Under what circumstances does federal environmental law trump state common law? This issue is at the heart of a closely watched case to be considered by the U.S. Supreme Court (SCOTUS).
On June 10, 2019, SCOTUS announced that it would review a Montana Supreme Court decision that will have important implications for the clean-up of sites under the Comprehensive Environmental Response, Compensation & Liability Act (CERCLA a/k/a the Superfund Law). In Atlantic Richfield Co. v. Gregory A. Christian, et al., the Montana Supreme Court allowed private residents' common law claims seeking damages for cleanup costs and restoration of property to proceed, holding that state common law claims are not preempted by CERCLA.
The Anaconda Smelter, originally constructed and owned by the Anaconda Copper Mining Company, processed copper ore for nearly a century before shutting down in 1980 at capacity of more than 8,000 tons of ore per day. In 1983, the U.S. Environmental Protection Agency (EPA) designated the area impacted by the Anaconda Smelter, now owned by defendant ARCO, as a Superfund Site under CERCLA. In 1984, EPA issued an Administrative Order requiring ARCO to begin a remedial investigation at the Smelter Site. In 1998, EPA then selected a remedy pursuant to CERCLA that detailed ARCO's cleanup responsibilities at the Site moving forward. As part of the clean-up, EPA required ARCO to remediate residential yards within the Smelter Site that contained levels of arsenic exceeding 250 parts per million in soil, and to remediate all wells used for drinking water with levels of arsenic more than ten parts per billion. ARCO has spent $470 million remediating the Site so far.
Unsatisfied with the EPA's selected remedy, a group of 98 landowners located within the bounds of the Smelter Site (the "Property Owners"), sought the opinion of outside experts to determine what actions would be necessary to fully restore their properties to pre-contamination levels. The experts recommended that the Property Owners remove the top two feet of soil from affected properties and install permeable walls to remove arsenic from the groundwater. Both remedies, however, required more restoration work than what the EPA required of ARCO in its selected remedy. Subsequently, in 2008, the Property Owners filed an action claiming common law trespass, nuisance, and strict liability against ARCO, and seeking restoration damages. Any recovered restoration damages would be placed in a trust account and distributed only for conducting restoration work. ARCO contends, however, that the claim for restoration damages is preempted by CERCLA.
As we've noted in previous blogs, "preemption" is a doctrine of American law stemming from the Supremacy Clause within Article VI of the U.S. Constitution, which provides that federal law is the "supreme law of the land." This means that some state and local laws and regulations are essentially blocked as superseded by federal law or the U.S Constitution. Hundreds of federal statutes expressly preempt state and local intervention, while many more have been interpreted by courts to imply that they preempt state or local laws. CERCLA is one of those federal laws that tends to trump state common law in many (though not all) respects.
On a motion for summary judgment, ARCO advanced three arguments regarding how the Property Owners' claim for restoration damages is preempted by CERCLA: (1) the claim constitutes a direct challenge to EPA's selected remedy and CERCLA's timing of review provisions, preventing the Court from hearing challenges to an EPA remedy; (2) the Property Owners are "potentially responsible parties" under CERCLA, and as such may not perform any restoration activities without EPA approval; and (3) the Property Owners' claim otherwise conflicts with CERCLA and is barred under the doctrine of conflict preemption.
In a lengthy opinion addressing various issues, the Supreme Court of Montana first held that CERCLA does not expressly, through the unambiguous language of Congress in the statute, preempt state common law claims. Instead, CERCLA expressly allows for complementary state laws, including common law, through a series of saving clauses included in 42 U.S.C. §§ 9614(a), 9652(d). The Court then went on to disagree with all three of the arguments ARCO presented and held that Property Owner's Claims for restoration damages under state common law are not barred by CERCLA. The Court first noted that at a minimum, a "challenge" under § 113(h) must be more than merely requiring ARCO to spend more money to clean up the land for the Property Owner's benefit. It must rise to the level of interfering, stopping, delaying, or changing the work the EPA has required. In this case, however, the Property Owners are not asking the Court to interfere with the remediation plan in any way, instead, the Property Owners are asking to be reimbursed for remediation that they will be doing themselves. Secondly, the Court held that the Property Owners are not currently, nor have they ever been, defendants in the legal proceedings in this matter, nor have they been a party to any settlement agreements regarding clean up proceedings, and as such the court declined to declare them as potentially responsible parties. Lastly, the Court held that the claims do not conflict with CERCLA because, as previously mentioned, CERCLA's savings clause, 42 U.S.C. §§ 9614(a), 9652(d), expressly contemplate the applicability of state law remedies.
It will be interesting to see how the conservative-leaning SCOTUS will decide this case. Regardless, CERCLA practitioners hope the decision will add some clarity to the issue of whether CERCLA bars state common law claims. The outcome of this case will have implications for contaminated site litigation moving forward.
Click here to review the Montana Supreme Court's decision in Atlantic Richfield Co. v. Gregory A. Christian, et al., DA 14-0015 (Sep. 1, 2015).
For more information on CERCLA related litigation or if you have been accused of being a "potentially responsible party" under CERCLA, call the attorneys of Periconi, LLC at 212-213-5500.