7th Circuit Approves Vague Injunctions for Site Remediation

September 8, 2009

Litigants in complex site remediation cases face an innate challenge in fashioning a remedy sufficiently detailed to be enforceable yet flexible enough to allow for changes in approach based on new information. Frequently, the litigation focuses on responsibility and not remediation, leaving an inexpert court to draft its own remediation order.

While this inherent uncertainty forces most parties to negotiate an agreed order with an environmental agency, some intrepid parties force a court decision on responsibility that often results in a court-ordered remedy that fails to include the procedural certainties or remedial guidance inherent in environmental agency agreements. While losing defendants then challenge such orders as vague and inconsistent with procedural rules requiring injunctions to be certain and clear, those challenges frequently fail.

The 7th Circuit provided the most recent and graphic example in U.S v. Apex Company, Inc., 2009 WL 2591545 (Aug. 25, 2009). Apex’s predecessor operated one of four refineries around the town of Hartford, Ill., on the Mississippi River just north of St. Louis. Releases from these refineries resulted in a substantial petroleum plume beneath the town, close enough to the surface to cause explosions in several homes. Parties responsible for the three other refineries formed a Hartford Working Group and entered into an agreed remediation order with USEPA.

Apex refused to participate and filed for bankruptcy protection. USEPA then sought an injunction under RCRA, claiming that Apex’s actions caused an imminent and substantial endangerment. The District Court ruled that Apex’s RCRA liability was not dischargeable in bankruptcy, and after a 17-day bench trial, issued an injunction requiring Apex to perform specified remedial tasks under the supervision and approval of the EPA.

In a decision issued Aug. 25, the 7th Circuit upheld the lower court. With respect to the bankruptcy claim, the court agreed with numerous prior decisions that injunctive relief under federal environmental laws could not be discharged as it was not a debt or a claim for money. The court also rejected Apex’s challenge to the injunction order, which Apex claimed was vague and unenforceable. The court freely acknowledged that the order was vague and not exactly consistent with requirements of Section 65(d) of the Federal Rules of Civil Procedure to be clear and certain.

The court held, however, that courts issue “regulatory decrees” to administer school systems and prisons in compliance with Rule 65. The court also held that the lower court did not improperly delegate its authority to supervise compliance with the order since Apex could challenge EPA’s interpretations to the court. The court noted that while Apex had provided no suggestions to make the order less vague, it could not be held in contempt after seeking to clarify or modify portions of the order it considered vague.

Plainly, the lower court faced a difficult task in preparing its order. The other responsible parties were already performing a complex remediation pursuant to an agreed order with EPA. The court could not order Apex to cooperate with or join these parties, nor could it order Apex to pay into the group either in the context of a RCRA claim or in light of the bankruptcy protection. Instead the court ordered Apex to perform many of the tasks to which the other parties had already agreed, apparently in the hope that such draconian action would force Apex to the bargaining table. The 7th Circuit had no desire to second guess the lower court in its handling of this complicated matter.

Yet this appears to be another example of environmental cases making bad law. Rule 65(d) requires certainty in injunctions so that the orders can be enforced and the parties not left constantly returning to court for direction and clarification. The “regulatory decrees” the 7th Circuit cited frequently require long term court supervision and the use of a special master to oversee progress and resolve disputes. In apparently delegating this responsibility to the EPA, the court left Apex with the difficult choice of either following EPA’s dictates or running to court to resolve disputes.

It seems clear that the lower court and 7th Circuit did not want Apex to “profit” by refusing to accept responsibility for the site. Having determined that Apex was responsible for some portion of the releases and not protected by bankruptcy rules from being ordered to perform remedial activities, both courts believed that any difficulties in resolving the injunction were Apex’s problem.

While the 7th Circuit’s opinion provides an insufficient basis to determine the justice of this burden as applied to Apex, there are numerous situations in which such a finding would impose onerous remediation and procedural requirements on defendants of the sort that Rule 65(d) was designed to avoid. While several recent decisions have indicated a more rational approach to remediation litigation under CERCLA and RCRA, this decision is a stark reminder of the risks of that approach.