Court Opinion

ID: 6929630
Source: CourtListenerOpinion
Date Created: 2022-07-23 23:51:36.523798+00
Date Added: 2024-06-11T16:07:06.123200
License: Public Domain

MIKVA, Chief Judge,
dissenting:
The Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), 42 U.S.C. § 9601 et seq., subjects four classes of parties to potential liability for hazardous waste cleanup costs: (1) the current owner and operator of a facility where hazardous substances are located; (2) any person who owned or operated the facility at the time of disposal of hazardous substances; (3) any person who arranged for the disposal of hazardous substances; and (4) any person who accepted hazardous substances for transport to a treatment facility or disposal site. 42 U.S.C. § 9607(a). Under CERCLA, the term “owner or operator” includes any person “owning or operating” a site of environmental contamination but “does not include a person who, without participating in the management of a vessel or facility, holds indicia of ownership primarily to protect his security interest in the vessel or facility.” 42 U.S.C. § 9601(20)(A). This exception, known as the secured lender exemption, lies at the heart of this appeal.
In 1991, the EPA commenced a rulemak-ing to “specify the range of activities that may be undertaken” by secured lenders without incurring CERCLA liability. 56 Fed. Reg. 28,798, 28,799 (June 24,1991). In 1992, the EPA adopted its Final Rule on Lender Liability Under CERCLA which provided that: (1) prior to foreclosure, a lender is subject to CERCLA liability only if she actually exercises decisionmaking control over the borrower’s environmental compliance, or over all or substantially all of the operational aspects of the enterprise, 40 C.F.R. § 300.-1100(c)(1) (1992); and (2) after foreclosing, a lender remains exempt from CERCLA liability so long as she takes steps to divest herself of the property in a prompt and commercially reasonable manner, 40 C.F.R. § 300.-1100(d)(1) (1992). The EPA intended that these regulations would bind all parties in CERCLA litigation, regardless of whether the United States was a party to the suit. 57 Fed.Reg. 18,344, 18,363 (April 29, 1992).
Michigan and the Chemical Manufacturers Association filed petitions for review of the EPA Final Rule because, as potential litigants, they did not want to be foreclosed from recovering cleanup costs from those secured lenders that the Final Rule exempts from CERCLA liability. Petitioners argue, and the majority agrees, that the Final Rule *1110is invalid because Congress delegated to the courts, rather than to the Executive branch, authority to interpret the , scope of CERC-LA’s secured lender exemption. I disagree. CERCLA’s language, structure and legislative history suggest that Congress- implicitly delegated to the President (who in turn delegated to the EPA) the authority to interpret who falls within the scope of CERCLA’s regulatory regime'. Accordingly, the EPA’s Final Rule on Lender Liability Under CERCLA is entitled to Chevron deference from this court. See Chevron U.S.A Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). I would uphold the rule.
A. Delegation of Authority
When Congress enacted CERCLA in 1980, it implicitly delegated authority to the EPA to define which parties fell within the statute’s regulatory regime. For example, CERCLA charged the EPÁ Administrator with responsibility for prescribing the manner and form by which owners and operators were to notify the agency of hazardous waste storage, treatment or disposal at their facilities. 42 U.S.C. § 9603(c). CERCLA also authorized the EPA Administrator to promulgate rules and regulations specifying the recordkeeping requirements to which owners and operators of hazardous waste facilities were subject and vested the EPA Administrator with discretion to waive those requirements on petition from those parties. 42 U.S.C. § 9603(d). In addition, CERCLA authorized the President, who in turn authorized the EPA, to undertake those remedial actions necessary to contain or remove hazardous substances at-risk of release “unless the President determine^] that such removal and remedial action w[ould] be done properly by the owner or operator of the vessel or facility from which the release or threat of release emanated].” 42 U.S.C. § 9604(a)(1). CERCLA also authorized the EPA to issue abatement orders to those parties responsible for particularly dangerous hazardous wastes. 42 U.S.C. § 9606. To administer each of these subsections effectively, the EPA was obliged to construe the term “owner or operator” within the meaning of CERCLA; Congress implicitly delegated authority to the EPA, as the administering agency, to do so. See Wagner Seed Co., Inc. v. Bush, 946 F.2d 918, 923 (D.C.Cir.1991), cert. denied, — U.S. -, 112 S.Ct. 1584, 118 L.Ed.2d 304 (1992). Consequently, the EPA’s construction of “owner or operator” is entitled to Chevron deference. See Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984).
The overall structure of CERCLA’s statutory scheme suggests that Congress delegated authority to the Executive to construe the scope of CERCLA’s statutory coverage. In CERCLA § 101, Congress defined key statutory terms. Typically, statutes contain these definitional sections to frame an agency’s delegated authority to interpret ambiguous statutory language. It would be unusual if not anomalous for Congress to have included, and left undifferentiated among CERCLA’s statutory definitions, the term “owner or operator” had Congress not intended to delegate authority to the EPA to interpret this concededly ambiguous statutory term. In interpreting the statute otherwise, the majority renders the EPA powerless to define not only the term “owner or operator” within the .meaning of CERCLA, but “vessel,” “facility,” “transport” and “transportation” as well. Interpreting CERCLA in this manner generates serious confusion within the statute’s “comprehensive” regulatory regime.
The majority arrives at its statutory interpretation by passing over much of CERC-LA’s language, structure and legislative history and concentrating instead on the pre-ponderanee-of-the-evidence standard embodied in CERCLA § 106(b)(2)(C). This standard of review signals to the majority that Congress intended to reserve all determinations of CERCLA liability, including the scope of statutory coverage, for the courts. In my view, the majority misreads the statute and misinterprets congressional intent. The preponderance-of-the-evidence standard embodied in CERCLA § 106(b)(2)(C) simply reflects continued congressional intent to have common law principles govern determinations of proximate causation regarding hazardous waste contaminations.
*1111Congress amended CERCLA in 1986 to provide, inter alia, a reimbursement mechanism for certain parties that receive and comply with EPA abatement orders. Pursuant to CERCLA § 106(b)(2)(C), a party is entitled to reimbursement of its abatement costs if it can establish “by a preponderance of the evidence that it is not liable for response costs under 9607(a).” 42 U.S.C. § 9606(b)(2)(C). Significantly, the legislative history of the 1986 amendments is devoid of any reference to, much less debate regarding, rescinding authority from the EPA to interpret who falls within the scope of CERCLA’s statutoiy coverage. That is because § 106(b)(2)(C) does not and was not intended to strip the EPA of this authority. The preponderanee-of-the-evidenee standard employed in § 106(b)(2)(C) simply restates the preponderance standard already employed in § 107(b).
CERCLA § 107, entitled “Liability,” provides in subsection (a) that “the owner and operator of a vessel or facility” as well as other specified parties “shall be liable” for response costs. Subsection (b), entitled “Defenses,” provides that:
There shall be no liability under subsection (a) of this section for a person otherwise liable who can establish by a preponderance of the evidence that the release or threat of release of a hazardous substance and the damages resulting therefrom were caused solely by—
(1) an act of God;
(2) an act of war;
(3) an act or omission of third party other than an employee or agent of the defendant ... if the defendant establishes by a preponderance of the evidence that (a) he exercised due care with respect to the hazardous substance concerned ... and (b) he took precautions against foreseeable acts or omissions of any such third party and the consequences that could foresee-ably result from such acts or omissions.
42 U.S.C. § 9607 (emphasis added). Thus, when it enacted CERCLA in 1980, Congress did not subject the EPA’s interpretation of “owner or operator,” or other key statutory terms which define the scope of CERCLA’s coverage, to the preponderance-of-the-evidence standard. Congress deliberately structured § 107 so that only issues of causation were subject to this standard of review. Indeed, the legislative history of CERCLA § 107 indicates that Congress adopted the preponderance-of-the-evidenee standard in subsection (b) to ensure that “the usual common law principles of causation, including those of proximate causation, [wjould govern the determination of whether a defendant ‘caused or contributed’ to a release or threatened release.” H.R.Rep. No. 96-1016, 96th Cong., 2nd Sess., pt. 2 at 33 (1980), reprinted in 1980 U.S.C.C.A.N. 6119, 6136.
On this reading of the statute, a party that receives and complies with an EPA abatement order is entitled to reimbursement of costs incurred if it can prove by a preponderance of the evidence, as required by § 107(b), that it did not proximately cause the contamination. In § 106(b)(2)(B), Congress afforded EPA the first crack at making these particularized determinations of causality. However, Congress wanted “traditional rules of foreseeability, causation, and certainty” ultimately to govern determinations of CERC-LA liability. H.R.Rep. No. 99-253(1), 99th Cong., 2nd Sess. at 83 (1986) reprinted in 1986 U.S.C.C.A.N. 2835, 2865. Accordingly, Congress incorporated into CERCLA § 106(b)(2)(C) the preponderance standard set forth in § 107(b). In so doing Congress changed little. Under CERCLA § 106(b)(2)(C), as in the rest of the statute, determinations of causality rest ultimately with the courts while most other determinations, including who falls within the scope of CERCLA’s statutory coverage, are for the EPA and are entitled to Chevron deference.
B. Private Right of Action
The majority bolsters its interpretation of CERCLA § 106 by reference to the private right of action that CERCLA confers on third parties. According to the majority, “[i]t cannot be argued that Congress intended EPA, one of many potential plaintiffs, to have authority to, by regulation, define liability for a class of potential defendants.” Kelley v. E.P.A, 15 F.3d 1100, 1107 (D.C.Cir. 1994). The majority offers no explanation of why that argument would be untenable. *1112There is every reason to hold that Congress created the private right of action to facilitate enforcement of CERCLA’s statutory scheme within the parameters of lender liability which the EPA, as the administering agency, would define.
According to the majority, Adams Fruit Co. v. Barrett, 494 U.S. 638, 110 S.Ct. 1384, 108 L.Ed.2d 585 (1990) renders implausible the interpretation of CERCLA § 106(b)(2)(C) offered above. It reads Adams Fruit to hold that the mere presence of a private right of action reflects a congressional intent to assign to the judiciary, rather than to the administrative agency, exclusive authority to define the scope of statutory liability. I disagree.
At issue in Adams Fruit, was whether Congress had delegated to the Department of Labor the authority to interpret the preemptive scope of the private right of action created by the Agricultural Workers Protection Act. Because the Department of Labor, (“DOL”), which was responsible for administering the Act, was not charged in any respect with administering the statute’s private right of action, the Court held that no deference was due DOL regulations defining the interplay between those actions and the exclusivity provisions of the state worker compensation schemes. In promulgating such regulations, DOL had simply “bootstrap[ped] itself into an area in which it ha[d] no jurisdiction.” Adams Fruit Co. v. Barrett, 494 U.S. 638, 650, 110 S.Ct. 1384, 1391, 108 L.Ed.2d 585 (1990). By contrast, the EPA must interpret the scope of CERCLA’s lender liability provisions “in the first instance” in order to fulfill its administrative responsibilities under CERCLA §§ 103, 104, and 106. Thus, unlike DOL in Adams Fruit, the EPA is not construing CERCLA’s private right of action per se when it construes the term “owner or operator” within the meaning of CERCLA. CERCLA’s private right of action thus provides scant support for concluding, as the majority does, that Congress reserved all determinations of liability under CERCLA for the courts.
C. Conclusion
In my view, the EPA did not exceed the scope of its delegated authority in promulgating regulations that construe the meaning of “owner or operator” within the meaning of CERCLA. Because CERCLA’s secured lender exemption lacks a plain meaning and the EPA’s Final Rule does not construe that exemption unreasonably, I would deny the petition and uphold the EPA’s Final Rule under Chevron.