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CERCLA, a/k/a Superfund 1. History Love Canal & Times Beach 1980: lame duck Congress “polluter pays” Burford era

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CERCLA, a/k/a Superfund 1. History Love Canal & Times Beach 1980: lame duck Congress “polluter pays” Burford era. CERCLA, a/k/a Superfund 1. History 2. Triggering Superfund What makes a site a Superfund site? What sort of event triggers Superfund?. Removal or

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Presentation Transcript
slide1
CERCLA, a/k/a Superfund
  • 1. History
    • Love Canal & Times Beach
    • 1980: lame duck Congress
    • “polluter pays”
    • Burford era
slide2
CERCLA, a/k/a Superfund
  • 1. History
  • 2. Triggering Superfund
    • What makes a site a Superfund site? What sort of event triggers Superfund?

Removal or

Remediation, in response to a

Release, of

Hazardous substances

slide3
CERCLA, a/k/a Superfund
  • 1. History
  • 2. Triggering Superfund

Report  HRS  NPL  NCP  RI/FS  ROD

slide4
CERCLA, a/k/a Superfund
  • 1. History
  • 2. Triggering Superfund
  • 3. Liability
    • Liable parties  “PRPs”
  • “arranger”
  • Transporter who selected site
  • O/O at time of disposal
  • Current owner
slide5
CERCLA, a/k/a Superfund
  • 1. History
  • 2. Triggering Superfund
  • 3. Liability
    • Liable parties
    • Nature of
    • liability
  • Strict
  • Retroactive
  • Joint and several
slide6
CERCLA, a/k/a Superfund
  • Olin Corp (11th Cir. 1997):
    • Bases for constitutional challenge to Superfund?
      • Commerce Clause
      • Ex post facto clause
slide7
Eastern Enterprises v. Apfel (1998)
  • EE left mining business in 1966.
  • Successive legislatively-endorsed voluntary pension and benefit programs for miners spanned period of EE involvement in industry and after. None guaranteed lifetimebenefits, though miners may have come to expect to receive such benefits over time.
  • Coal Act of 1992 compelled employers, including EE to pay into a fund providing lifetime health benefits for miners. EE’s contribution based upon premiums covering 1000 ex-EE employees.
slide8
Eastern Enterprises v. Apfel (1998)

The Eastern Enterprises test for assessing the constitutionality of legislatively-imposed retroactive liability:

  • Foreseeability/defeated expectations
    • Magnitude of impact
    • How retroactive?
  • Disproportionality
  • Remedial nature of statute?
  • Ask yourself whether Superfund passes this test?
slide9
CERCLA, a/k/a Superfund
  • 1. History
  • 2. Triggering Superfund
  • 3. Liability
    • Liable parties
    • Nature of
    • liability
    • Defenses to liability
  • Act of god
  • Third party
  • Innocent purchaser
slide10
CERCLA, a/k/a Superfund
  • 1. History
  • 2. Triggering Superfund
  • 3. Liability
    • Liable parties
    • Nature of
    • liability
    • Defenses to liability
    • Allocating liability
  • PROCESS:
  • 106 orders
  • Orphan shares
  • Mixed funding
  • How would you allocate liability among PRPs?
slide11
The "Gore factors":

(1) the amount of hazardous substances involved; (2) the degree of toxicity of the substances; (3) the degree of involvement by parties in the generation, transportation, treatment, storage, or disposal of the substances; (4) the degree of care exercised by the parties with respect to the substances; and (5) the degree of cooperation of the parties with government officials to prevent any harm to public health or the environment.

slide12
O’Neill v. Picillo (1st Cir. 1989)
  • 1977-79: Farm used as dump site (10,000 barrels)
  • 1979: Removal action undertaken; cost recovery action filed for past and future costs
  • 35 PRPs:
  • 30 settled for total of $5.8 million.
  • 3 of 5 non-settlers held liable for remaining past costs ($1.4 million) and future (unspecified) costs not yet incurred.
  • 2 PRPs successfully argued that EPA failed to show they contributed haz substances to site
slide13
O’Neill v. Picillo (1st Cir. 1989)
  • Is harm divisible?
  • 2 of 3 non-settling liable PRPs appealed:
  • 10,000 barrels total
  • 7800 barrels removed in phases II and III of cleanup
  • 59 barrels attributable to 2 PRPs. THEREFORE,
  • (59/7800) x $1,053,934 = our share
  • Only 300-400 barrels attributable to specific PRPs
  • Actual vs. averted harm
slide15
1963:A (owner of mfg plant) installs underground storage tanks to hold hazardous wastes.

1971:A goes out of business, clears the surface of the land, but leaves tanks in the ground (full).

1972:A sells land to B. B is unaware of tanks.

1973: Pinhole in tank: slow leakage begins and continues for 12 years.

1978: Contaminants migrate (via groundwater) across property line onto C’s property

1979:B sells land to D. C sells his land to E.

1985: Site (including parts of C’s and D’s land) listed on NPL. A, B, C, D, and E named PRPs.

slide16
SUPERFUND
  • LANDOWNER LIABILITY (cont’d)
  • 1. Effects
    • Brownfields
  • Property transfer statutes
  • Does Superfund merely codify landowner liability in tort?
slide17
SUPERFUND
  • OPERATOR LIABILITY
  • Definition of “operator” – how much/what kind of control?
    • Regulatory control – Stringfellow landfill
    • Bestfoods case
  • Secured creditor exemption
slide18
U.S. v. Bestfoods (1998)

1957: Ott Chemical Co. began manufacturing chemicals at plant

1965: CPC International Inc. incorporated a wholly owned subsidiary to buy Ott’s assets in exchange for CPC stock

1972: CPC sold Ott to another company.

1981: CPC and Ott named PRPs (among many others)

Is CPC an owner under Superfund? An operator by virtue of its ownership of Ott?

slide19
U.S. v. Bestfoods (1998)

Is CPC an owner under Superfund? An operator by virtue of its ownership of Ott?

Doesn’t CPC manage Ott for CPC’s benefit? CPC shares directors and officers with Ott for that purpose. Isn’t that enough to trigger operator liability?

Must CPC have managed the activities that caused the release in order to trigger operator liability?

May CPC monitor those activities without triggering liability?

slide20
SUPERFUND
  • OPERATOR LIABILITY
  • Definition of “operator” – how much/what kind of control?
    • Regulatory control – Stringfellow landfill
    • Bestfoods case
  • Secured creditor exemption
slide21
SUPERFUND
  • GENERATOR/ARRANGER LIABILITY
  • Definition and defenses
    • Must generator’s wastes be “released”?
  • The Aceto Chemical case
  • Factors that trigger “arranger” liability
  • Superfund Recycling Equity Act of 1999
slide22
Aceto Chemical (8th Cir. 1989)

Raw materials + instructions

ACETO CHEMICAL

Spills,

On-site disposal

CLIENT

Finished product

Are the raw materials “hazardous wastes”?

Did Aceto “arrange for disposal”?

slide23
Aceto Chemical (8th Cir. 1989)
  • Prima facie case of Superfund liability:
  • Aidex is a facility
  • A “release” of a “hazardous substance” occurred there
  • Release caused U.S. to incur response costs
  • Defendant is PRP – i.e., one of the classes of parties listed in Sec. 107(a) (subject to 107(b) defenses).
slide24
SUPERFUND
  • GENERATOR/ARRANGER LIABILITY
  • Definition and defenses
    • Must generator’s wastes be “released”?
  • The Aceto Chemical case
  • Factors that trigger “arranger” liability
  • Superfund Recycling Equity Act of 1999
slide25
Superfund Recycling Equity Act of 1999

(a) Liability clarification.

(1) As provided in subsections (b), (c), (d), and (e), a person who arranged for recycling of recyclable material shall not be liable under sections 107(a)(3) and 107(a)(4) with respect to such material.

(b) … "recyclable material" means scrap paper, scrap plastic, scrap glass, scrap textiles, scrap rubber (other than whole tires), scrap metal, or spent lead-acid, spent nickel-cadmium, and other spent batteries …

slide26
O’Neill v. Picillo (1st Cir. 1989)
  • 1977-79: Farm used as dump site (10,000 barrels)
  • 1979: Removal action undertaken; cost recovery action filed for past and future costs
  • 35 PRPs:
  • 30 settled for total of $5.8 million.
  • 3 of 5 non-settlers held liable for remaining past costs ($1.4 million) and future (unspecified) costs not yet incurred.
  • 2 PRPs successfully argued that EPA failed to show they contributed haz substances to site
slide27
O’Neill v. Picillo (1st Cir. 1989)
  • Is harm divisible?
  • 2 of 3 non-settling liable PRPs appealed:
  • 10,000 barrels total
  • 7800 barrels removed in phases II and III of cleanup
  • 59 barrels attributable to 2 PRPs. THEREFORE,
  • (59/7800) x $1,053,934 = our share
  • Only 300-400 barrels attributable to specific PRPs
  • Actual vs. averted harm
slide28
BIGELOW LANDFILL
  • Notice letter notifying PRPs that:
  • Bigelow Landfill, a now-closed and covered landfill on a 10 acre parcel, is on the NPL. A Hostess snack cake factory now sits on the site.
  • A plume of contaminated groundwater (metals, solvents, acids) underlies the parcel.
  • Early estimates of cleanup costs range from $800,000 to $4-5 million.
  • PRPs are responsible for cleanup. Come to informational meeting.
slide29
BIGELOW LANDFILL

PRP Basis of Liability Vol. Toxicity

Frank BigelowO/O 1944-65 N/A N/A

Town IDAOwner 1965-71 N/A N/A

HostessCurrent owner 0% N/A

Small generatorArrangers 60% 20Lowgroup (30 PRPs—10 available) (2% each) 10 High

Jim’s Spec. Chem. Arranger 10% High(in chapter 11)

DuPontArranger 10% High

CountyArranger/Transporter 10% Low

IBM+ Xerox

Landfill began leaking in 1966. County sent only MSW to landfill.

slide30
The "Gore factors":

(1) the amount of hazardous substances involved; (2) the degree of toxicity of the substances; (3) the degree of involvement by parties in the generation, transportation, treatment, storage, or disposal of the substances; (4) the degree of care exercised by the parties with respect to the substances; and (5) the degree of cooperation of the parties with government officials to prevent any harm to public health or the environment.

slide31
Eastern Enterprises v. Apfel (1998)
  • EE left mining business in 1966.
  • Successive legislatively-endorsed voluntary pension and benefit programs for miners spanned period of EE involvement in industry and after. None guaranteed lifetimebenefits, though miners may have come to expect to receive such benefits over time.
  • Coal Act of 1992 compelled employers, including EE to pay into a fund providing lifetime health benefits for miners. EE’s contribution based upon premiums covering 1000 ex-EE employees.
slide32
Eastern Enterprises v. Apfel (1998)
  • What test does this case establish for assessing the constitutionality of legislatively-imposed retroactive liability?
  • Does Superfund pass or fail that test?
  • Foreseeability/defeated expectations
    • Magnitude of impact
    • How retroactive?
  • Disproportionality
  • Remedial nature of statute?