Are you Type A? CERCLA NRDAR Modifications
Modifications to the CERCLA NRDAR Regulations for Type A Procedures
Authored by: Ryan Stifter, MS
On July 13, the US Department of the Interior (DOI) published its Final Rule modifying the Type A procedures for assessing natural resource damages (NRD) from hazardous substance releases recoverable under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) (see 43 C.F.R. Part 11).
Unlike Type B procedures, which often require extensive, costly, and sometimes controversial field studies and site-specific investigations, Type A procedures simplify damage calculations for smaller claims using standardized formulas and minimal site-specific data. Despite this, Type A procedures are rarely used, if ever. The DOI’s modified Type A procedures are intended to broaden their applicability, a change that is widely believed to streamline the natural resource damage assessment (NRDA) and restoration process, reduce assessment costs, and accelerate natural resource restoration. By the DOI’s estimates, potentially responsible parties (PRPs) would save $13 million to $15 million annually by switching to Type A procedures.
Why have you (likely) never seen Type A procedures used?
Current Type A procedures are impractical for most claims. The authorized damage formulas apply only to releases in coastal, marine, and Great Lakes environments—a small subset of CERCLA sites. In addition, the trustees face greater litigation risk.
While Type B assessments receive the “rebuttable presumption” of correctness in administrative and judicial proceedings, Type A assessments receive that protection only for claims with expected damages of $100,000 or less. Because most CERCLA NRD settlements exceed that threshold, trustees have generally favored Type B procedures.
What are the revised Type A procedures?
The DOI’s major revisions to the Type A procedures include the following:
- At least one PRP must voluntarily agree to their use, enter a tolling agreement for at least one year, and agree to reimburse the trustees’ reasonable assessment costs until the claim is resolved (or the PRP withdraws from voluntary participation).
- Methods “available and appropriate” for damages calculation are expanded to include those determining replacement or restoration of resources or their services, such as habitat or resource equivalency analysis (HEA or REA), recreation loss models, and benefits transfer approaches.
- Type A procedures are applicable to all natural resources in any environment where releases occur (by virtue of eliminating reliance solely on the current geographically restricted damage formulas).
- Claims with expected damages (excluding reasonable assessment costs) of less than $5 million are entitled to the “rebuttable presumption” when calculated using Type A procedures, unless all parties explicitly agree to a higher limit.
What could the DOI’s modifications mean for you?
It is anticipated that the modified Type A procedures will be applicable to significantly more claims—approximately two out of every three cases by DOI’s estimates. Considerations for deciding on engaging in a modified Type A assessment include:
- Accelerated Assessment Periods. Whereas Type B assessments can drag on for years as study after study is drawn up and completed (only to populate the same types of damage models proposed for Type A procedures), foregoing site-specific studies should accelerate the assessment and the necessary pace of engagement between the parties.
- Lower Assessment Costs. Simplified Type A procedures should reduce assessment costs. PRPs must tradeoff funding trustees’ reasonable assessment costs upfront for a shorter period of (presumably) less intensive study, with the cost of obtaining site-specific data and demonstrating that the trustees failed to follow Type B procedures, voiding the “rebuttal presumption.”
- More Art Than Science. Sacrificing primary studies means populating damages models using average data points taken from other claims, scientific literature, and gray literature. HEA and REA and so-called benefits transfer studies are subject to expert judgement. PRPs must scrutinize their applicability to the site and evaluate the tradeoffs of obtaining site-specific data.
- Greater PRP Influence. Engaging in the tolling agreement provides the incentive for PRPs to participate directly in the damages assessment, potentially providing more influence over the assessment and NRD settlement.
As stated above, PRPs would save $13 million to $15 million annually by switching to Type A procedures, as estimated by the DOI; whether the absolute number of active NRD claims increases as a result of the modifications remains to be determined.
What can Roux do to help?
Roux’s economic, ecological, human health, engineering, hydrogeologic, and additional scientific experts bring decades of combined NRDA experience, including assessing and interpreting the use of the simplified damages models that are now codified in the Type A procedures. To get in touch with one of our experts, please fill out the form below.
