## Facts

- R.W. Meyer, Inc. owned industrial property in Cadillac, Michigan and leased it to Northernaire Plating Company for electroplating operations.
- To support the lease arrangement, Meyer constructed a sewer line connecting the premises to the municipal treatment system.
- Northernaire generated hazardous electroplating wastes (including caustic acids, sludges, and cyanide products) and discharged wastes into the sewer line; Northernaire’s pretreatment was inadequate.
- The City revoked Northernaire’s authorization to use the sewer system, and hazardous waste accumulated on-site.
- A defect in the sewer line caused leaks, contributing to contamination and deterioration of the site, which was later abandoned.
- After a child suffered chemical burns while at the site, the Environmental Protection Agency conducted an immediate removal action, including neutralization, removal and disposal of contaminated materials, and decontamination.
- The United States sued under CERCLA § 107(a) to recover response costs, including direct removal costs, prejudgment interest, and indirect/overhead costs (e.g., rent, salaries, and support expenses) allocated to the site through EPA’s cost-allocation methodology.
- The district court granted partial summary judgment, holding Meyer, Northernaire, and Northernaire’s principal jointly and severally liable for the government’s costs, including allocated indirect costs.
- Meyer appealed, challenging the inclusion and support for indirect/overhead costs in the cost-recovery judgment.

## Issues

1. Whether CERCLA § 107(a)(4)(A) permits the United States to recover EPA indirect/overhead costs that are not site-specific but are allocated to a particular removal action.
2. Whether the government adequately supported its claimed response costs (including interest) and whether those costs were “not inconsistent with the national contingency plan.”
3. Whether Meyer’s objections created a genuine issue of material fact precluding summary judgment on the recoverability of the claimed costs.

## Decision

- The Sixth Circuit affirmed the judgment for the United States.
- The court held that CERCLA allows recovery of properly allocated indirect/overhead costs as part of “all costs of removal or remedial action” incurred by the government, so long as they are not inconsistent with the national contingency plan.
- The court upheld EPA’s cost documentation and allocation approach for indirect costs and concluded Meyer did not show inconsistency with the national contingency plan.
- The court concluded summary judgment was proper because Meyer’s challenges did not establish a triable factual dispute over the recoverability of the government’s costs.

## Legal Principles

- Under CERCLA § 107(a)(4)(A), the United States may recover “all costs of removal or remedial action” it incurs, limited by the requirement that the costs be “not inconsistent with the national contingency plan.”
- Recoverable CERCLA response costs may include indirect/overhead expenses necessary to operate the government’s response program (e.g., administrative and support costs) when reasonably allocated to a specific site.
- In a government cost-recovery action, the defendant bears the burden to show that the government’s claimed costs are inconsistent with the national contingency plan.
- Generalized or conclusory objections to cost categories or allocation methods do not create a genuine issue of material fact; detailed government cost submissions may support summary judgment.

## Conclusion

The Sixth Circuit upheld the government’s CERCLA cost-recovery judgment and confirmed that EPA may recover properly allocated indirect/overhead costs, placing the burden on defendants to demonstrate inconsistency with the national contingency plan and permitting summary judgment where that showing is not made.


United States v. R.W. Meyer, Inc., 889 F.2d 1497 (6th Cir. 1989)