EPA Approval for Superfund Cleanup Costs – the impact of Atl. Richfield Co. v. Christian in environmental lawsuits

Congress passed the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), also known as Superfund, in 1980 to provide broad Federal authority to respond directly to releases or threatened releases of hazardous substances that may endanger public health or the environment. CERCLA holds various types of "potentially responsible parties" (PRPs) strictly liable for cleanup costs in two ways: 1. CERCLA allows the Environmental Protection Agency to compel PRPs to either pay for the EPAs cleanup costs or to perform cleanup via administrative or judicial proceedings; and 2. CERCLA creates a private right of action for private parties (or States) to bring "citizen suits" to enforce CERCLA against PRPs that were not named in an EPA proceeding. In a new decision, Atl. Richfield Co. v. Christian, No. 17-1498, 2020 U.S. LEXIS 2405 (Apr. 20, 2020), the United States Supreme Court overruled the Montana Supreme Court and held that PRPs must seek EPA approval before remediating any portion of the Superfund-designated site and, as such, may not pursue a private action for prior cleanup costs undertaken without first obtaining EPA approval. In Atl. Richfield Co., a group of 98 landowners sued Atlantic Richfield Company under state common law nuisance, trespass, and strict liability for pollution stemming from copper mining activities from Atlantic Richfield's predecessor. The area had been designated a Superfund site by the EPA, and the EPA had been working with Atlantic Richfield over the past 35 years to remediate the area (although cleanup was still ongoing). Justice Robert’s opinion relied on two main principles. First, the Court ruled that CERCLA preempts any state law claims that the landowners brought specifically for cleanup costs. Therefore, even though the landowners sued under Montana law, any claims for cleanup costs must comply with CERCLA's requirements (although the Court recognized that Atlantic Richfield may be liable under state law for other property damage claims such as loss of property value). Second, the Court ruled that the landowners were PRPs under CERCLA even though the landowners did not create the hazardous waste, the EPA had never engaged with the landowners, and the statute of limitations had run on the CERCLA claim. As such, the Court ruled that the landowners must coordinate with the EPA when undertaking "remedial actions" as defined by 42 U.S.C. § 9601(24). The Court reasoned that Congress intended CERCLA to promote an orderly cleanup plan, and should not require the EPA to sue every landowner to ensure that such landowners cannot undertake their own substantial remediation efforts at odds with the broader EPA plan for the Superfund site. The practical upshot of this ruling is that property owners in designated Superfund sites should take care to coordinate with the EPA before undergoing any sort of cleanup effort. The Court was careful to specify that this only applies to "remedial actions" as defined by 42 U.S.C. § 9601(24), which does not include routine tasks like gardening, mowing the lawn, etc. Rather, 42 U.S.C. § 9601(24) cites, as examples, larger activities such as “perimeter protection using dikes, trenches, or ditches,” “segregation of reactive wastes,” “dredging or excavations,” “repair or replacement of leaking containers,” and “onsite treatment or incineration,” among others. The key to the Court’s ruling was whether the activities undertaken would interfere with the EPA’s own plan for remediating the site. Moreover, under this ruling, landowners who cannot obtain EPA approval must pursue damages under state law in more creative ways (which the Court left the door open to), including a suit for loss of use and enjoyment of property, diminution of value, incidental and consequential damages, and annoyance and discomfort. It should also be noted that CERCLA only applies to land that has already been designated a Superfund site; landowners may review their property at https://www.epa.gov/superfund/search-superfund-sites-where-you-live. If you have questions about this article, or about environmental law in general, please contact Matthias Kaseorg (mkaseorg@setlifflaw.com) at 804-377-1273 or Steve Setliff (ssetliff@setlifflaw.com) at 804-377-1261.