You are the President and owner of Barrel Finisher's Inc., a drum recycling company. Your company has been operating at the same location since World War II. Your company receives metal 55-gallon drums from companies, removes the contents left in the drum and then paints the drums for use again. Your company has its share of environmental problems from the past operating techniques of its founders. Initially, the contents of drums brought into the plant were washed out with a cleaning solution that was discharged to a settling pond where it was treated on site. Naturally, this created a toxic and hazardous waste due to the multiplicity of small amounts of chemicals left in the drums. The groundwater and the soil at your plant are contaminated with solvents, pesticides, metals and petroleum products from the more than fifty years of industrial activity at the site.
U.S. EPA is well aware of your site, and has repeatedly requested that you voluntarily enter into an agreement for the necessary work to protect human health and the environment from the presence of the many contaminants at the site and in the groundwater. However, you view the need to spend money on past environmental problems differently than U.S. EPA. You see the problem as one that strictly happened before the environmental laws and regulations were in effect. Furthermore, your plant is located in an industrial park where all of the land is contaminated, not just your land. In addition, nobody within three miles of your plant uses the groundwater because everyone knows the water is too polluted to drink. The bottom line is, you do not share U.S. EPA's sense of urgency as to any type of environmental restoration project at your plant. You expect that it will be at least another five years before U.S. EPA sues you in court to force you to clean up the property. With all of the court delays in today's legal system, you expect that you will be retired before you have to deal with the removal of any contaminated soil or groundwater from your property. You had everything figured out, until yesterday.
Yesterday, you received via Certified Mail from U.S. EPA something called a unilateral administrative order requiring that you immediately begin the environmental restoration of the contaminated soil and groundwater at your plant site. The order states that if you do not perform the tasks required by the terms of the order, you can be assessed $25,000 per day in penalties, and if you willfully violate the unilateral administrative order, you can be assessed three times the cost of clean up as a punitive fine. You had never heard of such a thing. You thought only a court could issue an order, and you have not been sued so how could you be subject to an order. You decide that this cannot possibly be legal, so you call an environmental attorney to see how best to avoid the U.S. EPA's unilateral administrative order. What you learn is very sobering.
The attorney that you hire to get you out of the unilateral administrative order explains that U.S. EPA prefers to obtain private-party response action through the negotiation of settlement agreements with parties willing to do the work. Your attorney explains that unilateral administrative orders issued under section 106 of CERCLA may be issued if a release or threat of a release of a hazardous substance from a facility may present an imminent and substantial endangerment to public health, welfare, or the environment. The order must include findings on the hazardous substances at the site, the nature of the release or threat of a release, the location of the release, the nature of, and basis for the finding of a possible imminent and substantial endangerment.
Your attorney explains that U.S. EPA uses unilateral administrative orders when viable private parties exist and are not willing to reach a timely settlement to undertake work under a consent order or decree. At that time, U.S. EPA has the authority to compel private-party response through unilateral administrative orders. If the responsible party does not comply with the order, U.S. EPA may refer the case for judicial action to compel performance and recover penalties. Your attorney explains that because of the presence of hazardous wastes in the soil and groundwater at your property, U.S. EPA should have little trouble showing an imminent and substantial endangerment to public health, welfare, or the environment at your facility.
Your attorney's review of the unilateral administrative orders issued by U.S. EPA against your company appear to be legally enforceable. Based upon what your attorney perceives as the validity and enforceability of the orders, your attorney explains that if your company, as a responsible party, does not comply with the unilateral orders, U.S. EPA can perform a cleanup using government money and then seek to recover those costs from your company through the courts. In addition, U.S. EPA can seek to recover punitive damages, and penalties.
You immediately ask your attorney what type of punitive damages and penalties your company might be responsible for if it refused to perform the clean up. Your attorney explains that under CERCLA ยง107(c)(3), U.S. EPA is authorized to collect punitive damages from one to three times the costs incurred by the government. This means that if the government spends one million dollars performing the clean up, you could be responsible for an additional punitive amount of three million dollars for not complying with the order to clean up the site. Furthermore, your attorney explains that under CERCLA section 106(b)(1), "any person who, without sufficient cause, willfully violates, or fails or refuses to comply" with any order, may be fined up to $25,000 for each day in which the violation occurs or the failure to comply continues. In other words, for every 30 day period that you refuse to comply with the unilateral order, U.S. EPA could recover an additional $750,000 in penalties.
You tell your lawyer that at least the government has to spend its money to cleanup the site before it can go after your company's money. By the time U.S. EPA finishes, you will have sold everything off and there will be no assets to pay fines and penalties. Your attorney explains that U.S. EPA has the option to request an enforcement order through the court pursuant to section 106, to compel compliance and to assess and to collect penalties so as to prevent you from stalling and liquidating company assets. In other words, if U.S. EPA goes to court to force you to comply with the order, and you refuse to comply with the order by stalling, you can be held in contempt of court. If you are held in contempt of court, the judge can throw you in jail if you do not comply with U.S. EPA's order when so ordered by the court. Regardless of the route U.S. EPA chooses to take upon noncompliance with a unilateral order, your attorney explains that your company will remain potentially liable for the response action, and in the worst possible scenario, you could go to jail for refusing to comply with the court's order to enforce the unilateral administrative order.
You tell your attorney that you would rather pay him to fight U.S. EPA's unilateral administrative order than to pay for what you consider a senseless cleanup. To your amazement, your attorney informs you that CERCLA precludes a responsible party from initiating court proceedings to challenge a unilateral order upon receipt. Under CERCLA section 113(h), courts may review section 106 orders only when U.S. EPA seeks to enforce the order, or if U.S. EPA seeks penalties for violation of the order, or if the responsible party attempts to recover money from U.S. EPA for response costs incurred after compliance with the order. Therefore, if responsible parties refuse to comply with a unilateral order, the Agency may use the government money in the "Superfund" to clean up the site, without first defending its actions in court. Furthermore, your attorney explains that once in a court proceeding where the validity of the order is properly at issue, section 113(j)(1) of CERCLA provides that judicial review of any issues concerning the adequacy of any response action is limited to the administrative record. U.S. EPA already will have compiled the administrative record for the selection of the remedy. Therefore, where U.S. EPA expects a court challenge to a clean up, it is U.S. EPA that prepares the evidence for the court to review. This record will include information on the release, the possible endangerment, and the response action required. The court will consider no other evidence outside of the administrative record.
You ask your attorney what, if anything, can be done, and your attorney explains that it is U.S. EPA's policy to provide responsible parties with an opportunity to discuss with the U.S.EPA regional office issuing the order, implementation of the response actions required by the order, and the extent to which the respondent intends to comply. However, your attorney cautions you that U.S. EPA will not participate in the conference for the purpose of resuming settlement negotiations or negotiating the terms of the order. Your opportunity to negotiate a settlement on terms better than those required by the order expired when your company refused to negotiate a timely consent decree. Furthermore, the conference is not an evidentiary hearing, and the opportunity to confer does not give your company any type of right for a court to perform a pre-enforcement review. In addition, the conference is not intended to be a forum for discussing liability issues or whether the order should have been issued. Instead, U.S. EPA views the conference as a way to ensure that the order is based on complete and accurate information, and to facilitate understanding of implementation. Essentially, your attorney explains, the conference is merely a mechanism for U.S. EPA to explain how you will comply with the order. In other words, the conference is where U.S. EPA tells you that settlement negotiations are over - now you will do it the way U.S. EPA's order dictates.
U.S. EPA's authority to issue unilateral orders has become one of its most powerful tools for forcing companies to undertake a clean up. Unilateral administrative orders are primarily used against responsible parties who delay, stall and otherwise thwart efforts by U.S. EPA to obtain a voluntary clean up. I advise clients who are involved in settlement negotiations with U.S. EPA to be aware that if the negotiations break down, U.S. EPA has the authority to issue a unilateral administrative order. Once a unilateral administrative order is issued, all negotiations are over and the U.S. EPA will get practically whatever it wants, at your expense.