(A.R. Volume 3, No. 17). On March 9, 1982, the EPA met with Rohm and Haas and BCM to discuss the BCM comments. The Administrative Record does not contain a transcript of the meeting, although it does include minutes and comments prepared by the EPA. (Vol. 3, No. 21 by Administrative Record). On March 20, 1982, EPA's consultant submitted a written response to the BCM report. (Vol. 3, No. 18 of Administrative Record).
By letter dated March 23, 1982, the EPA notified defendants Rohm and Haas, Owens-Illinois, Cenco, Marvin Jonas, and CBS that they had been identified as potentially responsible parties and could be held liable for the cost of the clean-up. The letter further offered them the opportunity to develop and implement their own remedial plan, and gave them 45 days to submit their proposals. On March 31, 1982, defendant Marvin Jonas responded, stating that it had not been given an adequate opportunity to study the EPA's proposal, and that it was unable to develop its own plan in the time provided. (A.R. Vol. 3, No. 20). On April 23, 1982, defendants Rohm and Haas and Owens-Illinois submitted a supplemental report by BCM. (A.R. Vol. 3, No. 25). These defendants also apparently submitted, in May of 1982, copies of a Preliminary Engineering Study of the Lipari Landfill prepared by BCM; however, the court has been unable to locate this document in the Administrative Record. (See Attachment # 11 to Affidavit of Salvatore Badalamenti).
The EPA undertook another feasibility study in May of 1982 in conjunction with another consultant, the Radian Corporation ("Radian"). The resulting report evaluated 32 alternatives for remedial action, including the BCM proposal. (A.R. Vol. 28). Radian also issued an Environmental Assessment (A.R. Vol. 27), and written comments to BCM's Preliminary Engineering Study (A.R. Vol. 3, No. 30).
The EPA held a public hearing to announce the recommended alternative on July 23, 1982. The potentially responsible parties were not given individual notice of this meeting, although it appears that defendant Rohm and Haas was present. (Attachment 6 to Badalamenti Affidavit). The Radian Study was released to the public and defendants at the meeting, and all parties were given five days to submit comments. (A.R. Vol. 4, No. 28). No transcript or minutes of the public meeting appear in the Record.
By letter dated July 30, 1982, Rohm and Haas requested a meeting with the EPA to present further comments on the Radian Study. On August 3, 1982, the EPA issued the ROD I. (A.R. Vol. 4, No. 31). On August 25, 1982, the EPA met with Rohm and Haas and BCM to discuss the defendant's concerns regarding the Radian proposal, and the EPA concluded that the issues raised did not merit revision of the R.O.D. (A.R. Vol. 4, No. 47).
After carefully reviewing the evidence in the Administrative Record of the defendants' participation in the response action selection process, we conclude that the hearing procedures provided by the EPA did not quite comply with the minimal requirements set forth in SARA. As described above, SARA requires adequate notice to potentially affected persons, an opportunity to comment on the proposed action, a recorded public meeting, agency response to the comments, criticisms, and new data submitted, and agency explanation of the selected action. See § 113(k)(2)(B) of SARA, 42 U.S.C. § 9613(k)(2)(B). While it appears that at least two of the defendants, Rohm and Haas and Owens-Illinois, were given ample opportunity to review EPA proposals and to submit their own analyses prior to the EPA's selection of a remedy, we are not satisfied that Rohm and Haas, Owens-Illinois or the other named defendants received all of the procedural protections set forth in SARA. First, it appears from the record before us that the defendants did not receive notice of the selected remedy "accompanied by a brief analysis of the plan and alternative plans that were considered" § 113(k)(2)(B)(i) of CERCLA, 42 U.S.C. § 9613(k)(2)(B)(i), until the July 23, 1982 public meeting, and there is no evidence in the record that the defendants even received individual notice of the public meeting. Moreover, after the July 23 meeting, the EPA allowed the defendants and the public only five days to submit comments. This short period of time is not consistent with SARA's requirement that the EPA "provide a reasonable opportunity for submission of written and oral comments. . . ." § 117(a)(2) of CERCLA, 42 U.S.C. § 9617(a)(2), incorporated by reference in § 113(k)(2)(B)(iii) of CERCLA, 42 U.S.C. § 9613(k)(2)(B)(iii), (emphasis added). Finally, we believe that the administrative record may be incomplete, inasmuch as it does not contain any comments provided by the defendants or the public at the public hearing (apparently no transcript was made) and it does not contain one of the reports submitted by the defendants' consultant. See § 117(d) of CERCLA, 42 U.S.C. § 9617(d), incorporated by reference in § 113(k)(2)(B) of CERCLA, 42 U.S.C. § 9613(k)(2)(B).
It is not immediately obvious, however, what this court's response should be in light of the identified deficiencies in the administrative process. Plaintiff urges us to employ an arbitrary and capricious standard of review based on the administrative record already complied by the agency. There is support for this course of action in SARA, which provides that until regulations are promulgated under the statute, "the administrative record shall consist of all items developed and received pursuant to current procedures for selection of the response action. . . ." § 113(k)(2)(C) of SARA, 42 U.S.C. § 9613(k)(2)(C). On the other hand, defendants argue that the agency's proceedings were so flawed that de novo review is required. They point to a Senate Committee Report accompanying SARA which provides:
If major deficiencies are shown to exist in the administrative record that has been assembled, judicial review of the response in an enforcement or cost recovery action may be de novo, i.e. open to the introduction of evidence by all parties.
S. Rep. No. 11, 99th Cong., 1st Sess. 57 (1985). The Supreme Court has also recognized that the district court has the authority, in actions governed by the Administrative Procedures Act, 5 U.S.C. § 101, et seq., to engage in de novo review "when the action is adjudicatory in nature and the agency fact-finding procedures are inadequate." Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 415, 28 L. Ed. 2d 136, 91 S. Ct. 814 (1971).
We do not believe, however, that either option proposed -- review on the present record or de novo review -- is appropriate in light of the unique circumstances present in this case. Response measures in this case commenced prior to CERCLA's enactment, and the initial hearing stages were conducted before the NCP was promulgated. In addition, of course, the first phase of the clean-up was completed, and the recovery suit filed, before SARA came into existence. As a result, the agency's hearing and decision-making procedures throughout were necessarily innovative and ad hoc. Nevertheless, it is clear from our review of the record that the EPA did notify potentially responsible parties of the problem promptly, and did attempt to involve them in its development of an appropriate response action. The flaws which we have identified in the administrative process relate to the completeness of the administrative record as a basis for judicial review. In other words, we are concerned that the present administrative record may not reflect all of the factors that the agency should have taken into consideration before reaching a final decision, because the parties were not given an adequate opportunity to present those factors to the agency. This defect prevents us from strictly limiting our review to the record already compiled by the agency. However, we are also not compelled to engage in de novo review. Where inadequacies in an administrative record frustrate proper judicial review of the agency's actions under the arbitrary and capricious standard, the proper course is to remand the case to the agency, or to allow supplementation of the record in district court. Florida Power & Light Co. v. Florion, 470 U.S. 729, 105 S. Ct. 1598, 84 L. Ed. 2d 643 (1985); Camp v. Pitts, 411 U.S. 138, 36 L. Ed. 2d 106, 93 S. Ct. 1241 (1972); ASARACO v. EPA, 616 F.2d 1153 (9th Cir. 1980).
In the present case, we believe that remand is appropriate. First, given the unusual procedural posture of this case, remand will benefit all parties in that it will enable them to develop the record with the full panoply of procedures afforded by SARA. Moreover, the agency, with its expertise in environmental issues, is in a far better position than this court to gather the supplemental evidence as an initial matter and to develop the record expeditiously and efficiently.
For all of these reasons, the case will be remanded to the EPA for further development of the administrative record for Phase I of the clean-up in accordance with the provisions of SARA. At the agency hearing, the arguments and presentations of the parties should be confined to the facts and circumstances in existence at the time the plan would have been noticed had the SARA procedures been followed throughout. The EPA should also respond to the new submissions in the manner prescribed by § 113(k)(2)(B)(iv). When the complete record is submitted to this court, we will limit our review to determining whether the EPA's choice of a response action was arbitrary, capricious or otherwise not in accordance with the law.
We note that since the initiation of this lawsuit, the EPA has identified other potentially responsible parties who have not yet been joined formally as parties to the action. This raises a potential constitutional question concerning the adequacy of SARA's judicial review procedures as applied to parties who had no opportunity to participate in the process before the agency. Given our disposition of plaintiff's motion, however, we need not reach this difficult issue. The EPA is directed to include, in the hearing we have ordered, all potentially responsible parties that the agency intends, in the future, to name as defendants in this case.
Defendants also argue that even if we apply an arbitrary and capricious standard of review to the EPA's choice of a response action, we can still consider evidence outside of the administrative record under applicable principles of administrative law. We need not rule on this issue now, given our decision to remand the action for further supplementation of the record. Defendants may renew this argument, with appropriate factual and legal support, should they desire, after the fully developed Administrative Record is certified to this court.
The EPA is directed to proceed expeditiously with the hearing on the appropriateness of the Phase I response action. This court will retain jurisdiction over other aspects of the litigation in order to supervise discovery on liability issues and the ongoing settlement discussions.
Counsel for the plaintiff shall submit an order consistent with this opinion.