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D'IMPERIO v. UNITED STATES

December 1, 1983

DR. FRANCESCO D'IMPERIO and QUINTON D'IMPERIO, Plaintiffs,
v.
UNITED STATES OF AMERICA, MOTEL DENNIS, INC., JOHN J. D'ANDREA, RONALD PHELPS, CALT, INC., and JOHN DOE and RICHARD ROE, unknown persons, Defendants



The opinion of the court was delivered by: GERRY

 The plaintiffs in this case are seeking a declaratory judgment to the effect that they are not liable for hazardous substance cleanup costs under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), 42 U.S.C. § 9607. Further, they seek a declaration that if they contribute to the cost of cleanup, their actions are compensable under § 9607(a)(4)(B). Finally, they wish to enjoin the United States from continuing to refer to their tract of land, which appears on a proposed National Priorities List of hazardous dumpsites, as the "D'Imperio Tract."

 The D'Imperios are the owners of a tract of land consisting of approximately 30 acres in Hamilton Township, New Jersey. They have owned the property since 1969. According to the complaint, prior to 1969, hazardous substances (including those enumerated in CERCLA, 42 U.S.C. § 9601(14)) were disposed on the property. In 1977, the New Jersey Department of Environmental Protection became aware of the presence of these substances on the property and ordered its prior owner, Motel Dennis, Inc., to properly remove the substances. Motel Dennis, Inc. did not comply, and no further steps were taken by the state. In 1980, the plaintiffs learned of the presence of the hazardous substances. In the spring of 1982, the United States Environmental Protection Agency released $250,000 from the Hazardous Substance Response Trust Fund ("Superfund") established under CERCLA (42 U.S.C. § 9631) for the purpose of studying the dumpsite. In a letter dated March 18, 1982, the EPA advised the D'Imperios that "conditions at the D'Imperio site have resulted in releases or threatened releases of hazardous substances . . . which may present an imminent and substantial endangerment to the public health"; that the EPA had determined that Dr. Francesco D'Imperio "may be a responsible party with respect to the site"; and that if he failed to undertake an investigation of the site as a first step toward remedial activity, he "may be held liable under section 107 of CERCLA [ 42 U.S.C. § 9607] for all costs incurred by the United States Government in connection with the site." In January 1983, the EPA proposed to place the site on a National Priorities List (pursuant to 42 U.S.C. § 9605(8)(B)) of the most hazardous dumpsites in the United States.

 In seeking a declaratory judgment, the plaintiffs first seek a judgment to the effect that they are not liable for any cost of cleanup of the site, since they fall within the defense to liability provided by 42 U.S.C. § 9607(b). Second, they seek a judgment to the effect that any costs they do incur are "necessary costs" within the meaning of § 9607(a)(4)(B), such that those costs are recoverable from either the Superfund or other parties responsible for the environmental damage. Finally, they seek an injunction restraining the United States from continuing to refer to the site as the D'Imperio Tract, as such reference is harmful to the reputations of the plaintiffs. The defendant, United States of America, has moved to dismiss as to these first two prayers for relief on the grounds that the controversy is not yet ripe for disposition. One reason the defendants cite for the lack of ripeness is that there has been no "final action" by the EPA, as is required by the Administrative Procedure Act for court adjudication. As to the prayer for injunctive relief, the USA seeks to dismiss the complaint as "patently frivolous."

 Ripeness is a requirement for relief under the Declaratory Judgment Act's language of "actual controversy." As stated in Maryland Cas. Co. v. Pacific Coal & Oil Co., 312 U.S. 270, 273, 85 L. Ed. 826, 61 S. Ct. 510 (1941):

 
The difference between an abstract question and a "controversy" contemplated by the Declaratory Judgment Act is necessarily one of degree . . . . Basically, the question in each case is whether the facts alleged, under all the circumstances, show that there is substantial controversy, between parties having adverse legal interests of sufficient immediacy and reality to warrant issuance of a declaratory judgment.

 It is clear, as the plaintiffs assert, that a party may seek a declaration of non-liability under the Declaratory Judgment Act. Lumbermens Mutual Casualty Co. v. Borden Co., 241 F. Supp. 683 (S.D. N.Y. 1965); Beacon Theatres v. Westover, 359 U.S. 500, 3 L. Ed. 2d 988, 79 S. Ct. 948 (1959). The actual enforcement of a statute or regulation, or the commencement of a suit by a private party is no prerequisite of a suit to establish non-liability. Doe v. Bolton, 410 U.S. 179, 188, 35 L. Ed. 2d 201, 93 S. Ct. 739 (1974); Lake Carriers Assn v. MacMullan, 406 U.S. 498, 32 L. Ed. 2d 257, 92 S. Ct. 1749 (1972). Nevertheless, not everyone who fears that a government agency or private party may seek to compel enforcement of a law or agreement may bring suit under the Declaratory Judgment Act. One's fears must be sufficiently real and immediate, based on the actions or representations of one's potential adversary or based on actions one desires to take which may run afoul of a law or agreement, valid or otherwise.

 Here, the plaintiffs, as owners of the site, are understandably upset about the possibility of being held liable under 42 U.S.C. § 9607. While we do not consider the plaintiffs' fears "imaginary or speculative," (see Steffel v. Thompson, 415 U.S. 452, 459, 39 L. Ed. 2d 505, 94 S. Ct. 1209 (1974)), in view of the letter they received stating that they "may be liable" and in view of the feasibility investigation about to be, or now being, undertaken by the EPA, yet we do not find their fears to be based on considerations sufficiently immediate to warrant a declaration of non-liability. The Government's letter speaks throughout with equivocation: the EPA "may spend public funds"; Dr. D'Imperio "may be a responsible party"; corrective action "may be necessary"; Dr. D'Imperio "may be liable." The letter does not require any action from the plaintiffs. At this point, as stated above, the Government has, in fact, begun to spend public funds to investigate the dumpsite, but the investigation is not for the purpose of assigning liability among the parties, but for the purpose of planning for a cleanup of the site, if necessary.

 But it is not simply because the case fails traditional tests for ripeness that we must dismiss the plaintiffs' prayer for a declaration of non-liability. The provisions of the Administrative Procedure Act (see 5 U.S.C. § 704) require that only "final agency action" is subject to judicial review. "A preliminary, procedural or intermediate agency action or ruling not directly reviewable is subject to review [only] on the review of the final agency action." Id. The plaintiffs argue that under 5 U.S.C. § 702, "[a] person suffering legal wrong because of agency action is entitled to judicial review." However, the Act must be read as a whole (see Ellsworth Bottling Co. v. United States, 408 F. Supp. 280 (W.D. Okla. 1975)); thus, "agency action" referred to in § 702 must mean "final agency action." The term "agency action" is defined broadly to include "orders, licenses, sanctions, relief, or the equivalent," 5 U.S.C. § 551, and covers "every form of agency power, proceeding, action, or inaction." FTC v. Standard Oil Co. of California, 449 U.S. 232, 239, 66 L. Ed. 2d 416, 101 S. Ct. 488 (1980). Here, then, the "power" of the EPA to seek the institution of a liability suit would constitute agency action, but the notice letter is far short of a final decision that the Government undertake such a suit. Where, as here, the EPA cannot bring the suit itself but must refer the matter to the Attorney General (see Executive Order 12286 of January 19, 1981, 46 Fed. Reg. 9901), it is less than certain what actions of the EPA would meet the finality requirement; it is clear, however, that the notice letter represents only the most preliminary of determinations. Clearly, a letter stating that a party "may be liable" is no more final than an FTC complaint stating that the agency had "reason to believe" that the named parties had violated the Federal Trade Commission Act. In the latter instance, however, the Supreme Court determined the complaint insufficient to constitute "final agency action." FTC, supra. See also Toilet Goods Ass'n. v. Gardner, 387 U.S. 158, 162-4, 18 L. Ed. 2d 697, 87 S. Ct. 1520 (1967). As in FTC, here the notice letter is "not a definitive statement of position. It represents a threshold determination that further inquiry is warranted," FTC, supra, at 241, if it even represents that. Accordingly, a determination of non-liability would be premature at this time. Nor does the inclusion of the D'Imperio site on the National Priorities List (42 U.S.C. § 9604) represent a determination of liability. As is made clear in the Senate Report on CERCLA:

 
The priority lists serve primarily informational purposes . . . . Inclusion of a facility or site on the list does not in itself reflect a judgment of the activities of its owner or operator . . . nor does it assign liability to any person. Subsequent government action in the form of . . . enforcement action will be necessary in order to do so.

 Sen. Rep. No. 96-848, 96th Cong., 2d Sess. 60 (1980). Thus, none of the EPA actions undertaken to date -- the notice letter, the listing on the National Priorities List, the early stages of a feasibility study -- represent a finding of possible liability of sufficient immediacy to warrant declaratory relief.

 One of the purposes of the "final agency action" requirement is to allow the agency the opportunity to "correct its mistakes and apply its expertise." FTC v. Standard Oil, supra, at 242; Weinberger v. Salfi, 422 U.S. 749, 765, 45 L. Ed. 2d 522, 95 S. Ct. 2457 (1975). Here, the EPA, through the affidavit of Biros, has admitted that its findings of liability are so preliminary that it would be premature to even state that these findings represent a mistake in need of correction. Another basis for the "final action" requirement is that it allows the agency to decide where it is most important to invest its scarce investigative and prosecutorial resources, rather than have to defend against a plaintiff it might consider not worth investigating. Thus, the requirement seeks to prevent any delay or impediment to effective enforcement by the agency. Dresser Industries, Inc. v. United States, 596 F.2d 1231, 1236 (5th Cir. 1979). We regard each of these considerations as significant, and added to what we have stated earlier, warrant a finding of non-ripeness. We, therefore, will dismiss the plaintiffs' prayer for a declaration of non-liability under 42 U.S.C. § 9607.

 What we have stated above is equally applicable to the plaintiffs' suit as to their eligibility for reimbursement of costs incurred under § 9607(a)(4)(B). In order to seek recovery under this section, it is necessary for the plaintiff to prove that he himself is not liable for these costs. In view of the fact that we have declined to adjudicate the question of liability under § 9607(a) and (b), it also is premature to adjudicate the question of eligibility for reimbursement. We would view the matter differently if the plaintiffs had already incurred expenses in the cleanup of the site. Indeed, the language of the subsection states that the ultimately responsible parties "shall be liable for . . . any other necessary costs of response incurred by any other person." (Emphasis added.) Thus, CERCLA seems to require actual, past outlay of expenses. Here, the plaintiffs have neither spent, nor do they propose to spend, funds "consistent with the national contingency plan." 42 U.S.C. § 9607. We do not suggest that their failure in this regard is irresponsible or delinquent; all we hold is that their actions to date provide no reason to delve into the question of liability and recovery of funds. The plaintiffs seem to argue that already they have incurred losses in that the Government, with their imminent permission, is about to enter their property, set up fences and start its feasibility study, and that this "taking" is compensable. But we do not believe that these expenses are of the type CERCLA contemplates as being recoverable under its provisions. Section 9607(a)(4)(B) contemplates recovery for "costs of response." "Response" is elsewhere defined as "removal . . . [or] remedial action." All expenses thus far incurred by the Government are related to its feasibility study, a ...


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