15 ELR 10395 | Environmental Law Reporter | copyright © 1985 | All rights reserved

CERCLA 1985: A Litigation Update

Phillip D. Reed

Editors' Summary: CERCLA is one of the most important environmental statutes, and one of the most difficult to follow. The shape of the legal scheme is being wrought, not in agency rulemakings, but in the courts, and each week brings another significant decision. To help our readers stay abreast of these developments, ELR tries to provide both in-depth analyses of specific issues such as bankruptcy and generator liability, and surveys of the broad trends in the law. When we last reviewed the litigation, in our June 1984 issue, the focus was on basic questions of the scope and nature of liability, particularly that of hazardous waste generators. The litigation outcomes were one-sided, with government interpretation of the statute carrying practically every decision, all of which came from the district courts. Since that time, CERCLA decisions continue to proliferate, with the first courts of appeals decisins appearing on the scene. The issues are changing, with increasing attention focused on preenforcement reviewability of EPA cleanup and enforcement actions, the relationship of EPA's broad power to implement cleanup plans to the property rights of those owning land under or next to the toxic waste dumps, landowner liability, affirmative defenses, private party recovery, and the scope of personal jurisdiction under the statute. The track record of the government is still very good, but EPA has suffered some telling losses. This Comment reviews the last 18 months of CERCLA caselaw to once again bring our readers up to date on the broad trends in CERCLA implementation.

The author wishes to thank Barnett Lawrence, ELR legal intern, who researched preenforcement review and wrote a first draft of the sections discussing that issue; Suzanne Baskin, ELR legal intern, who researched defenses and a number of other issues; and Mauro Montoya, ELI staff attorney, who assisted with the general research for the Comment.

[15 ELR 10395]

By design and by lack of design, the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA),1 has been shaped in court more than any other federal pollution control statute. By design the statute does not rely on detailed regulatory standards, permits, or administrative action to achieve its goal of cleaning up abandoned hazardous waste sites. Instead, it relies heavily on lawsuits to force cleanup or recoup cleanup costs. By lack of design due to eleventh-hour compromises and amendments in the Congress, the Act has much ambiguity and little authoritative legislative history. The courts, and in particular the federal district courts, have played a critical role in crafting the working parts of the statute. Convinced that the thousands of toxic waste dumps around the country will be cleaned up only if everyone linked with the waste can be made liable, the federal government has pushed an expansive reading of the statute. Because of statutory ambiguity and high stakes, those sought to be held liable have resisted vigorously. The result has been close to total legal victory for the government. Court after court has confirmed the Environmental Protection Agency's (EPA's) interpretation of the basic provisions of the Act.

The first wave of CERCLA litigation focused principally on the application of the Act's liability provisions to the companies that generated hazardous substances disposed of in now-unsafe dumps. The government argued that they imposed strict, joint and several liability on the category of potentially responsible parties most likely to be able to afford to pay for cleanup, the companies that generated the waste, upon a limited showing of causation. In combination these theories could make a company that contracted with an apparently reputable waste hauler for disposal of toxic chemical residues, which in turn dumped the wastes in an open field, liable for all of the costs of cleaning up the site even though its wastes were a small percentage of the problem. The government has been almost completely successful in court with its interpretation of generator liability under CERCLA. Those cases were discussed extensively in a June 1984 CERCLA Litigation Update Comment.2

The CERCLA decisions that have come down over the last 18 months probe different sets of issues. One group of cases has examined a second generatin of liability issues: landowner liability and the liability of generators whose connection with current CERCLA sites was created independently by transporters or other third parties. The government has been as aggressive and successful as it was in the generator liability cases. The government's success of liability issues has refocused attention from the principles of liability for past disposal f of hazardous waste to the process by which cleanup decisions are made. Instead of trying to avoid liability, most CERCLA defendants are now trying to minimize it, either by gaining some control over the government remedial actions for which they will have to pay or by going after those not pursued by the government who may be liable too. These cases reveal that there is much more to cleaning up hazardous waste dumps than establishing a tough liability scheme. The cleanup process is complex and hampered by a lack of knowledge of how to get rid of the wastes once and for all. The government's legal successes have not yet been translated across the board into success in eliminating the threats to public health and the environment posed by hazardous substance releases, and in some cases procedural issues are bringing cleanup efforts to a standstill.

[15 ELR 10396]

CERCLA Programs

CERCLA provides two basic approaches for cleaning up dangerous repositories or spills of hazardous substances: abatement orders forcing responsible parties to clean up, and cleanups by EPA or others, followed by actions to recover the costs from responsible parties. Section 106 gives the federal government authority to force responsible parties to abate imminent hazards to the public health or environment resulting from releases or threatened releases of hazardous substances.3 Section 104 empowers EPA itself to "respond" directly to releases or threatened releases of hazardous substances with actions that remove the immediate threat or remedy the entire environmental contamination,4 spending the money collected in the so-called Superfund5 to clean up the toxic pollution. The Fund may be used to repay government or private money spent cleaning up hazardous substance releases or to compensate the public for damages to natural resources.6 EPA cleanup actions are to be governed by cost-effectiveness and other standards spelled out in the "national contingency plan" (NCP).7 The extent to which formal consistency with the NCP or inclusion of a site on the national priorities list (NPL), which is appended to the NCP, is required, varies depending on the nature of the action and the parties.8 Section 107 makes four categories of "responsible parties" liable either for government cleanup costs incurred under § 104 that are "not inconsistent with" the NCP, or for private cleanup costs, if consistent with the NCP.9 Sections 104 and 107 combine to give the government the option of initiating the cleanup itself and then shifting the burden to responsible parties to pay for the work, a particularly useful option where the prerequisites for use of the Fund for long term remedial action cannot be satisfied. Where EPA can identify parties potentially responsible for hazardous substance releases, it either may try to compel them to clean up or may act itself, and then seek repayment.

In practice, EPA is not limited to two alternatives. The Act was intended to create powerful incentives for those responsible for toxic waste dumps and spills to clean them up, while enabling the government, through § 104 and the Superfund, to do the job alone where responsible parties could not be found or could not manage the cleanup. Because of its considerable power under §§ 106 and 107 to force responsible parties to carry out or pay for the cleanup of hazardous substance releases, the government also is in a good position to secure cleanup agreements through informal negotiations. Moreover, EPA argues that it need not complete a cleanup action under § 104 before seeking to adjudicate liability under § 107, including liability for future costs. Thus, the abatement order and response action alternatives can function in relatively similar fashion.

After a series of fits and starts,10 EPA has developed policies intended to make effective use of all its various CERCLA authorities and its negotiating leverage. A memorandum discusses when EPA will negotiate with potentially responsible parties and when it will take action under § 104 or § 107.11 The stated highest priorities for formal court action are: "— -107 actions in which all costs have been incurred; — -combined 106/107 actions in which a significant phase has been completed and additional injunctive relief is needed and identified, and the Fund will not be used; — -106 actions which will not be the subject of Fund-financed cleanup."12 The basic thrust of these policies appears to be to force private parties in some measure responsible for hazardous substances releases to clean up the problems as often as possible, saving Superfund money for emergency situations and sites where no solvent responsible parties can be found, and to get the ball rolling at sites where the multiplicity of potentially responsible parties or other liability questions make it difficult to start the process with a simple order.

Abatement Actions, § 106

CERCLA's imminent hazard authority gives EPA a no-nonsense way of telling people to clean up dangerous hazardous situations, or else.13 Once it detects such a risk, EPA may issue an administrative order or go to court for injunctive relief. The recipient of a § 106 order ignores it at considerable peril. Willful violators can be taken to court and penalized up to $5,000 per day;14 persons liable for releases who fail "without sufficient cause" to comply with an order issued under § 104 or § 106 can be held liable for three times the amount of response costs incurred by the government as a result of the noncompliance.15 Section 106 directs federal judges to use their full equitable powers to compel those responsible for the hazard to take whatever action is necessary to abate it. CERCLA's imminent hazard provision is a tool of the federal government alone; citizens cannot use or trigger the federal use of the power.16

Two legal shadows have hung over the imminent hazard authority: whether the recipient of an administrative order could obtain preenforcement review of the substance of [15 ELR 10397] the order and whether the scheme provides due process. Several courts have expressed concern about the constitutional issues, and while none have required early review of orders, one enjoined EPA from imposing the sanctions for violations of the order.

The courts have unanimously held that no preenforcement judicial review of the substance of § 106 orders is available. Two courts17 reasoned that the structure of the statute and its legislative history demonstrate that Congress did not intend to allow preenforcement challenges to orders to frustrate EPA's ability to ensure quick responses to emergency situations. Another court18 concluded that the order is not legally binding and therefore is not final agency action under the Administrative Procedure Act (APA).19

Several courts, however, have also ruled that they have jurisdiction to hear challenges to the constitutionality of the statutory scheme under which orders are issued, provided those challenges are ripe for review.20 They held that due process challenges were ripe because they raised purely legal questions and because without interpretation the CERCLA scheme could severely discourage order recipients from exercising their rights to make legitimate challenges to the orders. They would have to decide whether to disobey the order and run the risk of incurring treble damages or to comply with the order with no hope of repayment from the government should a subsequent challenge prevail.21

The courts that have reached the question have split on whether CERCLA's treble punitive damage and daily penalty provisions violate due process in this scheme. One court22 held that the statute violates due process because it provides no preenforcement or prompt post-enforcement hearing and the penalties are so severe as to have a coercive effect.23 The court concluded that the "without sufficient cause" limitation on treble damages does not cure the infirmity, because this exception does not protect one refusing to comply with an order while asserting a good faith defense. Other courts,24 however, have construed the "sufficient cause" defense to avoid constitutional problems. They found that CERCLA's legislative history supported treating good faith challenges to § 106 orders as "sufficient cause." Since this interpretation ensures that recipients of orders will have the opportunity to challenge their validity without risking huge penalties, the statutory scheme does not violate due process, in spite of the lack of a prior administrative hearing.

One of the recent § 106 cases illustates the difficulty of working out a suitable cleanup program even where all parties are agreed on the need and on who bears the ultimate liability. In Industrial Park Development Co. v. Environmental Protection Agency,25 plaintiff sued over EPA's intervention in its efforts to clean up a hazardous waste site on property plaintiff owned. EPA had issued a § 106 order directing plaintiff to clean up the site. While not agreeing to be bound by the terms of the order, plaintiff did hire a contractor and develop a cleanup plan that EPA's onsite coordinator approved. When EPA became concerned over the way plaintiff was handling the cleanup, the onsite coordinator modified the order and began to take over the cleanup. Plaintiff sued and the court ruled that plaintiff probably could prove that EPA's actions were arbitrary and capricious, but refused to enjoin them. It ruled that plaintiff would not suffer irreparable harm if EPA's cleanup was more expensive than plaintiff's, since plaintiff could raise the issue in any subsequent cost recovery action.

Similar problems arise in many cases. EPA worries that private parties doing the cleanup themselves will cut corners and fail to remedy the problem, or will drag their feet and let the problem persist too long. Private parties worry that EPA will spend too much on the site, and still may let its contractors botch the job. The responsible party might have to pay for a second cleanup if the job is not done right the first time.26 These concerns have spawned the recent wave of litigation over preenforcement judicial review and have led to the formation of private groups to facilitate resolution of cleanup disputes.27

Cleanup Actions, § 104

Section 104 is EPA's authority for direct action to abate the pollution from hazardous substance releases. The Act provides EPA with broad powers allowing it to prevent threatened leaks before they occur, to implement long-term solutions at sites of major releases, and to undertake all things in between.28 Section 104 gives EPA not only power to clean up, but also power to investigate and demand information needed to determine whether and how to act.29 [15 ELR 10398] The Act empowers EPA to take such "removal" or "remedial" actions as are necessary to protect the public health and welfare. Removal actions are those designed to resolve the immediate problems at a site (for example, hauling away leaking drums of toxic chemicals); remedial actions are those that provide a long term solution (for example, pumping and decontaminating tainted groundwater). Both kinds of actions must be consistent with the NCP. EPA is only authorized to spend Superfund money on final solutions if the sites are included in the national priority list30 and if it has considerable state cooperation.31 Section 104 was intended to give EPA a complete set of cleanup tools.

Two sets of issues have surfaced repeatedly in recent litigation over CERCLA § 104. The first concerns judicial review of EPA's cleanup decisions, which are based on remedial investigation/feasibility studies (RI/FSs) and issued as Records of Decision (RODs). The second concerns the scope of EPA's power to collect data and carry out response actions at the site and on neighboring property. While EPA has had favorable decisions on judicial review, the decisions on its cleanup powers may create serious problems for the Agency.

Judicial review of § 104 actions raises many of the same issues raised by review of § 106 orders.32 Potentially responsible parties worry that EPA will let contractors run up the tab the responsible parties eventually will have to pay and EPA worries that early review will stall action. A major difference is that the responsible party watching a § 104 action unfold knows it can challenge the cost effectiveness of the action in any § 107 cost recovery action. Arguably the challenge would be more likely to succeed before the money is spent, but it is possible that responsible parties would be able to mount stronger cases in cost recovery actions when the court can compare what EPA has spent with what it accomplished. Of course, where EPA brings a § 107 action for future costs, there is no apparent practical difference in the posture of the case for review from a § 106 action. Courts have been even less open to preenforcement review in § 104 cases.

Though some have expressed reservations, every court to address the issue has rejected judicial review of the remedies selected by EPA for its response actions, holding that review must await a cost recovery action. In J.V. Peters & Co. v. Administrator,33 the Sixth Circuit, reversing the district court,34 ruled that there is no private cause of action to challenge EPA's decisions prior to a § 107 action. The court found no basis for granting review under the APA, since the statute did not make the agency action reviewable and there would be an adequate remedy at law for the action when it became final. Preenforcement review, which CERCLA does not expressly authorize, should not be inferred, the court concluded, because it would frustrate CERCLA's purpose of speedy cleanup of hazardous waste sites. The § 107 cost recovery action, in which the defendant can assert that the response action was not cost effective, and therefore not consistent with the NCP, provides an adequate remedy at law.

District courts in other cases have come to similar conclusions, though with some reservations. Two courts have denied preenforcement review of EPA RODs.35 In one decision,36 the court held that a ROD is not reviewable under CERCLA or the APA for the same reasons given by the Sixth Circuit in J. V. Peters. The court also observed in dictum that although potentially responsible parties may not get preenforcement review of EPA cleanup decisions, CERCLA may contemplate a different result for victims of hazardous waste sites, who unlike responsible parties cannot obtain review later in the process.37 EPA's decision to conduct an RI/FS has similarly been held unreviewable prior to a cost recovery action.38 However, the court did hint that a ROD might qualify as final agency action.39 Although it has been able to stave off attempts to litigate its cleanup plans, EPA has tread shakier ground in fending off challenges to its authority to carry out cleanup actions. Responding to hazardous substance releases is a more complicated matter than Congress anticipated. In some cases responsible parties may be the ones to conduct the RI/FS instead of EPA. Does the Act grant responsible parties other than the site owner, for instance generators, access to the site where they are in an adversarial position with regard to the owner? Getting rid of the leaking drums and contaminated soil on the surface may be another unanticipated soil on the surface may be another unanticipated problem. Given the dearth of permitted disposal facilities, there may be no safe place to take the material. The only feasible option may be to build a secure storage or treatment facility on the site. But what if there is not enough room on the site for such a facility? And what if the contamination has spread off-site, either on the surface or through the groundwater? Investigating the problem or implementing the remedy may require access to and the construction of facilities on neighboring property whose owners have no responsibility for the hazardous waste problem. Such situations can cause legal tangles for which the Act provides no clear solution.

The potential problems of generator RI/FSs are illustrated by a recent case. The government allowed generators to conduct the study since the government could not do so within the discovery schedule set by the court. The district court adopted the recommendations of a special master that an order be issued requiring the site owner to give the generators access to the site, but that the generators be required to sign an agreement indemnifying the site owner for damages suffered by those conducting the testing. In In re Conservation Chemical Co. the Eighth Circuit [15 ELR 10399] affirmed this arrangement as withinthe discretion of the trial judge.40

The problems at Conservation Chemical are being worked out, but elsewhere EPA's cleanup program recently hit a major snag in October. In Outboard Marine Corp. v. Thomas,41 the court held that § 104 does not authorize EPA to enter private property on which there has been a release of hazardous substances to conduct preliminary work for a cleanup and waste storage facility to be located on uncontaminated land at the site. The court construed EPA's § 104 entry authority narrowly, recognizing only the express authorization in § 104(e)(1) to enter property to obtain information needed to identify substances found in a hazardous substance disposal site. The court rejected EPA's argument and the district court's ruling42 that authority to enter to conduct preliminary work for on-site remedial actions is implicit in § 104(b). The district court had upheld EPA's authority to enter under an ex parte warrant to conduct Phase I of its remedial action, which included extensive surveying, drilling, and testing to determine where on the factory grounds to build a treatment facility and a large pond to store PCB-contaminated soil and other waste. It ruled that CERCLA did not remove the Tucker Act remedy for any taking that such an intrusion on Outboard Marine's property would entail and that the entry was permissible. The Court of Appeals ruled that the availablility of the Tucker Act to compensate for any taking was irrelevant since there was no authority to enter for these activities in the first place. While the holding is limited to the facts of the case, the court seemingly would bar EPA entry for all but investigations of the type discussed in § 104(e)(1) absent an imminent and substantial endangerment.43 And while the complex litigation proceeds, the PCB contamination lingers, more than a decade after its discovery.

A related issue is being litigated in conjunction with the cleanup of the Stringfellow site in California. The government obtained a court order requiring owners of property near the site to grant it access to drill wells for monitoring and to draw off contaminated groundwater for treatment. The landowners have sued, alleging a taking resulting from the grant of authority for long-term remedial action and the alleged creation of hazardous conditions by bringing contaminated groundwater to the surface.44 The government argues that the response actions are not a taking because they are a valid exercise of the government's police power and because plaintiffs receive a private benefit from the cleanup action.45

Liability, § 107

CERCLA § 107 makes a variety of "responsible parties" liable for the costs of cleaning up hazardous substance releases and for natural resource damages. The liability scheme was the subject of intense last-minute debate. Provisions mandating strict, joint and several liability were deleted, but the legislative history indicated that liability was to be determined with reference to § 311 of the Federal Water Pollution Control Act46 and the evolving common law.47 Liability issues under CERCLA can be divided into seven questions: (1) who may recover, (2) who may be liable, (3) what conduct imposes liability, (4) do liable parties have rights of contribution or indemnification against other responsible parties, (5) what defenses are available, (6) what damages can the liable party be required to pay, and (7) what conduct satisfies liability. Much of the early litigation on this section concerned whether those who generated hazardous substances sent to now-leaking sites are subject to strict, joint and several liability. In the last year and a half, attention has shifted to exploring the bounds of the definitions of responsible parties, investigating statutory and equitable defenses, and determining the nature of liability among responsible parties.

Who May Recover

An important issue under § 107 has been who may avail themselves of the liability provisions and what must they demonstrate to recover. Section 107(a) indicates that federal and state response costs "not inconsistent with" the NCP may be recovered, as well as those of "any other person" if necessary and "consistent with" the NCP. On the face of the statute, private parties have a more difficult road to recovery. In recent months courts have had to address the scope of the definition of "state" and whether there are limits on private parties who may recover.

State cost recovery actions are common.48 Some courts have treated municipalities as private parties,49 but one recently held that a municipality cold qualify as a state.50 The court reasoned that "state" was not defined to exclude municipalities and should be interpreted broadly to satisfy the remedial goals of the statute and notedthat municipalities fulfill the same roles as states under certain other provisions of the Act.

[15 ELR 10400]

Private cost recovery actions also have been common. They often present the question of whether one potentially responsible party may recover from another. Some potentially responsible parties (for example, the current owners of land on which sites are located), have an incentive to curb pollution from the sites to limit their own liability or make the land suitable for other uses. A number of them have begun remedial action and sued generators or past owners and operators to recover or adjudicate liability for their costs. The alternative might be to wait for the government to come after them and then to seek contribution or indemnification from the other responsible parties, by which time the problem may have expanded. These actions have raised three sets of issues: whether responsible parties may avail themselves of the cost recovery authority, when such actions become ripe, and what amount of government involvement is needed to make privately incurred costs recoverable.

Courts generally have been open to cost recovery actions by responsible parties. For example, in Pinole Point Properties v. Bethlehem Steel Corp.51 the court held that one potentially liable party, in this case the current landowner who discovered that it had bought a hazardous waste site, could sue another, the prior owner who created the site, for response costs under § 107. Although the fact that one is a potentially responsible party is no legal bar to recovery, plaintiffs that were in fact directly responsible for a significant share of the environmental problem may find themselves on a different footing.52

Though CERCLA clearly contemplates private actions under its cost recovery authority, the extent to which those actions must be tied to government actions under CERCLA is not obvious. The statute says only that the costs must be consistent with the national contingency plan. On the one hand CERCLA embodies a policy of inspiring private parties responsible for hazardous substance releases or in a position to control them to act quickly to contain or eliminate the threat. Such public-spirited behavior would be encouraged by allowing early adjudication of the liability of other potentially responsible parties. On the other hand, CERCLA imposes a heavy burden of liability and a responsibility on those cleaning up sites to ensure that the remedy is environmentally adequate and cost-effective.53 Arguably private parties should not be able to force others to pick up their cleanup costs absent some assurance that they have done a legally adequate job. In theory the ability to challenge the action's inconsistency with the NCP protects those used, but that document is rather general and may not be an ideal template for measuring private actions.

District courts have come out all over the map on whether and, if so, how much government direction is necessary before a private party may act under § 107. At one end of the spectrum two courts held that private cost recovery actions concerning sites at which there was no formal government action were not ripe; one because there could be no private claim absent government approval of plaintiff's cleanup plan,54 the other because plaintiff had no concrete likelihood of being liable itself where there was no government enforcement action under CERCLA.55 Another court held that private parties could only recover costs expended at a site on the NPL or with similar indicia of government belief in the importance of the site.56 In an unusual variation, a private action was allowed at an operating site subject to a RCRA enforcement action on the theory that the RCRA oversight was enough government supervision to satisfy any such requirement under CERCLA.57 Another court ruled that CERCLA is silent on whether EPA approval is needed, but that the statute leaves the question to the agency, which in the NCP has required such approval only for long-term remedial actions.58 At the other end of the spectrum from the ripeness decisions, two courts ruled, however, that no prior government approval is necessary for private action; one ruling that whether the action is consistent with the NCP is a factual issue to be resolved at trial,59 the other that consistency with the NCP requires neither government preauthorization of costs or inclusion of the site on the NPL.60 In sum, most of the courts reviewing private cost recovery actions in the last 18 months demanded some government involvement, but those requiring a formal action such as inclusion of the site on the NPL or approval of the cleanup plan were in the minority.

Who May Be Liable

CERCLA § 107(a) makes four categories of persons potentially liable for releases or threatened releases of hazardous substances from facilities: current owners or operators of facilities, those who owned or operated the facilities at the time of disposal, those who "arranged for disposal" of hazardous substances (generators), and those who accepted wastes for transport to a disposal facility "from which there is a release or threatened release which causes the incurrence of response costs, of a hazardous substance." Although the drafting suggests that the quoted language applies only to transporters, it only makes sense if it applies to all four subsections.61 The first wave of CERCLA litigation focused on the liability of generators.62 More recently attention has shifted to landowners.

* Owners and Operators. CERCLA defines "owner or [15 ELR 10401] operator" broadly. For a facility it simply is a person owning or operating the facility; for abandoned facilities, those who "otherwise controlled activities at the facility" are added to the list.63 The breadth in the provision comes from the definition of "person," which includes individuals, all manner of business units, and the full range of governmental entities.64 It is well established that a state or local government may be an owner or operator under CERCLA.65 The question with regard to such entities may be whether they can be subject to private cost recovery actions. The definition expressly excludes one "who, without participating in the management of a vessel or facility, holds indicia of ownership primarily to protect his security interest in the vessel or facility.66

The section establishes two classes of owners and operators, current and prior. The provision dealing with current owners is broader than that for prior owners. "Prior owners and operators are liable only if they owned or operated the facility at the time of disposal of any hazardous substance; this limitation does not apply to current owners . . . ."67 CERCLA makes liable those who owned facilities at the time of disposal and those who own them now, but appears to ignore anyone who owned them in between.

Recent cases on landowner liability have examined four issues: individual liability, the scope of liability of owners without connection to operation, the security interest exception, and the extent to which sellers of facilities can be insulated from liability. In dealing with these issues, the courts place more weight on the function of the party's relationship to the disposal facility than on its form.

Individuals who own or operate CERCLA sites or are officers or managing shareholders in corporations that own or operate the sites may be held liable.68 These cases, as well as the analogous cases with corporate generators, do not raise traditional piercing-the-corporate-veil questions. The courts do not discuss whether the corporate entity should be disregarded, but whether, along with the corporations, individuals independently are exercising the degree of control or management to qualify as operators under CERCLA.

CERCLA imposes a sort of absolute liability on owners. They are liable even if they had no involvement with disposal activities of a lessee69 or were not the proximate cause of releases resulting principally from the activities of a previous owner.70 Current owners who are not operators may be able to use the § 107(b) third party defense if the hazard was caused solely by a prior owner or operator with whom the current owner had no contractual connection71 and can seek indemnification or contribution.72

Just as the stringency of older air and water pollution control laws drove much chemical waste into landfills, so the stringency of newer hazardous waste laws is driving many hazardous waste landfill owners into liquidation. Banks and trustees are taking title to more and more hazardous waste disposal facilities. Although the security interest exception seems to protect the financial institutions, they have not been immune from suit.73 One district judge recently held that a bank that foreclosed on a hazardous waste site and took certain steps to secure it before selling the property was not an owner under this language; nor was the Small Business Administration, which, as a condition of its loan to the former operator, reserved the power to take a hand in the operator's financial management.74 However, the court refused to grant summary judgment for another bank that not only loaned the operator money and supervised certain of its financial matters, but may have had a more direct role in the management of the business.75

Because of the heavy potential liability facing owners of hazardous substance disposal facilities, there is a great temptation to unload the property. One who has owned a facility at the time of disposal cannot escape liability to the government by selling the land76 but may be able to expand the community of responsible parties or to cut off liability to the purchaser. A district court recently held that a company selling an active hazardous waste disposal site had insulated itself from CERCLA liability as to the purchaser, by releases in the sale agreement.77 Courts are likely to scrutinize such agreements carefully, especially where there is some connection among the parties. In one case, the court refused to dismiss a government suit against a company that held title to a facility for one hour, pending a determination of whether the company actually exercised control over the site, which was sold to three of its employees.78

* Generator Liability. The litigation over generator liability, once a tidal wave,79 has subsided. That generators are broadly liable is well established. The key recent issues have concerned the "arranging for disposal" language of [15 ELR 10402] § 107(a)(3). Where does arranging for disposal end and the sale of a product begin? And does the language following § 107(a)(4) "at the facility . . . from which there is a release," preclude generator liability where generators arranged for disposal, but not at the site where the release occurred? Despite some muddled analysis, the bottom line in such cases has been clear. Courts are extremely reluctant to let a generator whose wastes ended up at a site that now is a problem out of the net of CERCLA liability.

The dividing line between arranging for disposal and selling a product seems to be determined by the nature of the transaction to the generator, not the purchaser. If the material eventually disposed of was a waste to the company generating it, it will be difficult to escape liability even if the material is sold for use by another. In New York v. General Electric Co.80 the court held that one who sold contaminated waste oil for use by an entity other than a disposal firm could be liable under § 107(a)(3). The purchaser, a dragstrip owner, used the waste oil to suppress dust. The dragstrip qualified as a facility. The court gave particular attention to the admonition in CERCLA's legislative history that generators should not be able to contract away liability. In contrast, the manufacturer of PCBs found in discarded transformers and waste oil was held not to be a generator in an earlier case, because the PCBs were a manufactured product, not a waste.81

A more difficult issue is whether a generator must choose the final resting place of its wastes, or at least be negligent in relation to the transporter's selection of a site, to be a responsible party. In Missouri v. Independent Petrochemical Corp.82 a case analyzed in detail elsewhere,83 the court held that a generator could be liable even though its wastes were removed from the site at which it arranged for disposal and taken to another site from which the CERCLA-triggering release occurred. The court reasoned that the initial removal was a forseeable release. Despite dicta in some cases suggesting that selection of the site is a requisite of generator liability,84 no court has excused a generator from liability because it did not select the site.85

What Conduct Imposes Liability

* Culpability. Courts have universally held that CERCLA § 107 imposes strict liability.86 Subsequent cases continue the trend.87

* Scope of Liability. After a wave of decisions holding that § 107 imposes joint and several liability where the injury is indivisible, this issue has been quiet. Those recent decisions in which the issue has been raised have followed the early line.88 As yet there have been no courts of appeals decisions on this point,89 but the unanimity of the district courts suggests that a radical departure from the current law is unlikely. United States v. Northeastern Pharmaceutical and Chemical Co., which is on appeal to the 8th Circuit, may provide the first appellate ruling.90

* Causation. The federal government argues that it need not prove that a defendant's actions were the proximate cause of the environmental threat or harm triggering the expenditure of response costs to recover under § 107. As to generator liability, it takes the position that CERCLA requires no more than proof that generators sent out hazardous substances for disposal, that the material ended up in a site at which a release or threatened release of any hazardous substance necessitated response action, and that material of the type the generator got rid of is present at the site.91 Early decisions upheld this limited causation test with regard to generators.92 More recent cases have held that the government need not prove proximate cause in cases against current or former owners and operators.93 The only dissenting voice came in a bench ruling on the liability of a transporter, in which the court seems to rule that causation is an element of liability.94 The Second Circuit's decision in New York v. Shore Realty Corp.,95 while focusing on owner liability, presented a strong argument for reading causation out of § 107(a) altogether. The court noted that requiring causation under § 107(a)(1) would render "superfluous the affirmative defenses provided in section 9607(b), each of which carves out from liability an exception based on causation." The result may be harsh for current owners, but if they have no causal connection to the release they may be able to avail themselves of the third-party defense in § 107(b). If they can't qualify for the third-party defense the only way to avoid liability may be to sell the property, in the unlikely circumstance a buyer could be found. It also observed that Congress removed language expressly establishing a causation requirement and that exculpating current owners who bought the property after dumping had ceased would create a loophole.96

[15 ELR 10403]

Contribution and Indemnification

Since there are multiple potentially responsible parties at most CERCLA sites and any one could in theory be held liable for the entire problem under joint and several liability, whether there are rights of contribution or indemnity have been critical issues. Courts interpreting CERCLA § 107 generally have held that rights of contribution go hand-in-hand with the joint and several liability, looking to a federal common law of liability.97

Not all liable parties are subject to or may avail themselves of rights of contribution. A state agency that is a responsible party has been held immune under the Eleventh Amendment to an action for contribution.98 A responsible party guilty of criminal violations of the Toxic Substances Control Act99 has been held not entitled to contribution.100

Defenses

Those falling within CERCLA's broad liability provisions can raise a variety of defenses, but they have provided little protection against the government's legal assaults to date. Section 107(b) enumerates three defenses, which are stated to be the only limits on liability under the section.101 The courts have construed these defenses narrowly. Potentially responsible parties have raised a variety of other defenses and bars to liability with occasional success. Of particular interest in recent cases are equitable defenses and jurisdictional challenges stemming from statutes of limitations or lack of personal jurisdiction.102

Statutory Affirmative Defenses

Section 107(b) of CERCLA provides defendants little protection. The defenses it allows are "extremely limited."103 The section is based on § 311 of the FWPCA but has a narrower third party defense.104 It exculpates otherwise liable parties who can show that the release of hazardous substances and resulting damages are due solely to acts of (1) war, (2) God, or (3) third parties with whom they have little or no connection. All three are limited by the requirement that the release and damages be caused solely by these factors. The first two defenses are, by their terms limited to unusual circumstances.105 The third allows defendants to point the finger at more common intervening causes, but only of a very select kind. The third party defense has two key limitations.

The first hole in the third party defense is that the third party may not be an employee or agent of the defendant and may not be linked directly or indirectly in a contractual relationship with defendant. The contractual relationship exception is a new touch, not found in FWPCA § 311. The scope of the exception is unclear in several key regards. The statute says that the third party's act or omission causing the release and damage must be "in connection with" the contractual relationship. Does this mean the activities must have been contemplated in the contract? Also, the breadth of the indirect contractual linkage is not clear. Must there have been enforceable contractual obligations between the actor and the defendant, as with the relationship between a lessor and a sublessee? One court has held that the passage of property from one party to another through the hands of a bank foreclosing on the first party does not constitute the requisite connection.106 Must the contract contemplate the third party actions that led to liability? The Second Circuit recently suggested that the contractual connection limitation requires express attention to the environmental issue. It noted that a purchaser of land cannot use the defense to insulate itself from liability for dumping by the seller if the contract contemplated that the purchaser assumed some of the seller's environmental liabilities.107 Further elucidation of these issues will have to await new decisions.

The second key limitation is that the defendant also must have exercised due care with respect to the hazardous substances and the third party. Again, there has been relatively little litigation under CERCLA. However, there is precedent under the FWPCA, which suggests the standard is high.108 Courts have applied the contractual connection limitation in several cases. The lessor of land used by the lessee for a hazardous waste disposal site may not avail itself of the § 107(b)(3) defense, because of the contractual relationship.109 The Second Circuit recently held that a current owner of a site cannot avail itself of the § 107(b)(3) [15 ELR 10404] defense where the former owner forseeably continued to dump hazardous wastes on the site after title passed.110

A more recent case identified circumstances in which the § 107(b)(3) defense applies. In United States v. Mirabile,111 the court refused to grant the government summary judgment on liability against the current owners of a hazardous waste site, ruling that there was no contractual connection between them and the earlier site operators. Defendants acquired the property through a sheriff's sale. A bank that had financed the waste disposal company foreclosed on the property and then made the high bid itself at the sheriff's sale; it then assigned its bid to defendants, with whom it had been negotiating.112 The bank held title to the property for some time in the interim, but was not itself liable, because it was not an "owner" within the meaning of § 101(20). Unfortunately, the court did not elaborate on its reasons for finding no contractual connection. The bank's role in the transfer of ownership from the operators to defendants arguably created an indirect connection, but there were no contractual obligations between the two. The court refused to grant defendants summary judgment, however, finding that there were issues of material fact about whether they exercised due care to prevent further releases of hazardous substances from the site.

Equitable Defenses

Equitable defenses have, at most, a limited role in CERCLA actions. One court recently recognized the defense of unclean hands in an action between responsible parties. In Mardan Corp. v. C.G.C. Music, Ltd.,113 the court held that a company that purchased a hazardous substance disposal site and continued to operate it as such for a time was barred from bringing a CERCLA action against the prior owner/operator by the clean hands doctrine and a general release in the sale agreement. The government argues that equitable defenses like unclean hands are not available against the government in CERCLA cases, and courts generally have agreed.114

Other Bars to Liability

With neither CERCLA nor equitable defenses offering much hope, defendants in § 107 actions have put a great deal of energy into identifying other means of blocking liability. Two that have come up in several recent cases are statutes of limitations and personal jurisdiction. While not technically defenses, these issues may be the best defense available to some CERCLA litigants.

* Statutes of Limitations. CERCLA includes one statute of limitations governing the Act's substantive provisions, § 112(d)'s requirement that "claims" be presented and actions for damages be commenced within three years of discovery of the loss or by December 11, 1983, whichever is later.115 On the face of the statute it is not clear whether this limitation applies solely to claims against the Fund and natural resource damage actions or also includes cost recovery actions. Two district courts recently ruled that the limitation does not apply to cost recovery actions.116 One court held that no statute of limitations applies to such actions.117 The other held that a three-year limit, beginning to run no later than when the government began to incur response costs, applies.118 Dicta in a recent Eighth Circuit decision suggests that either the tort or contract statute of limitations in 28 U.S.C. § 2415 applies.119 The court also ruled that, as to the FWPCA, the statute of limitations begins to run when the cleanup is complete.120

Personal Jurisdiction

One requisite for a CERCLA action is personal jurisdiction over the defendant. EPA's attempts to extend the net of liability as far as possible and what may be a drafting oversight in the statute have brought personal jurisdiction issues to the fore in several recent cases. Under the Federal Rules of Civil Procedure the reach of long arm personal jurisdiction is determined by reference to the statute at issue and the law of the state in which the court sits.121 CERCLA § 113(b) states that venue "shall lie in any district in which the release or damages occurred, or in which the defendant resides, may be found, or has his principal office."122 Recent cases have considered whether a district court has jurisdiction over out-of-state companies with minimal contacts with a disposal site in the state or whose only connection is through a wholly owned subsidiary. The question of personal jurisdiction and minimal contacts is posed in two cases concerning the contamination of the Picillo Pig Farm in Rhode Island. The state sued in state and federal court. Among the defendants whose wastes were found in the site were Rutgers University and several companies with no facilities in Rhode Island. These defendants argued lack of personal jurisdiction, claiming that their wastes ended up in Rhode Island without their knowledge or intent. [15 ELR 10405] In Violet v. Picillo,123 the court rejected the state's argument that CERCLA explicitly authorizes nationwide service of process, finding that § 113(b) deals with subject matter, not personal jurisdiction.124 Although noting that nationwide service of process would greatly facilitate implementation of the Act's far-reaching liability scheme, the court also ruled that CERCLA does not implicitly authorize nationwide service of process.125 However, the court also held that sufficient contacts between defendants and the state existed to establish personal jurisdiction, analogizing from products liability cases involving interstate distributors.126 Ironically, after the federal court decision came down, the state court denied jurisdiction over the three defendants addressed in that case.127 Although CERCLA does not excuse de minimis contributions of hazadous substances,128 personal jurisdiction claims might avail some defendants in some cases.

Questions of personal jurisdiction over parent corporations have arisen in the tangled web of corporate interactions leading to generation of dioxin wastes in Missouri. A chemical company was acquired by the Syntex conglomerate and after several transactions became Syntex Agribusiness, a wholly owned subsidiary. Syntex Agribusiness, as successor to the company that generated the dioxin wastes, is located in Missouri and is a defendant in several CERCLA suits. The government has tried to bring in the parent corporation and a second subsidiary, neither of which has facilities in the state, over challenges of lack of personal jurisdiction. In two instances the courts held that they lacked personal jurisdiction simply because CERCLA does not provide nationwide service.129 More recently, another judge ruled that CERCLA does give jurisdiction over foreign parent corporations for § 106 abatement actions, but not for § 107 cost recovery actions.130 The court reasoned that since § 106 places venue only in courts where the sites are located, nationwide service can be inferred. Since § 113(b) places venue either near the facility or in the defendant's home state, nationwide service is not essential to give the government a means of acquiring jurisdiction over all possible parties.

Damages

CERCLA § 107 imposes liability for response costs and natural resource damages. What a plaintiff may recover in a given case depends on a number of factors. In cost recovery actions, the key variables are when the costs were incurred, whether plaintiff is a private party or a state or federal government, and what the money was spent on. Natural resource damage claims present a different set of issues. While there is a substantial volume of natural resource damage litigation underway,131 most of the recent decisions on damages focus on cost recovery issues.

The timing of the response action is critical in cost recovery cases.132 Initially several courts ruled that costs incurred before enactment of CERCLA could not be recovered.133 More recently, several courts have held preenactment costs recoverable.134 Whether a plaintiff can win a judgment for future response costs is another question. If EPA must completely clean up a site before seeking to replenish the Fund, it will be able to handle a relatively small number of cleanup actions. To expand its reach, and perhaps to avoid limits on use of the Superfund for long-term remedial actions, EPA has sought judgments for future response costs early in the process, as when it completes the remedial investigation and feasibility study. Courts generally have been willing to enter judgment for future costs,135 but not always.136

On a second issue, what costs are recoverable, the answer depends on whether the plaintiff is the federal or a state government on the one hand, or a private party on the other. As a general matter, investigative and planning costs may be recovered.137 Private party costs must be consistent with the NCP and such plaintiffs have the burden of proof on consistency.138 Some courts have limited private plaintiffs to recovery of costs incurred in carrying out a governmentally initiated, sanctioned, or supervised cleanup program. Other courts have not required any formal governmental action.139 One court split the difference by concluding that whether prior federal approval of private actions [15 ELR 10406] is necessary is up to EPA and that EPA's NCP requires approval only for long-term remedial actions.140 Perhaps the most striking development on what costs are recoverable is the holding that costs of complying with a RCRA enforcement action may be recovered.141

Conclusion

The law governing CERCLA implementation is gradually taking shape in lawsuits across the country. Although there are few courts of appeals decisions, core issues of generator and landowner liability appear to be settled. Those who own CERCLA sites now, those who owned or operated the sites when wastes were being dumped there, and generators whose wastes were delivered to the sites, all are subject to strict, joint and several liability. The government need show little or nothing by way of a causal link between the actions of current owners or generators and the releases from the site. Statutory and equitable defenses offer little solace to responsible parties except in extreme cases. The government also has been successful in defending its rather flexible use of its CERCLA abatement, cleanup, and cost recovery options. These victories merely establish the foundation for an effective cleanup program; they do not ensure that dangerous abandoned chemical dumps will be contained or neutralized. Confusion over how to remedy the many, diverse sites around the country and intense litigation over the procedures for choosing remedies and carrying them out have made progress in the field difficult. A cynic might argue that while the lawyers have been cleaning up in court, no one has been cleaning up in the dumps. And the provisions of CERCLA that govern these disputes are, if anything, less complete and more confusing than the central abatement, response, and liability sections. There is likely to be considerable litigation over the design and management of cleanup programs, and the early results suggest that the government may not fare as well as it has on liability issues. The activities of groups like Clean Sites, or amendments to CERCLA, which appear imminent, may smooth out the process, but at present it seems likely that the courts will continue to be inundated with CERCLA litigation.

1. 42 U.S.C. §§ 9601-9657, ELR STAT. 41941.

2. Comment, CERCLA Litigation Update: The Emerging Law of Generator Liability, 14 ELR 10221 (1984) (hereinafter cited as 1984 CERCLA Litigation Update).

3. 42 U.S.C. § 9606, ELR STAT. 41947.

4. 42 U.S.C. § 9604, ELR STAT. 41945.

5. Subchapter II, 42 U.S.C. §§ 9631-9641, ELR STAT. 41953, provides for establishment of a Hazardous Substance Response Trust Fund, popularly referred to as the Superfund, a term that many apply to the entire statute.

6. CERCLA § 111, 42 U.S.C. § 9611, ELR STAT. 41950. Section 112, 42 U.S.C. § 9612, ELR STAT. 41951, details procedures for claims against the Fund.

7. CERCLA § 105, 42 U.S.C. § 9605, ELR STAT. 41946.

8. For example, one court has held that EPA may launch removal or short term remedial actions at sites not on the NPL, but may only undertake long term remedial actions at NPL sites. New York v. Shore Realty Corp., 759 F.2d 1032, 15 ELR 20358 (2d Cir. 1985).

9. 42 U.S.C. § 9607, ELR STAT. 41947.

10. See, e.g., Miller, EPA Superfund Enforcement: The Question Isn't When To Negotiate and When To Litigate, But How To Do Either and How Often, 13 ELR 10062 (1983).

11. See, e.g., ENVIRONMENTAL PROTECTION AGENCY, MEMORANDUM: INTERIM CERCLA SETTLEMENT POLICY (Dec. 5, 1984), reprinted at 15 ELR 30001 (Administrative Materials).

12. Id. at 30006.

13. It is both a progeny of the imminent hazard provisions of other federal pollution control statutes, and a response to their shortcomings in dealing with hazards created by past discharges. See, e.g., United States v. Northeastern Pharmaceutical and Chemical Co., 579 F. Supp. 823, 14 ELR 20212 (W.D. Mo. 1984).

14. Section 106(b), 42 U.S.C. § 9606(b), ELR STAT. 41947.

15. Section 107(c) (3), 42 U.S.C. § 9607(c) (3), ELR STAT. 41948.

16. Velsicol v. Reilly Tar & Chemical Co., 15 ELR 20103 (E.D. Tenn. Aug. 16, 1984). As amended in 1984, § 7002 of the the Resource Conservation and Recovery Act, 42 U.S.C. § 6972, ELR STAT. 42034, now authorizes citizen suits to compel abatement of imminent hazards from inactives as well as active hazardous waste disposal sites.

17. Aminoil, Inc. v. United States Environmental Protection Agency, 599 F. Supp. 69, 14 ELR 20801 (C.D. Cal. 1984); Wagner Electric Corp. v. Thomas, 612 F. Supp. 736, 15 ELR 20977 (D. Kan. 1985).

18. Earthline Co. v. Kin-Buc, Inc., 15 ELR 20315 (D.N.J. Apr. 13, 1984).

19. 5 U.S.C. § 704, ELR STAT. 41006.

20. Aminoil, 599 F. Supp. 69, 14 ELR 20801; Wagner Electric, 612 F. Supp. 736, 15 ELR 20977. See also United States v. Reilly Tar & Chemical Corp., 606 F. Supp. 412, 15 ELR 20348 (D. Minn. 1985); Industrial Park Development Co. v. Environmental Protection Agency, 604 F. Supp. 1136, 15 ELR 20573 (E.D. Pa. 1985) (jurisdiction not contested).

21. Several courts have held that the only recourse of one who complies with a § 106(a) order and later is determined not to have been a responsible party is recovery from other responsible parties, see, e.g., Aminoil, 599 F. Supp. 69, 14 ELR 20801.

22. Aminoil, 599 F. Supp. 69, 14 ELR 20801.

23. See also Industrial Part Development Co. v. Environmental Protection Agency, 604 F. Supp. 1136, 15 FLR 20573 (E.D. Pa. 1985) (plaintiffs have high likelihood of success on the merits on claim that procedures violate due process).

24. Wagner Electric, 612 F. Supp. 736, 15 ELR 20977; Reilly Tar, 606 F. Supp. 412, 15 ELR 20348.

25. 604 F. Supp. 1136, 15 ELR 20573 (E.D. Pa. 1985).

26. The fact that EPA selects a cleanup strategy at a site does not necessarily limit responsible parties' liability to the costs of that strategy should additional actions later be required. Liability for a site at which cleanup was completed might transfer to the Post-Closure Liability Fund, § 107(j), 42 U.S.C. § 9607(i), ELR STAT. 41948. Cases in which government contractors failed to control the site would not fall into this category. Responsible parties presumably would be liable unless the actions of the contractor made out the elements of a defense, an unlikely occurrence. See infra notes 105-08 and accompanying text.

27. The best known of these organizations is Clean Sites, Inc. For a discussion of the early plans of Clean Sites, see Clean Sites At Age One. . . An Uneven Start, ENVTL. F., March 1985 at 27.

28. Section 104(a), 42 U.S.C. § 9604(a), ELR STAT. 41945, authorizes EPA to respond to releases or "substantial" threats of releases of hazardous substances or of "pollutants or contaminants" that pose an imminent and substantial danger to public health or welfare.

29. Section 104(b) gives authority to investigate existing or threatened releases and to plan response actions; § 104(e) gives EPA power to obtain information needed to carry out its § 104 responsibilities from those involved with hazardous substance generation, transportation, storage, and disposal.

30. See New York v. Shore Realty Corp., 759 F.2d 1032, 1047-48, 15 ELR 20358, 20365 (2d Cir. 1985).

31. Fund moneys are available only if the state will agree to help finance the action and be responsible for long term maintenance of the site. CERCLA § 104(c), 42 U.S.C. § 9604(c), ELR STAT. 41945.

32. See supra notes 25-27 and accompanying text.

33. 767 F.2d 263, 15 ELR 20646 (6th Cir. 1985).

34. J.V. Peters & Co. v. Ruckelshaus, 584 F. Supp. 1005, 14 ELR 20277 (N.D. Ohio 1984) (preenforcement review of § 104 action allowed where claim is that the cleanup plan is irrational or arrived at in violation of statutorily mandated procedures).

35. United States v. Outboard Marine Corp. (N.D. Ill. Aug. 30, 1984); Lone Pine Steering Committee v. United States Environmental Protection Agency, 600 F. Supp. 1487, 15 ELR 20109 (D.N.J. 1985). But see United States v. United Nuclear Corp., 610 F. Supp. 527, 15 ELR 20442 (D.N.M. 1985) (hinting that the ROD may be reviewable).

36. Lone Pine, 600 F. Supp. 1487, 15 ELR 20109.

37. Id. at 14995, 15 ELR at 20115.

38. United Nuclear. Wheaton Industries v. Environmental Protection Agency, 15 ELR 20950 (D.N.J. July 11, 1985).

39. United Nuclear, at 529, 15 ELR at 20443.

40. In re Conservation Chemical Co., 22 ERC 1761 (8th Cir. Sept. 10, 1984).

41. 773 F.2d 883, 15 ELR 21094 (7th Cir. 1985).

42. Outboard Marine Corp. v. Thomas, 610 F. Supp. 1234, 15 ELR 20900 (N.D. Ill. Apr. 30, 1985).

43. Outboard Marine, 773 F.2d at 890, 15 ELR at 21097. The court said that there could be no imminent hazard at the facility, despite the presence of large quantities of PCBs in the environment, since EPA had been pursuing the case for 10 years.

44. Notice of Motion for Summary Judgment, Statement of Undisputed Facts, Memorandum of Points and Authorities, Declaration of Jerrold A. Fadem, and Declaration of Robert P. Oliker, Hendler v. United States, No. 456-84L (Cl. Ct. filed June 26, 1985).

45. Defendant's Memorandum in Support of Its Cross Motion for Summary Judgment and Opposition to Plaintiffs' Motion for Summary Judgment, Hendler v. U.S., No. 456-84L (Cl. Ct. filed June 26, In an unrelated case, Clark v. United States, 8 Cl. Ct. 649 (Cl.Ct. 1985), the Claims Court has ruled that CERCLA does not bar neighbors of a federally owned disposal site from claiming that contamination of groundwater has worked a taking.

46. 33 U.S.C. § 1321, ELR STAT. 42132.

47. 126 CONG. REC. S14963 (Nov. 24, 1980), reprinted in ELI, 1 SUPERFUND: A LEGISLATIVE HISTORY 168 (1982) (remarks of Sen. Randolph) ("[U]nless otherwise provided in this act, the standard of liability is intended to be the same as that provided in section 311 of the Federal Water Pollution Control Act (33 U.S.C. § 1321). I understand this to be a standard of strict liability. It is intended that issues of liability not resolved by this act, if any, shall be governed by traditional and evolving principles of common law. An example is joint and several liability. Any reference to these terms has been deleted, and the liability of joint tort feasors will be determined under common or previous statutory law.").

48. See, e.g., New York v. Shore Realty Corp., 759 F.2d 1032, 15 ELR 20358 (2d Cir. 1985).

49. See, e.g., City of Philadelphia v. Stepan Chemical Co., 544 F. Supp. 1135, 12 ELR 20915 (E.D. Pa. Aug. 4, 1985).

50. Mayor of Boonton v. Drew Chemical Corp., 15 ELR 20962 (D.N.J. July 24, 1985).

51. 596 F. Supp. 283, 15 ELR 20173 (N.D. Cal. 1984).

52. See, e.g., Velsicol v. Reilly Tar & Chemical Corp., 15 ELR 20103 (E.D. Tenn. Aug. 16, 1984) (current owner/operator may be blocked).

53. See supra text accompanying note 7.

54. Bulk Distribution Centers, Inc. v. Monsanto, Inc., 15 ELR 20151 (S.D. Fla. June 19, 1984).

55. Wickland Oil Terminals v. ASARCO, Inc., 590 F. Supp. 72, 14 ELR 20494 (N.D. Cal. 1984).

56. Cadillac Fairview/California, Inc. v. Dow Chemical Co., 14 ELR 20376 (C.D. Cal. Mar. 5, 1984), reconsideration denied, 14 ELR 20716 (C.D. Cal. Aug. 29, 1984).

57. Mardan Corp. v. C.G.C. Music, Ltd., 600 F. Supp. 1049, 15 ELR 20370 (D. Ariz. 1984).

58. Artesian Water Co. v. Government of New Castle County, 605 F. Supp. 1348, 15 ELR 20577 (D. Del. 1985).

59. Homart Development Co. v. Bethlehem Steel Corp., 14 ELR 20718 (N.D. Cal. July 12, 1984).

60. Pinole Point Properties v. Bethlehem Steel Corp., 15 ELR 20173 (N.D. Cal. Oct. 22, 1984).

61. New York v. Shore Realty Corp., 759 F.2d 1032, 1043, n.16, 15 ELR 20358, 20362, n. 16 (2d Cir. 1985).

62. See 1984 CERCLA Litigation Update, supra note 2.

63. Section 101(20) (A), 42 U.S.C. § 9601(20) (A), ELR STAT. 41941.

64. Section 101(21), 42 U.S.C. § 9601(21), ELR STAT. 41941.

65. See, e.g., Artesian Water Co. v. Government of New Castle County, 605 F. Supp. 1348, 15 ELR 20577 (D. Del. 1985).

66. Section 101(20) (A), 42 U.S.C. § 9601(20) (A), ELR STAT. 41941.

67. New York v. Shore Realty Corp., 759 F.2d at 1044, 15 ELR at 20363.

68. New York v. Shore Realty Corp., 759 F.2d 1032, 15 ELR 20358 (2d Cir. Apr. 4, 1985); United States v. Carolawn, 14 ELR 20699 (D.S.C. June 15, 1984); see also Memorandum from Courtney M. Price on Liability of Corporate Shareholders and Successor Corporations for Abandoned Sites Under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) (June 13, 1984). Individual corporate officers also may be personally liable as generators if they are responsible for the actions giving rise to liability. See, e.g., United States v. Mottolo, 14 ELR 20497 (D.N.H. Mar. 27, 1984).

69. United States v. Argent Corp., 14 ELR 20616 (D.N.M. May 4. 1984); United States v. Cauffman, 15 ELR 20161 (C.D. Cal. Oct. 23, 1984).

70. New York v. Shore Realty Corp., 759 F.2d 1032, 15 ELR 20358 (2d Cir. 1985).

71. See infra text accompanying notes 105-11.

72. See, e.g., Velsicol Chemical Corp. v. Reilly Tar & Chemical Corp., 15 ELR 20103 (E.D. Tenn. Aug. 16, 1984).

73. See, e.g. United States v. Maryland Bank & Trust Co., No. N84-4026, ELR PEND. LIT. 65847 (D. Md. complaint filed Oct. 31, 1984).

74. United States v. Mirabile, 15 ELR 20994 (E.D. Pa. Sept. 4, 1985) (creditors' defenses). See also In re T.P. Long Chemical, Inc., 45 Bankr. 278, 15 ELR 20635 (Bankr. N.D. Ohio Jan. 3, 1985) (A bank that holds a security interest in a hazardous waste disposal site is not an owner or operator even if it forecloses).

75. Mirabile, 15 ELR 20994.

76. See supra text accompanying note 67.

77. Mardan v. C.G.C. Music, Ltd., 600 F. Supp. 1049, 15 ELR 20370 (D. Ariz. Dec. 6, 1984). The court noted, however, that the seller could still be liable in a government cleanup action, but since the purchaser was cleaning up subject to a RCRA enforcement action, this prospect offered it little relief.

78. United States v. Carolawn Co., 14 ELR 20698 (D.S.C. June 15, 1984).

79. See 1984 CERCLA Litigation Update, supra note 2.

80. 14 ELR 20719 (N.D.N.Y. June 26, 1984).

81. United States v. Westinghouse Electric Corp., 14 ELR 20483 (S.D. Ind. June 29, 1983).

82. 15 ELR 20161 (E.D. Mo. Jan. 8, 1985).

83. See Comment, "Arranging for Disposal" Under "CERCLA: When Is a Generator Liable?, 15 ELR 10160 (June 1985), and Moorman & Kirsch, A Response to "'Arranging for Disposal' Under CERCLA," 15 ELR 10274 (Sept. 1985).

84. See Moorman & Kirsch, supra note 83, at 10274.

85. Nor has the independent action of a transporter been held a defense under § 107(b)(3). Indeed, given the exception to the defense for actions by those contractually linked to the defendant, such defenses would seem to require a completely independent intervening cause, i.e. someone other than the original transporter or its subcontractor or agent. See infra text accompanying notes 105-06.

86. See 1984 CERCLA Litigation Update, supra note 2.

87. United States v. Argent Corp., 14 ELR 20497 (D.N.M. May 4, 1984); United States v. Cauffman, 15 ELR 20161 (C.D. Cal. Oct. 23, 1984) (current and former owners strictly liable); United States v. Ottati & Goss, 22 ERC 1736 (D.N.H. July 25, 1984) (transporters strictly liable); Bulk Distribution Centers, Inc. v. Monsanto Co., 589 F. Supp. 1437, 1443, n.15, 15 ELR 20151, 20154, n. 15 (S.D. Fla. June 19, 1985).

88. See, e.g., Colorado v. ASARCO, Inc., 15 ELR 20253 (May 13, 1985).

89. In New York v. Shore Realty Corp., the Second Circuit noted that, though the issue was not before it, the commentator on whom it relied elsewhere in the opinion had pointed out that joint and several liability is consistent with other express provisions in the Act. New York v. Shore Realty Corp., 759 F.2d at 1042, n.13, 15 ELR at 20362, n. 13.

90. ELR PEND. LIT. 65853. Briefs were filed in October, 1984. The case is awaiting decision. Telephone conversation with David Shilton, Department of Justice, November 14, 1985.

91. See 1984 CERCLA Litigation Update, supra note 2.

92. Id.

93. New York v. Shore Realty Corp., 759 F.2d 1032, 15 ELR 20358 (2d Cir. 1985) (current owner); United States v. Cauffman, 15 ELR 20161 (C.D. Cal. Oct. 23, 1984) (either current or prior owner).

94. United States v. Ottati & Goss, 22 ERC 1736 (D.N.H. July 25, 1984).

95. 759 F.2d at 1044, 15 ELR at 20363.

96. Id.

97. United States v. Ward, 14 ELR 20804 (E.D.N.C. May 14, 1984) (Congress intended to allow contribution and indemnification to the extent available under federal common law); Wehner v. Syntex Agribusiness, Inc., 15 ELR 20346 (E.D. Mo. Apr. 1, 1985) (federal law governs, and legislative history and § 107(e)(2), concerning preservation of rights of action, demonstrate intent to allow contribution actions); Colorado v. ASARCO, Inc., 15 ELR 20523 (D. Colo. May 13, 1985) (Congress empowered federal courts to establish federal common law of liability on a case-by-case basis; most jurisdictions with joint and several liability allow contribution, as would treatises; and CERCLA expressly preserves contribution actions); Caldwell v. Gurley Refining Co., 15 ELR 20316 (8th Cir. Feb. 25, 1985).

98. United States v. Mottolo, 14 ELR 20497 (D.N.H. Mar. 27, 1984).

99. 15 U.S.C. §§ 2601-2629, ELR STAT. 41335.

100. United States v. Ward, 14 ELR 20804 (E.D.N.C. May 14, 1984).

101. Section 107(b), 42 U.S.C. § 9607(b), ELR STAT. 41947.

102. CERCLA defendants also defend themselves with allegations of constitutional violations or failure to adhere to statutory requisites for § 107 actions. Many of the issues raised by such claims have been resolved in earlier litigation. See, e.g., United States v. Northeastern Pharmaceutical & Chemical Co., 579 F. Supp. 823, 14 ELR 20212 (W.D. Mo. 1984) (retroactive liability is constitutional); Homart Development Co. v. Bethlehem Steel Corp., 14 ELR 20718 (N.D. Cal. July 12, 1984) (claims procedures of §§ 111, 112 not applicable to § 107 actions).

103. Pinole Point Properties v. Bethlehem Steel Corp., 596 F. Supp. 283, 15 ELR 20173 (N.D. Cal. Oct. 22, 1984).

104. For a discussion of the relationship between the two sections, see Note, Strict Liability Under Section 311 of the Clean Water Act: Cleaning Up Respondeat Superior and Negligence, 10 COLUMBIA J. ENVTL. L. 149 (1985).

105. No reported decisions address the act of war or act of God defenses. See Mola Development Corp., 22 ERC 1443 (C.D. Cal. Feb. 11, 1985) (United States informs the court that it is not claiming an act of God defense, but may rely on the act of war defense).

106. United States v. Mirabile, 15 ELR 20994 (E.D. Pa. Sept. 4, 1985).

107. New York v. Shore Realty Corp., 759 F.id 1032, 1048-49, 15 ELR 20358, 20366 (2d Cir. 1985).

108. See, e.g., Minneapolis Park and Recreation Board v. United States, 13 ELR 20029 (Ct. Cl. Trial Div. Apr. 29, 1982) and Travelers Indemnity Co. v. United States, 13 ELR 20046 (Ct. Cl. Mar. 30, 1982), holding that plaintiffs could not recover costs of cleaning up oil spills caused by vandals, by vandals, because they had not taken adequate precautions.

109. United States v. Argent Corp. 14 ELR 20616 (D.N.M. May 4, 1984).

110. New York v. Shore Realty Corp., 759 F.2d 1032, 1048, 15 ELR 20358, 20365-66 (2d Cir. 1985).

111. 15 ELR 20992 (E.D. Pa. Sept. 4, 1985) (site buyers' defenses).

112. United States v. Mirabile, 15 ELR 20994 (E.D. Pa. Sept. 4, 1985).

113. 600 F. Supp. 1049, 15 ELR 20370 (D. Ariz. 1984).

114. See, e.g., United States v. Mottolo, 605 F. Supp. 898, 15 ELR 20444, 20448 (D.N.H. 1985), but see United States v. Reilly Tar & Chemical Corp., No. 4-80-469 (D. Minn. June 14, 1984) (court refuses to dismiss defense of laches against federal government in § 106 action, since court is empowered to use its equitable powers to fashion remedies).

115. 42 U.S.C. § 9612(d), ELR STAT. 41952. Note that § 110(b), 42 U.S.C. § 9610, ELR STAT. 41950, sets a 30-day limitation period for claims of employee discrimination resulting from whistleblowing activities. See Fidler v. United States Department of Labor, 22 ERC 1391 (3d Cir. Jan. 29, 1985).

116. United States v. Mottolo, 605 F. Supp. 898, 15 ELR 20444 (D.N.H. 1985); Mola Development Corp. v. United States, 15 ELR 21029 (C.D. Cal. July 30, 1985). In a footnote, the court in New York v. General Electric Co., 14 ELR 20719, 20722, n.17 (N.D.N.Y. June 26, 1984) offered the dictum that the § 112(d) limitation probably does not apply to cost recovery actions.

117. Mottolo, 605 F. Supp. 898, 15 ELR 20444.

118. Mola Development, 15 ELR 21029.

119. Caldwell v. Gurley Refining Co., 15 ELR 20316 (8th Cir. Feb. 25, 1985). The court was considering whether a suit between two potentially responsible parties under CERCLA and FWPCA § 311 for oil and hazardous substance spills was ripe. A central issue was whether the government still had a cost recovery cause of action. The court held that a district court might choose either limitation, citing an FWPCA case on each side of the issue, which was enough to defeat defendant's contention that a cost recovery suit was definitely barred.

120. Id. at 20318.

121. Fed. R. Civ. P. 4(f).

122. 42 U.S.C. § 9613(b), ELR STAT. 41952.

123. No. 83-0787P (D.R.I. Aug. 2, 1985).

124. Id., slip op. at 11.

125. Id., slip op. at 21. The court held that as to one defendant, it was bound by a prior state court decision on the issue.

126. Id., slip op. at 29-30. Defendants should have known that they were sending their wastes into a stream of commerce that could carry them into any state when they gave their wastes to transporters with no attempt to specify the states where the wastes were to be disposed. Had defendants wished to insulate themselves from having to litigate in a distant forum like Rhode Island, they could have taken greater pains to ensure that disposal would take place closer to home. Rhode Island's interest in litigating the case in the state is compelling.

127. Bendick v. Picillo, No. 77-3161 (Super. Ct. Oct. 9, 1985).

128. In one recent case a group of third party generators argued that the principle of de minimis non curat lex warranted their dismissal from the action. The Special Master recommended that CERCLA precludes the application of the doctrine, though urging the parties to consider the volume and nature of such parties' wastes in pursuing settlement. United States v. Conservation Chemical Co., No. 82-0983-CV-W-5, (W.D. Mo. Nov. 12, 1984).

129. See, e.g., Wehner v. Syntex Agribusiness, Inc., 15 ELR 20346 (E.D. Mo. Apr. 1, 1985).

130. United States v. Bliss, No. 84-200C(1) (E.D. Mo. Nov. 1, 1985). The court held that the presence of a sales force in the state did not confer jurisdiction under Missouri law and so turned to CERCLA.

131. See, ELR PEND. LIT. 65876-77 [Colorado v. Asarco, Inc. [Colorado v. Union Carbide Corp. [Colorado v. Cotter Corp. [Colorado v. Gulf & Western Indus., Inc. [Colorado v. Idara Mining Co. [Colorado v. Asarco, Inc. [Chem. Waste Mgmt., Inc. v Thomas for abstracts of pleadings in seven state natural resource damage actions.

132. The issue here is the timing of the response action, not the timing of the responsible party's action.

133. See, e.g., United States v. Northeastern Pharmaceutical and Chemical Co., 579 F. Supp 823, 14 ELR 20212 (W.D. Mo. 1984).

134. Mayor of Boonton v. Drew Chemical Corp., 15 ELR 20962 (D.N.J. July 24, 1985); United States v. Shell Oil Co., 15 ELR 20337 (D. Colo. Mar. 26, 1985).

135. See, e.g., Jones v. Inmont Corp., 14 ELR 20485 (S.D. Ohio, Apr. 26, 1984) (private plaintiff may recover for future costs so long as some costs have been incurred); Velsicol v. Reilly Tar & Chemical Corp., 15 ELR 20103 (E.D. Tenn Aug. 16, 1984).

136. United States v. Mottolo, 23 ERC 1292 (D.N.H. July 18, 1985) (U.S. may amend complaint to seek future response costs, but must present quantified ad admnum before case may go to trial. CERCLA does not authorize a "rolling accounting" approach, which contravenes the doctrine against splitting claims — an application of res judicata).

137. See, e.g., Velsicol Chemical Corp. v. Reilly Tar & Chemical Corp., 15 ELR 20103 (E.D. Tenn. Aug. 16, 1984).

138. See, e.g., Levin Metals Corp. v. Parr-Richmond Terminal Co., 608 F. Supp. 1272, 15 ELR 20791 (N.D. Cal. May 17, 1985) (failure to allege consistency with NCP fatal to private cost recovery action on the pleadings).

139. See supra text accompanying notes 54-60.

140. Artesian Water Co. v. Government of New Castle County, 605 F. Supp. 1348, 15 ELR 20577.

141. Mardan Corp. v. C.G.C. Music, Ltd., 600 F. Supp. 1049, 15 ELR 20370 (D. Ariz. 1984).

15 ELR 10395 | Environmental Law Reporter | copyright © 1985 | All rights reserved