Opinion ID: 147650
Heading Depth: 2
Heading Rank: 1

Heading: Investigation and Negotiation

Text: The San Gabriel Basin is a groundwater reservoir in eastern Los Angeles County that serves as a source of drinking water for more than one million people. In 1979, the EPA discovered groundwater contamination in the basin. In 1984, it designated much of the basin as a site on the CERCLA National Priorities List for investigation and cleanup. The EPA divided the site into eight Operable Units. The South El Monte Operable Unit (SEMOU) covers approximately eight square miles in the south central portion of the San Gabriel Basin. The EPA's initial investigation determined that SEMOU groundwater contained volatile organic compounds (VOCs) that required containment and remediation. Throughout the 1990s, the EPA sent Notice of Liability Letters to PRPs, requesting that they participate in a Remedial Investigation and Feasibility Study (RI/FS). Thirty-three PRPs participated in the RI/FS process. By 1999, the EPA had completed the RI/FS and had identified numerous industrial facilities in the SEMOU that were potential sources of the VOCs. In September 2000, the EPA issued an Interim Record of Decision (IROD) based on the RI/FS. The IROD prescribed a 30-year remedial plan to clean contaminants from the groundwater and stop their spread. As part of the plan, local water providers (Water Entities) would pump the contaminated water, clean the water, and then sell the treated water to their customers. The EPA projected the estimated cost of VOC cleanup at $14 million, plus an additional $14 million for costs incurred by the state and federal governments. In March 2002, the EPA sent Special Notice Letters pursuant to § 122(e) of CERCLA, 42 U.S.C. § 9622(e), to 67 PRPs it had identified as current or former owners or operators of facilities in the basin that had used hazardous substances. The letters asked the PRPs to present good faith offers to comply with the IROD remedial plan and to pay the EPA's past costs in the SEMOU. In the meantime, the Water Entities sought to require the PRPs to pay for the water treatment response costs. After lengthy negotiations, in July 2002 the Water Entities and thirteen PRPs (Group of 13) entered into an agreement (G13 Agreement). The G13 Agreement provided that the Group of 13 would pay $4.7 million to fund VOC cleanup in exchange for a standstill agreement under which the Water Entities would agree not to bring suit against the group during the period that the funds were being used. The Water Entities also agreed to use good faith efforts to support efforts of the Group of 13 to obtain an approved settlement that would bar contribution claims by other PRPs against Group of 13 members. On August 28, 2003, the EPA issued a unilateral administrative order to 41 PRPs that had not yet entered into agreements or made good faith offers, requiring each of them to take remedial action. The remedial plan contained in the 2000 IROD addressed only VOC contamination. Soon after the issuance of the IROD, the EPA detected perchlorate in SEMOU groundwater at concentrations higher than the state's drinking water advisory levels. In 2005, the EPA issued an Explanation of Significant Differences (ESD) to update the IROD remedial plan to address perchlorate contamination. By 2007, estimated response costs had increased substantially. The EPA's VOC response cost estimate had increased from $14 million to $26 million. The ESD estimated an additional $46 million for perchlorate remediation. The estimated costs incurred by the state and federal governments had also increased from $14 million to $15 million. The total cost to clean up VOC and perchlorate contamination in the SEMOU groundwater was now estimated at $87 million.