Comprehensive Environmental Response, Compensation and Liability Act (CERCLA)

Overview

The Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), codified in 42 U.S.C. Chapter 103, is a large piece of legislation passed in 1980 that gives the Environmental Protection Agency (EPA) the ability to intervene in managing land contaminated with high levels of hazardous materials. Congress enacted CERCLA to address the environmental and health risks created by industrial pollution after the discovery of several highly contaminated sites in the 1970s. See: Love Canal, Times Beach, Valley of the Drums & Mottolo Pig Farm.

CERCLA permits the EPA to go and find potentially responsible parties (PRP) for environmental contamination and compel them to perform adequate cleanup or pay damages for the cleanup of contaminated sites. Additionally, Congress created the Hazardous Substance Superfund to give the EPA funds to clean up contaminated sites where there is no viable responsible party. As a result, CERCLA is commonly called “Superfund.”

Response Actions

The federal government may take two types of actions under CERCLA to address contamination:

Removal Actions:

These are short-term actions authorized by CERCLA; these may be taken to address releases or threatened releases that require a prompt response.

Remedial Actions:

These are long-term actions authorized by CERCLA; these permanently and significantly reduce the risk of release of hazardous substances.
- These actions may only be taken at places on the National Priorities List (NPL). To be included on the NPL, a proposed site is first subject to a Preliminary Assessment / Site Inspection (PA / SI) and then to a Remedial investigation / Feasibility Study (RI / FS).
- Balancing numerous factors, including types of contamination and proximity to people, the EPA selects the most urgent sites for the NPL through a Hazard Ranking System.

Some types of hazardous contamination remain outside the scope of CERCLA and fall under other programs addressing such contaminations. This includes many types of nuclear waste and petroleum.

Liability

Government Liability

The EPA can use the Superfund for any removal actions as they are responding to emergency situations. The Superfund can only be used for remedial actions if they are on the NPL, as these actions tend to take much more time and resources. CERCLA tries to focus the federal resources on the most threatening and contaminated sites. States must pay half the costs of remedial actions for non-federal NPL sites, but they do not typically pay for removal actions.

Scope of Liability for PRP

CERCLA casts a wide net in bringing in responsible parties, as current owners, past owners, arrangers, and transporters may be held strictly liable for contamination for costs of cleanup and for damages. This includes contamination that spreads to neighboring property. The EPA can seek reimbursement or upfront payment of costs from the PRP, and often, EPA negotiates with multiple PRP to allocate liability and cleanup responsibilities. PRP may also be liable to individuals that incur part of the cleanup costs or damages.

Although there have been challenges to the apparently retroactive nature of this (as parties have been held liable for actions that predate the statute), the courts have held that if the problems caused by the waste are ongoing, and the statute is a reimbursement obligation rather than a punishment, the statute is not retroactive, and thus not unconstitutional. US v. Monsanto, 858 F. 2d 160 (4th Cir. 1988). The Monsanto court also justified the retroactive nature as such: "CERCLA operates remedially to spread the costs of responding to improper waste disposal among all parties that played a role in creating the hazardous condition." And it is also important to note that additional challenges under the Commerce Clause have been rejected as well. See US v. Olin, 107 F.3d 1506 (11th Cir. 1997).

Potentially Responsible Parties (PRP)

To find PRPs, the "EPA looks for evidence to determine liability by matching wastes found at the site with parties that may have contributed wastes to the site." (See this EPA Article)

42 U.S. Code § 9607 outlines 4 different entities which qualify as PRPs:

Current Owners / Operator. Although this excludes property acquired through foreclosure or a security interest, this will still include current owners even if they made no contribution to the hazardous release.
- In NY v. Shore, a landowner who had purchased a contaminated site with the intention of cleaning it up and developing it, was held liable for clean up costs as he was aware of the condition of the land when he purchased it (and that dumping was still on-going at time of purchase).
Past Owner / Operator at the time the pollution occurred. Prior owners / operators will be held liable as well for any release of toxic substance that occurred during their possession / control of the land.
- Even a party who does not / did not own a facility may be liable as an "operator" if they had substantial control over the activities that lead to the release of hazardous substances.
  - See also: US v. Bestfoods, 524 U.S. 51 (1998).
Arrangers (person who arranged for disposal of a hazardous substance at a site).
- Under the "useful products doctrine" if you are not arranging for disposal, then you are out of the system. Thus, a producer of a chemical that is sold for use (not disposed of) is not an arranger.
Transporters (person who transported a hazardous substance to the site).
- Transporter liability is premised on the transporter playing some role in the selection of the site where the hazardous substances are taken.
  - See also: Tippins, Inc v. USX Corp., 37 F.3d 87 (3d. Cir. 1994).
- Additionally, even if the transporter moves the substance from one contaminated area of a parcel to another, uncontaminated area, the transporter will still be held liable.
  - See: Kaiser Aluminum & Chemical Corp. v. Catellus Development Corp., 976 F.2d 1338 (9th Cir. 1992).

Defenses

Although CERCLA imposes Strict Liability as well as Joint and Several Liabilities, creating major liability for involved parties, there are limited defenses available to avoid CERCLA liability.

While the act has a strict liability standard, a defendant may be able to escape liability by proving that even though they had mere knowledge of the pollution, they took steps to reduce the likelihood of spills.
- In Burlington Northern v. United States, 129 S. Ct. 1870 (U.S. 2009), the Supreme Court found that Shell, who supplied chemical products to Brown & Bryant Inc. (a chemical distribution business) was not an arranger and thus not responsible for Brown and Bryant's spills.
- The court noted that Shell took numerous steps to reduce the likelihood of spills and that Shell's mere knowledge that spills and leaks contented to occur was insufficient grounds for including Shell as an "arranger" of disposal.

42 U.S. Code § 9607(b) provides potential defenses:

An act of God / an act of War
- Courts have held these defenses do not apply to events that could be anticipated, such as heavy rains or earthquakes; rather these defenses would be limited to an exceedingly rare and unforeseen set of circumstances.
Third-party defense
- This defense will only apply if:
  - The PRP can show they exercised due care, and
  - There was no contractual relationship with the egregious third party.
- Thus, this defense will not apply if the dumper was an employee, agent, parent company, subsidiary, or anyone in a contract with the PRP.
  - For example, the third-party defense could apply in the case of a midnight dumper. Here, unbeknownst to the landowner, someone secretly dumped toxic waste on the landowner's land, and the landowner had no reason to suspect this might be happening.
Innocent landowners
- In response to criticism, amendments to CERCLA known as the Superfund Amendments and Reauthorization Act (SARA), include a defense for innocent landowners who "undertook all appropriate inquiries" before purchasing the land, and "had no actual or constructive knowledge" of the hazardous substance.
De minimis settlements
- Should the EPA determine a PRP contributed only a minimal amount of hazardous waste (as compared to other wastes at the site), and this waste did not contribute significantly to the clean up, the EPA may offer a settlement to that PRP.
- This policy is designed to protect small businesses who were not major contributors to the mess.
Separate harm
- Likewise, if a PRP can show that the mess was contained and removed (and thus contributed in no way to the hazardous release), the PRP may limit liability.
42 U.S. Code § 9607(q) Contiguous Properties
- This protects neighbors to polluted lands - a person who takes reasonable care and who is unaware of hazardous waste leaking onto their land from a contiguous property will not be liable

Brownfields

A brownfield is a property that has become underused because of the potential for CERCLA liabilities related to the property. An unintended consequence of CERCLA was that developers would refuse to purchase and attempt to clean brownfields for fear of potential liability for owning the land. In response, Congress created 42 U.S. Code § 9607(r) to protect developers and encourage them to clean up brownfields. The statute prevents liability being assigned to a bona fide prospective purchaser, so long as the purchaser does not impede the performance of either a response action or natural resource restoration.