A group of PRPs received an oversight cost bill pursuant to a CERCLA consent decree. (The following details are intentionally vague to protect both the innocent and the guilty.) The bill was for several hundred thousand dollars. During the year covered by the bill, the PRPs spent no money cleaning up the area of the site covered by the invoice. They spent little or no money monitoring the area of the site covered by the invoice. They spent no money preparing plans for the area of the site covered by the invoice.More
Category Archives: Superfund
Although it has taken a surprisingly long time, the holding in Burlington Northern which greatly lowered the standard for apportionment in Superfund cases is finally being embraced by lower courts. Last fall I blogged about a Seventh Circuit decision which rejected the trial court’s conclusion in the long-running Lower Fox River Litigation (US v. NCR Corp.) that a portion of the liability was not divisible. On remand, the trial court completely switched its earlier ruling and held that the harm was divisible based entirely on the relative volumetric contribution of the PRPs; the court then decided that the liability could be apportioned largely… More
The decision earlier this month in Cyprus Amax Minerals v. TCI Pacific Communications is a useful reminder that corporate form exists for a reason and that parent corporations who ignore corporate niceties do so at their peril. In the Bestfoods decision, the Supreme Court made clear that CERCLA does not displace state corporate law and that a parent corporation will only be held indirectly liable for the acts of its subsidiaries when the corporate veil can be pierced under applicable state law.
Though state law varies somewhat, veil piercing principles tend to be fairly similar among the states. … More
So the new Congress will be controlled by the GOP. The House and Senate will consider various bills to rein in EPA authority. Here’s one relatively modest suggestion for congressional consideration: amend CERCLA to limit EPA’s authority to recover oversight costs.
How many of us in the private sector have been in meetings with EPA where EPA had more technical people in attendance than the PRPs who were performing the remedy? How many of us have had clients receive oversight cost bills where the total amount of the oversight costs approached the amount spent on actually performing the remedy? How… More
It is generally the rule that a lessee who does not operate the property it rents will not be liable under CERCLA except in the unusual circumstance where the lessee qualifies as an “owner” of the property. Typically, this means that a lessee who sublets the rented property will not be liable under CERCLA. That was the holding in a recent federal case in New York, Next Millennium Realty, LLC v. Adchem Corp. There, the owner of a property contaminated with dry cleaning solvents sued a former tenant for CERCLA contribution because that tenant had sublet the property to a now defunct dry cleaner whose… More
In an important decision yesterday, Judge Douglas Woodlock of the District of Massachusetts confirmed that CERCLA preempts local cleanup bylaws. The case involved one aspect of the cleanup of the W.R. Grace Superfund Site in Acton, Massachusetts. In 2005, EPA issued a Record of Decision requiring operation of a groundwater pump and treat system in what is known as the Northeast Area of the Site. However, EPA recognized that the contamination in the area was limited and stated in the ROD that the treatment system might be turned off in three years if certain criteria were met. After three… More
How Much Deference Do States Get in Entering CERCLA Consent Decrees? Probably A Lot, But Perhaps Not As Much as You Thought
In Cannons Engineering, the First Circuit Court of Appeals famously stated that, when CERCLA consent decrees arrive at the courts of appeal for review, they do so “encased in a double layer of swaddling,” because both the EPA decision to enter into the decree and the district court review of the EPA decision are entitled to significant deference. Last week, in Arizona v. City of Tucson, the 9th Circuit Court of Appeals concluded that, where a state consent decree is concerned, the first layer of swaddling is somewhat thinner than where EPA is concerned. The Court also made… More
Even Superfund lawyers are likely to find the Supreme Court’s decision yesterday in CTS Corporation v. Waldburger to be of limited interest. Unable to reach an agreement about a federal “toxic tort” cause of action, Congress in the 1986 amendments to CERCLA settled on a limited provision that federalized the equitable tolling of statutes of limitation applicable to state toxic tort claims so that toxic tort claims would not accrue until a plaintiff either knew or should have known of his claim. The issue before the Supreme Court in CTS was whether that equitable tolling doctrine applied to state statutes of repose as well as to statutes… More
I Thought Redeveloping Brownfields Was a Good Idea: Apparently the Boston Globe Hasn’t Gotten the Message
In an article earlier this week, the Boston Globe reported on concerns that the Massachusetts Department of Environmental Protection is planning to weaken cleanup standards for hazardous waste sites in Massachusetts, seemingly in response to pressure from developers. The article is so wrong and the concerns are so misplaced that some response is necessary.
First, we expect MassDEP to regulate in the face of uncertainty. That means that MassDEP must set cleanup standards without perfect knowledge. As a result, most people – and certainly the environmentalists complaining about the regulatory changes – would expect MassDEP to err on the… More
Although one might not ordinarily think to associate child pornography and pollution, the two were linked at an oral argument yesterday before the United States Supreme Court. Specifically, in a child pornography case, the defendant was found guilty of viewing a child pornography video obtained from the Internet. Pursuant to federal statute, the defendant was ordered to make “restitution” in the amount of $3.4 million to the juvenile depicted in the video.
In arguments that will sound familiar to any environmental lawyer, the defendant’s counsel insisted that there had been thousands of views of the video so it would… More
For those of you who were skiing or snorkeling (snorkeling in my case) and missed it, on December 30, EPA announced a direct final rule incorporating the new ASTM 1527-13 standard for site assessments into its all appropriate inquiries rule. Following ASTM’s release of the new standard, EPA’s action was expected, but remains important.
The biggest issue here is what EPA will do regarding the prior standard, ASTM 1527-05. The answer for now is nothing; use of ASTM 1527-05 remains valid. However, the new rule states that EPA “recommends” use of ASTM 1527-13. EPA also stated that it… More
EPA’s Groundwater Remedy Completion Strategy: Making Cleanups More Efficient Or Just Increasing PRP Costs?
Last week, EPA released a draft Groundwater Remedy Completion Strategy. The strategy is intended to provide:
a recommended step-wise plan and decision making process for evaluating remedy operation, progress and attainment of [remedial action objectives] using an updated conceptual site model, performance metrics and data derived from site-specific remedy evaluations.
I like to think that I am skeptical, not cynical. Having worked on this stuff for 25 years, including some specific Superfund sites for most of that time, I’m skeptical that this means anything other than increased sampling and analytical costs and increased oversight costs, as my clients and… More
In State of New York v. Next Millenium Realty, decided earlier this week, the 2nd Circuit Court of Appeals confirmed the wisdom of Gilbert and Sullivan. It is very difficult to blow the statute of limitations in CERCLA cases.
The question before the court was whether New York could recover from PRPs the cost of a granulated activated carbon (GAC) system and an air stripper tower, installed in 1990 and 1995, to ensure that municipal wells serving the Town of Hempstead were safe to drink, notwithstanding the presence of contamination, ultimately shown to have been caused at the New… More
As Superfund lawyers know, the Supreme Court decision in Burlington Northern required proof of an intent to dispose hazardous substances as a prerequisite to imposition of arranger liability. While lower courts have often blissfully ignored the holdings in Supreme Court decisions under CERCLA, arranger liability seems to be one area in which the lower courts have taken the Supreme Court decision to heart.
In any event, while I have been pleased that lower courts have applied the rule in Burlington Northern, the arranger liability decision last week in United States v. D.S.C. of Newark Enterprises suggests to… More
As readers of this blog know, I believe in governmental environmental regulation. We have a complicated world and it is not surprising that many activities, including those generating greenhouse gases, cause negative externalities. At the same time, however, I have spent more than 25 years representing regulated entities in negotiations with government regulators and it is impossible to do such work without obtaining an appreciation for the very significant costs that bureaucracies impose.
With all due respect – cue the upcoming diss – to my many friends in government, the absence of market discipline or the ability to fire nonpolitical… More
A few months ago, I blogged on the decision in Duke Energy Progress Inc. v. Alcan Aluminum Corporation where a court held that a company would not be held liable for selling used transformers to a recycling facility for refurbishing and eventual resale to a new user. At the center of that holding was the notion that the transformers were not leaking PCB oils when delivered to the recycling center and could be refurbished in the exercise of due care without causing a release of PCBs.
In a post last year, I discussed what I I thought was the dubious dismissal of a CERCLA cost recovery action in Stratford Holding, LLC v. Fog Cap Retail Investors LLC. That case involved a holding that the costs of investigating the presence of solvents in the groundwater above regulatory standards were not “necessary” response costs because the the state had declined to list the site on its Hazardous Sites Inventory. In a short, unpublished opinion, the Eleventh Circuit Court of Appeals recently overturned the district court decision and correctly ruled that the failure of a state to list a site on its Hazardous Sites… More
The Fourth Circuit handed down a primer on CERCLA liability last week in PCS Nitrogen Inc. v. Ashley II of Charleston. It should be required reading for Superfund lawyers. The facts in the case are worthy of a law school law school exam question on CERCLA– contamination arising from manufacturing of fertilizer beginning in the 19th century with the original corporate operator long since dissolved giving rise to new generations of corporate owners and operators — some of whom knowingly moved contaminated soils around the site. While the decision does not make new law, it offers a helpful articulation and compendium on a… More
As we noted last month, the Supreme Court has determined that logging roads are not point sources subject to stormwater regulation under the Clean Water Act. On Wednesday, in Ecological Rights Foundation v. Pacific Gas and Electric, the 9th Circuit Court of Appeals, relying in part on the decision in Decker v. Northwest Environmental Defense Center, held that releases of pentachlorophenol and other pesticides from in-place utility poles also do not constitute point source discharges. As the Court concluded:
Utility poles simply are not “discernible, confined and discrete conveyances” that “channel and control” stormwater.
The Court further… More
The Intersection of Subrogation and Environmental Law — The Ninth Circuit’s Tyranny of Logic over Common Sense
In a decision that exalts casuistry over common sense, the Ninth Circuit recently held that an insurer who reimbursed $2.4 million in CERCLA response costs to its policyholder had no subrogation rights against the potentially responsible parties that actually caused the contamination in the first place. That holding turns upside down the most basic principles of insurance law.
Chubb Custom Insurance Company v. Space Systems/Loral involved an assisted-living facility which was built on a former manufacturing facility that had been operated and allegedly contaminated with VOCs by Ford. After buying the property, the owner of the assisted-living facility, Taube-Koret, was ordered by California regulators to clean up the contamination,… More
On Friday, MassDEP issued the formal public comment draft of its package of regulatory reforms under the Massachusetts Contingency Plan. Overall, it’s certainly a good package, which will facilitate getting to an endpoint with reduced transaction costs, but no decrease in environmental protection. It’s not perfect (and you have until May 17, 2013 to provide comments to help make it more perfect), and it took far too long, but congratulations are still due to MassDEP.
MassDEP’s summary organizes the proposed changes into five broad categories. Highlights in each area include the following:
Permit, Tier Classification, and Numerical… More
Exactly a year ago, I posted a blog that argued that the decisions on Superfund liability for the sale of usable product could be distilled down to an “unstated rule” — a party will be held liable as having intended to arrange for the disposal of a hazardous substance if it sells a waste that cannot be used or won’t be used as delivered without first causing the release of a hazardous substance. One year later, that rule still seems to be correct and still is unstated (except here).
Last week, MassDEP released new guidance on how it is assessing exposures to TCE in light of EPA new assessment of TCE risks released in September 2011. The biggest issue is that concerns about fetal exposure have caused MassDEP to tighten the imminent hazard threshold for indoor air exposures to 2 ug/m3. That’s an order of magnitude reduction from the prior standard of 20 ug/m3.
MassDEP has apparently thus far taken the position that it is not planning on reopening closed sites based on the new IH criterion. However, they are going to be under a lot of pressure… More
Reverse Coverage Suits: What Happens When Policyholders Agree to Defend and Indemnify Their Insurers
Increasingly, when settling coverage disputes, insurers require policyholders to agree to defend and indemnify the insurer against any additional claims asserted against the insurer. This produces the curious result that the policyholder and insurer functionally switch places. For example, Hartford Fire Insurance Company recently sued its policyholder, Lanxess Sybron Chemicals Company. Lanxess had settled a coverage dispute with Hartford concerning the Kearny Superfund Site in New Jersey. As part of that settlement, Lanxess agreed to defend and indemnify Hartford against other claims involving the Kearny Site. Hence, when Hartford was sued by another PRP at the Kearny Site (apparently an… More
The chaos unleashed by Aviall continues in a recent decision by the Seventh Circuit. In Bernstein v. Blankert, the Seventh Circuit revisited the issue whether a party having entered into an Administrative Order by Consent had a claim against other PRPs for cost recovery under Section 107(a) or for contribution under Section 113(f)(1). Offering a novel and entirely misguided conclusion, the court found that whether a party has a claim for cost recovery or for contribution hinges on whether that party had completed all of its obligations under the AOC.
According to the Seventh Circuit, CERCLA provides that a party has a contribution action when it (1) is… More
In Burlington Northern, the Supreme Court made clear that, in order to impose liability on a defendant as an “arranger” under Superfund for the sale of a product, the plaintiff must demonstrate that the defendant
must have entered into the sale of [the product] with the intention that at least a portion of the product be disposed during the transfer process.
Although courts do not seem thus far to have taken to heart the Supreme Court’s allocation discussion in Burlington Northern, there is growing evidence that the arranger discussion is taking hold in the lower courts. I… More
Is There A De Minimis Defense To Liability in Superfund? The Supreme Court Indicated There Was; One District Court Says No.
Burlington Northern squarely decided that where environmental harm is divisible, an individual PRP can obtain apportionment of its liability and be assigned a specific percentage share; in such instances, there will be no joint and several liability. The possibility follows from Burlington Northern that a PRP which can establish divisibility of harm might be able to show that its percentage share of liability is so small that it effectively has a complete defense to liability.
Remedy decisions are almost always won or lost at the agency level. Once the ROD issues, a PRP’s chance of having the selected remedy overturned in court is slim to none – a point that was driven home in a recent decision in the Lower Fox River case.
There, the government had engaged in a decade-long remedy selection process which began as a $325 million PCB dredging project. When the estimated costs of that dredging program skyrocketed, the government voluntarily amended the ROD at the PRPs’ request to utilize capping as well as dredging. When the estimated costs of that capping and dredging… More
Over a decade after it was issued, Aviall continues to cause difficulties for private settling parties in CERCLA. In Lewis v. Russell, a federal district court recently considered whether a PRP which agreed to a cash payment from another PRP has to reduce his claim against other PRPs by the actual amount of the cash payment or by the proportionate share of the settling party. Prior to Aviall, all settlements between PRPs were for contribution under Section 113(f)(1) and not for cost-recovery under Section 107; hence, settlements with one PRP did not affect the rights of other PRPs since a PRP could never be required… More
Who Knew? The National Research Council Discovers That Many Groundwater Cleanups Will Take More Than 100 Years
Daily Environment Report today noted that the National Research Council has produced a study, Alternatives for Managing the Nation’s Complex Contaminated Groundwater Sites, which assesses the scope of the groundwater contamination problem and our ability to address it. One significant takeaway from the report is that
Significant limitations with currently available remedial technologies persist that make achievement of MCLs throughout the aquifer unlikely at most complex groundwater sites in a time frame of 50-100 years. Furthermore, future improvements in these technologies are likely to be incremental, such that long-term monitoring and stewardship at sites with groundwater contamination should be expected.
EPA recently released two guidance documents relevant to Superfund practitioners. One establishes revised procedures regarding how EPA will manage negotiations with PRPs. The second updates EPA’s guidance on how it will handle Alternative Sites. To me, both have the flavor of deck chair management on the Titanic.
The RD/RA negotiation guidance has to be seen to be believed. It’s a document that seems reasonable on its face, but when you step back and take a big picture look, you have to ask whether there isn’t something wrong with a program requiring a 10-page set of details regarding the timeline for how to negotiate a… More
Indemnification Agreements Under CERCLA Do Not Affect Liability to Entities That Are Not Parties to the Agreement
Section 107(e) of CERCLA provides that
No indemnification, hold harmless, or similar agreement or conveyance shall be effective to transfer from the owner or operator of any vessel or facility or from any person who may be liable for a release or threat of release under this section, to any other person the liability imposed under this section. Nothing in this subsection shall bar any agreement to insure, hold harmless, or indemnify a party to such agreement for any liability under this section.
It’s always been understood that the first sentence of § 107(e) means that one cannot contract away… More
In April 2011, MassDEP launched a regulatory reform initiative. Yours truly participated in the original stakeholder group working with MassDEP to develop a list of potential reforms. Last week, MassDEP provided an update on the status of the reform package. While it has probably taken longer than Commissioner Kimmell had hoped, I am pleased to say that there is a lot of good stuff at this point, including some items that have been added since the original Action Plan was finalized in March 2012. Highlights include:
Elimination of MassDEP sewer connection permits. The existing program represents… More
In a poignant moment in Godfather III, Al Pacino’s character says: “Just when I thought I was out… they pull me back in”. EPA’s recent eye-popping announcement of a $366 million encore settlement by AVX with respect to the New Bedford Harbor Superfund Site re-enacts that moment, graphically illustrating the toxic combination of EPA’s sorry history of escalating remedy costs for water-based Superfund sites and Consent Decrees that contain cost-reopening provisions.
Although some of the proposed tax plans and budgets being discussed in this election year suggest that the same dollar can be counted and spent multiple times, a growing number of courts have held that CERCLA response costs can only be allocated once. The most recent holding comes in the Lower Fox River litigation where Judge Greisbach ruled that CERCLA pre-empts most ancillary state law claims – whether styled as state law contribution claims or common law claims for negligence and strict liability: “If the funds were expended pursuant to CERCLA, and if CERCLA itself provides a scheme… More
More Evidence That the Government No Longer Automatically Wins Superfund Cases: New Jersey Requires Proof of a Nexus Between a Discharge and Response Costs
As I have previously noted, government attorneys’ traditional approach to litigating Superfund cases has been to announce that they represent the government and that they therefore win. There was hope, following the Supreme Court’s decision in Burlington Northern, that those days were nearing an end.
It is clear to me, following too many cases after Burlington Northern, that the government remains of the view that it is entitled to win these cases just by showing up. This hubris was evident recently in a decision rendered under the New Jersey Spill Act. In NJDEP v. Dimant, the… More
In an environmental dispute between innocents involving a Church and a downgradient property owner, a federal court recently found the Church, although without original sin, was less innocent and should bear all the costs of the cleanup, even the costs of cleaning up an independent source of contamination on the downgradient property. In Alprof Realty LLC v. Corporation of the Presiding Bishop of the Church of Jesus Christ of Latter-Day Saints, the Church had bought a property with knowledge that it was contaminated. The Church cleaned up the source on its property and was investigating groundwater contamination on… More
Site owners who conduct environmental investigations of potential releases of hazardous substances in the expectation that they will be able to recover their costs from the party whose operations gave rise to that threatened release may be surprised by the outcome in a recent federal district case in Georgia, Stratford Holding, LLC v. Fog Cap Retail Investors LLC. There, a site owner brought CERCLA and state law claims against a tenant and subtenant for dry cleaning operations after the owner’s sampling showed over 2 ppm of tetrachloroethylene (PCE), in soil and 56 ppb in groundwater.
The court granted… More
An article in the New York Times earlier this week reported on EPA’s attempts under the Superfund program to address contamination in water bodies, such as rivers, lakes and harbors. Although the article acknowledges that these water body sites are technically challenging, it does not remotely capture the tortured regulatory history of these sites or the dubious remedial approach that EPA is now pursuing. It is not an exaggeration to say that some of the most notorious Superfund failures involve water body sites.
Typical of the course of water body sites under the Superfund program is the
PRPs hoping that the Supreme Court in Burlington Northern had established that volume could always be used as a basis for apportioning CERCLA liability will be disappointed by a recent Seventh Circuit opinion. Affirming the trial court’s apportionment decision in the Lower Fox River case on which I blogged earlier, the Seventh Circuit distinguished Burlington Northern and followed the Restatement test that apportionment is not available whenever each tortfeasor’s contribution is independently capable of causing the harm. According to the court, the discharge of PCBs into the Lower Fox River by multiple PRPs was akin… More
The First Circuit recently confirmed the traditional rule that it doesn’t take much to trigger an insurer’s duty to defend a policyholder against an environmental claim. In Travelers Casualty and Surety Company v. Providence Washington Insurance Company, the First Circuit overturned the trial court’s conclusion that there could be no coverage for contamination under liability policies issued after a property owner had ceased the activities giving rise to that contamination.
As the appellate court noted, Rhode Island’s trigger of coverage rule is based on manifestation of property damage – that is, when the property damage manifests itself or… More
Is Knowledge an Element of CERCLA Liaiblity: The Lower Fox River Court Said So, But Did The Court Really Mean It?
The course of the Lower Fox River Superfund litigation has been a continual set of surprises, and its denouement was true to that pattern. In his post-trial decision last week, Judge Griesbach wrote the sentence that most CERCLA defendants have been waiting 30 years to hear: “It … seems doubtful that a defendant can ever be found to be an arranger if he did not know the substance in question is hazardous.” For a statute in which liability has always been held to be strict and without fault, a judicial pronouncement that liability hinges on the defendant’s knowledge is… More
The Lower Fox River Superfund site continues to pump out decisions on key CERCLA issues. Most recently, the federal court in Wisconsin in US v. NCR Corp. took on the issue of divisibility of harm in granting a preliminary injunction requiring one of the PRPs, NCR, to complete the removal of 660,000 cubic yards of PCB-contaminated sediments from a portion of the Lower Fox River. In entering that injunction, the court rejected NCR’s argument that the harm was divisible, even though NCR presented expert evidence that it was responsible for only 9% of the PCBs in this portion… More
It’s always satisfying to find an open-minded judge who is willing to change his decision when he is shown to be wrong, but Judge Greisbach of the Eastern District of Wisconsin may be crossing the line from open-mindedness into a chronic inability to make up his mind. In the past 9 months, Judge Greisbach has issued three separate decisions in US v. NCR on the subject of whether a party, Appleton Papers, Inc., which purchased assets from an alleged polluting party, NCR Corp., can be held to have successor liability under CERCLA with respect to the PCB contamination of the… More
Deciding statute of limitations issues in CERCLA cases is not always a straightforward matter as the recent 54 page opinion in American Premier Underwriters Inc. v. General Electric Company illustrates. There, a federal court in Ohio was faced with the unenviable task of trying to determine whether remedial actions and removal actions at four separate railroad sites located in four different states were barred by statutes of limitations under CERCLA and state law. Unfortunately, the court seems to have surrendered its common sense in its close reasoning of the facts and the case… More
2012 is shaping up to be the Year of the Commerce Clause. Not only is the Commerce Clause at the center of the Supreme Court ‘s impending review of the Affordable Care Act later this spring; it is also at the heart of a statement made by a federal district judge in Voggenthaler v. Maryland Square, LLC that the Constitution bars the application of RCRA’s citizen suit provision in the case of a local groundwater contamination plume:
The central issue in this case is an alleged contamination plume located in Las Vegas, Nevada. As noted by [defendant]… More
Over the first two decades of CERCLA, the rule gradually emerged that parties which settled their liability were restricted to contribution claims under Section 113(f)(1) and would be entitled to contribution protection under Section 113(f)(c)(2). Moreover, in order to ensure the effectiveness of that settlement scheme, courts routinely ruled that claims against settling parties were all barred by contribution protection regardless whether those claims had been asserted in the form of direct CERCLA cost recovery claims under Section 107 or as common law tort claims for negligence, nuisance, or trespass. E.g., Cannons Engineering.
In 2004, the Supreme Court… More
Arguments about liability for the sale of “usable wastes” are as old as Superfund. The fact patterns involving the sale of usable wastes can be varied; however, the cases seem to be governed by the following simple but never explicitly stated rule: a party will be held liable if it sells a waste that cannot be used or won’t be used as delivered without first causing the release of a hazardous substance.
This unstated rule explains why parties selling spent solvents to recycling facilities have always been found to have arranged for disposal (the spent solvents can’t be used without… More
According to a report in yesterday’s Greenwire, President Obama’s proposed budget would reduce Superfund spending by 6%, from $565 million to $532 million. I still don’t understand why Obama, particularly with Cass Sunstein still at OMB, hasn’t turned this problem into an opportunity. I know I’ve flogged this one before, but a significant part of the explanation for the size of the Superfund budget is related to CERCLA’s status as the last bastion of command and control regulation. Everyone who practices in this area could provide endless examples of the almost unbelievable extent of micromanaging indulged in by EPA and its… More
For several decades now, the United States has taken the position that communications and documents exchanged in Superfund matters between government lawyers representing the US EPA and government lawyers representing federal PRPs are privileged. Specifically, the government has argued that both of these sets of government lawyers represent the same party — the United States, which is a unitary government — and thus their communications are protected as attorney-client communications. That unitary government position was squarely rejected earlier this week in Menasha Corporation v. United States Department of Justice – yet another litigation arising from the Lower Fox River… More
The PCB contamination in the Lower Fox River in Wisconsin continues to spawn novel Superfund decisions. The latest is US v. NCR, in which Judge Greisbach of the Eastern District of Wisconsin reversed his initial ruling, made less than six months ago, that the United States could not establish successor liability under CERCLA against Appleton Papers, which had bought assets from the alleged polluting party – NCR Corp – and assumed NCR’s liabilities. As Judge Greisbach explained in his earlier ruling, there can be no successor liability where the seller of assets remains a viable CERCLA defendant, since… More
Last week, MassDEP finally issued its long-awaited vapor intrusion guidance. Including appendices, it is 148 pages. There is a separate 52-page response to comments on the draft guidance. MassDEP has certainly learned that guidance must at least be described as guidance. The disclaimer runs a full page, and includes the following text:
MassDEP generally does not intend the guidance to be overly prescriptive. Use of such words as “shall,” “must,” or “require,” however, indicates that the text is referring to a specific regulatory and/or statutory requirement, rather than a suggested approach and/or optional measure. Use of the words “should” or “recommend” indicates… More
In New York State Superfund Coalition, Inc., v. New York State Department of Environmental Conservation, the highest court in New York recently put its own gloss on the long-standing environmental issue of “How Clean is Clean”. There, the court held that, even though liability for cleanup under New York’s state Superfund statute is triggered when there is a “significant threat” to the environment, the state has authority to promulgate regulations requiring cleanup beyond what would be necessary to eliminate that significant threat. Specifically, the Court affirmed regulations that require cleanup to “pre-disposal conditions, to the extent feasible”.
The court… More
As one Potentially Responsible Party in Wisconsin recently discovered, Superfund consent decrees are the gift that requires you to keep giving. In US v. Wauconda Sand & Gravel Co., a PRP which thought it was extinguishing its liability by signing a consent decree in 1994, received a demand from EPA a decade later to perform additional work. The PRP balked, claiming that it believed it had completed its obligations under the consent decree. The court, however, reached the opposite conclusion. According to the court, the consent decree obligated the PRP to perform or pay for additional testing and remediation… More
What follows is the full text of Bill S.325, introduced in the Massachusetts legislature this term.
SECTION 1. LIABILITY RELIEF In the event an individual or group of individuals unknowingly purchase contaminated residential land that does not qualify for Brownsfield funding and are not the polluter, they must be relieved of liability and fines in connection with said pollution. The Department of Environmental Protection(DEP) must be proactive in balancing public safety with feasibility. Specifically, where you have residential land that naple is present on part of the land. And, the innocent land owner wants to build over the area… More
Earlier this week, the Massachusetts DEP issued a package of regulatory reforms. While the focus of the package was on finding ways for MassDEP to implement its mission with fewer resources, a number of the reforms are specifically targeted at facilitating the development of renewable energy. If you want to see more about that angle, you can take a look at our client alert about the reforms.
On the non-energy side, my personal favorite is MassDEP’s expressed willingness to review the role of its hazard ranking system in the state Superfund, or Chapter 21E, program. Given the way the 21E program… More
Watch What You Do With That Shovel (Or Heavy Equipment): Another Developer Faces Superfund Liability For Site Redevelopment
More than 20 years ago, in the Tanglewood East decision, the 5th Circuit Court of Appeals held that a developers could potentially be liable under CERCLA for conducting site development activities that moved contamination on the site, exacerbated conditions, and required additional cleanup. There have not been many reported cases on this issue since then, so the decision earlier this week in Saline River Properties v. Johnson Controls seemed noteworthy.
The factual discussion was pretty sparse, but it seems undisputed that Johnson Controls had previously owned the property, the property was contaminated, and Johnson Controls was remediating it under… More
In an interesting decision issued today, in Zoning Board of Appeals of Holliston v. Housing Appeals Committee, the Massachusetts Appeals Court held that a local zoning board of appeals cannot use vague local environmental concerns as a basis for denying a comprehensive permit under the Massachusetts affordable housing statute, Chapter 40B. As those practicing in this area know, Chapter 40B consolidates all local permitting before the zoning board of appeals. The board can deny permits based on local needs, but there is a presumption that the need for affordable housing trumps local needs if the stock… More
Environmental liability has always been a dish best served in as many slices as possible. Hence, CERCLA jurisprudence in its first two decades was characterized by a judicial willingness to entertain ever more creative theories to extend environmental liability to new classes of parties, such as a developer who unknowingly moved contaminated soil (Tanglewood East) to a toll manufacturer who merely directed the production of a useful product with knowledge that there would be hazardous waste by-products (Aceto). More recently, however, courts have shown far less appetite for expanding the traditional boundaries of environmental liability beyond owners, operators,… More
As much as I’ve always found EPA’s use of unilateral administrative orders under Section 106 of CERCLA to be offensive, I still expected EPA’s authority to withstand challenge. As I noted previously, not every law that is unfair is unconstitutional. At least for now, the issue has probably been laid to rest. Yesterday, the Supreme Court denied GE’s petition for certiorari seeking to appeal the D.C. Circuit’s rejection of its claim that EPA’s exercise of its unilateral order authority is unconstitutional.
CERCLA has been constitutional for almost as long as Francisco Franco has been dead – and they’re… More
It’s long been a tenet of Superfund that one effective strategy for managing an expensive site is to bring in a lot of additional parties to share the costs. For some years now, that has been the strategy of the two largest PRPs alleged to have contaminated the lower Fox River in Wisconsin with massive amounts of PCBs. Cleanup costs for that site are estimated to cost $1.5 billion. So far, at least, that strategy of bringing in more parties has failed in ever more dramatic fashion.
Vapor Intrusion and the National Priorities List: Why Should the Biggest Superfund Problem Not Be Regulated Under Superfund?
As I have previously mentioned, EPA is considering including criteria related to vapor intrusion (VI) in the hazard ranking system scoring used to determine which sites should be added to the National Priorities List. As I noted when this first became news, it’s pretty much an obvious step for EPA to take. These are precisely the types of sites on which EPA should be focusing. At a certain level, I’d be happy – relatively – if EPA limited CERCLA to sites imposing threats to public water supplies and sites posing VI problems, and jettisoned everything else.
The National Association of… More
In its 2004 decision in Cooper Industries v. Aviall, the Supreme Court turned upside down many years of settled CERCLA jurisprudence establishing that a PRP only has contribution claims against other PRPs under Section 113(f)(1) and not direct cost recovery claims under Section 107(a). A decision earlier this week by the Eighth Circuit, Morrison Enterprises v. City of Hastings, coupled with the Supreme Court’s 2007 decision in Atlantic Research, provides clear guidance on when a PRP suing another PRP must assert a contribution claim and when he must assert a direct cost recovery claim.
In Atlantic Research, the Supreme Court had held… More
Recently, I expressed concern that District Courts, which traditionally have never seen a CERCLA plaintiff they didn’t like, would ignore the Supreme Court’s Burlington Northern decision – at least until there is another Supreme Court decision affirming that Supremes really meant the two-part holding in Burlington Northern: (1) divisibility isn’t that hard and (2) parties aren’t liable as arrangers unless they actually intended to dispose of hazardous material.
Although it shouldn’t be earthshaking, I was therefore encouraged to see last week’s decision in Schiavone v. Northeast Utilities Service Company. In Schiavone, the defendants sold used transformers to… More
In late 2009, Judge Griesbach ruled, in Appleton Papers v. George A. Whiting Paper, that parties who were significantly more “blameworthy” than others were not entitled to contribution from the less blameworthy parties. Last week, Judge Griesbach ruled on the cross-contribution motions from the defendants.
The defendants took a simple view. If the plaintiffs are not entitled to contribution from the defendants, because the plaintiffs were almost entirely at fault, then the defendants should be able to receive 100% of their own response costs in contribution from the plaintiffs. Plaintiffs, not surprisingly, took a contrary view. Plaintiffs’ position was that the… More
Vapor intrusion is the issue de jour at federal and state Superfund sites. On the federal side, EPA announced in January that it was considering adding vapor intrusion criteria to its calculation of hazard ranking scores. Frankly, as a concept, it’s hard to dispute. In fact, aside from when actual public water supplies are contaminated, indoor air is probably about the only risk associated with Superfund sites that we should care about. Every analysis EPA has ever done has shown that risks associated with Superfund sites are otherwise overestimated and it is not a cost-effective place to be putting environmental protection dollars. The question… More
A Man’s Home (Or Mall Or Other Business) May Be His Castle — But He Still Has to Provide Access When Contamination Is At Issue
Two recent decision illustrate that PRPs do hold some cards in hazardous waste litigation, particularly if they are willing to be aggressive in investigating the contamination. Both cases demonstrate that “victims” or bystanders can face serious consequences if they do not cooperate with the investigation.
In Carlson v. Ameren Corporation, the plaintiffs had purchased a former manufactured gas plant from Ameren Corporation. They brought suit under RCRA, seeking an injunction requiring that Ameren remediate the property. Ameren filed counterclaims against the Carlsons, alleging that they had refused to cooperate with the cleanup. The question was whether such a lack of cooperation could constitute… More
How Much Circumstantial Evidence Is Enough To Establish Liability? More Than Just Proximity and a Bad Name
Sometimes, good lawyering does matter. When DVL found PCBs on its property in Fort Edward, New York, and when it looked up and realized that GE had operated a manufacturing facility which utilized PCBs “almost adjacent” to DVL’s property, DVL and its attorneys may have thought that they had a slam dunk case on liability. Not so fast. Last week, in DVL v. General Electric, Judge Lawrence Kahn awarded GE summary judgment on liability, because DVL had failed to provide even enough evidence of GE’s liability to survive summary judgment.
DVL did have more than just GE’s proximity on its side. The types… More
As the holiday approaches, I am particularly thankful that I am not counsel to the Washington State DOT in United States v. Washington State DOT, a case that continues to make me want to take EPA, DOJ, and United States District Judge Robert Bryan by the neck and ask them what the heck are they thinking.
In July, I posted about Judge Bryan’s decision holding that the Washington DOT “arranged” for the disposal of hazardous substances by designing and operating a highway drainage system that deposited highway runoff containing hazardous substances into… More
As Superfund practitioners know, federal NPL sites are generally settled on the basis that the PRPs will first attain interim cleanup levels, though final cleanup levels are not determined until EPA is actually ready to issue its certification of completion of the remedy. Moreover, EPA insists that, should any ARARs change during the course of the cleanup, whatever standards are in effect at the time of site closure will be applied.
We saw the impact of this on the ground in 2001, when EPA revised the Safe Drinking Water Act maximum contaminant level, or MCL, for arsenic from 50 ppb… More
One of the first lessons I learned as a summer associate, more years ago than I care to remember, is that the probability of a successful estoppel claim against the government is approximately the same as the probability that there is a Santa Claus. After the recent decision from the District of New Jersey in FMC Corporation v. American Cyanamid, the probability of a successful estoppel claim may still be low, but it isn’t zero.
FMC involves claims concerning the Higgins Farm Superfund Site, in Franklin, New Jersey. According to the decision, FMC contacted the State of New Jersey in 2001… More
My partner Robby Sanoff blogged last week about the “Illusion of Finality in CERCLA.” His post addressed City of Emeryville v. Sherwin-Williams, in which the 9th Circuit Court of Appeals held that a person who was not a party to a prior settlement could bring a contribution claim against such a settling party, at least where the new claim involved contamination at a downgradient property, rather than the property that was the subject of the first settlement.
City of Emeryville seems to have been rightly decided. The only real lesson it teaches is that a PRP who wants to settle… More
In City of Emeryville v. The Sherwin-Williams Company, the Ninth Circuit recently underscored that CERCLA settlements can be a risky business that don’t always produce finality, particularly when neither the United States nor a state is a party.
The Ninth Circuit decision grew out of a federal court action by the City of Emeryville involving contamination at a manufacturing facility that had been operated by Sherwin-Williams. Sherwin-Williams settled that suit and obtained what it thought was broad protection against contribution claims based on contamination “at, on, under, and emanating from” the facility.
After Sherwin-Williams had performed its obligations under… More
Last week, in City of Pittsfield v. EPA, the First Circuit Court of Appeals affirmed denial of a petition by the City of Pittsfield seeking review of an NPDES permit issued by EPA. The case makes no new law and, by itself, is not particularly remarkable. Cases on NPDES permit appeals have held for some time that a permittee appealing an NPDES permit must set forth in detail in its petition basically every conceivable claim or argument that they might want to assert. Pretty much no detail is too small. The City of Pittsfield failed to do this, instead relying on their… More
There are only two permissible answers to this question:
Yes I don’t know.
I was reminded of this reality in reading the decision issued earlier this month in Solutia v. McWane, in which Chief Magistrate Judge Greene of the Northern District of Alabama held that a party which incurs response costs pursuant to a consent decree or administrative order may not bring an action for cost recovery under § 107 of CERCLA and is instead limited to a contribution action under § 113 of CERCLA.
For those of our readers who are either masochists or do Superfund law for… More
Last year, I analogized PRP efforts to have CERCLA’s unilateral administrative order provisions declared unconstitutional to Chevy Chase’s repeated announcements during the first year of Saturday Night Live that Francisco Franco was still dead. Eventually, that joke wore out. With yesterday’s decision by the D. C. Circuit Court of Appeals, in General Electric v. Jackson, upholding EPA’s UAO authority, these legal challenges may be similarly about to wear out.
The analysis in GE v. Jackson is pretty straightforward. EPA may not obtain fines or treble damages if a PRP defies a UAO unless the agency goes to court and the court… More
Last week, EPA’s Office of Solid Waste and Emergency Response announced release of its Community Engagement Implementation Plan. Who could be against community engagement? It’s as American as apple pie. It’s environmental justice. It’s community input into decisions that affect the community. It’s transparency and open decision-making.
Call me a curmudgeon, but I’m against it. Study after study shows that, in terms of the actual risks posed by Superfund sites, we devote too many of our environmental protection dollars to Superfund sites, when we should be focusing on air and water. Why do we keep doing this? Because the community demands it. As Peter Sandman has noted,… More
When the Burlington Northern decision was first announced, I concluded that “never has the Supreme Court done so much by doing so little.” On May 5, Judge John Mendez, of he Eastern District of California, proved me at least half right. In United States v. Iron Mountain Mines, joint and several liability was imposed on the defendants in 2002. The 2002 decision stated that “given the nature of pollution at the site, it would be difficult to identify distinct harms.” The court did not analyze whether there was a reasonable basis for apportionment of liability.
Following the Burlington Northern decision, the… More
One of the outstanding questions following the Supreme Court decisions in Aviall and Atlantic Research was whether a party which had entered into a consent decree with the United States and incurred direct response costs as a result could bring an action for cost recovery under § 107 of CERCLA or whether such a settling party would instead have a contribution action under § 113. The problem facing practitioners and the courts following Atlantic Research was that the Supreme Court seemed to have backed itself into a corner. By focusing its analysis of § 113 so narrowly on the traditional common law understanding… More
Last week, Judge William Griesbach, of the Federal District Court for the Eastern District of Wisconsin, issued an important Superfund contribution decision, which shows just how much equitable discretion judges have in resolving contribution claims. In Appleton Papers v. George Whiting Paper, Judge Griesbach ruled, on summary judgment, that one equitable factor, knowledge of the potential environmental harm caused by PCBs, trumped all others, and that the plaintiffs, who had manufactured carbonless copy paper, or CCP, had no right to contribution from paper companies which used CCP… More
In an interesting decision issued a few weeks ago, a District Court in Georgia held that a property manager at a strip mall could not be held liable as an owner of a facility under CERCLA. However, the court held that the property manager could be liable as an operator of the facility. I don’t think that the decision is correct, but if it is the law, then property managers would be wise to consider carefully what responsibilities they are willing to assume and what sort of indemnification agreements may be required with the actual property owners.
The case, More
Late last week, Elliott Gilberg, Acting Director of EPA’s Office of Site Remediation Enforcement (OSRE) issued an Interim Policy on Managing the Duration of Remedial Design/Remedial Action Negotiations. Members of the regulated community may not be surprised by the contents of the memo, but they certainly will not be pleased. In brief, the memorandum fundamentally makes two points:
EPA wants to shorten the duration of RD/RA negotiation
EPA is going to use the heavy hammer of unilateral administrative orders, or UAOs, to keep PRPs’ feet to the fire and ensure that negotiations move quickly.
PRPs will likely… More
Justice Potter Stewart famously said, with respect to obscenity, that “I know it when I see it.” I fear that the test for what constitutes an imminent and substantial endangerment under RCRA is no clearer than Justice Stewart’s subjective test regarding obscenity.
This week, in a decision that is good news for RCRA defendants, Judge Illlston, of the Northern District of California, ruled, in West Coast Home Builders v. Aventis Cropscience USA, that risks posed by potential future vapor intrusion into buildings from a groundwater plume could not be “imminent and substantial” where no development has… More
As a confirmed optimist and believer in technology, I’ve long thought that we can meet the challenge posed by global climate change – as long as we implement the right policies to provide incentives to develop the necessary technologies. Having the wide engineering knowledge that being a lawyer – as well as one of six political science graduates from MIT my year – provides, I have assumed that nanotechnology would play a substantial part in whatever the ultimate solution turns out to be.
Climate change is a big problem and we’re… More
For those of you who cannot get enough of Superfund, I spoke at a Boston Bar Association panel on this subject yesterday about the implications of the Supreme Court’s Burlington Northern decision. Thanks to EPA Region I and Joanna Jerison, head of the Region I Superfund Legal Office, for being willing to speak on so obviously sore a subject. And thanks to Craig Campbell for participating on the panel as well.
Earlier this month, the New Jersey legislature enacted a privatized system, modeled on Massachusetts approach, for cleaning up state superfund sites. Score one for truth, justice and the American Way. If that were all, the NJ legislation might be worth just a brief mention, but I thought it noteworthy that the Greenwire article concerning implementation of the program focused not on the spread of the privatized program approach, but on the outrage being mustered by the environmental community at the sell-out to polluters by the NJ government.
I like to think that I’m not naïve on such matters, but I… More
One more note on the Burlington Northern decision. A client of mine has already noted that one impact of the decision will be to result in more litigation over divisibility, which will be good for private lawyers (ouch!). She’s right, as my clients always are, but she shouldn’t be.
Litigation should only increase if EPA does not adjust its settlement demands. If EPA responds appropriately, and makes demands which reflect a fair resolution of a divisible liability, then there shouldn’t necessarily be more litigation than there is today. However, if EPA continues to negotiate with PRPs as though liability is always… More
Those of us who have practiced in the Superfund arena for some time know that the government, in those rare cases where it has been forced to litigate, has used the same oral argument in every case: “Good morning, your honor. My name is ______. I represent the government in this action and we win.” Today, the Supreme Court made clear that that the government now needs a new oral argument template.
As some of my clients know all too well, I’ve been spending a lot of time on some Superfund matters recently. Although I can’t remember a period when I didn’t have at least one moderately active Superfund case, significant immersion in complex remedial decision-making and negotiations provides an unwelcome reminder just how flawed CERCLA is. Almost 20 years after the acid rain provisions of the Clean Air Act ushered in wide-spread acceptance of the use of market mechanisms to achieve environmental protection goals and the state of Massachusetts successfully privatized its state Superfund program, the federal Superfund program, like some obscure former… More
Life After Atlantic Research: The Second Circuit Court of Appeals Holds that Response Costs Incurred Pursuant to a Consent Decree Are Recoverable Under Section 107 Of CERCLA
For those following developments in Superfund cost recovery and contribution case law after the Atlantic Research decision, it seemed worth noting that the Second Circuit Court of Appeals recently held, in W.R. Grace & Co. – Conn. v. Zotos International, Inc., that a party who incurs response costs pursuant to a state consent order has a right to bring an action to recover those response costs under § 107 of CERCLA.
Thus, the 2nd Circuit has answered the question left open by note 6 in Atlantic Research, and come down on the side of actions under § 107,… More
In Key Tronic Corp. v. United States, the Supreme Court held that costs which are “closely tied to the actual cleanup may constitute a necessary cost of response in and of itself….” Such costs include “work performed in identifying other PRPs.” According to the Supreme Court, “tracking down other responsible solvent polluters increases the probability that a cleanup will be effective and get paid.”
On the other hand, the Supreme Court noted that attorneys’ fees incurred in the course of negotiations with the government or for the purpose of defending a party against expected litigation are not recoverable.
The problem… More
Readers of a certain age will recall Chevy Chase’s Weekend Update segment during the first year of Saturday Night Live, when, for a number of shows, he would report that Francisco Franco was still dead. (And isn’t it great that there is actually a Wikipedia article on the subject of Franco still being dead!).
This segment was brought to mind by the report of this week’s decision out of the District Court for the District of Columbia, in the case of General Electric v. Jackson, affirming that EPA’s authority to issue unilateral administrative orders… More
“Expert Testimony” Evidence Proof
Private Contribution and Cost Recovery Claims Under CERCLA: The State of the Law after Atlantic Research
For those of you who haven’t been keeping up with the law on private cost recovery and contribution claims under CERCLA, following the decision in Atlantic Research, I recently participated in a panel discussion on the issue. A copy of my presentation can be found here.
The most contentious issue during the discussion was whether private parties who have settled with the government and performed direct cleanups – as opposed to reimbursing the government – as a result of such settlements have an action for cost recovery under § 107 of CERCLA or an action for contribution under § 113 of… More
In a recent decision, the 7th Circuit Court of Appeals confirmed that neither CERCLA nor RCRA provide convenient ways for the buyer of a building containing asbestos to finance the abatement of that asbestos. In Sycamore Industrial Park Associates v. Ericsson, the seller of the building replaced the old heating equipment shortly prior to sale, but left the old system, including piping, in place. The buyer sought to make the seller pay for the asbestos abatement on the ground that the seller has disposed of the old equipment by abandoning it in place when it installed the new system…. More
Two recent decisions from the Southern District of Texas make clear that, like pornography, the courts know arranger liability under CERCLA when they see it. Both cases involve defendants in private cost recovery actions arising out the Tex Tin Superfund Site in Texas City, Texas. The Tex Tin Settling Defendants Steering Committee (known by the mellifluous acronym TTSDSC) brought suit against Dow Chemical and Bayer USA, alleging that each had arranged for the disposal of hazardous materials at the Tex Tin Site. Dow Chemical obtained summary judgment that it was not liable for its shipments of hydrochloric acid –… More
As pretty much everyone knows, in order to improve its prospects for passage, the Senate added certain tax provisions to the financial bailout bill – also know as the Emergency Economic Stabilization Act of 2008, or H.R. 1424 – enacted earlier this month. One of the provisions included in the EESA was an extension of the brownfields tax incentive.
The brownfields tax incentive, originally enacted as part of the Taxpayer Relief Act of 1997, and codified as Section 198 of the internal revenue code, allows developers to immediately expense the cost of remedial work at brownfields sites,… More
As those of us who have practiced in the Superfund arena for some time know, in the early years of Superfund litigation, such litigation was, from the defendant’s perspective, brutish and short, if not nasty and mean. The DOJ attorney would, in essence, march into court, state “I am from the government; I win,” and the case would be over.
In recent years, that approach has not proven quite so uniformly successful. The key case in the defendants’ arsenal is United States v. Bestfoods. In Bestfoods, the Supreme Court looked to traditional common law principles regarding corporate law… More