We have consolidated the appeals in two intimately related cases that arise under the
*660
Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. §§ 9601
et seq.
The Act, also known (in its current, amended form) as the Superfund law, requires that sites contaminated by toxic wastes be cleaned up by or at the expense of the persons responsible for the contamination. In one of the cases, Employers Insurance of Wausau, an insurance company that the EPA had ordered to clean up a contaminated site, sued the President of the United States, invoking a 1986 amendment to the Superfund law that provides that “any person who receives and complies with the terms of any order” issued by the EPA to clean up a contaminated site may “after completion of the required action” petition the President for reimbursement of “the reasonable costs of such action” — “response costs,” as they are called — and if the petition is turned down may, within sixty days, sue the President in federal district court. §§ 9606(b)(2)(A), (B). The petitioner can obtain judicial relief either by proving by a preponderance of the evidence that it is not liable for response costs (and that the costs it incurred for which it seeks reimbursement were not excessive), § 9606(b)(2)(C), or that the particular response action ordered was arbitrary and capricious, or otherwise unlawful. § 9606(b)(2)(D). The district judge dismissed the suit on the ground that Employers Insurance had failed to complete the clean-up ordered by the EPA.
Employers Ins. of Wausau v. Clinton,
In the other suit, Employers Insurance sued the Administrator of the EPA, to whom the President has delegated the task of responding to petitions for reimbursement, contending primarily that the statutory procedures for challenging clean-up orders are constitutionally inadequate. This suit was filed under 28 U.S.C. § 1331 as a “nonstatu-tory” review proceeding (of which more later), an accepted method of challenging the procedures used by an agency.
Marozsan v. United States,
How did it come about that an insurance company was ordered to clean up contaminated land? Employers Insurance had issued a fire insurance policy to the occupant of a building in Michigan. The building caught fire and several electrical transformers were damaged. In a settlement with its insured, Employers Insurance agreed to have certain oils and other fluids drained from the transformers and removed from the insured’s premises. According to the EPA— Employers Insurance denies this — the insurance company arranged for the transportation of some seven hundred gallons of these fluids to an oil recycling facility elsewhere in Michigan. Shortly afterward, the facility was found to be contaminated with PCBs (polychlorinated biphenyls) and VOCs (volatile organic compounds), and the PCB contamination was traced to the fluids that had come from the transformers. The EPA designated Employers Insurance as a potentially responsible party within the meaning of the Act — responsible, that is, for the contamination and hence for cleaning it up — and it ordered the insurance company, along with several other alleged contributors to the contamination of the recycling facility, to participate in the clean-up. After initial resistance, Employers Insurance agreed to participate, and it submitted a plan, which the EPA approved, detailing its participation. Neither the order that the EPA issued, nor the plan of compliance that Employers Insurance submitted, is limited in so many words to the elimination of the PCB contamination. But after Employers Insurance finished that part of the clean-up, it stopped work, claiming that it was not responsible for, and therefore *661 would not clean up, any contamination not caused by PCBs. It petitioned the EPA (nominally the President) for reimbursement of the costs that it had incurred in the cleanup — -an amount in excess of $2 million. The EPA turned the insurance company down (precipitating these two suits) on the ground that the company had not completed the job.
Employers Insurance claims that it is not responsible for
any
of the contamination at the recycling facility, not even the PCB contamination, because it had not, as the EPA thought it had, arranged for the transportation of the noxious fluids, which would have made it a responsible party. § 9607(a)(3);
Amcast Industrial Corp. v. Detrex Corp.,
After Employers Insurance abandoned the clean-up, the EPA stepped in and arranged for the completion .of the job at a cost of several hundred thousand dollars. The agency has not yet tried to recover this expense or any part of it from Employers Insurance. Indeed, there is no reason to think the company was responsible for any of the contamination that it refused to clean up. And it is only responsible parties who are required by the Superfund law to pay the costs of cleaning up contaminated sites. The concern of Employers Insurance is not with the money that the EPA spent to complete the clean-up and might conceivably though improbably seek to recover from the company, but with the $2 million that the company spent and is unable to get reimbursed because it did not complete the job.
Without the provision authorizing suits for reimbursement of response costs, a person potentially responsible for toxic-waste pollution who was served with a clean-up order would have just two choices: comply with the order, or refuse to comply, in which event the EPA could either seek a mandatory injunction against the refuser, § 9606(a), or hire someone to clean up the polluted site at the EPA’s expense and then seek to recover that expense by a suit against the person it had ordered to do the clean-up. § 9613(h)(1). The- defendant would have an opportunity in that suit to put the EPA to its proof that the Superfund law really did require the defendant to clean up the site.
United States v. Princeton Gamma-Tech, Inc.,
The provision for reimbursement trims the horns of this dilemma by offering a party served with a clean-up order a third way.
*662
Id.
at 389 n. 9;
Dico, Inc. v. Diamond,,
But what happens when, as in the present case, a party takes what we are calling the third way but does not complete the cleanup? Completion of the action required by the EPA is an express statutory condition for seeking reimbursement. Does this mean that if for reasons utterly beyond a party's control it fails to complete the clean-up ordered by the agency it forfeits all right to seek reimbursement for expenses that it incurred, even if it turns out that it was never liable under the Superfund law? And even if it turns out, as .here, that the clean-up
has
been completed, albeit by someone else? Cf.
North Shore Gas Co. v. EPA,
We may assume without having to decide that the agency’s refusal to acknowledge the completion of the clean-up is reviewable by the nonstatutory-review route; for while the Superfund law prescribes and explicitly makes exclusive the routes for obtaining judicial review of clean-up orders, § 9613(h), the agency action that we are discussing — a refusal to acknowledge compliance with such an order — is not itself a cleanup order, not quite anyway. Even so, we do not see why such an action could not also be reviewed in a suit for reimbursement. If the party ordered to clean up a contaminated site claims to have completed the work, he has a claim for reimbursement, the reimbursement provision being available to “any person who receives and complies with the terms of any” Superfund clean-up order. § 9606(b)(2)(A). If the EPA turns down the claim on the ground that the clean-up has not been completed (or if completed, not completed by the party ordered to complete it, and therefore the agency’s order was not complied with), the party has a right to sue and the agency can defend by showing that the clean-up has not been completed and thus that a condition of maintaining such a suit has not been fulfilled. The district court will adjudicate this . ground for dismissal exactly as it would do in a separate proceeding to challenge the agency’s refusal to acknowledge the completion of the clean-up. The only difference — because in a suit for reimbursement, as in the ordinary nonstatutory-review proceeding, judicial review is confined to the record compiled in the administrative proceeding, § 9613(j)(l);
First National Bank v. Comptroller of Currency,
A more troublesome case is where the agency takes steps to postpone completion, making it impossible for the party to argue that it has completed the action required of it by the agency. Employers Insurance argues *663 that it complied fully with the clean-up order, which it interprets as being limited to PCB contamination, but that when it finished the EPA told it to do more. Like the miller’s daughter in “Rumpelstiltskin,” the company worries that if it did the more the EPA would find something else for it to do, thus postponing indefinitely the time when it could obtain reimbursement. The EPA’s response (at oral argument, so possibly ill-considered) is that the party can challenge each of the successive orders in a nonstatuto-ry review proceeding. We are surprised by this response. The successive orders would be clean-up orders, and, with exceptions not material to this case, the Superfund law allows these to be challenged only in proceedings by the agency to enforce the order (either by injunction or by a suit to recover the expense of the clean-up or to impose penalties for noncompliance with the clean-up order) or proceedings by the allegedly responsible person to seek reimbursement of the costs incurred in complying with the order. §§ 9613(h)(l)-(3).
Even if a nonstatutory review proceeding were possible, the party’s fight to reimbursement could (in principle anyway) still be delayed indefinitely, each successfully challenged order being succeeded by another order. That cannot have been the intention of the statute’s draftsmen, as we can show by attending carefully to the statutory language. The right of reimbursement extends to “any person who receives and complies with the terms of [any order],” and ripens into a right to petition and to sue “after completion of the required action.” § 9606(b)(2)(A). Obviously “required” means “required by the order.” Once a party completes whatever action is required by the terms of any order, it can seek reimbursement for the costs of that action. The fact that the agency issues another order (which the party is free to ignore if it is willing to run the risk of being made the defendant in an enforcement action) does not diminish the party’s rights to challenge the previous order.
The EPA does not acknowledge having issued a second order, an order that Employers Insurance clean up contamination unrelated to PCBs. It claims that the broader scope was implicit in the original order. The dispute is thus over, the interpretation of the order rather than over the agency’s right to issue successive orders and deny reimbursement until the last one (if there is a last one) is complied with fully. If the EPA is wrong about the meaning of the original order, this means that the order has been complied with fully — the action required by it completed — and Employers Insurance is entitled to proceed with its suit for reimbursement. The interpretive question, like the question whether a party has completed whatever action the agency wanted him to take, is one that the district court can decide in the reimbursement suit — with what weight given to the agency’s view of the matter we shall consider shortly.
The most difficult case is where the party cannot complete the required action for reasons beyond its control. Suppose it simply runs out of money and cannot borrow more.
United States v. Parsons,
Employers Insurance does not argue, however, that it would have been infeasible or unduly burdensome for it to shell out another couple of hundred thousand dollars to complete the clean-up project on which it had already spent in excess of $2 million. It is a large company with thousands of employees, and its annual revenues from premiums exceed $1 billion. It does argue, absurdly as it seems to us, that if it spent $1, or indeed l<t, on cleaning up the contaminated site, it would be entitled to sue for reimbursement of that expense and use the suit as a vehicle for obtaining an adjudication of its claim not to be a responsible party. The terms “compliance” and “completed” in the statute cannot be tortured long or hard enough to yield authorization for such a procedure, which is inspired not by anything in the Superfund law but by the provision for refund suits in the Internal Revenue Code — which anyway requires (with immaterial exceptions) payment in full before the suit is filed.
Flora v. United States,
The most difficult question presented by this ease is whether the EPA is authorized to gut the provision for reimbursement by issuing unreasonably, oppressively broad orders. Suppose the order had required Employers Insurance to clean up the recycling facility and, while it was at it, also to clean up the residual contamination in Chernobyl from the nuclear disaster there in 1986. If the insurance company cleaned up just the recycling facility it would not be complying with the order and if the EPA is right it would never be able to seek reimbursement. Our actual case is less extreme. But according to Employers Insurance, the EPA was completely unreasonable in ordering it (if that is what the agency actually did in the original order — this is the interpretive question that we mentioned) to clean up not only PCB contamination for which it would be responsible if it did arrange for the transportation of the fluids from its insured’s transformers, but also unrelated contamination at the site, for which it could not possibly bear any responsibility.
*665
We imagine that in a case, illustrated by our Chernobyl hypothetical, in which the clean-up order is so grotesquely broad as plainly to exceed the agency’s powers, the party against whom it is directed can comply with the valid part of the order and disregard the rest as void, a nullity, and having complied with the valid part seek reimbursement for the costs of that compliance. An order so completely ultra vires is no order for purposes of deciding whether compliance and completion have been achieved; the valid and the void commands in the order can be separated, and the void discarded. Cf.
DDI Seamless Cylinder International, Inc. v. General Fire Extinguisher Corp.,
But that is not our case. The agency takes the position, which may or may not be correct but is not irrational, that a polluter who wants to take advantage of the reimbursement provision may be required to clean up not only his own mess, as it were, but other messes at the same site. The agency’s position is at least consistent with the design of the reimbursement provision, which is to defer liability issues until after the clean-up is completed — that is, until the reimbursement proceeding.
Kelley v. EPA
This is not to deny that there would be a problem of the tail wagging the dog if the polluter responsible for only a tiny fraction of the contamination of the site were ordered to clean up the whole thing, perhaps because he had the deepest pocket of all the responsible parties. That might begin to approach our Chernobyl hypothetical. It is not the situation here. Employers Insurance was being asked to spend only about 10 percent more to clean up the non-PCB contamination than it had spent to clean up the PCB contamination for which (if it was the arranger) it was indeed a responsible party.
In the suit that names the Administrator of the EPA as the defendant rather than the President, the insurance company argued in the district court that the agency lacks statutory authority to condition reimbursement on the cleaning up of pollution for which the party ordered is not responsible.
Employers Ins. of Wausau v. Clinton, supra,
In any event, the main thrust of the suit against the Administrator was not that the order was overbroad; it was that the Superfund law does not give a party ordered to clean up a toxic-waste site an adequate opportunity to challenge the order. The relief sought was to invalidate the limitations that section 9613(h) places on the possible routes for challenging such orders. Such relief could be obtained only in a suit against the Administrator and therefore the suit is not precluded by those limitations; it is, as we suggested at the outset of this opinion, a proper invocation of nonstatutory review. As such it merely had no merit, while insofar as it sought a declaration that the clean-up order was too broad it strayed outside the permissible bounds of such a suit and was barred by the exclusive-remedies provision.
The company is left to argue that it
did
comply with the order and that the agency is mistaken to think otherwise — the agency has misinterpreted its own order. We must consider first what our standard of review is. The relevant section, § 9606(b)(2)(A) (“any person who receives
and complies
...”), does not say. The two other provisions potentially involved in this case, (C) and (D), imply different standards of review — plenary in (C) (the “preponderance of evidence” provision), deferential in (D) (the “arbitrary and capricious” provision).
Dico, Inc. v. Diamond, supra,
Which makes the case for deference stronger than in
Wagner Seed,
where the majority’s conclusion that the EPA’s interpretation of the meaning of the statutory language “receives and complies” is entitled to deference drew a spirited dissent from Judge Williams.
Id.
at 925. Stronger too than in
Kelley
and
Dico,
which held that no deference is to be given to the EPA’s judgment on whether the person seeking reimbursement is actually liable for response costs. The Superfund law does not give the EPA responsibility for administering the reimbursement provision; it has that responsibility only by virtue of delegation by the President. So it is by no means clear that it was to have authority to interpret the provision — authority to which
Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc.,
■ Employers Insurance points out that the procedure by which the EPA made this determination was not hedged about with the usual safeguards of the adjudicative process, and it argues that the absence of those safeguards justifies a more searching judicial review. The petition for reimbursement was indeed handled informally, by officials who have none of the trappings or protections of judicial officers, ef.
Fishgold v. Sullivan Drydock & Repair Corp.,
But the principles that require judicial deference to administrative findings are not limited to findings made in adjudications. Indeed the broadest deference is given to the findings made in rulemaking proceedings, most of them “informal” in the same sense as the proceeding in this case. See, e.g.,
Morales v. Yeutter,
We conclude that the EPA’s finding that Employers Insurance failed to comply with the clean-up order must be upheld unless it is arbitrary or capricious, or in the equivalent terminology of civil suits unless it is clearly erroneous. And it is not. The order by its terms embraces all hazardous substances at the recycling facility, regardless of the particular type of hazardous substance. No doubt the EPA could have given the order, a narrower reading, interpolating a limitation to hazardous substances for whose presence at the site Employers Insurance was responsible. But it chose not to do so and we cannot say that it acted unreasonably in refusing. We have already pointed to the reasons why the EPA might want to impose on a source of one pollutant the responsibility for cleaning up the entire site that had been contaminated by that pollutant, even if the site had been contaminated by other pollutants as well. So broad an order might or might not be proper, but, Employers Insurance having waived that issue, the only issue left is what the EPA meant. We think it meant, or more precisely could reasonably be understood to have meant, that Employers Insurance could not stop its clean-up efforts when the last of the PCBs was removed. Employers Insurance is therefore entitled to no judicial relief.
AFFIRMED.