By Deborah Quick

The successor in interest to a polluting industrial operator challenged the listing of a site on the National Priorities List, asserting the U.S. Environmental Protection Agency (EPA) acted arbitrarily and capriciously in failing to account for mitigation measures and in using residential health benchmark to analyze whether human health was at risk from air contamination within industrial buildings. [Meritor, Inc. v. U.S. Environmental Protection Agency, 966 F.3d 864 (D.C. Cir. 2020).]

Background

Between 1966 and 1985, Rockwell International Corporation manufactured wheel covers at a facility in Grenada, Mississippi (Rockwell Facility or Rockwell Site), which borders a residential neighborhood, as well as a creek and agricultural land. In 1985, Rockwell International sold the Rockwell Facility to another company and subsequently Rockwell International spun off its automotive division into a separate corporation called Meritor, Inc. As a result, while “Meritor never owned or operated the [Rockwell] Site[,]” it took on the liabilities of Rockwell, including those associated with the Rockwell Site. Rockwell’s manufacturing activities at the facility “produced hazardous substances, including toluene, trichloroethylene (TCE), and cis-1,2-dichloroethene (“DCE”), which were stored on site” leading to the development of a plume of toluene and TCE collecting in the soil and groundwater under and around the Rockwell Facility, which was first identified via a 1994 investigation.

CERCLA and the National Priorities List

The Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. §§ 9601 et seq., CERCLA) directs the EPA “to address the growing problem of inactive hazardous waste sites throughout the United States” (Eagle-Picher Indus., Inc. v. EPA, 759 F.2d 922, 925 (D.C. Cir. 1985)) by developing “criteria for determining priorities among releases or threatened releases” of hazardous waste. 42 U.S.C. § 9605(a)(8)(A). The resulting “National Priorities List” or “NPL” orders contaminated sites by “the relative risk or danger they pose to the public health, public welfare, or the environment,” thereby “identif[ying] those hazardous-waste sites considered to be the foremost candidates for environmental cleanup.” CTS Corp. v. EPA, 759 F.3d 52, 55 (D.C. Cir. 2014); 42 U.S.C. § 9605(a)(8)(B). The EPA uses the Hazard Ranking System set forth in 40 C.F.R. Part 300, App. A “to evaluate whether, and to what degree, a site poses a risk to the environment or to human health and welfare.”

The Rockwell Facility

Post-1994, studies established “the continued presence of hazardous waste” at the Rockwell Facility, “which has in turn harmed air quality in the area.” A 2016 EPA study identified elevated indoor concentrations of toluene, TCE, and DCE in the “main production building” and a Meritor-commissioned 2017 study “found heightened levels of toluene and TCE beneath the surface.”

That same year, Meritor installed a sub-slab depressurization system below the Rockwell Facility’s main building. The depressurization system was designed to reduce the intrusion of contaminated air into the building by creating a pressure differential between the building and the underlying soil. Despite improvements in air quality following the installation of this system, the degree of contamination within the main building continued to exceed ambient levels

In 2018, the EPA added the Rockwell Facility and “surrounding areas” to the NPL “based on the hazardous subsurface intrusion of toluene, TCE, and DCE.” 83 Fed. Reg. at 46,411.

Meritor’s Challenge to the Hazard Ranking System

Meritor challenged the EPA’s application of the Hazard Ranking System to rank the severity of “subsurface intrusion” of “noxious vapors from the soil into occupied buildings.” Specifically, Meritor criticized the agency for “failing to account for the company’s mitigation efforts,” i.e., installation of the sub-slab depressurization system, and using the “residential health benchmark” in its analysis of  “the ‘targets’ of the hazardous waste, meaning who will suffer exposure, whether humans, animals, natural resources, or sensitive environments.”

The D.C. Circuit’s Decision

Remediation Efforts

Meritor argued that the Hazard Ranking System regulations “strips away the EPA’s discretion to disregard remedial measures” such as the sub-slab depressurization when analyzing “the ‘likelihood of release’ of hazard waste into the environment” and in its “targets” analysis, by which the agency “accounts for populations and sensitive environments located near the contaminated area.”

Distinguishing prior D.C. Circuit cases that analyzed the prior 1982 version of the Hazard Ranking System (Eagle-Picher Indus., Inc. v. EPA, 822 F.2d 132, 149 (D.C. Cir. 1987) and Linemaster Switch Corp. v. EPA, 938 F.2d 1299, 1306–1307 (D.C. Cir. 1991)), Meritor cited “to two portions of the Hazard Ranking System that expressly account for the presence of mitigation measures.” Meritor’s first pointed to that portion of the current regulations that accounts for “whether a mitigation system has been installed” when assessing “the potential for exposure” under the “likelihood of release” analysis. The Court of Appeal dismissed this argument as irrelevant because:

. . .the EPA had no occasion to evaluate the potential for exposure (and so to consider Meritor’s installation of a sub-slab depressurization system) because the agency documented an actual, observed exposure at the site.

Rather, when exposure has been established the regulations require that the EPA “automatically assign[] the maximum score of 550 for the ‘likelihood of release’ component without regard to mitigation measures.”

Target Analysis

As for the “target” analysis, the court noted that the EPA’s exclusion of consideration of the sub-slab depressurization system “resulted in a lower or equal overall score for the ‘targets’ metric.” Fundamentally, the court 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.

Rather, “the Hazard Ranking System’s selective inclusion and omission of mitigation systems as a consideration suggests ‘that the omission’ of any reference to mitigation systems in other ‘context[s] was deliberate.’” Quoting Council for Urological Interests v. Burwell, 790 F.3d 212, 221 (D.C. Cir. 2015).

Meritor also faulted the EPA’s use of a “residential health benchmark” in its “targets” analysis. The targets analysis examined the relative health risks faced by the people occupying the buildings at the Rockwell Facility. “[T]he EPA relies on an exposure scenario ‘consistent with a residential individual … across all … pathways[,]” i.e., oral, inhalation or other exposure to carcinogens, “‘as this is most protective.’” Meritor argued the EPA should have instead employed an “industrial, rather than residential, health benchmark because the employees did not reside at the Rockwell Facility full time.” But as the court pointed out, the regulations require that the residential health benchmark be weighted by “dividing the number of people” exposed “by three if they are full-time workers and by six if they are part-time workers,” thereby “account[ing] for the worker’s reduced hours of exposure relative to residents.”

Conclusion and Implications

A big fact that seems like it should change the entire calculus—here, voluntary installation of an effective mitigation measure—didn’t. A close reading of the applicable regulations defeated these claims, because crediting the petitioner’s theories would have entailed “amend[ing] rather than apply[ing] the existing regulatory scheme.” The D.C. Circuit’s July 28, 2020 opinion is available online at: https://www.cadc.uscourts.gov/internet/opinions.nsf/4B3CE37E780788EA852585B30050D1D9/$file/18-1325-1853718.pdf