Cleanup Enforcement

EPA's cost recovery process involves

• Documenting the costs,
• Evaluating the factors for pursing recovery of those costs,
• Notifying parties of the costs and demanding repayment, and
• Negotiating a payment agreement.

Documentation

When EPA uses Superfund money for work at a site (or relating to a site), the Agency must document all its cleanup costs, including direct expenses (e.g., salary and contractual) and indirect expenses (e.g., overhead). In order to successfully recover these costs, they must be properly documented. For example, costs related to any work performed by contractors must indicate that the work was authorized and completed. Further, cost documentation must prove that the costs were actually incurred and paid for by the government.

Case Evaluation

EPA decides to pursue cost recovery based on several factors, such as:

• Strength of liability evidence,
• Financial strength of potentially responsible parties (PRPs),
• The amount of money to be recovered.

Notifying/Demand for Payment

As a matter of policy, EPA sends a written demand letter to PRPs prior to filing a cost recovery lawsuit. The demand letter requests that the PRPs reimburse the Superfund Trust Fund for a specified amount and triggers the accrual of prejudgement interest on the costs sought by EPA.

Negotiating a Settlement/Suing for Costs

PRPs will generally attempt to negotiate the extent of their liability for the cleanup costs owed to EPA. If a PRP agrees to reimburse EPA for its costs, the resulting settlement may be documented in a judicial consent decree or in an administrative settlement.

If a PRP refuses to reimburse EPA for its costs or if a settlement agreement cannot be reached, the Department of Justice (DOJ) will file a cost recovery action in court. During the course of a cost recovery action, EPA periodically updates the amount it is seeking. Cost recovery adjustments include:

• Additional cleanup work conducted by EPA,
• Legal costs incurred by EPA and DOJ, and
• The interest accrued on the amount sought.

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