On April 20, 2020, in Atlantic Richfield v. Christian, the U.S. Supreme Court held that Montana landowners can seek damages under state law in state court for money to clean up their properties within a Superfund site. But the Court also held that the landowners must first secure EPA authorization before conducting any additional remedial action within the site. No. 17-1498, 2020 WL 1906542 (U.S. Apr. 20, 2020).
The decision is a win for parties seeking to assert claims under state law in state courts to secure remedies for damages caused by polluting parties, without those state cases being dismissed for lack of jurisdiction based on the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”). On the other hand, the decision is a win for CERCLA potentially responsible parties (“PRPs”) seeking to defend against efforts by other parties to utilize state law and state courts to secure what critics would call “gold-plated” cleanups that are more costly than EPA-selected remedies and go beyond measures deemed by EPA to be protective of human health and the environment. If EPA authorization is required but not granted – for example, because EPA determines that the proposed additional measures would undermine EPA’s selected remedy for the site – then those additional measures would be prohibited.
Background. The Anaconda Copper Smelter in Butte, Montana, contaminated an area of over 300 square miles with arsenic and lead. Over the past 35 years, EPA worked with Atlantic Richfield (the current owner of the smelter site) to plan and implement cleanup actions under CERCLA. In 2008, a group of 98 landowners sued Atlantic Richfield in Montana state court asserting common law trespass, nuisance, and strict liability claims, and seeking “restoration damages.” Under Montana law, restoration damages must be spent on property rehabilitation. The landowners’ restoration plan includes measures beyond those EPA found necessary to protect human health and the environment (e.g., excavation to deeper depths and use of more stringent cleanup levels).
The Court’s Opinion. The Supreme Court considered (1) whether CERCLA strips Montana courts of jurisdiction over the state law claim for restoration damages, and (2) if not, whether CERCLA requires the landowners to seek EPA approval for their restoration plan.
The Court first held that Montana courts have jurisdiction over the state law claim, rejecting the argument that two CERCLA provisions combined to strip Montana courts of jurisdiction. Because the landowners’ restoration damages claim was based on state law, that claim did not “arise under” CERCLA, and therefore, section 113(b) did not deprive state courts of jurisdiction. The Court also rejected the argument that the limits on federal courts’ jurisdiction in section 113(h) impliedly limit state court jurisdiction through section 113(b).
The Court then held that the landowners are required to obtain EPA approval before taking remedial action because they are PRPs under CERCLA. The Court explained that PRPs are those parties that fall within the list of “covered persons” in section 107(a). Here, the landowners are covered persons (and, therefore, PRPs) because they own property on which hazardous substances have come to be located (i.e., a “facility”). As PRPs, the landowners are thus subject to the section 122(e)(6) requirement that, once a remedial investigation and feasibility study are underway pursuant to an administrative order or consent decree, “no potentially responsible party may undertake any remedial action” at the site without EPA authorization. The landowners’ PRP status (as determined by the Court) was necessary for this holding. Plaintiffs that are not PRPs are not subject to the section 122(e)(6) requirement. However, the Court’s jurisdictional holding (described above) applies regardless of whether the plaintiff bringing state law claims is a PRP.
Implications and Takeaways. The Court attempted to thread the needle between competing concerns for maintaining state court authority and state law actions (notwithstanding CERCLA), while preserving the “single EPA-led cleanup effort rather than tens of thousands of competing individual ones.” Although it offers some clear takeaways, the Court’s interpretation leaves questions unanswered.
- PRPs in the position of Atlantic Richfield have a potential shield against “gold-plated” cleanups. The opinion provides a clear avenue by which a PRP can potentially fend off state law claims (particularly common law torts) by which other parties might seek to force the PRP to dig deeper, clean cleaner, and otherwise undertake more expensive remedial actions than those directed by EPA. Insofar as those parties’ tort claims (e.g., trespass) are based on facts including hazardous substances entering onto the claimants’ properties, those claimants thereby become CERCLA PRPs subject to the section 122(e)(6) requirement for EPA approval of remedial actions (if that provision’s other triggering criteria are met). The shield is far from absolute (e.g., the party asserting the shield must be a PRP, the site must be subject to an administrative order or consent decree, and EPA could approve its request for additional actions), but it is a helpful possible option.
- The Court dismissed the idea that its decision could chill activities like excavations for a new garden or sandbox, asserting that those activities are not “remedial actions” that would require EPA authorization. However, the Court did not draw a clear line between those activities that fall within the definition of “remedial action” and those that do not. PRPs will need to carefully consider existing regulatory definitions and case law to analyze whether a particular action is a remedial action that requires EPA approval.
- CERCLA broadly defines “response” actions undertaken to address releases of hazardous substances. Response actions can be either “removal” actions or “remedial” actions. The requirement for EPA authorization in section 122(e)(6) is confined to “remedial action,” and does not include “removal” actions. Thus, based on the plain language of the Court’s opinion, parties like the Montana landowners – even if they are PRPs at a site subject to an administrative order or consent decree – could arguably undertake removal actions without EPA approval. However, coordination with EPA is still advisable to ensure that EPA does not end up taking the position that a planned removal action is actually a remedial action that requires EPA authorization.
- Businesses that are PRPs working with EPA at Superfund sites should be sure to consult legal counsel with CERCLA expertise, even when sued by plaintiffs under state law (e.g., common law trespass or nuisance actions), where the complaint does not even mention CERCLA or Superfund. The facts that give rise to the lawsuit may also confirm the plaintiffs’ PRP status under CERCLA, potentially triggering the requirement for EPA authorization, without which no activities constituting “remedial action” may be conducted.