Environmental Statute Jurisdiction over “Substances”

Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA)

• Enacted in 1980

  • A race to sign before President Ronald Reagan inauguration

• Focus on substances, including but not limited to waste

  • “waste” definition most relevant to RCRA

• Covers release into any medium: air, water, soil

• CERCLA regulates places (facilities) that are polluted, whereas CAA, CWA, RCRA regulate persons who pollute them

  • CERCLA does find the persons responsible for polluting the place
    

Review: CERCLA & RCRA Compared

• CERCLA

  • “Backward Looking”

  • Released hazardous substances

  • Philosophy - remediation

• RCRA

  • Current hazardous waste 

    • waste is a status: Is it waste?

    • Is the waste hazardous?

  • Philosophy - Tracking and management (“cradle to grave”)

    • Keeping tabs, preventing release into environment

CERCLA Countermands Common Law Principles

Countermands many concepts of Common Law

• Does not use a negligence standard (applies strict liability)

• Contract Law:  parties can shift liability to each other, but cannot escape liability to government

  • Example:  purchase contract releases seller of liability, indemnification

• Criminal mens rea (intent) is expanded

• Breaks through concept of the “corporate veil” which shields personal liability

• Countermands elements of bankruptcy law

CERCLA Structure
(4 basic elements)

1.   EPA authority to collect information and inspect facilities    (§102)

2.   EPA authority to respond and clean up:  National Contingency Plan (NCP) (§105)

3.   Money for clean up: The Superfund (Hazardous Substance Response Trust Fund)

4. Enforcement and Liability scheme (§107)

4.1   Defenses to liability (relief from strict liability)

CERCLA Definitions

• Facility

  • Structures, also land and water where release has occurred

  • Pipes, rolling stock, aircraft, pond, pit, lagoon, etc.

• Release

  • Leaking, pumping, pouring, emitting, dumping, leaching, etc.

  • Includes abandonment of barrels, tanks, storage containers

  • Both willful and inadvertent (strict liability)

  • Does not include asbestos (residential, business), natural substances in unaltered form, deterioration of water supply systems

CERCLA Definitions

• Hazardous substances

  • Very broad

  • Categorically includes those substances regulated (C.F.R.) under RCRA (hazardous waste), CWA (toxic effluent), CAA (HAP emissions), and TSCA (manufactured toxics)

  • Exceptions include petroleum, pesticide applications, and nuclear

    • Though releases during petroleum refining and manufacture of pesticides are subject to CERCLA (non-nuclear only)

• Potentially responsible party (PRP)

  • Can include current and former owners and operators, arrangers, transporters

  • Joint and several liability

    • Each PRP 100% responsible (identify RP for ultimate remediation costs)

    • PRPs fight to allocate liability between themselves

1. EPA rules define substances for clean up

• §102 directs EPA to issue regulations designating as “hazardous” which if released to environment pose “substantial danger” to human health or human welfare or the environment

• §101 incorporates substances regulated under CWA, RCRA, CAA, and TSCA

Summary:  CERCLA Regulates
Chemical Substances

Information and inspection

• Any person in charge of a facility must report a release immediately to EPA’s National Response Center (§103)

  • Local governments and other persons may report

  • CFR Regulations define “reportable quantity” per substance

• Information used to create list of ‘problem sites’ 

• EPA may request information (§104)

  • If do not comply, subject to treble damages under §107 recovery

• EPA may inspect facility to investigate and take samples
  

2. Scope and Implementation of Response Actions

1. Short-term emergency removal (defined§101[23])

   • Immediate risk (may include non-NPL sites)

2. Long-term remediation (defined§101[24])

   • More expensive, NPL sites only

• Scope:  “remove or arrange for removal of, and provide for remedial action relating to such hazardous substance, pollutant or contaminant… [deemed] necessary to protect human health or welfare or the environment” (§104)

• Both removal and remediation are done in compliance with National Contingency Plan (NCP) Process (40 CFR Part 300)
  

National Contingency Plan (NCP) Process (§105)

• Regulations to guide EPA hazardous substance response and cleanup (40 C.F.R. §300.700)

  1. Site investigation and analysis of remedial alternatives;

  2. Compliance with NCP regulations for clean up methods

  3. Public comment

     • Not required for removal actions (immediate threat)

  4. Cost-effective response

• Where EPA fails to comply with NCP, PRPs not responsible for clean up costs
  

National Contingency Plan (NCP)(40 C.F.R. Part 300, Subpart E)

• EPA compiles list of priority sites and potentially responsible parties (PRPs)

• Information is stored in the Comprehensive Environmental Response Compensation and Liability Information System (CERCLIS)

• EPA makes preliminary site assessments to determine threat to health and environment

• EPA quantifies potential risks using the Hazard Ranking System (HRS) for numerical score of toxicity, concentration, etc.

• EPA uses HRS to prioritize sites on National Priorities List (NPL)

• Ranking determines order of cleanup with funds from The Superfund

• 
  

States Role in Cleanup
(40 C.F.R. Part 300, Subpart F)

• EPA “shall ensure meaningful and substantial” state involvement (via Superfund Memorandum of Agreement [SMOA])

• State must supply at least one RCRA-regulated disposal facility

• Must provide 10% cost-share for sites within state’s borders

  • 50% if the site is state or municipal-owned

• State can take over remediation and step into cost recovery role under §107
  

Federal Facilities

• Superfund Amendments and Reauthorization Act of 1986

• Example:  former military bases

• Clean-up is managed and paid for by Agency responsible for facility

  • E.g. Department of Defense

• Clean up costs come from Agency budget

  • E.g. Defense Environmental Restoration Program

    • Clean up of former military training camps (unexploded ordinance)

• EPA (and states) have authority to ensure CERCLA regulations are followed at clean up of federal facilities

• Military war-time exemptions (see below)
  

CERCLA citizen suits (2 types)

1. Citizen enforcement 

   • 60 day notice to EPA, State, and alleged violator(s)

   • Injunctive relief

   • civil penalties

   • Private damages

     • Only government can recover damages for natural resource damage

2. Citizen may petition preliminary assessment of a site not already scheduled for cleanup

3. Always plaintiff must have standing

3.  The SUPERFUND

• Hazardous Substance Response Trust Fund (§111)

• Pays for (“finances”) federal share of removal, response or remediation (clean up) activities

• Originally funded by excise tax on chemical companies and government appropriations, now funded by appropriation

• Government has right of reimbursement from Potentially Responsible Parties

  • Legal allocation of responsibility between parties

• Related:  Small Business Liability Relief and Brownfields Revitalization Act of 2001

  • Money for redevelopment of Superfund sites

Superfund standard for remediation

• Superfund Amendments and Reauthorization Act of 1986 (SARA) standard for remediation

• THREE ELEMENTS

  • “(1) protective of human health and the environment, that is 

  • (2) cost-effective, and that 

  • (3) utilizes permanent solutions and alternative treatment technologies to the maximum extent practicable”
    
    

4.  Liability §107

Strict Liability

• Common law negligence not applicable

• Retroactive

  • Covers releases prior to enactment of CERCLA

• Joint and Several liability

  • Each Responsible Party (PRP) 100% liable for clean-up costs

• Restitution

  • EPA can force party to clean up or seek restitution to Superfund costs of cleanup

• Contribution

  • PRPs can sue each other to cover their fair share of cleanup costs based on ”proximate cause”

Potentially Responsible Parties (PRPs)

1. any person who currently owns or operates a facility or vessel from which a hazardous substance was released 

2. any person who at the time of disposal of a hazardous substance owned or operated the facility at which such disposal occurred

3. any person who arranged for the disposal or treatment of a hazardous substance (often referred to as a generator of waste), and any person who arranged for the transport of a hazardous substance for disposal or treatment (called an arranger) 

4. any person who accepts or accepted a hazardous substance for transport to a disposal or treatment facility, incineration vessel, or site selected by such person

(”Person” is an individual corporation, trust, partnership, or municipality)

Standard for liability

42 U.S.C. §9607

• Strict liability

• Joint and Several 

• Contribution attaches to PRP based on concept of “proximate cause”

• PRPs authorized to seek contribution from one another based on “equitable factors”

EPA has four enforcement tools

Initial defenses against Liability

• Acts of war

• Acts of god

• Acts of unrelated third parties

  • No direct or contractual link

  • PRP exercised due care

  • (see Landowner defenses anon)
    
    

Enforcement Tools 1 & 2:
Force PRP to Clean Up

• §106 provides two (2) responses to Imminent hazard to public health and welfare, and the environment by actual or threatened release of hazardous substance

• EPA has authority under imminent hazard threat to pursue

  1. Civil judicial injunction (court-ordered)

  2. Use administrative enforcement order (without court)
     

Enforcement Tool 3:
Restitution

Recovery of – (42 U.S.C. §9607)

• Response costs of federal and state governments (consistent with NCP)

• Any other response costs incurred by any other person (consistent with NCP)

• Damages to natural resources (43 C.F.R. §11)

  • (only for contamination since CERCLA enactment)

• EPA’s litigation costs, but not costs of investigation of a defendant

Enforcement Tool 4: 
Voluntary Cleanup

Threat of fines and other damages under cleanup order

• PRP enters settlement with EPA or state

• Advantages to PRP (now RP)

  • Avoid negative publicity

  • Cost of voluntary is generally lower (PRP can manage own costs)

  • Can be accomplished on more rapid schedule

• Disadvantage:  Government can reopen if receives “additional information” after settlement

• Have §113 contribution against fellow PRPs

Proximate Cause

• Factors sufficient to identify person as PRP

• Any quantity, level, or concentration of a hazardous substance sufficient for proximate cause

• Potential of endangerment (no actual damage or harm required)

• No ongoing relationship with contaminated site required

  • Retroactive to any point of past release

  • Courts have held does not violate due process

• Proximate Cause varies by PRP
  

Proximate Cause Factors (by PRP)

• Generators (produced the substance)

  • Responsible for generating the hazardous substances that have ended up at a facility

  • Former generators remain liable

  • Considered wealthiest and broadest category of PRP

  • Manufacturer of chemical used by generator not liable

• Arranger (party who arranges for disposal)

  • Made the decision that substance ended up on this site

  • Must have taken intentional steps to dispose of hazardous substances

  • Selling material to another plant may constitute disposal

    • Mere status as a recycler or manufacturer insufficient

• Owners and operators

  • Hazardous substances on-site at a facility

  • Includes lessees, sole trustee (that is also the beneficiary) of a real estate trust, and a land-purchaser after closing

• Officer liability (corporate)

  • Personally arranged for disposal of waste

  • Direct supervision of disposal of waste

• Transporters

  • Responsible only if transporter selected the disposal site

Transporter “Scrap Recycling” Exemption

• Transporters of recyclable material exempt

• Materials include plastic, glass, textiles, rubber (other than whole tires), metal, or spent lead-acid, spent nickel-cadmium, and other spent batteries

• Requirements

  • Must be a market for such materials

  • Sufficient quantity for productive use

  • Substitute for raw materials

  • Take ‘reasonable care’ that receiving facility is compliant with environmental laws
    

5.  Defenses Against Liability

State and municipal governments who involuntarily own property (e.g. tax foreclosure)

• Response action (Clean-up) Contractors

• Fiduciaries and financial lenders

• Generators and Transporters of recyclable materials

• Contributors of very small quantities of waste

• Service stations who recycled oil in compliance with regulations

• Innocent Landowners

• Innocent neighboring landowners

• Bona-fide prospective purchasers

PRP Landowner Defenses

1. Innocent Purchaser

   • does not know of contamination.  Purchaser neither knew nor had reason to know that hazardous material was on the property at time of purchase

   • Must prove by due diligence (i.e. site assessment)

2. Contiguous Landowners:  

   • No contribution to contamination

   • Did not know of potential contamination at time of purchase

   • Not closely related to liable PRPs

3. “Bona Fide Prospective Purchaser” 

   • May know about contamination prior to purchase, but no contribution to contamination

   • Acquired property after 2002 (date of revised statute)

     • Before 2002, must have had “Prospective Purchaser Agreement”

4.  Government involuntary acquisition (tax foreclosure, etc.)

• No association with party causing contamination

• Before Acquisition:

  • Requires owner to have made “all appropriate inquiries” prior to purchase

    • Requirements: 40 C.F.R. Part 312

    • Similar to Preliminary Site Assessment, must be performed by Environmental Professional

• After Acquisition, owner by statute must:

  • (1) stop any continuing release of a hazardous substance; 

  • (2) prevent any future releases; and 

  • (3) prevent or limit exposure to any previously released hazardous substance.
    

“All Appropriate Inquiry”

• EPA final rules for site assessments (fact sheet)

  • Satisfies “All appropriate inquiry”

  • ASTM International standard (American Society of Testing and Materials)

    • Bachelor’s degree or 10 years of experience

    • On-site visit

    • Review of records and databases

  • Older assessments qualify if updated to current ASTM International standard (1 year shelf-life)

“De Micromis” Exemption

• Exempts from cleanup liability parties who generated or transported waste to a site listed on the NPL if they contributed only “de micromis” amounts of hazardous substances to that site. 

  • Party must demonstrate that it contributed less than 110 gallons of liquid materials or 

  • Less than 200 pounds of solid materials containing hazardous substances. 

  • Not available to persons who contributed such quantities of wastes to a site on or after April 1, 2001. 
    
    
    

Other Liability LimitationsCorporate Officer (see above)

• Fiduciaries and Trustees

  • Excluded from the definition of owner or operator

    • Exceptions:

      • Take actual control of hazardous waste

      • Possess authority to do so under a trust arrangement

• Parent Company for acts of subsidiary

  • Exempt unless actual control exercised

Federal liability during times of war

• United States a PRP for industrial activities that it controls

• United States not a PRP for activities not under its direct control
  

Redevelopment:  BrownfieldsEPA authorized to provide assurances of no CERCLA enforcement action

• No protection from RCRA

• Brownfields programs

  • Encourage reuse of property

  • Third-party protection letters

Interaction of CERCLA with other law

• State contract law

  • PRPs can apportion liability between themselves, but not against federal government

  • indemnification

• Bankruptcy law

  • Government becomes unsecured creditor

• The petroleum exclusion
  

Insurance

• Duty to defend

• Definition of an occurrence under a comprehensive general liability (CGL) policy

• Pollution exclusion

  • Sudden and accidental

  • Absolute exclusion

• Trigger for coverage

• Equitable versus legal

Resources

BLM CERCLA Manual

Finding PRPs (EPA)

Negotiating Settlements (EPA)