Emhart Industries, Inc. v. New England Container Company, Inc et al

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
___________________________________
)
EMHART INDUSTRIES, INC., 	)
)
Plaintiff and Counterclaim 	)
Defendant, 	)
)
v. 	) 	C.A. No. 06-218 S
)
NEW ENGLAND CONTAINER COMPANY, 	)
INC; et al., 	)
)
Defendants and Counterclaim )
Plaintiffs. 	)
___________________________________)
)
EMHART INDUSTRIES, INC., 	)
)
Plaintiff and Counterclaim 	)
Defendant, 	)
)
v. 	) 	C.A. No. 11-023 S
)
UNITED STATES DEPARTMENT OF THE 	)
AIR FORCE; et al., 	)
)
Defendants, Counterclaim 	)
Plaintiffs, and Third-Party )
Plaintiffs, 	)
)
v. 	)
)
BLACK & DECKER, INC.; et al., 	)
)
Third-Party Defendants. 	)
___________________________________)
ORDER
WILLIAM E. SMITH, Chief Judge.
Before 	the 	Court 	are 	the 	Government’s 	Motion 	to 	Limit
Discovery 	and 	the 	Scope 	of 	Review 	Pursuant 	to 	Section 	113(j) 	of
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CERCLA 	(“Motion”) 	(ECF 	No. 	415) 	and 	a 	Cross-Motion 	to 	Strike 	or
Complete the Eleventh Administrative Record and Complete the Tenth
Administrative Record (“Cross-Motion”) filed by Emhart Industries,
Inc., and Black and Decker, Inc. (collectively, “Emhart”) (ECF No.
416). 	For 	the 	reasons 	that 	follow, 	the 	Court 	DENIES 	WITHOUT
PREJUDICE 	the 	Government’s 	Motion 	and 	DENIES 	AS 	MOOT 	Emhart’s
Cross-Motion.
The parties are familiar with the facts of this case, and the
Court need not repeat them here. 	This case has been brought under
the 	Comprehensive 	Environmental 	Response, 	Compensation, 	and
Liability Act (“CERCLA”), 42 U.S.C. § 9601, et. seq. 	Under CERCLA,
a 	district 	court 	“reviews 	[the 	Environmental 	Protection 	Agency’s
(“EPA”)] 	remedy 	selection 	(i.e., 	its 	selection 	of 	a 	[Unilateral
Administrative 	Order 	(“UAO”)] 	under 	the 	Administrative 	Procedure
Act’s ‘arbitrary and capricious’ standard. 	The Court reviews EPA’s
selection 	of 	the 	responsible 	party 	de 	novo.” 	Gen. 	Elec. 	Co. 	v.
Jackson, 	595 	F. 	Supp. 	2d 	8, 	11 	(D.D.C. 	2009); 	see 	also 	Kelley 	v.
E.P.A., 	15 	F.3d 	1100, 	1107 	(D.C. 	Cir. 	1994) 	(“The 	drafters 	of
subsection 	106(b) 	appear 	to 	us 	to 	have 	quite 	consciously
distinguished 	between 	EPA’s 	role 	in 	determining 	the 	appropriate
cleanup action (which is entitled to deference under 106(b)(2)(D))
from 	the 	agency’s 	position 	on 	liability 	when 	a 	party 	disputes
claims.”). 	Here, 	the 	Court 	has 	already 	conducted 	its 	de 	novo
review on liability, and deemed Emhart the responsible party. 	(See
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Phase 	I 	Findings 	of 	Fact 	and 	Conclusions 	of 	Law, 	ECF 	No. 	405.)
The 	Court 	now 	moves 	onto 	Phase 	II 	of 	the 	proceeding, 	in 	which 	it
will 	review 	EPA’s 	remedy 	selection 	under 	the 	arbitrary 	and
capricious standard.1
In 	general, 	a 	district 	court’s 	review 	“of 	any 	issues
concerning the adequacy of any response action taken or ordered by
[EPA] 	shall 	be 	limited 	to 	the 	administrative 	record.” 	42 	U.S.C.
§ 9613(j)(1); see also United States v. JG-24, Inc., 478 F.3d 28,
33-34 (1st Cir. 2007) (“Under CERCLA, judicial review normally is
limited to the administrative record as it existed at the time of
1 	Emhart 	argues 	that 	“in 	contrast 	to 	the 	EPA’s 	remedy
determinations, 	there 	is 	no 	reason 	to 	conclude 	that 	the 	EPA’s
decision 	to 	issue 	a 	UAO 	should 	be 	entitled 	to 	any 	deference.”
(Emhart’s 	Opp’n 	and 	Cross-Motion 	4, 	ECF 	No. 	416.) 	Relying 	on
Redwing Carriers, Inc. v. Saralands Apartments, 94 F.3d 1489 (11th
Cir. 	1996), 	Emhart 	contends 	that 	“in 	issuing 	a 	UAO, 	‘the 	EPA 	is
acting 	in 	its 	role 	as 	prosecutor 	in 	enforcing 	a 	federal
environmental 	statute,’ 	and 	any 	findings 	it 	makes 	in 	that 	regard
‘are merely the agency’s conclusions regarding who is liable under
CERCLA 	given 	the 	facts 	of 	a 	particular 	case.’” 	(Emhart’s 	Opp’n
and Cross-Motion 4, ECF No. 416 (quoting Redwing, 94 F.3d at 1507
n.24).) 	But Redwing was a decision on liability; there, the court
found 	that 	the 	fact 	that 	EPA 	concluded 	in 	its 	UAO 	that 	a 	certain
party was responsible did not prove that party was liable because
the 	court 	had 	de 	novo 	review 	of 	that 	question. 	See 	Redwing, 	94
F.3d 	at 	1507 	n.24) 	(“Rather 	than 	being 	authoritative
interpretations 	of 	a 	statute, 	these 	findings 	are 	merely 	the
agency’s 	conclusions 	regarding 	who 	is 	liable 	under 	CERCLA 	given
the facts of a particular case. 	Although the EPA’s view of who is
liable 	for 	cleaning 	up 	the 	Saraland 	Site 	may 	support 	Redwing’s
case, 	neither 	the 	district 	court 	nor 	this 	Court 	are 	obliged 	to
defer 	to 	the 	agency’s 	conclusions 	on 	this 	issue.” 	(emphasis
added)). 	Thus, 	Redwing 	does 	not 	support 	Emhart’s 	claim 	that 	the
decision 	to 	issue 	a 	UAO 	— 	as 	opposed 	to 	the 	decision 	to 	whom 	to
issue the UAO — should be de novo review.
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the 	challenged 	agency 	action.”). 	The 	Court 	is 	bound 	to 	accept
EPA’s “response action unless the objecting party can demonstrate,
on the administrative record, that the decision was arbitrary and
capricious 	or 	otherwise 	not 	in 	accordance 	with 	law.” 	42 	U.S.C. 	§
9613(j)(2). 	However, courts have recognized that there are several
exceptions 	to 	this 	rule 	where 	supplemental 	information 	may 	be
considered: 	(1) 	a 	showing 	of 	bad 	faith 	by 	the 	agency; 	(2) 	a 	need
for 	the 	testimony 	of 	experts 	in 	a 	highly 	technical 	matter; 	(3) 	a
record 	that 	is 	incomplete; 	and/or 	(4) 	a 	showing 	that 	an 	agency
failed 	to 	consider 	all 	relevant 	factors. 	See, 	e.g., 	Northwest
Bypass 	Grp. 	v. 	U.S. 	Army 	Corps 	of 	Eng’rs, 	Civil 	No. 	06-CV-00258-
JAW, 	2007 	WL 	1498912, 	at 	*2 	(D.N.H. 	May 	14, 	2007); 	United 	States
v. 	Dravo 	Corp., 	No. 	8:01CV500, 	2003 	WL 	21434761, 	at 	*2 	(D. 	Neb.
June 20, 2003).
There are two questions at issue in the Government’s Motion:
(1) 	may 	Emhart 	take 	additional 	discovery 	concerning 	EPA’s 	June
2014 	decision 	to 	issue 	a 	UAO; 	and 	(2) 	may 	the 	Court 	consider
evidence outside the administrative record in its review of whether
EPA’s remedy selection was arbitrary and capricious.
With 	respect 	to 	the 	first 	question, 	the 	Court 	already 	ruled
on 	essentially 	the 	same 	issue 	earlier 	in 	this 	case, 	and 	allowed
Emhart to take discovery concerning EPA’s remedy selection. 	(See
Mem. & Order on the Gov’t’s Mot. to Strike, ECF No. 283.) 	As the
Court 	noted 	in 	that 	Memorandum 	and 	Order, 	“[t]he 	completeness 	of
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the 	record 	and 	the 	good 	faith 	behind 	it 	can 	only 	be 	grasped 	by
looking beyond the record itself. 	Thus 	. . . the only way a non-
agency party can demonstrate to a court the need for extra-record
judicial 	review 	is 	to 	first 	obtain 	discovery 	from 	the 	agency.”
(Id. 	at 	5 	(quoting 	Amfact 	Resorts, 	L.L.C. 	v. 	United 	States 	Dep’t
of the Interior, 143 F. Supp. 2d 7, 12 (D.D.C. 2001)).) 	There is
no 	reason 	for 	the 	Court 	to 	rule 	differently 	concerning 	discovery
of 	EPA’s 	decision 	to 	issue 	the 	UAO, 	particularly 	given 	that
Emhart’s 	counsel 	represented 	that 	the 	scope 	of 	Emhart’s 	intended
discovery should not delay the Phase II trial.
Regarding 	the 	second 	question, 	the 	Court 	declines, 	at 	this
time, 	to 	limit 	its 	scope 	of 	review 	to 	the 	administrative 	record.
This 	is 	a 	complicated 	and 	highly 	technical 	case, 	and 	it 	is 	very
likely that at least some extra-record evidence will be useful to
the Court as “background information” and “for the limited purposes
of 	ascertaining 	whether 	the 	agency 	considered 	all 	the 	relevant
factors 	or 	fully 	explicated 	its 	course 	of 	conduct 	or 	grounds 	of
decision.” 	Asarco, 	Inc. 	v. 	U.S. 	Envtl. 	Prot. 	Agency, 	616 	F.2d
1153, 1160 (9th Cir. 1980); see id. (“It will often be impossible,
especially 	when 	highly 	technical 	matters 	are 	involved, 	for 	the
court to determine whether the agency took into consideration all
relevant 	factors 	unless 	it 	looks 	outside 	the 	record 	to 	determine
what 	matters 	the 	agency 	should 	have 	considered 	but 	did 	not.”).
Consequently, 	the 	Court 	hereby 	denies 	without 	prejudice 	the
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Government’s 	Motion, 	and 	reserves 	ruling 	on 	the 	admissibility 	of
any particular extra-record evidence until the time of trial.
At 	oral 	argument, 	counsel 	for 	Emhart 	represented 	that
Emhart’s 	Cross-Motion 	was 	defensive, 	in 	the 	event 	that 	the 	Court
decided to limit its review to the administrative record. 	Because
the Court denies the Government’s Motion, it also denies Emhart’s
Cross-Motion as moot.
For the foregoing reasons, the Government’s Motion is hereby
DENIED 	WITHOUT 	PREJUDICE; 	and 	Emhart’s 	Cross-Motion 	is 	DENIED 	AS
MOOT.
IT IS SO ORDERED.
William E. Smith
Chief Judge
Date: 	February 2, 2016
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