Opinion ID: 2737138
Heading Depth: 2
Heading Rank: 1

Heading: propriety of the remedy

Text: When the government brings an action under 42 U.S.C. § 9606 to enforce an administrative cleanup order, CERCLA allows for judicial review of EPA’s decision in selecting the response action. 42 U.S.C. § 9613(h)(2). However, the court must “uphold [EPA’s] decision in selecting the response action unless the objecting party can demonstrate, on the administrative record, that the decision was arbitrary and capricious or otherwise not in accordance with law.” Id. § 9613(j)(2). EPA’s remedy selection for the Site is reflected in the 2007 ROD amendment and the 2010 explanation of significant differences. For different reasons, both Glatfelter and NCR challenged that remedy on summary judgment, and they reassert their arguments on appeal. Nos. 13-2436 & 13-2441 9
First, Glatfelter argues that EPA’s decision in selecting the response action was not in accordance with law because EPA delegated the task of conducting a remedial investigation and feasibility study to WDNR without a valid cooperative agreement. CERCLA allows for the delegation of responsibility for remedial action as follows: A State or political subdivision thereof or Indi- an tribe may apply to [EPA] to carry out ac- tions authorized in this section. If [EPA] de- termines that the State or political subdivision or Indian tribe has the capability to carry out any or all of such actions in accordance with the criteria and priorities established pursuant to section 9605(a)(8) of this title and to carry out related enforcement actions, [EPA] may en- ter into a contract or cooperative agreement with the State or political subdivision or Indian tribe to carry out such actions. [EPA] shall make a determination regarding such an appli- cation within 90 days after [EPA] receives the application. 3 42 U.S.C. § 9604(d)(1)(A). Glatfelter argues that a state has no authority to “carry out the actions authorized” by CERCLA without a cooperative agreement and therefore the lack of a cooperative agreement between EPA and WDNR would undermine the selected remedy for the Site. 3 The President has delegated to EPA the authority to undertake response action under CLERCLA; thus, where the statute refers to the President, we substitute EPA. See Exec. Order No. 12,580, 52 Fed. Reg. 2923 (Jan. 23, 1987). 10 Nos. 13-2436 & 13-2441 Glatfelter’s argument is academic, however, because EPA and WDNR did in fact enter into a cooperative agreement regarding the remedial investigation and feasibility study for the Site, and the government filed authenticated copies of that agreement in the district court. Glatfelter complains that the cooperative agreement was not included in the administrative record, but nothing in CERCLA or the national contingency plan requires that cooperative agreements be included in the administrative record. The administrative record need only include “the documents that form the basis for the selection of a response action.” 40 C.F.R. § 300.800(a). Typically, that includes the following:
data and analysis of the factual information, and data that may form a basis for the se- lection of a response action. …
and site-specific policy memoranda that may form a basis for the selection of the re- sponse action. …
available to the public under § 300.815 for remedial actions, or § 300.820 for removal actions. …

administrative record file. … Nos. 13-2436 & 13-2441 11 Id. § 300.810(a). Notably, this list contains no mention of cooperative agreements. Instead, it emphasizes documentation of the substantive factors that play a role in the selection of a remedy. As a result, we find no support for Glatfelter’s argument that the failure to include the cooperative agreement in the administrative record undermines the selected remedy. It is true that as a general matter “judicial review of any issues concerning the adequacy of any response action taken or ordered by [EPA] shall be limited to the administrative record.” 42 U.S.C. § 9613(j)(1). But “[o]therwise applicable principles of administrative law shall govern whether any supplemental materials may be considered by the court.” Id. Those principles allow a reviewing court to consider materials outside the administrative record “when it is necessary to create a record without which the challenge to the agency’s action cannot be evaluated.” USA Grp. Loan Servs., Inc. v. Riley, 82 F.3d 708, 715 (7th Cir. 1996). Here, it would be impossible to evaluate Glatfelter’s challenge to the selected remedy without considering the documents that the government contends make up the cooperative agreement between EPA and WDNR. Thus, the district court properly considered those documents. Moreover, those documents show that EPA and WDNR entered into a valid cooperative agreement, which granted WDNR authority to conduct a remedial investigation and feasibility study for the Site. As a result, EPA’s reliance on WDNR to complete those tasks was in accordance with the national contingency plan and does not provide a basis for reversal. 12 Nos. 13-2436 & 13-2441
Next, Glatfelter argues that the district court failed to undertake any substantive review of the selected remedy, instead focusing on the process by which the selection was made. We agree that to determine whether an agency’s decision was arbitrary or capricious, the reviewing court “must go beyond the agency’s procedures to include the substantive reasonableness of its decision.” James Madison Ltd. v. Ludwig, 82 F.3d 1085, 1098 (D.C. Cir. 1996). This is because “reasonable procedures alone cannot absolve a court from making a ‘thorough, probing, in-depth review’ to determine if the agency has considered the relevant factors or committed a clear error of judgment.” Id. (quoting Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 416 (1971)). But “the reasonableness of the agency’s procedures is relevant to the court’s inquiry,” James Madison Ltd., 82 F.3d at 1098, and although the district court stated that “arbitrary and capricious are terms that describe the manner of remedy selection more than they do the result,” it did in fact engage in substantive review of the selected remedy. Moreover, “[e]ven if the district court here based its decision on the strength of the process alone—which we do not believe is the case—our de novo review of the record satisfies us that the agency’s conclusions were not arbitrary.” Id. Under the arbitrary-and-capricious standard of review, an agency’s decision must be upheld unless it has relied on factors which Congress had not intended it to consider, entirely failed to con- sider an important aspect of the problem, of- fered an explanation for its decision that runs counter to the evidence before the agency, or is Nos. 13-2436 & 13-2441 13 so implausible that it could not be ascribed to a difference in view or the product of agency ex- pertise. Nat’l Ass’n of Home Builders v. Defenders of Wildlife, 551 U.S. 644, 658 (2007) (quoting Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983)) (internal quotation marks omitted). The district court concluded that the agencies’ decision to maintain a preference for dredging in the amended remedy was rationally related to the facts before them. In particular, the court noted that dredging represents a more permanent solution because it actually removes PCBs from the Site, while capping and sand covering merely contain PCBcontaminated sediment. Moreover, capping and sand covering require long-term monitoring to ensure their effectiveness, and they are susceptible to failure during catastrophic events like floods. Ultimately, the district court concluded that the agencies acted rationally by adopting “a mild preference for the benefits of dredging and viewed these as being worth their added expense.” We agree. Most of the attacks Glatfelter levies against the agencies’ remedy selection have to do with the 2003 all-dredging remedy, which of course has been abandoned. Glatfelter argues that the problems with that remedy also infect the amended remedy, because in 2007 the agencies failed to reconsider all of the alternatives they had considered in 2003, even though by 2007 they had obtained more accurate information on the cost and effectiveness of the various remedial approaches. More specifically, Glatfelter contends that the agencies 14 Nos. 13-2436 & 13-2441 should have reconsidered an all-capping remedy, which would have been shown to be more cost-effective. However, as the government points out, an all-capping remedy was never on the table. In the 2003 ROD, the agencies explained that capping is limited by “Site-specific conditions such as water depth, average river current, river current under flood conditions, wave energy, ice scour, and boat traffic.” Thus, the agencies never considered an allcapping alternative, as Glatfelter suggests. Instead, they considered an alternative that would involve “capping to the maximum extent practicable with dredging in areas where capping is not appropriate.” Under the criteria developed for the 2003 ROD, this would have resulted in capping only about 2.25 million cubic yards of contaminated sediment and dredging the rest of the contaminated sediment. In contrast, the 2007 ROD amendment called for capping (or sand covering) about 3.5 million cubic yards of contaminated sediment. In other words, the alternative that Glatfelter contends the agencies should have reconsidered in 2007 actually called for less capping and more dredging than the remedy the agencies adopted. There is no indication that Glatfelter wanted the agencies to reconsider a more expensive remedy, so its argument makes little sense. Moreover, it was not arbitrary or capricious for the agencies to refuse to consider a pure capping remedy, because such a remedy was infeasible. As a result, Glatfelter has failed to show that the selected remedy should be overturned. 3. The 2010 Explanation of Significant Differences NCR argues that the selected remedy is not in accordance with law because the agencies failed to amend the ROD Nos. 13-2436 & 13-2441 15 when their cost estimates increased dramatically in 2010. The district court rejected this argument, holding that the agencies complied with the national contingency plan in publishing an explanation of significant differences rather than amending the ROD in 2010. Sometimes new information arises during the remedial design or action phases of a CERCLA cleanup, and the remedy selected in the ROD must be altered. Under such circumstances, the national contingency plan gives the lead agency two options. 40 C.F.R. § 300.435(c)(2). If “the differences in the remedial or enforcement action … significantly change but do not fundamentally alter the remedy selected in the ROD with respect to scope, performance, or cost,” then the lead agency may simply publish “an explanation of significant differences.” Id. § 300.435(c)(2)(i). However, “if the differences in the remedial or enforcement action … fundamentally alter the basic features of the selected remedy with respect to scope, performance, or cost,” then the lead agency must propose an amendment to the ROD. Id. § 300.435(c)(2)(ii). Amending the ROD is a more cumbersome process that involves receiving and responding to public comments on the proposed changes. Id. The explanation of significant differences that EPA and WDNR published in 2010 left intact the remedial approach outlined in the 2007 ROD amendment but revised the cost estimates associated with that approach. Specifically, the total cost of the remedial action in OU2–OU5, which was originally estimated at about $432 million, was now expected to be about $701 million, an increase of roughly 62 percent. NCR argues that such a drastic increase in cost “fundamentally alter[s] the basic features of the selected remedy with 16 Nos. 13-2436 & 13-2441 respect to ... cost” and that as a result, EPA and WDNR were required to propose an amendment to the ROD. In the 2010 explanation of significant differences, EPA and WDNR explained their decision to forgo another ROD amendment as follows: As set forth in the EPA guidance document en- titled, “A Guide to Developing and Documenting Cost Estimates During the Feasibility Study,” EPA 540-R-00-002 OSWER 9355.0-75 (July 2000), the expected accuracy range of a cost estimate for a detailed analysis of remedial action alterna- tives is -30% to +50%. As the current estimated cost of the OU 2 - 5 remedial action is 62% greater than the original estimate, it is nearly within EPA’s expected accuracy range for the cost of a remedial action and represents a “sig- nificant” but not “fundamental” change from the 2007 ROD Amendment. As NCR points out, however, the guidance document cited by the agencies contemplates that a “detailed analysis of alternatives” will be completed without the benefit of remedial design work. This was the case with the 2003 ROD, which explicitly cited the -30% to +50% accuracy range for its cost estimates. But the 2007 ROD amendment was issued after substantial remedial design work had been completed. Thus, we might expect its cost estimates to be more accurate. In fact, EPA also thought the 2007 ROD amendment’s cost estimates would be more accurate. Its response to comments questioning the accuracy of those estimates included the following statement: Nos. 13-2436 & 13-2441 17 The cost estimates for the ROD Amendment should be more reliable than the cost estimates in the 2003 ROD because new estimates are based on substantially more engineering anal- ysis and a much larger number of sediment samples (i.e., 10,000 sediment samples versus 1,700 sediments samples prior to the 2003 ROD). Thus, EPA represented to the public that the 2007 ROD amendment would be more accurate than the 2003 ROD, which identified a cost uncertainty range of -30% to +50%. We do not know how accurate the 2007 cost estimates were expected to be, because neither the 2007 ROD amendment nor the basis of design report on which it relied identified a range of uncertainty for total project costs. However, we would expect the range to be smaller than -30% to +50% but larger than -10% to +15%, which, according to the EPA guidance document cited by the agencies, is the range expected to be achieved after the remedial design process is complete. As a result, we reject the government’s argument that a cost increase of 62 percent is only marginally outside the range of uncertainty associated with the cost estimates in the 2007 ROD amendment. But even so, another ROD amendment was not necessarily required. We must still determine whether “the differences in the remedial or enforcement action … fundamentally alter[ed] the basic features of the selected remedy with respect to scope, performance, or cost.” 40 C.F.R. § 300.435(c)(2)(ii). This standard is ambiguous as it relates to the change at issue, i.e., an increase in cost unaccompanied by any change in the remedial approach. As a 18 Nos. 13-2436 & 13-2441 result, EPA’s interpretation of the regulation, which it promulgated, is relevant. Indeed, an agency’s interpretation of its own regulation is controlling unless it is “plainly erroneous or inconsistent with the regulation,” or there is “reason to suspect that the interpretation does not reflect the agency’s fair and considered judgment on the matter in question.” Auer v. Robbins, 519 U.S. 452, 461–62 (1997) (citation and internal quotation marks omitted). “This might occur when the agency’s interpretation conflicts with a prior interpretation, or when it appears that the interpretation is nothing more than a convenient litigating position or a post hoc rationalizatio[n] advanced by an agency seeking to defend past agency action against attack.” Christopher v. SmithKline Beecham Corp., 132 S. Ct. 2156, 2166–67 (2012) (citations and internal quotation marks omitted). The preamble to the national contingency plan makes EPA’s position clear: “EPA believes that the appropriate threshold for amending a ROD is when a fundamentally different approach to managing hazardous wastes at a site is proposed.” 55 Fed. Reg. 8666, 8771 (March 8, 1990). In contrast, “[s]ignificant changes to a remedy are generally incremental changes to a component of a remedy that do not fundamentally alter the overall remedial approach.” Id. at 8772. Moreover, EPA’s position is that a change in cost alone does not fundamentally alter the remedial approach and thus does not require a ROD amendment. See id. (“Where [a] new requirement would affect a basic feature of the remedy, such as timing or cost, but not fundamentally alter the remedy specified in the ROD (i.e., change the selected technology), Nos. 13-2436 & 13-2441 19 the lead agency would need to issue an explanation of significant differences announcing the change.”). In other words, EPA takes the view that to “fundamentally alter the basic features of the selected remedy with respect to … cost” is to choose a different remedial approach that costs more, not to stick with the same remedial approach but decide that it will cost more than previously thought. Because of the national contingency plan’s emphasis on “fundamentally alter[ing] the basic features of the selected remedy,” we cannot say that this interpretation is “plainly erroneous or inconsistent with the regulation.” Auer, 519 U.S. at 461 (internal quotation marks omitted). Moreover, EPA adopted this interpretation in an attempt “to develop an administrative process which balances the public’s continuing need for information about, and input into, post-ROD remedial action decisions, with the lead agency’s need to move forward expeditiously with design and implementation of the remedy after fundamental decisions have been made in the ROD.” 55 Fed. Reg. at 8773. And EPA’s approach seems to us an eminently reasonable way to balance these competing interests. Thus, we have no “reason to suspect that the interpretation does not reflect the agency’s fair and considered judgment on the matter in question.” Auer, 519 U.S. at 462. Consequently, EPA’s interpretation of its regulation is binding, and the agencies were not required to amend the ROD in 2010. Having disposed of each of Appellants’ arguments on the propriety of the remedy, we will affirm the district court’s entry of summary judgment in favor of the government on that issue. 20 Nos. 13-2436 & 13-2441