Opinion ID: 3034999
Heading Depth: 2
Heading Rank: 2

Heading: exemptions from the $2 million, 12-month

Text: STATUTORY CAP APPLICABLE TO REMOVAL ACTIONS Having determined that the action is properly characterized as a removal action, the inquiry turns to whether the EPA can recover costs in excess of the $2 million, 12-month statutory cap on removal actions. See 40 C.F.R. § 300.415(b)(5). The district court found persuasive the EPA’s explanations in the Action Memos of the immediate risk to public health. Grace I, 280 F. Supp. 2d at 1144. We agree and hold that, considering the widespread and pervasive asbestos contamination and the potential for further migration of asbestos fibers as documented in the Action Memos, the EPA’s decision to exceed the statutory cap was not arbitrary and capricious. [14] We begin with the language of 42 U.S.C. § 9604(c)(1): Unless (A) [the EPA] finds that (i) continued response actions are immediately required to prevent, limit, or mitigate an emergency, (ii) there is an immediate risk to public health or welfare or the environment, and (iii) such assistance will not otherwise be provided on a timely basis, . . . obligations from the Fund . . . shall not continue after $2,000,000 has been obligated for response actions or 12 months has elapsed from the date of initial UNITED STATES v. W.R. GRACE & CO. 15577 response to a release or threatened release of hazardous substances. See also 40 C.F.R. § 300.415(b)(5) (limiting actions to $2 million and 12 months “unless the lead agency determines that” one of the exemptions applies). Despite Grace’s assertion that the decision to exceed the cap is not subject to arbitrary and capricious review, the fact that the statute allows the EPA to invoke the exemptions when it “finds” certain conditions counsels otherwise. See 5 U.S.C. § 706(2) (courts should set aside agency conclusions and findings where “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law”). The EPA’s determinations in this case that there was an emergency, that the risk to public health was immediate, and that the assistance would not otherwise be forthcoming are inherently fact-based. In the First Action Memo, the EPA determined that the removal action met the three statutory elements required to exceed the cap. See § 9604(c)(1)(A). Namely, (1) the asbestos in the environment posed an immediate threat to the local population; (2) a cleanup beyond the cap was required to prevent, limit, or mitigate an emergency25 because of the size of 25 The term “emergency” is not defined in CERLCA or the National Contingency Plan, and the EPA has interpreted it to include a range of time-sensitive threats: Not all actions begin under what are commonly thought of as “emergency” conditions. Though events such as tire fires, train derailments, and chemical explosions require immediate action, other less dramatic threats to public health are addressed under EPA’s Emergency Response and Removal Program. Such threats include the discovery of leaking drums or tanks at an abandoned factory or complaints of tainted drinking water near a landfill. Regardless of the circumstances, quick and efficient cleanup of hazardous material eliminates risks to people and the environment and minimizes the stigma contamination can bring to properties and communities. Removal Program Report, supra, at 3. 15578 UNITED STATES v. W.R. GRACE & CO. the cleanup and the short construction season; and (3) assistance from other government agencies was not anticipated on a timely basis. The Second Action Memo reiterated this reliance on the “emergency exemption,” explaining that “[a]t all the locations discussed in this Action Memorandum if Removal Actions are not initiated or continued then people will be exposed to unsafe levels of amphibole asbestos.” In light of the EPA’s documentation of complete exposure pathways and the resulting continuing threat to public health, we hold that the EPA “articulate[d] a rational connection between the facts found and the conclusions made.” Envtl. Def. Ctr., 344 F.3d at 858 n.36. Turning to the Third Action Memo, the EPA continued its reliance on the emergency exemption, once again citing the statutory factors and explaining that a continued removal action was necessary to prevent exposure to unsafe levels of asbestos. In addition, the EPA relied on the “consistency exemption,” which allows for a continued removal action over the cap when it is “otherwise appropriate and consistent with the remedial action to be taken.” 42 U.S.C. § 9604(c)(1)(C); see also 40 C.F.R. § 300.415(b)(5)(ii) (corresponding provision). At the time the Third Action Memo was released, the EPA had proposed Libby to the National Priorities List but it had not yet been listed. Thus, as envisioned in the Action Memos, the removal action in Libby was not an exhaustive cleanup effort. Rather, the EPA has segued into the remedial phase and, in the interim, found that “[c]ontinued response actions are appropriate and consistent with the remedial actions to be taken.” On a practical level, the need to exceed the cap is not surprising given the urgency, magnitude, and long-standing nature of the problem. First, the tremendous scope of the removal in Libby made the $2 million ceiling unworkable. An entire town needed to be cleaned up, not just a mobile home park, Carson Harbor Vill., 270 F.3d at 867, or a “five-acre parcel of land,” Chapman, 146 F.3d at 1168. In contrast to UNITED STATES v. W.R. GRACE & CO. 15579 these localized threats, the EPA explained in its response to comments received from Grace in December 2001 that it still had more than 2000 properties to sample around Libby. The 12-month limit was also impractical given both the scale of the effort and the meteorological reality of the harsh conditions, which result in a short construction season and thus necessitate several years to complete cleanup activities that might be completed considerably faster in a more temperate climate. The severe winters and hot summers are further problematic in that they exacerbate the spread of asbestos particles through wind and erosion. Cleansing the site of these widespread particles requires such labor-intensive acts as bulk removal of contaminated materials followed by thorough cleaning and vacuuming of the houses. [15] Given these daunting realities and the EPA’s careful documentation of its reasons for invoking the emergency and consistency exemptions, we hold that the EPA’s decision to exceed the statutory cap was based on the relevant factors, there has been no clear error of judgment, and the decision was not arbitrary and capricious. See Marsh v. Or. Nat’l Res. Council, 490 U.S. 360, 378 (1989); Envtl. Def. Ctr., 344 F.3d at 858 n.36. Therefore, the EPA is entitled to recover the full costs of its removal action in Libby as found by the district court.