ELR Citation: ELR 20879
No(s). 89-4340 (JFG) (D.N.J. Feb 8, 1991)

The court rules that constitutional and equitable defenses are not available in an action to recover response costs under §107 of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), and 16 corporate defendants may raise only those affirmative defenses alleging divisibility of the environmental harm. The government alleged that the 16 defendants whose affirmative defenses are at issue were liable under CERCLA as persons who arranged for disposal, transport, or treatment of hazardous substances in connection with a New Jersey hazardous waste site that is ranked fourth on the CERCLA national priorities list. The defendants filed a third-party complaint seeking contribution under CERCLA §113(f), naming more than 250 defendants, including 17 local governments. The government sought to strike approximately 200 of the nearly 300 affirmative defenses the defendants set forth in their answers.

The court holds that the only affirmative defenses that can be asserted to liability under CERCLA §107(a) are those listed in §107(b)(1)-(3): an act of God, an act of war, and the complete absence of causation. The court holds that defenses of failure to state a claim and lack of subject matter jurisdiction are not available because they are based on language that is no longer in the complaint. The court holds that apportioning cleanup costs in a CERCLA §107 action is not appropriate, because CERCLA provides that such apportionment is to be accomplished through a §113 contribution action. Only during the contribution stage under CERCLA §113(f) are equitable considerations proper. Similarly, §106 contemplates equitable considerations in deciding whether to grant injunctions under that section. However, §107 imposes joint, strict, and several liability on potentially responsible parties (PRPs) for all response costs. Further, the court finds that the government's potential liability for contribution does not affect its §107(a) cost recovery action. Sections 107 and 113 serve distinct purposes. Section 107 allows a PRP, including the government, to collect all its response costs, even costs that it may be required to pay back to other PRPs as its equitable share in a §113 proceeding. The court observes that what might be a temporary windfall for a PRP in a §107 action serves as an incentive for private parties to clean up hazardous waste sites and to risk their own capital initially. The court also holds that defenses of failure to state a claim and lack of subject matter jurisdiction are insufficient as a matter of law since the government states a claim under §§107(a) and 113(g). Contrary to the defendants' assertion, §107(a) does not require proof of imminent and substantial danger to public health, welfare, or the environment. The court strikes defenses alleging acts or omissions of a third party as insufficient and as failing to conform to the statutory requirements of §107(b)(3). The court further strikes defenses alleging the government's negligence, contributory negligence, or assumption of risk, because they in essence allege a third-party defense that falls outside the parameters of §107(b)(3) and may be alleged in a §113 claim. The court also rejects defenses based on the defendants' lack of actual or proximate causation. The court further holds that the government's alleged failure to comply with CERCLA and to enforce environmental laws is not a defense. The court strikes as inconsistent with CERCLA any defenses alleging that the government did not mitigate damages or provide the defendants an opportunity to participate in response activities. The court strikes the defense that the government cannot recover response costs incurred before it entered into a contract or cooperative agreement with New Jersey under CERCLA §104(c)(3). No statutory prerequisites exist to a §107 action and the liability provisions of §107 are independent of those in §104. To challenge particular response costs, the defendants must prove that these costs are inconsistent with the national contingency plan.

The court next holds that only those defenses to joint and several liability that can be read to allege divisibility of harm at the site are appropriate. The court holds that CERCLA does not permit a de minimis defense to liability. That some of the materials disposed at the site did not contain hazardous substances is irrelevant as long as the defendants disposed of other materials containing hazardous substances. The court holds that the government is not required to sue all PRPs in a §107 cost recovery action, and failure to join municipal waste generators is not an affirmative defense.

The court holds that it cannot exercise equitable jurisdiction without a clear command from Congress that it should do so, and §107's restrictive intent precludes equitable considerations. Case law holding that §107 does not bar equitable defenses in a §106(a) suit is inapposite. Moreover, that equitable defenses are available in §106 and §113 proceedings is not at odds with Congress' intent to explicitly limit the defenses to those listed under §107(b). Equitable considerations logically can be precluded from the imposition of strict liability, yet be permitted in the court's determination of apportionment. Thus, the court strikes the defendants' many equitable defenses ranging from unclean hands and caveat emptor to waiver and laches. The court further holds that CERCLA is not unconstitutionally retroactive; nor is it a penal statute and is therefore not an ex post facto law. The court holds that the cumulative effect of CERCLA's provisions on individual constitutional rights does not violate procedural due process. Claims that do not amount to constitutional violations individually do not attain constitutional status when considered together.

The court holds that the Environmental Protection Agency's (EPA's) municipal settlement policy, ELR ADMIN. MATERIALS 35225 does not violate the defendants' rights to equal protection. The policy is consistent with EPA's broad discretion to select PRPs to recover its response costs, and is rationally related to CERCLA's purpose of efficient and rapid reimbursement of the Superfund. The court also holds that the policy is not a rule promulgated in violation of the Administrative Procedure Act, but rather is a general statement of policy not subject to notice and comment. The court next strikes the defendants' assertions that the response costs incurred by the government are improper and deems premature and insufficient the defenses that future costs are unrecoverable. Finally, the court holds that the government's action was timely filed within the three-year statute-of-limitations provision, and that the court has subject matter jurisdiction over the government's claims under CERCLA.

Counsel for Plaintiff
Bernard P. Bell
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

Counsel for Defendant
Norman S. Bernstein
Shea & Gould
1800 Massachusetts Ave. NW, Washington DC 20036
(202) 828-2000

H. Curtis Meanor
Podvey, Sachs, Meanor, Catenacci, Hildner & Cocoziello
The Legal Center, One Riverfront Plaza, Newark, NJ 07102-5497
(201) 623-1000