Superfund: 20+20 = 40

Posted on January 14, 2020 by John Barkett

It seems hard to believe that the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA)—affectionately known as the Superfund law—will be forty-years old in December 2020.

I first became involved with CERCLA in 1981, a few months after the law’s adoption. The State of Florida’s environmental regulatory agency was concerned about a transformer salvaging operation. It feared that mineral oil containing polychlorinated biphenyls that had been spilled on the ground would be carried throughout the surrounding area if a hurricane hit Miami and caused severe flooding. So it called on the Environmental Protection Agency to conduct a removal action – an emergency response – under CERCLA. That led to a lawsuit to gain access.  I represented a utility that had sold transformers to the salvager. A federal district court judge set a hearing on EPA’s motion for a preliminary injunction to gain access and allowed two weeks for discovery.  The judge also ordered the utility to intervene in the action.  We were taking depositions around the clock until the judge called us into chambers just before the hearing was scheduled to begin. We left chambers and headed not to the courtroom but to a hotel where we were ordered to engage in settlement discussions and not to return until a settlement had been reached.  The settlement was reached.  No hurricane hit.  The site was eventually remediated.  And acronyms like RI/FS, RD/RA, PRP, and NPL became a part of my daily vocabulary.

This case, however, was not the norm.  Once Chem-Dyne came down establishing the principle that in a government cost recovery action, the Superfund law created joint and several liability, and other cases affirmed EPA’s position that liability was also strict and retroactive, the litigation floodgates opened.  To conserve enforcement resources, EPA (the United States) sued “deep pocket” parties. Those parties then sued other PRPs who sued other PRPs—waves of multi-party actions.  The calls to members of Congress became louder as pizza parlors were spending more money on lawyers for the hazardous substances in the ink on their pizza boxes than they could make on a calzone.

Reforms eventually followed in the next two decades of Superfund.  The Superfund Amendments and Reauthorization Act (SARA) in 1986 plugged some holes in the statute and expressly provided for contribution actions.  The “innocent landowner” defense was added and literally created an industry – environmental assessment firms sprung up over night offering their services to anyone buying land or lending money for a real estate acquisition. 

Other amendments followed.  Section 107 of CERCLA initially ended in subparagraph (m).  Now there is a subparagraph (n) to protect fiduciaries, (o) to protect “de micromis” parties, (p) to create a municipal solid waste exception, (q) to address contiguous properties, and (r) to address prospective purchasers.   The Superfund Recycling Equity Act was passed in 1999 to reverse decisions of courts which found that a person recycling certain products was an arranger for disposal liable under Section 107(a)(3) of CERCLA.

Landfills, used oil recyclers, and solvent recyclers received most of the attention in the first three decades of Superfund—and in many cases are still receiving attention.    In the fourth decade of Superfund, river sediment sites have been the most prominent sites on the National Priorities List.  Their remedial investigation/feasibility study and remedial design/remedial action costs dwarf those of landfills on the NPL.

The Supreme Court has weighed in on the Superfund law on a few occasions. Key Tronic wounded the private Superfund enforcement business when the Court in 1994 determined that a private Superfund plaintiff could not recover litigation attorneys’ fees under CERCLA. Aviall (2004), Atlantic Research (2007), and Burlington Northern (2009) followed in a string of decisions that shook up the Superfund jurisprudence in the arena of contribution actions, cost recovery actions, and the evidence required to establish when someone has arranged for disposal or treatment of a hazardous substance. Burlington Northern also weighed in on how to prove a reasonable basis for apportionment in a cost recovery action.

A lot of money has been spent on Superfund sites these past 39 years.  Whether the risk reduction bought with those dollars was the best use of these funds can be debated.  But there is no debate that toxicology has risen in prominence because of Superfund and lawyers have had to become familiar with notations or phrases like 1 x 106, slope factor, and reference dose, to make sense of the difference between carcinogenic and non-carcinogenic risks in human health risk assessments.

All Superfund lawyers know Section 113(f)(1) of CERCLA, the statutory standard applicable in a contribution action: the court is to allocate response costs according to “such equitable factors as the court determines are appropriate.”  That text has resulted in the “Gore factors,” the “Torres factors,” and a host of arguments – sometimes supported by facts and oftentimes supported by inferences or even educated guesswork – as judges and allocators attempt to satisfy the statutory standard.

As we embark on a fifth decade of Superfund, we have another Superfund Task Force and a new set of recommendations focused on trying to speed up cleanups, accelerate remedial design, encourage private investment resulting in reuse of Superfund sites, promote redevelopment of sites to revitalize communities, and promote transparency and engagement with Superfund stakeholders. Actions always speak louder than words, so we can all just watch and hope that the noble goals of this latest Superfund Task Force can be met.

So, here’s to a “Happy 40th” to the Superfund law in 2020.  I was there for your birth and am glad to still be around to declare: you have definitely aged, but you still seem to be going strong!

The Government’s “Bare Legal Title” CERCLA Defense Wears Thin

Posted on August 29, 2017 by Theodore Garrett

The United States has encouraged economic activities such as mining on federal lands.  Such activities have resulted in contamination and subsequent CERCLA cleanup orders.  Companies undertaking such cleanups have sought contribution from responsible parties including the United States.  Two recent decision reject the government’s argument that its “bare legal title” should not give rise to CERCLA owner liability.  A logical result and also poetic justice, since the United States has consistently urged that CERCLA be construed broadly and liberally as a remedial statute.  Turnabout is fair play.  

In Chevron Mining Inc. v. United States, the 10th Circuit on July 19, 2017 held that the United States was liable as an owner under CERCLA 107(a) because it owned national forest lands in New Mexico.  The lands were mined over several generations by Chevron Mining.  Chevron began remediation expected to cost more than $1 billion pursuant to three EPA administrative orders.  Chevron then filed suit against the United States seeking contribution.  The 10th Circuit held that owner liability attaches to the United States as the owner of portions of the site, and plaintiff need not show that the defendant caused the release of hazardous wastes that required cleanup.  The court rejected the government’s argument that “bare legal title” is insufficient to trigger owner liability, noting that CERCLA contains neither an express nor an implied exception for owners of “bare legal title.”  The court’s opinion also notes that Chevron received loans from the United States, under the Defense Production Act, to fund its exploration activities and received authorization from the Forest Service for pipelines to dispose of mine tailings.  The case was remanded to the district court for further proceedings to determine the government’s equitable share. 

Similarly, in El Paso Natural Gas Company v. United States, the District of Arizona ruled on August 15, 2017 that the United States is liable under CERCLA as an owner of 19 uranium mines.  The mines are located on the Navajo Reservation and are being remediated by El Paso.  The court cited longstanding law that the United States owns fee title to reservation land.  The fact that the Navajo Nation has significant rights in reservation land is not inconsistent with the power of the United States over reservation land.  The court cited the Chevron Mining case above with approval, and also noted dicta from the 9th Circuit that the passive title owner of real property is liable.  Given CERCLA’s broad remedial purposes, the district court held that the United States, as a fee title holder with plenary and supervisory powers over reservation land, is an owner for purposes of CERCLA.  The court’s decision does not address the extent of the government’s liability, to be addressed in the equitable allocation phase of the case. 

These and other decisions will support efforts by companies responsible for remediation at CERCLA sites on federal land to have the government contribute an appropriate share of the cleanup costs.  Also, mindful of its potential liability, perhaps the government will more carefully consider risks and costs when making remedy decisions, which would be welcomed at all sites, whether or not on federal lands.