Argument preview: Justices to consider whether CERCLA bars state lawsuit to restore hazardous-waste site

For nearly a century, the Anaconda Smelter, located in southwestern Montana, refined copper ore for use in phone wires and power lines. The smelter shut down in 1980, the same year that Congress enacted the Comprehensive Environmental Response, Compensation, and Liability Act to manage and clean up hazardous-waste sites, dubbed “Superfund” sites. Three years later, the Environmental Protection Agency designated the smelter site as a Superfund site, and it would become one of the biggest – encompassing five towns and thousands of homes and people – and most expensive sites in the country: The smelter’s smokestacks emitted tons of arsenic and lead every day, spreading the toxic metals over roughly 20,000 acres. The EPA identified Atlantic Richfield, which owned the smelter by then, as the entity that was “potentially responsible” for the costs of cleaning up the site, and it created a comprehensive remediation plan. Atlantic Richfield has already spent $450 million carrying out that plan, but next week the Supreme Court will hear oral argument in a lawsuit by landowners within the site, who argue that Atlantic Richfield should be required to restore their property to its original condition.

The plaintiffs in the case live a few miles downwind from the smelter, on properties where metals emitted from the smelter’s smokestacks landed. In 2016, Atlantic Richfield completed all the work ordered by the EPA on their properties, but outside experts recommended more work beyond what the EPA had ordered Atlantic Richfield to do. Some of that work, Atlantic Richfield emphasizes, could actually make things worse by digging up long-buried arsenic in the soil and possibly contaminating more groundwater.

The plaintiffs’ desire to restore their land led to this lawsuit, which they filed in state court in Montana in 2008. Their lawsuit included several state-law claims – for trespass and nuisance, among other things – that seek compensation for the effects of contamination on the use and value of their land, and that everyone agrees would not be barred by CERCLA. But the plaintiffs were also seeking nearly $60 million in “restoration damages” that would require Atlantic Richfield to pay for more remediation.

Atlantic Richfield argued that the claims for money to restore the properties were trumped by CERCLA. The company pointed to a provision of CERCLA it read as indicating that state courts lack the power to review claims that constitute a “challenge to a CERCLA cleanup.”

The Montana Supreme Court rejected the company’s argument, holding that a challenge under that provision “must be more than merely requiring ARCO to spend more money to clean up the land or the property owners.” Instead, the court allowed the landowners to bring claims under state law that would require companies to pay for cleanup of hazardous-waste sites even when they are already working with the federal government to remediate the sites.

Atlantic Richfield then went to the U.S. Supreme Court, asking the justices to review the state court’s decision. The federal government agreed with the company that the Montana Supreme Court’s decision was wrong, but it nonetheless urged the justices to deny review. Despite that recommendation, the court granted Atlantic Richfield’s petition last June.

In its brief in the Supreme Court, Atlantic Richfield argues that Congress enacted CERCLA “to place the federal government in charge of remediating hazardous-waste sites across America from start to finish.” Superfund cleanup plans, the company emphasizes, “are breathtakingly complex and evolving processes” that can be “staggeringly expensive.” But because the EPA is in charge of the cleanup, Atlantic Richfield contends, the parties that have to pay for the cleanup know that “they are securing a global resolution of their responsibility for cleanup from the federal government and are buying into just one comprehensive remediation effort.” The Montana Supreme Court’s contrary reading, Atlantic Richfield cautions, would throw a wrench into this carefully constructed scheme by allowing landowners on Superfund sites to “decide to shred EPA’s plans and impose different, and potentially detrimental, multimillion-dollar cleanups.”

Atlantic Richfield assures the justices that the lawsuit falls within the “heartland” of Section 113 of CERCLA, which shields the EPA’s cleanup efforts from interference by lawsuits. Subsection (b) of that provision gives federal courts exclusive power over disputes arising under CERCLA, while subsection (h) further restricts the universe of CERCLA suits that federal courts can review, authorizing them to hear “challenges” to remedial action only in a narrow subset of circumstances that are not present in this case.

This is precisely the kind of challenge barred by Section 113(h), Atlantic Richfield maintains. The company pushes back against the Montana Supreme Court’s conclusion that the landowners’ claims are not a “challenge” for purposes of CERCLA because property owners wouldn’t do the work until later, so they are not trying to interfere with the remediation plan. “But the meaning of a ‘challenge’ to EPA remedial action cannot turn upon who wields the shovels,” the company suggests, “or whether they wait ten seconds or ten years to wreck EPA’s remediation efforts.” Moreover, the company adds, it’s hard to imagine how these claims wouldn’t be a challenge to the EPA’s plan: The whole point is that the landowners don’t think that the EPA has done enough.

The landowners’ claims are also prohibited by Section 122(e)(6) of CERCLA, Atlantic Richfield continues, which bars “potentially responsible parties” (PRPs) – the people or entities potentially responsible for dealing with contamination – from doing their own remediation without the EPA’s permission. Here, Atlantic Richfield asserts, the landowners are “classic” PRPs as the owners of land containing hazardous waste.

Atlantic Richfield rejects the Montana Supreme Court’s conclusion that property owners are not PRPs because no court has ever ruled that they are liable for cleanup and the EPA has not settled with them. That interpretation, Atlantic Richfield warns, would “unleash a stampede of practical problems”: The EPA would need either to wait until it could sue or settle with every PRP, or it would risk having the cleanup work undone.

Finally, Atlantic Richfield contends, the Constitution’s supremacy clause – which provides that federal laws are the “supreme Law of the Land” and trump any conflicting state laws – also bars it from having to pay restoration damages. If the company complied with its state-law obligations, Atlantic Richfield observed, it would be violating EPA cleanup orders – as evidenced by the fact that the landowners are asking for money to do things that the EPA does not want done.

The landowners begin by urging the justices to throw out Atlantic Richfield’s appeal, telling them that the U.S. Supreme Court does not have the power to review the case at all because it can only review final judgments by state courts – which the Montana Supreme Court’s decision was not.

The landowners offer a very different view of CERCLA. Contrary to Atlantic Richfield’s characterization, they say, the law was not intended as a “federal power-grab.” Nothing in the law, they contend, takes away state courts’ power to review state-law claims, and whether the EPA’s completed remediation plan was adequate under federal law has no bearing on whether landowners can win under Montana law.

Section 113 does not bar their claims, the landowners argue. Although subsection (b) gives federal courts the sole power to review cases “arising under” CERCLA, they are not raising any CERCLA claims. And subsection (h) was simply intended to prevent premature review of EPA’s orders under CERCLA. It applies only in federal courts, to challenges arising under federal law, while carving out state claims. But their claims for money to restore their land are not “challenges,” they continue, because they aren’t arguing that the EPA’s remediation orders were wrong or otherwise asking the state court to review the orders.

Section 122 of CERCLA, the landowners stress, only bars PRPs from doing their own remediation without the EPA’s permission. But the landowners maintain that, as the Montana Supreme Court ruled, they cannot be PRPs because they do not face any liability – that is, they are not “potentially responsible” – including because it is now too late for any claims to be brought against them. Atlantic Richfield’s “contrary interpretation,” the landowners argue, “assumes Congress used this obscure corner of CERCLA to grant EPA the (likely unconstitutional) authority to forever dictate whether homeowners may dig even a shovelful of dirt in their own backyards.”

Nor are their claims for restoration damages trumped by CERCLA, the landowners continue. Atlantic Richfield could comply with both CERCLA and a duty to restore the land; it just needs to ask the EPA for permission to do so, and there is no reason to believe that the EPA would deny a request to restore the properties. Although the EPA may have believed that the proposal to clean the groundwater on the landowners’ properties was “technically impractical,” the fact that the “remedy would be difficult and expensive” does not mean that “it would cause environmental harm,” the landowners posit. And as a practical matter, the landowners conclude, if “Congress intended to take the unprecedented step of granting EPA perpetual veto power over private property owners’ efforts to clean their own land within a vast Superfund site, it would have spoken more clearly.”

The stakes are high in this case, even beyond the millions of dollars that Atlantic Richfield could be required to pay to restore the landowners’ properties. The Chamber of Commerce and industry groups whose members are involved in other Superfund cleanups urge the Supreme Court to reverse, telling the justices that the Montana Supreme Court’s ruling would create “chaos across the Nation’s Superfund sites, with EPA pursuing one remediation course and various ad hoc private lawsuits mandating different, potentially dangerous or conflicting remediation work.”

On the other hand, Montana environmentalists stress the importance of keeping a state remedy available to address “contamination left behind by a century of mining practices that prevailed before the advent of modern environmental law.” Blocking these kinds of state claims, they say, would “be like limiting a physician’s treatment of a chronically ill patient to only one, partially effective option.”

A decision in the case is expected by summer.

This post was originally published at Howe on the Court.