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United States v. E.I. Dupont De Nemours and Co. Inc.

December 22, 2005


On Appeal from the United States District Court for the District of Delaware D.C. Civil Action No. 02-cv-01469 (Honorable Sue L. Robinson).

The opinion of the court was delivered by: Scirica, Chief Judge.


Argued En Banc September 8, 2005



At issue is whether the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA), 42 U.S.C. § 9601 et seq., authorizes the United States to recover costs incurred in the course of supervising a hazardous waste cleanup conducted by responsible private parties. We hold CERCLA provides for such recovery. Accordingly, we will overrule United States v. Rohm & Haas Co., 2 F.3d 1265 (3d Cir. 1993), and reverse the order of the District Court.


The material facts are undisputed. The DuPont Newport Superfund Site is an industrial site in Delaware, owned and operated at various times by appellees E.I. DuPont de Nemours and Company and Ciba Specialty Chemicals Corporation.*fn1 Because of severe contamination to the property and its groundwater, the site was identified in the early 1980s as a potential threat to human health. In February 1990, it was placed on CERCLA's National Priorities List. See 42 U.S.C. § 9605(a)(8)(B) (establishing the National Priorities List).

The EPA developed a remedial action plan, which called for various measures, including excavating and dredging contaminated soil, monitoring contaminated groundwater, and constructing treatment facilities. Because the parties could not agree on implementation, the EPA issued a unilateral administrative order directing DuPont to remediate the site in the manner set forth in the remedial action plan, subject to EPA oversight and approval. See § 9606 (authorizing administrative orders "as may be necessary to protect public health and welfare and the environment").

DuPont complied with the EPA's administrative order and executed a two-stage "private party cleanup action." The first stage-a "removal action" under CERCLA § 101(23), 42 U.S.C. § 9601(23)-consisted of developing project specifications and schedules tailored to the EPA's stated objectives. The second stage-a "remedial action" under CERCLA § 101(24), 42 U.S.C. § 9601(24)-consisted of the actual cleanup work, including soil excavation, remedial "cap" construction, groundwater barrier installation, groundwater monitoring and treatment, and wetland restoration. DuPont completed the project under budget, ahead of schedule, and to the EPA's satisfaction.

The EPA supervised both stages of the cleanup. Oversight of the first stage entailed reviewing and approving (1) project specifications, (2) treatment technologies, (3) testing and sampling methods, and (4) construction schedules. Oversight of the second stage entailed monitoring, reviewing, and approving (1) design plan implementation, (2) construction schedules, (3) health and safety issues, (4) field work, and (5) field change requests. The parties stipulate that, in supervising the first stage's removal action, the government incurred oversight costs of $746,279.77. They also stipulate that, in supervising the second stage's remedial action, the government incurred costs of $648,517.17. The total cost to the government was $1,394,796.94.

The government concedes Rohm & Haas, 2 F.3d 1265, bars recovery of oversight costs of a removal action, but asks that we reconsider that decision and allow the EPA to recover oversight costs incurred in supervising both the removal and remedial actions of DuPont's cleanup. Alternatively, the government contends Rohm & Haas does not control recovery of remedial action oversight costs and asks that we allow for recovery of its costs in supervising the remedial action component of DuPont's cleanup.

In a memorandum order and opinion, the District Court held the government's recovery of both "removal" and "remedial" action oversight costs is barred under Rohm & Haas. See United States v. E.I. du Pont de Nemours & Co., No. 02-1469, 2004 WL 1812704, at *6-9 (D. Del. Aug. 5, 2004). Accordingly, the District Court granted summary judgment for Dupont on all relevant claims.

The government appealed and petitioned for initial hearing en banc. Because of the importance of the issue and several intervening decisions from our sister courts of appeals questioning or rejecting our analysis in Rohm & Haas, see, e.g., United States v. Lowe, 118 F.3d 399 (5th Cir. 1997) (holding such costs recoverable), we granted the petition. See Fed. R. App. P. 35(b)(1)(B).


The District Court exercised jurisdiction under 28 U.S.C. § 1331. We have jurisdiction under § 1291. Our review on summary judgment of this interpretation of federal statutory law is plenary. See Wheeling & Lake Erie Ry. Co. v. Pub. Util. Comm'n, 141 F.3d 88, 94 (3d Cir. 1998).


CERCLA is a broad remedial statute, enacted in 1980 to ensure that parties responsible for hazardous waste contamination "may be tagged with the cost of their actions." United States v. Bestfoods, 524 U.S. 51, 56 (1998) (quoting S. Rep. No. 96-848, at 13 (1980), as reprinted in 1980 U.S.C.C.A.N. 6119). CERCLA is a product of Congress's judgment that "those responsible for problems caused by the disposal of chemical poisons [must] bear the costs and responsibility for remedying the harmful conditions they created." In re TuTu Water Wells CERCLA Litig., 326 F.3d 201, 206 (3d Cir. 2003) (quoting FMC Corp. v. Dept. of Commerce, 29 F.3d 833, 843 (3d Cir. 1994) (en banc)).

CERCLA grants the executive branch, acting primarily through the EPA, "broad power to command government agencies and private parties to clean up hazardous waste sites." Key Tronic Corp. v. United States, 511 U.S. 809, 814 (1994). This "broad power" may be exercised through a government-conducted cleanup, 42 U.S.C. § 9604(a)(1),*fn2 followed by a cost recovery action, § 9607(a),*fn3 or through a private party cleanup, § 9606.*fn4 A private party cleanup typically begins with a cleanup plan developed by the EPA. §§ 9604(c)(4),*fn5 9621(a).*fn6 The plan is implemented by responsible private parties, under either a consent agreement, § 9622,*fn7 or a unilateral administrative order, § 9606(a).*fn8 Throughout the cleanup, the EPA maintains responsibility for oversight and certification. See 40 C.F.R. § 300.400(h) (2005) ("EPA will provide oversight when the response is pursuant to an EPA order or federal consent decree"); see also §§ 9622(a), (f)(3), (f)(5) (contemplating EPA review and certification of private party cleanups). According to the EPA, private party cleanups comprise a significant percentage of all CERCLA removal and remedial actions. See U.S. EPA, Superfund: Building on the Past, Looking to the Future 72-74 (April 22, 2004) (reporting that private parties performed 49% of removal actions and 88% of remedial actions commenced in 2003).

In Rohm & Haas, we held the United States cannot recover "removal action" oversight costs incurred while supervising a private party cleanup. 2 F.3d at 1278. We reasoned that National Cable Television Ass'n, Inc. v. United States, 415 U.S. 336 (1974), bars recovery of such costs "unless the statutory language clearly and explicitly requires that result." Rohm & Haas, 2 F.3d at 1274. Emphasizing the lack of any "explicit reference to oversight of activities conducted and paid for by a private party," id. at 1275, and "the dramatic and unusual effect of requiring regulated parties to pay a large share of the administrative costs incurred by the overseeing agency," id. at 1274, we held CERCLA lacked the requisite "clear statement." Id.

After we decided Rohm & Haas, every other court of appeals that addressed the issue either questioned or rejected our holding. See United States v. Lowe, 118 F.3d 399, 401, 404 (5th Cir. 1997) (rejecting applicability of National Cable and holding CERCLA authorizes EPA recovery of private party response action oversight costs); United States v. Dico, Inc., 266 F.3d 864, 877-78 (8th Cir. 2001) (same); Atl. Richfield Co. v. Am. Airlines, Inc., 98 F.3d 564, 568-69 (10th Cir. 1996) (questioning applicability of National Cable and holding CERCLA provides for recovery of remedial action oversight costs).*fn9



We begin our analysis with the clear statement doctrine, established in National Cable, 415 U.S. 336, and applied in Rohm & Haas, 2 F.3d at 1273-74. Under the clear statement doctrine, "Congress must indicate clearly its intention to delegate to the Executive the discretionary authority to recover administrative costs not inuring directly to the benefit of regulated parties by imposing additional financial burdens, whether characterized as 'fees' or 'taxes,' on those parties." Skinner v. Mid-Am. Pipeline Co., 490 U.S. 212, 224 (1989) (explaining National Cable). Furthermore, when Congress intends to delegate this type of discretionary authority to a federal agency, it must set forth "an intelligible principle" to constrain the agency. National Cable, 415 U.S. at 342 (quotation omitted).

National Cable addressed the Independent Offices Appropriation Act, 1952, Pub. L. No. 137, 65 Stat. 290 (1952), which allowed federal agencies to prescribe any "such fee, charge or price, if any, as [the agency] shall determine . . . to be fair and equitable taking into consideration direct and indirect cost to the Government, value to the recipient, public policy or interest served, and other pertinent facts." National Cable, 415 U.S. at 337. This open-ended congressional delegation was intended to encourage self sufficiency among the agencies. Id. The Court found that in light of Congress's constitutionally vested taxing power, see U.S. Const. art. I, § 8, and the apparently unbridled taxing discretion granted to the agencies under the terms of the statute, the Act approached the outer boundaries of Congress's power to delegate. In the absence of a clear statement of Congress's intent to delegate its taxing power to federal agencies, and an intelligible principle constraining the agency's exercise of such power, the Court read the Act "narrowly to avoid constitutional problems," finding the phrase "value to the recipient" to be "the measure of the authorized fee." National Cable, 415 U.S. at 342-43.

After National Cable was decided, the Court clarified that the non-delegation principle is implicated only when Congress fails to provide "an administrative agency with standards guiding its actions such that a court could ascertain whether the will of Congress has been obeyed." Skinner, 490 U.S. at 218 (quotation omitted). In applying the "intelligible principle" test to particular statutory delegations, the Court's "jurisprudence has been driven by a practical understanding that in our increasingly complex society, replete with ever changing and more technical problems, Congress simply cannot do its job absent an ability to delegate power under broad general directives." Mistretta v. United States, 488 U.S. 361, 372 (1989). The Court has "found the requisite 'intelligible principle' lacking in only two statutes," one which provided "no guidance for the exercise of discretion," and the other which "conferred authority to regulate the entire economy on the basis of no more precise a standard than stimulating the economy by assuring 'fair competition.'" Whitman v. Am. Trucking Ass'n, 531 U.S. 457, 474 (2001) (citing Panama Refining Co. v. Ryan, 299 U.S. 388 (1935), and A.L.A. Schecter Poultry Corp. v. United States, 295 U.S. 495 (1935)). "In short," the Court has "'almost never felt qualified to second-guess Congress regarding the permissible degree of policy judgment that can be left to those executing or applying the law.'" Whitman, 531 U.S. at 474-75 (quoting Mistretta, 488 U.S. at 416 (Scalia, J., dissenting)).


DuPont contends CERCLA lacks both a clear statement delegating to the EPA the authority to recover oversight costs and an intelligible principle constraining the EPA's actions in exercising such authority. For these reasons, DuPont contends reading CERCLA to allow recovery of oversight costs is barred under National Cable.

After reconsideration, we cannot agree. Because of significant distinctions between the statutory framework at issue in National Cable and the one at issue here, we no longer believe National Cable governs our analysis of CERCLA. See Dico, 266 F.3d at 877; Lowe, 118 F.3d at 401; Atl. Richfield Co., 98 F.3d at 568. National Cable addressed the imposition of user fees by the Federal Communications Commission on parties it was authorized to regulate. 415 U.S. at 337-38; see Skinner, 490 U.S. at 224 (explaining National Cable struck down "agencies' efforts to receive from regulated parties costs for benefits inuring to the public generally"). CERCLA neither imposes user fees or taxes, nor imposes them on a regulated industry. CERCLA response costs are restitutionary payments, imposed on those responsible for contamination to cover costs of the contamination's cleanup. See Dico, 266 F.3d at 877 ("[P]rovisions allowing the EPA to recover costs are meant to make the guilty parties pay and thus are not like the user fees at issue in National Cable."); Lowe, 118 F.3d at 401 (CERCLA response costs "are neither fees nor taxes, but rather, payments by liable parties in the nature of restitution for the costs of cleaning up a contamination or a threatened contamination for which they are responsible."); Atl. Richfield Co., 98 F.3d at 568 ("EPA oversight costs are not fees or taxes levied against innocent members of a regulated industry to pay the EPA's general administrative costs, but part of the damages caused or contributed to by specific persons."). Nor does CERCLA target regulated industries, but rather "responsible parties," see 42 U.S.C. § 9607(a); United States v. Alcan Aluminum Corp., 964 F.2d 252, 257 n.4 (3d Cir. 1992), who are held strictly liable for the costs of cleaning up contamination for which they are responsible. See United States v. Chromalloy Am. Corp., 158 F.3d 345, 351 (5th Cir. 1998) ("CERCLA establishes 'a federal cause of action in strict liability.'") (quoting H.R. Rep. No. 96-1016(I), 96th Cong., 2d Sess. 22 (1980)).

Additional distinctions between CERCLA and the statutory scheme in National Cable strengthen our conclusion that CERCLA's cost recovery provisions do not implicate National Cable. CERLCA liability is judicially determined under a federal cause of action-it is not determined by administrative levy. Nor does CERCLA divorce an agency from the appropriations process, implicating agency accountability. Compare 26 U.S.C. § 9507(c)(1) (requiring congressional appropriation of Superfund accruals), with Rohm & Haas, 2 F.3d at 1274 (applying National Cable to ensure EPA accountability via the appropriations process).

Even if CERCLA were to implicate National Cable, its cost recovery provision, 42 U.S.C. § 9607, provides a clear statement of the power conferred and an intelligible principle governing the exercise of such power. See Skinner, 490 U.S. at 219 ("It is 'constitutionally sufficient if Congress clearly delineates the general policy, the public agency which is to apply it, and the boundaries of this delegated authority.'") (quoting Am. Power & Light Co. v. SEC, 329 U.S. 90, 105 (1946)). The government is authorized to recover, inter alia, "all costs of removal or remedial action incurred by the United States government . . . not inconsistent with the National Contingency Plan." 42 U.S.C. § 9607(a)(1)--(4)(A). Government recovery of oversight costs is specifically authorized, but limited by the detailed statutory definitions of "removal action" and "remedial action," id. § 9601(23)--(25), and by the provisions of the National Contingency Plan. See 40 C.F.R. pt. 300 (2005). The National Contingency Plan sets forth, inter alia, "methods and criteria for determining the appropriate extent of removal, remedy, and other measures," 42 U.S.C. § 9605(a)(3), and "means of assuring that remedial action measures are cost-effective." § 9605(a)(7). The plan also requires documentation of all costs that are to be recovered. See 40 C.F.R. § 300.160(a)(1) (2005).

A responsible party may challenge oversight costs as inconsistent with the plan. See United States v. Hardage, 982 F.2d 1436, 1445 (10th Cir. 1992) ("[A] defendant who is declared liable for future response costs may still challenge those costs as unrecoverable because the underlying response actions giving rise to the costs are inconsistent with the NCP."). Where the government's costs are inconsistent with the plan, they should not be allowed. See United States v. USX Corp., 68 F.3d 811, 817 (3d Cir. 1995) (noting that the district court "declined to grant summary judgment in favor of the United States on its damage claim . . . finding that there were genuine issues of material fact 'regarding the reasonableness of the [Remedial Investigation and Feasability Study] and whether the United States' response costs were incurred due to a 'needless and expensive monitoring study'"); Dico, 266 F.3d at 879; Wash. State Dep't of Transp. v. Wash. Natural Gas Co., 59 F.3d 793, 805 (9th Cir. 1995). The National Contingency Plan therefore sets forth an intelligible principle limiting the government's authority to recover CERCLA costs.

EPA recovery is further limited, and its discretion further constrained, by the statutory definition of "responsible parties." See 42 U.S.C. § 9607(a)(1)--(4); United States v. Alcan Aluminum Corp., 964 F.2d 252, 257 n.4 (3d Cir. 1992). Under CERCLA's cost recovery provisions, 42 U.S.C. § 9607(a), the EPA can recover costs only after making the requisite showing of liability under the comprehensive "responsible party" framework. These statutory standards guide the EPA and the courts, see Skinner, 490 U.S. at 218, and serve as constraints on the agency's cost recovery.

In sum, CERCLA represents Congress's effort to address a complex environmental problem under a comprehensive remedial statute. Congress's decision to hold responsible parties strictly liable for the government's costs of responding to hazardous waste contamination is both a reasonable exercise of legislative authority and different in kind from the unbounded delegation of taxing power at issue in National Cable. Furthermore, CERCLA § 107 contains a clear statement of the power conferred and "intelligible principles" to guide and constrain the agency in exercising such power. We see no constitutional delegation problem and hold National Cable's narrow rule of statutory construction does not apply.


Because National Cable is inapposite, ordinary principles of statutory construction govern the recovery of CERCLA oversight costs. The starting point is the language of the statute. If the meaning of the text is clear, "there is no need to . . . consult the purpose of CERCLA at all." Cooper Indus., Inc. v. Aviall Services, Inc., 125 S.Ct. 577, 584 (2004); see id. ("As we have said: '[I]t is ultimately the provisions of our laws rather than the principal concerns of our legislators by which we are governed.'") (quoting Oncale v. Sundowner Offshore Servs., Inc., 523 U.S. 75, 79 (1998)). We note at the outset, however, that "CERCLA is not . . . 'a model of legislative draftsmanship'." United States v. Gen. Battery Corp., 423 F.3d 294, 298 (3d Cir. 2005) (quoting Exxon Corp. v. Hunt, 475 U.S. 355, 363 (1986)). Where a statute's text is ambiguous, relevant legislative history, along with consideration of the statutory objectives, can be useful in illuminating its meaning. Gen. Dynamics Land Sys. v. Cline, 540 U.S. 581, 600 (2004) (examining "the text, structure, purpose and history" of the relevant statute).

By its terms, CERCLA's cost-recovery provision holds responsible parties liable for, inter alia, "all costs of removal or remedial action incurred by the United States government or a State or an Indian tribe not inconsistent with the national contingency plan," and "any other necessary costs of response incurred by any other person consistent with the national contingency plan." 42 U.S.C. § 9607(a)(1)--(4)(A), (B) (emphasis added).

"Removal action" comprises:

the cleanup or removal of released hazardous substances from the environment, such actions as may be necessary taken in the event of a threat of release of hazardous substances into the environment, such actions as may be necessary to monitor, assess and evaluate the release or threat of release of hazardous substances, the disposal of removed material, or the taking of such other actions as may be necessary to prevent, minimize, or mitigate damage to ...

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