The updated model of the remedial design/remedial action consent decree and statement of work seeks to streamline and quicken CERCLA settlement negotiations and address environmental justice concerns of Superfund sites in impacted communities.
The US Environmental Protection Agency (EPA) has long relied on model documents to facilitate the cleanup of sites under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA). The enforcement document that routinely takes the longest to negotiate and finalize is the remedial design/remedial action (RD/RA) consent decree (CD). The CD is a legal agreement between the United States and Potentially Responsible Parties (PRPs, or the Settling Defendants), negotiated among EPA, the US Department of Justice (DOJ), and the Settling Defendants, that is lodged in federal court, subject to public comment, and then entered by a US district court. The CD incorporates a Statement of Work (SOW), which provides the procedures and requirements for implementing the RD/RA under the CD.
In 2014, EPA and the DOJ issued an updated model RD/RA CD and SOW. Minor updates were made throughout the years, with the latest changes made in 2020.
Aiming to streamline the latest model of the RD/RA CD, a national workgroup, composed of attorneys from the EPA Office of Site Remediation Enforcement, EPA regional offices, and the DOJ, reviewed the latest model of the RD/RA CD and drafted a revised model. Also, the workgroup developed new environmental justice provisions for the SOW, seeking to align these with EPA Administrator Michael Regan’s prioritization of EPA’s commitment to the protection of environmental justice and Executive Order 14008, Tackling the Climate Crisis at Home and Aboard: Securing Environmental Justice and Spurring Economic Opportunity.
The 2021 model RD/RA CD and SOW became effective on August 31, 2021, and all future RD/RA CDs will use the new model.
KEY REVISIONS TO 2021 RD/RA CD
EPA incorporated numerous wording changes to tighten up language and avoid redundancy. Beyond that, the following represent some of the significant changes made to the CD and SOW:
- Use of Macros to Customize the CD: Previously, an attorney preparing the first draft of the CD had to follow the myriad instructions and bracketed text interlaced throughout the model. Now, the attorney can customize the CD for a particular site with just a few keystrokes.
- Section II, Parties Bound: Section II provides for the various parties to be bound by the CD. Previously, copies of the CD had to be provided to the contractors and subcontractors performing the cleanup work for the PRPs. Now, notice of the CD rather than a copy of the CD must be provided.
- Section III, Definitions: Significant revisions to the definitions include (1) “Future Response Costs” now integrates the definition for “Interim Response Costs,” which previously was separately stated and defined. Also, the interest clause portion of the definition now clarifies that it includes all interest accrued on EPA’s unreimbursed costs, including “Past Response Costs”; (2) “Settling Federal Agency” now has an option to limit the scope of US Department of Defense representations regarding liability to one or more service branches; and (3) “Work” now has a narrower definition, focusing only on those sections and provisions that actually contain work obligations. Previously, “Work” was defined to include all activities and obligations under the CD, except for activities under the Retention of Records section; now it only encompasses obligations under Sections V through VIII that pertain to Performance of Work, Property Requirements, Financial Assurance, and Indemnification/Insurance.
- Section V, Performance of the Work: Section V of the CD provides a detailed approach on how the Settling Defendants will perform the cleanup work. A significant change was made to the paragraph regarding “Modifications to the Remedial Action,” which now expressly requires Settling Defendants not only to implement modifications to the response action that EPA selects to achieve and/or maintain the performance standards or to carry out and maintain the effectiveness of the remedial action where that modification is consistent with the scope of the original remedial action, but also if EPA selects a further response action because a reopener condition is satisfied. Modifications must be selected consistent with the National Contingency Plan (NCP). Settling Defendants may participate in any NCP public comment opportunity as well as seek dispute resolution under the CD.
- Section VII, Financial Assurance: Clarification has now been provided that the amount for Financial Assurance is based solely on the “Work” as described under Section V, which does not include other costs. In addition, in connection with a request to modify the amount, form, or terms of Financial Assurance, the model CD provides an alternative that would allow Settling Defendants to invoke dispute resolution regarding EPA’s decision by the earlier of 30 days following the decision or some period of time (180 days is included in brackets) after EPA’s receipt of the request. This alternative may provide some relief to those Settling Defendants that have sought a reduction that EPA is slow to review.
- Section XII, Dispute Resolution: As previously established, Settling Defendants must use dispute resolution procedures to resolve any disputes arising under the CD; however, the dispute resolution procedures have been revised to confirm that Settling Defendants cannot initiate a dispute to challenge the Record of Decision and to clarify those disputes that are limited to review on the administrative record.
- Section XV, Covenants by Settling Defendants: To further streamline this section, the CERCLA and Resource Conservation and Recovery Act (RCRA) covenants have now been combined with the US Constitution, Tucker Act, and Equal Access to Justice Act covenants. As to the Settling Defendant’s Reservations, the covenants listed above do not apply to any lawsuits and orders brought after the effective date of the CD. The scope of the Settling Defendant’s covenants has been clarified, which now do not apply to unrelated matters such as tort claims, government contract claims, or Uranium Mill Tailings Radiation Control Act claims. Also, reservations have been omitted for matters not covered by the covenants to avoid redundancy, such as for tort claims. Finally, coverage of the de minimis/ability-to-pay (ATP) waiver has been revised to address matters in future de minimis/ATP settlements, thereby no longer mirroring the matters addressed by the CD.
- Section XVII, Records: Previously, Settling Defendants had to certify that they did not dispose of any records. Now, Settling Defendants must certify that they have implemented a litigation hold as related to the site.
Key Revisions to 2021 SOW
In addition, some significant changes were made to the SOW. Specifically, certain provisions that were previously part of the CD related to decisions made during the cleanup process have now been moved to the SOW. Most importantly, the revised SOW contains several community involvement provisions to address environmental justice issues facing communities that are disproportionately impacted by pollution.
The following key revisions are important to note:
- Section 2, Community Involvement: Provisions pertaining to community involvement have been moved from the CD to the SOW. Overall, the role of the Settling Defendants has been expanded in community involvement activities. For example, as part of the requirement to provide information to EPA about the design and implementation of the remedy, Settling Defendants must provide a Community Impact Mitigation Plan, which must contain validated data from monitoring of impacts to communities. Also, information pertaining to the cleanup work performed by the Settling Defendants will need to be communicated to EPA in a manner suitable for sharing with the public and the education levels of the community. Further, Settling Defendants’ responsibilities as to working with a selected community group for technical assistance and entering into a Technical Assistance Plan have been clarified and are now part of this section.
- Section 3, Coordination and Supervision: The SOW now includes provisions pertaining to the selection and duties of the Project Coordinator and Supervising Contractor, which provisions were previously part of the CD.
- Section 5, Remedial Action: This section now includes provisions for emergency response and reporting and permits, which previously were part of the CD.
EPA and the DOJ are enthusiastic about the revisions to the RD/RA CD and SOW and hopeful that they will result in more rapid negotiations and, accordingly, getting shovels in the ground more quickly. To help address any learning curve, EPA will hold an informational webinar in October to walk through and explain the revisions. While the revisions simplify and reduce redundancies in several sections, including dispute resolution, payment of response costs, and property requirements, we will see if the previously slow negotiations were the result of excess words, the substance of the provisions, or otherwise. With regard to implementation, the Settling Defendants’ expanded involvement in community work will increase cost and time for the overall cleanup process.