Settlement plays a fundamental role in the Environmental Protection Agency’s (“EPA”) Superfund enforcement program. Potentially Responsible Parties (“PRPs”) seeking to resolve their liability through the settlement process should take note that EPA recently issued two new guidance memoranda on its settlement procedures. One memorandum sets forth revised procedures for managing the duration of remedial design/remedial action negotiations and notably encourages the use of orders known as Unilateral Administrative Orders (“UAOs”) in the face of unsuccessful negotiations.
The recent memorandum, entitled Revised Policy on Managing the Duration of Remedial Design/Remedial Action Negotiations, and dated September 21, 2012, is aimed at strengthening EPA’s negotiation practice, shortening the duration of negotiations, and achieving timely settlements. Of note to PRPs is that EPA’s new guidance strongly endorses use of UAOs, stating: “We encourage use of EPA’s UAO authority in appropriate cases as a key component to expediting the RD/RA negotiation process.” The Guidance further cautions that “Potentially Responsible Parties (PRPs) should know during negotiations that EPA is willing and ready to issue a UAO if they unreasonably delay settlement.” The memorandum is available here for further review.
A UAO is an administrative order to a PRP directing it to undertake a response action (i.e, a short or long-term cleanup). If a PRP does not comply with a UAO then a court may impose treble damages on the PRP, requiring the PRP to pay up to three times what EPA spent conducting the cleanup. UAOs are not subject to pre-enforcement review by the courts and thus a PRP disputing its liability must decide whether to comply with EPA’s order or refuse to comply and risk that a court will subsequently impose treble damages should EPA bring suit to enforce its order.
EPA’s other new memorandum, entitled Transmittal of Updated Superfund Response and Settlement Approach for Sites Using the Superfund Alternative Approach, and dated September 28, 2012, aims to promote transparency and ensure consistency in its use of Superfund authority at sites listed on the National Priorities List (“NPL”) and at sites with Superfund alternative approach agreements. When a PRP enters into an alternative approach agreement, its saves EPA the time and resources associated with listing a site on the NPL. This second memorandum updates and supercedes EPA’s 2004 Revised Response Selection and Settlement Approach for Superfund Alternative Sites, and is available here for further review.