§14.3 - CERCLA Actions

§14.3 CERCLA ACTIONS

CERCLA establishes a federal program to address the cleanup of contaminated sites throughout the country. It provides the EPA with statutory authority and funding to perform cleanups itself, to order private parties to conduct cleanups, or to negotiate settlements whereby private parties consent to perform cleanups. 42 U.S.C. §§9604, 9606, 9622. Private parties may also perform a cleanup of a contaminated site voluntarily. The costs of investigating and cleaning up a contaminated site are referred to as response costs.

CERCLA provides two types of actions for parties to recoup response costs: cost recovery actions under 42 U.S.C. §9607(a)(4)(B), and contribution actions under 42 U.S.C. §9613(f)(1). CERCLA contribution and cost recovery actions arise when one or more parties volunteer or are forced to pay more than their fair share of the cleanup costs. Such parties may seek to recover costs from other potentially responsible parties in a cost recovery action or in a contribution action.

(1) Who is a potentially responsible party?

CERCLA imposes retroactive and strict liability on potentially responsible parties (PRPs) for response costs resulting from a release of hazardous substances into the environment. Burlington N. & Santa Fe Ry. Co. v. United States, 556 U.S. 599, 608-09, 129 S. Ct. 1870, 173 L. Ed. 2d 812 (2009); Franklin Cnty. Convention Facs. Auth. v. Am. Premier Underwriters, Inc., 240 F.3d 534, 552 (6th Cir. 2001). CERCLA §107(a), 42 U.S.C. §9607(a), creates liability for four categories of PRPs that may be subject to contribution or cost recovery claims: (1) current owners or operators of a facility; (2) past owners or operators of a facility at the time of disposal of any hazardous substances; (3) any person who arranged for disposal or treatment of hazardous substances at a facility; and (4) any person who transported hazardous substances to a facility. To establish its prima facie case in a cost recovery or contribution suit, a party must plead and prove that a defendant falls into one or more of these four categories. Cose v. Getty Oil Co., 4 F.3d 700, 703-04 (9th Cir. 1993).

Liability under the categories in CERCLA §107(a), 42 U.S.C. §9607(a), is limited to persons, which includes, among other entities, an individual, corporation, partnership, or the United States or a state government. 42 U.S.C. §9601(21). CERCLA generally imposes liability upon present owners of a contaminated site irrespective of whether the present owner or operator contributed to the contamination. Past owners and operators may be held liable for hazardous waste activities they conducted at a site decades ago, even if such activities may have been legal at the time. In general, when one company sells or otherwise transfers all its assets to another company, the latter is not liable for the debts and liabilities of the transferor. See, e.g., Atchison Topeka & Santa Fe Ry. Co. v. Brown & Bryant, Inc., 159 F.3d 358, 361 (9th Cir. 1998). However, successor corporations may be held liable for the contamination if common-law principles of successor liability are satisfied. See id. at 361-62. Parent companies may also be held directly liable as an operator if the parent company actively participated in, and exercised control over, the operations of a subsidiarys facility, or derivatively liable if the corporate veil can be pierced. See United States v. Bestfoods, 524 U.S. 51, 118 S. Ct. 1876, 141 L. Ed. 2d 43 (1998).

(2) What cleanup costs are recoverable?

For a private party who cleans up a site to recover its costs from other PRPs, several prerequisites must be satisfied. First, the costs incurred in cleaning up the site must be consistent with the National Contingency Plan (NCP), which outlines specific steps parties must take in choosing a remedial action plan and cleaning up a hazardous waste. Carson Harbor Vill., Ltd. v. Cnty. of Los Angeles, 433 F.3d 1260, 1265 (9th Cir. 2006); 42 U.S.C. §§9605, 9607(a)(1)-(4)(B). Second, the cleanup costs must be necessary costs of response, as that term is defined in the statute and construed in CERCLA case law. 42 U.S.C. §9607(a)(1)-(4)(B).

Once a party has incurred response costs consistent with the NCP, it may seek a judgment for those costs already incurred and may request declaratory relief for any future response costs. See, e.g., Wickland Oil Terminals v. ASARCO, Inc., 792 F.2d 887, 893 (9th Cir. 1986). Injunctive relief, however, is not available to private parties. That is to say, private parties may not obtain a court order compelling another PRP to implement a cleanup action. See, e.g., Ohio v. U.S. Envtl. Prot. Agency, 997 F.2d 1520 (D.C. Cir. 1993); Cadillac Fairview/Cal., Inc. v. Dow Chem. Co., 840 F.2d 691, 696-97 (9th Cir. 1988).

(a) Consistency with the NCP

Cleanup actions undertaken by private parties are considered consistent with the NCP if the actions, when evaluated as a whole, are in substantial compliance with the regulatory requirements set forth in 40 C.F.R. part 300 and the actions result in a CERCLA-quality cleanup. Carson Harbor Vill., 433 F.3d at 1265. A CERCLA-quality cleanup has been described as a response action that (1) protects human health and the environment, (2) utilizes permanent solutions and alternative treatment technologies or resource recovery technologies to the maximum extent practicable, (3) is cost-effective, (4) satisfies Applicable and Relevant or Appropriate Requirements (ARARs) for the site, and (5) provides opportunity for meaningful public participation. Franklin Cnty., 240 F.3d at 543. The NCP does not require a showing that a plaintiff fulfilled each and every applicable NCP provision, but rather mandates substantial compliance. La.-Pac. Corp. v. ASARCO Inc., 24 F.3d 1565, 1575-76 (9th Cir. 1994), as amended (Aug. 30, 1994), cert, denied, 513 U.S. 1103 (1995).

In government-initiated cost recovery actions, the burden of proof is on the defendant to prove that the governments costs were not consistent with the NCP. 42 U.S.C. §9607(a)(1)-(4)(A); see, e.g., United States v. Chapman, 146 F.3d 1166, 1169 (9th Cir. 1998); United States v. Hardage, 982 F.2d 1436, 1442-43 (10th Cir. 1992). In private cost recovery or contribution actions, however, the burden is on the plaintiff seeking recovery to prove that its cleanup costs were incurred consistent with the NCP. 42 U.S.C. §9607(a)(1)-(4)(B); see, e.g., Pub. Serv. Co. of Colo. v. Gates Rubber Co., 175 F.3d 1177 (10th Cir. 1999); Stanton Rd. Assocs. v. Lohrey Enters., 984 F.2d 1015 (9th Cir. 1993). [A]ny response action carried out in compliance with the terms of an order issued by EPA pursuant to section 106 of CERCLA, or a consent decree entered into pursuant to section 122 of CERCLA, will be considered consistent with the NCP. 40 C.F.R. §300.700(c)(3)(ii).

(b) Necessary costs of response

In determining whether response costs are necessary, the Ninth Circuit Court of Appeals focus[es] not on whether a party has a business or other motive in cleaning up the property, but on whether there is a threat to human health or the environment and whether the response action is addressed to that threat. Carson Harbor Vill. v. Unocal Corp., 270 F.3d 863, 872 (9th Cir. 2001), cert. denied, 535 U.S. 971 (2002). A substantial number of courts have considered whether specific types of costs incurred by private party plaintiffs fall within the definition of response costs for purposes of CERCLA §107(a)(1)-(4)(B), 42 U.S.C. §9607(a)(1)-(4)(B). The following types of costs have been found to be recoverable:

The following costs are generally not recoverable under
CERCLA: