Oil and Hazardous Substances; Never the Twain Shall Meet

Late last month, in Munoz v. Intercontinental Terminals Company, the 5th Circuit Court of Appeals held that the liability provisions of CERCLA and the Oil Pollution Act do not overlap and that, consequently, where oil and hazardous substances commingle, the sole remedy is under CERCLA.

As the Court correctly noted, it has long been the case under CERCLA that petroleum commingled with hazardous substances is subject to CERCLA jurisdiction as a hazardous substance.  However, it is not obvious why there cannot be any overlap between the liability provisions of CERCLA and the OPA.

In Munoz, a fire occurred at a tank farm.  There were tanks containing hazardous substances and other tanks containing oil.  Based on the facts recited in the opinion, it appears that all of the tanks were surrounded by a single combined secondary containment area.  As a result of the fire, the proverbial chemical soup accumulated in the containment area and, when containment was breached, the soup flowed into the Houston Ship Channel.

I don’t doubt that the chemical soup should be considered a hazardous substance subject to jurisdiction under CERCLA, but does that necessarily mean that the oil lost its status as “oil” such that it was no longer subject to jurisdiction under the OPA?  Consider the following hypothetical, which seems totally plausible.  Many tank farms have separate containment areas for each tank.  What should the outcome be if there’s a large tank farm with one tank containing waste TCE and another tank some distance away that contains oil?  If they both have releases that breach secondary containment, and the TCE and oil each separately enter the water, that would seem to constitute two separate spills, one subject to CERCLA and one subject to the OPA.

But what happens over time, when the two releases merge?  Does the oil magically lose its status as oil, so that the combined release is subject only to CERCLA?  What happens to the part of the release closer to shore that remains pure oil.  Is that still subject only to the OPA?

As far as one can tell from the opinion, the plaintiffs in Munoz did not present this question to the Court.  The Court in any case did not address it.  Perhaps the next plaintiffs will read this blog and present the question to the next appellate court that must decide this issue.

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