number of cases that were filed by “pro se” plaintiffs— individuals not represented by an attorney—which we believed might be  an indicator of errors because individuals representing themselves might  have less knowledge about how to file cases than an attorney. We found  that 3 percent of the cases listed under a CERCLA cause of action in  PACER were filed by “pro se” plaintiffs. We did not review court  documents for these cases to determine if the cases were, in fact, related  to CERCLA. Despite the potential that the CERCLA cases we identified  might not represent the exact number of cases related to CERCLA from  fiscal years 1994 through 2007 because of court errors or other factors, we  believe that our methodology likely identified a large majority of the  CERCLA cases filed in U.S. district courts during this period. Therefore,  we determined that these data represent a reliable basis from which to  analyze overall trends in CERCLA litigation during this period.
Finally, to further assess the reliability of the data we collected and  analyzed, we discussed our preliminary findings during the interviews we  conducted with Superfund experts. The experts generally indicated that  the results of our analyses of enforcement outcomes, CERCLA litigation,  and program status reflected their experience, or they provided  explanations for the trends we observed. As a result of these efforts, we  concluded that the data we collected and analyzed were sufficiently  reliable for the purposes of this report. Where necessary in the report, we  note potential limitations of these data.
We conducted this performance audit from August 2007 to July 2009, in  accordance with generally accepted government auditing standards. Those  standards require that we plan and perform the audit to obtain sufficient,  appropriate evidence to provide a reasonable basis for our findings and  conclusions based on our audit objectives. We believe that the evidence  obtained provides a reasonable basis for our findings and conclusions  based on our audit objectives.
section_title: Appendix II: Detailed Information on the Number, Duration, Complexity, and Outcomes of CERCLA Cases
subsections: section_title: Information on the Number of Cases Filed
paragraphs: Tables 17, 18, and 19 provide detailed information on the number of cases  filed under a Comprehensive Environmental Response, Compensation,  and Liability Act (CERCLA) cause of action, in fiscal years 1994 through  2007, by the U.S. district court and geographic area—the Environmental  Protection Agency (EPA) region—in which they were filed, and by the  type of plaintiff that filed them. All three tables show a decline in the total  number of CERCLA cases filed over the period. See appendix I for more  information on how we developed these data and the potential limitations  in our methodology for identifying and analyzing cases.
section_title: Information on Case Duration
paragraphs: Table 20 and figures 14 and 15 provide information on the duration of  CERCLA cases filed in fiscal years 1994 through 2007, by the type of  plaintiff and by the number of defendants in the case. Cases with federal  and state plaintiffs were typically shorter in duration than cases filed by  other plaintiffs, while cases with more defendants were typically longer in  duration. The following information on case duration is based on our  analysis of both open and closed cases. Approximately 92 percent of cases  filed from fiscal years 1994 through 2007 were closed as of the end of fiscal  year 2007. Analysis of only closed cases revealed no substantial  differences in case duration.
section_title: Information on Case Complexity
paragraphs: Figures 16 and 17 provide information on the complexity of CERCLA cases  filed in fiscal years 1994 through 2007, by the type of plaintiff. Complexity  is measured by the number of defendants and the percentage of cases in  which defendants pursue additional parties. While the average number of  defendants varied somewhat between different plaintiff types, the  percentage of cases in which defendants pursued additional parties was  higher in cases filed by other plaintiffs than it was for federal or state  plaintiff cases.
section_title: Information on Case Outcomes
paragraphs: Figure 18 provides information on the outcomes of CERCLA cases filed  from fiscal years 1994 through 2007. Previously negotiated settlements  were more common among federal plaintiff cases, while voluntary and  court dismissals were more common among cases filed by other plaintiffs.  Some of the following information on case outcomes is based on analyses  of both open and closed cases. In some instances, analysis of only closed  cases was more appropriate, such as when analyses looked at whether  cases only had certain outcomes. However, overall, our analyses of only  closed cases revealed no substantial differences with the outcomes of all  cases, including those that were still open as of the end of fiscal year 2007.
Figure 19 provides information on the extent to which cases reached  consensual or nonconsensual outcomes. Most cases filed by the federal or  state governments resulted in only consensual outcomes, while cases filed  by other plaintiffs more often resulted in nonconsensual or both outcome  types when compared to the cases filed by the federal or state  deral or state  governments.  governments.
Figure 20 provides information on the duration of cases by the outcomes  reached in the cases. Cases that included previously negotiated  settlements were substantially shorter, on average, than other cases. The  longest cases were those that included nonconsensual judgments.
Figure 21 provides information on the percentage of closed cases with  minimal litigation. Cases with minimal litigation are those whose only  outcomes were either (1) previously negotiated settlements or (2)  settlements in cases in which there was no evidence of adversarial actions,  such as counterclaims or discovery activity recorded in the docket. While  65 percent of closed federal plaintiff cases and 59 percent of closed state  plaintiff cases were classified as having minimal litigation, only 4 percent  ly 4 percent  of cases filed by other plaintiffs fell into this category.  of cases filed by other plaintiffs fell into this category.
Figure 22 provides information on the percentage of closed cases resulting  Figure 22 provides information on the percentage of closed cases resulting  in only voluntary or court-ordered dismissals. Although our analysis did  in only voluntary or court-ordered dismissals. Although our analysis did  not track outcomes according to individual parties or claims, these cases  not track outcomes according to individual parties or claims, these cases  may represent instances where the plaintiff was unable to get the relief it  may represent instances where the plaintiff was unable to get the relief it  sought in filing the case and either dismissed the case voluntarily or the  sought in filing the case and either dismissed the case voluntarily or the  case was dismissed by the court. Cases filed by federal or state  case was dismissed by the court. Cases filed by federal or state  governments resulted in dismissals with no other outcomes much less  governments resulted in dismissals with no other outcomes much less  often than those filed by other plaintiffs.  often than those filed by other plaintiffs.
Figure 23 provides information on the percentage of closed cases with  dismissals in which there was some evidence of a settlement that was not  clearly recorded in the docket. Because plaintiffs other than the  government are not subject to CERCLA’s requirement that certain  settlements (e.g., consent decrees) be approved by a court, this analysis  provides some indication of the extent to which cases with voluntary or  court dismissals may have also had out-of-court settlements that resolved  liability issues between parties.
Figure 24 provides information on the percentage of closed cases whose  only outcomes were nonconsensual judgments, by type of plaintiff. The  percentage of cases with such outcomes did not substantially vary among  the different types of plaintiffs.
Figure 25 provides information on the percentage of closed cases with  appeals by whether the outcomes in the case were consensual or  nonconsensual. Cases with only nonconsensual outcomes were much  more likely to have appeals than those with only consensual outcomes.
section_title: Appendix III: Comments from the Environmental Protection Agency
section_title: Appendix IV: GAO Contact and Staff Acknowledgments
subsections: section_title: Staff Acknowledgments
paragraphs: In addition to the individual named above, Vincent P. Price, Assistant  Director; Tim Bazzle; Miles Ingram; Krista Loose; Christopher Murray; Ira  Nichols-Barrer; and Kathleen Padulchick made key contributions to this  report. Elizabeth Beardsley, Michele Fejfar, Richard Johnson, and Carol  Herrnstadt Shulman also made important contributions.