CERCLA OVERVIEW - Canadian Bar · PDF fileCERCLA OVERVIEW. A. INTRODUCTORY/OVERVIEW ... Love Canal and the Poisoning of America, The Atlantic Monthly, Dec 1979 ... The NCP sets forth

Updated: May 2011

CERCLA OVERVIEW

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CERCLA OVERVIEW

TABLE OF CONTENTS

A. INTRODUCTORY/OVERVIEW........................................................................................ 1

1. HISTORY ............................................................................................................................................ 1

2. STRUCTURE AND PURPOSE ............................................................................................................... 2

3. FURTHERANCE OF STATUTORY GOALS ............................................................................................. 3

B. CERCLA'S LIABILITY STANDARD ............................................................................... 3

1. STRICT LIABILITY ................................................................................................................................ 3

2. JOINT AND SEVERAL ("J&S") LIABILITY .............................................................................................. 4

3. RETROACTIVE LIABILITY .................................................................................................................... 5

C. GOVERNMENTAL ALTERNATIVES AT A SUPERFUND SITE ................................. 5

1. RESPONSE ACTIONS .......................................................................................................................... 5

2. INFORMATION GATHERING AND SITE ACCESS ................................................................................. 6

3. CLEANUP PROCESS ............................................................................................................................ 7

4. WORK OPTIONS ................................................................................................................................ 8

D. PRIVATE PARTY RESPONSE ACTIONS UNDER GOVERNMENT DIRECTION - CERCLA SECTION 106 ................................................................................................................ 8

1. STANDARDS (WHETHER ADMINISTRATIVE ORDER OR INJUNCTION) ............................................... 8

2. SANCTIONS FOR NON-COMPLIANCE ................................................................................................ 9

E. COST RECOVERY ACTIONS - CERCLA § 107(a)(4)(A) ............................................. 11

1. BASIC ELEMENTS OF LIABILITY FOR FEDERAL GOVERNMENT, STATES, OR INDIAN TRIBES ........... 11

2. THE FOUR ELEMENTS OF LIABILITY - SECTION 107(a) .................................................................... 11

3. CURRENT OWNERS AND OPERATORS ............................................................................................. 13

4. PAST OWNERS AND OPERATORS .................................................................................................... 14

5. GENERATORS .................................................................................................................................. 17

6. TRANSPORTERS ............................................................................................................................... 19

F. RECOVERABLE COSTS................................................................................................. 19

1. GOVERNMENTAL RESPONSE COSTS ............................................................................................... 19

2. RECOVERABILITY OF PRE-CERCLA COSTS ........................................................................................ 21

3. PRIVATE COST RECOVERY ACTIONS UNDER 107(a)(4)(B) ............................................................... 22

4. EXTRATERRITORIALITY .................................................................................................................... 23

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G. DEFENSES TO LIABILITY - SECTION 107(b) ............................................................. 23

1. ACT OF GOD .................................................................................................................................... 23

2. ACT OF WAR .................................................................................................................................... 24

3. THIRD PARTY DEFENSE .................................................................................................................... 24

4. PROCEDURES ................................................................................................................................... 25

H. EXCLUSIONS ................................................................................................................... 26

1. PETROLEUM .................................................................................................................................... 26

2. SECURITY INTEREST HOLDERS ......................................................................................................... 26

3. INNOCENT LANDOWNERS .............................................................................................................. 27

4. FEDERALLY PERMITTED RELEASES .................................................................................................. 27

5. COMMON CARRIERS ....................................................................................................................... 28

6. PESTICIDE ........................................................................................................................................ 28

7. CONSUMER PRODUCTS ................................................................................................................... 28

8. RECYCLERS ....................................................................................................................................... 28

9. DE MICROMIS EXEMPTION SECTION 107(o) ................................................................................... 29

10. MUNICIPAL SOLID WASTE EXEMPTION (MSW) SECTION 107(p) ................................................... 29

11. CONTIGUOUS PROPERTY OWNERS SECTION 107(q) ...................................................................... 30

12. PROSPECTIVE PURCHASER SECTION 107(r).................................................................................... 30

13. BROWNFIELDS 128(b) .................................................................................................................... 30

14. RADIONUCLIDES SECTION 101(22)(c) ............................................................................................. 30

I. STANDARD OF REVIEW ............................................................................................... 31

1. ADEQUACY OF RESPONSE COSTS ASSERTED BY GOVERNMENT .................................................... 31

J. STATUTE OF LIMITATIONS ........................................................................................ 31

K. SECTION 107 COST RECOVERY ACTIONS DO NOT ALLOW FOR TRIALS WITH JURIES ......................................................................................................................................... 32

L. CERCLA SETTLEMENTS (SECTION 122, codified at 42 U.S.C. § 9622, et seq.) ........ 32

1. STATUTORY GOAL ........................................................................................................................... 32

2. DISCRETIONARY AUTHORITY .......................................................................................................... 33

3. PROCEDURE AND SCOPE ................................................................................................................. 33

4. CONSENT DECREE ........................................................................................................................... 33

5. DE MINIMIS SETTLEMENTS ............................................................................................................. 34

6. CONTRIBUTION PROTECTION ......................................................................................................... 35

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7. MIXED FUNDING ............................................................................................................................. 36

8. NON-BINDING ALLOCATIONS OF RESPONSIBILITY ("NBAR") .......................................................... 36

9. RELEASES FROM LIABILITY / COVENANT NOT TO SUE .................................................................... 36

10. STANDARD OF REVIEW FOR CONSENT DECREES ........................................................................... 37

M. CONTRIBUTION SUITS (SECTION 113, codified at 42 U.S.C. § 9613, et seq.) .......... 38

1. BASIC STANDARD ............................................................................................................................ 38

2. EFFECT ON PROCURING JOINT AND SEVERAL LIABILITY ................................................................. 39

3. ELIGIBILITY TO BRING CONTRIBUTION ACTION .............................................................................. 39

4. ALLOCATION OF COSTS ................................................................................................................... 41

5. RIGHT TO A JURY TRIAL ................................................................................................................... 42

6. STATUTE OF LIMITATIONS .............................................................................................................. 42

N. NATURAL RESOURCES DAMAGES (SECTION 107) ................................................ 43

1. STATUTE .......................................................................................................................................... 43

2. NATURAL RESOURCES ..................................................................................................................... 43

3. ELIGIBILITY TO BRING NRD CLAIMS ................................................................................................ 44

5. NRD STATUTE OF LIMITATIONS ...................................................................................................... 44

6. NRD ASSESSMENTS ......................................................................................................................... 44

7. MEASUREMENT OF DAMAGES ....................................................................................................... 45

O. JUDICIAL REVIEW ......................................................................................................... 46

1. EXCLUSIVE FEDERAL JURISDICTION ................................................................................................ 46

2. TIMING OF REVIEW OF RESPONSE ACTIONS .................................................................................. 46

3. PRE-ENFORCEMENT REVIEW .......................................................................................................... 47

4. CITIZEN SUITS .................................................................................................................................. 48

5. INTERVENTION STANDARD ............................................................................................................. 49

6. SOVEREIGN IMMUNITY ................................................................................................................... 49

7. CERCLA AND BANKRUPTCY LAW ..................................................................................................... 52

P. OBLIGATIONS AT FEDERALLY-OWNED FACILITIES ........................................... 56

1. FEDERAL AGENCY HAZARDOUS WASTE ASSESSMENT AND EVALUATION: SECTION 120(d) .......... 56

2. FEDERAL PROPERTY TRANSFERS: § 120(h) (as amended) ............................................................. 57

3. THE COMMUNITY ENVIRONMENTAL RESPONSE FACILITIES ACT ................................................. 58

By John C. Cruden. This outline was prepared in my individual capacity.

CERCLA OVERVIEW

A. INTRODUCTORY/OVERVIEW

1. HISTORY

a. CERCLA was passed in 1980 at the end of the ninety-sixth Congress to clean up leaking, inactive or abandoned sites and provide emergency response to spills. CERCLA is the abbreviation for the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. §§ 9601-9675, as reauthorized and substantially amended by the Superfund Amendments and Reauthorization Act of 1986 ("SARA"), Pub L. No. 99-499, 100 Stat. 1613 (1986). SARA introduced more stringent cleanup standards, created a new independent regulatory program - the Emergency Planning and Community Right-to-Know Act, 42 U.S.C. §§ 11001-11050, and codified some court decisions.

b. The statute was initiated as a response to severe environmental and health

problems at toxic waste sites such as Love Canal in New York1 and Times Beach in Missouri.2

c. Federal funding for the "Superfund" was initially $1.6 billion (1981-85).

The revenue source was primarily a direct tax on sales of petroleum and certain chemical feedstocks. SARA increased the fund to $8.5 billion through additional taxes. In 1991, Congress reauthorized CERCLA for an additional three years and the funding authority for an additional four years. The taxing authority expired on December 31, 1995.

1 “In the late 1930s or early 1940s, the Hooker Chemical Company began dumping toxic was in an abandoned canal near Niagara Falls. Michael H. Brown, Love Canal and the Poisoning of America, The Atlantic Monthly, Dec 1979, at 33. In 1953, the canal was filled and sold to the city to provide land for a new elementary school and playground. Id. Families moved into the area, unaware that the large field behind their homes was teeming with toxic waste. Id. Despite evidence of contamination, it took until 1978 for New York State and the federal government to investigate the pervasive health problems affecting the residents and the deterioration of buildings around the Love Canal. S.Rep. No. 96-848, at 8-10 (1980). Ultimately, it was determined that thousands of tons of toxic waste contaminated the area around Niagara Falls, creating an “environmental ghetto[ ]” that then-President Carter declared a federal emergency. Id.”. From Niagara Mohaw Power Corp. v. Chevron U.S.A., Inc., 596 F.3d 112, 120n.5 (2d Cir. 2010). 2 The Resource Conservation & Recovery Act ("RCRA"), 42 U.S.C. § 6901 et seq., as amended by the Hazardous and Solid Waste Amendments of 1984 ("HSWA"), Pub. L. No. 98-616, 98 Stat. 3221 (1984), and other environmental statutes provided only limited authorities to deal with abandoned sites at the time CERCLA was enacted. RCRA § 7003, 42 U.S.C. § 6973, now provides corrective action requirements similar to CERCLA authorities, and covers hazardous or solid wastes presenting an "imminent and substantial endangerment to public health or the environment."


d. Superfund Reauthorization - In the 103rd Congress, two bills were introduced at the request of the administration to reauthorize CERCLA: H.R. 3800 and S. 1834. In the 104th Congress the most significant bills were S. 1285 and H.R. 2500. In the 105th Congress, S. 8, as amended, was voted out of the Senate Environment and Public Works Committee on March 26, 1998 and H.R. 2727 was voted out of the House Transportation and Infrastructure Committee, Water Resources and Environment Subcommittee on March 11, 1998. In the 106th Congress, S. 1090 was the major Senate Bill. Although none of the reauthorization bills passed, there have been significant changes since 1986, including new language on lender and fiduciary liability, recycling, and brownfields and small business. Pub. L. No. 104-208, Asset Conservation, Lender Liability, and Deposit Insurance Protection Act of 1996, Subtitle E (amending CERCLA § 101(20), the secured creditor exemptions under CERCLA); Pub. L. No. 106-113, the Superfund Recycling Equity Act of 1999 (SREA) (adding new CERCLA § 127); Pub. L. No. 107-118, the Small Business Liability Relief and Brownfields Revitalization Act (adding new and amended CERCLA Sections 107(o)-(r); 101(35), (39)-(41); 122(g)(7)-(12)).

2. STRUCTURE AND PURPOSE

a. CERCLA is remedial. It creates a response, compensation, and liability scheme. B.F. Goodrich Co. v. Murtha, 958 F.2d 1192 (2d Cir. 1992); Young v. United States, 394 F.3d 858, 862 (10th Cir. 2005).

b. CERCLA is predicated on restitution. Those responsible for causing

hazardous substance releases should pay the cost of cleanup.

c. CERCLA is not a prescriptive or regulatory program and does not make any conduct unlawful (with the exception of a criminal provision under Section 103, which governs spill reporting requirements).3

d. By Executive Order 12580, 3 C.F.R., 1987 Comp. p. 193, most authorities

for non-federally owned sites are delegated to the U.S. Environmental Protection Agency ("EPA"), except natural resource damages.

e. The primary CERCLA regulation is the National Oil Hazardous Substances

Pollution Contingency Plan ("NCP").4 The NCP was challenged and 3 Section 103(b) imposes criminal sanctions for failure to notify the government of releases of hazardous substances in particular quantities. Section 103(c) and (d), known as the community right-to-know provisions, require certain owners and operators to notify the government and maintain records for the treatment, storage or disposal of hazardous wastes. Violations can result in a maximum penalty of five years’ imprisonment and significant fines. See, e.g., United States v. Freter, 31 F.3d 783 (9th Cir. 1994). See amendments by Title I, Pub. L. No. 104-208 (Sept. 30, 1996). 4 40 C.F.R. Part 300 et seq. The NCP sets forth the basic criteria that a) governs responses


substantially upheld in Ohio v. United States Envtl. Prot. Agency, 997 F.2d 1520 (D.C. Cir. 1993).

3. FURTHERANCE OF STATUTORY GOALS

a. CERCLA was enacted to provide a framework for cleanup of the nation's worst hazardous waste sites. The primary goal of CERCLA is to protect and preserve public health and the environment from the effects of releases or threatened releases of hazardous substances to the environment. See Voluntary Purchasing Groups, Inc. v. Reilly, 889 F.2d 1380, 1386 (5th Cir. 1989); Dedham Water Co. v. Cumberland Farms Dairy, Inc., 805 F.2d 1074, 1081 (1st Cir. 1986); New York v. Shore Realty Corp., 759 F.2d 1032, 1040 n.7 (2d Cir. 1985); O'Neil v. Picillo, 682 F. Supp. 706, 726 (D.R.I. 1988) aff'd, 883 F.2d 176 (1st Cir. 1989).

b. Congress intended that those responsible for creation of hazardous

conditions bear the burden of cleaning up those conditions. See Carter-Jones Lumber Co. v. LTV Steel Co., 237 F.3d 745, 749 (6th Cir. 2001); Monarch Tile, Inc. v. City of Florence, 212 F.3d 1219, 1221 (11th Cir. 2000); Lone Pine Steering Comm. v. United States Envtl. Prot. Agency, 777 F.2d 882, 886 (3d Cir. 1985), cert. denied, 476 U.S. 1115 (1986); OHM Remediation Servs. v. Evans Cooperage Co., 116 F.3d 1574 (5th Cir. 1997).

c. Voluntary private party cleanup of sites is strongly encouraged, as the Fund

is insufficient to finance cleanups at all sites and, therefore, must be allocated to those sites where there are no viable potentially responsible parties. See 42 U.S.C. § 9622; United States v. Conservation Chem. Co., 628 F. Supp. 391 (W.D. Mo. 1985).

d. CERCLA's legislative history indicates that Congress intended to have the

scope of liability determined under common law principles. The Restatement (Second) of Torts applied in United States v. Chem-Dyne, 575 F. Supp. 802, 806 (S.D. Ohio 1983) was endorsed in the legislative history of SARA.

B. CERCLA'S LIABILITY STANDARD

1. STRICT LIABILITY

a. Plaintiffs need not prove that a potentially responsible party's ("PRP") conduct was negligent. See United States v. R.W. Meyer, Inc., 889 F.2d 1497 (6th Cir. 1989), cert. denied, 494 U.S. 1057 (1990); Kaladish v. Uniroyal Holding, Inc., 3:00 CV 854, 2005 U.S. Dist. LEXIS 17272, *8-9

to releases and threatened releases and b) oversees the development of appropriate remedies, whether privately or publicly financed. The NCP was re-promulgated in 1990. 55 Fed. Reg. 8666 (1990).


(D. Conn. Aug. 9, 2005).

2. JOINT AND SEVERAL ("J&S") LIABILITY

a. Courts have uniformly ruled that PRP liability under Section 107(a)(4)(A) is joint and several if two or more persons have contributed to a single indivisible harm. Thus, each and every PRP at a site where the harm is indivisible can be held liable for the entire cost of site cleanup. Meyer, 889 F.2d at 1506-08.

b. To determine whether the harm at a site is divisible, courts look to

“‘traditional and evolving principles of common law[.]’” Burlington N., 129 S. Ct. at 1881 (quoting Chem-Dyne, 572 F. Supp. at 808) (alteration in original). The “universal starting point for divisibility of harm analyses in CERCLA cases” is the Restatement (Second) of Torts. Id. (quoting United States v. Hercules, Inc., 247 F.3d 706, 717 (8th Cir. 2001)). A defendant can avoid joint and several liability if it proves (a) there are “distinct harms,” or (b) there is a “reasonable basis for determining the contribution of each cause to a single harm.” Restatement (Second) of Torts § 433A (1965).

c. “Not all harms are capable of apportionment, however, and CERCLA

defendants seeking to avoid joint and several liability bear the burden of proving that a reasonable basis for apportionment exists.” Burlington N., 129 S. Ct. at 1881. See also Chem-Nuclear Sys., Inc. v. Bush, 292 F.3d 254, 259 (D.C. Cir. 2002); Boeing Co. v. Cascade Corp., 207 F.3d 1177, 1183 (9th Cir. 2000); Meyer, 889 F.2d 1497; United States v. Monsanto Co., 858 F.2d 160 (4th Cir. 1988), cert. denied, 490 U.S. 1106 (1989). Cf. United States v. Alcan Aluminum Corp., 964 F.2d 252 (3d Cir. 1992) on remand 892 F. Supp. 648; aff’d, 96 F.3d 1434 (3d Cir. 1996); cert. denied, 521 U.S. 1103 (1997); United States v. Alcan Aluminum Corp., 990 F.2d 711 (2d Cir. 1993), on remand 97 F. Supp. 2d 248 (N.D.N.Y. 2000); In re Bell Petroleum Serv. Inc., 3 F.3d 889 (5th Cir. 1993); United States v. Bell Petroleum Servs., Inc., 64 F.3d 202 (5th Cir. 1995); Rumpke of Ind. Inc. v. Cummins Engine Co., 107 F.3d 1235 (7th Cir. 1997). “When two or more causes produce a single, indivisible harm, ‘courts have refused to make an arbitrary apportionment for its own sake, and each of the causes is charged with responsibility for the entire harm.’” Burlington N., 129 S. Ct. at 1881 (quoting Restatement (Second) of Torts § 433A, Comment i, p. 440 (1963-1964)). Moreover, “[e]quitable considerations play no role in the apportionment analysis; rather, apportionment is proper only when the evidence supports the divisibility of the damages jointly caused by the PRPs.” Id. at 1882 n.9.

d. Section 113(f) provides qualifying PRPs the right to seek contribution

against other PRPs that are liable under Section 107(a)(4)(A). "In resolving contribution claims, the court may allocate response costs among liable parties using such equitable factors as the court determines are appropriate"


in order to reduce potentially harsh results of J&S liability. Section 113(f)(1). (See cases cited at section M. infra).

e. In Atl. Research Co. v. United States, 551 U.S. 128 (2007), the Supreme

Court allowed a PRP to bring a direct claim under Section 107(a)(4)(B). 551 U.S. 128 (2007). The Court, however specifically reserved the question of whether that party can seek J&S liability. See infra Paragraph F.3.a.

3. RETROACTIVE LIABILITY

a. Congress intended CERCLA to apply retroactively to situations in which past acts have contributed to existing endangerment. Franklin County Convention Facilities Auth. v. Am. Premier Underwriters, 240 F.3d 534 (6th Cir. 2001); United States v. Northeastern Pharm. & Chem. Co. ("NEPACCO"), 810 F.2d 726, 734 (8th Cir. 1986), cert. denied, 484 U.S. 848 (1987); United States v. Olin Corp., 107 F.3d 1506 (11th Cir. 1997) (rev’g 927 F. Supp. 1502 (S.D. Ala. 1996)). See also United States v. Alcan Aluminum Corp., 49 F. Supp. 2d 96, 99 (N.D.N.Y. 1999) (rejecting application of E. Enters. v. Apfel, 524 U.S. 498 (1998) to CERCLA). Accord Combined Props./Greenbrier Ltd. P’ship v. Morrow, 58 F. Supp. 2d 675 (E.D. Va. 1999); United States v. Dico, Inc., 266 F.3d 864 (8th Cir. 2001).

b. For natural resource damages, there is no cause of action if both the release

of hazardous substances and the resulting damages that occurred were "wholly before" CERCLA was enacted. Section 107(f)(1). See In re Acushnet River & New Bedford Harbor, 716 F. Supp. 676, 683 (D. Mass. 1989).

C. GOVERNMENTAL ALTERNATIVES AT A SUPERFUND SITE

1. RESPONSE ACTIONS

a. Under Section 104(a), EPA may spend Superfund monies whenever there is a release or substantial threat of release of any hazardous substance into the environment.5

b. The President is given the discretion to take necessary "removal" or

"remedial" actions in response to releases or threat of releases of hazardous substances, pollutants or contaminants.6

5 Section 104 (a)(3) has three limitations on response authority, associated with naturally occurring substances, products part of structures, and releases into drinking water supplies. These limits may be overcome by criteria set forth in Section 104(a)(4). 6 Depending on the type of action, e.g., "removal" - Section 101(23), or "remedial" - Section 101(24), there are limits on the cost expenditures and requirements as to state shares. See


(1) Removal Actions are broadly defined in Section 101(23) to include

short-term actions necessary to protect public health or welfare or the environment. This type of action has temporal (twelve months) and monetary ($2 million) restrictions, but the site does not need to be on the National Priorities List (NPL). See United States v. W.R. Grace & Co., 429 F.3d 1224, 1247-48 (9th Cir. 2005), cert. denied 549 U.S. 951 (2006). A removal action can either be “time-critical,” when the lead agency determines that cleanup must begin in less than six months, or “non-time critical,” when the lead agency determines that a planning period of at least six months is available before on-site activities must begin. 40 C.F.R. § 300.415(b). For non-time-critical removals, the lead agency must undertake an Engineering Evaluation/Cost Analysis (EE/CA) to investigate the site, characterize the potential risks involved, and identify the alternatives for removal action. 40 C.F.R. § 300.415(b)(4)(i). The lead agency, after a public comment period, then selects the removal action alternative by documenting the decision in a removal action memorandum.

(2) Remedial Actions ("RA") are also broadly defined in Section

101(24) to include long-term, permanent actions necessary to abate a release and contamination. A site must be listed on the NPL to undergo federal RA using Superfund monies. These actions must be funded jointly by Federal and State governments. The State must agree to pay 10% of RA costs (and all Operations and Maintenance costs), before EPA can use Superfund monies. If the release is from a state facility, the state share is 50%. Section 104(c)(3). See Minnesota v. Abrams Metals, Inc., 155 F.3d 1019 (8th Cir. 1998) (because state project was remedial and not removal, state actions were inconsistent with NCP).7

2. INFORMATION GATHERING AND SITE ACCESS

a. Section 104(e) provides substantial authorities for EPA to gather information and gain site access. See United States v. Gurley, 235 F. Supp. 2d 797 (W.D. Tenn. 2002), aff’d, 384 F.3d 316 (6th Cir. 2004).

generally Sections 104(c)(1), (3), & (4). The most seriously contaminated sites are placed on the National Priorities List ("NPL"), a compilation that now includes over 1,200 sites across the nation. However, any property where hazardous substances have been deposited may fall under CERCLA authority. See United States v. W.R. Grace & Co., 280 F. Supp. 2d 1135, 1145 (D. Mont. 2002), aff’g, 429 F.3d 1224 (9th Cir. 2005) (EPA’s decision to conduct removal action rather than remedial action was consistent with National Contingency Plan (NCP) and could not be second-guessed.) 7 These temporal and monetary limits do not apply to privately funded removal actions. Section 104(c)(1).


b. U.S. must show reasonable basis to believe there may be a release or threat

of release of a hazardous substance. EPA may obtain access by warrant, agreement, or administrative order. EPA access orders comply with the Fourth Amendment. United States v. Tarkowski, 248 F.3d 596 (7th Cir. 2001).

c. Section 104(e) requests are equivalent to administrative discovery, and

subject to a penalty of $27,500 for each day of inadequate response or non-compliance. See, e.g., United States v. Crown Roll Leaf, Inc., 29 E.R.C. 2018 (D.N.J. 1988), aff'd, 888 F.2d 1382 (3d Cir. 1989), cert. denied, 493 U.S. 1058 (1990); United States v. Barkman, 784 F. Supp. 1181 (E.D. Pa. 1992); United States v. JG-24, Inc., 331 F. Supp. 2d 14 (D.P.R. 2004); Pharmacia Corp. v. Clayton Chem. Acquisition, LLC, 382 F. Supp. 2d 1079, 1081 (S.D. Ill. 2005).

d. CERCLA Section 113(h) applies to limit judicial review. (See outline at

section O., infra).

3. CLEANUP PROCESS

a. To accomplish the goal of cleaning up releases of hazardous substances, Section 105(a) requires EPA to promulgate a list of sites subject to releases or threatened releases which require remediation. This list is the NPL of hazardous waste sites, and it is included in the NCP. 40 C.F.R. pt. 300, app. B.

b. The remedy selection is a three-step process. First, EPA conducts a study

and prepares a report called a “remedial investigation and feasibility study” (RI/FS) which determines the extent of contamination at a particular site or operable unit and the alternatives available to remediate the site. 40 C.F.R. 300.430(a), (d) & (e) (detailing purpose and content of RI and FS). Second, EPA uses the RI/FS to develop a proposed remedy for a particular hazardous waste site which is made available to interested persons prior to selection of a remedy for a site. 40 C.F.R. 300.430(a)(2). Finally, EPA reviews and responds to the comments, and consults with the affected state and other agencies where appropriate, before making a final decision.

c. EPA's final decision selecting a remedy is determined in a Record of

Decision (ROD), which is also made available to the public before the commencement of any remedial action. Section 117, 40 C.F.R. 300.430(f)(1)(ii); 300.430(f)(4)-(6). EPA compiles and maintains an administrative record, which contains the documents relevant to the remedy selection. CERCLA limits judicial review of any response action to the administrative record.

d. The ROD documents the selection of a remedy from among the alternatives


evaluated. 40 C.F.R. § 300.430(f). At sites where there is typically a separate ROD for each Operable Unit, the EPA remedial action may entail that each Operable Unit comprises an incremental step toward comprehensively addressing the site problems. EPA may also approve “interim” RODs or action that allow for selection of initial measures that are expected to advance the cleanup process and can be implemented while the RI/FS is being completed and a final ROD issued, in which case the interim measure may become part of the final remedial action at the site. See Preamble to the NCP, 55 Fed. Reg. 8666.

4. WORK OPTIONS

a. EPA can do the work itself using money from the Superfund and seek reimbursement from the PRPs; or

b. EPA can order the PRPs to do the work by an administrative order (“AO”)

or court-ordered injunctive relief.

D. PRIVATE PARTY RESPONSE ACTIONS UNDER GOVERNMENT DIRECTION - CERCLA SECTION 106

1. STANDARDS (WHETHER ADMINISTRATIVE ORDER OR INJUNCTION)

a. A PRP may be ordered to take response actions by an AO or injunctive relief when there "may be" an imminent and substantial endangerment. United States v. E.I. du Pont de Nemours & Co., 341 F. Supp. 2d 215 (W.D.N.Y. 2004).

(1) Imminent: Only the risk of harm need be imminent, not the harm

itself. Risk may be imminent even if actual harm is months/years away.

(a) "[W]hile the risk of harm must be 'imminent' for the

Administrator to act, the harm itself need not be. Thus, for example, the Administrator may invoke this section when there is an imminent likelihood of the introduction into drinking water of contaminants that may cause health damage after a period of latency." Safe Drinking Water Act, Pub. L. No. 93-523, H.R. Rep. 1185, 1974 U.S.C.C.A.N. (88 Stat. 1660) 6454, 6488.

(b) The term refers to the imminence of risk, not harm.

Imminent endangerment is one likely to materialize, even though this may be far off in time. "[T]he imminence of a hazard does not depend on the proximity of the final effect but may be proven by the setting in motion of a chain of events which would cause serious injury." See United States


v. Hardage, Civ-80-1031-W slip op. at 3, 4 (W.D. Okla. Dec. 2, 1980). Actual proof of harm need not be shown. See United States v. Vertac Chem. Corp., 489 F. Supp. 870 (E.D. Ark. 1980); United States v. Dickerson, 660 F. Supp. 227 (M.D. Ga. 1987).

(2) Substantial: "Among those situations in which the endangerment

may be regarded as 'substantial' are the following: (1) a substantial likelihood that contaminants capable of causing adverse health effects will be ingested by consumers if preventive action is not taken; (2) a substantial statistical probability that disease will result from the presence of contaminants in drinking water; or (3) the threat of substantial or serious harm (such as exposure to carcinogenic agents or other hazardous contaminants)." Pub. L. No. 93-523, H.R. Rep. 1185, 1974 U.S.C.C.A.N. (88 Stat. 1660) 6454, 6488.

(3) Endangerment: "[E]ndanger means something less than actual harm.

When one is endangered, harm is threatened; no actual injury need ever occur." Endangerment "is not a standard prone to factual proof alone. Danger is a risk, and so must be decided by assessment of risk." Risk is to be assessed "from suspected, but not completely substantiated, relationships between facts, from trends among facts, from theoretical projections . . . or from probative preliminary data." Vertac, 489 F. Supp. at 885 (quoting Reserve Mining Co. v. Envtl. Prot. Agency, 514 F.2d 492, 529 (8th Cir. 1975); Interfaith Cmty. Org. v. Honeywell Int’l, Inc., 399 F.3d 248, 258 (3d Cir. 2005).

(a) Endangerment includes harm to public health or welfare or

environment. This phrase encompasses a very broad standard. Public "welfare" potentially embraces safety, recreational, aesthetic, environmental, and economic interests.

(b) Harm may occur due to actual or threatened release of

hazardous substances from a facility. An actual or threatened release must be a listed hazardous substance, not merely a "pollutant" or "contaminant."

b. Section 106 does not define liable parties, but the United States argues that it

applies to the same category of parties as under Section 107, i.e., owners, operators, generators, and transporters. See outline at section E., infra).

2. SANCTIONS FOR NON-COMPLIANCE

a. Administrative Order

(1) The civil penalty for violating an AO "without sufficient cause" is


$27,500 per day of noncompliance ($25,000 before January 30, 1997) per day (Section 106(b)(1)) plus treble damages (Section 107(c)(3)) if EPA must spend Superfund monies to carry out the response action. See United States v. Parsons, 723 F. Supp. 757 (N.D. Ga. 1989), vacated on other grounds by 11th Cir. 1991 (treble damages and punitive penalty of $2.26 million); General Electric v. Jackson, __ F.3d __ (DC Cir. 2010).

(2) If a party complies and then later proves that it was not a liable party

under Section 107, the party has the right to seek reimbursement from the Superfund under Section 106(b). No later than 60 days after completing the work required by an AO, a party may “petition the President for reimbursement from the Fund for reasonable costs of such action, plus interest.” Section 106(b)(2)(A). Before filing suit, a petitioner must exhaust its administrative remedies with EPA. United States v. Dico, Inc., 136 F.3d 572 (8th Cir. 1998).

(3) Under Section 113(h), there is no right to pre-enforcement judicial

review of an AO. See Solid State Circuits, Inc. v. United States Envtl. Prot. Agency, 812 F.2d 383 (8th Cir. 1987). But see General Electric Co. v. Whitman, 257 F. Supp. 2d 8 (D.D.C. 2003), rev’d, 360 F.3d 188 (D.C. Cir. 2004) (holding that a constitutional challenge to a Section 106 order could be considered).

(4) Sufficient Cause Defense: Congress and the courts have construed

"sufficient cause," as an "objectively reasonable, good faith belief that one has a valid defense." United States v. Parsons, 723 F. Supp. 757, 763 (N.D. Ga. 1989) (citing additional cases). See also Solid State Circuits, 812 F.2d at 391-392. The author of the bill in the Senate advised:

We intend that the phrase ‘sufficient cause’ would encompass defenses such as the defense that the person who was the subject of the President's order was not the party responsible under the act for the release of the hazardous substance . . . There could also be ‘sufficient cause’ for not complying with an order if the party subject to the order did not at the time have the financial or technical resources to comply or if no technological means for complying was available.

United States v. Reilly Tar & Chem. Corp., 606 F. Supp. 412, 419-20


(D. Minn. 1985) (citing remarks of Senator Stafford in 1 Legislative History, 770-71). See also United States v. LeCarreaux, Civ. No. 90-1672, 1991 WL 341191, *26 (D.N.J. 1991) (financial status is not "sufficient cause" for failure to comply with an Order) and Solid State Circuits, 812 F.2d at 390 (equitable arguments are not “sufficient cause” for non-compliance with order and are not a defense to liability).

(5) EPA may order a party to participate in a cleanup even if another

party has agreed in a consent decree to perform that cleanup. United States v. Occidental Chem. Corp., 200 F.3d 143 (3d Cir. 1999).

b. Injunctive Relief

(1) Injunctive relief is available only to the United States, not states or

private parties. See Colorado v. Idarado Mining Co., 916 F.2d 1486, 1494-98 (10th Cir. 1990); Ohio v. United States Envtl. Prot. Agency, 997 F.2d 1520 (D.C. Cir. 1993) (challenging changes to NCP).

(2) Executive Order 13016 (August 1996) amended Executive Order

12580 and delegated Section 106 authority to the Secretaries of Interior, Commerce, Agriculture, Defense, and Energy with respect to facilities under their management or control, to be exercised with concurrence of either the Coast Guard or EPA, as appropriate. These agencies and DOJ entered into a Memorandum of Understanding (MOU) (September 1997) detailing the implementation process.

E. COST RECOVERY ACTIONS - CERCLA § 107(a)(4)(A)

1. BASIC ELEMENTS OF LIABILITY FOR FEDERAL GOVERNMENT, STATES, OR INDIAN TRIBES

a. When there is a release or threatened release of hazardous substances by a responsible party from a facility that causes the incurrence of response costs, and the costs are not inconsistent with the NCP, all government costs are recoverable.

b. States and tribes can also take actions and seek reimbursement from private

parties for their expenditures pursuant to Section 107(a).

2. THE FOUR ELEMENTS OF LIABILITY - SECTION 107(a)

a. Liability is created in part by the release or substantial threat of release.8 8 Defined in Section 101(22). The statute excludes certain categories from the definition of release including workplace exposure, engine exhaust emissions, and "the normal application of fertilizer”. See City of Tulsa v. Tyson Foods, Inc., 258 F. Supp. 2d 1263, 1287-88 (N.D. Okla.


(1) These terms are defined broadly and include leaking, leaching,

abandonment of drums or containers, as well as dumping or disposing into the environment. See, e.g., Dedham Water Co. v. Cumberland Farms Dairy, Inc., 889 F.2d 1146, 1152 (1st Cir. 1989).

(2) There is no minimum threshold release, concentration, or reportable

quantity required to create liability. See, e.g. Johnson v. James Langley Operating Co., 226 F.3d 957 (8th Cir. 2000); B.F. Goodrich Co. v. Murtha, 958 F.2d 1192 (2d Cir. 1992); United States v. Alcan Aluminum Corp., 964 F.2d 252 (3d Cir. 1992); Esso Standard Oil Co. v. Perez, CIVIL 01-2012 (SEC), 2004 U.S. Dist. LEXIS 19954, *33 (D. P. R. Oct. 1, 2004).

(3) In establishing CERCLA liability, the U.S. need not prove that the

responsible party is the only source of the contamination or that the releases occurred in any particular amount. Alcan-Aluminum, 964 F.2d at 264, 259-60.

(4) Liability for “passive disposal” (i.e., mere migration of preexisting

contamination) is unsettled. Carson Harbor Vill., Ltd. v. Unocal Corp., 270 F.3d 863 (9th Cir. 2001) (en banc decision that active human conduct is not required for “disposal” of a hazardous substance, but holding that the mere movement of contamination in the soil in this case did not constitute disposal). Compare Nurad, Inc. v. William E. Hooper & Sons, Co., 966 F.2d 837, 844-47 (4th Cir. 1992) (passive migration and leaking from underground storage tanks established “disposal”), with United States v. 150 Acres of Land, 204 F.3d 698 (6th Cir. 2000); United States v. CDMG Realty, 96 F.3d 706 (3d Cir. 1996); Solvent Chem. Co. v. E.I. DuPont de Nemours & Co., 01-CV-425C(SC), 2005 U.S. Dist. LEXIS 16573, *20-22 (W.D.N.Y. June 28, 2005).

b. The release or threat of release must be of a hazardous substance9

2003), vacated and settled by City of Tulsa v. Tyson Foods, Inc., No. 01 CV 0900EA(C), 2003 U.S. Dist. LEXIS 23416 (N.D. Okla. July 16, 2003) (emphasis added). 9 Hazardous substances are defined broadly under CERCLA by referring to substances listed under other federal statutes. See 40 C.F.R. § 302.4 (comprehensive listing of CERCLA hazardous substances), published at 50 Fed. Reg. 13486 (Apr. 4, 1985). The term includes "hazardous wastes" under Section 3003 of the Resource Conservation and Recovery Act (“RCRA”), 42 U.S.C. § 6923, "hazardous substances" identified under Section 311 of the CWA, 33 U.S.C. § 1321, "toxic pollutants" designated under Section 307 of the CWA, 33 U.S.C. § 1317, "hazardous air pollutants" designated under Section 112 of the Clean Air Act ("CAA"), 42 U.S.C. § 7412, and "imminently hazardous chemical substances or mixtures or any article containing such a substance or mixture" under Section 7 of Toxic Substance Control Act, 15 U.S.C. § 2606. Petroleum, however, is not a


(1) A minimum amount or reportable quantity requirement does not

exist. Mere listing or designation as a hazardous substance is sufficient to create liability for disposal of any amount of the substance. See, e.g., Stewman v. Mid-South Woods Prods. of Mena, Inc., 993 F.2d 646, 649 (8th Cir. 1993); United States v. JG-24, Inc., 478 F.3d 28 (1st Cir. 2007).

(2) This term includes municipal solid waste. B.F. Goodrich Co. v.

Murtha, 958 F.2d 1192 (2d Cir. 1992). See EPA Municipal Solid Waste Policy, 54 FR 51071.

(3) Mining wastes known as "Bevill Wastes" may still be hazardous

substances under Section 101(14). La.-Pac. Corp. v. ASARCO, Inc., 13 F.3d 1378 (9th Cir. 1994).

c. The release or threat of release must come from a vessel or at a facility.

(1) Facility is defined very broadly under Section 101(9) to include:

(a) Any building, structure, installation, equipment, pipe or

pipeline, ... well, pit, pond, lagoon, impoundment, ditch, landfill, storage container, motor vehicle, rolling stock, or aircraft, or

(b) Any site or area where a hazardous substance has been

deposited, stored, disposed of, or placed, or otherwise come to be located; but does not include any consumer product in consumer use or any vessel.10

d. The release or threat of release must be caused by a responsible party, i.e., a

person that falls within one or more of the following four categories for a potentially responsible party (“PRP”).

3. CURRENT OWNERS AND OPERATORS

a. The term applies to all current owners or operators. The plaintiff does not have to prove that disposal of hazardous substances occurred at the time of ownership or operation. “Owner” has been held to include tenants whose leases grant them broad rights over leased property. See, e.g., United States v. A & N Cleaners & Launderers, Inc., 788 F. Supp. 1317, 1332-34

hazardous substance unless already included in the above categories, and neither is natural gas. 42 U.S.C. § 9601(14) (emphasis added). 10 “Facility” is so broadly defined that this element is rarely an issue, but the extent of the facility in question, and whether an area comprises one facility or several, may be an issue in some cases. See N.J. Tpk. Auth. v. PPG Indus., 197 F.3d 96, 105 (3d Cir. 1999).


(S.D.N.Y. 1992). The Second Circuit held that a lessee is liable as an “owner” only if it is a “de facto owner” as opposed to merely “exercis[ing] control over the facility;” the latter may suffice for “operator” liability. Commander Oil Corp. v. Barlo Equip. Corp., 215 F.3d 321, 331 (2d Cir. 2000).

b. Ownership status is usually determined as of the time plaintiff files

complaint.

c. The Supreme Court in Bestfoods stated: “an operator must manage, direct, or conduct operations specifically related to pollution, that is, operations having to do with the leakage or disposal of hazardous waste, or decisions about compliance with environmental regulations.” 524 U.S. 51, 66-67 (1998). See also Consol. Edison Co. of N.Y., Inc. v. UGI Utils., Inc., 310 F. Supp. 2d 592 (S.D.N.Y. 2004); Esso Standard Oil Co. v. Perez, CIVIL 01-2012(SEC), 2004 U.S. Dist. LEXIS 19954 (D.P.R. Oct. 1, 2004); GenCorp, Inc. v. Olin Corp., 390 F.3d 433 (6th Cir. 2004) (co-venturers constructive “ownership and possession”).

4. PAST OWNERS AND OPERATORS

a. Section l07(a)(2) imposes liability on "any person who at the time of disposal of any hazardous substance owned or operated" the facility. The United States need not prove a release or threat of a release at the time it was owned/operated, only that disposal of a hazardous substance occurred during the relevant time.

b. Individual liability

(1) Officers and directors can be found directly liable as an "operator."

See United States v. NEPACCO, 810 F.2d 726, 734 (8th Cir. 1986) (president and major shareholder and vice president and principal responsible official of the company were found liable for arranging for disposal); New York v. Shore Realty Corp., 759 F.2d 1032, 1043 (2d Cir. 1985) (individual stockholder who manages the business was also an "owner"); Sidney S. Arst Co. v. Pipefitters Welfare Educ. Fund, 25 F.3d 417, 421 (7th Cir. 1994) (individual operator liability). A contrary decision by the Sixth Circuit was vacated by the Supreme Court. Donahey v. Bogle, 129 F.3d 838 (6th Cir. 1997), vacated, 524 U.S. 924 (1998). Subsequently, the Sixth Circuit has upheld a finding of individual liability. Carter-Jones Lumber Co. v. Dixie Distrib. Co., 166 F.3d 840 (6th Cir. 1999); Carter-Jones Lumber Co. v. LTV Steel Co., 237 F.3d 745 (6th Cir. 2001). See also Browning-Ferris Indus. v. Ter Maat, 195 F.3d 953 (7th Cir. 1999); GenCorp, Inc., 390 F.3d at 447 (holding that officer and directors may be liable as operators even if they were unaware of the exact location of disposal).


(2) Shareholders can be held liable by corporate veil-piercing, if the

required elements are satisfied. See Carter-Jones, 237 F.3d 745 (applying state law for veil-piercing standard but interpreting it broadly); Ter Maat, 195 F.3d 953 (leaving open whether federal or state law governs veil piercing).

c. Successor liability

(1) Section 101(21) includes "corporations" in the list of liable entities.

Section 5 of 1 U.S.C. indicates when the words "company" or "association" are used, then successors are automatically included. United States v. Mex. Feed & Seed Co., 980 F.2d 478, 486 (8th Cir. 1992).

(2) Courts have held normal principles of successor liability apply to

CERCLA. Smith Land & Improvement Corp. v. Celotex Corp., 851 F.2d 86 (3d Cir. 1988), cert. denied, 488 U.S. 1029 (1989) (leading decision). In general, “where one company sells or otherwise transfers all its assets to another company, the latter is not liable for the debts and liabilities of the transferor.” 15 W. Fletcher, Cyclopedia of the Law of Private Corporations § 7122 (perm. ed. rev. vol. 1999). However, the doctrine of successor liability permits exceptions to the general rule in four specific instances: when (a) the purchaser expressly or implicitly agrees to assume liability; (b) the purchase is a de facto consolidation or merger; (c) the purchaser is a mere continuation of the seller; or (d) the transfer of assets is for the fraudulent purpose of escaping liability. See, e.g., Philadelphia Elec. Co. v. Hercules, Inc., 762 F.2d 303, 308-09 (3d Cir. 1985), cert. denied, 474 U.S. 980 (1985); Interfaith Cmty. Org. v. Honeywell Int’l, Inc., 263 F. Supp. 2d 796 (D.N.J. 2003), aff’d, 399 F.3d 248 (3d Cir. 2005), cert. denied, 545 U.S. 1129 (2005). In addition, some federal courts have recognized another theory of CERCLA successor liability under federal common law, known as the “substantial continuity” or “continuation of the enterprise test”. See United States v. Carolina Transformer Co., 978 F.2d 832, 837-38 (4th Cir. 1992). Contra Atchinson, Topeka & Santa Fe Ry. Co. v. Brown & Bryant, Inc., 159 F.3d 358 (9th Cir. 1997); New York v. Nat’l Servs. Indus., 352 F.3d 682 (2d Cir. 2003), on remand, 380 F. Supp. 2d 122 (E.D.N.Y. 2005); United States v. Gen. Battery Corp., 423 F.3d 294 (3d Cir. 2005) (holding that “substantial continuity is untenable as a basis for successor liability under CERCLA”).

(3) Courts are divided on whether state or federal law controls.

Compare Anspec Co. v. Johnson Controls, Inc., 922 F.2d 1240 (6th Cir. 1991) (reversing district court decision, holding that Congress


included successor corporations within description of liable parties and applying state law), with United States v. Mex. Feed & Seed Co., 980 F.2d 478 (8th Cir. 1992) (substantial continuity test); N. Shore Gas Co. v. Salomon, Inc., 152 F.3d 642 (7th Cir. 1998) (parties stipulated federal common law applied); General Battery, 423 F.3d 294 (holding that a de facto merger creates successor liability under federal common law).

d. Parent Company Liability. Parent companies may also be directly liable as

an operator if the parent actively participated in, and exercised control over, the operations of a subsidiary’s facility. United States v. Bestfoods, 524 U.S. 51 (1998) (unanimously reversing lower court’s en banc decision in United States v. Cordorva Chem. Co., 113 F.3d 572 (6th Cir. 1997). See also United States v. Township of Brighton, 153 F.3d 307 (6th Cir. 1998); Atl. Gas Light Co. v. UGI Utils., Inc., 463 F.3d 1201 (11th Cir. 2006) (applying Bestfoods to hold parent not liable); United States v. Kayser-Roth Corp., 272 F.3d 89, 102 (1st Cir. 2001) (finding parent liable, the court stated “[w]hatever the ambiguity created by [Bestfoods’] references [to general facility operations], we think it is clear that direct operator liability requires an ultimate finding of the parent’s involvement with ‘operations having to do with the leakage or disposal of hazardous waste, or decisions about compliance with environmental regulations.’” Bestfoods presumes that activities conducted by dual officeholders were taken on behalf of the subsidiary, not the parent. 524 U.S. at 71; Raytheon Constructors Inc. v. ASARCO, Inc., 368 F.3d 1214 (10th Cir. 2003). A parent company also faces “derivative” liability if the corporate veil can be pierced. In Bestfoods, the Supreme Court recognized that courts and commentators disagree “over whether, in enforcing CERCLA’s indirect liability, courts should borrow state law, or instead apply a federal common law of veil piercing.” 524 U.S. at 64 n.9. Because that issue was not presented, the court expressly did not resolve the conflict.

e. Dissolved Corporations. In the Seventh Circuit, state law governs whether a

dissolved company remains amenable to CERCLA suits. Citizens Elec. Corp. v. Bituminous Fire & Marine Ins. Co., 68 F.3d 1016, 1019-20 (7th Cir. 1995). Accord La.-Pac. Corp. v. ASARCO, Inc., 5 F.3d 431 (9th Cir. 1993). But see Town of Oyster Bay v. Occidental Chem. Corp., 987 F. Supp. 182 (E.D.N.Y. 1997); United States v. Sharon Steel Corp., 681 F. Supp. 1492 (D. Utah 1987); AM Props. Corp. v. GTE Prods. Corp., 844 F. Supp. 1007 (D.N.J. 1994) (holding that CERCLA preempts inconsistent state law and allows suit against dissolved corporation).

f. Federal Lien. Section 107(l) establishes a federal lien in favor of U.S. upon

“all real property and rights to such property ... subject to or affected by a removal or remedial action,” although the lien must be perfected to ensure priority over subsequent lienholders. In Reardon v. United States, the court


found EPA procedures lacked adequate procedural safeguards. 947 F.2d 1509 (1st Cir. 1991) (en banc). Subsequently, EPA promulgated procedures for instituting such liens which were upheld in United States v. 150 Acres of Land, 5:95CV 1009, 1998 U.S. Dist. LEXIS 1289 (N.D. Ohio Jan. 26, 1998), aff’d in pertinent part by 204 F.3d 698, 710-11 (6th Cir. 2000). A new statutory “windfall lien” has also been established. (See outline at Section H.12, infra).

5. GENERATORS

a. Section 107(a)(3) imposes liability on "any person who by contract,

agreement or otherwise arranged for disposal or treatment, or arranged with a transporter for transport for disposal or treatment, of hazardous substances owned or possessed by such person, by any other party or entity, at any facility or incineration vessel owned or operated by another party or entity and containing such hazardous substances, . . ." See generally Morton Int’l Inc. v. A.E. Staley Mfg. Co., 343 F.3d 669 (3d Cir. 2003).

b. A generator is liable if it “takes intentional steps to dispose of a hazardous

substance.” Burlington N. & Santa Fe Ry. Co. v. United States, 129 S. Ct. 1870, 1879 (2009).

c. A generator is also liable if it arranged for “treatment” of hazardous

substances – i.e., if it arranged for any process designed to change physical, chemical, or biological character of a hazardous waste so as to render it, inter alia, nonhazardous or amenable for recovery. See 42 U.S.C. § 6903(34); Cadillac Fairview/California, Inc. v. United States, 41 F.3d 562, 565-66 (9th Cir. 1994).

d. The determination of whether a party arranged for disposal or treatment is

“fact intensive and case specific,” Burlington N., 129 S. Ct. at 1879, and may involve consideration of circumstantial evidence. See United States v. Cello-Foil Prods., Inc., 100 F.3d 1227, 1233 (6th Cir. 1996) (intent can “be inferred from the indirect action of the parties”). A single transaction may serve as both the sale of a useful product and an arrangement for disposal or treatment. See Burlington N., 129 S. Ct. at 1880 (a party may be liable if it enters into a transaction with the “intention that at least a portion of the product be disposed of”) (emphasis added).

e. Although Section 107(a)(3) refers to arranging for disposal or treatment of

“hazardous substances,” some courts have required that the material being disposed of or treated satisfy the RCRA definition of “solid waste” or “hazardous waste” for arranger liability to attach. See Pneumo Abex Corp. v. High Point, Thomasville & Denton R.R. Co., 142 F.3d 769, 774 (4th Cir. 1998) (treatment); United States v, Wedzeb, 844 F. Supp. 1328, 1335-36 (S.D. Ind. 1994) (disposal); but see B.F. Goodrich v. Murtha, 958 F.2d 1192,


1202 (2d Cir. 1992) (“waste” not required).

f. The plaintiff need not prove that the generator selected the facility; a generator is liable even if it directed transporter to take hazardous substances to another facility. O'Neil v. Picillo, 883 F.2d 176 (1st Cir. 1989).

g. Plaintiffs need not prove that the generator owned or possessed hazardous

substances if it exercised sufficient control over disposal. United States v. NEPACCO, 810 F.2d 726 (8th Cir. 1986). The Ninth Circuit has held that plaintiffs need not prove that the generator owned, possessed, or controlled the hazardous substances at all. See Pakootas v. Teck Cominco Metals, Ltd., 452 F.3d 1066, 1080-82 (9th Cir. 2006).

h. Plaintiffs need not prove that the hazardous substances found, released, or

cleaned up at the site were generator’s wastes, i.e., need not "fingerprint" the wastes, but plaintiffs must prove that generator's wastes were shipped to the site and that "like substances" were found there. Tosco Corp. v. Koch Indus. Inc., 216 F.3d 886, 892 (10th Cir. 2000); Carson Harbor Vill., Ltd. v. Unocal Corp., 270 F.3d 863 (9th Cir. 2001); United States v. TIC Inv. Corp., 68 F.3d 1082, 1088 (8th Cir. 1995), cert denied, 519 U.S. 808 (1996); Redwing Carriers Inc. v. Saraland Apartments, 94 F.3d 1489, 1512 (11th Cir. 1996).

i. Whether the disruption or movement of contaminated earth constitutes a

"disposal" is unsettled. Compare Tanglewood E. Homeowners v. Charles-Thomas, Inc., 849 F.2d 1568, 1573 (5th Cir. 1988) (land filling and grading by developer constitutes disposal), with Alcan-Toyo Am., Inc. v. N. Ill. Gas Co., 881 F. Supp. 342 (N.D. Ill. 1995) (owner’s excavation and stockpiling did not constitute disposal). See also Geraghty & Miller, Inc. v. Conoco Inc., 234 F.3d 917, 929 (5th Cir. 2000) (possibility that environmental contractors caused migration of hazardous substances precludes summary judgment that contractors are not liable as generators); Blasland, Bouck & Lee, Inc. v. City of N. Miami, 96 F. Supp. 2d 1375 (S.D. Fla. 2000) (absent negligence, response action contractor cannot be held liable for failing to remedy contamination without worsening it); United States v. CDMG Realty Co., 96 F.3d 706 (3d Cir. 1996) (disposal includes the spreading of contaminants already introduced at the facility during a soil investigation); Redwing Carriers, 94 F.3d at 1510-12; Kaiser Aluminum & Chem. Corp. v. Catellus Dev. Corp., 976 F.2d 1338, 1342 (9th Cir. 1992). In Dent v. Beazer Materials & Servs., the Court found prior owners not liable because of leaking of wood-treating substances on their property from creosote processing facility on adjacent property by subsurface migration. 156 F.3d 523 (4th Cir. 1998). In Bonnieview Homeowners Ass’n, LLC v. Woodmont Builders, L.L.C., 655 F. Supp. 2d 473, 490-93 (D.N.J. 2009), the court found that a developer’s movement of contaminated soil constituted a “disposal” – but also found that the developer did not “arrange for disposal,” because, unaware that the soils were contaminated, it took no intentional


steps to dispose of a hazardous substance.

j. The parent company of a subsidiary generator may also be held liable if the plaintiff meets the Supreme Court’s Bestfoods standards. Carter-Jones Lumber Co. v. Dixie Distrib. Co., 166 F.3d 840 (6th Cir. 1999).

6. TRANSPORTERS

a. Section 107(a)(4) imposes liability on "any person who accepts or accepted any hazardous substances for transport to disposal or treatment facilities, incineration vessels or sites selected by such persons, . . ." See Prisco v. A&D Carting Corp., 168 F.3d 593, 602 (2d Cir. 1999).

b. Plaintiff must have evidence that the transporter PRP selected the site. See,

e.g., Tippins Inc. v. USX Corp., 37 F.3d 87, 93-94 (3d Cir. 1994); B.F. Goodrich v. Betkoski, 99 F.3d 505, 520-21 (2d Cir. 1996) overruled on other grounds by New York v. Nat’l Servs. Indus., Inc., 352 F.3d 682 (2d Cir. 2003).

c. Section 107(c)(1)(A) limits recovery of a vessel to $300 per gross ton of the

vessel, or $5 million, whatever is greater, unless there is willful misconduct or willful negligence. See also Section 108(a)(1) (vessel certificate of financial responsibility).

F. RECOVERABLE COSTS

1. GOVERNMENTAL RESPONSE COSTS

a. Section 107 allows the government to recover its response costs "notwithstanding any other provision or rule of law, and subject only to the defenses set forth in subsection (b) of this section.” Courts have emphasized that consistency with the NCP is “the only criterion for the recoverability of response costs under CERCLA.” United States v. Hardage, 982 F.2d 1436, 1443-44 (10th Cir. 1992); United States v. NEPACCO, 579 F. Supp. 823, 850-51 (W.D. Mo. 1984) and Laidlaw Waste Sys. v. Mallinckrodt, Inc., 925 F. Supp. 624, 632 (E.D. Mo 1996); United States v. JG-24, Inc., 331 F. Supp. 2d 14, 64 (D.P.R. 2004). In considering consistency under the NCP, courts review EPA’s selection of a response action under an arbitrary and capricious standard, based on the administrative record, pursuant to Section 113(j). See United States v. Burlington N. R.R. Co., 200 F.3d 679, 689 (10th Cir. 1999); United States v. Chapman, 146 F.3d 1166, 1170-71 (9th Cir. 1998); United States v. Akzo Coatings of Am., Inc., 949 F.2d 1409, 1424 (6th Cir. 1991).

b. Recoverable costs include government's past response costs, the costs of any remediation paid for by the government, prejudgment interest, indirect costs,


enforcement costs, and future costs at the site that the government may incur. United States' litigation costs and attorney fees are considered enforcement activity costs. See United States v. Gurley, 43 F.3d 1188, 1199-1200 (8th Cir. 1994), (recoverable costs include government payroll expenses); Betkoski, 99 F.3d at 528 (enforcement costs including attorney’s fees); United States v. Hardage, 750 F. Supp 1460, 1497-1504 (W.D. Okla. 1990) (site investigation, enforcement, indirect and litigation costs); United States v. R.W. Meyer, Inc., 889 F.2d 1497, 1499, 1504-05 (6th Cir. 1989) (indirect or “overhead” costs recoverable); O'Neil v. Picillo, 883 F.2d 176, 178 (1st Cir. 1989) (prejudgment interest); United States v. E.I. Dupont de Nemours & Co., 432 F.3d 161, 168 (3d Cir. 2005) (EPA may recover overhead costs); United States v. Township of Brighton, 153 F.3d 307, 321 (6th Cir. 1998) (prejudgment interest); see also United States v. Lowe, 118 F.3d 399 (5th Cir. 1997); Atl. Richfield Co. v. Am. Airlines, Inc., 98 F.3d 564 (10th Cir. 1996) (holding that EPA oversight costs are recoverable); United States v. Dico, Inc., 266 F.3d 864 (8th Cir. 2001), reh’g and reh’g en banc denied, cert denied, 122 S. Ct. 2291(2002); United States v. Chromalloy Am. Corp., 158 F.3d 345 (5th Cir. 1998) (oversight costs are recoverable even if Economy Act was not complied with); JG-24, 331 F. Supp. 2d at 64 (explaining,“[r]ecoverable response costs include not only the costs of actual cleanup or removal activities, such as excavation and removal of drums and other wastes, but also the costs of sampling, site assessment, investigations, monitoring, oversight, and litigation and other enforcement costs. Moreover, recoverable response costs include indirect costs, as well as direct costs. The United States is also entitled to prejudgment interest on its past response costs.”); United States v. W.R. Grace & Co., 429 F.3d 1224 (9th Cir. 2005) (awarding EPA $11 million in indirect costs).

c. The United States and States are entitled to "all costs" of response action

incurred not inconsistent with the NCP, generally not limited to "reasonable" or "necessary" costs. Dico, 266 F.3d at 878-79; United States v. NEPACCO, 810 F.2d 726, 747-48 (8th Cir. 1986); Hardage, 982 F.2d at 1441-43; United States v. Domenic Lombardi Realty, Inc., 334 F. Supp. 2d 105, 108 (D.R.I. 2004); Solvent Chem. Co. v. E.I Dupont De Nemours & Co., 2005 U.S. Dist. LEXIS 16573, at *242-243 (W.D.N.Y. June 28, 2005), United States v. Gurley, 317 F. Supp. 2d 870, 878 (E.D. Ark. 2004). But see Chapman, 146 F.3d at 1176 (attorney’s fees portion of enforcement costs limited to reasonable attorney’s fees). The United States may prove its costs by means of cost summaries and payroll reports with underlying documentation. United States v. Findett Corp., 220 F.3d 842 (8th Cir. 2000); Chapman, 146 F.3d at 1171; Hardage, 982 F.2d at 1442-43. A defendant may object to costs by offering “evidence to counter or otherwise challenge the extensive government documentation of its costs.” Meyer, 889 F.2d at 1508; Solvent Chem. Co., 2005 U.S. Dist. LEXIS 16573, at *230; United States v. E.I. Dupont De Nemours & Co., 341 F. Supp. 2d 215, 246 (W.D.N.Y. 2004)


Gurley, 43 F.3d at 878.

d. PRPs challenging government expenses bear the burden of proving that response actions giving rise to costs were selected in a manner inconsistent with the NCP. Raytheon Aircraft Co. v. U.S., 590 F.3d 1112 (10th Cir. 2009) Hardage, 982 F.2d at 1491; United States v. Kramer, 913 F. Supp. 848 (D.N.J. 1995); United States v. Am. Cyanamid Co., 786 F. Supp. 152 (D.R.I. 1992), aff’d, 381 F.3d 6 (1st Cir. 2004). Response actions need not “advance” NCP goals to be recoverable. United States v. 150 Acres of Land, 204 F.3d 698, 710 (6th Cir. 2000). To show costs are “inconsistent,” a party must demonstrate: (1) on the administrative record, that the decision to choose a particular remedy was arbitrary and capricious, Hardage, 982 F.2d at 1443; E.I. Dupont De Nemours & Co., 341 F. Supp. 2d at 215; and (2) that the cleanup, due to the variance from the NCP, resulted in demonstrably avoidable and unnecessary remediation costs. O’Neill v. Picillo, 682 F. Supp. 706 (D.R.I. 1988), aff’d 883 F.2d 176 (1st Cir. 1989); United States v. Kramer, 913 F. Supp. 848, 866 (D.N.J. 1995); Miami-Dade County v. United States, 345 F. Supp. 2d 1319, 1334 (S.D. Fla. 2004); Gurley, 317 F. Supp. 2d at 878; Domenic Lombardi Realty, 334 F. Supp. 2d at 107. See 42 U.S.C. § 9613(j)(4). See also Alex A. Beehler, Steve C. Gold, & Steven Novick, Contesting of CERCLA Costs by Responsible Parties -- There Is No Contest, 22 Env't L. Rep. (Envtl. L. Inst.), Dec. 1992, at 10763. United States v. Vertac Chem. Corp., 966 F. Supp. 1491 (E.D. Ark. 1997), aff’d 247 F.3d 706 (8th Cir. 2001) cert. denied, 534 U.S. 1065, on remand 364 F. Supp. 2d 941 (E.D. Ark. 2005). This burden of proof and standard for cost recovery applies not only when EPA is exercising the President’s CERCLA authorities, but also to federal land managing agencies exercising that authority to clean up federally-owned land. See United States v. Chrysler Corp., 157 F. Supp. 2d 849, 859-61 (N.D. Ohio 2001) (U.S. entitled to maintain cost recovery, not contribution action despite being the property owner); United States v. Chrysler Corp., 168 F. Supp. 2d 754, 763-64 (N.D. Ohio 2001) (U.S. entitled to presumption of consistency with the NCP even where majority of costs were incurred by the National Park Service, the federal land manager).

e. Section 107(a)(4) allows the government to also recover interest on amounts

recoverable, from the later of the date of demand or date of expenditure. f. In addition to the recovery of costs, Section 113(g)(2) authorizes the

imposition of a declaratory judgment as to liability for future response costs. See City of Wichita Kan. v. Trs. of APCO Oil Corp., 306 F. Supp. 2d 1040 (D. Kan. 2003).

2. RECOVERABILITY OF PRE-CERCLA COSTS

a. Courts have held that Section 107 permits recoverability of costs incurred at a site prior to the enactment of CERCLA. See NEPACCO, 810 F.2d 726.


b. State was held not entitled to recover natural resources damages (NRD)

when it did not show that the injuries occurred after effective date. § 107(f)(1). Montana v. Atl. Richfield Co., 266 F. Supp. 2d 1238, 1242 (D. Mont. 2003).

3. PRIVATE COST RECOVERY ACTIONS UNDER 107 (a)(4)(B)

a. In United States v. Atl. Research Co., 551 U.S. 128, 136 (2007), the Supreme Court held that a private PRP (who did not have a cause of action for contribution under Section 113(f) because of the Court’s decision in Aviall, see infra Par. M.2.a) could bring its causes of action to recover costs under Section 107(a)(4)(B). The Court noted that “[t]he plain language of [Section 107(a)(4)(B)] authorizes cost-recovery actions by any a private party, including PRPs.” Id. Most courts have limited this Section 107 remedy to parties who have not been sued or who have not settled and who thus do not have a claim under Section 113(f), and have required PRPs that have a claim under Section 113(f) to use it. See, e.g., Agere Systems, Inc. v. Advanced Environmental Technology Corp., 602 F.3d 204 (3d Cir. 2010); Niagara Mohawk Power Corp. v. Chevron U.S.A., Inc., 596 F.3d 112 (2d Cir. 2010); W.R. Grace & Co. v. Zotos Intern., Inc. , 559 F.3d 85, 94 (2d Cir. 2009); Kotrous v. Goss-Jewett Co., 523 F.3d 924, 933 (9th Cir. 2008). But see, e.g., Ford Motor Co. v. Michigan Conso. Gas Co., No. 08-CV-13503, 2009 WL 3190418 (E.D. Mich. Sept. 29, 2009).

b. A party seeking recovery of costs has the burden of proving the costs were

"necessary" and incurred "consistent with" the NCP. NEPACCO, 810 F.2d at 747. Key issues will be whether the private remedy selected was protective of human health and the environment, a range of alternatives were legitimately considered, and there was adequate public participation. See Carson Harbor Vill. v. Unocal Corp., 270 F.3d 863, 871 (9th Cir. 2001) (necessity judged against degree of threat to human health and environment); Young v. United States, 394 F.3d 858, 863-864 (10th Cir. 2005); Reg’l Airport Auth. of Louisville v. LFG, LLC, 460 F.3d 697, 703-04 (6th Cir. 2006).

c. Response costs do not include tort damages for personal injury, property

damage, or economic losses. Artesian Water Co. v. Gov’t of New Castle County, 659 F. Supp. 1269, 1285-86 (D. Del. 1987), aff’d in part and remanded in part 851 F.2d 643 (3d Cir. 1988). Private recovery actions also do not include “medical costs.” Prisco v. State of New York, 902 F. Supp. 400, 410-11 (S.D.N.Y. 1995).

d. Private parties cannot recover attorney's fees associated with bringing a cost

recovery action under CERCLA, however, attorney’s fees incurred for legal work that “benefitted the entire cleanup effort” are recoverable. Key Tronic Corp. v. United States, 511 U.S. 809, 819-20 (1994); see also Franklin


County Convention Facilities Auth. v. American Premier Underwriters, Inc., 240 F.3d 534, 549 (6th Cir. 2001); Sealy Conn., Inc. v. Litton Inds., Inc., 93 F. Supp. 2d 177, 189-91 (D. Conn. 2000); Syms v. Olin Corp., 408 F.3d 95, 104 (2d Cir. 2005).

e. Response actions “carried out in compliance with the terms of an order

issued by EPA pursuant to section 106 of CERCLA, or a consent decree entered into pursuant to section 122 of CERCLA will be considered ‘consistent with the NCP.’” 40 C.F.R. § 300.700(c)(3)(ii).

f. Other response actions must be in “substantial compliance” with the NCP to

allow for private cost recovery. 40 C.F.R. § 300.700(c)(5)-(6); Franklin County Convention Facilities Auth., 240 F.3d at 543-45; Union Pacific R.R. v. Reilly Indus. Inc., 215 F.3d 830, 834-39 (8th Cir. 2000) (holding that plaintiff did not substantially comply with public participation requirements); Nutrasweet Co. v. X-L Eng’g Co., 227 F.3d 776, 791 (7th Cir. 2000); Sherwin-Williams Co. v. ARTRA Group, Inc., 125 F. Supp. 2d 739, 751-53 (D. Md. 2001); Young, 394 F.3d at 864-865; Regional Airport Auth., 460 F.3d at 707-09.

4. EXTRATERRITORIALITY

a. CERCLA is not extraterritorial. See Arc Ecology v. United States Dep’t of

Air Force, 294 F. Supp. 2d 1152, 1157-59 (N.D. Cal 2003), aff’d, 411 F.3d 1092 (9th Cir. 2005). Cf. Pakootas v. Teck Comminco Metals, 452 F.3d 1066 (9th Cir. 2006), cert. denied, 552 U.S. 1095 (2008) (although original source of hazardous substance was Canada, CERCLA jurisdiction covered subsequent release in U.S.).

G. DEFENSES TO LIABILITY - SECTION 107(b)

There are only three affirmative defenses available under Section 107(b). See, e.g., B.F. Goodrich v. Betkoski, 99 F.3d 505, 514 (2d Cir. 1996) (plaintiff entitled to summary judgment if defendants cannot establish one of three affirmative defenses); Town of Munster, Ind. v. Sherwin-Williams Co., 27 F.3d 1268, 1271-72 (7th Cir. 1994) (holding that CERCLA does not permit equitable defenses to liability); Elementis Chems. Inc. v. T. H. Agric. & Nutrition, LLC, 373 F. Supp. 2d 257, 264-65 (S.D.N.Y. 2005). Note that Defendant must show that the release or threatened release was caused solely by one of the following:

1. ACT OF GOD

a. This term means an "unanticipated grave natural disaster or other natural phenomenon of an exceptional, inevitable, and irresistible character, the effects of which could not have been prevented or avoided by the exercise of due care or foresight." See United States v. M/V Santa Clara I, 887 F. Supp.


825, 843 (D.S.C. 1995) (storm did not justify the act of God defense because it was predicted and the effects were avoidable); United States v. Barrier Indus., 991 F. Supp. 678, 679-80 (S.D.N.Y. 1998) (unprecedented cold spell not defense); United States v. Stringfellow, 661 F. Supp. 1053, 1061 (C.D.Cal.1987) (heavy rainfall was not an act of God under CERCLA because it was “foreseeable based on normal climatic conditions and any harm caused by the rain could have been prevented through design of proper drainage channels.”).

2. ACT OF WAR

a. An act of war connotes a sudden hostile action. The sinking of ships belonging to a belligerent nation by submarines of another nation, or torpedoing a destroyer, constitutes an act of war. See Stankus v. New York Life Ins. Co., 44 N.E. 2d 687 (Mass. 1942); Farbwerke Vormals Meister Lucius & Bruning v. Chem. Found., Inc., 283 U.S. 152 (1931) (capture of enemy-owned patent is an act of war); Hijo v. United States, 194 U.S. 315 (1904) (seizure of enemy vessel).

b. The leading CERCLA case on this issue is United States v. Shell Oil Co., 841 F. Supp. 962, 970-72 (C.D. Cal. 1993), aff’d, 281 F.3d 812 (9th Cir. 2002). The court found that oil companies could not invoke "act of war" defense to escape liability for dumping hazardous substances which were disposed of following production of aviation fuel during World War II; further, the term "act of war" as used in CERCLA could not reasonably be construed to cover either government's wartime contracts to purchase aviation fuel or its regulation of oil companies' production of aviation fuel.

3. THIRD PARTY DEFENSE

a. This Section 107(b)(3) defense applies to an act or omission of a third party (other than an employee or agent of the defendant), or one whose act or omission occurs in connection with a contractual relationship, existing directly or indirectly, with the defendant. The third party defense requires proof that the acts or omissions of a third party were the sole cause of a release.

b. Section 101(35)(a) defines the term “contractual relationship” to include

“land contracts, deeds, or other instruments transferring title or possession.” Compare State of New York v. Lashins Arcade Co., 91 F.3d 353, 360 (2d Cir. 1996) (contract must relate to hazardous substances), with Lefebvre v. Central Maine Power Co., 7 F. Supp. 2d 64, 71 n.3 (D. Me. 1998) (rejecting Lashins)

c. Current owner may rely on third party defense only if it can establish the

elements of the “innocent landowner” defense set forth in Section 101(35). See, e.g., Foster v. United States, 922 F. Supp. 642, 653-57 (D.D.C. 1996).


d. Defendant must show that "(a) he exercised due care with respect to the

hazardous substance concerned . . . and (b) he took precautions against foreseeable acts or omissions of any such third party and the consequences that could foreseeably result from such acts or omissions.” Section 107(b)(3). See also Carter-Jones Lumber Co. v. Dixie Distrib. Co., 166 F.3d 840, 845 (6th Cir. 1999). Allowing migration of hazardous substances can be failure to exercise due care, even if the defendant did not bring hazardous substances to the site and was not negligent in contributing to the release. Franklin County Convention Facilities Auth., 240 F.3d at 547-48; but cf. United States v. 150 Acres of Land, 204 F.3d 698, 706 (6th Cir. 2000) (narrowly tailoring due care and precautions inquiry to particular circumstances of inheritance of property); Advanced Tech. Corp. v. Eliskim, Inc., 96 F. Supp. 2d 715, 718 (N.D. Ohio 2000) (party that inadvertently exposes hazardous substances deposited by another may be innocent landowner).

4. PROCEDURES

a. Defendant must prove these defenses with a preponderance of evidence.

Arguments that costs were inconsistent with the NCP relate to recoverability of particular costs but are not defenses to liability. United States v. Kramer, 757 F. Supp. 397, 436 (D.N.J. 1991); Illinois v. Grigoleit Co., 104 F. Supp. 2d 967, 980 (C.D. Ill. 2000); United States v. Cantrell, 92 F. Supp. 2d 704, 717 (S.D. Ohio 2000). Arguments that individual costs are unreasonable, excessive, duplicative, improper, and/or not cost effective do not provide a defense as NCP is limited in its requirements. United States v. Kramer, 913 F. Supp. 848, 853-54 (D.N.J. 1995).

b. Courts have held that the following are not available defenses: absence of

causation, absence of negligence, laches, and "unclean hands." Equitable defenses are not available. See Kramer, 757 F. Supp. at 428; Kelley v. Thomas Solvent Co., 714 F. Supp. 1439, 1451-52 (W.D. Mich. 1989) (denying equitable defense of laches); Stringfellow, 661 F. Supp. at 1062; United States v. Vineland Chem. Co, 692 F. Supp. 415, 423-24 (D.N.J. 1988) (striking estoppel defenses); California Dep’t of Toxic Substances Control v. Neville Chem. Co., 358 F.3d 661, 672 (9th Cir. 2004) (“Every court of appeals that has considered the precise question whether § 9607 permits equitable defenses has concluded that it does not, as the statutory defenses are exclusive”).

c. Defendants bear the burden of proof as to all statutory exemptions. See

Betkoski, 99 F.3d at 514.


H. EXCLUSIONS

1. PETROLEUM

a. Crude oil, or any fraction thereof, natural gas, natural gas liquids, liquefied natural gas, or synthetic gas usable for fuel (or mixtures of natural gas and such synthetic gas) are excluded from the definition of a "hazardous substance" under Section 101(14). See Wilshire Westwood Assoc. v. Atl. Richfield Corp., 881 F.2d 801, 810 (9th Cir. 1989) (holding that petroleum exclusion covers leaded gasoline); Petrovic v. Amoco Oil Co., 200 F.3d 1140 (8th Cir. 1999). Petroleum mixed with hazardous waste, such as used oil, is not exempt. EPA Final Rule, 50 Fed. Reg. 13456 (Apr. 4, 1985); Wilshire, 881 F.2d at 808-10. See also Tosco Corp v. Koch Indus., 216 F.3d 886, 893-94 (10th Cir. 2000) (petroleum mixed with hazardous substances in environmental media not within scope of exclusion); Southern Fuel Co. v. Amoco Oil Co., No. WN-92-3322, 1994 U.S. Dist. LEXIS 15769 at 13 (D. Md. 1994) (determining that petroleum products contaminated with hazardous substances do not come under the ambit of CERCLA's petroleum exclusion); Cose v. Getty Oil Co., 4 F.3d 700, 704-07 (9th Cir. 1993) (holding that discarded crude oil tank bottoms are not entitled to exclusion); Esso Standard Oil Co. v. Perez, 2004 U.S. Dist. LEXIS 19954, at *29-34 (D.P.R. Oct. 1, 2004) (holding that co-defendants did not fall under petroleum exemption because they released crankcase oil which is contaminated by wear metals and fuel residue).

2. SECURITY INTEREST HOLDERS

a. Section 101(20)(A) excludes owners or operators "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." A mortgagee or lender is generally not liable unless he participates in management of the facility (other than providing financial advice). 42 U.S.C. § 9601(F)(i)(20). See also In re Bergsoe Metal Corp., 910 F.2d 668, 671-73 (9th Cir. 1990); Monarch Tile Inc. v. City of Florence, 212 F.3d 1219, 1222 n.2 (11th Cir. 2000).

b. This exemption was the subject of an EPA Rule. Lender Liability Under

CERCLA, 57 Fed. Reg. 18344 (Apr. 29, 1992). This rule was vacated by the D.C. Court of Appeals on the ground that EPA lacked authority to promulgate it. Kelley v. Envtl. Prot. Agency, 15 F.3d 1100 (D.C. Cir. 1994), reh’g denied, 25 F.3d 1088, cert. denied, Am. Bankers Ass’n v. Kelley, 513 U.S. 110 (1995). The Rule was then reissued as policy. 57 Fed. Reg. 18, 344 (1992). Congress resolved conflicting court decisions in 1996 when it enacted the Asset Conservation, Lender Liability, and Deposit Insurance Protection Act of 1996, Pub. L. No. 104-208.

c. The Asset Conservation, Lender Liability, and Deposit Insurance Act of


1996, Pub. L. 104-208, added a new Section 101(20)(E)-(G), one similar to the Lender Rule. The secured creditor defense protects lenders from liability if they did not participate in the management or exercise actual control over the facility. That Act also validates that portion of the Rule which addresses involuntary acquisition by government entities. See “EPA Policy on Interpreting CERCLA Provisions Addressing Lenders and Involuntary Acquisitions by Government Entities,” 62 Fed. Reg. 36, 424 (July 7, 1997). The party seeking to assert this exemption bears the burden of establishing entitlement by showing that it qualifies under each element of the exemption.

3. INNOCENT LANDOWNERS

a. Section 101(35) provides protection for defined "innocent landowners." The defense arises from the definition of “contracted relationship” for purposes of a Section 107(b)(3) third-party defense. See Westwood Pharms., Inc. v. Nat’l Fuel Gas Distribution Corp., 964 F.2d 85, 89-91 (2d Cir. 1992). This defense applies if: (a) the defendant acquired real property after the disposal of hazardous substances, did not know, and had no reason to know about the hazardous substances on, in, or at the facility when it was acquired (Foster v. United States, 922 F. Supp. 642, 653-57 (D.D.C. 1996)); (b) the defendant is a government entity, who through its responsibilities acquired the facility (Hercules Inc. v. United States Envtl. Prot. Agency, 938 F.2d 276, 281 (D.C. Cir. 1991)); or (c) the defendant acquired the facility by inheritance or bequest. Snediker Developers Ltd. v. Evans, 773 F. Supp. 984, 990 (E.D. Mich. 1991).

b. Small Business Liability Relief and Brownfields Revitalization Act, Pub. L.

No. 107-118, 115 Stat. 2356 (2001), amended Section 101(35) as follows: (1) it makes clear that the defense applies to easement holders and tenants of proper holders; (2) it requires that the landowner took reasonable steps to stop continuing releases and prevent future releases; and (3) it further defines what constitutes “all appropriate inquiry.” See United States v. Domenic Lombardi Reality, Inc., 290 F. Supp. 2d 198, 209 (D.R.I. 2003) (holding the amendment was not retroactive); 1325 “G” St. Assocs. v. Rookwood Pigments NA, No. DKC 2002-1622, 2004 U.S. Dist. LEXIS 19178 at *39 (D. Md. 2004) (relying on the assumption that the Brownfield Amendments are not retroactive in finding that the plaintiff had satisfied all necessary elements of the innocent landowner defense).

4. FEDERALLY PERMITTED RELEASES

a. Section 101(10) sets out examples of releases of hazardous substances that are allowable under CERCLA because of established permits set out in various other environmental statutes such as CAA, CWA, Solid Waste Disposal Act, 42 U.S.C. § 6901 et seq., Safe Drinking Water Act, 42 U.S.C. § 300f et seq., Marine Protection, Research, and Sanctuaries Act, 33 U.S.C.


§ 1401 et seq., and Atomic Energy Act, 42 U.S.C. § 2011 et seq. b. "[T]he exception for federally permitted release states an affirmative

defense." United States v. Freter, 31 F.3d 783, 788 (9th Cir. 1994). Accordingly, defendant has burden of going forward with sufficient evidence to raise the exception as an issue.

c. Section 107(j) provides that “[r]ecovery by any person (including the United

States or any State or Indian tribe) for response costs or damages resulting from a federally permitted release shall be pursuant to existing law in lieu of this section.”

5. COMMON CARRIERS

a. Section 101(20)(B) insulates the shipper of hazardous substances from being "considered to have caused or contributed to any release during such transportation which resulted solely from circumstances or conditions beyond his control."

6. PESTICIDE

a. Section 107(i) exempts application of pesticide products registered under the Federal Insecticide, Fungicide Act. See Redwing Carriers v. Saraland Apartments, 875 F. Supp. 1545, 1564-65 (S.D. Ala. 1995) (partially reversed on other grounds).

b. Improper application of pesticide may result in CERCLA liability. United

States v. Tropical Fruit, S.E., 96 F. Supp. 2d 71, 90-91 (D.P.R. 2000).

7. CONSUMER PRODUCTS

a. Section 101(9) excludes from the definition of facility sites where hazardous substances have come to be located as a result of “any consumer product in consumer use.”

b. In Uniroyal Chem. Co. v. Deltech Corp., the court defined “consumer

product in consumer use” as “any good normally used for personal, family, or household purposes, which was being used in that manner when the subject release occurred.” 160 F.3d 238, 257 (5th Cir. 1998).

8. RECYCLERS

a. Superfund Recycling Equity Act (SREA), P.L. 106-113, 113 Stat. 1536 (Nov. 29, 1999) provides liability exemption to recyclers of scrap paper, plastic, glass, textiles, rubber (not whole tires) and some batteries meeting specified criteria. See CERCLA § 127. PRP has burden to demonstrate that the exemption applies.


b. SREA does not affect any concluded administrative or judicial action, or any

pending judicial action initiated by the United States prior to enactment. See Morton Int’l v. A.E. Staley Mfg. Co., 106 F. Supp. 2d 737, 749-51 (D.N.J. 2000); United States v. Atlas Lederer Co., 97 F. Supp. 2d 830, 831 (S.D. Ohio 2000); United States v. NL Indus., No. 91-CV-578-JLF, 2005 U.S. Dist. LEXIS 10713 (S.D. Ill. May 4, 2005). Courts have, however, applied SREA retroactively to cases filed by private parties that were pending at the time of enactment. See Gould Inc. v. A & M Battery & Tire Serv., 232 F.3d 162, 169-70 (3d Cir. 2000).

c. Any person who brings an action in contribution against a recycler not liable

under CERCLA shall pay for costs of defending the action. Section 127(j). d. Section 114(c) exempts service station dealers who generate or transport

recycled oil (if RCRA requirements are met). Service stations can still be liable as owners or operators.

9. DE MICROMIS EXEMPTION SECTION 107(o)

a. Section 107(o) exempts generators and transporters where the amount of hazardous substances is quite small. Parties may be exempt at NPL sites if hazardous substances are less than 110 gallons of liquid waste or 200 pounds of solid waste.

b. The treatment, disposal, or transport must have occurred before April 1,

2001.

c. The exemption does not apply if EPA finds the hazardous substances contributed significantly to the response action costs. This determination is not judicially reviewable.

d. In Section 107 cost recovery action by the government, the PRP has the

burden of proving that this exception is available. In Section 113 private contribution action, plaintiff must prove defendant does not fall within this exemption.

10. MUNICIPAL SOLID WASTE EXEMPTION (MSW) SECTION 107(p)

a. Section 107(p) addresses municipal solid waste (MSW). MSW is household waste, collected and disposed of as part of normal collection service, containing typical amounts of hazardous substances (i.e., food, household, and yard waste).

b. Owner/operator/lessees of residential property which dispose of MSW at

NPL sites are exempt under Section 107(p). Transporters and municipalities are not exempt.


c. Small businesses and tax exempt entities (under 100 employees) that

generate MSW are exempt under Section 107(p).

d. The exemption does not apply if EPA finds the hazardous substances contributed significantly to the response action costs. This determination is not judicially reviewable.

11. CONTIGUOUS PROPERTY OWNERS SECTION 107(q)

a. Section 107(q) exempts contiguous property owners/operators that did not “cause, contribute, or consent to the release or threatened release.”

b. In order to qualify for the defense, owner/operator must establish by

preponderance of the evidence that it meets a series of statutory conditions, including that the owner is not “affiliated with any other person that is potentially liable,” takes reasonable steps to deal with the contamination, provides full cooperation to authorities, and is in compliance with applicable law.

12. PROSPECTIVE PURCHASER SECTION 107(r)

a. Section 107(r) protects a buyer who would otherwise become liable as owner or operator solely because it purchased contaminated property. Buyer must meet eight conditions (including not being a PRP).

b. Subject to certain conditions the new purchaser will not be liable except for a windfall lien that covers unreimbursed response costs. The lien shall not exceed the increase in fair market value of the property attributable to the response action.

13. BROWNFIELDS SECTION 128(b)

a. Section 128(b) prohibits EPA from taking § 106(a) or § 107(a) enforcement action against a PRP conducting or completing a response action that is in compliance with the applicable state cleanup program.

b. Exceptions include requests by the State for EPA to act where EPA

determines that there is an “imminent and substantial endangerment”. This section applies only to response actions conducted after February 15, 2001.

14. RADIONUCLIDES SECTION 101(22)(c)

a. CERCLA exempts any “release of source, by product, or special nuclear material from a nuclear incident.” This exemption applies to releases covered under the Price Anderson Act, 42 USC § 2210, and releases


arising out of remedial activities under the Uranium Mill Tailings Radiation Control Act, 42 USC § 7212(a) and 7942(a). RCRA excludes “source, special nuclear or by product material as defined by the Atomic Energy Act” from the definition of “solid waste”. 42 USC § 6903(27). However, all major radionuclides are hazardous air pollutants under CAA regulations, 40 CFR 61.01. See also Amoco Oil Co. v. Borden, Inc., 889 F.2d 664, 669 (5th Cir. 1990); United States v. United Nuclear Corp., 814 F. Supp. 1552 (D. N.M. 1992) (addressing EPA’s remediation of leachate from radioactive mine tailings).

I. STANDARD OF REVIEW

1. ADEQUACY OF RESPONSE COSTS ASSERTED BY GOVERNMENT

a. In Section 107(a)(4)(A) action for cost recovery, while the elements of liability must be established de novo, the standard for reviewing costs themselves is arbitrary and capricious. See United States v. R.W. Meyer, Inc., 889 F.2d 1497, 1508 (6th Cir. 1989); United States v. JG-24, 331 F. Supp. 2d 14, 65 (D.P.R. 2004). Judicial review of any issue concerning the adequacy of any response action taken or ordered by the United States is limited to the administrative record, and the standard of review is arbitrary and capricious. Section 113(j)(1)-(2).

b. Defendants have the burden of proving that specified costs claimed are

inconsistent with the NCP. United States v. NEPACCO, 810 F.2d 726, 747-48 (8th Cir. 1986); United States v. Gurley, 317 F. Supp. 2d 870, 878 (E.D. Ark. 2004); JG-24, 331 F. Supp. 2d at 64-65.

c. Once it is shown that selection of response action was not arbitrary,

capricious or inconsistent with the NCP, the United States is entitled to all costs (not just all reasonable costs) incurred in implementing response action. See Meyer, 889 F.2d at 1503.

J. STATUTE OF LIMITATIONS

1. Under Section 113(g)(2)(A), which discusses removal actions, the United States must bring an action within three years after completion of the removal action (unless remedial action has begun by then). See United States v. Chromatex, Inc., 832 F. Supp. 900, 901 (M.D. Pa. 1994); United States v. Cantrell, 92 F. Supp. 2d 704, 716 (S.D. Ohio 2000) (completion of final site investigation rather than completion of construction of clay cap would be completion of removal action for limitations purposes). In Colorado v. Sunoco, Inc., 337 F.3d 1233, 1242 (10th Cir. 2003), the Court of Appeals held that in a site where there were multiple removal and remedial activities, “the key issue in determining the timeliness of Colorado’s action is when ‘physical on-site construction of the [first] remedial action’ occurred at the site.” See California Dep’t Of Toxic Servs. v. Neville Chem. Co., 213 F. Supp. 2d 1115, 1127-28 (C.D. Cal. 2003) aff’d, 358 F.3d 661 (9th Cir. 2004), cert.


denied, 543 U.S. 869 (2004) (excavating wells not “initiation of physical on-site construction of the remedial action”).

2. Under Section 113(g)(2)(B), which discusses remedial actions, the United States

must bring an action within six years after initiation of physical on site construction (removals included if the remedial action was initiated within three years of completion of removal). See United States v. Navistar Int’l Transp. Corp., 152 F.3d 702 (7th Cir. 1998); United States v. Findett, 220 F.3d 842, 848 (8th Cir. 2000). See also Neville Chem. Co., 358 F.3d at 671 (holding that the statute of limitations cannot begin to run until a final remedial action plan has been adopted); Schaefer v. Town of Victor, 457 F.3d 188, 203-09 (2d Cir. 2006) (plaintiff barred).

3. CERCLA authorizes subsequent actions for later-incurred response costs if the

initial action is timely filed. See Section 113(g)(2) (statute of limitations for initial actions, authorizing declaratory judgments for future costs); Findett, 220 F.3d at 845.

K. SECTION 107 COST RECOVERY ACTIONS DO NOT ALLOW FOR TRIALS WITH JURIES

1. It is well settled that a CERCLA cost recovery action, an action in equity for restitution, does not provide a right to jury trial. NEPACCO, 810 F.2d at 749, cert. denied, 484 U.S. 848 (1987); United States v. Vertac Chem. Corp., 966 F. Supp. 1491, 1497 (E.D. Ark. 1997); United States v. Mex. Feed & Seed Co., 729 F. Supp. 1250, 1254 (E.D. Mo. 1990); Miami-Dade County v. United States, 345 F. Supp. 2d 1319, 1324 (S.D. Fla. 2004) (rejecting county’s demand for jury trial in CERCLA action). There has been one reported jury trial in a case brought by the United States. Vertac, 966 F. Supp. at 1497 (advisory jury returned verdict in favor of United States against Uniroyal Chemical Ltd.).

2. In natural resource damages some courts have held that there is a right to jury

trial. See In re Acushnet River & New Bedford Harbor, 712 F. Supp. 994, 1000 (D. Mass. 1989). But see General Elect. Co. v. United States Envtl. Prot. Agency, 18 F. Supp. 2d 138, 144 (D. Mass. 1998).

L. CERCLA SETTLEMENTS (SECTION 122, codified at 42 U.S.C. § 9622, et seq.)

1. STATUTORY GOAL

a. A fundamental goal of CERCLA is to facilitate voluntary settlements in order to expedite remedial actions and minimize litigation. The specific settlement provisions found in Section 122 were added in 1986 in an effort by Congress to eliminate impediments to settlement of claims relating to the cleanup of Superfund sites. See United States v. Akzo Coatings of Am., Inc., 949 F.2d 1409, 1436 (6th Cir. 1991) (“presumption in favor of voluntary settlement”); accord United States v. Lexington-Fayette Urban County Gov’t, 591 F.3d 484, 489 (6th Cir. 2010).


2. DISCRETIONARY AUTHORITY

a. Section 122(a) affords the United States the discretion to enter into an agreement with any person to perform response action at a site.

b. The scope of Attorney General's authority was addressed in United States

v. Hercules, Inc. 961 F.2d 796, 798-99 (8th Cir. 1992). In rejecting defendants’ assertion that Section 122(h) limits the AG's settlement authority, the Court determined that “the Attorney General has exclusive authority and plenary power to control the conduct of litigation in which the United States is involved, unless Congress specially authorizes an agency to proceed without the supervision of the Attorney General . . . Congress does not have the authority to limit the power of the Attorney General.” Id.; see also United States v. Carpenter, 526 F.3d 1237 (9th Cir. 2008) (determining that “[w]hile it is true that the Attorney General has plenary discretion [under § 122] to settle litigation to which the federal government is a party . . . a decision that is discretionary is not rendered unreviewable in all circumstances”); United States v. Santee Sioux Tribe of Nebraska, 135 F.3d 558, 562 (8th Cir. 1998); United States v. ASARCO, Inc., 814 F. Supp. 951, 957 (D. Colo. 1993).

3. PROCEDURE AND SCOPE

a. Section 122 authorizes EPA and DOJ to conduct negotiations under specified procedures, defines the scope of covenants not to sue, and provides for public comment on proposed settlements. Section 122(d), (e) & (f).

b. Section 122(e)(2)(A) provides for a moratorium following PRP

notification under Section 122(a). Absent a significant public health or environment threat, EPA “may not commence a remedial investigation and feasibility study . . . for 90 days after providing notice and information” and cannot commence any removal or abatement action for 120 days after providing notice and information. See 42 U.S.C. § 9622(e)(2)(A).

4. CONSENT DECREE

a. General Rule. Subject to court approval, Section 122(d) requires settlements involving the implementation of remedial actions to be embodied in judicial consent decrees. Two standard consent decrees call for PRPs to (1) perform the site work remedy as set forth in the Record of Decision or (2) to pay past EPA expenses.

b. Model Work Consent Decree. The model Remedial Design/Remedial

Action Consent Decree has been revised and was published at 63 Fed. Reg. 9541 (Feb. 25, 1998). It is also available online at


http://es.epa.gov/oeca/osre/950713.html. Many of the model provisions are nationally uniform and are widely incorporated into actual decrees.

c. Reopeners. Section 122(f)(6)(A) provides that where settlements contain

a covenant not to sue, the settlement “shall include an exception to the covenant that allows the President to sue such person concerning future liability resulting from the release or threatened release that is the subject of the covenant where such liability arises out of conditions which are unknown at the time . . . that remedial action has been completed at the facility concerned.”

5. DE MINIMIS SETTLEMENTS

a. Section 122(g) authorizes administrative and judicial de minimis settlements when the claim involves a minor portion of the response costs at the facility and, in the EPA's judgment, the amount and toxicity of hazardous substances contributed by the settling party are minimal in comparison to other hazardous substances at the facility. See United States v. Cannons Eng’g Corp., 720 F. Supp. 1027, 1032 (D. Mass. 1989) (“[a] de minimis PRP is one whose contribution is minimal both in the amount and toxicity of the hazardous substances involved. In such settlements, the United States may provide a complete covenant not to sue for all further liability with respect to the facility”).

b. This type of settlement is often appropriate for small volume generators

(usually less than 1%) whose waste contains no greater toxicity than anyone else’s. See id. at 1045 (noting that it is “Congress's clear intention to have the government settle early with small generators in order to be able to simplify negotiations, focus on those with greater proportional responsibility, and speed the cleanup of Superfund sites”).

c. Settlors must agree to settle their liability for a share of the total costs and

"cash-out." The share usually includes a premium. United States v. Cannons Eng’g Corp., 899 F.2d 79, 88-89 (1st Cir. 1990) (upholding EPA determination, including premium, as “substantively fair”).

d. Section 122(g)(7) was amended in 2002 to codify DOJ and EPA practice

of settling with PRPs who have a limited ability to pay. In addition, Section 122(g)(8) was added to require that the PRP waive all claims (including contribution) against other PRPs for all settlements under Section 122(g), “unless the President determines that requiring a waiver would be unjust.” See also Model CERCLA de minimis Consent Decree and Administrative Order on Consent, 60 Fed. Reg. 62849-01 (Dec. 7, 1995).


6. CONTRIBUTION PROTECTION

a. Under CERCLA Section 113(f)(2), a person who has resolved his or her liability to the United States is protected against third party contribution claims for all matters addressed in the settlement. This form of contribution protection is also known as a “settlement bar.” See generally Alcan Aluminum Corp. v. Butler Aviation-Boston, Inc., No. 3:CV-02-0562, 2003 WL 22169273 at *3 (M.D. Pa. Sept. 19, 2003) (noting that “Courts have consistently ruled that [Section 113(f)(2)] permits those who settle with the government (settlors) to obtain protection against claims for contribution by those who do not settle with the government (non-settlors)) (citing additional cases).

b. Prior to Atl. Research Corp., most courts rejected efforts by non-settlors to

limit the intended effect of CERCLA's contribution protection provisions, including efforts to bring a claim under Section 107(a) instead of Section 113 to avoid the the contribution bar. See, e.g., United Technologies Corp. v. Browning-Ferris Industries, Inc., 33 F.3d 96, 103 (1st Cir. 1994)(CERCLA’s “mechanism for encouraging settlement would be gutted” if PRP were allowed to bring Section 107 claim to avoid Section 113(f) contribution protection); United States v. Southeastern Pennsylvania Transp. Auth., 235 F.3d 817, 823 (3d Cir. 2000) (rejecting attempt to limit contribution protection to response actions settlor would perform, which would have reserved contribution claim for work to be performed by non-settlor); United States v. Cannons Eng’g Corp., 899 F.2d 79, 92-93 (1st Cir. 1990) (rejecting attempt to end run contribution protection through assertion of a common law indemnification claim); Dravo Corp. v. Zuber, 13 F.3d 1222, 1226-27 (8th Cir. 1994) (rejecting challenge to de minimis settlement that provided contribution protection against the non-settlors' costs). See also Akzo Coating, Inc. v. Aigner Corp., 30 F.3d 761, 769 (7th Cir. 1994) (holding that CERCLA does not afford contribution protection where matter is “not addressed” in settlement); United States v. Acorn Eng’g Co., 221 F.R.D. 530, 537-38 (C.D. Cal. 2004) (holding that non-settling PRPs did not have a right to intervene in action to approve consent decree). But see Waste Mgmt. of Pennsylvania, Inc. v. City of York, 910 F. Supp. 1035, 1036 (M.D. Pa. 1995) (determining that in a non de minimis AOC under section 122(h), contribution protection is limited to claims for costs incurred by the United States Government) (emphasis in the original).

c. In United States v. Atl. Research Corp., the Court held that PRPs, in

certain circumstances, could bring their claims under Section 107(a) instead of Section 113. The Court indicated that the Section 113(f)(2) contribution bar “does not, by its terms, protect against cost-recovery liability under Section 107(a).” 551 U.S. 128, 140-41 (2007). The United States has taken the position that a settlement with the United States provides protection against charges brought under Section 107(a) for


“matters addressed” pursuant to Section 113(f)(2) and/or by operation of common law.

d. Under Section 113(f)(2), the liability of non-settling parties is reduced by

the amount of any settlement with the United States. The House report indicates that non-settling parties will "remain potentially liable for the amounts not received by the government through settlement." H.R. REP. NO. 99-253(III), at 19 (1985), reprinted in 1986 U.S.C.C.A.N. 3038, 3042. UCFA does not apply. See, e.g., Cannons Eng’g, 720 F. Supp at 1049, n.26.

7. MIXED FUNDING

a. Section 122(b)(1) allows EPA to reimburse settling parties for this work. The purpose of this mixed funding authority is to “mix funds from Superfund with private party monies, where appropriate . . . so as to enable response actions by the settling parties to proceed as quickly as possible.” H.R. REP. NO. 99-253(I) at 101 (1985), reprinted in 1986 U.S.C.C.A.N 2835, 2883.

b. EPA may choose, for example, to settle for less than one hundred percent

of the statutory maximum when an "orphan share" exists at the site or defendants do not have the financial ability to pay.

c. Pre-authorization agreements from EPA allow PRP reimbursement from

the Superfund.

8. NON-BINDING ALLOCATIONS OF RESPONSIBILITY ("NBAR")

a. The NBAR process is encouraged under Section 122(e)(3). More often, PRPs decide their own internal allocation through PRP committees, which are usually formed for the purpose of negotiating with the United States.

d. The use of Alternative Dispute Resolution (ADR) has significantly

increased in CERCLA settlements. See generally Jon Niermann, Alternative Dispute Resolution in CERCLA Settlement, 17 J. ENVTL. L. & LITIG. 389 (2002).

9. RELEASES FROM LIABILITY / COVENANT NOT TO SUE

a. Section 122(f)(1) authorizes release from liability if (1) it is in the “public interest,” (2) it would expedite the response action, (3) the PRPs are in full compliance with the consent decree, and (4) the response action has been approved by EPA.

b. Pursuant to Section 122(f)(6)(A), all covenants (except special covenants

and de minimis settlements) are subject to a reopener clause that allows


for future liability for unforeseen and unknown conditions that arise following completion of the remedial action.

c. The AG can also grant a covenant not to sue to future owners with a

“prospective purchaser agreement.” See, e.g., 69 Fed. Reg. 2887-02 (May 19, 2004).

10. STANDARD OF REVIEW FOR CONSENT DECREES

a. Remedial Action. Section 122(d)(1)(A) specifies the procedures applicable whenever the Government “enters into an agreement under this section with any potentially responsible party with respect to remedial action under Section 9606 of this title . . . .”

b. Cost Recovery. Settlement of cost recovery claims under Section 107

does not invoke Section 122 procedures, except insofar as cost claims are included in Section 106 remedial action settlements, or the Section 107 settlement includes a covenant not to sue for Section 106 claims.

c. Public Comment. Section 122 settlements are subject to public comment

and notice of the lodging of a consent decree is provided by Federal Register Notice. The normal comment period is 30 days. Section 122(d)(2)(B) provides as follows:

The Attorney General shall provide an opportunity to persons who are not named as parties to the action to comment on the proposed judgment before its entry by the court as a final judgment. The Attorney General shall consider, and file with the court, any written comments, views, or allegations relating to the proposed judgment. The Attorney General may withdraw or withhold its consent to the proposed judgment if the comments, views, and allegations concerning the judgment disclose facts or considerations which indicate that the proposed judgment is inappropriate, improper, or inadequate.

d. Entry of Decree. The Attorney General moves for entry of the decree

following review of any comments received. Most consent decrees are entered without significant delays in proceedings after close of the comment period. DOJ presents all comments to the court and non-parties may seek to intervene.

e. Presumption of Validity. There is a strong presumption in favor of the

validity of consent decrees, given the Attorney General’s inherent


discretion to settle litigation and EPA’s technical expertise. See, e.g., United States v. Hooker Chems. & Plastics Corp., 540 F. Supp. 1067, 1080 (W.D.N.Y. 1982), aff’d, 749 F.2d 968 (2d Cir. 1984); accord United States v. Akzo Coatings of Am., Inc., 949 F.2d 1409, 1433 (6th Cir. 1991). The trial court has the discretion to deny intervention, United States v. Tex. E. Transmission Corp., 923 F.2d 410, 415-16 (5th Cir. 1991). The court has discretion whether or not to conduct a hearing. Hooker, 540 F. Supp. at 1082-83; United States v. Seymour Recycling Corp., 554 F. Supp. 1334, 1336-37 (S.D. Ind. 1982).

f. Three-Part Standard for Judicial Review. There is a three-part standard for

review of CERCLA consent decrees: (1) fairness, (2) reasonableness, and (3) consistency with statutory goals. See H.R. REP. NO. 99-253(III), at 19 (1985). See also United States v. Fort James Operating Co., 313 F. Supp. 2d 902, 906 (E.D.Wis. 2004); United States & the State of Wisconsin v. P.H. Glatfelter Co. & WTM I Co., No. 03-C-0949 at 3 (E.D.Wis. 2004); United States v. Davis, 261 F.3d 1, 20 (1st Cir. 2001); Akzo Coatings of Am., 949 F.2d at 1435; United States v. Cannons Eng’g Corp., 899 F.2d 79, 85 (1st Cir. 1990). Although the court is not a rubber stamp, judicial review is made with “considerable deference.” Fort James Operating Co., 313 F. Supp. 2d at 907 (quoting in part Davis, 261 F.3d at 21 (stating that a reviewing court must defer to the administrative agency's construction of the settlement)). See also United States v. Southeastern Pennsylvania Transp. Auth., 235 F.3d 817, 822 (3d Cir. 2000) (same); United States v. DiBiase, 45 F.3d 541, 543-44 (1st Cir. 1995) (same). Courts need not conduct an evidentiary hearing to evaluate CERCLA consent decrees. United States v. Comunidades Unidas Contra La Contaminacion, 204 F.3d 275, 278-79 (1st Cir. 2000); 55 Motor Ave. Co. v. Liberty Indus. Finishing Corp., 332 F. Supp. 2d 525, 530 (E.D.N.Y. 2004); Fort James Operating Co., 313 F. Supp. 2d at 907; United States v. Grand Rapids, Michigan, 166 F. Supp. 2d 1213, 1227 (W.D. Mich. 2000).

M. CONTRIBUTION SUITS (SECTION 113, codified at 42 U.S.C. § 9613, et seq.)

1. BASIC STANDARD

a. Section 113(f) (added by SARA) establishes that a PRP has a right to seek contribution “during or following” a Section 106 or 107(a) enforcement action from any other person who is liable under Section 107, and specifically provides that “in resolving contribution claims, the court may allocate response costs among liable parties using such equitable factors as the court determines are appropriate.” In United States v. Atl. Research Corp., the Supreme Court quoted Black’s Law Dictionary to define “contribution” as the “tortfeasor’s right to collect from others responsible for the same tort after the tortfeasor has paid more than his or her proportionate share, the shares being determined as a percentage of fault.” 551 U.S. 128, 138 (2007); see BLACK’S LAW DICTIONARY 353 (8th ed.


2004).

2. ELIGIBILITY TO BRING A CONTRIBUTION ACTION

a. In December 2004, the Supreme Court in Cooper Indust., Inc. v. Aviall Servs., Inc. held that a private party not sued under Section 106 or 107(a) could not bring a contribution action under Section 113(f)(1). 543 U.S. 157, 165-67 (2004). The Court expressly held that “Section 113 provides two express avenues for contribution Section 113(f)(1) (‘during or following’ specified civil actions) and Section 113(f)(3)(B) after an administrative or judicially approved settlement that resolves liability to the United States or a State.” Thus, after Aviall, a PRP may only bring a contribution claim under Section 113 if it meets the requirements of either 113(f)(1) or (f)(3)(B). The Court, however, did not resolve a number of collateral questions, including whether defendant Aviall had a direct or an implied right to contribution under Section 107.

b. A unanimous Supreme Court resolved that issue in June 2007, in United

States v. Atl. Research Corp., giving some PRPs a right to sue under CERCLA 107(a)(4)(B). 551 U.S. 128, 135-36 (2007). However, most courts have held that if a PRP has a claim under Section 113(f), it must use it and may not bring its claim under Section 107(a) instead. See supra Paragraph F.3.a.

c. One court has held that a consent order under which the property owner

which the property owner obtained a specific release of CERCLA liability, qualified as an “administrative or judicially approved settlement.” Further, “that a state does not need the approval of the United States before it can remediate hazardous substances and sue PRPs under §107.” Niagra Mohawk, 596 F.3d at 127, citing N.Y. v. Shore Realty, 759 F.2d 1032, 1047- 48 (2d Cir. 1985).

3. EFFECT ON PROCURING JOINT AND SEVERAL LIABILITY

a. A PRP’s claim against liable parties responsible “for an appropriate division of the payment one of them has been compelled to make that PRP is by definition making a [Section 113(f)] claim for contribution.” Bedford Affiliates v. Sills, 156 F.3d 416, 424 (2d Cir. 1998) (“a quintessential claim for contribution [occurs] where a party seeks to apportion liability for an injury for which it is also directly liable”). Accordingly, a PRP is not entitled to a finding of joint and several liability against another PRP in a Section 113 contribution action.

b. Apportionment of environmental cleanup costs looks to whether

defendants may avoid joint and several liability by establishing a fixed amount of damages for which they are liable, while contribution actions allow jointly and severally liable PRPs to recover from each other on the


basis of equitable considerations. See Burlington N. & Santa Fe R.R. Co. v. United States, 129 S.Ct. 1870, 1881-82 (2009).

c. Pre-Aviall/ARC decisions on this issue include: Bedford Affiliates v.

Sills, 156 F.3d 416, 424 (2d Cir. 1998); New Castle County v. Halliburton NUS Corp., 111 F.3d 1116, 1121-22 (3d Cir. 1997); Control Data Corp. v. S.C.S.C. Corp., 53 F.3d 930, 935 (8th Cir. 1995); Morrison Enters. v. McShares, Inc., 302 F.3d 1127, 1135 (10th Cir. 2002); United States v. Colo. & Eastern R.R., 50 F.3d 1530, 1534-36 (10th Cir. 1995) ("CERRC II"); United Techs. Corp. v. Browning-Ferris Indus., 33 F.3d 96, 103 (1st Cir. 1994), cert. denied, 115 S. Ct. 1176 (1995); Akzo Coatings, Inc. v. Aigner Corp., 30 F.3d 761, 764 (7th Cir. 1994); In re Dant & Russell, Inc., 951 F.2d 246, 249 (9th Cir. 1991); Amoco Oil Co. v. Borden, Inc., 889 F.2d 664, 672 (5th Cir. 1989); Smith Land & Improvement Corp. v. Celotex Corp., 851 F.2d 86, 88-89 (3d Cir. 1988), cert. denied, 488 U.S. 1029 (1989).

4. ALLOCATION OF RESPONSE COSTS, GENERALLY

a. A number of courts have used the so-called "Gore factors" to allocate response costs. See, e.g., Centerior Service Co. v. Acme Scrap Iron & Metal Corp., 153 F.3d 344, 354 (6th Cir. 1998) (citing United States v. Colorado & Eastern R.R., 50 F.3d 1530, 1536 n.5 (10th Cir. 1995)); accord Kalamazoo River Study Group v. Rockwell Int’l, 107 F. Supp. 2d 817, 822 (W.D. Mich. 2000). See also Bancamerica Commercial Corp. v. Trinity Indust., Inc., 900 F. Supp. 1427, 1472 (D. Kan 1995). These equitable factors were originally proposed by then - congressman Gore as an amendment to the 1980 CERCLA bill, which failed to pass. Kalamazoo and other cases summarize these factors as follows:

(1) the ability of the parties to demonstrate that their contributions to a

discharge, release, or disposal of a hazardous waste can be distinguished;

(2) the amount of the hazardous waste involved; (3) the degree of toxicity of the hazardous waste involved; (4) the degree of involvement by the parties in the generation,

transportation, treatment, storage, or disposal of the hazardous waste;

(5) the degree of care exercised by the parties with respect to the

hazardous waste concerned, taking into account the characteristics of such hazardous waste; and

(6) the degree of cooperation by the parties with federal, state, or local


officials to prevent any harm to the public health or the environment.

b. The Gore factors are not mandatory, nor do they exclude other equitable

considerations when allocating liability. See Cadillac Fairview/California, Inc. v. Dow Chem. Co., 299 F.3d 1019, 1027 (9th Cir. 2002) (acknowledging that district courts had the discretion to select equitable factors); Boeing Co. v. Cascade Corp., 207 F.3d 1177, 1187 (9th Cir. 2000) (same); Tosco Corp. v. Koch Indust., Inc., 216 F.3d 886, 894-95 (10th Cir. 2000) (facilities’ years of operation); B.F. Goodrich Co. v. Murtha, 958 F.2d 1192, 1206 (2d Cir. 1992) (“financial resources of the parties involved”); United States v. R. W. Meyer, Inc., 932 F.2d 568, 576-77 (6th Cir. 1991); Foster v. United States, 130 F. Supp. 2d 68, 78 (D.D.C. 2001) (whether current owner contributed to discharged wastes); Anschutz Mining Corp. v. NL Indust., Inc., 891 F. Supp 492, 495 (E.D. Mo. 1995) (noting that the Gore factors “do not serve as precedent”); Weyerhaeuser Co. v. Koppers Co., 771 F. Supp. 1420, 1423 (D. Md. 1991) (benefits received by the parties from the activities leading to the release); Amoco Oil Co. v. Borden, Inc., 889 F.2d 664, 673 (5th Cir. 1989) (circumstances involved in the property's conveyance, including the price paid and discounts granted); Agere Systems, 602 F.3d 204 at 235 (court’s may consider cooperation with the government).

c. Courts distinguish factors that affect allocation from those that determine liability in the first instance. See, e.g., Kalamazoo River Study Group v. Menasha Corp., 228 F.3d 648, 656 (6th Cir. 2000) (holding that causation is not an element of liability though it may bear on allocations); Boeing Co. v. Cascade Corp., 207 F.3d 1177, 1185-86 (9th Cir. 2000) (noting that defendant may owe contribution even if plaintiff would have incurred same costs had defendant not disposed of any hazardous substances at site); Cadillac Fairview, 299 F.3d at 1028 (concluding that the U.S. must pay 100 percent costs for World War II activity because of indemnification agreement).

5. ALLOCATION OF COSTS WHERE THERE HAS BEEN A SETTLEMENT

a. The law is unsettled as to how to allocate costs in a contribution suit when there have been prior settlements. The National Conference of Commissioners of Uniform State Laws has developed two model statutes that address a situation in which the claimant settles with one of several joint tortfeasors: the Uniform Contribution Among Joint Tortfeasors (UCATA) in 1955 and the Uniform Comparative Fault Act (UCFA) in 1977. UCATA has been adopted by 19 states and UCFA by 2 states. State law, however, does not control pursuant to Section 113(4)(3)(c).

b. UCFA. When a litigant has settled with another party, the UCFA would

reduce the contribution share of the remaining defendants by the


percentage of total fault of the settlors. See Agere Systems, 602 F.3d at 235 (3rd Cir. 2010).

c. UCATA. On the other hand, UCATA only credits the amount of money

paid in the settlement. d. Some courts have applied the UCFA pro rata share credit rule, which

reduces the non-settlors' liability by those settlors' equitable share of liability. Other courts advocated use of the UCATA pro tanto credit rule, which reduces the non-settlors' liability by the dollar amount specified in the settlement.

e. The Supreme Court in McDermott applied UCFA in the context of an

admiralty proceeding. McDermott, Inc. v. AmClyde, 511 U.S. 202 (1994). The Seventh Circuit, however, held that McDermott’s approach was not appropriate in CERCLA cases and applied UCATA instead of UCFA. See, e.g., Akzo Nobel Coatings, Inc. v. Aigner Corp., 197 F.3d 302, 307 (7th Cir. 1999); see also United States v. SCA Servs. of Ind., Inc., 827 F. Supp. 526, 532 (N.D. Ind. 1993); Douglas County, Neb. v. Gould, Inc., 871 F. Supp. 1242 (D. Neb. 1994); Barton Solvents, Inc. v. Southwest Petro-Chem, Inc., 834 F. Supp. 342, 345-46 (D. Kan. 1993); Am. Cyanamid Co. v. King Indust., Inc., 814 F. Supp. 215, 217 (D.R.I. 1993); Allied Corp. v. ACME Solvent Reclaiming, Inc., 771 F. Supp. 219, 223 (N.D. Ill. 1990). Cases applying UCFA include Comerica Bank-Detroit v. Allen Indus., 769 F. Supp. 1408, 1413 (E.D. Mich. 1991); United States v. Western Processing Co., 756 F. Supp. 1424, 1429 (W.D. Wash. 1990); Lyncott Corp. v. Chem. Waste Mgmt., Inc., 690 F. Supp. 1409, 1418-19 (E.D. Pa. 1988). But see Am. Cyanamid Co. v. Capuano, 381 F.3d 6, 21 (1st Cir. 2004) (refusing to choose one approach over the other and deferring to the district court’s discretion to allocate response costs under CERCLA).

6. RIGHT TO A JURY TRIAL

a. District courts are split as to whether a right to a jury trial exists in Section 113(f) contribution cases. Compare Am. Cyanamid Co. v. King Industries, Inc., 814 F. Supp. 209, 213-215 (D.R.I. 1993) and Hatco Corp. v. W.R. Grace & Co., 59 F.3d 400 (3d Cir. 1995) (no jury trial right), with United States v. Shaner, Civ. A. No. 85-1375, 1992 WL 154618 (E.D. Pa. June 15, 1992) (right to jury trial exists). Fed. R. Civ. Pro. 39(c) also applies.

7. STATUTE OF LIMITATIONS

a. Section 113(g)(3) provides a three-year statute of limitations for contribution suits, after a party’s liability is determined by judgment, administrative order, or judicially approved settlement. Courts have taken various approaches to determining statute of limitations absent any of


these events. See Geraghhty & Miller, Inc. v. Conoco, Inc., 234 F.3d 917, 924 (5th Cir. 2000); Sun Co. v. Browning-Ferris, Inc., 124 F.3d 1187, 1192 (10th Cir. 1997); Sherwin-Williams Co. v. ARTRA Group, Inc., 125 F. Supp. 2d 739, 745-56 (D. Md. 2001); Reichhold Chems. Inc. v. Textron, Inc., 888 F. Supp. 1116 (N.D. Fla. 1995).

N. NATURAL RESOURCES DAMAGES11 (SECTION 107)

1. STATUTE

a. A natural resource damages claim is a statutory cause of action arising from “[a] injury to, destruction of, or loss of [b] natural resources [c] resulting from such a release [of a hazardous substance].” Section 107(a)(4)(c). See generally New Mexico v. General Elec. Co., 467 F.3d 1223 (10th Cir. 2006) (barring the use of state common law theories to obtain unrestricted money damages).

2. NATURAL RESOURCES

a. Natural resources: Section 101(16) defines “natural resources” as “land, fish, wildlife, biota, air, water, ground water, drinking water supplies, and other such resources belonging to, managed by, held in trust by, appertaining to, or otherwise controlled by the United States . . . , any State or local government, any foreign government, any Indian tribe, or, if such resources are subject to a trust restriction on alienation, any member of an Indian tribe.”

b. “Customarily, natural resource damages are viewed as the difference

between the natural resource in its pristine condition and the natural resource after the cleanup, together with the lost use value and the costs of assessment. As a residue of the cleanup action, in effect, [damages] are thus not generally settled prior to a cleanup settlement.” In re Acushnet River & New Bedford Harbor, 712 F. Supp. 1019, 1035 (D. Mass. 1989) (AVX litigation).

c. Congress deliberately excluded “purely private” property from the

definition of natural resources. Ohio v. United States Dep’t of Interior, 880 F.2d 432, 460 (D.C. Cir. 1989). However, resources need not be owned by the government to be deemed a “natural resource” under CERCLA. Id. “Rather, a substantial degree of government regulation, management or other form of control over property would be sufficient” to

11 Similar Federal claims for natural resource damages exist under Section 1002(b)(2)(A) of the Oil Pollution Act of 1990, codified at 33 U.S.C. § 2710(b)(2)(A); Section 311(f)(4)-(5) of the Clean Water Act, codified at 33 U.S.C. § 1321 (f)(4)-(5); Section 312 of the Marine Protection, Research, and Sanctuaries Act, codified at 16 U.S.C. § 1443; and the Park System Resources Protection Act, 16 U.S.C. § 19.


make the CERCLA natural resource damages provisions apply. Id. at 461.

3. ELIGIBILITY TO BRING NRD CLAIMS

a. Natural resource damages claims may be brought exclusively by State or Federal government trustees, or by designated trustees of Indian tribes. Section 107(a)(4)(c). EPA is not a trustee. Private entities may not bring CERCLA natural resource damage claims. Artesian Water Co. v. Gov’t of New Castle County, 851 F.2d 643, 649 (3d Cir. 1988); Doyle v. Town of Litchfield, 372 F. Supp. 2d 288, 296 (D. Conn. 2005); Nat’l Ass’n of Mfrs. v. United States, 134 F.3d 1095 (D.C. Cir. 1998).

b. Recovery of natural resource action costs can only be used to restore,

replace, or acquire equivalent natural resources. Section 107(f)(1). See Puerto Rico v. SS Zoe Colocotroni, 628 F.2d 652, 676 (1st Cir. 1980) (“[t]he ultimate purpose of any such remedy should be to protect the public interest in a healthy functioning environment and not to provide a windfall to the public treasury”).

4. NRD STATUTE OF LIMITATIONS (“SOL”)

a. Under Section 113(g)(1), which discusses natural resource damages actions, the United States must bring an action within three years after the later of the following:

(1) the date of the discovery of the loss and its connection with the

release in question, and

(2) the promulgation of Department of the Interior (DOI) regulations. The D.C. Court of Appeals held that the promulgation of the last DOI Regulation was in March 1987. Kennecott Utah Copper Corp. v. United States Dep’t of Interior, 88 F.3d 1191, 1213-14 (D.C. Cir. 1996). See also United States v. Montrose Chem. Corp., 104 F.3d 1507 (9th Cir. 1997).

b. If claim arises at a site which is listed on the NPL or which RA has been

initiated, SOL is three years from completion of remedy.

5. NRD ASSESSMENTS

a. Section 301(c) required the President to promulgate two types of regulations for assessment of NRD: (A) simplified procedures and (B) protocols for full assessments. DOI promulgated the Type A Rule which uses a computer model to calculate damages in 1987, at 43 C.F.R. §§ 11.40 -.41. DOI also promulgated the Type B Rule, 43 C.F.R. 11.60 - .84, amended at 53 Fed. Reg. 5166 (Feb. 22, 1988). In 1989, the D.C. Court of Appeals remanded both the Type A and B Rules for revisions consistent


with its opinion. See Ohio v. United States Dep’t of Interior, 880 F.2d 432 (D.C. Cir. 1989); Colorado v. United States Dep’t of Interior, 880 F.2d 481 (D.C. Cir. 1989).

b. DOI promulgated a revised Type B Rule on March 25, 1994, 59 Fed. Reg.

14262.12 The DOI regulations were substantially upheld in Kennecott Corp. Type A procedures were upheld in Nat’l Ass’n of Mfrs.

c. The DOI NRDA regulations define “injury” as “a measurable adverse

change, either long or short-term, in the chemical or physical quality or the viability of a natural resource.” 43 C.F.R. § 11.14(v). The regulations allow proof of injury by evidence either of an adverse change in a given natural resource or of the exceedance of a regulatory standard, such as water quality standards, see 43 C.F.R. § 11.62, whereby the exceedance of such a standard is per se injury.

d. Use of DOI regulations is optional for trustees, but following the

regulations provides for a rebuttable presumption of validity. See Utah v. Kennecott Corp., 14 F.3d 1489 (10th Cir.), cert. denied 513 U.S. 872 (1994).

6. MEASUREMENT OF DAMAGES

a. Damages may be measured as the cost of directly restoring the injured resource to “baseline” – the physical, chemical, and biological condition the resource would have been in absent the release. 43 C.F.R. § 11.14(e). Alternatively, a trustee may seek to replace or acquire natural resources “equivalent” to those that have been lost, in which case the injury is valued as the cost of acquisition, habitat improvement, or the like, sufficient to return equivalent services, in both human and ecological terms, to those that have been lost. “Congress intended the damage assessment regulations to capture fully all aspects of the loss.” Ohio v. United States Dep’t of Interior, 880 F.2d at 463.

b. At a minimum, liability for natural resource damages includes the costs of

restoring, replacing, or acquiring the equivalent of an affected resource, injury assessment and restoration planning costs, and indirect costs necessary to support such activities. See 42 U.S.C. § 107(f)(1); 43 C.F.R. § 11.83(b)(1). Generally, the cost of restoration or replacement does not capture the full extent of the public’s loss. The ecological services and public use and enjoyment provided by injured resources lost from the date of the injury until the date the services those resources provided are fully returned to their baseline conditions may also be recovered. See 42 U.S.C.

12 NOAA also proposed a rule of NRD assessment of OPA damages at 61 Fed. Reg. 440 (Jan. 5, 1996). The D.C. Court of Appeals substantially upheld that regulation in General Elec. Co. v. United States Dep’t of Commerce, 128 F.3d 767 (D.C. Cir. 1997).


§ 9607(f)(1); 43 C.F.R. § 11.83(c)(I). Damages for these losses, known as “interim losses,” are also recoverable. Ohio v. United States Dep’t of Interior, 880 F.2d at 454 n.34.

O. JUDICIAL REVIEW

1. EXCLUSIVE FEDERAL JURISDICTION AND PREEMPTION

a. Section 113(b) provides that, subject to Section 113(h), the federal district

courts have exclusive original jurisdiction over all “controversies” arising under the Act.

b. Courts have found that “state law contribution claims for CERCLA

response costs conflict with CERCLA contributions claims and therefore are preempted.” Niagara Mowhak, 596 F.3d 112, 238 (2nd Cir. 2010). See also PMC, Inc. v. Sherwin-Williams Co., 151 F.3d 610-618 (7th Cir. 1998). State law indemnification claims are also preempted by CERCLA. Niagra Mohawk, 596 F.3d at 139.

2. TIMING OF REVIEW OF RESPONSE ACTIONS

a. Section 113(h) specifically controls the timing of judicial review, and divests the federal courts of jurisdiction to review challenges to: “removal or remedial action selected under Section 9604 . . ., or to review any order issued under Section 9606(a) . . . in any action except one of the following:

(1) An action under Section 9607 . . . to recover response costs or

damages or for contribution. (2) An action to enforce an order issued under Section 9606(a) . . . or

to recover a penalty for violation of such order. (3) An action for reimbursement under Section 9606(b)(2) . . . . (4) An action under Section 9659 [citizens' suit] . . . alleging that the

removal or remedial action taken under Section 9604 . . . or secured under Section 9606 . . . was in violation of any requirement of this chapter. Such an action may not be brought with regard to a removal where a remedial action is to be undertaken at the site.

(5) An action under Section 9606 . . . in which the United States has

moved to compel a remedial action.”

b. NPL Listings. In United States v. ASARCO Inc., the Ninth Circuit Court


of Appeals held that it lacked jurisdiction to review the breadth of a “site” listing on the NPL because the NPL listing is a regulation, and that exclusive jurisdiction to review regulations under CERCLA lies with the D.C. Circuit. 214 F.3d 1104 (9th Cir. 2000); see, e.g., Section 113(a).

3. PRE-ENFORCEMENT REVIEW

a. Pre-Implementation and Enforcement Challenges Barred. Section 113(h) bars pre-implementation and pre-enforcement challenges to removal or remedial actions under CERCLA. Thus, subject to five enumerated exceptions, federal court jurisdiction is precluded under any law for a challenge to any EPA response action prior to the action's completion, or to the filing of an enforcement action. See, e.g., Oil, Chem. & Atomic Workers Int’l Union v. Richardson, 214 F.3d 1379, 1382 (D.C. Cir. 2000) (no NEPA jurisdiction over activity within CERCLA’s definition of “removal”); Boarhead Corp. v. Erickson, 923 F.2d 1011, 1021-22 (3d Cir. 1991) (no jurisdiction under the National Historic Preservation Act); Schalk v. Reilly, 900 F.2d 1091, 1095 (7th Cir. 1990), cert. denied, 111 S. Ct. 509 (1990) (no jurisdiction under RCRA or NEPA); North Shore Gas Co. v. Envtl. Prot. Agency, 930 F.2d 1239, 1244-45 (7th Cir. 1991) (no jurisdiction to review challenges under RCRA or NEPA); Southern Pines Ass’ns. v. United States, 912 F.2d 713, 716 (4th Cir. 1990) (CERCLA allows “EPA to act to address environmental problems quickly and without becoming entangled in litigation”); Frey v. Envtl. Prot. Agency, 270 F.3d 1129 (7th Cir. 2001) (Section 113(h) is not technically a subject matter jurisdictional bar, but rather a prerequisite to relief, discusses when response action is completed for purposes of bar); Reynolds v. Lujan, 785 F. Supp. 152, 153-54 (D.N.M. 1992) (commencement of CERCLA action at federal facility listed on the NPL barred suit under citizen suit provision of RCRA); Neighborhood Toxic Cleanup Emergency v. Reilly, 716 F. Supp. 828, 834-35 (D.N.J. 1989) (Section 113(h)(4) prohibits review through citizen suits until the remedial action selected is completed); New Mexico v. General Elec. Co., 467 F.3d 1223, 1249 (10th Cir. 2006) (state NRD claim is “in all respects, a challenge to an EPA -ordered remediation” and barred); Cannon v. Gates, 538 F.3d 1328 (10th Cir. 2008) (jurisdictional bar removal or remedial actions does not prevent a challenge to a completed remedial plan).

b. However, in Cabot Corp. v. United States Envtl. Prot. Agency, the Eastern District of Pennsylvania suggested in dicta that while a suit brought by PRPs challenging a remedial plan was subject to dismissal under Section 113(h)(1), citizens' challenges to the plan's adequacy before implementation might arguably be permitted under Section 113(h)(4). 677 F. Supp. 823, 828-29 (E.D. Pa. 1988). Other courts have specifically rejected the reasoning in Cabot. See, e.g., Neighborhood Toxic Cleanup Emergency, 716 F. Supp. at 834-35. But see United States v. Princeton Gamma-Tech, Inc., 31 F.3d 138, 142-43 (3d Cir. 1994) (Court had


jurisdiction under Section 113(h)(1) and (4) to consider remedy challenge where alleged continuance of project would cause irreparable harm to public health and the environment). The Third Circuit reversed this position as to Section 113(h)(4), however, in Clinton County Comm’rs v. United States Envtl. Prot. Agency, 116 F.3d 1018, 1025 (3d Cir. 1997) (en banc) cert. denied sub nom., Arrest the Incinerator Remediation, Inc. v. EPA, 522 U.S. 1045 (1998). Finally, in APWU v. Potter, the Court dismissed the challenge to the postal services’ cleanup of anthrax, holding that USPS was authorized to take removal action and Section 113(h) applied. 343 F.3d 619, 624 (2d Cir. 2003). But see Fort Ord Toxics Project, Inc. v. California Envtl. Prot. Agency, 189 F.3d 828, 833-34 (9th Cir. 1999) (determining that Section 113(h) does not bar review of remedial actions conducted by federal agencies under Section 120 authority); General Elec. Co. v. EPA, 360 F.3d 188, 191-92 (D.C. Cir. 2004) (constitutional challenge to EPA § 106 order may be considered).

c. A remedial investigation/feasibility study constitutes a removal or remedial action so that Section 113(h) bars judicial review. Razore v. Tulalip Tribes of Wash., 66 F.3d 236, 239 (9th Cir. 1995).

d. In United States v. Colorado, the Tenth Circuit held that a state suit

seeking to enforce state hazardous waste procedural requirements at a federal facility on the NPL was not barred by Section 113(h). 990 F.2d 1565, 1576 (10th Cir. 1993), cert. denied, 510 U.S. 1092 (1994). The court relied upon Section 114(a), which provides that “[n]othing in [CERCLA] shall be construed as preempting any state from imposing any additional liability or requirements with respect to the release of hazardous substances within such state.” 42 U.S.C. 9614(a). The court impliedly found that there was no inconsistency between what the state was seeking to require and the ongoing CERCLA process. United States v. Colorado, 990 F.2d at 1577 (emphasis added). The case leaves open the question of whether CERCLA would preempt, or Section 113(h) would bar jurisdiction to hear, an attempt by a state to compel a cleanup action that was irreconcilably inconsistent with an action being undertaken pursuant to CERCLA.

4. CITIZEN SUITS

a. Violations of CERCLA Requirements. Section 310(a)(1) allows citizens (including states) to bring suit against the United States or other persons “alleged to be in violation of any standard, regulation, condition, require-ment, or order which has become effective” under CERCLA, including the provisions of a Section 120 agreement.

b. Mandatory Duties. Section 310(a)(2) allows citizens to sue the “President

or any other officer of the United States . . . where there is alleged a failure” to perform any non-discretionary act or duty, including acts or


duties under Section 120 agreements.

c. Notice. Sixty day notice is a jurisdictional requirement for any suit under Section 310. Boarhead, 923 F.2d at 1019 n.13.

5. INTERVENTION STANDARD

a. Section 113(i) provides for intervention in any proceeding under CERCLA when the person seeking to intervene shows:

an interest relating to the subject of the action and is so situated that the disposition of the action may, as a practical matter, impair or impede the person's ability to protect that interest, unless the President or the State shows that the person's interest is adequately represented by existing parties.

b. CERCLA confers a broad, but not unconditional right to intervene, which

mirrors the language in FRCP 24(a). See United States v. Alcan Aluminum, Inc., 25 F.3d 1174, 1185-86 (3d Cir. 1994); United States v. Union Elec. Co., 64 F.3d 1152, 1161 (8th Cir. 1995), aff’d 132 F.3d 422 (8th Cir. 1997) (allowed non-settler to intervene if applicant “is or may be bound by the judgment in the action”). Compare U.S. v. Acorn Eng’g Co., 221 F.R.D. 530, 534-35 (C.D. Cal. 2004) (PRP lacked right to intervene), with United States v. City of Glen Cove, 221 F.R.D. 370, 373 (E.D. N.Y. 2004) (PRP has right to intervene).

6. SOVEREIGN IMMUNITY

a. CERCLA defines a "person" to include the United States government. See Section 101(21).

b. CERCLA expressly provides that the federal government can be held

liable. See Pennsylvania v. Union Gas Co., 491 U.S. 1, 10 (1989), overruled on other grounds by Seminole Tribe of Fla. v. Florida, 517 U.S. 44 (1996); FMC Corp. v. United States Dep’t of Commerce, 29 F.3d 833, 843 (3d Cir. 1994) (en banc) (holding that the federal government can be considered an “operator” and be subject to CERCLA liability). Cf. City of Bangor v. Citizens Communications Co., No. Civ. 02-183-B-S, 2004 WL 483201 at *12 (D. Me. Mar. 11, 2004) (holding that pursuant to sovereign immunity under the Eleventh Amendment, states cannot held liable under CERCLA). But see United States v. Vertac Chem. Corp., 46 F.3d 803, 810 (8th Cir. 1995), cert. denied by Hercules Inc. v. United States, 515 U.S. 1158 (1995) (holding that nationwide control over supply of raw materials during wartime does not make government liable); East Bay Mun. Util. Dist. v. United States Dep’t of Commerce, 142 F.3d 479, 484-85 (D.C. Cir.


1998) (holding that the federal government is not liable for WWII effort despite regulatory control of private zinc mine production).

c. Waiver of sovereign immunity, Section 120(a) (emphasis added):

(1) In General. § 120(a)(1):

Each department, agency, and instrumentality of the United States (including the executive, legislative, and judicial branches of government) shall be subject to, and comply with, this chapter in the same manner and to the same extent, both procedurally and substantively, as any nongovernmental entity, including liability under Section 9607 of this title. Nothing in this section shall be construed to affect the liability of any person or entity under Sections 9606 and 9607 of this title.

(2) Application of Requirements to Federal Facilities. § 120(a)(2):

All guidelines, rules, regulations, and criteria which are applicable to preliminary assessments carried out under this chapter for facilities at which hazardous substances are located, applicable to evaluations of such facilities under the National Contingency Plan, applicable to inclusion on the National Priorities List, or applicable to remedial actions at such facilities shall also be applicable to facilities which are owned or operated by a department, agency, or instrumentality of the United States in the same manner and to the extent as such guidelines, rules, regulations, and criteria are applic-able to other facilities. No department, agency, or instrumentality of the United States may adopt or utilize any such guidelines, rules, regulations, or criteria which are inconsistent with the guide-lines, rules, regulations, and criteria established by the Administrator under this chapter.

(3) Exceptions. Section 120(a)(3)

This subsection shall not apply to the extent otherwise provided in this section with respect to applicable time periods. This subsection shall also not apply to any requirements relating to bonding, insurance, or financial responsibility. Nothing in this chapter shall be construed to require a State to comply with Section 9604(c)(3) of this title in the case of a facility which is owned or operated by any department, agency, or instrumentality of the United States.

(4) Application of State laws at Non-NPL Facilities.

Section 120(a)(4) (as amended)


State laws concerning removal and remedial action, including State laws regarding enforcement, shall apply to removal and remedial action at facilities owned or operated by a department, agency, or instrumentality of the United States or facilities that are the subject of a deferral under subsection (u)(3)(c) of this section when such facilities are not included on the National Priorities List. The preceding sentence shall not apply to the extent a State law would apply any standard or requirement to such facilities which is more stringent than the standards and requirements applicable to facilities which are not owned or operated by any such department, agency, or instrumentality.

d. Claims Based on Agency Regulatory Activities. Courts have consistently

held that when the EPA under CERCLA (or the Coast Guard under the Oil Pollution Act) is carrying out their regulatory authority to implement the cleanup program, there is no waiver of immunity to subject the agency to liability as a PRP. See United States v. Am. Color & Chem. Corp., 858 F. Supp. 445, 449 (M.D. Pa. 1994); United States v. Atlas Minerals & Chems., Inc., 797 F. Supp. 411, 420 (E.D. Pa. 1992); In re Paoli R.R. Yard PCB Litigantion, 790 F. Supp. 94 (E.D. Pa. 1992), aff'd, 980 F.2d 724 (3d Cir. 1992); United States v. Skipper, 781 F. Supp. 1106 (E.D.N.C. 1991); United States v. Azrael, 765 F. Supp. 1239 (D. Md. 1991); United States v. Western Processing Co., 761 F. Supp. 725, 729-30 (W.D. Wash. 1991). But see United States v. Iron Mountain Mines, Inc., 881 F. Supp. 1432, 1445 (E.D. Cal. 1995) (distinguishing between sovereign actions in a regulatory, as opposed to business capacity).

1. Cases involving other agencies carrying out non-cleanup regulatory authorities have found there to be a waiver of sovereign immunity. See FMC Corp. v. United States Dep’t of Commerce, 29 F.3d 833, 838-39 (3d Cir. 1994) (reaffirming panel decision holding the United States liable as operator of a facility that government closely regulated during World War II; the en banc court deadlocked with regard to whether the U.S. was also subject to arranger liability); see also Burlington N. & Santa Fe Ry. Co. v. United States, 129 S. Ct. 1870, 1879 (2009) (predicating arranger liability upon the existence of an intent to dispose).

2. Actual government control is required to establish government liability under CERCLA. See East Bay Mun. Util. Dist. v. United States Dep’t of Commerce, 142 F.3d 479, 486 (D.C. Cir. 1998) (U.S. not entitled to sovereign immunity but not liable as operator of mine because facts did not establish “actual government control”); United States v. Shell Oil Co., 281 F.3d


812 (9th Cir. 2002) (holding that CERCLA did waive sovereign immunity, but reversed district court holding U.S. liable as a generator as a result of exercising its pervasive World War II regulatory authority); Cadillac Fairview/California v. Dow Chem. Co., 299 F.3d 1019 (9th Cir. 2002) (finding the U.S. liable for World War II activity due to indemnification agreement).

e. Fifth Amendment Takings. If money damages are asserted against the

United States, the exclusive remedy is an action against the United States in the U.S. Court of Federal Claims under the Tucker Act, 28 U.S.C. 1491(a)(1), when the claim exceeds $10,000. Heller, Ehrman, White, & MacAuliffe v. Babbitt, 992 F.2d 360, 361-64 (D.C. Cir. 1993); accord Clopton v. Dep’t of Navy, No. 95-5362, 1996 WL 680189 at *1 (D.C. Cir. Oct. 30, 1996). See also Hendler v. United States, 175 F.3d 1374, 1378 (D.C. Cir. 1999); Bublitz v. Brownlee, 309 F. Supp. 2d 1, 6 (D.D.C. 2004).

f. Supremacy Clause. City cannot stop a federally-directed action by serving

PRP during CERCLA remedy with cease and desist order pursuant to zoning ordinance. United States v. City & County of Denver 100 F.3d 1509 (10th Cir. 1996); Esso Standard Oil v. Rodriguez-Perez, 455 F.3d 1, 5 (1st Cir. 2006).

g. State Sovereign Immunity. The statutory definition of “person” also

includes a state. The Supreme Court, however, held that Congress cannot use its Commerce Clause power to abrogate states’ sovereign immunity under the Eleventh Amendment, and Congress could not authorize suits by private parties against non-consenting states. Seminole Tribe of Fla. v. Florida, 517 U.S. 44, 60 (1996) (overruling Pennsylvania v. Union Gas Co., 491 U.S. 1 (1989)). In Burnette v. Carothers, 192 F.3d 52, 56-57 (2d Cir. 1999), the Court held that Eleventh Amendment sovereign immunity also barred actions against state agencies and officials. See also Fox v. State Univ. of New York, 497 F. Supp. 2d 446, 450 (E.D.N.Y. 2007). But see In re Dairy Mart v. Nickel, 411 F.3d 367, 374-75 (2d Cir. 2005).

h. Medical Monitoring Costs. Sections 301(a) and 120 do not provide cause

of action to compel the government to pay medical monitoring costs. Pritkin v. United States Dep’t of Energy, 47 F. Supp. 2d 1225, 1230-31 (E.D. Wash. 1999), aff’d, 254 F.3d 791 (9th Cir. 2001). See also Struhar v. City of Cleveland, 7 F. Supp. 2d 948, 952-53 (N.D. Ohio 1998).

7. CERCLA AND BANKRUPTCY LAW

a. Subject Matter

(1) The following discussion is extracted from U.S. v. Gurley. 434 F.3d 1064, 1067-68 (8th Cir. 2006). Under 28 U.S.C. § 1334(b), district


courts have jurisdiction over bankruptcy cases. District courts, however, need not adjudicate these cases; they may refer them to the federal bankruptcy courts: “Each district court may provide that any or all cases under title 11 and any or all proceedings arising under title 11 shall be referred to the bankruptcy judges for the district.” 28 U.S. C. § 157(a).

(2) Bankruptcy courts may hear all bankruptcy cases and their “core proceedings.” Bankruptcy court judges “may hear and determine all cases under title 11 and all core proceedings arising under title 11, or arising in a case under title 11, referred under subsection (a) of this section, and may enter appropriate orders and judgments, subject to review under section 158 of this title.” Id. § 157(b)(1). Core proceedings include “allowance or disallowance of claims against the estate.” Id. § 157(b)(2)(B). Adjudication of the filing of and objection to a proof of claim in a bankruptcy case is a core proceeding arising under Title 11. In re Wood, 825 F.2d 90, 97 (5th Cir. 1987) (“If the proceeding is one that would rise only in bankruptcy, it is also a core proceeding; for example, the filing of a proof of claim or an objection to the discharge of a particular debt.”); accord In re Wolverine Radio Co., 930 F.2d 1132, 1141 (6th Cir. 1991).

(3) While district courts may refer bankruptcy cases to bankruptcy courts,

when “resolution of the proceeding requires consideration of both title 11 and other laws of the United States regulating organizations or activities affecting interstate commerce,” the district court “shall, on timely motion of a party,” withdraw reference of the proceedings to the bankruptcy court. 28 U.S.C. § 157(d). Withdrawing the reference and returning adjudication of a proof of claim to the district court does not change the proceeding’s bankruptcy nature or affect the district court’s subject matter jurisdiction granted under 28 U.S.C. § 133(b). See, e.g., In re Nat’l Gypsum Co., 134 B.R. 188, 192-93 (N.D. Tex.1991).

(4) CERCLA proof of claim are no exception to this rule. The Bankruptcy

Code defines a “claim” in part as a “right to payment, whether or not such right is reduced to judgment, liquidation, unliquidated, fixed, contingent, matured, unmatured, disputed, legal, equitable, secured, or unsecured.” 11 U.S.C. § 101(5)(A). The Code also provides any creditor may file a proof of claim. Id. § 501(A). The government’s proof of claim fits these broad definitions.

b. Priority of Environmental Claims in Bankruptcy

(1) Environmental claims have been found to have administrative

expense priority in bankruptcy based on at least two legal rationales. The first involves debtors’ obligations under non-


bankruptcy law for property that they own or have an interest in. The leading Fifth Circuit case is In re H.L.S. Energy Co. 151 F.3d 434, 436 (5th Cir. 1998) (holding that the State of Texas was entitled to administrative expense priority under 11 U.S.C. §§ 503(b)(1)(A), 507(a)(2), to satisfy the bankrupt estate’s post-petition environmental obligation to plug unproductive oil wells). See also In re American Coastal Energy Inc., 399 B.R. 805, 808 (Bankr. S.D. Tex. 2009). Four other Courts of Appeal agree with the Fifth Circuit, entitling the Government to administrative expense priority for response costs incurred post-petition with respect to property of the bankruptcy estate, since the trustee or debtor-in-possession has an obligation to manage its property in accordance with applicable non-bankruptcy law. See Pennsylvania v. Conroy, 24 F.3d 568, 569-70 (3d Cir. 1994) (Alito, J.); In re Chateaugay Corp., 944 F.2d 997, 1009-10 (2d Cir. 1991); In re Wall Tube & Metal Prods. Co., 831 F.2d 118, 123-24 (6th Cir. 1987); In re Smith-Douglass, Inc., 856 F.2d 12, 17 (4th Cir. 1988).

(2) A second rationale for administrative expense priority for

environmental claims is where environmental harm or liability results off-site from the debtor’s post-petition acts or property. The debtor has administrative expense liability for the costs of responding to the environmental problems and liabilities resulting from its own property or acts post-petition. This kind of administrative expense liability is based on the reasoning of the Supreme Court in Reading Co. v. Brown. 391 U.S. 471 (1968). Under this rationale, Debtors can also incur administrative expense liability through fines and penalties for violations of environmental laws. See, e.g., In re Charlesbank Laundry, Inc., 755 F.2d 200, 202 (1st Cir. 1985) (fine incurred by Chapter 11 debtor for failing to abate nuisance was an administrative expense); but see In re Motel Invs. of Christiansburg LLC, 307 B.R. 536, 538 (Bankr. W.D. Va. 2004) (distinguishing Charlesbank Laundry by bifurcating intentional and negligent acts).

(3) Environmental claims can also have priority as secured claims,

including sites where EPA has perfected a lien for its cleanup costs, monies held in trust for cleanup obligations, setoffs for tax refunds, and insurance proceeds from insurance coverage for the contaminated sites.

c. Consent Decrees, Administrative Orders, Injunctions, Regulatory

Obligations, and Bankruptcy

(1) A debtor-in-possession is required to comply with work requirements arising under court orders, administrative orders,


injunctions, and other environmental regulatory requirements imposed by law. During a bankruptcy case, the police and regulatory exception to automatic stay permits governmental units to continue with any police or regulatory actions or proceedings, “including the enforcement of judgment other than money judgments.” 11 U.S.C. § 362(b)(4). Courts making this determination consider whether: (1) the order is within the framework of what is traditionally considered a recovery of money damages for a sum certain; and (2) the order seeks performance of remedial acts to prevent potential future harm and obtain compliance with law. See In re Commonwealth Oil Ref. Co., 805 F.2d 1175, 1186-88 (5th Cir. 1986); Penn Terra Ltd. v. Dep’t of Envtl. Resources, 733 F.2d 267, 275-78 (3d Cir. 1984); United States v. Oil Transport Co., 172 B.R. 834, 836 (E.D. La. 1994); United States v. ILCO, Inc., 48 B.R. 1016, 1022-23 (N.D. Ala. 1985).

(2) When a Plan of Reorganization is confirmed, the Reorganized

Debtors must still comply with injunctive obligations and work requirements. Since the debtor does not have the right to pay money and refuse to deal with ongoing releases of its hazardous wastes threatening public health and safety, these injunctive obligations are not dischargeable claims. In re Chateaugay Corp., 944 F.2d 997, 1008 (2d Cir. 1991). See also In re Torwico Elecs., Inc., 8 F.3d 146, 151 (3d Cir. 1993) (order was not a dischargeable claim because State sought cleanup rather than money and the release of hazardous wastes was “threatened and ongoing,” and was “an attempt to prevent additional damage”); AM Int’l, Inc. v. Datacard Corp., 106 F.3d 1342, 1348 (7th Cir. 1997); United States v. Apex Oil Co., 438 F. Supp. 2d 948, 951-52 (S.D. Ill. 2006) (holding that EPA request for injunction under RCRA § 7003 to cleanup groundwater plume near former oil refinery was not a dischargeable claim in bankruptcy), aff’d on reconsideration No. 05-CV-242-DRH, 2006 WL 2375014 (S.D. Ill. Aug. 15, 2006); New York v. Mirant New York, Inc., 300 B.R. 174, 177-78 (S.D.N.Y. 2003) (determining that debtor must comply with injunctive relief requirements of Consent Decree).

d. Environmental Liabilities Are Estimated Based on the Legal Rules Which

Govern CERCLA Liability

The Supreme Court recently restated the well-settled rule that bankruptcy courts must look to non-bankruptcy law in evaluating claims in bankruptcy, Travelers Cas. & Sur. Co. v. Pac. Gas & Elec. Co., 549 U.S. 443 (2007). See generally In Re Nat’l Gypsum Co., 139 B.R. 397, 414-15 (N.D. Tex. 1992) (CERCLA claims


must be estimated under the usual rules under CERCLA governing joint and several liability and divisibility).

P. OBLIGATIONS AT FEDERALLY-OWNED FACILITIES

1. FEDERAL AGENCY HAZARDOUS WASTE ASSESSMENT AND EVALUATION: SECTION 120(d)

a. EPA is required to establish a public "docket," published in the Federal Register and updated every six months, listing the information required of every federal agency and/or federal facility under RCRA §§ 3005, 3010, and 3016, or CERCLA § 103. These sections of RCRA and CERCLA essentially require federal agencies to report all facilities and activities whereby the agency generated, transported, treated, stored or disposed of hazardous waste, whether currently or in the past, or where there has been a release of a reportable quantity of hazardous substances. EPA must then take steps to assure that a preliminary assessment is conducted in accordance with NCP to determine which sites should be listed on the NPL. CERCLA § 120(d). See Conservation Law Found. of New England, Inc. v. Reilly, 755 F. Supp. 475, 476 (D. Mass. 1991).

b. Required Federal Action at NPL Facilities: Section 120(e)

(1) RI/FS: Within six months of NPL listing the agency must

commence the Remedial Investigation and Feasibility Study, (RI/FS) pursuant to a timetable set by EPA and the relevant State.

(2) ROD: After completion of the RI/FS the lead agency must issue a

Record of Decision choosing preferred remedy; EPA either concurs in agency remedy choice or chooses a different remedy. Section 120(e)(4).

(3) FFA/IAG: Not later than six months after a federal facility’s

completion of EPA review of RI/FS (which culminates in issuance of the Record of Decision (“ROD”), the agency must enter into an interagency agreement ("IAG" or "Federal Facility Agreement (‘FFA’)”) with EPA, and in some instances the federal facility and EPA include the state in the IAG for a three-party agreement.

(a) Generally the FFA/IAG will be negotiated and signed prior

to commencement of the RI/FS in order to provide a comprehensive guide and agreement concerning how the entire cleanup will progress. EPA has negotiated "model" FFA/IAGs with DOD and DOE.

(b) Private PRPs may also be included in the agreements if


they are carrying out a portion of the response action.

(c) Government decision to act under FFA or IAG is considered a remedial action decision barred from pre-enforcement review by Section 113(h). World Works I, Inc. v. United States Dep’t of Army, 22 F. Supp. 2d 1204, 1207 (D. Colo. 1998).

(4) Starting Work: Within fifteen months of completing the RI/FS

(i.e., issuance of the ROD), the lead agency must commence “substantial continuous physical on-site remedial action.” Section 120(e)(2).

2. FEDERAL PROPERTY TRANSFERS: § 120(h) (as amended)

a. Notice. “[W]henever any department, agency, or instrumentality of the United States enters into any contract for the sale or other transfer of real property which is owned by the United States and on which any hazardous substance was stored for one year or more, known to have been released, or disposed of, the head of such department, agency, or instrumentality shall include in such contract notice of the type and quantity of such hazardous substance and notice of the time at which such storage, release, or disposal took place, to the extent such information is available on the basis of a complete search of agency files.” Section 120(h)(1). Proper form of notice is set forth in regulations at 40 C.F.R. Part 373 (1992). See generally Hercules Inc. v. United States Envtl. Prot. Agency, 938 F.2d 276 (D.C. Cir. 1991) (reviewing EPA rule on federal notice and covenant requirements when transferring real property contaminated by hazardous substances).

b. Contents of Certain Deeds. - In accordance with EPA regulations at 40

C.F.R. Part 373, any deed to transfer real property owned by the United States on which “any hazardous substance was stored for one year or more, known to have been released, or disposed of,” must contain:

(1) a notice of the type and quantity of such hazardous substances,

notice of the time at which such storage, release, or disposal took place, and a description of the remedial action taken, if any;

(2) a covenant warranting that (I) all remedial action necessary to

protect human health and the environment with respect to any such substance remaining on the property has been taken before the date of such transfer, and (II) any additional remedial action found to be necessary after the date of such transfer shall be conducted by the United States; and

(3) a clause granting access if remedial or corrective action is


necessary.

d. Potentially Responsible Party. The requirements of the covenant shall not apply in any case in which the person or entity to whom the property is transferred is a potentially responsible party with respect to such real property. These requirements are also not applicable if the property, to be closed or realigned, is leased and certain other conditions are met.

e. Deferral. EPA, with concurrence of State Governor, may defer requirements of remedial action following certain required findings in Section 120(h)(3)c). Such a deferral does not change the obligations of the Federal Agency Section 120(h)(3)(c)(iv).

f. Warranty. When necessary cleanup work is done, the U.S. will give a

warranty to the transfer. Section 120(h)(3)(c)(iii). See also Conservation Law Found. v. Dep’t of Air Force, 864 F. Supp. 265 (D. N.H. 1994).

3. THE COMMUNITY ENVIRONMENTAL RESPONSE FACILITIES ACT ("CERFA"), §§ 120(h)(4)-(5):

a. Scope. CERFA applies to any federal property “on which the United States plans to terminate federal government operations” except certain Department of Defense (DOD) property subject to base closure legis-lation; the amendments clarify somewhat the extent of the due diligence search.

b. Petroleum Products. The agency must, in addition to the other

requirements of Section 120, identify property where petroleum products were treated, stored, disposed of etc., and six months prior to any “termination of operations” must identify portions of the property that are not contaminated;

c. EPA Concurrence. For uncontaminated areas that are part of parcels listed

on the NPL, the agency must seek concurrence from EPA with the delineation of uncontaminated property;

d. State Concurrence. For such property that is NOT listed on the NPL, the

concurrence must be sought from “the appropriate state official;” concurrence is presumed if not denied within 90 days;

e. When “All” Remedial Action Has Been Taken. CERFA amends Section

120(h)(3) by defining when “all remedial action has been taken” as the point when “the construction and installation of an approved remedial design has been completed, and the remedy has been demonstrated to the Administrator to be operating properly and successfully.”

f. Leases. CERFA requires federal agencies to notify the state of any lease


of the property the term of which extends past the date federal operations are terminated. Section 2834 of the 1996 Defense Authorization Act amended Section 120(h)(3) to specifically allow DOD to enter into long-term leases for contaminated property, subject to certain conditions.

g P.L.104-106 and 104-201 (1999) added CERCLA Sections 120(a)(4), (d),

and (h), which excepted real property leases from covenant requirements but directed federal agency leasing property at installations approved for closure or realignment to make a determination that the lease use would be consistent with protection of human health and the environment and that the United States would take all necessary environmental remedial action.

Documents

CERCLA OVERVIEW - Canadian Bar · PDF fileCERCLA OVERVIEW. A. INTRODUCTORY/OVERVIEW ... Love Canal and the Poisoning of America, The Atlantic Monthly, Dec 1979 ... The NCP sets forth