Feds Must Chip In on Superfund Cleanup Tab, 9th Circuit Says

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By Steven M. Sellers

The federal government shouldn’t have been let off the hook for superfund cleanup costs at a California aeronautical manufacturing plant, the U.S. Court of Appeals for the Ninth Circuit ruled Oct. 4 ( TDY Holdings, LLC v. United States , 9th Cir., No. 15-56483, 10/4/17 ).

The Ninth Circuit said a district court improperly allocated 100 percent of the cleanup costs at the San Diego plant to TDY Holdings LLC, given how closely the U.S. military was involved in plant operations as early as the 1940s, the court said.

The ruling gives TDY and its corporate predecessor, Ryan Aeronautical Co., a fresh opportunity to argue that the Department of Defense should bear some cleanup costs stemming from the release of toxic chemicals required by government contracts dating back to World War II.

The cost allocation was a “sharp deviation” from court decisions interpreting the Comprehensive Environmental Response, Compensation, and Liability Act, the Ninth Circuit said.

The manufacturing operation, which closed in 1999, released polychlorinated biphenyls, as well as chromium compounds and chlorinated solvents, both of which were required by the federal government to ensure product quality, according to the decision.

Saddling the military contractor with all cleanup costs primarily incurred in war-effort production “was a 180 degree departure from our prior case law” and out-of-circuit cases, particularly when the government required the use of two of the chemicals before their toxicity was recognized, the court said.

The government also had agreed to pay some of the cleanup costs at the plant in some of the contracts, the court said.

Circuit Judge Paul J. Watford concurred in the decision but said most of the costs still should be allocated to TDY.

U.S. Circuit Judge Morgan Christen wrote the opinion, joined by Judges J. Clifford Wallace.

The law offices of Morgan Lewis & Bockius represented TDY.

For More Information

The opinion is available at http://src.bna.com/s6O.

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