Posted on May 24, 2017 by John Barkett
One of the challenges for lawyers involved in CERCLA litigation is educating the judge on how CERCLA works. But when both the advocate and the court misapprehend how CERCLA works, Voila! Bad law is made.
CERCLA is hardly a model of clear drafting, but one area of confusion involves the difference in the burden of proof in the application of Section 107(a)(4)(A) and (B). As CERCLA practitioners know, a party liable under one of the four categories of Section 107(a)(1) – (4) is liable under Section 107(a)(4)(A) to the United States, a State, or a Tribe for costs that are incurred “not inconsistent with the national contingency plan.” On the other hand, under Section 107(a)(4)(B), “any other necessary costs of response incurred . . . consistent with the national contingency plan” is the standard applicable to private cost recovery claims.
Washington State Dep’t of Transp. v. Washington Natural Gas Co., 59 F.3d 793 (9th Cir. Wash. 1995) is one of many decisions that explain the distinction. In a 107(a)(4)(A) action, a defendant has the burden of proving that the government or Indian tribe’s costs are inconsistent with the National Contingency Plan (NCP) because of the presumption of NCP consistency attached to governmental or tribal actions. “In contrast, any ‘other person’ seeking response costs under § 9607(a)(4)(B) must prove that its actions are consistent with the NCP.” 59 F.3d at 799-800 (citation omitted). In other words, Section 107(a)(4)(A) focuses on costs because consistency is presumed. Section 107(a)(4)(B) focuses on actions because consistency must be proved.
Lawyers, law clerks, and judges who do not understand the distinction can become the purveyors of bad law. Pentair Thermal Mgmt., LLC v. Rowe Indus., Inc. Nos. 06-cv-07164 NC & 10-cv-01606 NC, 2013 WL 1320422 (N.D. Cal. Mar. 31, 2013) illustrates the problem. In Pentair, there was a cleanup of polychlorinated biphenyls in soils. There was no quarrel with the NCP process leading up to the selection of an excavation remedy. But during remediation problems were encountered that resulted in adjustments to the remedy and increased costs. CERCLA practitioners know that fundamental changes to a National Priorities List-site remedy require another round of public participation. 40 C.F.R. §300.435(c)(2)(ii)(H). To defeat plaintiff’s costs, defendant decided to argue that the changes to the remedy required re-notice to the public of the remedial action because they were fundamental changes, and thus plaintiff’s actions were not consistent with the NCP.
Defendant’s argument was premised on United States v. Burlington Northern Railroad Company, 200 F.3d 679 (10th Cir. 1999), where the court of appeals concluded that the Environmental Protection Agency’s problems during a remedial action did, indeed, represent a fundamental change to the remedy requiring re-notice to the public. The court of appeals held that despite an NCP violation, on remand, the burden of proof remained on the defendant to establish that “EPA’s remedial actions resulted in demonstrable excess costs that would not have otherwise been incurred.” Id. at 695.
The district court in Pentair found NCP consistency even with the changes to the remedy. However, without appreciating the fact that Burlington Northern was a Section 107(a)(4)(A) case—presumably because defendant was relying on the decision—the court said that even if the remedial changes were fundamental, defendant would still lose based on Burlington Northern and another governmental cost recovery action, Minnesota v. Kalman W. Abrams Metals, Inc., 155 F.3d 1019 (8th Cir. 2015). Both of these were Section 107(a)(4)(A) cases where a defendant must prove which of the government’s costs were inconsistent with the NCP. The district court in Pentair failed to appreciate the distinction. It wrongly held that, had the district court determined that the remedy changes were fundamental, defendant would still have had the burden of proof to show which of plaintiff’s costs were non-NCP compliant.
The dangers of dicta! Compounded by the failure to comprehend the different burdens of proof in a 4(A) and a 4(B) action. That’s the formula for making bad law.