Counting the Value of Superfund Cash Out Settlements for

Future Response Actions as Injunctive Relief

Issue

A tentative decision has been made to count the Volume of Contaminated Media Addressed (VCMA) for certain Superfund cash out settlements where the proceeds will go into a special account and will be used to finance future cleanup work at the site (as opposed to being disbursed to other PRPs who are performing the response action). OSRE would also like to count the dollar value of the future work resulting from those cash outs settlements as Injunctive Relief as opposed to Cost Recovery (aka Recovery of Past Response Costs)

Current CCDS Guidance

The current Case Conclusion guidance says that proceeds from cash out settlements placed in Special Accounts for future work should be reported in the Cost Recovery portion of ICIS. However, we believe that the amount of the cash-out going towards future response work should be counted as Injunctive Relief and any amount covering past response costs should be reported as cost recovery. We believe this will allow for consistency between CERCLLIS and ICIS data were in OSRE has historically reported cash of amounts for future response work as “Value of PRP Work to be Performed”, the CERCLIS analog to ICIS’s “Injunctive Relief”

Example

On March 11, 2008, EPA entered into a bankruptcy settlement with W.R. Grace which resolves the 2003 judgment (in 2003, the federal district court in Montana awarded EPA over $54 million for cleanup costs incurred by EPA through Dec. 31, 2001) as well as continuing cleanup costs EPA has incurred since Dec. 31, 2001 and will incur in the future. EPA will place the settlement proceeds into a special account within the Superfund that will be used to finance future cleanup work at the site.

EPA estimates that of the $250 million in settlement proceeds, $59 million is to cover past response costs already incurred by EPA (i.e., cost recovery) and believes that this amount should be recorded in ICIS as Cost Recovery. However, OSRE believe that the remaining $191 million which will be placed into a site-specific special account for future response work at the Libby Montana Superfund Site should be reported as Injunctive Relief in ICIS.

If this is not corrected, the Value of Cost Recovery Reported from ICIS will be $191 million more than the value OSRE reports from CERCLIS.

Contact

Bruce Pumphrey, OECA/OSRE