Posted by: Steven M. Taber | March 1, 2009

Northern District of California Rules that EPA Must Publish Financial Assurance Regulations for Superfund Cleanups

On February 26, 2009, Judge William Alsup of the U.S District Court for the Northern District Court of California ruled that the U.S. Environmental Protection Agency must publish a notice that identifies classes of facilities, owners, and operators for which financial assurance requirements will first be developed under Section 108(b) of CERCLA.  42 U.S.C. 9608(b).

Although the lawsuit concerned the EPA’s loophole that allows polluting companies to get out of paying for costly cleanups by declaring bankruptcy, ats is typical in most Bush-era EPA filings, EPA’s primary defense to allegations came not from actually defending its conduct, but from attacking the standing of the plaintiffs.  Judge Alsup spends 8 pages sorting out the standing issues, and 4 pages addressing the substantive issues.

Even when the court turns to the substantive allegations, the EPA, once again seeks the protection of a technical limitation.  The plaintiffs asserted that EPA has a non-discretionary duty under 42 U.S.C. 9608(b)(1) to publish notice of classes, and promulgate and implement regulations regarding financial assurance for Superfund cleanups under CERCLA.  Although the EPA concedes that it has not published the required notice, it contended that the claim is time-barred by the six-year statute of limitations set forth in 28 U.S.C. 2401.

Judge Alsup ruled that the sec. 2401 violations were of a “continuing violation” nature, and therefore, each day that the EPA failed publish a notice was a new violation.  Although the U.S. Circuit Courts of Appeal are split as to whether environmental violations are “continuing violations” and the Ninth Circuit has not ruled one way or the other, Judge Alsup found the language in a recent District of Oregon case persuasive that time-bars are to protect against stale claims, but “[w]hen the statutory violation is a continuing one the staleness concern disappears.”

For that reason the Court ruled that EPA must identify and publish notice of classes as specified in Section 108(b)(1) by May 4, 2009.  The Court also states that it will hold the issues of EPA’s duty to promulgate and implement financial assurance requirements in abeyance pending the publication of notice of classes, “as the Court believes this will shed light on the merits of the other challenged duties under Section 108(b).”

Although the Department of Transportation was a Defendant in the lawsuit, the court granted DOT’s motion for summary judgment on the basis that the plaintiffs did not have standing to sue DOT because no “injury is fairly traceable to DOT’s action or inaction.”

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