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April 21, 2020  |  Written by Daniel J. Condren

SCOTUS Announces State Courts Have Jurisdiction Over State Law Claims Impacting Remediation at Superfund Sites, but EPA Approval Required for Concurrent Cleanup Programs

On April 20, 2020, the U.S. Supreme Court (Court) announced that state courts may hear state-law claims imposing independent cleanup obligations on Superfund site owners, but for sites where a federal cleanup program is already underway, Environmental Protection Agency (EPA) approval is required before any concurrent remediation measures may proceed.  This decision implicates all entities owning land within the vicinity of a Superfund site.

The Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), also known as the Superfund statute, was passed in 1980 and created a nation-wide program to remediate contamination caused by industrial pollution.  In 1983, the EPA designated one of its inaugural Superfund sites, an area of roughly 300 square miles around the Anaconda Copper Smelter in Butte, Montana.  Since then, the agency has managed an extensive and costly cleanup for which the site’s current owner, Atlantic Richfield, is responsible under CERCLA.

In 2008, a group of 98 landowners owning property within the Anaconda site sued Atlantic Richfield in Montana state court under several state-law tort claims. One claim in particular is what led the case to the U.S. Supreme Court—Montana law allows a landowner to seek “restoration damages,” or a monetary award to be used for financing the landowners’ plan for restoration of the damaged property.  Atlantic Richfield was already undertaking the federal cleanup program that CERCLA required of it, but the landowners’ proposed restoration plan went beyond the existing plan approved by the EPA.

In the trial court, Atlantic Richfield and the landowners filed competing motions for summary judgment on the issue of whether CERCLA precluded the landowners’ claim for restoration damages.  Atlantic Richfield made two arguments:  (1) that CERCLA stripped the Montana courts of jurisdiction to hear the restoration damages claim, and (2) that CERCLA prohibited the landowners from taking any remedial action without EPA approval.  The trial court and the Montana Supreme Court held for the landowners on both claims.  On review of those rulings, the Court agreed that the Montana courts had jurisdiction to hear the restoration damages claim, but reversed on the second issue, holding that the landowners’ proposed remediation plan could not proceed without EPA approval.  In sum, “Atlantic Richfield is liable for the landowners’ own re­mediation beyond that required under [CERCLA]…so long as the landowners first obtain EPA approval for the remedial work they seek to carry out.”

On the first issue, state court jurisdiction, the Court observed that while CERCLA does grant federal courts exclusive jurisdiction to hear claims brought under the Superfund statute itself, the Act does not prohibit state courts from hearing claims brought under other sources of law, such as the common-law nuisance, trespass and restoration damages claims of the landowners.  Atlantic Richfield argued that a separate provision of the Act—one barring federal courts from hearing challenges to cleanup plans approved by the EPA—also operated to prohibit the Montana courts from hearing the landowners’ restoration damages claim.  The Court rejected this argument.

The Court’s majority did agree that CERCLA requires the landowners to obtain EPA approval before undertaking their proposed remediation program.  Once the EPA or responsible party has begun their investigation of cleanup options at a particular Superfund site—the first stage after site designation—CERCLA Section 122(e)(6) prohibits “potentially responsible parties” (PRPs) from undertaking any remedial action without EPA approval.  The purpose of this provision is to help ensure a single EPA-led cleanup effort, as opposed to potentially numerous competing individual plans.  The question thus turned on whether the landowners themselves qualified as PRPs under the Act; if so, they would need EPA approval to proceed.  The majority reasoned that CERCLA identifies owners of polluted sites as one category of PRP, and because the smelters’ pollutants have come to be located on the landowners’ properties, the landowners qualify as PRPs.

Justice Gorsuch argued in dissent that the landowners could not be considered PRPs because they were no longer potentially liable for any cleanup costs; the six-year limitation period had passed and they could no longer be sued, and CERCLA additionally contains an “innocent landowner” exemption.  The majority responded that limiting the definition of PRPs to entities who could be sued for cleanup costs would upset the statute’s purpose of effecting a single, comprehensive EPA-led cleanup program, by allowing landowners to take remedial action without any oversight of projects that might negatively impact the ongoing federal effort.  The landowners argued that the decision would forever require them to obtain EPA approval before digging a sandbox for their grandchildren, but the Court assured that “the grandchildren of Montana can rest easy” because CERCLA does nothing of the sort:  “Remedial action” is a defined term in the statute and only encompasses technical actions dealing with contamination directly, and does not reach everyday activities like installing a sprinkler or digging a sandbox.  Justice Gorsuch’s most evocative criticism in dissent proclaimed that the majority “transforms [CERCLA] from a law that supplements state environmental restoration efforts into one that prohibits them,” and “strips away ancient common law rights from innocent landowners.”  The majority responded with citations to other portions of the Act that require state involvement in the remediation process:  cleanup plans must generally meet the applicable standards of state environmental laws, states must be afforded “substantial and meaningful involvement” in the cleanup process, and the EPA usually must defer initiating cleanup at a contaminated site that a state is already remediating.

In sum, this case first holds that federal courts do not have exclusive jurisdiction over all lawsuits concerning Superfund sites, only claims arising under the Superfund statute itself—state courts may hear state-law claims involving Superfund sites, including claims that implicate existing federal cleanup efforts.  Second, for sites subject to an ongoing federal cleanup program, CERCLA requires that any independent remediation program must secure EPA approval prior to implementation.  This is not limited to plans arising from state-court litigation.  Indeed, any entity owning property within a designated Superfund site must now obtain EPA approval before undertaking “remediation action” as that term is defined in the Superfund statute.  What remains uncertain is the extent to which that requirement will constitute what Justice Gorsuch fears it will—an impermissible barrier to private and state-led environmental restoration efforts.  On that issue, the Court left open the fundamental question its decision created:  what does this newly-required approval process look like, and what discretion does the EPA have when considering such requests?  The majority suggested that the EPA must approve concurrent cleanup programs that do not conflict with the agency’s own, but offered nothing concrete.  In the end, the opinion implies that it falls on the other two branches of government to take over and define what CERCLA requires of the EPA when faced with concurrent remediation plans.  Congress is also free to rewrite CERCLA to address any issues it takes with this decision’s interpretation of the statute.  Accordingly, new federal legislation or administrative rulemaking arising from this decision is likely, and barring that, more litigation is certainly on the way.

For more information on this case and its implications, please contact Dan Condren at dcondren@somachlaw.com.

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