How many remediation angels can dance on a single remediation pinhead? In the recent NL Industries v. ACF Industries ruling, a federal judge in the Western District of New York decided that, for the purposes of CERCLA cost recovery and declaratory judgment claims, all actions taken to clean up a Superfund site constitute one set of remedial actions, regardless of the number of "operable units" the site is divided into during the remediation.
Here's how the court decided this: from 1892 to 1972, NL Industries ("NL") operated a brass foundry on a 7.5 acre portion of what later became a Superfund site in Depew, New York. In 2004, NL entered into a consent order with EPA, under which it performed response activities at the site. NL removed hazardous materials and soil from the "Phase I" area of the Superfund site, and completed remedial action on this portion in early 2007. However, during these response activities, it discovered that the contamination was broader than expected. A second "Phase II" remediation area was added to the Superfund site in late 2007; cleanup of this area is currently underway.
In 2010, NL brought suit against a number of companies already named potentially responsible parties by EPA, as they had owned or operated on properties within the bounds of the Superfund site over time. NL sought cost recovery and contribution under CERCLA for amounts it had spent in cleaning up the "Phase I" portion of the site, as well as a declaratory judgment under CERCLA for amounts it would expend for "Phase II" cleanup, and indemnification and contribution under state common law.
One defendant moved to dismiss the action, alleging that the CERCLA claims were time barred, the declaratory judgment claim was premature, and the state law claims were preempted. This was referred to a Magistrate Judge, who recommended that the motion to dismiss be denied as to the CERCLA claims, but granted as to the declaratory judgment and state law claims. Both parties objected.
The Court adopted the Magistrate Judge's position as to the CERCLA and state law claims, but rejected his recommendation on declaratory judgment. Quoting an earlier federal case in the neighboring Northern District of New York, the Court recognized that "regardless of the number of operating units at a site, there can be only one remedial action for any given facility." That is, all removal activities at any one Superfund site are considered a single action, for statute of limitations purposes. Here, cleanup of the "Phase II" area was merely a continuation of remediation at the "Phase I" site. As remediation of "Phase II" has not yet been completed, the statute of limitations had not yet began to run.
Similarly, the Court determined that NL's allegations that it has incurred and would continue to incur response costs for remediation of "Phase II" were sufficient to support its declaratory judgment action, in light of the "Phase I" and "Phase II" work being considered part of the same removal action. However, the Court found no error in the Magistrate Judge's decision that the state law remedies of indemnification and contribution are not available in a CERCLA action, as Congress intended the federal statute to provide a single mechanism for apportioning liability.
Although this ruling allows you to wait until the end of remediation to seek compensation from other PRPs, it is best to act early to preserve your rights. Periconi, LLC has been involved in several CERCLA cost recovery matters, and can help ensure that you are optimally protected under the law.