Courts Considering Liability Relief at Superfund Sites

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By Sylvia Carignan

The Environmental Protection Agency could change the way it ranks environmental and public health hazards at the country’s most contaminated sites, depending on the outcome of a pending federal appeals court decision ( Sunnyside Gold Corp. v.EPA, D.C. Cir., No. 16-1417, argued 2/20/18 ).

Judges on the U.S. Court of Appeals for the District of Columbia Circuit are questioning whether the EPA should determine the full extent of contamination in Colorado’s Bonita Peak Mining District before designating it as a superfund site and placing it under the agency’s oversight. The district includes the Gold King Mine site, where 3 million gallons of wastewater leaked into a river in 2015.

Attorneys watching the case told Bloomberg Environment that companies could be relieved of some liabilities if the court tells the EPA to conduct more thorough assessments before designating superfund sites.

The EPA didn’t assess chemical hazards at certain properties near Gold King Mine because it would have delayed the surrounding area’s addition to the National Priorities List, the agency told appeals court judges Feb. 20. The agency said determining chemical threats across the 100,000-acre district would have “taken a considerable amount of time” without altering its decision.

However, EPA should provide a thorough explanation for including disparate sources at a single superfund site before forcing companies to hash out their potential liability, Steve Jawetz, a principal at Beveridge & Diamond in Washington, told Bloomberg Environment.

Sunnyside Gold Corp. is challenging the EPA rule that added the mining district and the company’s properties to the National Priorities List. The EPA gains oversight at sites added to the list and may negotiate with companies over the cleanup bill, but Sunnyside Gold said the EPA didn't assess its properties before adding them to the Bonita Peak Mining District Superfund Site. The company argued that makes it liable for cleanup cost.

Companies challenge superfund designations “fairly often,” Bart Seitz, a partner in the Washington office of Baker Botts LLP, told Bloomberg Environment. The court’s ruling in this case would be relevant to other superfund sites dominated by mining activities, Seitz said, but also could have some bearing on other contaminated sites.

Testing Won’t Change Listing

The EPA didn’t have data on the quantity of waste or a chemical analysis of the waste at those properties, but further assessment would be unlikely to change the agency’s decision to list the site, Meghan Greenfield, the Justice Department attorney who argued on behalf of the EPA, said.

“The process here is supposed to be quick and inexpensive,” Greenfield told the judges. “Scoring each and every mine would have taken a considerable amount of time.”

The district was placed on the National Priorities List in 2016. The EPA assessed some of the properties in the Bonita Peak Mining District using its Hazard Ranking System, which helps the agency determine the relative threat associated with actual or potential releases of hazardous substances. If sites score at least 28.5 on the system, they may be placed on the National Priorities List. Sites on the list are among the most contaminated in the country.

If the court were to tell the EPA it must score each source of contamination separately, that may be helpful to companies who argue their properties don’t qualify for the National Priorities List, Jawetz said.

‘Roach Motel’

Judge Douglas Ginsburg noted that sites on the National Priorities List often remain there for years, and adding sites is no small matter.

“The NPL is sort of a roach motel, right? You go in, and you don’t come out,” he said.

Greenfield said the agency’s assessments of some mining district properties registered at the maximum Hazard Ranking System score, which is 50. If the agency were to assess all of the properties, she argued, that wouldn't change the fact that the site qualifies for the National Priorities List.

“As a practical matter, that would make little sense,” she said.

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