Opinion
CIVIL ACTION NO. 1:CV-93-1482
April 29, 1996
MEMORANDUM
Authority of the United States to Enter Into De Micromis Settlements
On February 8, 1996, the court imposed a briefing schedule on the issue of the United States' authority to enter into de micromis settlements with various Third and Fourth-Party Defendants in this case. Briefing is complete and the issue is ripe for disposition. I. Background
The United States indicates in its memorandum that approximately 100 parties support its position that CERCLA provides the authority for it to enter into de micromis settlements. Joining the Generator Defendants in their Opposition are various Fourth-Party Plaintiffs and the Keystone Defendants. The court will refer to the parties Opposing the United States collectively as "Defendants."
A short statement of the procedural posture of the case will put the relevant issues in context.
This case arises out of the Keystone Sanitation Landfill Site (the Site), a private municipal landfill located in Union Township, Adams County, Pennsylvania. The Site was in operation from approximately 1966 until April 1990. The United States commenced this action on September 27, 1993, pursuant to Section 107 of the Comprehensive Environmental Response Compensation and Liability Act of 1980 (CERCLA), 42 U.S.C. § 9607, against eleven potentially responsible parties (PRPs). The original Defendants include eight parties joined pursuant to § 107(a) — the "Generator Defendants" — and three parties joined pursuant to §§ 107(a)(1), (2), and/or (3) — the "Keystone Defendants." On August 1, 1994, the Generator Defendants instituted a Third-Party Action against approximately 180 Third-Party Defendants to recover response costs pursuant to Section 107(a) of CERCLA,. 42 U.S.C. § 9607, as well as Sections 702(a) and 1101 of Pennsylvania's Hazardous Sites Cleanup Act (HSCA), 35 Pa. Stat. Ann. tit. 35, §§ 6020.702(a), 6020.1101. The Third-Party Complaint also alleges that the Third-Party Defendants are liable for contribution pursuant to Section 113(f) of CERCLA, 42 U.S.C. § 9613 (b), and Section 705(a) of HSCA, 35 P.S.C.A. § 6020.705(a). On October 5, 1995, certain Third-Party Defendants filed a Fourth-Party Action against approximately 500 additional parties to recover response costs and contribution pursuant to CERCLA and HSCA.
In August of 1995, the court referred this case to Magistrate Judge Smyser for the purpose of conducting settlement negotiations. In furtherance of the settlement process, the court has stayed most discovery and motions practice. The settlement process is presently stalled, however. This is in part due to the Environmental Protection Agency's (EPA) plan to offer de micromis settlements to certain small volume contributors in the case. Parties who are able to confirm that they meet certain criteria established by the EPA will be afforded contribution protection in exchange for $1.00, thus resolving their liability in the case. Because several parties indicated that they would challenge the EPA's authority to enter into de micromis settlements, the court directed the parties to brief the issue prior to the EPA seeking court approval of the proposed consent decree. On March 22, 1996, the issue became ripe for disposition. On April 5, 1996, the EPA lodged the proposed de micromis consent decree with the court pending solicitation of public comment.
The Department of Justice (DOJ) notified the court on November 13, 1995, of the EPA's intention.
The issue before the court is whether the EPA has the authority to enter into de micromis settlements with parties whose contributions to the Keystone Site it deems "minuscule." The court's determination of whether those settlements are fair, reasonable, and consistent with the objectives of CERCLA is reserved for the point at which it undertakes its review of the consent decree.
II. Discussion A. The Proposed De Micromis Settlements
The EPA has defined de micromis parties in this action to include parties who have disposed of less than 1,800 cubic yards of municipal sold waste (MSW), which contains "`not more' than 55 gallons or 100 pounds of material containing hazardous substances derived from industrial, commercial, or institutional processes or activities." (U.S. Mem. in Supp. at 2.) The EPA originally estimated that 318 of all named parties, or 46% of the 689 named parties, meet the volumetric cut-off of 1,800 cubic yards. (U.S.' Mem. in Supp. at 3.) Not all of those parties, however, meet the EPA's toxicity cut-off of 55 gallons or 100 pounds of hazardous waste. The consent decree lodged with the court names approximately 95 parties. The EPA has reserved the right to lodge additional consent decrees in the near future.
For purposes of the proposed de micromis settlements, the EPA defines "MSW" as "solid waste generated primarily by households, but may include waste from commercial, institutional, or industrial sources. MSW may include (1) non-hazardous substances, (2) household waste, (3) industrial trash, or (4) minuscule quantities of hazardous substances derived from commercial, institutional, or industrial processes or activities." (U.S.' Mem. in Supp. at 2 n. 2.)
EPA defines "household waste" as "any material, including garbage, trash and sanitary waste in septic tanks, derived from households (including single and multiple residences, hotels and motels, bunkhouses, ranger stations, crew quarters, campgrounds, picnic grounds, and day-use recreation areas). Household waste includes primarily non-hazardous substances (including yard waste, food waste, paper waste, glass and aluminum) and may contain small quantities of household hazardous waste (including pesticides and solvents)." Id.
Finally, "industrial trash" constitutes "trash tram a commercial institutional or industrial entity which is very similar to Household (sic) waste; It does not include hazardous substances that are derived from a commercial, institutional, or industrial process or activity."Id.
The EPA's original calculation of 318 potentially eligible de micromis parties would have removed parties which were at most collectively responsible for less than 5% of the total waste at the Site. (Id.) This percentage, as evidenced by the number of parties on whose behalf the EPA lodged the de micromis consent decree, is presently much smaller. Moreover, due to the EPA's toxicity cut-off criteria, this 5% would in all likelihood represent the least toxic waste at the Site. (Id.) Settling parties will pay $1.00 and receive covenants not to sue from the EPA as well as contribution protection against claims brought by other parties. (Id.)
B. Positions of the Parties
The EPA argues that the proposed de micromis settlements are a subset of the de minimis settlements provided for in CERCLA Section 122(g) and that its authority to define the eligibility criteria for de minimis parties encompasses its authority in this case to determine the lesser amount of contribution that qualifies parties as de micromis. The EPA maintains that its decision to offer de micromis settlements will further Congress' objectives of affording expeditious relief to those parties who have contributed the least amount of waste to the Keystone Site.
Defendants do not take the position that the EPA lacks the authority pursuant to CERCLA to enter into settlements with low-volume low-toxicity contributors to the Keystone Site. Rather, Defendants argue that the EPA lacks the authority to enter into de micromis settlements for nominal sums which are unrelated to a party's volumetric contribution to the Site. (Defs.' Mem. in Resp. at 7.) Defendants contend that CERCLA mandates that settlement amounts be determined on a strictly volumetric basis, thus precluding the EPA from determining that a party's fair share is a nominal amount unrelated to the amount of its contribution to the Site. Defendants cite various EPA Guidances, CERCLA's legislative history and case law in support of their position. Additionally, Defendants argue that the EPA's proposed de micromis settlement initiative constitutes an unauthorized legislative rule and results in a takings. The court finds no merit in Defendants' arguments and will dispose of each of them in turn. Accordingly, it will sustain the EPA's authority to enter into the proposed de micromis settlements at this stage in the litigation.
C. Statutory Framework
CERCLA directs the EPA in appropriate situations to reach expeditious final settlements with small-volume low-toxicity generators. CERCLA terms these settlements "de minimis" settlements. 42 U.S.C. § 9622 (g). Section 122(g)(1) provides the following:
(1) Expedited final settlements. Whenever practicable and in the public interest, as determined by the President, the President shall as promptly as possible reach a final settlement with a potentially responsible party in an administrative or civil action under section . . . 107 . . . if such settlement involves only a miner portion of the response costs at the facility concerned and in the judgment of the President, the conditions in subparagraph (A) . . . are met:
(A) Both the following are minimal in comparison to other hazardous substances at the facility:
(i) The amount of the hazardous substances contributed by that party to the facility.
(ii) The toxic or other hazardous effects of the substances contributed by that party to the facility.42 U.S.C. § 9622 (g)(1) (emphasis added). Section 122(g)(3) instructs the President to settle or provide a covenant not to sue "as soon as possible after [he] has available the information necessary to reach such a settlement or grant such a covenant." 42 U.S.C. § 9622 (g)(3). Section 122(g)(5) provides that settlements under section 122(g) will include covenants not to sue from the United States, as well as protection against contribution claims brought by other parties. 42 U.S.C. § 9622 (g)(5).
Section 122(g) does not specify a precise volume of waste for the EPA to use in classifying a party as de minimis. Instead, the statute provides the EPA with the discretion to define de minimis on a case-by-case basis. See United States v. Rohm Haas Co., 721 F. Supp. 666, 683-84 (D.N.J. 1989). The EPA's determination of de minimis eligibility criteria in a given case is subject to review by the court. Id. at 685 n. 22. Section 122(g) does not prescribe the amount a settling party must pay in order to obtain contribution protection, nor a specific formula that the EPA must use in calculating a settlement amount. Nothing in section 122(g) mandates that the amount of settlement be proportional to the settling party's volumetric contribution to the site. Again, the EPA's discretion in this regard is limited to the extent that courts review proposed consent decrees in order to ensure that they are "fair, reasonable, and faithful to the objectives of CERCLA." United States v. Borough of Lemoyne, et al., No. 93-667, slip. op. at 15 (M.D. Pa. November 17, 1994).
D. The EPA Settlement Guidelines
Defendants claim that the EPA Guidances on CERCLA settlements with de minimis and de micromis waste contributors require it to use a volume-based matrix in order to ensure that a party's settlement amount is proportional to the volume it contributed to the site. (Defs'. Mem. in Resp. at 9-10; Defs.' Ex. F, Guidance on CERCLA Settlements with De Micromis Waste Contributors, OSWER Directive No. 9834.17, at 7-8 (July 30, 1993) (1993 De Micromis Guidance); Defs.' Ex. G, Streamlined Approach for Settlements with De Mimmis Waste Contributors under CERCLA Section 122(g)(1)(A), OSWER Directive No. 9834.7-1D, at 3 (June 30, 1993) (1993De Mimmis Guidance); Defs.' Ex. E, Methodologies for Implementation of CERCLA Section 122(g)(1)(A) De Micromis Contributor Settlements, OSWER Directive No. 9834.7-1B, at 12-13 (December 20, 1989) (1989 De Minimis Guidance); Defs.' Ex. H, Interim Guidance on Settlements with De Mimmis Waste Contributors under Section 122(g) of SARA, OSWER Directive No. 9834.7, at 18-20 (June 19, 1987) (1987 De Mimmis Guidance). Defendants' argument that the policies expressed in the Guidances bind the EPA to structure settlements in accordance with the their contents is misplaced. Defendants concede that the Guidances merely "recommend" calculating a party's settlement cost by using a matrix which reflects the ratio of a party's waste contribution to the estimate of the total volume of waste at a site, in proportion to its share of payment of the total cost of cleaning up the site. (Defs.' Mem. in Resp. at 10.) The Guidances clearly state that they are not rules binding on the agency and that the EPA reserves the right to take action at variance with the Procedures outlined within them. The EPA's suggested use of the matrix in the 1993 De Micromis Guideline recognizes that individually calculated volumetric shares are not required when settling with parties who have contributed very small amounts of waste. (Defs.' Ex. F, 1993 De Micromis Guidance at 10.) Indeed, the 1993 De Micromis Guideline also states that the EPA is free to establish a standardized payment for everyone in a de micromis class at a particular site. Id.
More importantly, however, is the fact that the types of settlements proposed by the EPA in this case are in accordance with the policies expressed in the Guidances. The EPA recognizes the need for quick resolution of claims and potential claims against parties who contributed small amounts of waste to a site. Id. at 3. In most instances, the EPA uses its enforcement authority to settle or litigate with parties it has identified as PRPs. The EPA also exercises its enforcement discretion in deciding which parties not to pursue. In doing so, the Guidelines recognize that large volume contributors, whom the EPA has identified as PRPs and chosen to pursue, may seek contribution from parties who have contributed such small amounts of waste to a site that the EPA either decided not to pursue them, or was unaware of their existence. De micromis settlements provide the EPA with the means of ensuring that the transaction costs imposed on such small volume contributors are not in gross distortion to the amount of their potential liability, thus promoting equitable allocations of responsibility for the cleanup at Superfund sites. This goal is not necessarily inconsistent with the overall objective of CERCLA, to impose the burden and costs of cleanup on responsible parties. The parties whom the EPA determines are eligible forde micromis settlements are the parties who have contributed such minuscule amounts of waste to the Site that the EPA has concluded that their share of cleanup costs is zero. Whether the EPA's determination in this regard is fair, reasonable, and consistent with the objectives of CERCLA is reviewable by the court when it reviews the terms of the consent decree.
E. Legislative History
Defendants argue that in authorizing the EPA to enter into de minimis settlements, Congress intended de minimis PRPs to pay their "fair share" of cleanup costs when settling with the United States. (Defs.' Mem. in Resp. at 16; Ex. 3 at 1242.) Defendants maintain that de micromis settling parties must also be held to this "fair share" standard. Defendants rely upon the following statement by Senator Bentsen in support of their position:
Removing these small contributors allows them to pay a fair share, but it reduces the ability of other — major — responsible parties from dragging these small contributors into the process and through the lengthy litigation in which, in many cases, the lawyer's fees could exceed the amount of responsibility.Id. Senator Bentsen's statement that de minimis settling parties may pay their fair share is permissive and is not included in Section 122(g). More importantly, however, nothing in Senator Bentsen's remarks suggest that a de minimis party's "fair share" must be calculated based upon its volumetric contribution to a site. The passage cited by Defendants does not suggest that CERCLA precludes the EPA from determining that a party's contribution to e site is so small, that the "fair share" correctly attributable to that party is zero. If anything, Senator Bentsen's remarks suggest he would favor the types of settlements being proposed by the EPA in this case.
Legislative history not cited by Defendants indicates Congress' intent that the EPA possess the authority to enter into settlements when those settlements would involve only a minor portion of the response costs at a Superfund site.
In sum . . . the de minimis settlement provision is intended to confirm EPA's authority to enter into settlements which involve only small portions of total clean-up costs when the settlements are with potentially responsible parties who would not be responsible for a significant portion of costs in any case. Settling with such parties early can simplify and expedite site negotiations. Allowing minor responsible (sic) parties to cash out also avoids the imposition of unnecessary negotiation or litigation costs on such parties.
(Pl.'s Ex. 1, H.R. Rep. No. 253, 99th Cong., 1st Sess., pt. 3, at 32 (1990), reprinted in Sen Comm. on Environmental and Public Works, 102. st. Cong., 2nd Sess., Legislative History of the Superfund Amendments and Reauthorization Act of 1986, at 2242-44 (1990); see also Pl.'s Ex. 2, H.R. Rep. No. 253, 99th Cong., 1st Sess., pt. 5, at 31 (1990), reprinted in, Sen. Comm. on Environmental and Public Works, 101st Cong., 2nd Sess., Legislative History of the Superfund Amendments and Reauthorization Act of 1986, at 2572 (1990); Dravo Corp. v. Zuber, 13 F.3d 1222, 2226 (8th Cir. 1994) ("Congress clearly and repeatedly expressed its desire to minimize litigation by granting de minimis PRPs protection from contribution actions as soon as possible. . . .") CERCLA's legislative history does not suggest that the EPA must calculate settlement amounts in proportion to a party's volumetric contribution. Whether the EPA's decision not to do so is fair and reasonable is reviewable by the court at the time that it reviews the consent decree.
F. Case Law
Defendants also argue that case law requires that settling parties pay their fair share of cleanup costs when entering into settlements with the EPA. Defendants equate "fair share" with volumetric contribution. Defendants' position ignores the premise underlying the EPA's decision to offer de micromis settlements to the parties in this case — that certain parties have contributed such small amounts of waste to the Keystone Site that the transaction costs it would incur in resolving its liability would "dwarf" any share that could be assigned to that party. (Pl.'s Reply Mem. at 2.) Thus, the share attributable to that party is zero, and therefore, it should be permitted to settle for a nominal amount. The case law cited by Defendants does not mandate that the EPA's calculation of a party's "fair share" be proportional to the amount of waste that the party sent to a site.
Defendants cite United States v. Pesses et al., 1994 WL 741277 (W.D.Pa. November 7, 1994); Transtech Indus., Inc. v. A Z Septic Clean, Inc., 798 F. Supp. 1079 (D.N.J. 1992), appeal dismissed, 5 F.3d 51 (3d Cir. 1993), cert. denied, Mayco Oil Co. v. Transtech Indus., Inc., ___ U.S. ___, 114 S.Ct. 2692 (1994); and Avnet, Inc. v. Allied-Signal, Inc., 835 F. Supp. 1132 (D.R.I. 1992), in support of their position.
The court in Pesses legitimately questioned the bases, or lack thereof, for the EPA's determination of the share of total site responsibility upon which the federal agencies' settlement amount in that case was based. Pesses does not support the conclusion that the courtmust reject a settlement amount that is not based on volume where it is satisfied that there is an adequate basis upon which to conclude that the settling party's fair share of total site responsibility is reflected in the settlement amount, even if that amount is $1.00.
In Transtech, the court suggested that the record did not support an EPA settlement which would have permitted the settling party to pay $4.9 million in past costs to escape contribution liability for nearly $100 million in future costs. The court's decision holding that the settling parties were not entitled to contribution protection for future costs was based on the terms of the consent decree, not that their previous settlement amount failed to reflect their "fair share" of volumetric contribution to the site.
Defendants also cite a passage from Avnet in which the court stated that "CERCLA provides de minimis PRPs with the capacity to pay an amount proportionate to their responsibility to the site." Avnet, 825 F. Supp at 1138. Nothing in the court's language in Avnet suggests that in all cases, a settling party's payment must be based on the volume of waste it contributed to a site.
Other cases, however, illustrate that courts have upheld the propriety of settlement amounts that did not necessarily reflect the settling party's volumetric contribution to a site. In United States v. Bay Area Battery, et al., 895 F. Supp. 1524, 1529 (N.D.Fla. 1995), the district court upheld the EPA's proposed settlement with eleven defendants whose payment amount was based on their ability to pay. The court noted that the EPA "must be afforded leeway to depart from an apportionment formula to account for factors not amenable to regimented treatment." Id. at 1529 (citing United States v. Cannons Eng'g Corp., 899 F.2d 79, 87-88 (1st Cir. 1990) ("Because we are confident that Congress intended EPA to have considerable flexibility in negotiating and structuring settlements, we think reviewing courts should permit the agency to depart from rigid adherence to formula wherever the agency proffers a reasonable good-faith justification for departure.")).
The EPA has cited several consent decrees in which courts have approved settlements with de micromis components. In United States v. AT T et al., No. 94-438 (M.D.N.C. January 25, 1995), the district court approved a decree conferring full benefits of a CERCLA § 122(g) settlement to approximately 2400 parties who contributed less than 319 pounds of lead-bearing materials to a former battery recycling facility. (Pl.'s Ex. 10 at 8, 16-22, 40-44, 67.) The terms of the settlement imposed no payment obligation on these 2,400 parties. The decree required the remaining 450 large-volume generator defendants to pay the EPA's past costs of $4 million and implement a remedy estimated to cost between $40.5 and $100 million.
The EPA also cites a settlement involving a former oil waste refinery approved by the district court in United States v. Arrowhead Refining Co., et al., No. 89-202 (D. Minn. May 22, 1995). (Pl.'s Ex. 11.) The consent decree in that case provided that 32 de micromis parties would receive complete contribution protection in exchange for a flat fee of $3,000. Id. at 26.
The EPA also cites an administrative settlement with 88 de minimis entities each of whom contributed less than 1.0% of the total hazardous waste at the site, and upon whom the EPA imposed no payment obligation. (Pl.'s Ex. 9, Administrative Order on Consent for Lorentz Barrel and Drum Site, San Jose California, U.S. EPA Docket No. 95-01.) The settlement terms included a blanket waiver of all claims against the de minimis entities.
Defendants' attempt to distinguish the consent decrees relied upon by the EPA fails. The fact that the settlement with de micromis parties inArrowhead Refining took place in the context of a global settlement is fortuitous, but irrelevant for present purposes. In addition, the fact that in Lorentz Barrel and Drum Site, the EPA settled with entities that had not been impleaded in a contribution action is also irrelevant for the limited purpose to which the court looks to this case.
The cases cited by EPA, although they arise in the context of courts' approval of consent decrees, do not in and of themselves require a finding by the court that the EPA's proposed de micromis settlements in this case are fair, reasonable and in accordance with CERCLA's objectives. The cases cited by the EPA merely lend support to the idea that nothing in CERCLA mandates that settlement amounts must always be proportional to the settling parties' volumetric contributions to a site. Whether the de micromis settlements proposed by the EPA for individual parties are fair, reasonable and consistent with CERCLA's objectives is a question the court will undertake when it conducts its review of the consent decree. For now, however, the court is not persuaded that CERCLA dictates that in all instances the amount of a party's settlement reflects its volumetric contribution to a Superfund site.
G. Remaining Issues
(1) The EPA's De Micromis Policy Constitutes an Unconstitutional Taking
Defendants also take the position that the EPA's proposed de micromis settlements deprive them of their valuable right of contribution. They claim that under the EPA's proposed settlement they will receive a credit of $318 towards cleanup costs instead of $595,000 which represents the de micromis parties' "fair share" of the cleanup costs. (Defs.' Mem. in Resp. at 20.) Defendants' argument is without merit.
Defendants' estimate of the de micromis parties "fair share" of the response costs is based on the EPA's projection that the settlements will encompass 5% of the total waste sent to the Site. Defendants multiplied 5% by the $11.9 million the EPA estimates it will cost to clean-up the Site ($11.9 million x 5% = $595,000) (Defs.' Mem. in Resp. at 6 nn. 12 13.)
Congress has clearly stated in Section 113(f)(2) of CERCLA that the United States may shield a settling PRP either partially or completely from claims for contribution brought by other non-settling parties. See United States v. Maryland Sand, Gravel and Stone, 1994 WL 541069 (D.Md. 1994) (citing United States v. Pretty Products, Inc., 780 F. Supp. 1488, 1494 (S.D.Ohio 1991)). In addition, in Cannons Engineering, the First Circuit held that there is no federal common law right to contribution and thus the defendants' claims that Section 122(g) settlements would result in the deprivation of a constitutionally protected property interest were insupportable. 899 F.2d at 92 n. 6 (citing Texas Indus., Inc v. Radcliff Materials, Inc., 451 U.S. 630, 641-42 (1981); Northwest Airlines, Inc. v. Transport Workers Union, 451 U.S. 77, 90-91 (1981)). Other courts have not explicitly rejected Defendants' position that the right to contribution in CERCLA actions constitutes a property right. See Waste Management of Pennsylvania, Inc. v. City of York, 910 F. Supp. 1035, 1043 (M.D.Pa. 1995); General Time Corp. v. Bulk Materials, Inc., 826 F. Supp. 471, 477 (M.D.Ga. 1993). However, these courts have recognized that the procedures the EPA is mandated to follow prior to entering into Section 122(g) settlements afford non-settling parties with the appropriate procedural safeguards. Waste Management, 910 F. Supp. at 1041; Bulk Materials, 826 F. Supp at 477; see also United States v. Serafini, 781 F. Supp. 336, 339 (M.D.Pa. 1992) (CERCLA provision providing for publication of proposed settlement in federal register provides interested parties with adequate notice).
(2) The EPA's Proposed De Micromis Settlement Constitutes an Unauthorized Legislative Rule
Defendants' argument that the EPA's proposed de micromis settlements constituted an unconstitutional taking is in part based on their position that the settling parties are not paying their "fair share" of cleanup costs. (Defs.' Mem. in Resp. at 21 n. 22.) This argument assumes that the court will find that the settling parties are not paying their fair share. However, as the court has noted supra, the court's review of whether the EPA's determination that the de micromis parties' should be assigned a "fair share" of zero is reserved for the time at which it undertakes its review of the consent decree.
The EPA's decision to offer de micromis settlements in this case grew out its 1995 Superfund Reform Initiatives. (See Defs.' Ex. D, Letter from U.S. Department of Justice to the Honorable Sylvia H. Rambo of 11/13/95, at 2; Defs.' Ex. C at 9.) Defendants claim that the Reform Initiatives constitute a legislative rule and that they are invalid due to the EPA's failure to promulgate them in accordance with the Administrative Procedures Act, (APA) 5 U.S.C. § 553 (b). The EPA maintains that the Reform Initiatives are merely statements of policy and therefore, not subject to the notice-and-comment procedures of the APA.
Defendants cite the recent Third Circuit case DIA Navigation Co., Ltd. v. Pomeroy, 34 F.3d 1255 (3d Cir. 1994), in support of their position. InDIA, the Third Circuit articulated the difference between legislative rules, which must be promulgated in accordance with the notice-and-comment procedures outlined in the APA, and interpretive rules which do not. Defendants' reliance on DIA is misplaced.
"[W]hat distinguishes interpretive from legislative rules is the legal base upon which the rule rests. If the rule is based on specific statutory provisions, and its validity stands or falls on the correctness of the agency's interpretation of those provisions, it is an interpretive rule. If, however, the rule is based on an agency's power to exercise its judgment as to how best to implement a general statutory mandate, the rule is likely a legislative one."Id. at 1264 (quoting United Technologies Corp. v. EPA, 821 F.2d 714, 719-20 (D.C. Cir. 1987)). Under the standards articulated by the Third Circuit, the court finds that the Reform Initiatives do not constitute a legislative rule. The Reform Initiatives do not "create new law, rights or duties." DIA, 34 F.3d at 1264 (quoting United Technologies Corp., 821 F.2d at 718). The Third Circuit in DIA also acknowledged that
as applied to many rules, such statements [as those articulated above] are apt to amount to conclusions about rules rather than principled bases on which to categorize them. Thus courts have inquired into the agency's perception of the rule.DIA, 34 F.2d at 1264. The court finds no reason not to afford the EPA the same deference in this case. The EPA does not claim that the Reform Initiatives are either legislative or interpretive rules, but merely statements of general policy. As such, they "announc[e] the agency's tentative intentions for the future." United States v. Kramer, 757 F. Supp. 397, 433-36 (D.N.J. 1991) (quoting Pacific Gas Elec. Co. v. Federal Power Comm., 506 F.2d 33, 38 (D.C. Cir. 1974)). The EPA's Reform Initiatives do not fetter its discretion to determine on a case-by-case the circumstances under which and to whom it will offer de micromis settlements, nor do they create an enforceable right to obtain a $1.00 de micromis settlement.
Even if the court were to find that the Reform Initiatives constitute interpretive rules, as such they would not be subject to the notice-and-comment procedures of the APA. 5 U.S.C. § 553 (b).
III. Conclusion
The court finds that the proposed de micromis settlements in this case are a subset of the settlements provided for in Section 122(g) of CERCLA. CERCLA does not mandate that in all instances the EPA calculate Section 122(g) settlement amounts in proportion to the settling party's volumetric contribution to a Superfund site. Whether the proposed settlements in this case are fair, reasonable and in accordance with CERCLA's objectives will be addressed by the court at the time at which it undertakes its review of the proposed consent decree.
An appropriate order will be entered by the court.
ORDER Authority of the United States to Enter Into De Micromis Settlements
In accordance with the accompanying memorandum of law, IT IS HEREBY ORDERED THAT the court finds that the proposed de micromis settlements in this case are a subset of the settlements provided for in Section 122(g) of CERCLA. CERCLA does not mandate that the EPA calculate Section 122(g) settlement amounts in proportion to the settling party's volumetric contribution to a Superfund site. Whether the proposed settlements are fair, reasonable and in accordance with CERCLA's objectives will be addressed by the court at the time at which it undertakes its review of the proposed consent decree.