A Richmond, Va., federal appeals court has restored an environmental consultant's legal fight for $2.7 million in federal funds to cover work at a Superfund cleanup site it managed, rejecting a lower court’s dismissal of its claim over a technicality.
In ordering the federal district court to reconsider the case, the appellate judges in the December ruling dispute the contention that August Mack Environmental Inc. was not entitled to the payment because the firm failed to submit a form that the US Environmental Protection Agency said has not been used in 25 years.
The consultant was hired as supervising contractor by Indianapolis specialty chemical company Vertellus, which was identified as a potentially responsible party for a contaminated 38-acre former coal tar refining site in Fairmont, W. Va., added to the Superfund cleanup list in 2000.
The chemical firm signed a cleanup consent decree with EPA and the state in 2012 to manage cleanup for the site, which has toxics such as lead dust, mercury, and drummed liquid chemical waste. ExxonMobil and CBS Corp. also were parties to the nearly cleanup agreement,
CBS inherited liablity from Westinghouse Electric Corp., which it purchased in 1995, because a former light bulb manufacturing plant disposed of wastes at the site. The cleanup fund totaled about $37 million, according to the court ruling.
The cleanup fell under EPA jurisdiction after Vertellus declared Chapter 11 bankruptcy and stopped work in 2016. EPA specified and approved the cleanup, including a removal design work plan submitted by August Mack. The consultant worked at the site from 2012 to 2016.
Unable to gain a claimed $2.7-million payment from Vertellus, and following rejections also from CBS and ExxonMobil, August Mack requested the money from the Superfund program in 2017, as its authorizing law allows. But regulations require that any claimant planning to recover costs from the federal program must use a certain form to obtain EPA approval before beginning cleanup work.
EPA’s claim denial was upheld by an agency administrative law judge, who agreed August Mack had not obtained proper approval for Superfund payment for remaining site costs, faulted the firm’s failure to submit a specific preauthorization form and said the consultant was not a party to the consent decree.
The federal district court upheld that decision.
“Because August Mack had been hired by Vertellus, it expected to be paid by Vertellus and did not seek preauthorization to be paid out of the Superfund,” an Indianapolis-based attorney for August Mack told ENR.
The appeals court said EPA should consider August Mack’s request of “substantial compliance” with the preauthorization process.
“Put simply, EPA should not arbitrarily fault August Mack for failing to strictly comply with the preauthorization process when EPA itself has declared the required form to be obsolete,” the court said, noting its non-use for more than 25 years. “August Mack could not be required to seek preauthorization in the manner specified,” the court said.
The firm had essentially done what was required for preauthorization, according to its attorney. The district court now will hear the case merits to determine payment eligibility based on completion of work to EPA’s satisfaction.
August Mack Environmental ranks among ENR's Top 200 Environmental Firms, reporting 2019 environmental services revenue of about $24 million.