The Nickel Report

Last month, the Supreme Court held oral argument in a case that addressed cleanup obligations for potentially responsible parties (PRPs) at Superfund sites. In Atlantic Richfield Company v. Christian, a company tasked with remediating one of the nation’s largest Superfund sites is urging the Supreme Court to overturn a Montana Supreme Court decision that permitted residents to sue the company for additional restoration damages, despite its ongoing cleanup efforts under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).

The Anaconda Smelter Superfund Site and Landowners’ Lawsuit

Prior to closing in 1980, the Anaconda Smelter Site in southwestern Montana was home to one of the world’s largest copper smelting operations for nearly a century. During the copper smelting process by the previous owner of the site, the Anaconda Mining Company (AMC), tons of potentially hazardous materials were emitted from the facilities’ smokestacks. EPA placed the facilities and the surrounding areas on the Superfund National Priorities List (NPL) in 1983, shortly after CERCLA was enacted.

Since the 1983 designation, Atlantic Richfield (ARCO), the subsequent owner of AMC, has worked extensively with EPA to clean up the site. Over the last 35 years, the company has spent over $470 million on soil and groundwater remediation in accordance with EPA’s directives. As part of the CERCLA cleanup effort, EPA has required that arsenic levels in soil be reduced below 250 parts per million (ppm) in residential areas throughout the site.

Despite the ongoing remediation, landowners filed suit against ARCO in 2008, seeking an additional $50 million to fund additional cleanup necessary to lower the arsenic level in the soil to 8 ppm—approximately 31 times lower than 250 ppm mandated by EPA’s remedial order. In 2017, the Montana Supreme Court ruled that the residents could pursue their claim against ARCO. The company filed a petition for a writ of certiorari on April 27, 2018, asking the Supreme Court to overturn the state court’s decision.

The Issues on Appeal

ARCO maintains that the Montana Supreme Court’s decision to allow the residents’ claim to proceed was incorrect on three grounds.

First, ARCO asserts that the residents’ claim seeking to remediate affected properties beyond levels required by EPA constitutes a “challenge” to the agency’s cleanup orders in violation of section 113(h) of CERCLA. The Montana Supreme Court rejected this argument and held that the landowners’ remediation plan was not a challenge to EPA’s cleanup effort. The state court reasoned that the residents’ claim would not “alter” EPA’s remediation plan because it could be conducted by the residents themselves after ARCO completed its EPA-ordered cleanup. In its certiorari petition, ARCO argues that the Montana Supreme Court interpreted section 113(h) too narrowly. According to ARCO, rather than focus on who would implement the cleanup order, the court should have determined whether the residents’ claim “calls into question” or “impacts” EPA’s chosen remedy.

Second, the company contends that the residents, as current property owners, are PRPs, who are prohibited from conducting cleanup activities at a Superfund site unless authorized by EPA under section 122(e)(6) of the statute. Again the Montana Supreme Court found ARCO’s argument unpersuasive and declared that the landowners could not be PRPs because they were never designated as such by ARCO or EPA. In response, ARCO asserts that CERCLA defines PRP broadly and imposes liability by operation of law on the current owners and operators of property within a Superfund site, regardless of whether they have been previously assigned PRP status.

Lastly, ARCO argues that the restoration claim is constitutionally preempted by CERCLA. Although CERCLA contains certain savings clauses that preserves state claims—so long as they do not conflict with the statute—ARCO asserts that the Montana Supreme Court wrongly concluded that CERCLA’s savings clauses “categorically preserve plaintiffs’ ability to bring any state-law restoration claims, even those that specifically conflict with CERCLA or an EPA-selected remedy.”

Oral Argument

During the December 3 hearing, the justices seemed to wrestle with the competing interests addressing the landowners’ concerns and maintaining the consistency in Superfund cleanups.

Justice Stephen G. Breyer stated he was worried that finding for the landowners could result in “10,000 juries or 50 states” imposing conflicting duties for Superfund site cleanup efforts that would be “up to hundreds of different judges to decide.” Meanwhile, Chief Justice John G. Roberts seemed to back the government’s position that EPA is in the best position to make remedial determinations concerning Superfund sites. EPA argued that it selects remedial actions based on the evaluation of numerous factors that seek to balance competing considerations in a way that best serves the overall public interest, whereas individual landowners, who are not on the hook for the cleanup costs, are concerned with maximizing the restoration of their property. Justice Roberts appeared particularly concerned about whether property owners’ proposed additional remedies, which include excavation of additional soil areas, could lead to further environmental harm.

In addition to the practical concerns underlying the case, the justices also probed both sides about the legal merits of the preemption issue. Justice Elena Kagan seemed hesitant to agree with ARCO’s argument that CERCLA preempts the residents’ lawsuit. Although she acknowledged the logic of having EPA direct all cleanup activities at Superfund sites, she noted that CERCLA’s savings clause allows states “to impose additional liability or requirements with respect to the release of hazardous substances.”

Justice Ruth Bader Ginsburg intimated that the case could be resolved without ruling on the preemption issue altogether by determining whether the landowners were PRPs under the statute; however, the justices appeared to be split on the issue. Justices Sonia Sotomayor and Kagan claimed that treating the landowners as PRPs, despite having no actual culpability for the contamination, seemed to “be a stretch.” Meanwhile, Justice Breyer seemed to suggest that property owners qualified as PRPs when he told counsel for the landowners that they “should have to go and get EPA’s permission” to carry out their remedial plan. Some justices also floated the possibility of remanding the case to allow landowners to secure the agency’s approval of their restoration plan.

Conclusion

The Supreme Court’s decision in the case could have far reaching implications in the context of CERCLA and beyond. If the landowners’ claim is upheld, PRPs across the country could be exposed to liability for cleanup efforts beyond those specified by EPA.