Outlook 2017: Superfund to Focus on Contribution Claims, New EPA Rules

The federal superfund law celebrates its 37th birthday in 2017, and according to experienced attorneys tracking the litigation, plenty remains to fight about.

The hazardous substance cleanup law, never a model of clarity, formed the basis for several significant legal rulings in 2016.

They included a high-profile decision by the U.S. Court of Appeals for the Ninth Circuit on transboundary aerial pollutants from Canada, and another from the U.S. Court of Appeals for the District of Columbia Circuit clarifying how the federal government should be treated relative to other liable parties.

A spate of interesting superfund cases are on tap for the coming year.

Top among them are another Ninth Circuit case, this one addressing whether a company’s settlement of its liability under another federal statute triggers its right to file a superfund contribution claim.

Another lawsuit to watch in 2017, this one in the U.S. Court of appeals for the Tenth Circuit, is expected to address whether the federal government is responsible for paying for contamination cleanups on federal land leased to mining companies and others.

Look Back: No Aerial Liability, Equal Treatment for Feds

The marquee ruling in 2016 came from the Ninth Circuit, which held that emissions carried by the wind onto land or water don’t constitute “disposal” under the Comprehensive Environmental Response, Compensation, and Liability Act, clearing a Canadian smelter of liability ( Pakootas v. Teck Cominco Metals, Ltd. , 830 F.3d 975, 82 ERC 2045, 2016 BL 241292 (9th Cir. 2016)) (see related story).

Attorneys strongly differ on whether the court got the Teck Cominco decision right.

Attorney Peter Hsiao with Morrison and Foerster in Los Angeles said the court properly followed precedent and that air pollution already is controlled under the Clean Air Act and state law through a carefully designed regulatory scheme.

But Professor Craig Johnston at Lewis & Clark Law School in Oregon said the precedent was distinguishable. “Teck was an emitter—it wasn’t passive movement. That should be adequate to be disposal,” he said.

In another closely watched case, the D.C. Circuit in August said the federal government’s agreement to cover Lockheed Martin Corp.'s cleanup costs wasn’t a basis to reduce the government’s own share of liability ( Lockheed Martin Corp. v. United States , 833 F.3d 225, 83 ERC 1010, 2016 BL 269266 (D.C. Cir. 2016)) (see related story).

The Lockheed decision means the government will be treated like any other liable party in superfund litigation, Prof. Alfred Light at St. Thomas University School of Law in Miami Gardens, Fla., told Bloomberg BNA.

The Ninth Circuit in June also issued a decision holding that a company that has been sued under the superfund law isn't limited to a contribution action to recover cleanup costs at a different but related site ( Whittaker Corp. v. United States , 825 F.3d 1002, 82 ERC 1725, 2016 BL 187374 (9th Cir. 2016)) (see related story).

At the trial court level, the U.S. District Court for the Eastern District of New York in February ruled that listing a contaminated site on the superfund National Priorities List many years after the state of New York discovered the contamination revived the state’s natural resources damages claim ( New York v. Next Millennium Realty, LLC , 160 F. Supp. 3d 485, 82 ERC 1405, 2016 BL 35748 (E.D.N.Y. 2016)) (see related story).

In September, the U.S. District Court for the Eastern District of Missouri held that the owners of a contaminated site couldn’t recover costs under superfund for testing done to confirm that contamination migrated to their property from a nearby site because it duplicated testing already performed by the Environmental Protection Agency ( Wilson Rd. Dev. Corp. v. Fronabarger Concreters, Inc. , 83 ERC 1233, 2016 BL 305802 (E.D. Mo. 2016)) (see related story).

Contribution Claims, Federal Lease Liability

In the coming year, federal appeals courts will consider the intersection of the superfund law and other environmental statutes as they relate to contribution claims, and the extent of the federal government’s superfund liability on federally leased land.

In February, the Ninth Circuit is slated to consider whether superfund provides a contribution claim where a party hasn’t expressly settled its CERCLA liability—an issue that has divided the Second and Third Circuits.

Many other environmental statutes lack express contribution rights. The ruling, if upheld, would ensure that parties settling under those statutes would have an avenue to pursue cleanup costs from other liable parties.

In another case, the Tenth Circuit is set to decide whether the federal government is liable for contamination on federal land leased to a mining company.

Chevron Corp. argues the government provided engineering services and facilitated mining waste disposed of on federal land. Consequently, it should pay a portion of the contaminated area’s cleanup costs.

At the trial court level, the U.S. District Court for the District of South Carolina will consider whether the recipient of a unilateral cleanup order may pursue a cost recovery or contribution action.

Meanwhile, lower courts in Wisconsin and Michigan will consider apportionment and allocation at sediment sites—an issue that has divided courts at the trial and appellate level.

Topic Citation Description Status Latest Story
Contribution Asarco LLC v. Atl. Richfield Co., 9th Cir., No. 14-35723 Appeal from ruling that a consent decree for RCRA and CWA violations also triggers CERCLA statute of limitations for a contribution action. Set for oral argument 2/8/17. Recent Superfund Decision Expands Option of Contribution to Non-CERCLA Settlements
  Chevron Mining v. United States 10th Cir., No. 15-02209 Chevron Mining, which held mining rights on federal land, seeks to hold the U.S. liable as an owner for mining contamination and as an arranger for “facilitating” mining waste disposal. Oral argument held 11/14/16. Chevron Mining to Pay $4M to Restore Natural Resources at New Mexico Mine
  New York v. Gen. Elec. Co., N.D.N.Y., No. 14-cv-00747 GE countersuit against New York for cleanup of PCBs allegedly released by the state's removal methods at scrap yards. New York's sovereign immunity defense ruled inapplicable, liability trial pending. Pretrial motions pending. Court Allows GE Superfund Claims Against N.Y.
  PCS Nitrogen Inc. v. Ross Dev. Corp., D.S.C., No. 14-cv-04252 Contribution lawsuit over supplemental remediation ordered by the EPA; enforcement order held equivalent to civil action for contribution purposes. Summary judgment motions pending. The proceedings are stayed as to defendant Ashley II of Charleston, LLC pending conclusion of bankruptcy proceedings. Enforcement Order Equivalent of Civil Action Limits Party to Superfund Contribution Claim
Cost Recovery White Plains Housing Auth. v. Getty Properties Corp., S.D.N.Y., No. 13-cv-06282 Cost recovery suit over benzene plume barred by CERCLA petroleum exclusion; RCRA claim allowed to proceed. Discovery and depositions ongoing. Status conference set for 4/28/17 Petroleum Exclusion Covers Oil Components, Includes Benzene Released as Gas Degrades
Apportionment & Allocation Appvion, Inc. v. P. H. Glatfelter Co., E.D. Wis., No. 08-cv-16 Lawsuits over apportionment of liability for cleanup costs for PCB contamination at the Lower Fox River Superfund Site. Trial on allocation among NCR, Georgia-Pacific, and Glatfelter set for 3/27/17. Kimberly-Clark Settlement Doesn't Bar Claim, Appvion Says
  ExxonMobil Corp. v. United States, S.D. Tex., No. 10-cv-02386 Litigation involving division of cleanup costs between the federal government and ExxonMobil for adjoining World War II-era industrial sites. Operator liability found for both parties for each site. Trial over allocation of costs pending. Discovery ongoing. ExxonMobil, U.S, to Share Superfund Costs for WWII Factory Waste; Allocation Deferred
  AmeriPride Serv., Inc. v. Texas Eastern Overseas, Inc., E.D. Cal., No. 00-cv-00113 Cleanup cost litigation against multiple parties for tainted soils at an industrial laundry plant in Texas. After 9th Circuit remand, district court rules pro rata approach applies. Allocation trial completed 11/15/16. Briefing completed 12/19/16 on proportionate share approach. Pro Rata Split of Superfund Costs Ruled Fairer
  Emhart Indus., Inc. v. New England Container Co., D.R.I., No. 06-cv-00218 Allocation of cleanup costs for Centredale Manor Superfund Site in Rhode Island. Emhart held jointly liable for failure to establish divisibility of harm. Phase II bench trial continued to 1/17/17. Brief Operation Rejected for Superfund Apportionment
  Georgia-Pacific Consumer Prods. LP v. NCR Corp., W.D. Mich., No. 11-cv-00483 NCR liable as “arranger,” International Paper as “operator,” for PCBs at the Kalamazoo Superfund Site. Bench trial to determine allocation of cleanup costs ended 12/19/15. Post-trial motions ongoing. NCR Liable as Arranger for Recycled Scrap; International Paper Liable as Mill Operator
  Garrett Day LLC v. Int'l Paper Co., S.D. Ohio, No. 15-cv-00036 Multi-party litigation over paper mill contamination brought by assignees of the city of Dayton, Ohio. Amended complaint filed 3/24/16. Pretrial motions ongoing. Failure to Allege ‘Disposal' Warrants Superfund Dismissal
Policy Overlook: Vapor Rules, Insurance to Effect Changes

A high-profile addition to superfund assessment criteria and a pending final rule on financial insurance for the hardrock mining industry are likely to dominate superfund compliance changes writ large in 2017.

The EPA Dec. 8 released a final rule adding vapor intrusion to the superfund Hazard Ranking System (HRS), and lawyers and advocates say it is likely to induce a modest increase to the superfund National Priority List (see related story).

Broadened Superfund Criteria

Vapor intrusion, also known as subsurface intrusion, now will join surface water, groundwater, air and soil contamination as potential factors in the superfund Hazard Ranking System (HRS) assessments, the program’s assessment metric.

Vapor intrusion is the process of volatile compounds migrating through subsurface groundwater or soil to indoor air in above-ground structures. Human exposure can cause a range of health problems depending on the particular chemicals resting below the surface.

The rule (RIN:2050-AG67), which will take effect 30 days after it formally enters the Federal Register, is poised to increase the number of listed sites by making it easier to hit the HRS 28.5 point threshold, Norman Bernstein, a lawyer with Bernstein and Associates LLC in Rye Brook, N.Y., told Bloomberg BNA. That scale draws in scoring from the soon-to-be five total factors.

“The total number of sites which would be eligible for listing under the NPL would increase, and the agency itself has in effect acknowledged that,” Bernstein, a critic of the rule, said. “If they reduced the weight of the other criteria, that would have been a regulatory neutral change, but in fact they put their thumb on the scale.”

A staunch supporter of the new requirement, Lenny Siegel, executive director of the advocacy group the Center for Public Environmental Oversight, agreed more sites likely will fall in the EPA's crosshairs. “I don’t think there will be a flood because a lot of the potential [vapor intrusion] sites are on the NPL for other reasons,” he told Bloomberg BNA. “It’s not going to tilt the entire program in a new direction, but symbolically it reminds people to evaluate [vapor intrusion] as a new contamination pathway, which could be equally important.”

The rule falls within the 60 legislative-day window for the Congressional Review Act (CRA), a mechanism for repeal. But Republicans likely will be selective in their repeal priorities. “This one may be not sufficiently material for Congress to act on it, so the agency would have to go through notice and comment requirements to change the rule,” Bernstein said, referring to guidelines embedded in the Administrative Procedure Act.

In the environment space, Republicans most likely will target climate change rulemaking for immediate CRA repeal, as well as the Interior Department’s coal industry-related stream protection rule (RIN:1029-AC63).

Industry, Advocates Blast Mining Insurance

Meanwhile, the court-ordered finalization of superfund hardrock mining insurance requirements is likely to continue to rankle Western states and mining companies, which immediately lashed out at the EPA following the informal release of the proposal in December (see related story).

The heavily anticipated, court-ordered proposal (RIN:2050-AG61) prompted immediate criticism from Western states and industry, both of which have blasted the rulemaking process repeatedly over the past year.

Following its release, House Natural Resources Committee Chairman Rob Bishop (R-Utah) and Energy and Commerce Chairman Fred Upton (R-Mich.), two fierce critics of the rulemaking, called the regulation burdensome and duplicative. “The latest EPA proposed regulation is the result of sue-and-settle litigation that perpetuates more of the same special interest handouts from this administration,” they said in a statement. “State financial assurance programs and numerous other federal regulations are already in place to ensure environmental stewardship, but the EPA ignored input from those models and stakeholders.”

The EPA rule would force hardrock mine operators to obtain superfund financial assurances to cover hazardous discharge impacts. Hardrock refers to minerals that contain gold, silver, iron, copper, zinc, nickel, tin, lead and other metals, as opposed to, for instance, coal.

Certain categories of facilities are exempt, such as mines less than five acres in size and stream bed mines that don’t use hazardous substances.

The incoming administration isn't obligated to finalize proposals issued under a preceding administration, but the related litigation is a likely bulwark against halting the rulemaking process. The D.C. Circuit in January 2016 said the EPA must finalize the rule by Dec. 1, 2017 ( In re Idaho Conservation League , D.C. Cir., No. 14-1149, 1/29/16 ) (see related story).

The court also decided the EPA must finalize financial assurance requirements for other industries over a staggered period between 2020 and 2024.

Alongside releasing the hardrock mining rule, the agency notified the public that it intends to issue proposals for chemical manufacturing; electric power generation, transmission and distribution; and petroleum and coal products manufacturing sectors (RIN:2050-AG56).

Meanwhile, the EPA released regional guidance in April on the inclusion of financial assurance requirements in cleanup consent decrees and unilateral administrative orders.


The Trump campaign team floated the general idea of devolving EPA’s superfund authority to the states, Don Elliott, a Covington & Burling LLP lawyer in Washington, D.C., and former EPA top-ranking legal official, told Bloomberg BNA. Elliott said that likely would mean states would absorb more cleanup responsibility.

He was unable to provide more details, and since then several superfund professionals have speculated how such a shift would materialize.

That devolution could come in the form of increased state influence over remedy selection, often referred to as a record of decision, Winston Porter, president of Environmental Strategies in Savannah, Ga., and the former head of the EPA’s waste office, told Bloomberg BNA.

States often clean up sites better than federal headquarters, Porter said, while also emphasizing what he described as the excessively long standard process of evaluating remediation strategies and implementing a plan.

“Right now, there are ways for the EPA and the states to work together. States take some of the responsibility and the EPA takes some, but statutory authority still stays at the EPA [headquarters],” Porter said. “In order to get the final authority for picking the remedy to the states, that would likely mean a change in law, and I don’t say that casually.”

The superfund statute doesn't provide the EPA with the authority to delegate compliance to states. That marks a distinction from air, water and Resource Conservation and Recovery Act laws. Still, nearly all states have superfund programs to augment or enhance federal efforts.

Staffing levels and responsibilities vary, however, and the EPA rarely delegates comprehensive superfund assessment and remediation to state programs for the more significant cleanups.

Some superfund professionals are skeptical of such a change. “It’s a double-edged sword,” Bernstein said. “Some state programs are weak. I’m not sure they could do that devolution without substantially increasing monies going to the states.”

Targeted Budget Cuts?

Still, superfund professionals and other stakeholders are flying blind into the incoming year to a certain degree, in light of President-elect Donald Trump’s calls to dismantle the EPA. “We’re going to have little tidbits left, but we’re going to get most of [the EPA] out,” he said in early 2016. That said, Trump never has publicly specified a superfund overhaul, nor has his campaign or transition team.

Following the lapse of a tax on toxic material handlers in the mid-1990s, the EPA either must clean up sites with congressionally appropriated taxpayer funds or get responsible parties to foot the bill.

More than 1,300 sites currently are on the priority list, with an additional 53 sites proposed for listing, according to EPA data dated Nov. 29, 2016. Nearly 400 sites have been deleted from the priority list throughout the life of the program.

Meanwhile, environmental groups fear a slashed budget for the agency. Siegel suggested, though, that targeted cuts actually could stave off massive cuts to superfund.

“It’s real clear that Trump and his prospective appointees want to limit what the EPA does on climate change, and I would expect him to lean against anything else that threatens the fossil fuel companies. But not all exposure and contamination issues are partisan,” Siegel said. “If it’s the [air program] that absorbs the cuts, then other programs might not hurt as much.”

Siegel said Republican legislatures nationwide have rallied around safety measures against, for instance, perfluorinated chemicals contamination.

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