Comprehensive Environmental Response, Compensation and Liability Act (CERCLA)

OVERVIEW OF CERCLA

Recently Posted Articles concerning CERCLA:

  1. Northern District of California Rules That  EPA Must Publish Financial Assurance Regulations for Superfund Cleanups,” posted 03/01/2009.
  2. “Court Tells GE:  CERCLA Does Not Violate 5th Amendment.” Posted 01/28/2009
  3. “EPA’s Exemption for Air Releases of Hazardous Substances from Animal Waste at Farms Gets it From Both Sides.” Posted 01/21/2009.
  1. CERCLA
    1. The critical statutory provision is CERCLA 107(a)(4)(B), 42 U.S.C. sec. 9607(a)(4)(B).
      1. The section provides: “[any responsible party (PRP) associated with a ‘facility’] from which there is a release, or a threatened release which causes the incurrence of response costs, of a hazardous substance, shall be liable for . . . [any] necessary costs of response incurred by any other person consistent with the National Contingency plan.”
      2. This provision has been interpreted to create a private right of action for recovery of response costs.
      3. Plaintiff may itself be a PRP statutorily liable for governmental or private party response costs.
      4. But plaintiff is not required to be a PRP to maintain private cost recovery action.
    2. Elements of a claim under section 107(a)(4)(B).
      1. There is or has been a “release” or “threatened release” of a hazardous substance.
        1. Broad definition of “release” in CERCLA ¤ 101(22): “spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, or disposing into the environment (including the abandonment or discarding of barrels, containers and other closed receptacles containing any hazardous substance or pollutant or contaminant).”
        2. “Release” construed broadly to include mere presence of hazardous substances in soil and groundwater.
        3. “Threatened release” likewise broadly construed. E.g., barrels containing hazardous substances with minor leaks; and presence of PCBs in concrete flooring.
        4. A plaintiff need not demonstrate that emissions violate a quantitative threshold to establish the “release” of a hazardous substance within the meaning of CERCLA. However, a party must demonstrate that a release violates or threatens to violate some state or federal standard in order to justify and recover incurred response costs.
      2. Hazardous substances have been “disposed of”:
        1. CERCLA sec. 101(29) defines “disposal” similarly to release.
        2. “Disposed of” has been broadly interpreted. E.g., indoor spilling of PCBs deemed disposal; and lead dust settling inside warehouse deemed disposal.
        3. Disposal has been found to occur when hazardous materials are moved or released during landfill excavations.
        4. But in one case general movement and migration of a hazardous substance on property at the time the defendants owned was held not to constitute “disposal”.
      3. “Hazardous substance.”
        1. Hazardous substances are defined in CERCLA ¤ 101(14) by reference to other federal statutes:
          1. Section 311 of the Clean Water Act, 33 U.S.C. ¤ 1321.
          2. Section 102 of CERCLA, 42 U.S.C. ¤ 9609.
          3. Section 3001 of RCRA, 42 U.S.C. 6921.
          4. Section 307 of the Clean Water Act, 33 U.S.C. ¤ 1317.
          5. Section 112 of the Clean Air Act, 42 U.S.C. ¤ 7412.
          6. Any other hazardous substances or mixture which EPA chooses to list under 15 U.S.C. ¤ 2606.
        2. A material need not necessarily be a “waste” intended for disposal in order for it to be deemed a hazardous substance for CERCLA liability purposes. E.g., spent caustic solution that was purchased to neutralize acidic soil generated in oil reclamation process was a “hazardous waste” for purposes of CERCLA liability.
        3. EPA’s listing of a material as a hazardous substance establishes such as a matter of law.
        4. Courts have continued to hold that there is no quantitative minimum applicable to the term hazardous substance.
        5. As a procedural matter, the plaintiff has the burden of proving that materials are “hazardous substances.” E.g., opinion testimony that substances found at site were “probably flammable” insufficient to establish they were hazardous substances.
        6. Exclusions from definition of hazardous substances are narrowly construed. For example, the petroleum exclusion applies to unrefined and refined gasoline and all of its components and additives, even though some constituents themselves are designated hazardous substances. But the exclusion has not been extended to contaminants found on an oil company’s property in excess of the amounts that would have been added during the oil refining process.
        7. Asbestos incorporated into buildings is not a hazardous substance for which costs of removal are recoverable under CERCLA. E.g. CERCLA does not authorize the use of Superfund in response to a release or threat of release from products that are part of the structure of residential or business buildings; but one case held that CERCLA is applicable to private cost recovery action for the removal of asbestos.
      4. “Facility.”
        1. Broadly defined as “any site or area where a hazardous substance has been deposited, stored, disposed of, or placed or otherwise come to be located.” CERCLA sec.101(9).
        2. Virtually anything can be a “facility.” E.g., truck full of paint cans; real estate subdivision built on a former wood treating facility; any site where a hazardous substance is located.
    3. Liable parties
      1. CERCLA plaintiffs may assert claims against one or more of the following “responsible parties.”
      2. Current owner and operator.
        1. CERCLA imposes liability upon those who currently own or operate a facility regardless of whether the current owner or operator caused or contributed to the release or threat of release or disposed of hazardous substances on site.
        2. Need only be owner or operator.
        3. Need only have indicia of ownership. E.g., trustee and beneficiary of real estate trust an “owner”.
        4. A lessee is an owner or operator.
      3. Past owners and operators: CERCLA imposes liability on those who owned or operated a facility at the time of disposal of hazardous substances regardless of whether they caused or contributed to the release or threatened release.
      4. Generators.
        1. Generator is any party who “arranged for the treatment or disposal” of hazardous substances at a facility requiring cleanup. CERCLA sec. 107(a)(3).
        2. Liability attaches to the party responsible for deciding the manner in which the substance was disposed.
        3. A generator does not need to know to which site its wastes were taken in order to be held liable as one who arranged for the disposal of hazardous substances.
        4. The sale of a useful product containing a contaminant does not generally transform the seller into a generator.
        5. However, generator liability may attach where the generation of hazardous wastes is inherent in a formulation process, such as pesticide formulation.
      5. Transporters.
        1. CERCLA imposes liability on any person who accepts any hazardous substance for transport to a facility requiring cleanup, if the transporter selected the facility. CERCLA ¤ 107(a)(4).
        2. Common carriers are excepted from liability, unless they actually select the site for disposal.
      6. Other potentially liable parties (see other outlines included with these course materials for detailed discussion).
        1. Lenders.
        2. Parent corporations and/or controlling shareholders.
        3. Successor and/or predecessor corporations.
        4. Individuals who participate in decisions concerning handling and disposal of hazardous substances or whose authority within company would allow them to ensure that hazardous substances are handled and disposed of properly.
    4. Liability principles.
      1. Joint and several liability.
        1. Defendants under CERCLA are jointly and severally liable where the harm at a site is indivisible.
        2. There is no defense to joint and several liability for parties that are de minimis with respect to the toxicity or volume of their contributions to a site.
        3. The question of whether the harm is divisible is one of fact, and defendants rarely can establish divisibility.
        4. Defendants have a right to seek contribution, but the court in its discretion may defer contribution issues to a later action.
      2. Causation.
        1. Traditional tort notions such as proximate cause are inapplicable to actions brought under CERCLA.
        2. A minimal causal nexus between a generator’s waste and site conditions is required to establish liability. The plaintiff need only prove a generator’s wastes were sent to the site and substances chemically similar to those in the generator’s waste were found at the site.
        3. Also, a minimal nexus is required between a release and the incurrence of response costs. A plaintiff need not prove actual contamination of a property to establish liability under CERCLA; the issue is whether a release or threat of release caused response costs.
    5. Courts have rejected defendants’ efforts to limit the instances in which CERCLA claims may be asserted.
      1. private cost recovery action can be brought at any location. Site need not be on National Priorities List.
      2. Governmental involvement at site is unnecessary.
        1. Federal government authorization not prerequisite.
        2. Federal government approval of cleanup action not prerequisite.
        3. Not necessary for state or local governmental action to precede the response.
      3. Not necessary to provide 60 day notice under CERCLA sec. 112.
      4. Note, however, that CERCLA sec. 113(l) now requires plaintiff to provide copy of complaint to the Attorney General and the EPA Administrator.
        1. May discourage lawsuits by parties seeking response costs for cleanup of own property, if want to avoid government involvement.
        2. In light of government’s resource constraints, requirement is likely to have no practical effect.
        3. In any event, not clear that fulfilling requirement is jurisdictional prerequisite to cause of action.
    6. CERCLA does provide limits on recovery.
      1. Plaintiff can only recover “response costs.”
        1. Includes costs of investigation, testing, assessment, site security.
        2. Does not include cost of pre-purchase environmental evaluation.
        3. Does not include economic losses or damages.
        4. Does not include medical monitoring for personal health reasons, or medical expenses for treatment of personal injuries or disease.
        5. Might include medical testing and screening to assess the effect of a release on public health.
        6. Does not include costs of relocating a business, or of a permanent plant shut-down.
        7. May or may not include attorneys’ fees.
        8. Injunctive relief (e.g., to compel defendant to perform cleanup) is not available.
      2. Plaintiff must incur response costs before bringing suit.
        1. However, cleanup need not have completed.
        2. Also, declaratory relief may be available.
        3. Plaintiff need not have incurred response costs if it seeks a declaratory judgment of nonliability.
      3. Plaintiff must demonstrate that response costs are necessary.
      4. Additionally, must prove response costs are consistent with the National Contingency Plan (NCP).
        1. Determined in light of NCP in effect when response costs incurred.
        2. One court has interpreted consistency as requiring strict compliance with all procedural requirements of NCP.
        3. Another court has held that “consistency with the NCP does not necessitate strict compliance with its provisions.”
        4. EPA has adopted the latter view in its latest revision to the NCP. “A private party response action will be considered ‘consistent with the NCP’ if the action, when evaluated as a whole, is in substantial compliance with the applicable requirements . . . and results in a CERCLA-quality cleanup.” 55 Fed. Reg. 8666, 8858 (March 8, 1990), to be codified at 40 C.F.R. sec. 300.700(c)(3)(i).
    7. Defenses to liability
      1. Statutory defenses are extremely limited. CERCLA sec. 107(b) provides defense only if the defendant can prove that the releases in question and resulting damages were caused solely by:
        1. An act of God;
        2. An act of war; or
        3. An act or omission of a third party other than an employee or agent of the defendant, or other than one whose act or omission occurs in connection with a contractual relationship with the defendant.
      2. Non-statutory defenses may provide a more realistic basis for avoiding liability.
        1. Contractual defenses: Although PRPs cannot eliminate their CERCLA liability by contract, CERCLA does not preclude insurance, hold harmless or indemnification agreements — i.e., PRPs remain liable to the government but may allocate response costs among themselves by contract. Contracts allocating CERCLA responsibility are assessed under state contract law.
        2. In real property and asset purchase contracts, “as is” clauses have been held to be merely warranty disclaimers and are not effective to shift liability for CERCLA costs.
        3. Likewise, the caveat emptor defense has been rejected; i.e., a seller of contaminated property cannot avoid CERCLA liability by asserting that the caveat emptor doctrine shields the seller.
        4. Equitable defenses.
          1. Several courts have acknowledged that equitable defenses may be raised because cost recovery under CERCLA sec. 107 is in nature of restitution, an equitable remedy.
          2. Equitable defense of unclean hands has been successfully used to bar recovery under CERCLA sec. 107(a)(4)(B).
      3. Equitable allocation of response costs.
        1. Because a cost recovery action is restitutionary, courts will consider equitable factors in apportioning liability.
        2. Such apportionment is consistent with the statutory policy that in contribution actions under CERCLA sec. 113(f), court may “allocate response costs among liable parties using such equitable factors as the court determines are appropriate.”
        3. Courts are likely to rely on “Gore factors” in making equitable allocations.
          1. Ability to distinguish one’s contribution to the release or disposal.
          2. Amount of hazardous substances involved.
          3. Degree of toxicity of hazardous substances involved.
          4. Degree of involvement in generation, transportation, treatment, storage or disposal of the hazardous substance.
          5. Degree of care exercised, taking into account characteristics of the hazardous substances.
          6. Degree of cooperation with government officials to prevent harm to public health or the environment.
      4. Courts have discretion to directly apportion damages among PRPs in private cost recovery actions.
    8. Other Matters.
      1. Jurisdictional Issues.
        1. Under CERCLA sec. 113(b), subject matter jurisdiction of private cost recovery claims lies exclusively in the federal district courts.
        2. Requirement that plaintiff have incurred response costs before suing has been held to be a jurisdictional requirement.
      2. Statutes of Limitation.
        1. Removal actions (short-term response measures): three years after completion of action. CERCLA sec. 113(g)(2)(A).
        2. Remedial actions (permanent response measures): generally six years after initiation of physical on- site construction of action. CERCLA sec. 113(g)(2)(B).

Copyright 1998, Steven M. Taber, staber@taberlaw.com

Responses

  1. I want to buy some land, but 20 years ago there was a petroleum spill on the land. the wife of the owner now own the property. what can she do to sell me the property? Is there a statute of limitation? Can she be held responsable for the spill?

  2. Do I have a case ?
    I was deceived by : The previous owners , The Inspector , The Appraiser
    and The Realestate Brokers that sold me this home .

    The previous owners did not disclose that an animal hoarder lived in
    this house for over two years with 17 dogs , 83 cats , 6 chickens and
    4 rabbits . The animals were allowed to roam around inside of the
    house , urinate and deposit fecal matter on the carpet and on the walls
    all through the house . According to the neighbors the odors were so
    bad on a windy day … it consumed the entire neighborhood .

    The carpet was so saturated with urine all through the house …that
    hay hooks and shovels were used to remove the urine soaked rotted
    carpet stuck to the floors . According to a neighbor that helped them .

    Gallons of un-diluted bleach was poured directly over the partical board
    flooring . A garden hose was brought into the house and used to soak
    the floors inside of the entire house . This caused the urine ,
    bleach and contaminated water to drain into the sub flooring and then
    into the insulation under the house . This formed mold and mildew .
    The urine on the walls were covered up by using an airless paint rig .
    This is according to the neighbors that witnessed the work being done .

    Everything was covered up so well with bleach , deodorizers , padding ,
    new carpet and fresh paint …that no problems or bad odors were detected
    until a little over a year ago after a rain storm and high winds . It took all of
    that time for all of the bleach , deodorizers and other stuff to wear off .
    My entire house stinks so bad of animal urine and feces…that on some days
    it burns the nose , throat and eyes . A neighbor offered me a spare bedroom .
    I have not been able to stay in my own home because of the contamination .

    The same hoarder ” Louise Latham ” was also forced out of California City
    via Code Enforcement . She then moved directly from there into this house .
    The Mojave Desert News Paper did an artical about the filthy conditions she
    lived in and why The City Officials had evicted her and red tagged her home .

    After the hoarder was evicted from this house …this house was offered to
    the neighbors for $14,000 by the previous owners . No one wanted it as they
    knew it was a nasty contaminated sick house that needed to be destroyed .

    The health hazard of the contamination in the soil under the house is unknown .
    Hoarders never have their animals inoculated . According to the neighbors …
    aIl of the animals were full of mange and sick enough to be euthanized .

    The neighbors had complained to : The Health Dept , Animal Control and The
    Sheriff numerous times .The authorities kept passing them around from one
    agency to another and no one ever showed up . For two years the neighbors
    endured the horrible smell , noise from the fighting cats and the dogs fighting
    and barking all hours of the day and night inside of the house .

    The work men that the previous owners had hired… thought it would be
    funny to trap the remaining cats under the house that were left behind
    by the hoarder .They left them with no food or water and no way to escape .
    These feral cats that were left under the house …they contaminated the soil .
    The cats died a very slow , cruel , agonizing death and were left to rot .
    The neighbors called animal control … they never showed up .
    The neighbors didn’t want to take a chance on getting attacked or bitten .

    The previous owners knew , but did not mention the contaminated soil or
    mounds of cat hair and dead animal carcuses that were under the house .
    The Inspector and The Appraiser ” did not ” go under the house . If they
    had , they would have noticed the contamination , the dead animals and
    The State Code Violations . The Inspector was paid for not doing her job .

    I have spent $15,000 on repairs and the house is still unfit to live in .
    I have also paid out over $17,000 in mortgage , interest , insurance
    and taxes on a home that no one can ever repair or live in .
    The Manufactured Home Laws for The State of California in this kind
    of a situation , is that the house has to be red tagged and can not be sold .

    Everything looked fine inside and outside of the house at the time .
    The deodorizors and the bleach made it impossible to detect any other
    odors . The house passed the inspection and they signed off on it .
    According to the CDC and Animal Planet….animal hoarder cleanup is
    extremely dangerous and is a ” Bio Hazard Situation ” that would have
    to be cleaned by a licensed Bio Hazard Team , the same as a crime scene .

    I am seeking the following damages from everyone that was involved in
    selling me this home . Because of the sickness my husband is dead and
    I am 100% disabled . According to the CDC the contamination may have
    played a part .The realtors were well aware of the disclosure laws…
    but violated them anyway in order to make a fast buck .

    A licensed Manufactured Home Contractor and a neighbor went under
    my house last month . They said it was a giant litter box , 60X10 feet of
    soil contamination , animal carcuses , cat hair , mildew and mold odors .

    REMEDY AS FOLLOWS :

    To be paid for in full by Coldwell Banker .
    This contaminated house is to be removed from my property .
    The contaminated soil is to be removed by a licensed bio-hazard team .

    A Brand New Manufactured Home of my choice is to be moved onto my
    property by a Licensed Manufactured Home Contractor , set up and ready
    for me to move into it . My new home is to be paid for in full .
    All property : the land , existing outside structures and my brand new
    manufactured home are to be in my name free and clear of all charges.

    I also want the $50,000 in existing mortgage paid in full because they
    initiated the fraud in the first place and they knew good and well that the
    failure of disclosure was a violation of the laws in The State Of California .
    I have more then paid the price for what they did as I lost my business too.

    Furthermore :

    “AS IS “… Has Nothing To Do With Severe Contamination . Nor Does A Statute
    Of Limitations according to The California Department of Housing .
    This kind of contamination…because it was hidden and covered up so well …
    was not detected until recently when all of the deodorizers and bleach wore off .
    The failure of disclosure has caused some serious health problems . I was air
    lifted twice , had nine ambulance rides to the hospital and admitted over 11 times
    for SVT ( heart rate 280 ) . I had 9 ablasions on my heart and this is not normal .
    One or two is standard . Some animal contaminations according to the CDC can
    irritate the heart . All of this happend in just two years and this is not normal .

    This very well could have caused the death of my husband as this kind of
    contamination exposure in patients of by-pass surgery , causes severe
    inflamation to the graphted artery walls according to the CDC and can cause
    death . Not to mention my near death . I would like to know what’s in the soil .
    This should be a felony , as I am homeless and paying a mortgage on a house
    that is a total loss because of what these criminals did . It’s heart breaking .

  3. i think petroleum is exempt under cercla


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