W.R. Grace & Co. (Grace) appealed a district court ruling that the Environmental Protection Agency (EPA) properly characterized an asbestos cleanup that Grace was liable for, as a removal action under the Comprehensive Environmental Response Compensation and Liability Act (CERCLA), rather than a remedial action. Grace also challenged the district court's holdings that EPA properly exempted the cleanup site from the cost and time limitations on removal actions, and that EPA properly calculated the indirect costs involved in the removal action. The Ninth Circuit affirmed all of the district court's conclusions.
Between the 1920s and 1990s, a series of companies ending with Grace, mined and processed vermiculite, which contains an asbestos known as tremolite, at a mine located seven miles outside of Libby, Montana. In 1999, EPA began investigating the effects of the vermiculite mine on the surrounding community. Much vermiculate had been dispersed throughout the community because Grace had, for example, donated the substance to local schools and allowed employees to take it home for their own use. EPA sought to gather information, on airborne asbestos levels in Libby, and on friable asbestos levels around Libby to determine if immediate intervention was necessary. The investigation revealed pervasive asbestos contamination around Libby that posed an immediate threat because human activities such as walking and vacuuming, along with natural forces like wind, were rendering asbestos particles airborne and, thus, subject to inhalation.
Under the regulations EPA promulgated pursuant to CERCLA--known as the National Oil and Hazardous Substances Pollution Contingency Plan (National Contingency Plan)--EPA is capable of two different responses to hazardous substance releases: removal actions and response actions. EPA undertakes removal actions to "counter imminent and substantial threats to public health and welfare." In a typical removal action, EPA is limited to a twelve-month period and $2 million expenditure, but these limitations are subject to the following two exemptions:
(i) If there is an immediate risk to public health or welfare of the United States or the environment; continued response actions are immediately required to prevent, limit, or mitigate and emergency; and such assistance will not otherwise be provided on a timely basis; or
(ii) Continued response action is otherwise appropriate and consistent with the remedial action to be taken.
Large scale removal actions are thus reserved for particularly urgent situations. In contrast, EPA undertakes remedial actions to provide permanent remedies that do not warrant an urgent response. A remedial action involves more "detailed and onerous" requirements, such as, the site's listing on the National Priorities List, and that EPA consider costs in choosing a remedy. Responsible parties, such as Grace, are liable for the U.S. government's costs associated with cleanup under CERCLA, and thus often have an interest in whether EPA characterizes the action as removal or remedial.
Following EPA's investigation in Libby the agency initiated a single removal action that it laid out in three separate action memoranda over the course of two years. The first action memorandum, issued in May 2000, authorized an urgent $5.8 million clean up of two sites that contained former vermiculite plants. This cleanup qualified for an exception to the $2 million and twelve month limitation on removal actions because of the immediate threat, the size of the cleanup, the brevity of the season when cleanup could occur, and the likelihood that other government agencies would not respond quickly.
The second action memorandum, issued in July 2001, identified six additional sites, including schools and homes, where asbestos was highly concentrated and readily friable. To clean up these sites, EPA expanded the exemption from limitations on removal actions and pushed the authorized costs of cleaning up the sites identified within the Libby site to $20.1 million. EPA's third action memorandum, issued in May 2002, similarly identified multiple sites within the Libby site that, because of the urgent need for action, were not subject to the limitations on removal actions. In the end, EPA raised the overall removal action cost to $55.6 million. At this time, in October 2002, EPA also began taking steps to transition to the remedial action that is currently in progress in Libby, by adding the site to the National Priorities List.
In March 2001, EPA filed suit against Grace to recover the costs of its removal action. Following a district court's initial finding that Grace was liable for the costs, and a subsequent three-day bench trial to determine the amount that Grace was obligated to pay the court awarded EPA $54.53 million and a declaratory judgment of Grace's liability for future costs. Grace appealed to the Ninth Circuit with the claims that EPA improperly characterized its response as a removal action, that EPA could not allow such enormous exemptions to the $2 million and twelve-month limitations on removal actions, and that EPA miscalculated the indirect costs of the removal action.
The Ninth Circuit concluded that the Libby cleanup, although a unique and unprecedented removal action, qualified as a removal action because of the extraordinary circumstances at the Libby site. The Ninth Circuit agreed with the district court's determination that EPA's decision to undertake a removal action was not arbitrary and capricious. But where the district court ceased inquiry after determining that EPA's categorization of the Libby cleanup as a removal action was consistent with the National Contingency Plan, and therefore not arbitrary and capricious, the Ninth Circuit went further to assess whether the actions EPA took were appropriate removal actions. The Ninth Circuit thus undertook a two step analysis, first agreeing with the district court that EPA considered the appropriate regulatory factors in undertaking the removal action, and second, assessing whether the activities EPA undertook were, as a matter of law, appropriate to a removal action.
In the first step of its two step analysis, the Ninth Circuit reiterated the district court's conclusion that EPA did not arbitrarily and capriciously undertake a removal action because EPA demonstrated compliance with the National Contingency Plan. EPA's "carefully documented reasoning" in its three action memoranda sufficiently satisfied the conditions laid out in the National Contingency plan that dictate whether a removal action is appropriate. Specifically, the court focused on the EPA's analysis of the magnitude of the threat presented by vermiculite and the necessity of an expedient response to the hazard as factors in compliance with the National Contingency Plan. The court thus quickly moved to the second phase of its inquiry, asking whether the cleanup activities EPA undertook qualified as a removal action.
To answer this question the court examined the meaning of "removal" using the two-step analysis originating in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. Before proceeding very far with the Chevron analysis however, the court first decided what level of deference it would give to the interpretation of "removal" advanced by EPA in its suit against Grace. The court considered the line of Supreme Court decisions pertaining to agency deference, beginning with Chevron. The Ninth Circuit determined that, although the degree of deference outlined in Chevron is appropriate for agency interpretations that carry the force of law, courts are unsettled as to the degree of deference to be accorded less formal agency interpretations, like the interpretation of "removal" EPA posited in its suit against Grace.
In the end, the Ninth Circuit opted to follow the rule in a case that resembled the situation in Grace, Alaska Department of Environmental Conservation v. EPA. In that case the Supreme Court gave "respect to the EPA's reading of the relevant statutory provisions." The Ninth Circuit thus chose to apply a "modified deference standard affording respect to the EPA's informal interpretations." The court noted that regardless of whether it chose to apply this modified deference or full Chevron deference it drew the same conclusion that EPA appropriately categorized the cleanup activities at the Libby site as a removal action.
After determining the applicable level of deference, the court continued with its Chevron analysis. Under Chevron step one the court inquired whether "Congress has directly spoken to the precise question at issue." The court concluded that CERCLA's definition of "removal" is vague and consists of sweeping terms. The court added that the statutory definition of "remedial" is equally broad and further that the factors triggering a removal action are very similar to the factors that trigger a remedial action. The court added that both definitions provide examples of the kinds of actions that qualify as either remedial or removal, but these examples proved unilluminating given that some are similar and the lists are not exclusive. Despite these parallels, the court determined that "remedial" and "removal" are distinguishable in that the definition of "remedial" refers to "permanent" remedies while that of "removal" focuses on temporary emergency remedies. Because the plain language of the statute was inconclusive, the court next considered CERCLA as a whole.
The court concluded that the statute in its entirety does little to clarify what kinds of response actions are removal as opposed to remedial other than to suggest that remedial actions may be "long term." The court similarly concluded that the purpose of the statute does little to inform the interpretation of "removal" other than to encourage a liberal reading of the term to enable "expeditious and efficient clean up" that protects and preserves public health and the environment. Finally, the court turned to CERCLA's legislative history, which was "unhelpful" because of CERCLA's unique character as last minute compromise legislation. The court only gleaned from the history that the statue promotes aggressive action to protect public health. In sum, the court determined that the distinction between "removal" and "remedial" rests upon the "time sensitivity of the threat and the significance of the public health threat" but that CERCLA is otherwise ambiguous regarding the specifics of a removal action as opposed to a response action. Consequently, the court moved to the second phase in the Chevron analysis, to assess in light of the proper level of deference afforded to the agency whether EPA's construction of the ambiguous term is reasonable.
The court reiterated that it would apply the deference invoked in Alaska Department of Environmental Conservation, which is less than Chevron deference, but entails respect and approbation for an informal agency interpretation. Applying this deference standard, the court approved the reasonableness of EPA's removal/remedial distinction that is based on whether EPA has time to tackle all of the procedural requirements of a remedial action, and whether EPA's removal action aims to "minimize and stabilize imminent harms to human health and the environment." Based on this understanding the court ultimately deferred to EPA's choice of removal action activities at the Libby site. In order to first understand what EPA's interpretation of "removal" entailed the court looked to EPA's most formal interpretation of CERCLA, the National Contingency Plan and then at EPA's informal interpretations.
The court discovered that the National Contingency Plan echoes much of the ambiguous language of CERCLA, but provides a helpful list of activities that could be part of a removal action, including activities such as fencing and excavation. At this point the court noted that many of the activities that EPA undertook as part of its removal action at the Libby site, fell into the scope of the National Contingency Plan examples, such as removing exposed piles of vermiculite. The court then added that EPA's interpretation of removal action and the actions it carried out at the Libby site were reasonable based on the well-documented need for immediate action. The court cited the three EPA action memoranda and the accompanying investigations and reports that provided ample evidence of the imminent threat that faced Libby.
The court then emphasized that the actions EPA undertook in Libby were consistent with the National Contingency Plan's expectation that EPA transition from a removal to a remedial action if it "determines that the removal action will not fully address the threat posed by the release." The court again cited the agency's three action memoranda that indicated EPA intended the removal action to "compliment and contribute to the overall success of any remedial actions in the future." The court thus deferred to both the agency's interpretation of "removal" as manifested in the National Contingency Plan and the agency's interpretation of the term as manifested by its choice of activities that comported with the National Contingency Plan.
For additional evidence that EPA rationally construed "removal" the court next looked to the agency's informal interpretations, beginning with a 2000 memorandum intended to guide project managers in choosing between removal and remedial actions (Removal Memo). This memorandum emphasized "time sensitivity" and stated that "even expensive and complex response actions may be removal action candidates if they are relatively time-sensitive." The court also looked to another EPA report describing the removal program, that singled out time sensitivity as a critical element in removal actions. Lastly the court considered prior court decisions that highlighted the immediacy of the threat involved in removal actions.
The court pointed out that many courts had viewed the duration of the action as determinative, but then added that the Removal Memo downplays the duration of an action and asserts that a removal action, although urgent, will not necessarily be brief. The court reasoned that, due to the magnitude of contamination in Libby and the harsh winters that cut short the cleanup season, the duration of the Libby cleanup was reasonable even as a removal action. The court added that to require removal actions to be temporary in nature would practically limit EPA's ability to undertake removal actions as interim and immediate responses that transition to remedial actions.
Considering these informal interpretations of "removal," along with the descriptions of removal actions in the National Contingency Plan the court concluded that the understanding of removal actions that EPA posited over the course of the litigation, as time sensitive and taken to counter imminent threats to public health was "rationally construed." The court further agreed that the activities EPA undertook as part of its removal action were consistent with the agency's reasonable understanding of removal actions.
Once the court determined, as a matter of law, that EPA properly categorized its response at the Libby site as a removal action, the court refused to question EPA's testing, methodology and data analysis despite Grace's claims that EPA's practices were flawed. The court noted that EPA cannot ignore accepted scientific principles or adopt findings contrary to the record, but deferred to EPA's reasoned judgment, because of the scientific and specialized nature of the issues and because EPA had thoroughly documented the basis of its determinations in the administrative record.
Finally, the court added that its deferral to EPA's construction of removal actions was in accordance with the goal of CERCLA to protect public health. The Ninth Circuit cautioned that there are limits to removal actions but did not attempt to define them since the cleanup in Libby fell within them.
The court next moved to Grace's claim that EPA improperly exempted the Libby cleanup from the $2 million and twelve-month limitations on removal actions. The Ninth Circuit agreed with the district court ruling that EPA did not act arbitrarily and capriciously in incurring costs in excess of $2 million because the agency had documented widespread and pervasive asbestos contamination and a potential for continued dispersion of asbestos fibers. The court indicated that EPA's decision to invoke an exemption is subject to arbitrary and capricious review and that under such review the agency met the three statutory prerequisites to authorizing an exemption, namely the agency documented (1) an immediate threat, (2) the need for a cleanup beyond the time and money limitations to prevent, limit or mitigate an emergency, and (3) its doubt that other government assistance would arrive in a timely manner. The court determined that, given EPA's careful documentation of the scale of contamination and the practical limitations on cleanup, such as climate, along with the fact that EPA had transitioned into a remedial cleanup, the agency had not acted arbitrarily and capriciously in allowing an exemption from the $2 million and twelve month limitations on removal actions. EPA was therefore entitled to recover all of its costs.
The court lastly moved to Grace's claim that EPA overestimated the indirect costs involved in the removal action. EPA calculated $11,322,226 in indirect costs and upon reviewing and approving this figure the district court made extensive findings on EPA's methodology. The Ninth Circuit applied a clearly erroneous standard to the these findings and determined that the district court did not err in its assessment that EPA reasonably calculated indirect costs based on the total expenditures at each site, rather than based on the number of hours that EPA personnel logged at a each site within the Libby site. EPA explained that this second method, advocated by Grace, could not account for all of the costs of a cleanup. The court agreed and added that the General Accounting Office supports the full cost method, and further, that the district court had stated that Grace's accounting expert was not credible.
In summary, the Ninth Circuit affirmed a district court holding that Grace was liable for all of EPA's costs associated with the removal action at the Libby site. After determining that CERCLA does not expressly describe the characteristics of a removal action, the court deferred to the interpretation of removal that EPA promoted in the litigation as supported by the interpretations in the National Contingency Plan and several informal agency interpretations, as a time sensitive response that is necessary to counteract an imminent harm to the public health. The court further determined, based on the administrative record, that the actions EPA undertook over the course of its response at the Libby site were all within the scope of the agency's construction of a removal action. Once the court ascertained that the removal action was appropriate, the court determined that EPA's exemption from the $2 million and twelve-month limitations on removal actions was also appropriate because of the extent and imminence of the threat in Libby and because of practical restrictions on the cleanup process. Lastly, the court determined that the district court did not error in approving EPA's calculation of indirect costs based on total costs rather than personnel hours.
Judge Bea concurred with the majority's holding that the EPA properly classified its response as a removal action but wrote separately to underline that the court should have reviewed, under the arbitrary and capricious standard, EPA's response at each individual location within the Libby site. Judge Bea gave the example of EPA's excavation of a Middle School track despite the school superintendent's claim that EPA had concluded that there was no current risk of exposure from the track. Judge Bea added that EPA provided additional findings in the record to justify the excavation as part of the removal action, but reiterated that because of disputes like the one in this example, the court should "stand ready to review separately the EPA's actions at different locations."
Unless (A) [EPA] finds that (i) continued response actions are immediately required to prevent, limit, or mitigate an emergency, (ii) there is an immediate risk to public health or welfare or the environment, and (iii) such assistance will not otherwise be provided on a timely basis, . . . obligations from the Fund . . . shall not continue after $2,000,000 has been obligated for response actions or 12 months has elapsed from the date of initial response to a release or threatened release of hazardous substances.
See also National Oil and Hazardous Substances Pollution Contingency Plan, 40 C.F.R. § 300.415(b)(5) (2005) (limiting actions to $2 million and 12 months unless an exemption applies).
 "Because asbestos is generally only harmful if inhaled or ingested, the mere presence of asbestos does not necessarily constitute an immediate threat." United States v. W.R. Grace & Co., 429 F.3d 1224, 1230 (9th Cir. 2005).
 40 C.F.R. § 300.415(b)(5) (2005).
 See, e.g., "[A] remedial action seeks to effect a permanent remedy to the release of hazardous substances when there is no immediate threat to public health" Pub. Serv. Co. of Colo. v. Gates Rubber Co., 175 F.3d 1177, 1182 (10th Cir. 1999).
Priorities List for Uncontrolled Hazardous Waste Sites, 67 Fed. Reg. 65,315 (Oct. 24, 2002). For progress on the remedial action
see U.S. Envtl. Prot. Agency, Superfund Site Progress Profile: Libby Asbestos
csitinfo.cfm?id=0801744 (last visited June 28, 2006).
 United States v. W.R. Grace & Co., 280 F. Supp. 2d 1135, 1148 (D. Mont. 2002). Under 42 U.S.C. § 9607(a)(4) (2000) responsible parties are liable for "all costs of removal or remedial action incurred by the United States Government . . . not inconsistent with the National Contingency Plan."
 See 40 C.F.R. § 300.415(b)(2) (2005) (citing factors taken into account in national contingency plan).
 United States v. W.R. Grace & Co., 429 F.3d 1224, 1234 (9th Cir. 2005). EPA's memoranda included findings such as "'there are over 3000 three gallon buckets of unexpanded Libby vermiculite' being used at a mushroom farm at the former screening plant, and that surface soils contained visible vermiculite that could readily migrate." Id.
 467 U.S. 837 (1984). "In Chevron, [the Supreme Court] held that ambiguities in statutes within an agency's jurisdiction to administer are delegations of authority to the agency to fill the statutory gap in reasonable fashion." Nat'l Cable & Telecomms. Ass'n v. Brand X Internet Serv., 125 S.Ct. 2688, 2700 (2005).
 See United States v. Mead Corp., 533 U.S. 218, 226-27 (2001) (holding Chevron applies "when it appears that Congress delegated authority to the agency generally to make rules carrying the force of law, and that the agency interpretation claiming deference was promulgated in the exercise of that authority"); Barnhart v. Walton, 535 U.S. 212, 221 (2002) (applying Chevron deference even though the EPA reached its interpretation through means less formal than "notice and comment" rulemaking).
 See id. § 9601(24).
 It is a "fundamental canon of statutory construction that the words of a statute must be read in their context and with a view to their place in the overall statutory scheme." Food & Drug Admin. v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 133 (2000) (quoting Davis v. Mich. Dep't of Treasury, 489 U.S. 803, 809 (1989)).
 See, e.g., Carson Harbor, 270 F.3d at 885 (indicating that the search for legislative history of CERCLA is "somewhat of a snark hunt").
 "The Surgeon General of the United States has stated that toxic wastes may be the most serious threat to public health in our country in the next decade. So it is in this spirit of urgency that I cosponsor this substitute [bill] today." S. Rep. No. 96-848, at 2 (1980).
 The court made note of details such as the statement in a May 17, 2000 toxicology report that "[a]irborne fiber concentrations in the residential area of Libby exceeded the present occupational Permissible Exposure Level . . . ." Grace, 429 F.3d at 1242.
from Stephen Luftig, Director, Office of Emergency and Remedial Response, and
Barry Breen, Director, Office of Site Remediation Enforcement, to Regions I -
X, Program and Legal Division Directors, Use of Non-Time-Critical Removal
Authority in Superfund Response Actions (Feb. 14, 2000), available at
 Office of Emergency & Remedial Response, U.S. Envtl. Prot. Agency, EPA 540-K-00-002, The Emergency Response and Removal Program 3 (July 2000), available at http://www.epa.gov/superfund/resources/emer_res.htm (last visited June 26, 2006).
 See, e.g., City of Wichita v. Trs. of APCO Oil Corp. Liquidating Trust, 306 F. Supp. 2d 1040, 1077-78 (D. Kan. 2003) (determining city's cleanup was "remedial in nature" where "[t]he court has heard no evidence that the contamination at the Site posed a threat to human health or the environment which required an immediate response"); Carson Harbor Vill., Ltd. v. Unocal Corp., 287 F. Supp. 2d 1118, 1157 (C.D. Cal. 2003) (finding action was remedial where "[t]here is no evidence in the record that the materials posed the type of threat to human health and welfare that required immediate action").
 See Great Basin Mine Watch v. U.S. Envtl. Prot. Agency, 401 F.3d 1094, 1098 (9th Cir. 2005) (holding court will overturn a final agency action if agency "entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before to agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise").
 See Balt. Gas & Elec. Co. v. Natural Res. Def. Council, 462 U.S. 87, 103 (1983) ("When examining this kind of scientific determination, as opposed to simple findings of fact, a reviewing court must generally be at its most deferential.").
 See, e.g., Hanford Downwinders Coal., Inc. v. Dowdle, 71 F.3d 1469, 1481 (9th Cir. 2005) ("[T]his circuit has joined others in recognizing that protection of the public health was one of the remedial goals of CERCLA.").
 See 40 C.F.R. § 300.415(b)(5) (2005).