U.S. Supreme Court Holds that CERCLA Does Not Block State Law Claims Seeking Restoration, Subject to EPA Approval

Stoel Rives - California Environmental Law

In a split decision in which Chief Justice John Roberts authored the majority opinion, the United States Supreme Court held yesterday in Atlantic Richfield Co. v. Christian that the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) does not bar a plaintiff’s ability to bring state law claims in state court for property damage, such as nuisance and trespass claims, that do not arise under CERCLA.  The Supreme Court further held that plaintiffs can bring restoration claims against potentially responsible parties (“PRPs”) for remediation beyond what the Environmental Protection Agency (“EPA”) requires under CERCLA, but any additional remedial action must be approved by the agency.

Turning to the facts of the case before the Court, between 1884 and 1902, the Anaconda Copper Mining Company built three copper smelters west of Butte, Montana. From 1912 to 1980, those smelters refined tens of millions of pounds of copper ore.  Atlantic Richfield Company (“ARCO”) bought the Anaconda Company in the 1970s and closed the Butte facility in 1980.  In 1983, the EPA designated an area of more than 300 square miles around the smelters as a Superfund site under CERCLA.  EPA approved a cleanup plan and ARCO estimates that it has spent roughly $450 million implementing EPA’s orders. EPA projects that the cleanup will continue through 2025.

In 2008, a group of 98 owners of property within the Anaconda Superfund site sued ARCO in Montana state court, asserting trespass, nuisance, and strict liability claims under state common law, and seeking, among other remedies, restoration damages, which under Montana law must be spent on rehabilitation of the plaintiff’s property.  The landowners propose a restoration plan that goes beyond EPA’s own cleanup plan, and estimate that their cleanup plan would cost ARCO between $50 million and $58 million.

In Atlantic Richfield Company v. Christian, the Supreme Court first considered whether Montana state courts have jurisdiction over the landowners’ claim for restoration damages, or if CERCLA section 113 deprives the Montana courts of jurisdiction.  CERCLA Section 113(b) states that “the United States district courts shall have exclusive original jurisdiction over all controversies arising under this chapter,” but the Supreme Court held that the case brought by the landowners did not arise under CERCLA.  Rather, the landowners’ common law claims for nuisance, trespass, and strict liability arise under Montana law, giving Montana state courts jurisdiction.  The justices also noted that Section 113(h) “permits federal courts in diversity cases to entertain state law claims regardless of whether they are challenges to cleanup plans,” and that CERCLA “permits federal courts and state courts alike to entertain state law claims, including challenges to cleanups.”

On the merits, the Supreme Court further determined that the landowners were properly considered potentially responsible parties under CERCLA, and therefore were subject to the requirement (under Section 122(e)(6)) that they first obtain EPA authorization before conducting “restoration” activities that would constitute “remedial action” under CERCLA.  In reaching this decision, the Court reasoned that “interpreting ‘potentially responsible parties’ to include owners of polluted property reflects [CERCLA’s] objective to develop, as its name suggests, a ‘Comprehensive Environmental Response’ to hazardous waste pollution.”

The implications of the Atlantic Richfield case are potentially far-reaching for Superfund sites that have been the subject of CERCLA settlements under section 113.  Sites previously settled may be subject to further litigation under applicable state law theories of recovery.  If potentially responsible parties under CERCLA did not explicitly resolve potential state law claims, then those are viable and still may be brought in state court.  However, by finding the landowners were PRPs under CERCLA, and would therefore require federal approval from EPA before taking any action to restore their properties, the Court’s decision in this case was relatively narrow.  The Court noted that landowners only needed EPA’s approval for “remedial action” and indicated that landowners would be released from that requirement when EPA delists the Superfund site. The Court left undecided other broader, more complicated underlying issues implicit in this case, such as whether the landowners’ claims were more broadly preempted by CERCLA.

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Stoel Rives - California Environmental Law
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