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 Cassel Industrial Area. The suit was filed in 2006 and the earliest tolling agreement was signed more than six years after both the GAC and the air stripper had been installed.
The defendants argued that the treatment systems were remedial actions, and thus subject to a six-year statute of limitations running from commencement of construction of the remedial action, rather than removal actions, subject to a three-year statute of limitations, running from completion of the removal action. The basis of their argument was at bottom just common sense – always a dangerous tactic in interpreting CERLCA. The notion was that removal actions are short term measures not necessarily part of the comprehensive cleanup, while remedial actions are longer-term actions that are part of the comprehensive cleanup. They noted that the GAC and air stripper were still operating many years later and had been integrated into the comprehensive cleanup plan. Defendants persuaded the District Court, but not the Court of Appeals.
The Court of Appeals focused, not on the duration of the operation of the GAC and air stripper, but instead on why they had been installed in the first place. As the Court noted, at the time the decisions were made to install the GAC and air stripper, officials were just responding to perceived emergencies concerning the quality of a public drinking water supply. Such actions do indeed have the flavor of removal actions. Moreover, there was no notion at the time that these activities would be part of the long-term remedial approach at the Site. That they may later have been incorporated into the remedial plan does not retroactively make them removal activities from the beginning.
This is a close case and I am largely persuaded that the Court of Appeals got it right – but I still worry about where common sense fits in to these questions. Looking at the structure of the statute of limitations provisions in CERCLA, one gets the distinct impression that members of Congress surely expected that removal actions would start and finish first, and that the removal limitations period would always run first. The notion that the removal action limitations period would extend beyond the remedial action limitations period is definitely a head-scratcher. But, then, so is most of CERCLA.