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Superfund in the Age of Reason. Implications of three Supreme Court cases: • BNSF v. United States (2009) • Atlantic Research (2007) • Aviall Services (2004). Bradley M. Marten Marten Law Group PLLC CERCLA & MTCA — Laws and Litigation Advanced Sediment Conference May 11, 2009.

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superfund in the age of reason

Superfund in the Age of Reason

Implications of three Supreme Court cases:

• BNSF v. United States (2009)

• Atlantic Research (2007)

• Aviall Services (2004)

  • Bradley M. MartenMarten Law Group PLLC
    • CERCLA & MTCA — Laws and LitigationAdvanced Sediment ConferenceMay 11, 2009
u s supreme court decisions under cercla
U.S. Supreme Court Decisions Under CERCLA

BNSF (2009)

Atlantic Research (2007)

Aviall Services (2004)




Superfund enacted (1980)

two distinct sets of issues are presented in these cases
Two Distinct Sets of Issues Are Presented in These Cases
  • Who can sue and be sued?
    • Aviall
    • Atlantic Research
    • BNSF (Shell portion)
  • How much do you have to pay? And how do you decide?
    • BNSF (Railroad liability)
  • Only way to appreciate Court’s decisions on these issues is to start with the CERCLA statute itself
cercla sec 106 a
CERCLA Sec. 106(a)
  • 42 USC § 106(a)
    • … when the President determines that there may be an imminent and substantial endangerment to the public health or welfare or the environment because of an actual or threatened release of a hazardous substance from a facility, he may require the Attorney General of the United States to secure such relief as may be necessary to abate such danger or threat, and the district court of the United States in the district in which the threat occurs shall have jurisdiction to grant such relief as the public interest and the equities of the case require.”
cercla section 107 a 3
CERCLA Section 107(a)(3)
  • 42 USC § 107(a)(3)
    • 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… … shall be liable for
    • (A) all costs of removal or remedial action incurred by the United States government or a State or an Indian tribe not inconsistent with the national contingency plan;
    • (B) any other necessary costs of response incurred by any other person consistent with the national contingency plan;
    • (C) damages for injury to, destruction of, or loss of natural resources, including the reasonable costs of assessing such injury, destruction or loss resulting from such a release…
cercla section 113 f 1
CERCLA Section 113(f)(1)
  • 42 USC § 113(f)(1)
    • (1) Any person may seek contribution from any other person who is liable or potentially liable under Section 9607(a), during or following any civil action under Section 9606 of this Title or under Section 9607(a) of this Title.
cercla section 113 f 3 b
CERCLA Section 113(f)(3)(B)
  • 42 USC § 113(f)(3)(B)
    • A person who has resolved its liability to The United States or a State for some or all of a response action or for some or all of the costs of such action in an administrative or judicially approved settlement may seek contribution from any person who is not a party to a settlement…
restatement second of torts 875
Restatement (Second) of Torts, § 875
  • … when two or more persons acting independently cause a distinct or single harm for which there is a reasonable basis for division according to the contribution of each, each is subject to liability only for the portion of the total harm that he has himself caused.… But where two or more persons cause a single and indivisible harm, each is subject to liability for the entire harm.
who can sue or be sued aviall services 2004 facts
Who Can Sue or Be SuedAviall Services (2004) — Facts
  • Aviall Services operated a aircraft maintenance facility. Cooper was prior owner. Aviall cleaned up the site under the threat of enforcement but was never actually sued, nor did it enter into a judicial settlement.
  • Aviall then sued Cooper under Sec. 113(f)(1) to recover its equitable share of cleanup costs. Cooper defended on grounds Aviall was never required to clean up the land.
who can sue or be sued aviall services 2004 holding
Who Can Sue or Be Sued?Aviall Services (2004) — Holding
  • PRPs who voluntarily undertake a cleanup, and have not been sued under Sec. 106 or 107 of CERCLA cannot seek contribution from other PRPs under Sec. 113(f)(1)
  • Section113 (f)(1) says “during or following a civil action”
  • Section 113(f)(3)(B) says “resolved its liability... in an administrative or judicially approved settlement.”
who can sue or be sued atlantic research 2007 facts
Who Can Sue or Be Sued?Atlantic Research (2007) — Facts
  • Atlantic Research retrofitted rocket motors for the U.S. in Arkansas
  • Contaminants from operations contaminated soil and groundwater
  • Atlantic cleaned up the site at own expense, then sued U.S., initially under Sec. 113 and Sec. 107
  • Atlantic amended its complaint, and re-filed under Sec. 107 after Aviall decision (because had not been sued by U.S. or settled
who can sue or be sued atlantic research 2007 holding
Who Can Sue or Be Sued?Atlantic Research (2007) — Holding
  • Party who cleaned up without first having established its liability to EPA can still sue other PRPs under Sec. 107
  • Section 113(f) and 107(a) provide “two distinct remedies”
  • Section 113(f) allows contribution among PRPs with common liability; while Section 107(a) permits recovery by a private party which has incurred cleanup costs itself.
  • When a PRP pays a judgment or discharges its obligation under a settlement agreement, “it does not incur its own costs of response...[but] reimburses other parties for costs that those parties incurred.”
bnsf v united states 2009 facts
BNSF v. United States (2009) — Facts
  • Brown & Bryant, Inc. (B&B), facility repackaged agricultural chemicals, on 4.7-acre parcel,
  • 0.9-acre parcel leased from BNSF and UP
  • Railroads played no role in B&B’s operations
  • Only basis for liability was status as “owner”
  • Shell Oil sold a soil fumigant to B&B
  • Buyer responsible for the product once it arrived at the facility
  • Minor spills took place upon delivery
  • Much larger releases resulted when B&B washed out its equipment.
  • Cal. DTSC ordered B&B to clean up
  • B&B goes out of business
  • EPA listed site on NPL
  • Railroads and Shell are named PRPs and ordered to clean up site
  • EPA and California file cost recovery action for $8 million in response costs
u s district court opinion
U.S. District Court Opinion
  • Railroads held liable as owners
  • Shell liable as having “arranged for disposal”
  • District court held there was reasonable basis to apportion liability and did so – 9% to Railroads, 6% to Shell
  • Remaining “orphan” share attributable to B&B left unreimbursed – EPA/California left to pay
apportionment formula used by the district court
Apportionment Formula Used by the District Court
  • Railroads:
    • % property leased x % of time leased x % of chemicals spilled on leased land
  • Shell:
    • Gallons of chemicals spilled by Shell vs. total gallons of chemicals spilled
ninth circuit s decision
Ninth Circuit’s Decision
  • Ninth Circuit reversesDistrict Court
  • Holds Railroads and Shell jointly and severally liable
  • Holds it cannot reasonably apportion liability as between PRPs; too complex
  • Calls District Court’s formula a “meat axe approach”
  • Awards EPA/California 100% of their costs
petition for certiorari
Petition for certiorari
  • “This Court has never addressed the basic principles governing apportionment under CERCLA, and the issue involves the proper allocation of hundreds of billions of dollars of liability at thousands of cleanup sites nationwide.”— BNSF Petition for Certiorari
supreme court decision 8 1 may 4 2009
Supreme Court Decision (8-1)May 4, 2009
  • Arranger Liability (Shell)
      • Only liable if intended to dispose of waste
  • Joint and Several Liability
      • Joint and several unless “reasonable basis for apportionment” of liability
      • Burden is on PRPs to show reasonable basis for apportionment
      • Court accepted fairly simplistic formula for apportioning liability in this case
        • “Meat axe” approach good enough for eight justices
hypothetical 1
Hypothetical 1
  • A owns site, contaminated by prior owner, B (who is insolvent). A owned property 10 years; B owned it 40 years
    • Questions:
      • Is there a reasonable basis for allocating liability?
      • What if A refuses EPA Sec. 106 order to cleanup
        • Good faith basis for refusal?
        • Fund lead cleanup?
hypothetical 2
Hypothetical 2
  • Group A of PRPs cleanup site for $100 million sue group B
      • Orphan share is 40%
      • Can group A receive $100 million? Or only $60 million?
      • Should group A stop funding cleanup?
      • Risk of non-recovery of orphan share if continue cleanup
      • Risk of EPA enforcement if stop cleanup
      • Is there a risk of losing insurance coverage for voluntary payment?
what next
What Next?
  • Federal
      • Fewer “voluntary” cleanups?
      • Fewer EPA enforcement orders?
      • Reinstitute Superfund tax?
      • Clean up only priority sites?
  • Will states fill the EPA gap?
      • MTCA contains joint and several language
        • But program funding is being curtailed
      • Oregon Superfund statute contains language similar to CERCLA
        • State faces same enforcement dilemmas as EPA
thank you
Thank You
  • Marten Law Group PLLC1191 Second Avenue, Suite 2200Seattle, WA 98101(206) 292-2600