Opinion ID: 3013294
Heading Depth: 2
Heading Rank: 2

Heading: Compliance with the National Contingency Plan

Text: Section 107 provides that “response costs” can only be recovered from “responsible parties” when they were: 1) necessary; and 2) consistent with the National Contingency Plan (“NCP”). 42 U.S.C. §9607(a)(4)(B). With respect to consistency with the NCP, 40 C.F.R. §300.700 provides in pertinent part: (c)(3) For the purpose of cost recovery under section 107(a)(4)(B) of CERCLA: (i) A private party response action will be considered “consistent with the NCP” if the action, when evaluated as a whole, is in substantial 7 compliance with the applicable requirements in paragraphs (5) and (6) of this section, and results in a CERCLA-quality cleanup; and (4) Actions under § 300.700(c)(1) . . . and (c)(2) will not be considered “not consistent with the NCP” based on immaterial or insubstantial deviations from the provisions of 40 CFR part 300. Paragraphs (5) and (6) of 40 C.F.R. §300.700(c) set forth the procedural requirements for an NCP-compliant cleanup effort by reference to other sections of the CFR. They include requirements about worker health and safety, documentation of costs, permits, reports, removal site evaluation, remedial site evaluation, and opportunity for meaningful public comment. The District Court concluded that Outlet City’s “response costs” were not in “substantial compliance” with the NCP for the following reasons: 1) Outlet City did not properly document the cost of actions taken (other than legal fees, which were documented but not legally justified); 2) Outlet City did not conduct a timely, effective, or comprehensive site evaluation; 3) with regard to the removal of groundwater contaminants, there was no substantial compliance because Outlet City only removed 15% or less of the product to be recovered and the NYSDEC admonished it for not doing better; 4) Outlet City failed to prove that any permanent measures consistent with removal of the hazardous substance have been initiated or completed. (D. Ct. Op., pp. 11-12) Focusing on the third and fourth reasons, it is clear that the District Court improperly equated “substantial compliance” with “substantial amount of removal or remediation.” That is not the standard codified in the C.F.R. under the NCP. The NCP does not require that a 8 cleanup be substantially complete when an action is filed. The NCP requires only “substantial compliance” with the procedural requirements of the statute. Although the other two reasons are legitimate NCP non-compliance concerns, the District Court did not consider evidence presented by Outlet City in concluding that these steps weren’t taken. For example, the District Court did not address the testimony of Outlet City’s expert that its expenditures were “reasonable, necessary and substantially compliant” with the NCP (App. 759-760), and did not reference any evidence to the contrary. Given that there is ample documentation of Outlet City’s expenditures in the record, and particularly based on the testimony of its expert, the District Court’s opinion does not enable us to meaningfully review the judgement. In addition, the District Court’s conclusion may run afoul of the instruction in the NCP that strict compliance is not required. In fact, if the procedural deviations are “immaterial or insubstantial” they should not be deemed inconsistent with the NCP. 40 C.F.R. §300.700(c)(4). At a minimum, Outlet City presented sufficient evidence to warrant a more comprehensive analysis.3