Full opinion text
Table of Contents Page I.FINDINGS OF FACT. 939 A. The Parties. 939 B. The Property. 939 C. Plant History. 939 1. Ownership . 939 2. Manufacturing. 940 3. Waste Treatment. 941 4. Location of Site Facilities. 942 D. Contamination Overview. 942 1. Sampling. 942 2. Contaminants. 943 E. Remediation by Hateo. 943 1. DEP Involvement at the Fords Property. 944 2. The PA Disposal Area. 944 a. The Manufacturing of Phthalic Anhydride. 944 b. Disposal of the PA and Naphthalene Still Bottoms. 945 c. Investigation, Sampling and Testing of the PA Disposal Area 946 d. The Decision to Excavate. 947 (1) Assessment . 947 (2) The Need for a Response Action. 948 (3) The Potential Sale to Exxon . 949 Page (4) The EPA Land Ban of K024. 949 (5) Alternatives and Costs. 950 (6) The Excavation. 950 3. Project 50 . 951 a. Television Camera Inspection of Hatco’s Sewer System. 952 b. The Ester I and West Road Sewer Lines . 953 c. Isolation and Capping of the Lagoons. 953 d. Elimination of Ester II Swale Discharge. 954 e. Ester I Tank Farm Construction Projects . 954 4. Project 51 . 955 F. Response Costs Incurred by Hateo. 956 1. Cleanup of the PA Disposal Area. 956 2. Project 50 . 956 3. Project 51 . 956 4. Groundwater Monitoring: 1982-86. 957 5. Laboratory Work: 1991-93 . 957 6. Disposal of PCB-Contaminated Waste. 957 7. Cleanup of M Tanks. 957 8. Management Time and Attorneys’ Fees. 958 9. DRAI Fees. 958 II.CONCLUSIONS OF LAW. 960 A. Count I — Hatco’s Claim Under CERCLA 1. Elements of Hatco’s Prima Facie Case. 960 2. The NCP. 960 a. Removal or Remedial Actions?. 961 b. The PA Response Action. 963 (1) Motives and Intent. 963 (2) Questions of Compliance — 1985 NCP Removal Provisions 964 (A) Propriety of a Removal Action — Assessment. 964 (B) Alternatives and Costs. 966 (C) Community Relations, ARARs and Cost Documentation 968 c. Projects 50 and 51. 969 3. Necessary Response Costs. 970 B. Count Four — Hatco’s Claim for Contribution Under the New Jersey Spill Act. 972 C. Alocation of Response Costs. 972 1. PA Response Action. 973 2. Project 50 . 973 a. Replacement of Ester I and West Road Sewer Lines. 974 b. Television Camera Inspection of the Sewer System. 974 e. Isolation and Capping of the Lagoons. 975 d. Diverting Ester II Swale Discharge from the East Lagoon to the EPT Plant. 975 e. Ester I Tank Farm Construction Projects . 975 3. Project 51 . 975 4. Groundwater Monitoring: 1982-86. 976 5. Laboratory Work: 1991-93 . 976 6. Disposal of PCB-Contaminated Waste. 977 7. Cleanup of M Tanks. 978 8. Management Time and Attorneys’ Fees. 978 9. DRAI Fees. 978 D. Prejudgment Interest. 979 E. Punitive Damages. 980 III.RETAINING JURISDICTION 980 WOLIN, District Judge. INTRODUCTION The dawn of reckoning has arrived. After nearly five years, six opinions, two trials, reams of trial and deposition testimony, and thousands of exhibits, the Court enters the long awaited damages phase in this complex environmental litigation arising from prolonged hazardous waste discharges at an industrial property located in Fords, New Jersey (the “Fords property”). While this Opinion undertakes the first allocation of damages between plaintiff Hateo Corporation (“Hat-eo”), the current owner of the Fords property, and W.R. Grace & Co. — Conn. (“Grace”), the previous owner, it also marks a definitive point of closure — at least with respect to this forum — in the ongoing legal contest between Hateo and Grace, each seeking to devolve upon the other the costs of remediating this property. Previous opinions issued by this Court have touched upon the cruel dilemma of modern society — the insatiable quest for corporate growth and its economic rewards, paradoxically purchased at the expense of ecological and human resources. The Court will not revisit that theme today, but it is not forgotten, upon reaching this watershed in the struggle to place responsibility where responsibility is due for the contamination and cleanup of the Fords property. For the past decade, the property has been the subject of extensive scrutiny and study by New Jersey’s Department of Environmental Protection (“DEP”) and private envi-. ronmental consultants, generating an enormous wealth of historical information about the facility’s thirty-three year operation and its current environmental condition. Because of this vast historical record, past speculative financial exposure gives way to the sobering receipt of the first invoice. To date, Hateo has expended over ten million dollars responding to the environmental conditions at the Fords property. If nothing else, this action has proven that the cleanup of an industrial site may not only be expensive, but may involve a range of actors, from state regulatory agents to private consultants, engaging in a variety of activities, which may include negotiating settlements, testing for contamination, contracting with disposal companies, excavating materials and replacing or cleaning contaminated equipment. The list of potentially required tasks is endless, so too are the potential costs. Hateo has undertaken four different remediation activities since its purchase of the property. Instituted by Hateo in early 1991, and completed by end of that summer, Project 50 involved various construction projects designed to limit the migration of contaminants via the flow of surface water over certain areas of the property. Project 51, which is ongoing, involves activities taken in response to groundwater contamination found at specific locations at the site. Hateo also undertook the offsite disposal of certain contaminated liquids from the facility. And last, but significantly, one of these four projects involved a distinct area of the Fords property which Grace had used as a depository for the byproducts of its phthalic anhy-dride manufacturing processes. The predominant byproduct has been designated as a hazardous waste by the United States Environmental Protection Agency (“EPA”). In August 1988, Hateo excavated the area (the “PA Disposal Area”) and disposed of the materials at an offsite landfill. Hateo now seeks to recover from Grace the expenses associated with these four projects, in addition to the costs incurred as a result of DEP’s oversight of the remedial efforts at the property. In pursuit of its response costs, Hateo has invoked both federal and state statutory mechanisms for recovery: the Comprehensive Environmental Response and Liability Act of 1980 (“CERCLA”), 42 U.S.C. §§ 9601 et seq.; and the New Jersey Spill Compensation and Control Act (“Spill Act”), N.J.S.A. 58:23-11, et seq. .To recover under CERCLA, Hateo must prove that the remediation projects were selected and implemented in accordance with the National Contingency Plan (“NCP”), a rule promulgated by EPA which provides a framework for responding to the release of hazardous substances into the environment. Grace challenges the propriety of awarding to Hateo any costs arising from Projects 50 and 51 and the excavation of the PA Disposal Area, alleging that Hateo failed to comply with NCP requirements. With respect to Projects 50 and 51 and the question of NCP compliance, the Court relies solely on the record created in the Hateo III trial and additional stipulations submitted after this trial. Grace also vigorously opposes Hatco’s recovery of response costs associated with the PA Disposal Area, which exceed five million dollars. Grace’s objection is grounded upon two allegations. First, Hateo never considered the NCP prior to undertaking the excavation. Second, Hateo excavated the area only to meet a precondition of an agreement to sell the property, not to remedy any significant threat to human health or the environment. In September of 1993, the Court conducted a bench trial to determine whether Hateo had complied with the NCP when implementing the excavation of the PA Disposal Area. To assist the Court with this decision, Hat-eo presented one expert witness, Mr. Kenneth Siet, currently associated with Dan Ra-viv Associates Incorporated (“DRAI”), the environmental consulting firm hired by Hat-eo to address the problems that spawned this litigation. Prior to his position with DRAI, Mr. Siet worked at DEP for approximately eight years, overseeing the remediation of over eighty sites, a few of which involved the implementation of NCP-related tasks. Based upon a review of the documentary evidence, Mr. Siet offered the opinion that Hateo had substantially complied with the NCP in excavating the PA Disposal Area. Grace, in opposition, presented two expert witnesses, Dr. James Mercer and Dr. L. Anthony Wolfskill. Dr. Mercer is the president and principal hydrogeologist at Geo-Trans, Inc., an environmental consulting firm. Based upon a review of the documentary evidence and the benefit of hindsight, Dr. Mercer concluded that the PA Disposal Area did pose a threat to the environment in 1988. In his view, however, Hateo inadequately investigated the area and thus could not have discovered any threat to the environment prior to the excavation. He concluded that Hateo had not substantially complied with the NCP. Dr. Wolfskill is associated with Woodward-Clyde Consultants, a consulting firm specializing in civil and environmental engineering and science. Based upon documentary evidence, he testified on the technical issues considered by Hateo prior to the excavation. It was his opinion that Hateo failed to weigh adequately the alternatives to excavation and hence had not substantially complied with the NCP. Subsequent to the trial, the parties submitted proposed findings of fact on the issue of NCP compliance for Projects 50 and 51 and for the excavation of the PA Disposal Area. In addition, the parties filed numerous stipulations in an effort to assess the response costs for which Hateo now seeks recovery. In addressing the question of causation in Hateo III, the Court lamented the difficulties inherent in assigning liability in a complex environmental case, likening the task to crossing a mine field with a faded map as a guide. The Court has survived that journey and now ventures into a different, but no less daunting, mine field. Whether it be causation, cost allocation or NCP compliance, the arenas of environmental legislation, remediation and jurisprudence are fraught with impediments to exacting precision and defy patent standards of simple application. In this case-by-ease world of environmental litigation, the Court will apply the dictates of common sense and reality in assessing responsibility and allocating the sizable costs for the remediation of the environmentally affected sites. With this goal in mind, the Court today converts legal and scientific concepts into the currency of the marketplace— real dollars. Through findings of fact and conclusions of law, the Court fulfills the warrant for its existence. I.FINDINGS OF FACT A.The Parties 1.* Plaintiff Hateo Corporation (“Hateo”), a New Jersey corporation, is-the present owner of the property at issue in this ease. 2.* Defendant W.R. Grace & Co. — Conn. (“Grace”), a Connecticut corporation, is the prior owner of the property at issue in this case and a wholly owned subsidiary of W.R. Grace & Company, a New York Corporation. (Stipulation No. 46) B.The Property 3.* The property at issue in this litigation is an eighty-acre parcel of land located in Fords, New Jersey (the “Fords property”). (Stipulation No. 1) The Fords Property is situated approximately 4,000 feet from the Raritan River, (47:19 (Raviv)), and is bounded to the north by King George Post Road, to the east by Sling Tail Creek, to the south by Industrial Highway and to the west by Crows Mill Creek. (DE002) 4.* The slope of the Hateo site is generally south-southwest. Groundwater flow and surface drainage events follow the site’s surface topography, which is high in the center (34:13 (Raviv)), and run toward and are collected by Sling Tail Brook and Crows Mill Creek. (Stipulation No. 9) 5.* The soil profile of the Hateo site, moving from the surface to the underlying soils, changes from fill with clay to light to dark gray clay to clay mixed with sand to clay to poorly sorted sand and finally to dark gray clay. (357:6 (Raviv)) The natural dark clay layer is significant because its lower permeability prevents the movement of contamination. (357:21 (Raviv)) C.Plant History 1. Ownership 6.* In the early 1950s, a brick and tile manufacturer used the Fords property as a clay pit. (Stipulation No. 2) 7.* In approximately 1954, Mr. William Hackman (“Hackman”), the owner of the Hateo Chemical Company, purchased the Fords property and relocated his chemical manufacturing business there. (Stipulation No. 3) The Hateo Chemical Company previously was located in Kearny, New Jersey, where it manufactured plasticizers, synthetic lubricants and napalm. (Stipulation No. 4) 8.* From approximately 1954 until 1959, Hackman owned and operated the Hateo Chemical Company on the Fords property (the “Fords facility”). (Stipulation No. 5) 9.* In June 1959, Grace purchased the Hateo Chemical Company from Hackman for approximately $5.4 million. (E10 at WRG 06767) The business became a division of Grace known as the Hateo Chemical Division. (Stipulation No. 6) 10.* Hackman remained at the helm of the Hateo Chemical Division until 1962 when Mr. Alex Kaufman (“Kaufman”) became president of the Hateo Chemical Division. Kaufman held this position until his resignation in 1978. (Stipulation No. 85) 11.* From 1959 until August 21, 1978, Grace owned and operated the Fords facility. On August 21, 1978, the Farben and Fuss Corporations purchased the Fords facility from Grace for $9.6 million. (E671 at H037006; 2032:18-2033:6 (Kaufman)) The Fuss Corporation (“Fuss”) purchased the “Chemical Realty” of the Hateo Chemical Division. The Farben Corporation (“Far-ben”) purchased the “Chemical Assets other than the Chemical Realty” of the Hateo Chemical Division. (Stipulation No. 7) Kaufman held controlling interests in both Fuss and Farben. (1967:6-9, 2032:18-21 (Kaufman)) 12.* On September 1, 1978, Farben changed its name to the Hateo Chemical Corporation. On September 30, 1978, Fuss merged into the Hateo Chemical Corporation. On October 28,1986, the Hateo Chemical Corporation was renamed the Hateo Corporation. (Stipulation No. 8) 2. Manufacturing 13.* Upon arrival at the Fords property in 1954, the Hateo Chemical Company had one reactor, one stripper, one refiner, a filter press and tanks. (1878:5 (Kaufman)) 14.* From approximately 1954 until 1959, two plants were in operation at the Hateo Chemical Company: (1) an esterification plant (Ester I) where plasticizers and synthetic lubricants, including dioctyl phthalate, dibutyl phthalate and diisooctyl phthalate, were manufactured from acids and alcohols; and (2) a sebacic acid plant where raw materials were generated to make aviation turbine oils. (Stipulation No. 5; (1882:9 (Kaufman))) 15.* During this period, alcohols, sebacic acid and phthalic anhydride were stored at the site and the railroad siding was used to load and unload tankers. (1989:22 (Kaufman)) Other raw materials brought to the site included octyl alcohol, butyl alcohol, 2-ethylhexyl alcohol and castor oil. (E10 at WRG06810; Hackman Dep. 52:12) 16.* Grace’s 1959 purchase brought the necessary capital for expansion. (1884:20 (Kaufman)) Besides continuing to produce various phthalate esters in the Ester I plant, during the 1960s, additional manufacturing facilities were built at the site. 17.* In 1960, the Hateo Chemical Division constructed and began operating a benzyl chloride plant. The plant manufactured ben-zyl chloride which in turn was combined with phthalic anhydride to produce butyl benzyl phthalate (“BBP”), a plasticizer. (Stipulation No. 15) The benzyl chloride plant operated until 1965. (37:8 (Raviv); Stipulation Nos. 15, 60) Plaintiff Hateo never has manufactured butyl benzyl phthalate. (Stipulation No. 35) 18.* In 1961 and 1963, the Hateo Chemical Division built two plants on the eastern portion of the Fords property, known as PA-1 and PA-2. These plants manufactured phthalic anhydride from naphthalene. (Stipulation No. 10) George Napack was hired to oversee the construction and operation of the PA plants. (Napack Dep. 18, 217-18) 19.* The Hateo Chemical Division began the manufacturing operations of PA-1 in 1961 and PA-2 in 1963.. (Stipulation No. 11) Production of phthalic anhydride at the two PA plants ceased in 1971. (Stipulation No. 12) 20.* The Hateo Chemical Division continued to use phthalic anhydride in its operations, purchasing quantities from outside suppliers to manufacture various esters. The use of purchased phthalic anhydride at the Fords facility continues to the present day. (Stipulation No. 13) 21.* While the PA plants were in operation, still bottoms from the [phthalic anhy-dride] production were deposited in an area to the east of the PA plants referred to as the “PA Disposal Area.” (Napack Dep. 47-48) 22.* In 1961, the Hateo Chemical Division installed a molecular still in the Ester I tank farm to separate by-products manufactured in the sebacic acid plant. The molecular still was closed in 1965. (Stipulation Nos. 16, 60; 1066:2-11 (Trela)) 23.* In or around 1960, the Hateo Chemical Division installed two thermal units (“SH-1 and SH-2”) to provide heat for a new reactor added in the Ester I plant. (E22, 23, 29) From approximately 1961 to 1966 aroclor was used as a heat transfer fluid in the hydrotherm units. (Stipulation No. 27) 24.* In 1970, Grace constructed a second esterification plant (“Ester II”) to manufacture DOP and other phthalate esters. (1239:21 (Reid)) The Ester II plant remains in operation today at the Fords facility. 25.* After Hateo purchased the facility in 1978, it continued to manufacture a variety of plasticizers, including di-n-butyl phthalate (“DBP”), bis (2-ethylhexyl) phthalate (“DEHP”), diisodecyl phthalate and DOP. (E1043 at A301887; 186:25-187:2 (Raviv) (Hateo and Grace made same use of Ester I complex)); (2170:18-21 (Staples) (same)) 26.* Other chemicals that have been used and stored at the site since 1978 include benzene (“BZ”), 1,1,1-TCA (“TCA”), methylene chloride, styrene, xylene and toluene. (E968, 1241, 1737) 27.* In the post-1978 period, Hateo began the manufacture of phenyl xylyl ethane (“PXE”), which required the use of xylene and styrene. (E1043 at A301975, 1410 at A301646; 1243:5 (Reid) (PXE manufacture began in early 1980s)) 28.* Since 1978, Hateo has used the Ester II plant to manufacture various phthalate esters, including DOP, DEHP and DIDP, and to distill PXE and TCA bottoms.' (2179:22-2180:11, 2905:4-23 (Staples); Lynch Stipulation ¶¶ 6, 7; Maimón Stipulation ¶ 34; E1404) 29.* In 1983, Hateo modified existing facilities and constructed a new plant at the Fords site to manufacture Z-Aspartic Acid (“ZAA”). (Maimón Stipulation ¶¶ 1-3; Na-pack Dep. 45:20-46:9; 152:8 (Raviv)) These facilities are located in the area of the former benzyl chloride plant. (146:16 (Raviv)) By June 1984, the ZAA facility was in the semi-commercial startup phase. (1339:15 (Chryss)) 30.* In 1986, plaintiff Hateo dismantled the two PA plants at the Fords facility. (Stipulation No. 72) 3. Waste Treatment 31.* Between 1954 and 1959, Hackman dug at least one settling pond at the Fords facility that was designed to handle waste by allowing product to separate from water. (1881:14 (Kaufman); 33:10-19 (Raviv); E10 at WRG06830; DE001) During this period, liquid wastes flowed into the pond system. (E10 at WRG06830) After settling, the effluent was released from the pond and flowed through marsh land into the Raritan River. Id.; (1891:19 (Kaufman)) 32.* By 1961, Grace had expanded the pond system, adding additional ponds, one of which subsequently was divided into two ponds, for a total of four ponds at the site. (E12, 15; Stipulation No. 59) 33.* With the settling pond system, Grace sought to minimize the amount of process waste discharged and to recover suspended solids containing product. To accomplish these goals, Grace skimmed the esters and other organic matter that floated to the surface of the ponds and neutralized the remaining liquid effluent with lime slurry. The recovered product was returned to the plant to manufacture off-color plasticizer (“OOP”) to sell as a Grace product. (Stipulation No. 18) 34.* While in operation, semi-solid matter accumulated in the ponds, thereby necessitating periodic cleaning. (Stipulation No. 17) Known as “demueking,” this process involved scooping solid material from the bottom of the ponds. (Stipulation No. 19) The dredged material was deposited in an area west of ponds three and four known as the “muck storage area.” (40:16-43:5 (Raviv)) 35.* From 1959 until 1971, Grace discharged waste products from the various plant operations into the ponds system. Ar-oclor leaks, liquid waste effluent from the Ester I and benzyl chloride plants and Ester I leaks and spills of phthalates and raw materials were discharged to the ponds. (Stipulations Nos. 31-34) 36.* In 1966, Grace completed the construction of sewer lines at the site to connect the Fords facility to the Middlesex County Sewerage Authority (“MGSA”). The MCSA later changed its name to the Middlesex County Utilities Authority (“MCUA”). (Stipulation No. 20) 37.* As part of the MCSA connection, Grace installed two clay-lined lagoons at the Fords facility. (Stipulation No. 21) The lagoons were designed and used, until 1971, as a temporary storage location for plant effluent prior to discharge to the MCSA. (Stipulation No. 36; Ackelsberg Dep. 204:14-20) 38.* When Grace’s gravity-based settling pond system and the clay-lined lagoons were in operation between 1966 and 1971, process effluent flowed from the settling ponds to the clay-lined lagoons to sewers connected to MCSA. (Stipulation Nos. 22, 36) Liquid waste from the [PA] plants was released to the lagoons and ultimately to the MCUA. (Stipulation No. 37) 39.* In 1969, [DEP] directed the Hateo Chemical Division of W.R. Grace to eliminate the ponds because of odor problems. (Stipulation No. 24) The Hateo Chemical Division completed the pond elimination program in March 1971. (Stipulation No. 25) Plaintiff Hateo never operated the settling pond system or the muck storage areas. (Stipulation No. 26) 40.* In 1990, plaintiff Hateo began operating an effluent pretreatment plant (the “EPT plant”) at the Fords site. (Stipulation No. 13) The main purpose of the EPT plant was to reduce the organics in Hatco’s effluent prior to its discharge to the MCUA. (715:7-14 (Raviv)) 4. Location of Site Facilities 41.* Throughout, the history of the site, the manufacturing and waste disposal facilities largely have been situated in the central portion of the site. In aerial photographs, this concentration of buildings and other artificial structures forms a capital letter “T” with the vertical structures traveling north to south and the horizontal improvements running east to west. 42.* During Grace’s ownership, the Ester I complex served as the industrial center and was bounded on the west by the Ester I tank farm and to the east by the two PA plants. To the south of the PA plants four large tanks, known as the “M tanks,” were installed to store the naphthalene used in PA production. Continuing south from the M tanks, the Ester II building appears. West of Ester II, two railroad sidings, one serving each ester plant, run north from the southern boundary of the property. 43.* Directly to the south of the Ester I complex two ponds were located, pond number one to the west and pond number two to the east. Two larger ponds were found further to the south, pond number three to the east and pond number four to the west. The sebacic acid plant was situated to the east of ponds one and two. East of ponds three and four, the benzyl chloride plant was located. A muck storage area was created southwest of ponds three and four. At the southern boundary of the property, just west of the railroad sidings, the two lagoons were constructed. 44.* Due north of these manufacturing and waste structures, a pilot plant, the quality control laboratory, the alcohol tank farm and drum storage areas were located. 45.* Many of these structures remained unchanged following Hateo’s purchase of the site. During the pond elimination program, Grace reclaimed the areas of the site the ponds and muck storage areas had occupied. Hateo constructed the EPT plant in the area of former pond four. Hateo also added the ZAA facility, converting the former benzyl chloride plant and constructing a new building just south of former ponds one and two. D. Contamination Overview 1. Sampling 46.* In August 1979, the DEP visited the Hateo site and took a single sample from the surface of each of the two lagoons. (1220:3-1221:10 (Reid); E699) In March 1980, DEP officials returned to the Hateo site and gathered soil samples. (1229:7-17 (Reid)) 47.* In 1981, the DEP’s selected seven groundwater monitoring well sites, beginning the first systematic testing at the Hateo facility. (214:15-23 (Raviv)) Paulus, Sokolowski and Sartor, Inc. (“PS & S”), an environmental consulting firm, installed these wells in 1982. (66:11-15 (Raviv)) 48.* Subsequent DEP spot sampling of the lagoons and other portions of the site occurred in 1981 (876:23 (Trela); E720), 1984 (879:6 (Trela); E825) and 1985. (883:1 (Tre-la); E881) The MCUA drew samples of Hat-co’s sewer waste water in 1986. (886:19 (Trela); E1040) 49.* As a result of the DEP’s continued interest in the site, in 1986 Hateo hired DRAI to provide advice with respect to the DEP’s demands. (1443:3-10 (Chryss)) DRAI installed additional groundwater monitoring wells in 1987, 1990 and 1992, (65:23-66:22, 214:15-23 (Raviv)), and performed surface and subsurface soil investigations in various areas throughout the site in 1987, 1988, 1991 and 1992. (E2253) The DEP specified the groups of chemicals to be tested as well as the testing methods. (97:7-21 (Raviv)) 50.* Based on evidence of historical activities at the Hateo site, DRAI created areas of environmental concern (“AECs”), a basic concept in any kind of environmental investigation of plants, which allowed it to examine the impact of particular operations at relevant parts of the site. See Appendix III. (54:2-23 (Raviv)) DRAI also developed a grid system to guide its soil studies. (DE013; 64:11-19 (Raviv)) In areas where contamination was found, the density of the grid was increased in order to fine-tune its delineation. (64:20-65:22 (Raviv)) 51.* In 1987 and 1988 Exxon Chemical [“Exxon”], a potential Hateo purchaser, hired Environ, an environmental consulting company, to come to the site and conduct testing. Environ examined soil and groundwater conditions at Hateo. (1472:8-20 (Chryss)) 2. Contaminants 52.* The resulting data indicates that the Hateo site contains three principal contaminants: (1) base neutrals (“BNs”); (2) poly-chlorinated biphenyls (“PCBs”); and (3) volatile organic compounds (“VOCs”). (69:6 (Ra-viv)) 53.* BNs, also known as semivolatiles, are a subset of organic chemicals. (919:11 (Tre-la)) This category includes different phtha-late esters, including DEHP, BBP, DEP, DBP and DOP, (93:4, 69:8, 75:21 (Raviv)), as well as petroleum products and naphthalene. (2068:2 (Staples)) BNs are the source of the greatest volume of contamination at the Hat-eo site. (2067:2-15 (Staples)) 54.* Two types of PCBs were found at the site, aroelor 1248 and aroclor 1254. When tracing the history of PCBs, it is important to evaluate reports of the presence or absence of PCBs carefully. (882:12 (Trela)) Obtaining accurate PCB results is difficult, because the applicable testing method is susceptible to interference by organic chemicals, such as the phthalate esters present at the Hateo site. (880:5, 881:1 (Trela)) Testing of soil borings is more accurate than testing of groundwater samples. (888:6 (Trela)) 55.* Sampling also revealed the presence of a variety of VOCs. This category of chemicals includes solvents such as toluene, xylene, TCA, TCE and benzene. (76:3 (Ra-viv)) 56.* These pollutants are distributed throughout the site at various depths and concentrations. To some degree, each group of contaminants is present in the soils and the groundwater. Often these chemicals are commingled in the same soil. The DEP primarily is concerned with the VOC contamination in the groundwater and the PCB soil contamination. (742:4-20 (Raviv); E2453 at A216332) E. Remediation By Hateo 57.Since its purchase of the site in 1978, Hateo has undertaken four remediation projects: (a) Project 50; (b) Project 51; (e) the removal of PCB-contaminated liquid, including lagoon skimmings, from the site; and (d) the excavation of material from the PA Disposal Area. The two latter remediation activities were required by Exxon as conditions precedent to its potential purchase of the facility. (1852:19-23, 1854:17-1855:18 (Chryss); E1365 at Exxon 00135) 1. DEP Involvement at the Fords Property 58. Certain response costs sought by Hateo may be traced to involvement at the site by DEP, which directed Hateo to undertake various remediation activities. With respect to Hatco’s ownership, DEP initially visited the site to investigate the discovery of oil in Crows Mill Creek. Hateo III, 836 F.Supp. at 1082. 59. In October 1979, DEP directed Hateo to begin a pollution abatement program, under which Hateo would excavate contaminated soil from the site and install monitoring wells. Id. at 1082-83. 60. On June 16, 1981, following visual inspections and tests confirming contamination, DEP issued an Administrative Order directing Hateo to perform soil borings, install monitoring wells, cease groundwater pollution and remove contaminated soils from the site. Hateo responded by sampling the lagoons and requesting an administrative hearing. Id. at 1083. 61. On September 28, 1982, following negotiations, DEP and Hateo executed an Administrative Consent Order (“ACO I”), under which Hateo was to install seven groundwater monitoring wells and sample the wells periodically during the following five years. Id. 62. On April 15, 1985, DEP ordered Hat-eo to close the effluent line to the lagoons by April 18, 1985. Id. 63. On December 16, 1985, DEP issued a draft New Jersey Pollutant Discharge Elimination Permit (“NJPDES permit”) which required Hateo to submit to DEP a plan for closing the lagoons. Id. 64. Following more negotiations, and the beginning of DRAI’s work at the site, DEP issued the final NJPDES permit on April 22, 1987. Id. By November 1987, Hateo had instituted measures designed to comply with the minimum regulatory requirements of the NJPDES permit. Id. 65. By the spring of 1991, Hateo recognized the need for an administrative consent order to finish site remediation. On October 30, 1991, the first draft consent order was issued, which directed a Remedial Investigation/Feasibility Study (“RI/FS”) and the implementation of a remediation action plan for the site. Id. at 1084. 66. On August 5, 1992, DEP issued a directive to Hateo and Grace, requesting that they arrange for the cessation of the environmental threat at the Fords site within thirty days. Hateo filed its draft RI on August 26, 1992, and signed the consent order (“ACO II”) on September 9, 1992. Grace refused to sign ACO II, but submitted a timely response to DEP. Id. at 1082, 1084. 67. Under ACO II, Hateo completed a remedial investigation and a scoping report and investigation, including a remedial investigation work plan, field work and a final report. Id. at 1084. 2. The PA Disposal Area a. The Manufacturing of Phthalic An-hydride 68. In 1961 and 1963, the Hateo Chemical Division built two plants on the eastern portion of the Fords property, known as PA-1 and PA-2. These plants manufactured phthalic anhydride. (Stipulation No. 10) George Napack was hired to oversee the construction and operation of the PA plants. (Napack Dep. 18, 217-18). 69. Manufacturing operations began at PA-1 in 1961 and at PA-2 in 1963. (Stipulation No. 11) Production of phthalic anhydride at the two PA plants ceased in 1971. (Stipulation No. 12). ■ 70. The Hateo Chemical Division continued to use phthalic anhydride in its operations, through purchases from outside suppliers to manufacture various esters. The use of purchased phthalic anhydride at the facility continues to the present day. (Stipulation No. 13) 71. In 1986, plaintiff Hateo dismantled the two PA plants at the Fords property. (Stipulation No. 72) 72. Naphthalene and air were the raw materials used to manufacture phthalic anhy-dride. The manufacturing process differed between the two plants. At PA-1, naphthalene was fed directly into a stream of hot air inside a system known as a fluidized bed reactor. PA-2 utilized a fixed-bed reactor, which required the naphthalene first to be reduced to vapor in a naphthalene evaporator prior to being introduced into the reactor. (Napack Dep. 164-67; Ackelsberg Dep. 100-01; Rush Dep. 173) 73. Naphthalene has a distinctive odor similar to the smell of moth balls. (3216:14-19, 3387:10-12 (Siet)). Raw naphthalene is amber in color. Pure phthalic anhydride is white. (Rush Dep. 191) 74. The phthalic anhydride manufacturing processes at PA-1 and PA-2 generated a molten distilled residue, which was poured into pie-shaped containers and cooled. In this form, the byproduct is known as a solid still bottom (“PA still bottom” or as designated under CERCLA “K024”). (Napack Dep. 47-56; Ackelsberg Dep. 100-01; Biertu-mempfel Dep. (Vol. 1) 56-57). The PA still bottoms were black in color and brittle in substance. (Napack Dep. 48-50; Nagiewicz Dep. 73-74) 75. The process at PA-1 required naphthalene of a higher purity. The PA-2 system used naphthalene of a much cruder quality, which produced a still bottom with more impurities and greater contaminants. (3230:4^12 (Siet); Napack Dep. 51-52) Naphthalene is not a component of the PA still bottoms; it dissipates in the phthalic anhy-dride cooking process. (3224:4-11, 3256:5-3257:1 (Siet)) 76. The naphthalene evaporator at PA-2 also generated still bottoms (“naphthalene still bottoms”), which were viscous or tarry in substance, dark brown in color and constitu-ently different from PA still bottoms. (Na-pack Dep. 164-67; Rush Dep. 185-86, 191) b. Disposal of the PA and Naphthalene Still Bottoms 77. From 1961 to 1964, George Napack managed the Hateo Chemical Division’s PA plants and was involved in the decision to dispose of PA still bottoms as landfill. (Na-pack Dep. 60-61) 78. From 1961 to 1964, Harland Rush was a foreman and supervisor of the PA plants. (Rush Dep. 18-19) 79. Between 1961 and 1967, PA-1 generated an estimated 2,213 tons of PA still bottoms.' Between 1964 and 1971, PA-2 produced an estimated 2,500 tons of PA still bottoms. (E1247) 80. While the PA plants were in operation, PA still bottoms were deposited on the grounds east of PA-2 known as the PA Disposal Area (AEC 7A), which was downgra-dient from the PA plants, had the appearance of an empty field and had no lining, pads, dikes or containment. (Napack Dep. 48, 63-64, 215-16; E2571 at H511288; 351:11-23 (Raviv); Biertuempfel Dep. (Vol. 2) 93-95; Rush Dep. 130-32) 81. The PA Disposal Area was a discrete, well-defined area, which also was used to dispose of phthalic anhydride and materials or waste containing naphthalene. (E1152A; E1282; 3224:17-3225:1, 3304:4-3305:19 (Siet)) 82. Naphthalene still bottoms produced by the naphthalene evaporator at PA-2 were discharged into an area located to the northeast of the PA plants ultimately referred to as the “Naphthalene Disposal Area” (AEC 14). (Nagiewicz Dep. 76-78; Dominach Dep. 211-12) 83. There was a distinct line of demarcation between the PA Disposal Area to the east of the PA plants and the Naphthalene Disposal Area to the northeast of the PA plants. (Rush Dep. 185-86) 84. While DEP has concluded that phthalic anhydride and naphthalene are significantly degradable, the PA and naphthalene still bottoms in the PA and Naphthalene Disposal Areas were sufficiently persistent to remain in the environment twenty years after they were deposited. (E1995; 3494:16-3495:9 (Siet)) 85. Sling Tail Creek runs within twenty feet of the eastern boundary of the PA Disposal Area. (353:9-15 (Raviv)) Surface waters generally run off the PA Disposal Area to the east or southeast, in the direction of Sling Tail Creek, which in turn flows into the Raritan River. (Stipulation No. 50) 86. There are no public drinking water wells downgradient from the PA Disposal Area. There are four drinking wells located within a mile upgradient. (3589:11-13 (Mercer)) The State of New Jersey has designated the groundwater in the area of the Fords property as a potential source of drinking water. (3671:1-8 (Mercer)) 87. Aquatic life exists in Sling Tail Creek. (3683:11-17 (Mercer)) 88. When combined with water, phthalic anhydride hydrolyzes to phthalic acid, which is very mobile. The PA Disposal Area contained a mobile hazardous waste that could, and in fact did, migrate to the groundwater and to Sling Tail Creek. (3223:7-11 (Siet); 3686:6-3687:3 (Mercer)) 89. In August 1988, contamination in the PA Disposal Area posed an imminent threat of migrating to groundwater and to Sling Tail Creek. (3632:6-9, 3648:9-22 (Mercer)) c. Investigation, Sampling and Testing of the PA Disposal Area 90. In July of 1981, approximately twenty years after the first PA and naphthalene still bottoms were deposited, DEP, during a routine investigation, collected two leachate samples along Sling Tail Creek. (E750, E769) One sample, taken from a location adjacent to the Naphthalene Disposal Area, contained a naphthalene concentration in excess of 300 parts per million (“ppm”). (E771; 3563:10-3565:20 (Mercer)) The other sample, taken from a location further downstream, and adjacent to the PA Disposal Area, contained no traces of naphthalene. (E771; 3563:10-3565:20 (Mercer)) 91. In 1981, DEP selected seven groundwater monitoring well sites, which began the first systematic testing at the Hateo facility. (214:15-23 (Raviv)) PS & S installed these wells in 1982. (66:11-15 (Raviv)) One well, known as “4S,” was installed in 1983, in an area adjacent to Sling Tail Creek, downgra-dient of the PA and Naphthalene Disposal Areas, and approximately 50 to 70 feet from the PA Disposal Area. (Stipulation No. 52; 353:18-22 (Raviv)) 92. By April 22, 1987, DEP determined that contamination in Well 4S reflected an actual discharge of pollutants into the groundwater, posing a potential threat to public health, safety and the environment. DEP issued the NJPDES permit to regulate the actual or potential discharge to groundwater. (E1070; 3191:17-3194:21, 3379:14-22 (Siet)) VOCs and BNs were found in Well 4S. (3394:19 (Siet)) At this time, DEP had not identified the PA Disposal Area as the source of the contamination in Well 4S. (3197:12-19 (Siet)) 93. WThile considering the cost of complying with the NJPDES permit, in October 1987, Hateo first recorded the fact that the PA Disposal Area was an area of environmental concern that potentially could require remediation. (E1112; 3204:18-3207:18 (Siet)). 94. On November 2, 1987, Hateo compared contamination levels in Well 4S to the legal limitations imposed under New Jersey Ground Water Quality Standards. Many of the contaminants in Well 4S exceeded the New Jersey standards. (E1119; 3209:10-22, 3211:8-3214:9 (Siet)). On the same day, Hat-eo did some exploratory digging in the PA Disposal Area and discovered naphthalene and phthalic anhydride waste materials and parts of six drums, which, based upon visual identification, contained phthalic anhydride (E1121; 3214:10-3215:19 (Siet); 3684:20-3685:10 (Mercer)) 95. In December 1987, Environ took soil samples from the PA Disposal Area during an environmental assessment at the Fords property. These samples confirmed the presence of wastes generated during the phthalic anhydride manufacturing process. (Stipulation No. 53; E1607 & Table 1; E1655; DE013; 367:21-368:22 (Raviv)) 96. On February 17, 1988, Hateo notified Grace of the potential need to remediate the PA Disposal Area, including the estimated volume of material and costs. (E1174-75) 97. By March 1988, Hatco’s environmental consultant, DRAI, had linked the groundwater contamination in Well 4S to the contaminants in the PA Disposal Area. DRAI proposed to DEP that additional soil sampling be conducted in conjunction with the groundwater monitoring which was then ongoing under the NJPDES permit. DRAI concluded that, left untouched, contaminants from the PA Disposal Area would continue to leach into the groundwater and ultimately enter Sling Tail Creek. (3234:19-3237:2, 3378:21-25 (Siet); 359:10-13, 363:5-7 (Raviv)) 98. In June 1988, DRAI completed a draft report on the soil samples taken in March 1988. (E1232) This report detailed the conditions of the soil below the surface of the PA Disposal Area. The sampling results indicated the presence of phthalic anhydride and phthalic acid. (32691:1-3270:2; 3287:13-3288:3 (Siet)) 99. In another June 1988 report, Hatco’s Research and Development Department documented the continuing testing and assessment of the PA Disposal Area. (E1231) 100. Water samples obtained from the PA Disposal Area in June 1988, indicated concentration levels of phthalic anhydride or phthalic acid at 2,000 to 5,000 ppm, which were characterized as high concentration levels. (E1268; 3712:2-8 (Mercer)) 101. Where soil or groundwater sampling indicates the presence of a contaminant that has not been targeted in the study, the contaminant is referred to as a tentatively identified compound (“TIC”), meaning that the contaminant has been positively identified, but its concentration level has not been determined accurately. (3434:20-3435:13 (Siet)) 102. In June 1988, DRAI documented TIC data indicating the presence of phthalic anhydride in twenty-two samples taken from the PA Disposal Area. (E1261) 103. In July 1989, DRAI prepared a formal report on soil and sediment investigation, which included the March 1988 sampling results from the PA Disposal Area. (E1563) The TIC data from July 1988 was not incorporated in this report. (3459:1220 (Siet)) The report documents three or four positive findings of phthalic anhydride, not all of which may be linked to the PA Disposal Area. (3612:22-3613:17 (Mercer)) DRAI sampling of Sling Tail Creek sediment, taken from locations adjacent to or near the PA Disposal Area, registered low levels of BNs. (DE0123; 3587:24-3587:14 (Mercer)) 104. In August 1988, DRAI prepared a formal report on the groundwater sampling taken in April 1988, which included the results from Well 4S. (E1297) d. The Decision to Excavate (1) Assessment 105. Hatco’s ability to assess the PA Disposal Area was enhanced by the onsite presence of Hateo chemists and personnel who were employed at the facility during the operation of the PA plants. These long-standing employees knew how the still bottoms were generated and where they were discarded. (E1247; E1248; 3169:20-3170:2, 3180:2-7 (Siet)) Hatco’s experienced personnel also knew the chemical properties of the disposed materials and understood that BNs, not VOCs, were the contaminants that would be associated with the PA Disposal Area. (3406:18-3407:7 (Siet)) 106. Hatco’s preliminary assessment of the PA Disposal Area was comprised of a review of the site history, aerial photos and laboratory results compiled by DRAI, Environ and Hateo chemists and personnel. (E1252; 3179:25-3180:14 (Siet)) 107. Hateo considered the actual impact on groundwater and the threat to surface water. (3181:16-25 (Siet)) Hateo had available for its evaluation groundwater and soil testing data, which had been collected and analyzed by three different groups: DRAI, Environ and Hatco’s own internal chemists. (E1152A; E1232-33; 3170:3-14, 3225:17-24 (Siet)) 108. Prior to and during the excavation of the PA Disposal Area, Hateo never considered — or was even aware of — the relevant NCP criteria that would impact a subsequent cost recovery action. (3170:15-23, 3171:11— 13 (Siet)) Hateo did not prepare an RI/FS in connection with the PA Disposal Area. (3183:25-3184:2 (Siet)) Hateo did not publish a formal public comment in any newspaper. Hateo did not request that DRAI perform an environmental fate and transport analysis, a theory which ascertains the migration of various pollutants within the subsurface or soil matrix. (3331:22-3332:15; Raviv Dep. 2161-63) 109. Notice of the contamination and plans to excavate the PA Disposal Area was provided to DEP and to Grace. (E1174-75; E1229; E1235; E1282; E1283; E1327; 3191:7-11 (Siet)) 110. While Hateo failed to specifically consider NCP requirements, Hateo paid close attention to New Jersey pollution limitations for groundwater in relation to Well 4S and the NJPDES permit. Hateo was also aware that treatment of the PA Disposal Area would require government oversight in the form of permitting. (E1152A; E1154; E1249; 3221:25-3222:3 (Siet)) (2) The Need for a Response Action 111. Hateo identified the PA Disposal Area as a source of release. (3667:12-18 (Mercer)) While the historical record indicates that there was an imminent threat of release, Hateo did not document that such a conclusion had been reached prior to excavation of the PA Disposal Area. (3668:3-3669-3 (Mercer)) No one — not Hateo, DRAI or any other party — produced a document prior to excavation in 1988 indicating that there was a threat to Sling Tail Creek. (3379:6-10 (Siet)) 112. As to the magnitude of the threat, the historical record indicates that Hateo had contaminant concentrations from water samples taken from Well 4S, and from soil samples taken from the PA Disposal Area, which were viewed in relation to New Jersey’s designation that groundwater in the area was a potential drinking water source. (3670:5-3671:14 (Mercer)) 113. Hateo also understood the nature and extent of K024 material in the PA Disposal Area. (3172:16-20, 3175:7-15 (Siet)) 114. With respect to K024, there is no metamorphosis from hazardous substance to hazardous waste — K024 is a listed hazardous waste under CERCLA and the Resource Conservation and Recovery Act (“RCRA”) (42 U.S.C. §§ 6901, et seq.). Reachability studies are not required to determine whether K024 is a hazardous waste. (3682:6-11 (Mercer)) The presence of K024 in an uncontrolled landfill represents a threat. (3380:23-3381:2 (Siet)) 115. Hateo took action in response to a release or threat of release of a hazardous substance. (3172:11-13 (Siet)) In 1988, there were actual releases into Well 4S and Sling Tail Creek. (3680:10-3681:3 (Mercer)) Absent a response action, future releases from the PA Disposal Area would have occurred. (3705:3-6 (Mercer)) 116. Although unaware of the term “ARAR” (applicable or relevant and appropriate standard), Hateo considered applicable ARARs in substance, including (a) New Jersey Groundwater Quality Standards and New Jersey drinking water standards, as incorporated in the NJPDES permit, (b) federal and state cleanup requirements, including the state action level for BNs, and (c) EPA’s proposed regulation prohibiting land disposal of materials that contained certain concentration levels of K024. (E1119; 3194:2-20, 3198:4-3200:1, 3249:6-17 (Siet); Raviv Dep. 2581) (3) The Potential Sale to Exxon 117. In 1987-88, Exxon considered purchasing the Fords property and the chemical plants. (3185:23-3186:2 (Siet)) 118. As of June 29, 1988, Exxon was insistent that Hateo excavate all materials from the PA Disposal Area as a prerequisite to any purchase. (E1264; 3343:17-22 (Siet)) 119. On November 3,1988, Exxon executed a letter of intent to purchase the property and facilities. (E1365) (4) The EPA Land Ban of K024 120. On April 8, 1988, EPA issued a proposed regulation limiting excavation and off-site disposal of certain hazardous materials, including K024, after August 8, 1988. Beyond this effective date, incineration would be the EPA-accepted method of treatment for K024. (Stipulation No. 55) Due to inadequate incineration capacity, the proposed regulation contained a two-year variance for K024, deferring the- effective date of proposed land ban on K024 until August 8, 1990. Consequently, under the proposed regulation, any nonwastewater containing K024 in excess of six mg/kg could not be land disposed after August 1990 without the proper variance. 121. Hateo had not anticipated the proposed land ban of K024. The record reveals that even as late as April 5, 1988, Hateo had not learned of EPA’s imminent proposal. (3227:25-3228:6, 3240:3-5 (Siet)) 122. On April 18, 1988, Exxon advised Hateo of the proposed land ban of K024. (E1215) 123. On May 17,1988, EPA issued another proposed regulation which removed K024 from the two-year variance list. Under this second proposal, land disposal of K024 would be limited as of August 8, 1988. However, the proposed regulation did contain a two-year variance for contaminated soil, but not soil waste. The distinction between contaminated soil and soil waste was unclear. EPA solicited from the public proposed methods for distinguishing contaminated soil from soil waste. 124. Hateo did make some effort to determine whether the proposed soil variance would apply to the K024 materials in the PA Disposal Area. On May 23, 1988, less than one week after EPA published the second proposed land ban, Hateo officials met with DEP to discuss the proper waste classification of the soil and materials in the PA Disposal Area. (E1229) 125. By a letter dated June 14, 1988, Hateo sought from EPA clarification regarding the definition and extent of the proposed soil variance. (E1251; 3672:22-25 (Mercer)) 126. Hateo did not, however, prepare or consider any data in relation to the specific standards of the land ban. Visual or aerial inspection of the site — even by persons familiar with the history and contents of PA Disposal Area — would not reveal (a) the presence of any K024 in excess of the land ban standard, or (b) the volume of K024 material within the PA Disposal Area that exceeded the proposed standard. (3489:13-25 (Siet)) 127. The final version of the land ban, published August 17, 1988, contained the two-year variance for the land disposal of soil, but maintained the distinction between contaminated soil and soil waste. However, EPA was unable to create a generally applicable method for distinguishing the two types of soil and decided that such determinations would be made on a case-by-case basis. (3311:21-3312:9 (Siet)) In the final regulation EPA proscribed the land disposal of non-wastewater with K024 concentrations in excess of 28 mg/kg, absent the applicability of the soil, or other approved, variance. 128. Prior to the excavation of the PA Disposal Area, and even as late as the effective date of the regulation, August 8, 1988, Hateo remained uncertain in regard to the applicability of the land ban to the materials in the PA Disposal Area. (3301:22-3302:1 (Siet); 3673:1-3674:13 (Mercer)) (5) Alternatives and Costs 129. Hateo and DRAI considered alternatives to land disposal for the materials in the PA Disposal Area, including capping of the area, various solvent extraction methods, on-site soil recycling and physical screening technologies. (E1152A; E1154; E1161; E1242 at H503094; E1244; 3356:11-16 (Siet); 3740:22-25 (Wolfskill)) At the time, incineration was the only other demonstrated technology for treating K024 waste. (3302:20-19 (Siet)) 130. Hateo understood that the expense of incineration could be four, five, or even ten times greater than the costs of landfilling. (E1215; E1282; 3186:24-3187:3, 3302:14-19 (Siet)) Mobile incineration was not a prevalent technology at the time of the excavation. Incineration would have required the physical removal and transportation of earth from the PA Disposal Area. (3187:8-17 (Siet)) 131. Hatco’s assessment of treatment alternatives and prospective costs was severely impacted by the uncertain applicability of the impending land ban of K024. (E1215; E1253; 3248:14-3249:17, 3264:13-3265:25, 3282:15-3283:11 (Siet); (3672:16-3673:11 (Mercer))) 132. While the land ban would not have required Hateo to treat or excavate the PA Disposal Area, the imminent implementation of the ban, and its possible application to the PA Disposal Area, impacted Hatco’s cost analysis once a response action was deemed necessary. (3382:8-3384:2 (Siet)) 133. In the interim period between the publication of the proposed regulations and the effective date of the land ban, the cost for landfilling increased, on average, by ten percent. (3251:1-17 (Siet)). Even with a variance, Hateo believed that access to hazardous waste landfills would become limited and costs would increase by twenty-five percent by 1989. (E1215) Any delay would either increase Hatco’s landfilling costs or might result in sizeable incineration costs under the land ban. 134. Having selected the land disposal alternative, Hateo surveyed and priced various contractors for offsite disposal of the K024 materials. (E1209; E1250; E1256-57; 3239:7-23, 3282:9-14 (Siet); 3774:7-9 (Wolfs-kill)) 135. Given the history, nature and extent of the contamination in the PA Disposal Area, the aura of uncertainty surrounding the land ban, and the alternatives and the costs, Hateo concluded that immediate excavation and offsite landfilling of the PA Disposal Area was the best and most cost-effective treatment alternative regardless of whether a variance would ultimately apply to the K024 materials. (E1215) 136. On July 1, 1988, Hateo entered into a contract with Chem Waste Inc., for the excavation and offsite landfilling of materials in the PA Disposal Area. (Stipulation No. 56) The agreement documented Hatco’s inquiry into former waste disposal practices, the operations of the former PA plants and the nature and extent of materials in the PA Disposal Area. (E1271) (6) The Excavation 137. Hateo utilized visual inspections to delineate the PA Disposal Area and determine the extent of material to be excavated. (E1282; 3305:2-19, 3484:11-13 (Siet)) The visually identifiable materials were admixed throughout the soil in the PA Disposal Area. (3317:17-25 (Siet)) Hateo did a substantial job of determining the volume and substance of contaminants. (3614:15-24 (Mercer)) 138. Hateo was prepared to stockpile any excavated material that, by visual inspection, did not appear contaminated, but no such material was discovered during the excavation. (E1271 at H50667; 3317:24-3318:5 (Siet)) 139. The PA Disposal Area either was adjacent to or encompassed an area which had been designated as the PCB Swale Area. Contaminants found in the PA Disposal Area were also visually identified in and excavated from the PCB Swale Area. (3510:8-3511:13 (Siet)) 140. The excavation and offsite disposal of 24,938.76 tons of material — including the estimated 5,000 tons of admixed K024 — took five weeks to complete, from July 12,1988, to August 18, 1988. (E1362; Stipulation No. 64; 3317:9-16 (Siet)) 141. The excavation, originally scheduled for completion on August 8, 1988, continued two or three days beyond the effective date of the land ban — also August 8,1988 — due to heavy rains which complicated the excavation. (3246:5-15 (Siet)) 142. Given the information available at the time, Hateo conducted an adequate evaluation and formulated an appropriate response to the K024 contamination in the PA Disposal Area. (3169:18-16 (Siet)) Hateo appropriately considered certain hydrogeological factors, the volume of contaminated material, the recyclability of the PA Disposal Area, and certain relevant standards or action levels. (3614:15-24, 3616:7-3617:10, 3618:18-25, 3622:4-10 (Mercer)) 3. Project 50 143. Project 50 began after December 4, 1990, when a tankwagon of oil material taken from the EPT plant was returned to the site, having been rejected by an outside waste handling facility. The oil waste contained significant levels of PCBs with concentration levels exceeding fifty ppm — the facility was not licensed to receive materials with PCBs in excess of fifty ppm. (872:18-873:1 (Trela)) Hateo suspected, and eventually confirmed, that its effluent, discharged to the MCUA through the EPT plant, was contaminated with PCBs. 144. Approximately 200 industrial clients discharge effluent to the MCUA. DRAI ultimately calculated that Hateo was contributing potentially as much as 74% of the total allowable limit of PCBs at MCUA. (E1687; 915:3-916:21 (Trela)) 145. Hateo notified the DEP, EPA and MCUA that PCBs had been discovered in the EPT plant waste. (E1801; 901:23-903:21 (Trela)) Throughout Project 50, Hateo regularly communicated with MCUA. (908:18-909:3 (Trela)) 146. PCB contamination in Hatco’s effluent presented a time-critical problem. On March 17, 1991, MCUA was to cease ocean-dumping of its sludge pursuant to statutory and judicial mandates. In view of this deadline, MCUA had instituted an alternative plan in which its sludge would be used in the development of a commercial agricultural product. Concern arose over the potential impact of Hatco’s contaminated effluent on MCUA’s land-based alternative to ocean-dumping. (E1792; 873:17-874:24 (Trela)) 147. In January 1991, Hateo began to formulate and implement a scientific investigation into the nature, source, quantity and distribution of PCBs in the effluent and sewer system. Given the time-critical nature of the effluent problem, Hateo adopted protocols that were designed to produce data rapidly. (905:14-907:4 (Trela)) 148. To determine the amount and distribution of PCBs in the effluent, DRAI sampled separately the PCB levels in various phases of the effluent. The goal was to discover the level of PCBs contributed to the effluent by solid particles. (910:9-911:6 (Tre-la)) 149. Various sources at the site were linked to the PCB contamination in the sewer system and the EPT plant, including spills at the Hydrotherm Units, discharges into the ponds, spills of off-color plasticizer, spills at the capryl still, spills at the molecular still and spills from the hydrotherm systems in Ester I and the sebacic acid plant. These sources relate to Grace’s ownership of the site. (1035:23-1037:6 (Trela)) 150. In February 1991, Hateo began to consider specific interim actions that might be employed during Project 50. (949:14-21 (Trela)) With respect to potential PCB migration, these actions were considered and evaluated for their scientific appropriateness, technical efficiency, cost effectiveness and consistency with the ultimate remedy to be selected for the site. (Third Set of Stipulations ¶¶ 6-7; 950:14-19, 970:24-972:5, 977:15-978:23 (Trela); E1827; E1922; E1964; El966-67; E1971; E1973; E1976; E1989; E1999; E2033; E2016; E2019; E2087; E2089; E2117; E2132; E2209) In view of these considerations, Hateo formulated an action plan for Project 50. (E1892) 151. The contractors, laboratories, engineers, and the surveying, excavating and waste disposal companies considered for enlistment on Project 50 were evaluated based upon experience, cost estimates, competence, and the ability to complete assigned tasks and comply with applicable regulatory requirements. (993:11-21 (Trela); E1803; E1819, E1822, E1830-31; E1833-34; E1849; E1854; E1859-60; E1863; E1871; E1880; E1886; E1888-89; E1891; E1896; E1909; E1912; E1924; E1930; E1916; E1961; E1965; E1981-82; E1988; E2002-03; E2010; E2013-15; E2020; E2052-53; E2119; E2139; E2148; E2158; E2195; E2202; E2208; E2216; E2234) 152. The EPA has found acceptable only a few existing technologies for the remediation of PCB-contaminated soils. These alternatives range in cost from $500 per ton upward to $1,000 per ton for disposal of substantially contaminated soils. (962:2-25 (Trela)) 153. While formulating and implementing Project 50, Hateo believed that the interim response activities constituted a removal, not a remedial, action under the NCP. (