By Josh Bloom
In an eagerly anticipated ruling, on April 20, 2020, the U.S. Supreme Court in an opinion authored by Chief Justice Roberts in Atlantic Richfield Co. v. Christian, has ruled landowners may sue for restoration damages under state law notwithstanding that a CERCLA remedial action was already underway. However, the court also ruled that although those landowners may not be liable under CERCLA because the statute of limitations had run on potential claims against them as facility owners, they nonetheless remain potentially responsible parties for purposes of the CERCLA § 122 bar, which provides that once a remedial investigation and feasibility study is initiated, a PRP may not undertake a remedial action without EPA approval.
At the center of this case is the infamous Anaconda copper smelting facilities outside of Butte, Montana. Those smelting facilities, first built in 1884, and operated through 1980, were designated as one of the original Superfund sites in the early 1980s. Atlantic Richfield Company, which purchased the facilities in the early 1970s, has spent approximately $450 million during the 35 years of the CERCLA cleanup. In 2008, 98 landowners with properties within the Superfund site sued Atlantic Richfield in state court, bringing state nuisance, trespass and strict liability claims. The issue was whether the Montana state courts have jurisdiction to hear claims for restoration damages, which in this case would require cleanup that would go beyond what EPA required under the CERCLA remedial action.
At issue are two provisions of CERCLA. Section 113(b) strips state courts of jurisdiction over claims “arising under” CERCLA, providing that federal district courts have exclusive original jurisdiction over such claims. Section 113(h) provides, with five limited exceptions, that federal courts do not have jurisdiction to hear challenges to selected CERCLA removal or remedial actions. (Those exceptions under § 113(h) generally relate to cost recovery or contribution claims, order enforcement, or § 106 reimbursement) The reasoning behind § 113(h) is that before a CERCLA remedy is approved, the National Contingency Plan and other provisions require significant public and state participation on remedy selection, but once approved, the intent is to implement the remedy without undo interference or delay.
In consideration of the jurisdictional issue, all of the justices, with the exception of Justice Alito, who believed that the question was premature, agreed that state courts have jurisdiction to hear claims that do not “arise under” CERCLA. The provision of exclusive original jurisdiction to federal district courts under §113(b) extends only to CERCLA claims. As for the jurisdictional limitations under § 113(h), the Chief Justice explained that “by its own terms,” § 113(h) refers to federal courts, not state courts. He further noted that the fact that § 113(h) bars federal courts of jurisdiction over certain § 113(b) claims does not bar state courts from hearing a category of cases that do not “arise under” CERCLA. The Chief Justice noted that “if that were Congress’s goal, it would be hard to imagine a more oblique way of achieving it. Often the simplest explanation is the best: Section 113(b) deprives state courts of jurisdiction over cases “arising under” the Act—just as it says—while §113(h) deprives federal courts of jurisdiction over certain “challenges” to Superfund remedial actions—just as it says.”
Furthermore, in response to Atlantic Richfield’s further argument that § 113(b) provides federal courts jurisdiction over all cleanup challenges, whether brought under federal or state law, the Court noted that “[i]t would be one thing for Atlantic Richfield to try to surmount the clear statement rule that applies to the uncommon, but not unprecedented, step of stripping state courts of jurisdiction over federal claims. But Atlantic Richfield’s position requires a more ambitious step: Congress stripping state courts of jurisdiction to hear their own state claims. We would not expect Congress to take such an extraordinary step by implication.”
It is also important to note that there was no question § 113(b) has no bearing on a state plaintiff’s state law compensatory damage claims. The issue in Atlantic Richfield v. Christian was centered on the restoration damage claims, which asked, among other things, that arsenic be cleaned to a level of 15 parts per million (whereas the EPA-approved remedy for arsenic was to clean to a level of 250 parts per million), and that soil be excavated to a depth of two feet (whereas the EPA remedy was for a one-foot excavation). In all, the restoration claim would increase overall cleanup costs by over $50 million.
Although the Court held that the Montana state courts did have jurisdiction to hear the landowners’ restoration damage claims, that did not mean that, even if those landowner plaintiffs prevailed in their state court action, restoration action could be enforced absent EPA approval. Section 122(e)(6) requires that once a remedial action and feasibility study at a Superfund site has been initiated, whether by EPA or another PRP under an administrative order or consent decree, a CERCLA potentially responsible party must obtain EPA approval before it can undertake a remedial action at that site.
In this case, the landowners, notwithstanding that they could be considered PRP’s as facility owners under CERCLA § 107, argued that because any potential claim against them would be barred under the statute of limitations, they were no longer PRPs and therefore not subject to the § 122(e)(6) EPA-approval prerequisite. The Court disagreed, noting that although the statute of limitations defense might prevent liability on the part of landowners, that did not affect their status as PRPs. The same would be true if a PRP could escape liability by claiming an innocent landowner defense—it may not have liability but it would still be a PRP for purposes of § 122(e)(6).
Joshua A. Bloom is a partner at Environmental General Counsel LLP.
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