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Civil Judicial and Administrative Site Remediation Enforcement Cases

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20480

May 19, 1995

OFFICE OF ENFORCEMENT AND COMPLIANCE ASSURANCE

MEMORANDUM

SUBJECT:
Office of Enforcement and Compliance Assurance and Regional Roles in Civil Judicial and Administrative Site Remediation Enforcement Cases

FROM:
Steven A. Herman
Assistant Administrator

TO:
Assistant Administrators
Regional Administrators
General Counsel
Regional Counsels
Regional Waste Management Division Directors
Office of Enforcement and Compliance Assurance Office Directors

On July 11, 1994, I issued a redelegation of authority and guidance on Headquarters' involvement in regulatory enforcement cases. This guidance stemmed, in part, from recommendations made by the Regional Impacts Task Force regarding the division of roles and responsibilities between Headquarters and the Regions in the enforcement and compliance assurance program. The approach embodied in those redelegations includes a focus an value-added participation of the appropriate EPA personnel, a focus on "nationally significant" matters and issues, and flexibility in terms of the overall review and concurrence process.

This memorandum and its attachment follow up that July 11, 1994 redelegation of regulatory enforcement matters, and establishes the roles of the Office of Enforcement and Compliance Assurance (OECA) and the Regions in the handling of civil judicial and administrative cases under the Comprehensive Environmental Response, Compensation Liability Act (CERCLA or Superfund), the Resource Conservation and Recovery Act (RCRA) corrective action enforcement program, the Leaking Underground Storage Tank (LUST) program (where corrective action activities are involved) and the Oil Pollution Act (OPA) (where remediation activities are involved). This memorandum supersedes all prior guidance documents and memoranda, which established Headquarters (Office of Waste Program Enforcement or Office of Enforcement) concurrence or consultation roles in these areas. This memorandum does not address: 1) regulatory enforcement actions, including the Emergency Planning and Community Right-To-Know Act (EPCRA), which are handled by the Office of Regulatory Enforcement, or 2) the Office of Solid Waste and Emergency Response (OSWER) or the Office of General Counsel's (OGC) role in site remediation cases. This redelegation and guidance is effective immediately and will be reviewed annually.

This represents a further shift of case specific authority from OECA to Regional Offices, while maintaining the optimal level of OECA participation which is necessary and appropriate in the given circumstances. All classes of RCRA corrective action, OPA remediation, LUST corrective action, and CERCLA judicial actions will be directly referred to the Department of Justice (DOJ), except for parallel proceedings.

Pursuant to this redelegation and guidance, case specific matters will be handled under three basic approaches: (1) matters which require Headquarters' concurrence; (2) matters which require consultation with Headquarters; and (3) other matters for which neither concurrence or consultation are formally required, but where interaction between the Region and Headquarters is encouraged and desirable. These approaches are set out in greater detail in the attachment. The purpose for these approaches is to maximize the quality and efficiency of our enforcement and compliance program, recognizing the roles and expertise of staff in both the regions and in OECA.

Shifting case specific authority to the Region also recognizes the maturity of the site remediation programs, the impressive track record of the Regions in carrying out their responsibilities, and the efficiencies that can be achieved. It does not signal an intention to operate this enforcement program as if EPA were split into ten totally independent offices. It is imperative that Regions and Headquarters continue to maintain contact on a voluntary cooperative basis. Consistency and coordination continue to be important operating principles.

Effective communication and oversight will occur by taking advantage of routine and ad hoc opportunities. Headquarters will continue to participate in nationally managed cases, directly referred cases when the case or issue rises to national attention, when more than one Region is taking action against the same company (e.g., multi-regional bankruptcies, natural gas pipelines), and where there is a national initiative. Day to day contact by phone or computer and national meetings and workgroups will provide opportunities to exchange information and provide necessary alerts to "hot" matters. Regions should use these occasions to identify to Headquarters cases which will require concurrence, mandatory consultation or input/participation. OSRE also intends to conduct after-the-fact audits of Regional performance to identify any problem with the procedures and delegation limitations set out in this memorandum. Where appropriate Headquarters oversight may be reduced or heightened on a Region-specific basis as a result of these reviews.

In conjunction with the redelegation and guidance issued on July 11, 1994 regarding regulatory enforcement matters, this memorandum setting forth similar guidance for Superfund enforcement, RCRA corrective action, and other remediation programs should improve the overall quality of the Agency's enforcement and compliance assurance program. Notwithstanding any of the requirements set out above, frequent and collegial communication between the Regions and Headquarters is an essential part of our operating principles. The processes described in this memorandum and its attachment will hopefully place both the Regions and OECA in a better position to identify and address the many significant issues that arise in the context of a national enforcement and compliance assurance program.

cc: John C. Cruden, Chief, Environmental Enforcement Section, DOJ

Attachment


ATTACHMENT

REQUIRED CONCURRENCES AND CONSULTATIONS

Headquarters concurrence is required for a substantially smaller number of matters than previously required. Concurrence will only be required in civil judicial settlements: where total site costs exceed $100 million (raised from the previous threshold of $60 million); where a settlement significantly deviates from written Agency policy or breaks new ground in an important sensitive area; or where the Region anticipates recovering less than 50% of total site costs (unless the primary element limiting recovery is ability to pay). In addition, Headquarters approval will be needed for the decision to grant a covenant not to sue without reopeners in a CERCLA settlement (except for de minimis and bankruptcy settlements), for "hold action" letters to DOJ requesting a delay in filing a complaint beyond 60 days, for "no action" assurances, for Federal facility CERCLA agreements, and for settlements with multi-media covenants not to sue. More detailed descriptions of these categories, and procedures for obtaining concurrence, are set out below.

Headquarters consultation allows Headquarters to be aware of certain types of matters, and to have input, but in a less burdensome manner than formal concurrence. By and large consultation is required only in situations that previously required formal concurrence. The consultation process is designed to reduce burdens on the Regions in several ways. First, the process is less formal and will entail less paperwork. Second, consultation can, and in many cases should, occur prior to conclusion of negotiations, reducing the potential for delay. Finally, consultation is mandatory only for the element of the case that falls within the described consultation category. Other aspects of the case need not be submitted to Headquarters (except to the extent needed to provide context). The attachment describes the consultation category and the procedure to be followed. Note that in some cases where concurrence had been required in the past that neither concurrence nor consultation is now mandated.

Voluntary cooperative interaction should take place over a wide range of issues and case specific questions. Headquarters personnel often possess specialized expertise that Regions are encouraged to call upon. Headquarters staff will relay policy direction and intent, convey information from the national perspective, and serve as conduits of information from one Region to another. In some cases Headquarters staff can be assigned to handle specific matters, in effect supplementing regional staff. OECA/Office of Site Remediation Enforcement (OSRE) is also available to offer informal advice and serve as a sounding board for new ideas.

The concurrence and consultation requirements apply to settlements of cases that have been referred to DOJ, to those that settled in pre-referral negotiations, and to unilateral orders, administrative orders on consent, and agreements.

  1. Required CERCLA Concurrences(1)

    Requests for Headquarters concurrence will require a written request for concurrence from the appropriate Regional official addressed and sent to the appropriate Headquarters official. A copy plus attachments should also be sent to the Office Director/OSRE (or for Federal facility matters, to the Office Director, Federal Facilities Enforcement Office). The request will consist of a memorandum that identifies the settlement provision or circumstance that triggers the Headquarters concurrence with a copy of the 10-point settlement analysis attached. A copy of this memorandum should be faxed, sent by computer or regular mail to one of the Headquarters staff to the case so they may begin the concurrence process.

    1. Concurrence by the AA/OECA is required for RD/RA settlements and large "cashout" settlements (> $10 million) at sites where total past and future costs exceed $100 million.

      Settlements at sites where costs exceed $100 million are by their nature of national significance and often attract much public attention. To determine the appropriate level of Headquarters' involvement with the settlement, the total past costs plus projected future costs of all operable units at the site should be used as the basis for calculating costs, even if the settlement is for one operable unit at the site or for one group of PRPs. Concurrence by the AA/OECA is not required for "cashouts" less than $10 million unless they are covered by paragraph A.5 of this attachment. This provision should apply to only a few sites annually.

    2. Concurrence by the AA/OECA is required for settlements which significantly deviate from written Agency policy or which break new ground in an important sensitive area.

      This is a clarification of prior CERCLA settlement policy in which Headquarters retained authority over settlements involving "substantial deviations from Agency policy," category of precedent setting cases. (See OSWER Dir. No. 9012. 10-a). This category can involve issues already covered by specific guidance, documents or new potentially controversial issues. Identification of cases falling within this class will require an ongoing cooperative Regional/Headquarters effort.

    3. Concurrence by the AA/OECA is required for "hold action letters" to DOJ requesting delay in filing a complaint beyond 60 days.

    4. Concurrence by the AA/OECA is required for "no action" assurances, i.e., promises outside the context of a formal enforcement proceeding that EPA will not take enforcement action. Comfort letters that do not contain express assurances that enforcement action will not be taken do not require Headquarters concurrence.

    5. Concurrence by the Office Director (OD)/OSRE, will be required for settlements which compromise greater than 50% of total past and projected future response costs, except when: total past and projected future response costs are less than $2 million, or the settlement puts total recovered costs at the site over 50% of total past and projected future costs, or the Region has documented a reasonable expectation for achieving greater than 50% total past and projected future response costs recovery at the site. This category does not include bankruptcy settlements, settlements in which the primary basis for the compromise is ability to pay, de minimis settlements, or de micromis settlements.

      This requirement focuses on total site settlement achievements rather than specific settlement components. Headquarters involvement in settlements that significantly compromise site costs is important for overall program accountability. Total site costs include all past and projected future costs.

    6. Advance written approval by the OD/OSRE is required before offering to grant PRPs a covenant not to sue without reopeners. This category includes: (1) extraordinary circumstances settlements under CERCLA 122(f)(6)(B); (2) settlements with special covenants under CERCIA 122(f)(2); (3) judicial or administrative settlements relying on the "inherent settlement authority of the Attorney General" (e.g., "cashout" settlements, in which a premium payment is accepted in lieu of reopeners or in which reopeners are excluded based upon extraordinary circumstances-type factors). It does not include settlements granting covenants not to sue without reopeners when they are based on filed bankruptcies (chapters 7 or 11), settlements granted to insurance companies that pay the maximum claim at a site on behalf of an insured that is a PRP, or de mimimis or de micromis generator settlements.

      Headquarters maintains approval authority for such covenants because of the finality of relieving parties of future liability at a site, the potential precedential effect, and the level or public scrutiny and congressional oversight that this type of settlement receives. Each time a covenant not to sue without reopeners is to be granted, the site-specific justification must be clearly documented.

    7. Settlements that include multi-media covenants not to sue require the concurrence of the AA/OECA. (Multi-media covenants are those that address site remediation and regulatory violations.) Covenants not to sue under 7003 do not require concurrence.

    8. Settlements of nationally managed CERCLA cases (e.g. Love Canal) require the concurrence of the AA/OECA.

    9. Concurrence by the AA/OECA is required for CERCLA cleanup agreements with Federal agencies involving 100% federal ownership of property, 100% federal operation of a site, or mixed work at a formerly used defense site.

    Federal facility matters are often issues of national significance. Because disputes may be raised to the Administrator, Headquarters maintains a concurrence role in Federal facility CERCLA cases. Therefore, the Federal Facility Enforcement Office (FFEO) should be contacted regarding these Federal facility CERCLA cases.(2)

    OSRE will continue to be the contact for private sites with Federal PRPs. FFEO and OSRE will work with each other to determine the logical lead at sites with mixed federal and private ownership.

  2. Required CERCLA Consultations

    Requests for Headquarters consultations can be made by telephone (or in writing) to the Headquarters staff person assigned to the case (contact the appropriate RSD Branch Chief or Senior Counsel if no one is assigned to the case). Background information necessary to provide context for the provision or circumstance that triggers the Headquarters consultations and any other information regarding special elements involved should be E-mailed, faxed or mailed at the same time to the Headquarters person assigned to the case. Regional and Headquarters staff should discuss the provision or circumstances requiring consultation in detail. A letter from the RSD Branch Chief or Senior Counsel to the appropriate Regional Branch Chief will confirm that the consultation took place and will summarize any comments or concerns Headquarters has with the proposal. Telephone or computer conversations may provide advance notice that the consultation requirements have been met.

    1. Consultation at OD/OSRE level is required for:

      1. Settlements in which, under any applicable penalty policy, the Region is contemplating waiving greater than 50% of potential civil penalties under CERCLA 104(e)(5), 106(b) or 109(c) or greater than 50% of stipulated penalties, or any treble damages. (Waiver of administrative penalties under 109(a) and (b) do not require consultation.)

      2. Multi-regional bankruptcy cases after the concurrence of all relevant RAs. (For multi-media covenants, see A.7.)

      The compromise of claims for civil or stipulated penalties and treble damages has received heightened Congressional scrutiny as EPA has moved to an enforcement first approach, issuing greater numbers of UAOs for performance of work. This is an area in which the Agency needs to ensure vigorous enforcement and in which national consistency is important.

    2. Consultation at the RSD Director level is required for:

      1. Administrative settlements under 122(h) where the region is contemplating compromises of future costs. (This replaces the prior consultation requirement for 122(h) settlements where total past and future site costs exceed $500,000.)

      2. All mixed funding settlements for mixed work; preauthorization; and "cashouts" in which the amount recovered under the settlement is greater than $10 million.

        Unless specifically delegated to a Regional Administrator under Delegation 14-9-A, OSWER approval is needed before Regions enter into preauthorization agreements. OSRE should be contacted when a preauthorization proposal meriting serious consideration is first submitted by PRPs. OSRE will work with the Regions and OSWER's Office of Emergency and Remedial Response to determine if the site is a good candidate and to obtain Headquarters approval as appropriate.

        The $10 million "cashout" provision reflects Headquarters interest at sites at which PRPs are providing EPA with large amounts of money for EPA (or another party) to do the work at the site. EPA continues to have a strong preference for PRPs to do site work.

      3. Settlements based on divisibility of harm provisions. This category does not include situations where divisibility is based on geographically distinct areas of contamination without comingling.

        Headquarters will review the site-specific circumstances when divisibility is used to justify a CERCLA settlement. The terms of such a settlement particularly demand national consistency while the courts are split as to what constitutes a basis for divisibility.

      4. Settlements involving municipalities as generators or transporters of municipal solid waste.

      5. The first settlement in each Region involving de micromis parties.

      6. Prospective purchaser agreements.

      7. Settlements involving Supplemental Environmental Projects that deviate from the SEP Policy or that compromise penalties as described in B.1 of this attachment (excluding Supplemental Environmental Projects under EPCRA and 103(b) actions).

      8. Appeals of adverse Federal administrative decisions.

      9. Settlements involving de minimis landowners.

        Due to the complexity of the interaction between the innocent landowner defense and the de minimis criteria for qualification, consultation will be retained pending additional Regional experience in this area.

      10. Settlements which compromise payment of oversight costs.

      11. Pre-Referral Negotiation (PRN) Litigation Reports where OECA expects to have a concurrence role on the settlement. All other PRN Litigation Reports require consultation with the appropriate RSD Branch Chief.

    3. Consultation with the RSD Judicial and Administrative Procedures Team is required for:

      Section 106(b) petitions.

    4. Consultation with designated Headquarters staff is required for:

      1. Section 104(e) orders for access.

      2. Section 104(c) UAOs for information gathering and Section 122(e) subpoenas, when either the UAO or the subpoena deviates significantly from the current models.

      The Regions should consult the AA/OSWER directly on: 1) decisions to obligate more than $6 million for a removal Action; and 2) decisions to approve FRP conducted risk assessments. When an enforcement issue is present, OSRE is consulted by OSWER.

      Regions are no longer required to: 1) get Headquarters concurrence before issuing the second 30-day extension to the CERCLA RD/RA special notice negotiation moratorium; 2) consult with Headquarters on decisions not to issue a CERCLA UAO for RD/RA; 3) consult with Headquarters prior to issuance of 106 removal orders; or 4) Consult with OSRE on selection of containment-only remedies (consultation with OERR on such decisions should continue).

  3. Required RCRA/OPA/LUST Concurrences

    Requests for Headquarters concurrence will require a written request for concurrence from the appropriate Regional official addressed and sent to the appropriate Headquarters official. A copy plus attachments should also be sent to the OD/OSRE (or for Federal facility matters, to the OD/FFEO). The request will consist of a memorandum that identifies the settlement provision or circumstance that triggers the Headquarters concurrence and a copy of any available Regional analysis. A copy of this memorandum should be faxed to one of the Headquarters staff assigned to the case so they may begin the concurrence process.

    1. Concurrence by the AA/OECA is required for "no action" assurances, i.e., promises outside the context of formal enforcement proceeding that EPA will not take enforcement action.

    2. Concurrence by the AA/OECA is required for "hold action letters" to DOJ requesting delay in filing a complaint beyond 60 days.

Notes

  1. On September 13, 1987, certain CERCLA settlement authorities were delegated to the RAs by Delegations 14-13-B (civil judicial enforcement actions) and 14-14-E (de mimimis settlements under 122(g)). These delegations also required RAs to obtain Headquarters concurrence for most CERCLA settlements.

    A June 17, 1988 memorandum (OSWER Directive # 9012.10-a) waived the concurrence requirements completely for most categories of CERCLA settlements and delegated another category of settlements to the RAs with a Headquarters consultation requirement. The memorandum did retain Headquarters concurrence for certain types of settlements, and for all settlement types not specifically identified. The June 17, 1988 memorandum was incorporated into the limitations section of the revised CERCLA delegations 14-13-B and 14-13-E issued on May 11, 1994. The limitations in delegations 14-13-B and 14-13-E envision further modification for the categories of settlements that are delegated to the RAs. Return to Document

  2. Contacting the OD/FFEO is consistent with the procedures in the "Guidance on Coordination of Federal Facility Enforcement Actions with the office of Enforcement," dated October 20, 1992 which continue as before, and provide for notice to the OD/FFEO as early as possible before certain actions are taken or announced against either federal agencies or their contractor-operators. Return to Document

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