Supreme Court’s Superfund Ruling Will Significantly Impact PFAS Litigation

Jul 15, 2020 | Environmental, PFAS, Toxic Tort

In April 2020, the U.S. Supreme Court issued a split decision in which the Justices held that he Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) does not preclude a landowner’s right to assert state law claims like nuisance and trespass that do not arise under the act. The result of the ruling was that residents in Montana were permitted to sue a company that previously owned a Superfund site, even though the company had remediated the site in accordance with an agreement with the EPA. The ruling will have far-reaching implications, but one of the most significant impacts will be on the PFAS litigation.

CASE BACKGROUND

In Atlantic Richfield Co. v. Christian et al., case number 17-1498 (U.S. 2020), residents of Montana sued a company (Atlantic Richfield Co.) in Montana state court to force the company to clean up their residential property of contaminants. For nearly a century, the Anaconda Copper Smelter in Butte, Montana contaminated an area of over 300 square miles with arsenic and lead. In 1983, the EPA designated the 300 square mile area a Superfund site and over the next 37 years, worked with the current owner of the closed smelting facility to implement a cleanup plan for a remediation.  The cleanup is expected to continue until 2025. In the 35 years since, EPA has managed an extensive cleanup at the site, working with Atlantic Richfield to remediate more than 800 residential and commercial properties; remove 10 million cubic yards of tailings, mine waste, and contaminated soil; cap in place 500 million cubic yards of waste over 5,000 acres; and reclaim 12,500 acres of land. At the time of the Supreme Court hearing, Atlantic Richfield estimated that it spent roughly $450 million implementing the EPA’s orders.

In 2008, a group of 98 owners of property within the Superfund site filed a lawsuit against Atlantic Richfield in
Montana state court, asserting trespass, nuisance, and strict liability claims under state common law. The landowners sought restoration damages, among other forms of relief.  The landowners proposed a restoration plan that went beyond EPA’s own cleanup plan, which the agency had found “protective of human health and the environment.” For example, the landowners proposed a maximum soil contamination level of 15 parts per million of arsenic, rather than the 250 parts per million level set by EPA. And the landowners sought to excavate offending soil within residential yards to a depth of two feet rather than EPA’s chosen depth of one.
The landowners also sought to capture and treat shallow groundwater through an 8,000-foot long, 15-foot deep, and 3-foot wide underground permeable barrier, a plan the agency rejected as costly and unnecessary to secure safe drinking water. The landowners estimated that their cleanup would cost Atlantic Richfield $50 to $58 million. Atlantic Richfield would place that amount in a trust and the trustee would release funds only for restoration work.

At the trial court level, the court court granted summary judgment to the landowners on the issue of whether CERCLA precluded their restoration damages claim and allowed the lawsuit to continue. After granting a writ of supervisory control, the Montana Supreme Court affirmed, rejecting Atlantic Richfield’s argument that CERCLA stripped the Montana courts of jurisdiction over the landowners’ claim and concluding that the landowners were not potentially responsible parties (or PRPs) prohibited from taking remedial action without EPA approval under §122(e)(6). The owner of the Superfund site asked the U.S. Supreme Court to overturn the Montana Supreme Court’s decision.

The U.S. Supreme Court upheld the Montana state court decisions; however, it did place some limits on the extent that the residents can pursue damages for the remediation work that they proposed, as the Court held that the residents must seek and obtain EPA approval for any additional remediation actions that they wish to take place on their properties and that exceed the EPA’s previously approved cleanup plan. That’s because the landowners are “potentially responsible parties” as defined by CERCLA. Under the act, potentially responsible parties are prohibited from taking remedial action without EPA approval. While the Montana high court found the residents are not PRPs because they are not actually responsible for any of the contamination, the Justices said CERCLA does not make such a distinction.

Citing the high court’s own 2007 ruling in U.S. v. Atlantic Research Corp. , the majority said even parties not responsible for contamination may fall within the broad definitions of potentially responsible parties. The justices noted that “innocent” landowners may be shielded from liability under CERCLA’s “innocent landowner” and “third party” defenses. “Under the landowners’ interpretation, property owners would be free to dig up arsenic-infected soil and build trenches to redirect lead-contaminated groundwater without even notifying EPA, so long as they have not been sued within six years of commencement of the cleanup,” the majority said. “We doubt Congress provided such a fragile remedy for such a serious problem.”  The landowners said that if they’re considered PRPs, they’ll forever be required “to get permission from EPA in Washington if they want to dig out part of their backyard to put in a sandbox for their grandchildren,” but the Supreme Court said the law doesn’t go that far. “The grandchildren of Montana can rest easy … The act’s definition of remedial action does not reach so far as to cover planting a garden, installing a lawn sprinkler, or digging a sandbox,” the majority said. But it does bar state law claimants from imposing a sitewide remedy on a company that goes beyond what the EPA has already approved, the justices said. Atlantic Richfield is still potentially liable under state law for compensatory damages, including loss of use and enjoyment of property, diminution of value, incidental and consequential damages, and annoyance and discomfort, the majority said. And if the EPA agrees, companies may be liable for cleanup beyond what they already agreed to.
PFAS IMPLICATIONS
Much attention has been given to whether PFAS will be designated as “hazardous substances” under CERCLA. A determination by the EPA that PFAS constitute “hazardous substances” under CERCLA will have far-reaching implications well beyond manufacturers of PFAS. Land owners (whether the actual site testing for elevated PFAS or abutting properties), developers, and any company utilizing PFAS in their manufacturing processes will be potentially liable and responsible for clean up costs if such a designation is made for PFAS and if land testing reveals the presence of PFAS. In addition, the designation under CERCLA will reopen numerous previously closed Superfund sites for further testing and remediation.  A designation as a “hazardous substance” will also enable federal, state, tribal and local authorities to collect information regarding the location and extent of releases.
Now, though, the U.S. Supreme Court makes clear that parties can bring cleanup lawsuits, including those for PFAS, on residential, commercial, or industrial sites that are part of larger Superfund-designated lands. With over 1,300 active Superfund designated sites in the United States, current and former landowners or companies with Superfund site responsibilities find themselves at additional risk of remediation costs should parties beyond the EPA press for additional remediation. Given that PFAS are receiving exponentially increasing media and scientific attention, there is little doubt that the Supreme Court’s ruling will be used by residents of other states to press for faster or more comprehensive Superfund cleanup action or funding.  Companies with Superfund responsibilities should pro-actively asses risk for additional actions and costs given the Supreme Court’s ruling.

 

CMBG3 Law is following judicial, legislative, and administrative developments relating to PFAS. More information about the services we can provide, including risk assessments, to ensure your business is ready for any intersection with these substances can be found on our PFAS Litigation page.

Our attorneys have been at the forefront of PFAS issues, including giving presentations as to the future waves of litigation stemming from PFAS issues. For more information, please contact any of our PFAS – Toxic Torts Team: Jessica Deyoe, Suzanne Englot, Alexandra Fraher,or John Gardella.

Authored By:

John Gardella, Esq.

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