THOMPSON, HINE AND FLORYATTORNEYS AT LAW

AKRON. OHO 1100 NATIONAL CITY BANK BUILDING . (216) 3664000BRUSSELS. BELGIUM 829 EUCUD AVENUE FAX (31« 566-3883

CTICINNATL " . CLEVELAND. OfflO 441144070

1993DAYTON. OHIOCANDOR MARYLAND , (216) 566-5817PALM SEACa rLORIDATORONTO. ONTARIOWASHINGTON. D.C.

VIA FEDERAL EXPRESS HAIL

Ms. Karen Kelvin, ChiefSuperfund Removal SectionU.S. Environmental Protection AgencyRemoval Enforcement Section (3HW33)841 Chestnut BuildingPhiladelphia, Pennsylvania 19107

Re: CERCLA Section 106 (a) Order Issued toColumbia Iron & Metal Company for theMetcoa Radiation site, Pulaski,Pennsylvania. Docket No. III-93-Q2-PC

Dear Ms. Kelvin:Columbia Iron & Metal Company ("Columbia

Iron") has received the July 20, 1993 Administrative order("Order") issued by the U.S. Environmental Protection Agency("EPA") under Section 106 (a) of the ComprehensiveEnvironmental 'Response, Compensation, and Liability Act of1980 ("CERCLA"), 42 U.S.C. S 9606 (a), as amended on July 30,1993, for implementation of response activities relating tothe Metcoa Radiation Site ("Site") in Pulaski, Pennsylvania*Pursuant to Section 20.1 of the Order, this letter shallserve as notice that Columbia Iron does x&£, intend to complywith the Order for, among other things, the followingreasons s

Cl) Columbia Iron iff not properly considered to be a- ..T party under the Order?(2) The unilateral issuance of the* Order violates due

. . process,;:.. . ..' ,.(3) The Order does not specify the work to be

, performed by each respondent and improperlyimposes joint and several liability on eachRespondent;

(4) EPA's failure to name additional Respondents tothe Order iff arbitrary and capricious and contraryto EPA policy;

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Ms. Karen MelvinAugust 12, 1993 Page 2

(3) EPA's failure to discuss terms of a settlementwith potential de minimi* parties is unreasonable;

(6) The terms of the Order are unduly burdensome andunreasonable; and

(7) Compliance with the Order would, cause profound:financial hardship for Columbia XtfSn.

Each of these reasons is discussed separately below.I . Columbia Iron Is Not Properly considered to Be a Party

under the Order. ____ ________ • _________

A. To Establish a. Prim* Facie case1 under CERCLAsection lOff(a), EPA Kust Establish the Blements ofLiability under CERCLA section umai. _________

EPA has identified Columbia Iron as one o£the Respondents required to comply with the terms of the „Order'. Order 5 3. lav In order for EPA to establish a. prima.facie case under CERCLA Section 106 (a), it must establishthe elements required by CERCLA Section 107 (a), 42 U.3.C. $9607 (a), and, in addition, show that tha contamination by ahazardous substance poses an "imminent and substantialendangerment" to tha public health, welfare, or theenvironment. See united states v. Bliaa. 667 F. Supp. 1298,1313 (E.D. Mo. 1937); United States v. A & F Materials Co. -

578 F. Supp. 1249, 1257-58 (S.D. 111. 1984).

The elements of a prima facie claim underCE&CXJt Section 107 (a) aret

(1) The defendant ia within one of the four categoriesof "covered persons-; " *

(2) There waa a, "release or threatened, release*9 of, a"hazardous substance;" -.

(3f The plaintiff incurred "response costs;" and"(4X TH* response costs were consistent with, the

National Contingency Plan ("NCP*).» " - -. . '\ .Sea Artesian Water Co. v. government of New Cast la County.659 F. Supp. 1269, 1273-79 (D. Del. 1937), aff'd 851 P.2d643 (3d Cir. 1983) . If these elements are not satisfied,Columbia Iron cannot be a potentially responsible party("PRP") under CERCIA Section 107 (a) and, as a result, EPAwould haver failed ta establish the prima facie elementsunder CERCLA Section 106(a) .

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B« Columbia Iron Is Not Liable Under CERCLA section107(a) and, Therefore, I« Not Required to Complywith the Order.________________________

Assuming, arcmenda. that EPA has satisfiedthe second, third, and fourth elements of CERCLA Section107(a), EPA nonetheless has not satisfied.the requirement ofthe first element that Columbia Iron be withth one of fourcategories of "covered persons." Consequently, ColumbiaIron is not liable under CERCLA section 107(a) and EPA hasfailed to establish the prima facie elements under CERCLASection 106(a) against Columbia Iron.

The four categories of covered persons are:(1) the current, owner or operator of the facility; C2) aperson who owned or pperated the facility during which timethe disposal of a hazardous substance occurred; (3) anyperson who arranged for the disposal, treatment, ortransportation of a hazardous substance that contaminatedthe facility; and (4) any person who accepted for disposal,treatment, or. transportation a hazardous substance thatcontaminated the facility. CERCLA S 107(a)(l)-(4); 42U.S.C. § 9607(a)(l)-(4). Columbia Iron is not and was neverthe owner or operator of the Site; therefore,- Columbia Ironcould not be considered within the first two categories ofcovered persons. CERCLA S i07(a)(1),(2); 42 U.S.C. S9607(a)(1),(2). Similarly, Columbia Iron never accepted fordisposal, treatment, or transportation any hazardoussubstance which may have contaminated the site and, thus,Columbia Iron cannot be classified within the fourthcategory of covered persons. CERCLA S 107(a)(4); 42 U.S.C.S 9607(a>(4).

. The only possible basis for classifyingColumbia Iron as a covered person under CERCLA Section107 (a) would be the third category of persons who arrangedfor the disposal, treatment, or transportation of ahazardous substance which contaminated the Site. CERCLA S19?f«*(3); 42 U.S.C. S 9fi07(a)(3>.. However, Columbia Ironis not*within this category for two"reasons: (1) thematerials which Columbia Iron sold to The Pesses Co.("Pesses*) were not "hazardous substances* and (2) thetransactions between Columbia Iron and Pesses involved thesale of valuable produces and did not constitute the"disposal" or "arranging for" the disposal of hazardoussubstances. , ,- , .' ,,.. ' .

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1. The Materials Which Columbia iron sold toPesses Were Not "Hazardous substances" UnderCZRCLA.____________;______________________

Columbia is a dealer or broker in scrapmetala* and made' or brokered sales of metals, to Passes titOhio. Pesses, and its affiliate Metcoa, were? in thebusiness of processing and/or brokering matais and alloys*Metcoa operated a secondary metal smelting operation at theSite. Scrap metal containing varying quantities of a givenmetal were an essential requirement of Pesses' business, arequirement which Columbia Iron, among many others,supplied. Columbia Iron's only dealings with Pessesinvolved a supplier relationship.

Section 101(14) of' CERCLA defines "hazardoussubstance" as a substance which has been designatedhazardous or toxic under CERCLA Section 102 or one of thefollowing statutes: (1) Clean Water Act Sections 307 or311, 33 U.S.C. s 1317, 1321; (2) Resource conservation and-Recovery. Act of 137& ("BCS*."}- Section 3001, 4i U.SiC.- 56921T (a) Clean Air Act Section 11*,, 4Z U.s»c*. £ 74l2';4 or(4) Toxic Substances control Act ("TSCA") Section 7, 15U.S.C. $ 2606. Ssa CERCLA S 101(14); 42 U.S.C. $ 9601(14).The list of hazardous substances identified by EPA pursuantto CERCLA Section 102 is merely a compilation of substancesdesignated as hazardous or toxic under these other statutes*See United States v. Alcan Alu^inMffl Corp.. 753 F. Supp. 531,537 (N.O.N.Y. 1991), aff'd in part, rav'd in part on othergrounds 990 F.2d 711 (2d Cir. 1993) .

The materials which Columbia Iron sold toPesses generally contained nickel, cadmium, magnesium,molybdenum, cobalt, copper, bronze and other likesubstances. These substances potentially implicate only twoof the above statutory provisions: RCRA Section 3001 andClean. Water Act Section 307;;, however, a review of theseprovisions demonstrates- that the material which- ColumbiaIroir-sg£d to Pesses is not a hazardous substance undereither o5 these- provisions. - • -

• a. The Material Which Columbia Iron Sold toPesses Was Not a RCRA "Hazardous Waste."

RCRA Section 3001 establishes a process bywhich substances can be identified and listed as a"hazardous waste.." 42 U.S.C. $ 6921. under RCRA, before amaterial can ba classified as a "hazardous waste," it mustfirst fall within the definition of "solid waste." RCRA 51004(5), 42 U.S.C. $6903(3)? sea 40 C.F.R. $ 26l.3(a)(1992) > RCRA; Section 1004(27} define* "solid waste* a» "any v.

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rHOMPSON, HINE AND FLORY

Ms. Karen Melyin £V^:August 12, 1993 ; r; page 5

garbage, refuse, sludge . . . and other discarded material .. . ." 42 U.S.C. S 6903(27); £££ 40 CiF.R. S 261.2(a)(l)(1992). The materials which Columbia: Iron sold to Pesseswere not "discarded,1* and thus not "solid waste" or"hazardous waste* * '

- . v , * -

Three decisions are instructive to the abovedetermination. In American Mining Congress TT. EPA. 824 F.2d1177, 1190 (D.C.1' Cir. 1987) f AMC II , the court held that theterm "discarded materials" under RCRA was meant to apply toitems "that are truly discarded, disposed of, thrown away orabandoned" and thus did not include recyclables. In a latercase involving the same parties, the same court concludedthat the fact that a material may eventually be recycleddoes not prevent the material from being considereddiscarded. American Mining Congress v. EPA. 907 F.2d 1179,1185-87 (D.C. Cir. 1990) ( AMC III . However, AMC.II foundthat the storage of the materials at issue in anticipationof recycling was "discarding" because those materials were"part of the waste disposal problem." AMC n, 907 F.2d at-:1186-87* In American Petroleum Institute v. EPA. 9Q6 F.2d729, 741-42 (D.C. Cir. 1990) (&EI) , the same court held thatK061 waste (electric furnace dust) did not lose its statusas solid and hazardous waste when it reached a metalreclamation facility.

; - . - . _ . : - - - • - • = . . . - . -When the facts of the above cases are

compared to Columbia Iron's current situation, it is clearthat Columbia Iron did not "discard" its materials. First,unlike the situation in &£I, scrap metal is specificallyexcepted from the RCRA regulations. See 40 C.F.R. S261.6(a) (3) (iv) (1992). Therefore, unlike K061, scrapmetal is not a RCRA waste that would have to be"rehabilitated" by future reclamation. Second, the K061waste in AEI was sent to the reclamation facility as part ofa mandatory waste treatment plan. API. 906 F.2d at 741.This had the effect of turning reclamation into a method ofdisposal. On the other hand, Columbia iron's transactionswere^ in the normal course of its business and were not analternative to disposal.. ' - - ' " . • • . • . t •

Columbia Iron's situation also isdistinguishable from that tn AMC TT. Colombia Iron'smaterials were not collected in anticipation of someuncertain possibility of recycling or reclamation. Rather,they were obtained and sold by Columbia Iron as a product.If any storage in anticipation of reclamation occurred, itoccurred under the control and direction of Pesses or itsaffiliates, after Columbia Iron had sold the materials.Therefore, any "discarding" was the action of Pesses and/orits affiliates, and hot of Columbia Iron. Consequently, at

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the time the materials left the control of Columbia Iron,they had not been discarded, and thus were not solid orhazardous waste- under RCRA. -

b. The Materials Which Columbia Iron Soldto Pesses Were Hot "Toxia Pollutants"under the Clean Water Act._________

Certain of the elements present in thematerials sold by Columbia Iron to Pesses are listed as"toxic pollutants" under Section 307 of the Clean Water Act,33 U.S.C. S 1317. However, as solid pieces of metal, thescrap materials sold to Pesses are stable and could notcontribute to the release or threatened release of hazardoussubstances at the Site.

EPA's own regulations confirm thisconclusion. Pursuant to CERCLA Section 102, 42 U.S.C. S9602, EPA has promulgated mandatory reporting requirementsfor releases of quantities of hazardous substances. See- 4<&C.P.R. S 302*4 (1992),. The basis.'for this, requirement is .>that such releases may present a substantial danger to thepublic health or welfare or the environment. Significantly, -the regulations provide that the release solid particles ofcadmium, chromium, copper, and nickel need not be reportedif "the mean diameter of the particles released is larger \. ;than 100 micrometers (0.004 inches)." 40 C.F.R. S 302.6(d) "(1992).

The scrap metal sold by Columbia Iron toPesses was many times larger than the maximum reportablesize, which means that EPA has determined that such, scrapdoes not present a danger to public health or welfare or theenvironment* Therefore, the materials sold by Columbia Iron.to Pessea do not fall under any of CERCLA's definitions ofhazardous substances, and those transactions cannot giverise to CERCLA liability. -

^ -?• Columbia iron's Transactions with Pesses Did— not Constitute the Disposal or Arranging for ,

the Disposal of Hazardous Substances*Even if the materials which Columbia Iron

sold to Pesses were found to be "hazardous,* Columbia Ironstill would not be liable under Section 107 (a) of CERCLAbecause it did not "dispose," or "arrange for the disposal"of these materials. , . •

There exists a substantial body of case lawholding that the seller or supplier of a product, even aproduct containing hazardous substances, is not liable under

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Ms* Karen Me ly in 1(f >August 12, 19$3 ;'-K*.. t Page 7

CERCLA. as having disposed or arranged for the disposal or ofhazardous substances, see. c.q.r ftM int'l. Inc. v.International Forcing EouiP. Corp >. 9fl2 F^2d 989. 998*99(6th Cir. 1993); Davton Independent School District v. U.S.Mineral Products Co.. 906 F.2d 1059, 1065-66 (5th Cir.1990); United States v. Peterson Sand and Gravel. Inc.. 806F. Supp. 1346 (N.D. 111. 1992) ("seller liability for thelater misuse by the buyer of useful but hazardousingredients in a manufacturing process was not intended byCERCLA' s authors; such liability vould chill permissiblemanufacturing"! i Kellev v. Arco Industries Corp.. 739 F.Supp. 354, 360-61 (N.D. Mich. 1990); Prudential InsuranceCo. v. U.S. Gvpstin Co.. 711 F. Supp. 1244, 1253-54 (D.N.J.1989); Edward Hinea LMfflfrfT Co. v. Vulcan Materials Co.. 685F. Supp. 651, 655-56 (N.D. 111. 1988), £££!df 861 F'2d 155(7th Cir. X988rr united States v. Westinohouse. 22 Env'tRep. Cas, (BNA) 1230, 1233 (S.O* Ind. 1983). These casesdemonstrate that where a product is sold in an arms-lengthtransaction for use in another company's manufacturingprocesses, disposal has not occurred. * .

. In AH Tftt*lv 982 >*2d at 989-99, the SixthCircuit held that the vendor of property and chemicals onthe property was not liable under CERCLA for arranging forthe disposal of the chemicals, which were released into theenvironment when the purchaser let the property deteriorate.The court noted that the chemicals were useful and hadvalue, and that the vendor intended for the chemicals to beused for the manufacturing purposes for which they had beenbought. Id. at 999. As with the vendor in AM Intl.Columbia iron sold a valuable and useful product. Followingthe reasoning of AM int'l. Columbia Iron's sale ot usefulscrap metal to Peases was not arranging for the disposal ofhazardous substances .

Courts also have examined the purpose behindthe transaction as proof of whether the seller was engagedin the- sale- oC a product or in disposal. In Edward HinesLuafcejT* the cpurt stated-that "(t]he crucial inquiry for, __identifying/* responsible parties under [Section 107 (a) ] isthe reason for the transaction in the hazardous substance."685 F Supp at 655, n.3. In that case, the seller hadsupplied creosote for use in the buyer's wood treatmentprocess, and the court held that the seller was notattempting to dispose of its own waste, but rather was thesupplier of a product. I£. at 656.

Cases imposing liability for the sale ofwaste oil are distinguishable from the line of cases citedabove, and do not alter the conclusion that Columbia Iron

v . was a supplier of a product and not a disposer* The

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Ms. Karen MelvinAugust. 12, 1993 Page 8

determination in New York v. General Electric Co.. 592 P. V JSupp. 291, 297 (N.D.N.Y. 1984), that the supplier of waste - ^oil could be considered to- have- arranged for tha disposal ofa hazardous substance was based.on findings that themotivation for the transactions was the disposal of thewaste* oil generated as a by-product or the. sailer'soperations. .

Columbia Iron's motivation for its sale ofmaterials to Peases clearly was not the disposal of thesematerials. As a broker/dealer, such sales were its normalbusiness. It only acquired the materials to resell then,and did not generate the materials as "waste*1* In GeneralElectric. the waste oil was created by General Electric'smanufacturing process, and. disposal was a need. Also,General Electric knew that its buyer intended to spray thewaste oil on a drag-racing track as a dust suppressant; itknew that it was arranging for disposal. On the other hand,Columbia Iron was supplying a product that it believed wasto be used in the buyer's business processes. Any .incidental disposal through the process of Peases at Matcoawas- unforeseeable by, and not the responsibility of,Columbia Iron. *

.Thus, even if a portion of the materials sold

by Columbia iron to Pesses are found to be "hazardous \jsubstances" under CERCLA, Columbia did not dispose of orarrange for the disposal of those substances, and thereforeis not liable under Section 107 (a) (3) of CERCLA* As such,Columbia Iron is not properly subject to the order underCERCLA Section 106(a).

n. The unilateral Issuance of the order violates DueProcess._________________;___ • ____^_

__ EPA's unilateral issuance of the Order underCERCLA Section 106(a) violated the due. process clause oi, thefifth, amendment o£ the Constitution because EPA has notprovMuHl Columbia iron with a. meaningful, opportunity tocontest the Order. In Mathewa v. Bldridae. 424 0.3, 319,349 (1976) the Supreme court developed a three-part test for *protecting; procedural due process rights* The Matfaewa testrequire* an evaluation oft (1) the private interest atstake, (2) the risk of erroneous deprivation of thisinterest through existing procedures and the value ofaddition procedural safeguards, and (3) the government'sinterest at stake. Id.

" . Columbia Iron's interest at stake is itsability ta be protected from the arbitrary and unfoundeddetermination of liability and the assessment of clean up- v

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Ms. Karen Kelvin ' <ri-vr ' 'August 12, 199*3 rfvfcy;. Page 9

costs. The government's interest is in facilitating theprompt clean up of sites contaminated with hazardoussubstances and holding those parties responsible for thecontamination liable for the clean up costs. See ArtesianWater. 659 F. $upp* at 12.77-

Columbia Iron asserts that-it is not liableunder CERCLA/but the procedure followed by "EPA in issuingthe Order provided no opportunity for Columbia Iron and theother Respondents to be heard prior to the finding of"liability." Section 21.1 of the Order states thatRespondents may confer with EPA to discuss "sufficientcause" defenses to the Order, but then explains that such aconference would not be an adversarial hearing or part of aproceeding to challenge the Order* The meeting which EPAattorney Ks. Kathleen Root held on July 29, 199? after theeffective date of the Order with some of the Respondentsdoes not cure the due process violation because the meetingdid not enable the Respondents to challenge the finding ofCERCLA liability.

On the basis of the ffathews factors, dueprocess required EPA, at a minimum, to provide a hearingprior to the effective date of the Order to address claimsof non-liability under CERCLA. EPA did not provide such ahearing and, thus, violated Columbia Iron's due processrights.

III. The Order Does Not Specify the Work to Be Performed byEach Respondent and improperly Imposes Joint andSeveral Liability on Bach Respondent* - __________

. The Order improperly attempts to impose jointand several'liability on the Respondents for the cleanup ofthe Site. In United States v. Strinafellow. 20 Env't Rep.Cas. (BNA) 1905, 1910 (C.O. Cal. 1984), the court held thatan order issued under CERCLA Section 106 (a) mustspecifically identify the response actions to be taken byeachireoApient of• the order:

Insofar as [EPA] may intend to ask the Court to, compel certain actions on the part of defendants,i.e.* not merely to restrain all defendants but toforce the undertaking of positive steps, the Court

' concludes that such orders would have to statewith specificity the steps to be taken and theparty to take them. If steps were ordered to betaken jointly, the Court would have to prescribethe participation of each defendant. . . . In sum,the Court sees no role under section 106(a) of

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CERCLA for what plaintiffs describe as "joint andseveral liability to abate."

Tha Order issued to Columbia Iron and theother Respondents asserts that the Respondents, are jointlyand severally liable for carrying out its provisions. OrderSS 4.7, 6.3. The Order makes no attempt to identify thespecific actions to be taken by particular Respondents. Inthe context of CERCLA Section 107(a) actions, courts —including the Third Circuit — repeatedly have recognizedthe right of CERCLA defendants to demonstrate that theenvironmental contamination caused by one defendant's wasteis divisible from the other contamination at a site. See.a.q.. United States v. Alcan Aluminum C?n?i r 9 0 P.2d 711,723 (2d Cir. 1993); United States v. Alcan AlUlBJn^ffl P?TT- *964 F.2<3 252, 269-70 (3d Cirv 19»2Vr. United State* viMonsanto Co.. 358 F.2d 160, 171-72 (4th Cir. 1988), cert.denied 490 U.S. 1106 (1939); Q'Nail v. Pieillo. 333 F.2d176, 173-79 (1st Cir. 1989), cert, denied sub noa. AmericanCyanamid Co. v. O'Nail- 493 U.S. 1071 (1990); United Statesv- S-trinqfallow. 661 F. Supp. 1053, 106tt -(.C.D., Cal. 1937).<However, the Order' provides the- Respondents with, no such :opportunity to demonstrate that the environmental Tcontamination which: may be attributable- to their material isdivisible from other contamination at the Site.

The May 8, 1992 Management Options/AnalysisReport ("MO/AR") of the Site identifies specific areas ofradioactive and non-radioactive contamination, sea, a.er..MO/AR, Figure 3-4. At a minimum, the Order should have madea distinction between responsibility for the radioactivecontamination and responsibility for the non-radioactivecontamination. EPA's failure to make such a distinction isan effort to impose "joint and several liability to abate"and, therefore, is not a valid exercise of its authorityunder: CERCLA Section 106(a).IT. BPX'e- Failure to Ham Additional Bespoadent* to the

order-l» Arbitran ind Capricious and Contrary to BPA.**1 —— _ » * • ' • • •- ^ -W- . - - t, ^ • _n^» ^ 1Policy. _____m______ •

: The Order, falls, to name as Respondents otherparties* which are similarly situated to Columbia Iron. ASTsuch, the Order is arbitrary and capricious and contrary toEPA's own policy. EPA guidance for the issuance of CERCLASection 106(a) orders directs EPA to issue such orders,where otherwise appropriate, to the largest number of.parties possible* See Guidance of CERCLA < 106 falUnilateral Administrative Qrdera for Remedial Pesiort andRemedial AetJQqr OSHE& Directive 9833.0-la (March 7, 1990),

ISw

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Ms. Karen MelvinAugust 12, 1993 , Page 11

In addition to the named Respondents, thereare numerous other parties that have been identified aspotentially responsible parties with respect ta the siteeither as (l) Respondents to EPA's August 17, 1990 Section106 (a) order requiring response actions to be talcen at theSite, or (2) defendants or third-party defendants in thecivil action regarding the cleanup of the. Site. See Section106 faV Order. Docket No. III-90-32-DC (Aug. T7, 1990);United States v. Peases. CA No. 90-0654 (W.D.Pa.). EPA'sfailure to name these other parties as Respondents isarbitrary and capricious and contrary to it own expressguidance*V* CFA's Failure to Discuss Terms of a settlement with

Potential Be Hinlmia Parties Is Unreasonable. _____

Under CERCLA Section 122 (a) , , EPA has theauthority to enter into a settlement with Columbia and theother Respondents which would protect the Respondents fromcontribution claims brought under CERCLA Sections 107 or 113by .other PRBsv See CERCLA S 122(a>; 42 U.S. C. $ 9622 (a) . iIn CERCLA Section 122 (m) , Congress directed EPA to enter rinto such settlements that are in the public interest andconsistent with the National Contingency Plan "in order toexpedite effective remedial actions and minimizelitigation." CERCLA $ 122 (a), 42 U.S.C. $ 9622(a); 333.United States v. Vertae Chem. Corp.. 756 F. Supp. 1215, 1218(E.D. Ark. 1991) ("the public policy favoring settlements isreflected in . . . CERCLA"), aff'd United States v.Herenlga. Inc. . 961 F.2d 796 (8th Cir. 1992). Settlementsunder CERCLA Section 122 (a) also are consistent with thegeneral federal policy favoring settlements* New York v.Exxon Corp.. 697 F. Supp. 677, 692-93 (S.D.N.Y. 1988) .

, . By refusing to entertain the of f er ofColumbia Iron and other Respondents to negotiate asettlement with, respect to the cleanup of the Site prior tothe effective- data of the Order, EPA is undermining thecla2OR.congreflsJ.onal directive supporting such settlements*Furtfiermore by refusing to consider allocation 'issues, EPAis iaqpadino/ remedial action at the Site -and fostering aclimatai that encourages litigation among the Respondents.Thus, EPA' & actions contravene the purposes of CERCLASection 122 (a). ,VI. The Terms of the Order Are Unduly Burdensome and

a a If OB.

The Order imposes an unduly abbreviatedtimeframes for performing- certain work required by theOrder. For example, Section 8.2, as amended, requires the

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Ms. Karen MelvinAugust. 12, 1993 Pag* 12

Respondents to notify EPA within twenty business days of theeffective date of the Order of the identity of thecontractor, subcontractor, supervisory personnel, and otherpersons who will be primarily responsible for developing theResponse Action Plan ("RAP"), similarly* Section 3.4a., as.amended, requires* the- Respondents to. submit the RAP to EPAwithin thirty days of the effective date of £Jie Order.Given 'the magnitude and complexity of the work required bythe order, the Respondents, particularly a small companysuch as Columbia Iron with limited resources, could notpossibly comply with this schedule.

VII* compliance with the order would cans* ProfoundFina hip fog ColM>**is Iron.

Even if Columbia Iron were a proper party to.the order (which it is not) , compliance with the order wouldresult in financial consequences that would destroy thecompany. Based on information contained in the MO/AB, the?cost of compliance with the Order would be between $1.9 antl$4 million* An expenditure of this level would: deptleta fColumbia Iron's resources* As a small, local business* 4Columbia Iron cannot reasonably be expected to, and will fnot, commit to such an expenditure*Till. Columbia iron Has "Sufficient cause" to Refuse to

Comolv with the- ord«g. ___ _

A party may refuse to comply with a SectionI06(a) order provided it has "sufficient causa." CERCLA 5106(b); 42 U.3.C. $ 9606 (b). The term "sufficient cause" isnot defined in CERCLA*. United States v. teearreaux* 1991U.S. Dist LEXIS 19273 (D.H.J. July 30r 1991), at 23*However, "sufficient cause* merely requires that a partysubject to a Section 105 (a) have an objectively reasonablebasis for believing that the order vasv invalid orinapplicable* to* it. Solid State Circuits. Tno. v. EPA. ai2F.2& 383* 39& (1987) . Thus, the ten "sufficient cause"

esv "defenses such as the def ens* that the personsubject of the [Section 106] order was not the

partjRyesponsibl* under the act for the release of th*hazardbtUB substance*.* teearreauxv 1991 Ov 3., Dist. LEXIS ,1927T, att 25. , citing Wacmer Slee. Corp* v. Thomas* 612 P.Supp. 735, 74S (D. Ran. 1935). For. the- reasons enumeratedabove, Columbia Iron has "sufficient, cause* under CERCLASection 106 (b) for refusing to comply with, the order.IX* Conclusion*

This1 letter is not intended to provide anexhaustive list of the- -bases for Columbia Iron's refusal to

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Ms . Karen MelvinAugust 12, 1993 Page 13

' . . .

comply with the Order; rather, it is intended to demonstratethat Columbia Iron has sufficient cause under CERCLA Section106 (b) to refuse to comply with the Order*

Although Columbia Iron is not properly aparty under the Order, Columbia Iron remains very interestedin discussing with EFA the possibility of .participating in ade minimis settlement pursuant to CERCLA Section 122, 42U.S.C. S 9622. Columbia Iron believes that such asettlement would be in its best interests and in the bestinterests of EPA. On August 13, 1993, a letter should besent to Ms. Kathleen Root of EPA and Ms. Lynn Penman of theU.S. Department from several companies, including ColumbiaIron, which proposes a settlement for these companies as deminimis parties at the Site.

Columbia Iron will continue to pursue thepossibility of a de minimis settlement with EPA. Pleasecontact me directly to discuss further the possibility of ade minimis settlement. ,

' • > . - " ' * - - • . . • ' ? •sincerely,

Christopher D. Knopf

cc: Michael A. Cyphert, Esq. . :. Mr. Ronald BoneKathleen Root, Esq. (via Federal Express Kail)

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