LawFlash

EPA May Ignore Mitigation System and Use of Industrial Facility in National Priorities Listing

July 31, 2020

Deferring to the US Environmental Protection Agency, the US Court of Appeals for the DC Circuit rejected a challenge to the first-ever listing of a site on the Superfund National Priorities List under recent regulatory revisions that allowed the agency to consider “subsurface intrusion.”

Meritor, Inc., which assumed the environmental liabilities of Rockwell International Corporation, challenged the US Environmental Protection Agency’s (EPA’s) listing of the Rockwell International Wheel & Trim facility on the National Priorities List (NPL). Meritor argued that EPA’s action was arbitrary and capricious because (1) EPA failed to consider an installed vapor-intrusion mitigation system that reduced the potential for subsurface intrusion of hazardous substances into the facility, and (2) EPA used a residential benchmark in evaluating contaminant levels at the industrial facility where residential use was prohibited. The US Court of Appeals for the DC Circuit rejected Meritor’s arguments, concluding that EPA’s decision was reasonable and consistent with the governing regulatory provisions.

Background

Rockwell International Corporation operated a facility manufacturing automotive wheel covers in Grenada, Mississippi from 1966 to 1985. In 1994, an investigation uncovered that an underground plume of toluene, trichloroethylene (TCE), and cis-1,2-dichloroethene (DCE) had collected in the soil and groundwater beneath the facility. All three hazardous substances are alleged to have been produced in the course of manufacturing operations at the facility.

A 2016 study by EPA and a 2017 study by Meritor revealed that the presence of these hazardous substances beneath the facility affected indoor air quality. In response to the studies, Meritor installed a sub-slab depressurization system below the facility to mitigate the potential for vapor intrusion into the facility. Notwithstanding Meritor’s mitigation efforts, EPA added the facility to the NPL in 2018, based on the potential subsurface intrusion of the three substances into the facility. See 83 Fed. Reg. 46408 (Sept. 13, 2018). In reaching its listing determination, EPA declined to consider the presence of the sub-slab depressurization system and used residential exposure assumptions when scoring the facility under the agency’s Hazard Ranking System.

DC Circuit’s Opinion

In its decision, the DC Circuit “afforded the EPA ‘significant deference’ with respect to the ‘highly technical issues involved,’” rejecting Meritor’s challenges to EPA’s listing decisions. The court held that EPA’s regulations did not require the agency to consider the mitigation measures in place at the facility. The regulation only required EPA to consider mitigation measures when (1) evaluating “the potential for exposure (in the course of determining the likelihood of a release of hazardous waste),” or (2) when assessing “the ‘population within an area of subsurface contamination’ component of the ‘targets’ metric.”

In this case, “the agency documented an actual, observed exposure at the site,” rendering the first circumstance moot. Furthermore, the agency “never relied on the ‘population within an area of subsurface contamination’ factor . . . . [B]y excluding those points from the computation, the EPA’s analysis necessarily resulted in a lower or equal overall score for the ‘targets’ metric.”

The court remarked that Meritor could “hardly complain about the EPA’s failure to look at other factors that would have, at best, left the [facility’s] final score right where it was and, at the worst for Meritor, resulted in an even higher score.” The court also rejected Meritor’s argument that “the regulations’ sporadic references to mitigation systems in some factors implicitly mandate the consideration of mitigation systems at every step and for every factor in the analysis,” noting that acceptance of this argument “would amend rather than apply the existing regulatory scheme.”

The court further held that the Hazard Ranking System permits EPA to use a residential health benchmark, even when evaluating a nonresidential facility. The court noted that “nothing in the text of the Hazard Ranking System expressly instructs the EPA to use site-specific exposure assumptions on the front end of the process when it is selecting the appropriate health benchmarks. The regulation, instead, instructs the EPA to use ‘health-based benchmarks,’” and the Hazard Ranking System “already accounts for the workers’ reduced hours of exposure relative to residents.” Accordingly, the court held that “EPA’s use of residential exposure assumptions is reasonable,” because, among other things, “[e]rring on the side of caution in evaluating the toxigenic effects of hazardous substances on people is not unreasonable.”

Meritor also raised with the court additional arguments challenging EPA’s calculations of the quantity of the substances at issue. However, the court declined to address these because Meritor “did not raise them before the EPA.”

Implications

The DC Circuit’s decision is likely have a significant effect on the evaluation and remediation of contamination beneath manufacturing, chemical, and other industrial facilities around the country. The court’s affirmation of EPA’s first NPL listing of a Superfund site due to subsurface intrusion of hazardous substances will inform listing decisions at other of sites with subsurface contamination. Its decision to afford EPA wide discretion in whether to consider existing mitigation measures, combined with the wide latitude it afforded EPA in selecting appropriate health benchmarks, could lead to the listing of more industrial sites on the NPL.

The court’s decision also may have the unintended consequence of disincentivizing companies to install vapor intrusion mitigation systems, a common mitigation measure at industrial facilities. This, in turn, could result in delays and/or increased costs in addressing subsurface contamination at such sites.

Finally, the DC Circuit’s refusal to address Meritor’s arguments about EPA’s calculation of the quantity of hazardous waste at issue serves as a reminder that parties must evaluate and raise with EPA in the preliminary assessment and site listing process all potential challenges to EPA’s listing decision. If these arguments are not timely raised, they may be waived permanently.

Contacts

If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:

Washington, DC
Duke K. McCall, III
Drew Cleary Jordan
Colin S. Harris

San Francisco
Ella Foley Gannon

Los Angeles
Jim J. Dragna
Rick R. Rothman

Philadelphia
Jeffrey Hurwitz

Princeton
John McGahren
Stephanie R. Feingold
Laurie Matthews
Christopher McAuliffe