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CERCLA, a/k/a Superfund 1. History Love Canal & Times Beach 1980: lame duck Congress “polluter pays” Burford era PowerPoint Presentation
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CERCLA, a/k/a Superfund 1. History Love Canal & Times Beach 1980: lame duck Congress “polluter pays” Burford era. Hypothetical: XYZ Corp. discovers groundwater contamination (benzene, zinc). Investigation reveals that prior owner – paint manufacturer – used these materials in the 1980s.

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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

Hypothetical:

  • XYZ Corp. discovers groundwater contamination (benzene, zinc).
  • Investigation reveals that prior owner – paint manufacturer – used these materials in the 1980s.
  • Possibly getting into groundwater from buried disposal area (low spot that prior owner used for waste disposal).
  • What happens now?
slide3

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

slide4

CERCLA, a/k/a Superfund

  • 1. History
  • 2. Triggering Superfund

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

slide5

CERCLA, a/k/a Superfund

  • 1. History
  • 2. Triggering Superfund
  • 3. Liability
    • Nature of
    • liability
  • Strict
  • Retroactive
  • Joint and several
slide6

CERCLA & Retroactive Liability

  • Olin Corp (11th Cir. 1997):
    • Bases for constitutional challenge to Superfund?
      • Commerce Clause
      • Ex post facto clause
slide7

CERCLA, a/k/a Superfund

  • 1. History
  • 2. Triggering Superfund
  • 3. Liability
    • Nature of
    • liability
    • Liable parties  “PRPs”
  • “arranger”
  • Transporter who selected site
  • O/O at time of disposal
  • Current owner
slide8

CERCLA, a/k/a Superfund

  • 1. History
  • 2. Triggering Superfund
  • 3. Liability
    • Nature of
    • liability
    • Liable parties
    • Defenses to liability
  • Act of god
  • Third party
  • Innocent purchaser
slide9

CERCLA, a/k/a Superfund

  • Owner liability: Shore Realty (2d Cir. 1985)
    • How was Shore classified as a PRP?
    • What defenses to liability did Shore raise? How did the court respond to them?
    • What if Shore hadn’t known about the hazardous wastes on the property?
slide10

CERCLA, a/k/a Superfund

  • ? Owner liability: Shore Realty (2d Cir. 1985)
    • How was Shore classified as a PRP?
    • What defenses to liability did Shore raise? How did the court respond to them?
    • What if Shore hadn’t known about the hazardous wastes on the property?
  • The Small Business Liability Relief and Brownfields Revitalization Act
  • Innocent purchasers
slide11

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.

slide12

SUPERFUND

  • OPERATOR LIABILITY
  • Definition of “operator” – how much/what kind of control?
    • Regulatory control – Stringfellow landfill
    • Bestfoods case
slide14

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?

slide15

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?

slide16

SUPERFUND

  • OPERATOR LIABILITY
  • Definition of “operator” – how much/what kind of control?
    • Regulatory control – Stringfellow landfill
    • Bestfoods case
  • Secured creditor exemption
slide17

SUPERFUND

  • GENERATOR/ARRANGER LIABILITY
  • Definition and defenses
    • Must generator’s wastes be “released”?
  • The Aceto Chemical case
slide18

Aceto Chemical (8th Cir. 1989)

Raw materials + instructions

AIDEX CHEMICAL

Spills,

On-site disposal

ACETO & OTHERS

Finished product

Are the raw materials “hazardous wastes”?

Did Aceto “arrange for disposal”?

slide19

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).
slide20

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
slide21

Superfund Recycling Equity Act of 1999

(a) Liability clarification.

(1) … 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 …

slide22

CERCLA, a/k/a Superfund

  • 1. History
  • 2. Triggering Superfund
  • 3. Liability
    • Nature of
    • liability
    • Liable parties
    • Defenses to liability
    • Allocating liability
  • PROCESS:
  • 106 orders
  • Orphan shares
  • Mixed funding
  • How would you allocate liability among PRPs?
slide23

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
slide24

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
  • Actual vs. averted harm
slide25

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.

slide26

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.
slide27

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?
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

Skip BigelowO/O 1944-63 N/A N/A

HarperOwners 1963-71 N/A N/A

Singleton

County Current owner N/A N/A

Monsanto Arrangers 22.5% High

Dow Arranger 22.5% Low

Fly By NightArranger 22.5% High

Bigelow ChemArranger 22.5% Low

Landfill began leaking in 1966.

slide30

BIGELOW LANDFILL: Small Arrangers

PRP Volume = < 1% Toxicity

High

High

Bigelow Dry Cleaning

Fred's Metal Plating Co.

IBM

Jimmy's Scrap City

Joe's Garage

Mary Kay Cosmetics Mfg. Co. Mom & Pop Recycling

Sam's Autobody

Sharon's Specialty Chemicals

Small Town Paints

Washington Printing Co.

High