US Supreme Court Update: Cases to Watch for CERCLA Practitioners

The Legal Intelligencer 

(by Alana Fortna)

While there are several interesting environmental cases currently before the U.S. Supreme Court, two cases are particularly relevant for any legal practitioner handling Superfund cases, whether they involve site remediation issues or litigation over the cleanup costs. The two cases to watch are Atlantic Richfield v. Christian, Case No. 17-1498, and County of Maui v. Hawaii Wildlife Fund, Case No. 18-0260. Respectively, these two cases deal with the important legal questions of preemption and how groundwater discharges can be regulated and enforced. Both issues could have a significant impact on the scope of remediation and potential litigation at Superfund sites. CERCLA practitioners should watch for the opinions in these two cases.

The Atlantic Richfield appeal came out of the Montana Supreme Court, and it asks the court whether the Comprehensive Environmental Response, Compensation and Recovery Act (CERCLA), 42 U.S.C. Section 9601 preempts state common law remedies. The case involves the Anaconda Smelter Site, a Superfund site covering 300 square miles of property impacted by historical smelter and ore processing operations. The U.S. Environmental Protection Agency (EPA) placed the site on the National Priorities List in 1983 and identified Atlantic Richfield Co. as a potentially responsible party (PRP). After years of remedial investigation under EPA oversight, the EPA approved a remedial action plan for the cleanup of the site. The respondents in the appeal are a group of landowners who sued Atlantic Richfield alleging common law tort claims seeking more traditional damages, such as monetary damages and diminution of property value.  However, the respondents also sought relief in the form of restoration, asking that Atlantic Richfield remediate or pay for remediation above and beyond the EPA-approved remedy. The respondents argued that Montana law supports their requested relief and requires Atlantic Richfield to restore the property to its pre-contamination state before the on-set of historical smelting operations. The critical question presented to the court is whether CERCLA preempts state common law claims for restoration that seek clean-up remedies that conflict with EPA-ordered remedies. The Montana Supreme Court held that landowners can pursue common law claims for restoration despite the conflict with EPA’s remedy.

Before the U.S. Supreme Court, Atlantic Richfield argued that the lawsuit and the restoration relief requested is barred by Section 113 of CERCLA, which deprives courts of the ability to hear challenges to the EPA’s remedial action plans. This is a critical component of CERCLA because it prevents parties from disrupting the remedial process and trying to impose a different remedy than what was approved by the agency with authority and experience. With respect to the preemption issue, Atlantic Richfield argued that in order to comply with the alleged state law duty to restore the property, it would have to defy the EPA order implementing the chosen remedial action. This creates a clear and stark conflict between state law and CERCLA. Numerous parties filed amicus curiae briefs in the appeal, including the Chamber of Commerce of the United States. The U.S. Supreme Court also invited the Solicitor General to file a brief expressing the views of the United States, and the Solicitor General also participated in oral argument before the court on Dec. 3, 2019.

The potential impacts of a decision affirming the Montana Supreme Court could be far-reaching. Such a decision could open the door to litigation by any displeased property owner in the vicinity of a Superfund site who believes that the EPA’s selected remedy is insufficient. Such litigation, if successful, would disrupt the regulatory framework of CERCLA, make remediations even more costly, and undercut the certainty and protections afforded to PRPs who work with EPA to clean up contaminated sites. Remedial investigations under CERCLA follow a certain process that evaluates the nature and extent of contamination and evaluates the feasibility of various alternatives for remedial action. CERCLA already includes public notice and comment requirements to allow the community to weigh in on the efforts at a given site. However, a ruling that affirms the Montana Supreme Court would allow private parties to try to dip their hands into the remediation process by filing a private action that was never contemplated by CERCLA or its regulatory framework.

The second case of interest is the County of Maui appeal out of the U.S. Court of Appeals for the Ninth Circuit, which involves how discharges to groundwater are regulated. While several federal cases have addressed the issue of the indirect discharge of pollutants into jurisdictional waters via groundwater transport, the U.S. Supreme Court granted certiorari in the County of Maui case. The case involves discharges to wastewater treatment plant wells that eventually reached the Pacific Ocean. The Ninth Circuit found Clean Water Act liability based on indirect discharges but limited coverage to instances where “the pollutants are fairly traceable from the point source to a navigable water such that the discharge is the functional equivalent of a discharge into the navigable water” and the pollutants that reach the surface water are more than “de minimis.” This is an important issue with far-reaching ramifications because it is generally understood that all groundwater that is not otherwise removed (i.e., pumped for drinking water supply) will eventually discharge to a surface water. The Clean Water Act prohibits discharges of pollutants from a “point source” without a NPDES permit.

The U.S. Supreme Court granted the petition from the Ninth Circuit case as to the following question: “Whether the Clean Water Act requires a permit when pollutants originate from a point source but are conveyed to navigable waters by a nonpoint source, such as groundwater.” Numerous amicus curiae briefs were filed from a variety of parties, including former U.S. EPA officials and administrators, several states, and other interested organizations, which shows the importance of the question involved. The county argued that the Clean Water Act very deliberately controls pollution from “point sources” differently from “non-point sources.” Only discharges from “point sources” are regulated by the Clean Water Act and require a permit. The county argued that this position is unambiguously supported by the text, structure, context, history and purpose of the Clean Water Act. Oral argument occurred on Nov. 6, 2019, and an opinion is expected sometime this year.

How does a case about regulation under the Clean Water Act potentially affect liability at contaminated Superfund sites being remediated under CERCLA or the Resource Conservation and Recovery Act (RCRA)? Similar to the Atlantic Richfield case, a decision from the U.S. Supreme Court affirming the Ninth Circuit could threaten to disrupt the regulatory process for remediating sites. Such a decision could open up PRPs to unanticipated liability under the Clean Water Act, which includes a citizen suit provision. Both CERCLA and RCRA cleanups are based on an evaluation of risk. For example, under CERCLA, a PRP in conjunction with EPA evaluates remedial action alternatives, which may not include absolute source control. Acceptable alternatives may allow for some form of natural attenuation or institutional controls related to groundwater contamination. Moreover, CERCLA and RCRA include a mechanism for a determination that removal of certain contamination in groundwater is technically infeasible. If a PRP has not achieved complete source control, then it could arguably face additional liability under the Clean Water Act for contamination that is migrating from the source area into groundwater and ultimately to a navigable water. This is not what was intended by the Clean Water Act. Therefore, the groundwater conduit theory could potentially disrupt the regulatory framework and semblance of predictability at Superfund sites while opening PRPs up to additional, unintended litigation.

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Reprinted with permission from the April 2, 2020 edition of The Legal Intelligencer © 2020 ALM Media Properties, LLC. All rights reserved.