Court Opinion

ID: 9496865
Source: CourtListenerOpinion
Date Created: 2023-08-05 16:37:19.622572+00
Date Added: 2024-06-11T17:52:51.593596
License: Public Domain

MAYER, Chief Judge,
dissenting.
Because I believe that Empire reasonably waited to receive EPA approval before resuming work required under the contract, and because that excusable delay would be more than sufficient to allow Empire to meet the extended commercial operation date (“COD”), I dissent.
Contrary to the court’s suggestion, Empire does more than provide a “mere assertion of a colorable claim ... ■ that its actions would violate some regulatory requirement” if it had complied with the government’s orders to resume work. Ante at 1353. More accurately, Empire reasonably could have expected to be held liable for violations of federal environmental law if it had complied. The board itself found that as of May 1991, “Empire knew or should have known ... that the [oil-water separator] represented a potential environmental problem.” Empire Energy Mgmt. Sys., Inc., ASBCA No. 46741, 03-1 B.C.A. (CCH) ¶ 32,079, at 158,541, 2002 WL 31501910 (2002). Empire had additional reason to suspect the existence of hazardous waste at the project site when on June 5, 1992, it learned of the Resource Conservation and Recovery Act Facilities Investigation (“RFI”) — an investigation specifically requested because of concerns raised in a previous RFI. As of June 5, 1992, therefore, prudence prohibited Empire from resuming work at least until it received notification that the project area was not contaminated; otherwise it would have been exposed to potential liability, indemnification clause notwithstanding. See 42 U.S.C. § 9607(a)(3) (2000) (prohibiting the arrangement for disposal of hazardous waste); Redwing Carriers, Inc. v. Saraland Apartments, 94 F.3d 1489, 1512 (11th Cir.1996) (“a ‘disposal’ may occur when a party disperses contaminated soil during ... construction”).
The court notes the board’s conclusion that “construction work could have been done on site without interfering with the RFI work.” Ante at 1353. As of June 5, 1992, however, Empire would have had no way to know whether its work would interfere with testing, and more importantly, whether its work would be conducted on contaminated soil. As the board itself stated, “If the sampling produced evidence of contamination, sampling would then proceed further out.” Empire Energy, 03-1 B.C.A. (CCH) at 158,549. Prior to the conclusion of sampling, then, Empire would have had no knowledge of the extent to which contamination infected the project site. Because the entire project site was contained within the RFI site, Empire could only wait until it had received notification of the RFI’s completion — notification that must come from the EPA — be*1359fore it could be confident that project work would not violate federal law.
Presuming that the first notification Empire received from the EPA was sufficient to exonerate Empire of any potential liability, excusable delay would run from June 5,1992, to January 8,1993. This was 217 days — obviously more than the 154 days the board determined Empire needed to achieve COD. Indeed, in light of EPA’s vacillation, confusion, and self-protectiveness, id. at 158,549; 158,554, Empire has a good argument for excusable delay through June 2, 1993, lest it be left holding the bag if EPA had changed its position. I would therefore reverse the board’s decision and convert the termination for default into one for convenience.