State & Local News Vol. 22, No. 2, Winter 1999 Environmental Law Update By Stephanie P. Brown Challenge to EPA’s MSW Settlement Policy Fails On November 16, 1998, the federal district court for the District of Columbia dismissed a suit brought by industrial groups to overturn the U.S. Environmental Protection Agency’s (EPA) "Policy for Municipality and Municipal Solid Waste CERCLA Settlements at NPL Co-Disposal Sites" ("MSW Policy"). Chemical Manufacturers Ass’n v. EPA, No. 98-1255-LFO (D. D.C.). The MSW Policy, promulgated in February 1998, provides specific mathematical formulas that EPA regional offices may use to determine the financial responsibility of certain municipalities and other parties who enter into settlements with EPA to resolve their liability under the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. §§ 9601 et seq. (a/k/a Superfund). See 63 Fed. Reg. 8,197 (Feb. 18, 1998). See also Spring 1998 issue of State & Local Law News. These formulas may result in financial liability that is significantly less than that which could be achieved without the MSW Policy. The MSW Policy applies to any party, including a municipality, that generates or transports municipal sewage sludge and/or municipal solid waste (collectively, "MSW") that is deposited at a "co-disposal" site on the Superfund National Priorities List. Co-disposal sites are those at which both hazardous and nonhazardous waste has been deposited. The policy also applies to municipal - but not private - ;owners and operators of such sites. The MSW Policy is important to these potentially responsible parties (PRPs) because by settling with EPA these PRPs obtain statutory protection from private third-party contribution actions. In short, the MSW Policy allows generators and transporters of MSW to settle by paying an amount equivalent to the product of the estimated quantity of MSW they contributed to the site multiplied by a unit cost of $5.30 per ton. The policy allows municipal owners and operators of co-disposal facilities to settle at a presumptive baseline amount of 20 percent of the total estimated site response costs. An EPA region may, however, increase the percentage, generally not above 35 percent, based upon site-specific facts, such as that the municipality exacerbated environmental contamination or exposure, or received operating revenues substantially higher than the owner/operator’s presumptive settlement amount. Conversely, a region may adjust the percentage downward if the municipality voluntarily made specific efforts to mitigate environmental harm. EPA regions also may consider other relevant equitable factors at the site. Industry groups have criticized the MSW Policy as allowing settlement in an amount that is unreasonably low in relation to the actual cost of responding to MSW at a Superfund site. Also, industry has argued that the policy unfairly saddles non-MSW parties, particularly private owners/operators, with a disproportionate share of site response costs. Furthermore, industry predicts that the policy will give MSW parties inordinate leverage in private party negotiations, because these parties can obtain a favorable settlement with EPA rather than submit to private party demands. EPA’s long-standing practice of facilitating settlement by certain parties, such as de minimis and de micromis parties, whose waste is not viewed as a major contributor to response costs, has withstood judicial scrutiny. EPA’s discretion under the MSW Policy is consistent with this practice. Also, the MSW Policy’s deference to municipalities reflects a trend in recent Superfund reauthorization legislation whereby MSW parties and local governments would receive partial immunity from CERCLA liability. In its November ruling, the court found that, among other things, EPA’s MSW Policy did not constitute final agency action and was not ripe for review. The ruling, however, leaves open the opportunity to challenge specific settlements entered under the policy - ;and such challenges are expected. EPA’s regional offices have begun to implement the policy. Shortly after the district court ruling on the MSW Policy, the U.S. Department of Justice lodged a proposed consent decree in United States v. Allied Signal and Amphenol Corp., No. 97-CV-0436 (TJM/DNH)(N.D. N.Y.). See 63 Fed. Reg. 64,521 (Nov. 20, 1998). This settlement resolves the liability of four New York municipal governments in a third-party cost recovery action filed against them by two industry PRPs. Reportedly, the settlement applies the MSW Policy, assessing the towns approximately $63,000 in total, based upon $5.30 per ton of MSW. (Generally, EPA does not comment upon its rationale for specific settlement amounts.) The industry PRPs had sought a total of $2.7 million from the towns. An industry challenge to this, apparently, first-ever settlement under the MSW Policy is likely. EPA Issues HWIR-Media Rule On November 30, 1998, EPA published its final HWIR-Media rule, which governs the management of hazardous remediation waste. See 63 Fed. Reg. 65,874. The HWIR-Media rule modifies the Resource Conservation and Recovery Act (RCRA) Subtitle C hazardous waste management requirements for manufacturing wastes to provide less stringent regulations for hazardous wastes from cleanup activities. The HWIR-Media rule applies to sites at which hazardous waste are treated, stored, or disposed of, which otherwise would be subject to RCRA Subtitle C requirements. The HWIR-Media rule makes several major reforms from RCRA Subtitle C, to facilitate the management of remediation wastes. Among other things, the rule: Streamlines permitting through Remedial Action Plans (RAPs), special permits for treating, storing, and disposing of remediation waste, which will be faster and easier to obtain than standard RCRA permits; Creates an exemption from facility-wide RCRA corrective action requirements where site owners and/or operators perform remediation under RAPs; Introduces a new unit known as a "staging pile," which allows more flexibility in storing remediation waste during cleanup; and Exempts dredged material from RCRA Subtitle C if managed under an appropriate permit under the Clean Water Act or Marine Protection, Research and Sanctuaries Act (a/k/a Ocean Dumping Act). Notably, EPA has announced that it views this rule as only a partial response to issues related to handling remediation waste, and that the Agency will continue to participate in legislative reform efforts. (Also, EPA has promulgated its final RCRA Closure/Post-Closure rule, which applies to owners and operators of closed and closing hazardous waste management facilities. In short, under this rule, regulators may issue a post-closure permit to a facility, or impose the same regulatory requirements in an enforcement document issued under an alternative, nonpermit authority. See 63 Fed. Reg. (Oct. 22, 1998).) Safe Drinking Water Act Rules Issued Over the past few months, EPA has issued several new rules pursuant to the Safe Drinking Water Act (SDWA), 42 U.S.C. §§ 300f et seq.. Interim Enhanced Surface Water Treatment Rule (IESWTR). EPA has finalized its IESWTR. The IESWTR applies to public water systems that use surface water or ground water under the direct influence of surface water and serve 10,000 or more people. Among other things, the IESWTR sets zero as the Maximum Contaminant Level Goal (MCLG) for cryptosporidium, tightens turbidity performance criteria, requires covers on new finished water reservoirs, and requires sanitary surveys for all surface water systems. The rule is effective February 16, 1999. See 63 Fed. Reg. 69,478 (Dec. 16, 1998). Disinfection Byproducts Rule. EPA also has published its Stage 1 Disinfection Byproducts Rule (DBPR). The DBPR applies to, among others, public water systems that are community water systems (CWSs) which treat water with a chemical disinfectant for primary or residual treatment. The expansive rule: Finalizes MCLGs for bromate, chlorite, and certain trihalomethanes and haloacetic acids; Sets disinfectant level goals for chlorine, chloramines, and chlorine dioxide; and Sets National Primary Drinking Water Regulations (NPDWRs) for certain disinfectants and disinfection byproducts. Among other things, the NPDWRs also include monitoring, reporting, and public notification requirements. The rule is effective February 16, 1999. See 63 Fed. Reg. 69,390 (Dec. 16, 1998). Community Water System Consumer Reports. EPA also has promulgated its final rule governing annual water quality reports that CWSs must provide to consumers pursuant to the 1996 SDWA amendments. The rule applies to municipal, county, and other publicly owned CWSs and certain nonpublic CWSs. Among other things, the rule requires that consumer reports include information on the source water, regulated contaminants in the water purveyed by the CWS, and information regarding CWS compliance with SDWA requirements. CWSs must deliver their first reports by mid-October 1999. See 63 Fed. Reg. 44,512 (Aug. 19, 1998).  Stephanie P. Brown is an attorney-advisor in the U.S. Environmental Protection Agency’s Office of Site Remediation Enforcement, in Washington, D.C. Ms. Brown may be reached at (202) 564-2596 or brown.stephanie@epamail.epa.gov. (The views are those of the author and do not represent the views of U.S. EPA.) State & Local Law News home page | Table of Contents