This post was authored by summer associate Kelly Hanna.

In Daikin Applied Americas, Inc. v. EPA, the D.C. Circuit Court of Appeals sided with the U.S. Environmental Protection Agency (“EPA”) by holding that a groundwater plume can be listed as a Superfund Site on the National Priorities List (“NPL”) pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”), 42 U.S.C. § 9601 et seq., even if the sources of contamination are not clearly identified. No. 20-1479, 2022 WL 2565083 (D.C. Cir. July 8, 2022). The Court also held that substantial evidence exists to support aquifer interconnectivity so long as observed releases occur at each aquifer. Thus, EPA’s decision to list a “groundwater plume with no identified source” that spanned multiple aquifers in an area southwest of Minneapolis, Minnesota on the NPL survived both arbitrary and capricious and substantial evidence challenges.

In the early 1990’s, the Minnesota Department of Health detected chlorinated volatile organic compounds (“CVOCs”) in the groundwater of Edina and St. Louis Park. In 2004, the Minnesota Pollution Control Agency’s (“MPCA”) discovered CVOCs in four aquifers: the Quaternary Drift Aquifer, the Platteville-Glenwood Aquifer, the St. Peter Aquifer, and the Prairie du Chien-Jordan Aquifer. After further investigation, in 2019, EPA proposed to list the area on the NPL as the “Highway 100 and County Road 3 Groundwater Plume Site” with the boundaries defined according to the observed releases in municipal water wells in Edina and St. Louis Park. EPA did not identify a source property or properties because the observed releases could not “reasonably be attributed to one or more specific sources” due to the co-mingled nature of the releases from multiple sources.

EPA finalized the Site listing on September 3, 2020. Petitioners, Daikin Applied Americas Inc. and Super Radiator Coils LP, former owners of a metal fabricating facility that is a possible source of the contaminants, challenged the listing in the D.C. Circuit and made two primary assertions: (1) the EPA acted arbitrarily and capriciously in defining the site by ignoring possible sources of contamination; and (2) substantial evidence did not support aquifer interconnectivity. They also filed a motion to supplement the record with extra-record evidence. The Court found each argument to be without merit and dismissed the motion for supplementation.

The Court began its opinion by walking through the relevant portions of CERCLA. Pursuant to CERCLA § 9605, EPA maintains the NPL to document hazardous waste sites that are high priorities for long-term federal remediation and response. To determine whether a site should be place on the NPL, EPA scores potential sites according to the Hazard Ranking System (“HRS”).  Among other things, the HRS examines possible migration pathways (such as air, soil, surface water, and groundwater) to score a site, which becomes eligible for listing on the NPL if the score is over 28.50.  Pursuant to HRS regulations, where there is a groundwater plume whose original sources cannot be reasonably identified, the plume itself may be considered the source.  Finally, HRS allows for the combination of multiple aquifers into a “single hydraulic unit for scoring purposes if aquafer interconnections can be established.”

The Court then first addressed Petitioners’ claim that the EPA ignored possible sources of contamination. The Court held that Petitioners were mistaken in this argument for three reasons. First, EPA properly abided by HRS procedures in its characterization of the Site as a groundwater plume with no identified source. Second, no HRS requirement requires EPA to exhaust all investigative avenues to identify sources as such a mandate would contradict the purpose of the NPL and HRS to quickly and inexpensively identify sites that warrant further action under CERCLA. Third, the Court held that the EPA did not arbitrarily ignore Petitioners’ comments on the proposed listing regarding other plausible sources of contamination; in fact, EPA acknowledged the comments and noted that additional characterization would be needed to delineate the plume and attribute release(s) to one or more specific facilities. Accordingly, the Court held that “[l]isting does not set the Site boundaries in stone. As more information becomes available in the remedial investigation/feasibility study stage, the EPA may expand (or contract) the Site.”

The Petitioners’ second argument, that substantial evidence did not support interconnectivity between the four aquifers, rested on the assertion that the EPA utilized flawed chemical analyses and cherry-picked sampling wells to establish observed releases in each aquifer. The Court held that Petitioners simply misread the EPA’s chart and, moreover, there was no guidence requiring EPA to select specific wells for sampling so long as observed releases are seen in each aquifer using any selection of background wells within the distances required by CERCLA.  Additionally, the Court held that EPA properly established interconnectivity of aquifers through observed releases.

Finally, the Court denied the Petitioners’ motion to supplement the record with extra-record evidence because the Petitioners did not demonstrate the existence of any “unusual circumstances,” such as the agency’s affirmative exclusion of relevant evidence or the agency’s questionable procedural validity, to warrant supplementation. More specifically, the Court held that any exclusion was harmless to the outcome. 

The D.C. Circuit’s holding establishes EPA’s ability to list contaminated groundwater sites on the NPL without knowing the specific source of the groundwater’s contamination. The Court’s reasoning rests on the premise that listing is an initial step in the remediation process; therefore, more information about sources will become known as the process progresses. Moreover, the Court’s holding also illustrates the deference that is given to EPA’s determinations to support a listing, and here specifically, the relative ease of establishing aquifer interconnectivity. Thus, the holding may restrict future challenges based on arbitrary and capricious or substantial evidence standards of review to groundwater listings.

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