In Frey v. EPA, 751 F.3d 461 (7th Cir. 2014) (“Frey III”), the Seventh Circuit ruled in favor of the Environmental Protection Agency (“EPA”) in a dispute concerning the sufficiency of a remedial clean-up plan for polychlorinated biphenyl (“PCB”) contaminated sites. The dispute arose from a citizen suit alleging that EPA failed to adhere to certain Comprehensive Environmental Response Compensation and Liability Act (“CERCLA”) standards. Specifically, the citizen plaintiffs challenged the remedial actions outlined in a consent decree entered into by the defendants and various government entities, including EPA. As explained below, the Seventh Circuit ultimately affirmed the lower court’s ruling against the citizen plaintiffs.
In the late 1970s, PCB contamination was discovered at several sites in the Bloomington, Indiana area. The PCBs, which EPA classifies as “probable” human carcinogens and toxic to humans and wildlife, came from defective capacitors manufactured by CBS Corp. (formerly Westinghouse Electric Corp., and now Viacom Inc.) (“CBS”). The record showed that CBS deposited the capacitors in local landfills and dumps, where the PCBs escaped and entered the environment. CBS also discharged PCB-contaminated water to a local sewage treatment plant.
EPA, the State of Indiana, Monroe County, and the City of Bloomington filed a CERCLA enforcement action against CBS for these disposals of harmful contaminants. The parties appeared to resolve the issue with the execution of a consent decree in 1985. Compliance with the consent decree deteriorated after the Indiana legislature prevented an incinerator from being built, which was an integral part of the original consent decree. After lengthy negotiations to structure a new remedy, CBS and EPA settled on a three-stage clean-up process. Stage 1 addressed PCB contamination at landfills, while Stages 2 and 3 addressed current and future PCB contamination of groundwater and sediment from the sites. Despite reaching a new agreement, the citizen plaintiffs were unsatisfied with the remedial plan. The dispute led to a series of rulings issued by the Seventh Circuit.
In 2000, the citizen plaintiffs filed a CERCLA citizen suit against EPA while Stage 1 was ongoing. The district court sua sponte dismissed the citizen plaintiffs’ CERCLA suit because it concluded that remediation plans were not complete. In Frey v. Environmental Protection Agency, 270 F.3d 1129 (7th Cir. 2001) (“Frey I”), the Seventh Circuit reversed the district court and found that the record did not include sufficient facts to determine whether the remediation was complete and, therefore, capable of review pursuant to § 113(h).
On remand, EPA moved for summary judgment arguing that citizen plaintiffs’ suit was barred by § 113(h). The district court found that remedial planning was underway and granted EPA’s motion. In Frey II, the Seventh Circuit reversed the district court and held that “EPA . . . failed to provide any objective referent by which to measure its progress” and, therefore, plaintiffs could file a citizen suit. 403 F.3d 829 (7th Cir. 2005). The court explained, “EPA . . . must point to some objective referent that commits it and other responsible parties to an action or plan. No such objective evidence exists in this record. There is no timetable or other objective criterion by which to assess when EPA's amorphous study and investigation phase may end.” Id. at 834. The court further concluded that this case involved “a challenge to a remedial action, because it dealt with ‘actions consistent with permanent remedy’ including excavation and destruction of hazardous materials.” Id. at 835; see also Frey III, 751 F.3d at 467.
In 2008, EPA filed an amendment to the 1985 consent decree settling all claims amongst the parties to the enforcement action. In July 2009, the citizen plaintiffs amended their complaint and alleged that EPA failed to complete a Remediation Investigation Feasibility Study (“RI/FS”)1 or equivalent before selecting Stages 1, 2, and 3. The citizens further argued that the remedial plan in the consent decree would not prevent all PCB releases from entering the environment. Therefore, according to the citizen plaintiffs, EPA had failed to protect human health and the environment. Plaintiffs also alleged that EPA violated CERCLA’s requirement that all settlement agreements be entered into as consent decrees.
After both parties filed for summary judgment, the district court ruled that it was barred from reviewing claims regarding Stages 2 and 3 of the clean-up plan outlined in the consent decree because Stages 2 and 3 were ongoing. In Frey III, the Seventh Circuit affirmed the district court’s opinion and specifically relied on CERCLA § 113(h)(4) reasoning that the section prevents a court from considering a CERCLA citizen suit until a remedial action is complete. Section 113(h)(4) provides in relevant part that:
No Federal court shall have jurisdiction . . . to review any challenges to removal or remedial action selected under section 9604 of this title, or to review any order issued under section 9606(a) of this title, in any action except . . . (4) An action under section 9659 of this title (relating to citizens suits) alleging that the removal or remedial action taken under section 9604 of this title or secured under section 9606 of this title was in violation of any requirement of this chapter. Such an action may not be brought with regard to a removal where a remedial action is to be undertaken at the site.
42 U.S.C. § 9613(h)(4).
The Seventh Circuit analyzed how to apply § 113(h)(4) when EPA has made new plans to conduct future work at a site after a court has already decided that no future action was planned. 751 F.3d at 468. Ultimately, the Court concluded that “a court remains able to review citizens’ claims about the old plan that are not directly affected by the new plan.” Id. at 468. However, if the old and new plans overlap, a court is unable to “resolv[e] claims about the old plan that are directly affected by the new plan, that is, claims about aspects of the old plan that fall within the plans' overlap.” Id. In this case, because Stage 1 was complete, the Court could review parts of Stage 1 that would not be impacted by Stages 2 and 3. Id. at 469.
In their challenge to Stage 1, the citizen plaintiffs first argued that EPA failed to prepare the equivalent of a RI/FS because EPA did not consider whether Stage 1 would stop all PCB releases into the environment. The Seventh Circuit rejected this argument and determined that EPA had completed the functional equivalent of an RI/FS. Specifically, EPA had considered whether Stage 1 alone would stop all of the PCB releases and had concluded that Stage 1 would be a good first step to preventing PCB releases. However, EPA also recognized that additional steps would be needed to resolve the contamination completely.
Plaintiffs then argued that Stage 1 violated CERCLA’s mandate to protect human health and the environment because Stage 1 did not stop all of the PCB releases into the environment. The Court, however, concluded that it must give deference to EPA’s conclusion that Stage 1 was protective of human health and the environment. Furthermore, EPA is not required to select the most protective remedy; instead, “EPA is explicitly directed to consider other factors, including cost, when selecting a remedy.” Id. at 471 (citing 42 U.S.C. § 9621(b)(1)).
Next, plaintiffs argued that EPA violated CERCLA’s mandate requiring all agreements with parties to be entered as consent decrees. The Court determined that this argument was moot because the district court previously approved an amendment to the consent decree. Plaintiffs then asserted that they were the prevailing party entitled to attorneys’ fees “because the EPA amended the consent decree in response to their lawsuit.” Id. Relying on Buckhannon Board and Care Home, Inc. v. West Virginia Department of Health and Human Resources, 532 U.S. 598, 605 (2001), the Court rejected plaintiffs’ argument and concluded they were not the prevailing party because plaintiffs’ lawsuit did not result in a court-ordered change in the relationship between the parties.
The most recent Frey decision provides three key takeaways. First, a party cannot challenge a CERCLA remedial plan until it is complete. Second, in cases where a new remediation plan would impact an old remediation plan, courts are unable to resolve claims about the old plan where there is an overlap with the new plan. Third, courts will review whether EPA followed the procedures for selecting the remediation plan as laid out in CERCLA, but will generally give deference to the substance of EPA’s remediation plans.