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United States District Court, Northern District of New York

October 12, 1990


The opinion of the court was delivered by: Cholakis, District Judge.


This action concerns an area of land in the Town of Moreau, Saratoga County, known as the Caputo/Moreau landfill, the water supply of which is impacted by or threatened by the impact of hazardous substances released into the soil from 1958 to 1968 when 30 acres of the "Impact Area" were used as industrial waste disposal facility. In 1982, it was discovered that the water in the Impact Area had high levels of trichlorethylene ("TCE"). See An Assessment of Drinking Water Quality in the Area of the Caputo Inactive Hazardous Waste Site, Administrative Record ("AR") at 011-131 to 137.*fn1 The Environmental Protection Agency ("EPA") installed temporary activated carbon filter systems on the drinking water systems of 70 residences near the facility. Defendant General Electric Company ("GE"), which had deposited 452 tons of waste in the facility between 1958 and 1968, is the potentially responsible party ("PRP") under § 107 of the Comprehensive Environmental Response Compensation and Liability Act ("CERCLA"), 42 U.S.C. § 9607. See Letter from EPA to GE dated May 27, 1983, wherein EPA notified GE that it is a responsible party under CERCLA. AR at 001-2540 to 2542.

In November 1983, the EPA and GE entered into an Administrative Consent Order ("ACO"), AR at 003-1971 to 1982, wherein GE agreed to, inter alia: (1) take immediate temporary corrective action; (2) conduct a Remedial Investigation ("RI") "to fully define the nature and extent of contamination that constitutes the release and threatened release; (3) conduct a Feasibility Study ("FS"), an engineering study of feasible remedial alternatives, from which EPA would select a remedy to be implemented by GE; (4) perform a Remedial Design, or schedule for completion of remedial work; and (5) perform the chosen Remedial Action.*fn2 The ACO was subject to 30-day public commentary period, and a public information meeting was to be held.*fn3 The public was put on notice of the ACO on December 2, 1983. AR at 001-2162 to 2165. After the commentary period had run, during which numerous comments were made, EPA issued its response on January 27, 1984, but did not alter the ACO. AR at 001-2114 to 2121. On February 7, 1984, EPA issued letters of thanks to all who had submitted comments on the ACO. AR at 001-2081 to 2111.

GE hired Dunn Geoscience Corporation ("Dunn") to perform the Remedial Investigation ("RI") and Feasibility Study ("FS"). In October 1984, Dunn issued the RI, AR at 003-1732 to 1877, where it determined, inter alia, that hazardous substances were being released into the environment, and that the aquifer underneath the Impact Area was contaminated. See RI at 124, AR at 003-1864, where Dunn states:

  The most significant aspect of contaminant
  distribution illustrated by the section is the
  tendency for TCE concentrations to be highest at
  intermediate and deep levels within the aquifer.

In response to a direction from EPA, an Addendum to the RI was prepared for GE by Dunn in March 1985, to study contamination at an area bounded by Cheryl Drive, Myron Road and Terry Drive in the Town of Moreau. AR at 002-1529 to 1739.

In August 1985, GE issued the FS. AR at 001-812 to 947. Dunn discussed various remedial alternatives, which included two alternatives for restoration of the aquifer. The first alternative, entitled "Source Containment, Groundwater Monitoring and Air Stripping Groundwater Discharge," has been referred to in prior motion papers as the "natural restoration" approach. AR at 001-904 to 909. First, the contaminated area, or "plume," would be sealed up by a capped slurry wall made of a combination of soil and bentonite (a claylike substance). The slurry wall would purportedly prevent the contamination from spreading, hence the term "source containment." The second step of natural restoration is groundwater monitoring, whereby the groundwater would be periodically sampled to determine whether the levels of contamination are decreasing, and whether the plume migration is changing. The final step is "air-stripping," a process whereby water is treated at its discharge point to surface waters at the Reardon Brook, in that the contaminants are removed from the water and dispersed into the air. The natural restoration alternative did not provide for treatment of the water in the aquifer. The aquifer is expected, through natural processes, to flush itself clean over time. AR at 001-916. Dunn estimated that the "duration of natural flushing will likely be on the order of decades." AR at 001-905. The natural process was expected to cost $3.2 million. AR at 001-908.

The other alternative is entitled "Source Containment, Groundwater Pumping and Recharge," and has been referred to in prior motion papers as the "active restoration" approach. AR at 001-909 to 915. This approach featured the slurry wall "source containment" from the natural restoration approach, but continued with "groundwater pumping and recharge." The water is pumped out of the aquifer and into various wells for cleaning, and then pumped back into the aquifer. Dunn could not estimate how long the active restoration method would take, but put it up into "decades" along with natural restoration. AR at 001-912. The active restoration option had advantages in that the processes were well-defined and thoroughly understood by hydrologists, and in perhaps taking less time to purify the aquifer. However, this process had its disadvantages — uncertainty as to effect on the direction of groundwater flow and the discharge at Reardon Brook, and cost — $7.9 million. AR at 001-914. The Dunn Report recommended taking the natural restoration approach to treatment of the aquifer. AR at 001-924.*fn4

A lengthy public commentary period followed the issuance of the FS. The State of New York issued its concerns in a letter to EPA dated October 4, 1985. AR at 001-750 to 753. The State indicated that "the sizing of the pipes will have to be sufficiently large to reflect possible future residential expansion into the now largely vacant plume impacted area." AR at 001-750. The State strongly opposed the natural restoration approach, and concluded:

    Finally, if USEPA decides to allow the General
  Electric Company to deal with aquifer restoration
  by the natural processes and the air stripper on
  Reardon Brook, then the State requests the USEPA
  to require GE to commit to installing permanent
  water supply to any residential areas that would
  be developed between Bluebird Road and Reardon
  Brook and periodic monitoring of the plume to
  determine present conditions and movement.

AR at 001-752. The Town of Moreau issued its comments on November 26, 1985, and objected to the failure of the FS to provide for an adequate alternate water supply, as well as the alleged incorrect analysis of the number of homes affected by the contamination. AR at 001-696 to 731. The Town echoed comments made by the State concerning treatment of the aquifer. AR at 001-727 to 730.

Under the terms of the ACO, EPA was to select a remedy for treatment of the Impact Area, and put it in a document known as a Record of Decision ("ROD"). In a letter to EPA dated January 14, 1986, the State indicated its concern that a ROD would issue which would fail to address adequately aquifer restoration. AR at 001-574 to 576. As the letter indicates, EPA via telephone had notified the State that it would select natural restoration in the ROD. In the State's opinion, "[t]he agreement which USEPA intends to conclude with General Electric Co. will, in essence, leave a once productive aquifer unusable, essentially forever." AR at 001-574. The State further commented:

    It should also be recognized that the
  institutional controls on aquifer use, i.e. G.E.'s
  proposal to provide for a public water supply to
  all areas of the town impacted by its contaminant
  plume, do not completely address the "human
  exposure" and future development issues. . . . . .

    Please make certain that the Record of Decision
  reflects the realities involved in USEPA's
  settlement, i.e., the complete loss to New York of
  a vital aquifer system, the continued groundwater
  violations, and the need to monitor the health and
  environmental conditions in the plume area, so
  that future hazardous waste polluters are not
  under the impression that the installation of a
  public water

  supply is all that is needed to resolve hazardous
  waste site conditions.

AR at 001-575. EPA answered this letter on February 4, 1986, in an attempt to "correct the erroneous record" apparently created by the prior letter. AR at 001-468 to 470. EPA had previously agreed at a meeting with the State in New Paltz that "EPA in its Record of Decision will insert language stating that the aquifer has been damaged, and that the work under the Order does not require General Electric to address aquifer restoration." AR at 001-468. EPA continued:

  With respect to a statement about future
  development, you should be aware that General
  Electric has agreed and will be ordered to provide
  sufficient water for future development. They
  agreed to this several months ago, and that
  agreement was reiterate[d] at several meetings with
  State officials.

Id. (Emphasis added).*fn5

The State responded on February 18, 1986, stating that it awaited receipt of the ROD, and that EPA had previously been notified of groundwater contamination at levels in excess of New York regulations. AR at 001-577 to 578. At some point in 1986, EPA indicated its intention to choose the natural restoration approach in an Enforcement Decision Document ("EDD").*fn6 In a letter to EPA dated July 8, 1986, the State indicated that the EDD did not provide that the groundwater remained contaminated at levels well in excess of New York regulations. See Exhibit 7 of State of New York's Motion to Intervene, filed June 8, 1989.*fn7 The State concluded: "This letter along with my October 4, 1985 letter to you clearly identifies the State's concerns and position regarding this site." Id., at 2. The State made its position clear that it strongly opposed the natural restoration option, and a compromise was apparently reached. In June 1987, a revised EDD was issued, which required GE, along with the natural restoration option, to build a public water distribution system for 120 current residences, with the water supply coming from the Village of South Glens Falls. See Exhibit 8 of State of New York's Motion to Intervene. The alternate water supply was considered by the State as a replacement for the aquifer. With respect to future development, the revised EDD provided "GE has offered, and EPA will allow, for the provision of public water to currently undeveloped areas within the plume of contaminated water should these areas undergo development in the future." Revised EDD at 2, AR at 015-0041.*fn8 The revised EDD contained the following additional language under the subheading "Objectives":

  The most important objective of the proposed
  remedial actions is to provide a safe drinking
  water supply for residents whose drinking water
  wells have been adversely impacted by groundwater
  contamination emanating from the GE Moreau site.
  This includes the provision of a safe water supply
  for future development in currently undeveloped
  areas where groundwater contamination also exists.

  Revised EDD at 7, Exhibit 8 of State of New York's Motion to Intervene. The State concurred with the revised EDD in a letter dated June 22, 1987:

    The State of New York has reviewed the revised
  Enforcement Decision Document (EDD) for the GE
  Moreau site, dated June 8, 1987. The revised EDD
  reflects the concerns previously transmitted to
  your agency regarding institutional controls and
  provisions for GE to provide public water to
  undeveloped areas within the contaminated plume.
  We, therefore, concur with the revised EDD as

AR at 001-0021 and 015-0042. (Emphasis added).
*fn9 The State's position is that it concurred with the revised EDD with the understanding that GE would supply public water to as-yet undeveloped areas within the Impact Area.

On July 13, 1987, EPA issued the ROD, AR at 011-0001 to 0038, which purported to be a copy of the revised EDD. However, the language concerning the provision of water to undeveloped areas as they develop was deleted. AR at 011-0002. Furthermore, the sentence from the "Objectives" portion of the revised EDD was also deleted. AR at 011-0007. No explanation for the removal of language which prompted the State's concurrence with the revised EDD has been proffered by EPA. The ROD continues by stating that "The State of New York has been consulted and agrees with the approved remedies." AR at 011-0003. The Administrative Record, for all intents and purposes, is apparently completed upon the issuance of the ROD.

GE was unable to enter Town property to perform the alternate water supply provision of the remedy chosen by EPA in the ROD, because the Town refused to let them on the property, and threatened GE with trespass actions. The Town refused to acquiesce in GE's entrance on its land to build the system, claiming (1) that the area which the system would cover was too small; (2) the quality and quantity of water supply from South Glens Falls is or would become substandard; and (3) EPA and GE had failed to obtain necessary permits for the construction.

EPA, as the authorized representative of plaintiff United States of America, thereafter brought suit on two grounds: (1) against the Town of Moreau for an Order Granting Immediate Access pursuant to CERCLA § 104(e)(3), 42 U.S.C. § 9604(e)(3) & (5); and (2) against GE for an order directing GE to proceed with the balance of the response action, pursuant to CERCLA § 106(a), 42 U.S.C. § 9606(a). The Town was named an indispensable party defendant in the § 106 claim, pursuant to Fed.R.Civ.P. 19. On September 7, 1988, the Court issued an Order to Show Cause why the Order Granting Immediate Access should not be granted. On September 16, 1988, the Court heard oral argument on the Order to Show Cause. The Town argued that immediate access could not be granted because EPA/GE had failed to obtain permits from the New York State Departments of Health and Environmental Conservation. While it appeared that the reason the permits were not granted was the Town's refusal to approve the response measures, the issue focused on was whether permits were necessary at all. CERCLA § 121(e)(1), 42 U.S.C. § 9621(e)(1) provides:

  No Federal, State, or local permit shall be
  required for the portion of any removal or
  remedial action conducted entirely
  onsite, where such remedial action is selected and
  carried out in compliance with this section.

(Emphasis added). The Court determined that the Town property within the Myron Road, Terry Drive and Cheryl Drive area was "onsite," thereby making permits for the work to be performed in that area unnecessary. At the time the Court's decision was made, the relevant authority was the plain meaning of the statute, along with the following cases: Dickerson v. Administrator, EPA, 834 F.2d 974, 977 (11th Cir. 1987); United States v. Charles George Trucking Co., Inc., 682 F. Supp. 1260, 1267 (D.Mass. 1988); United States v. Long, 687 F. Supp. 343, 344 (S.D.Ohio 1987); United States v. Iron Mountain Mines, Inc., No. S-87-1189, slip op. at 1, 1987 WL 46792 (E.D.Cal. Sept. 18, 1987) (Exhibit G of EPA's Motion Papers); United States v. Western Processing Company, 751 F. Supp. 902 at 905 (W.D.Wash. 1986) (Exhibit E of EPA's Papers). The Court granted EPA's motion for an Immediate Order in Aid Of Access, which also included an injunction against the Town's interference with GE's efforts, and signed the proposed order.*fn10 As such, the first cause of action was fully resolved.*fn11

Along with the papers in support of the Immediate Access Order, EPA included a Consent Decree which purported to resolve the § 106 action. While the Court initially entered the Consent Decree, it is clear that such entry was improper, as the public commentary provisions of CERCLA § 122(d), 42 U.S.C. § 9622(d), had been violated. On October 20, 1988, the Court reserved decision on the Town's motion to vacate the Consent Decree, and directed that the provisions of CERCLA § 122 be complied with.*fn12 In accordance with CERCLA § 122(i)(1), 42 U.S.C. § 9622(i)(1), notice of the lodging of the Consent Decree was published in the Federal Register on March 21, 1989. 54 Fed.Reg. 11573. Extensions of time have been granted so that comments on the Consent Decree could be made. Comments have been received from the State and the Town, and EPA and GE have responded thereto.

The Court's review of the Consent Decree is a limited one, and the Consent Decree must be enforced if it is reasonable, fair and consistent with CERCLA's goals. United States v. McGraw-Edison Company, 718 F. Supp. 154, 158 (W.D. N.Y. 1989); State of New York v. Town of Oyster Bay, 696 F. Supp. 841, 843 (E.D.N. Y. 1988). While the Court cannot act as a "rubber stamp" for the Consent Decree, the Court cannot review the proposed settlement de novo. United States v. Cannons Engineering Corp., 899 F.2d 79, 84 (1st Cir. 1990); See also City of Detroit v. Grinnell Corp., 495 F.2d 448, 462 (2d Cir. 1974). The Court's task "is to determine whether the settlement represents a reasonable compromise, all the while bearing in mind the law's generally favorable disposition toward the voluntary settlement of litigation and CERCLA's specific preference for such resolutions." United States v. Rohm & Haas Company, 721 F. Supp. 666, 680-681 (D.N.J. 1989). Factors for the Court to consider are (1) the strength of the Government's case; (2) the good faith efforts of the negotiators; (3) opinions of counsel; and (4) the possible risks involved in litigation if the settlement is not approved. City of New York v. Exxon Corp., 697 F. Supp. 677, 692 (S.D.N.Y. 1988); United States v. Hooker Chemicals & Plastics Corp., 540 F. Supp. 1067, 1072 (W.D.N.Y. 1982).

While the Court's review is akin to the Administrative Procedure Act's "arbitrary and capricious" standard, United States v. Ottati & Goss, Inc., 900 F.2d 429, 434 (1st Cir. 1990),*fn13 the Court cannot approve of a Consent Decree where the agreement is "illegal, a product of collusion, inequitable, or contrary to the public good." Kelley v. Thomas Solvent Company, 717 F. Supp. 507, 515 (W.D.Mich. 1989). Likewise, EPA may not "mislead any of the parties, discriminate unfairly, or engage in deceptive practices," nor may it "spoon feed PRP's." United States v. Cannons Engineering Corp., 899 F.2d 79, 93 (1st Cir. 1990). The Court's review of the Consent Decree is limited to the Administrative Record, United States v. Wastecontrol of Florida, Inc., 730 F. Supp. 401, 405 (M.D.Fla. 1989), and that review is discretionary with the trial court. United States v. Hooker Chemical & Plastics Corp., 776 F.2d 410, 411 (2d Cir. 1985).

The Court has thoroughly reviewed the comments filed by the Town and the State, the responses to the comments received from EPA and GE, the voluminous documents included in the Administrative Record, and documents that for no apparent reason were omitted from the Administrative Record. EPA emphatically argues that this case is a very narrow one, and that the only matter before the Court is whether that portion of the remedy dealing with the alternate water supply is proper. EPA argues that the State and Town are trying to expand the case to cover irrelevant matters. In this Court's judgment, the Moreau aquifer is not an irrelevant matter, and is inextricably intertwined with the alternate water supply issue.

The State made it clear well prior to the issuance of the ROD that the Moreau aquifer was contaminated at levels well in excess of state regulations. EPA responded that it would not, although it could, order GE to remedy the contamination in the aquifer. The State concurred with an alternate water supply as a means of aquifer replacement, since EPA would not order aquifer treatment. EPA informed the State that it would order GE to comply with its offer to provide for future development in the Impact Area. The issue of whether EPA had the power to make such a representation is irrelevant, since such a representation was made, and it effectuated a concurrence from the State. The revised EDD, while written in permissive language, contained language that was removed without explanation from the ROD. The removed language, in this Court's judgment, was the cornerstone of the State's concurrence with the proposed remedy. The Court can only surmise as to the motivating factors behind such deletions, as EPA has provided no explanations. The State made it clear that it concurred with the revised EDD as written. The ROD is not the revised EDD as written, and the statement by EPA that the State concurs with the remedy selected is inaccurate.

The failure to provide certain documents in the Administrative Record is also a troubling matter. While the Court acknowledges that its review is limited to the Administrative Record, the Court cannot enter a Consent Decree based on an incomplete record that gives the appearance of selective omissions.

EPA also argues that it cannot order GE to provide for future development within the Impact Area, as CERCLA only speaks to past contamination and present remediation. In this Court's judgment, the Moreau aquifer is presently contaminated. The State's concern over the present contamination at the aquifer was purportedly placated by statements that EPA could order GE to provide for future development. Because of these statements, and language in the revised EDD which the State understood as providing for the future, the State abandoned its prior position that the EPA's position concerning aquifer restoration was inadequate.

Despite the law's preference for voluntary settlements of CERCLA actions, this Court cannot approve this Consent Decree. The Court is of the opinion that EPA may have misled the State into concurring with the revised EDD, which was a crucial portion of the negotiation process between EPA and the State. While the Court commends EPA for granting the Town due process (even when such process may not have been due), the same cannot be said for their negotiations with the State. The Court furthermore is at a loss to explain why crucial documents were omitted from the Administrative Record, as well as why crucial language was omitted from the ROD. Without any explanation from EPA, the Court can only determine that these omissions were, at best, arbitrary. After a thorough review of the voluminous documents in the file, it is hereby

ORDERED, that the Consent Decree is vacated, and it is further

ORDERED, that the State of New York's motion for partial summary judgment is stricken from the Court's November 2, 1990 motion calendar, subject to renewal by the State after a review of this Memorandum-Decision and Order.

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