'Arranger liability' under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA): judicial retreat from legislative intent.

• Author: Lannetti, David W.

Although it is easy to sympathize with the courts' intuitive

desire to hold liable parties whose egregious and tortious actions

have posed environmental hazards for the rest of society,

we must also recognize the constraints of the statute that

Congress has enacted. CERCLA imposes strict liability; considerations

of fault or blameworthiness are, by definition,

irrelevant under its terms.(1)

In enacting the Comprehensive Environmental Response, Compensation, and Liability Act of 1980(2) (CERCLA), Congress intended to hold liable, among others, responsible parties that "arranged for" the disposal of hazardous materials. The statute's failure to explicitly define "arranged for," combined with its scant legislative history, has led to multiple interpretations of CERCLA arranger liability by the federal courts of appeals, ranging from a standard of strict liability to a standard requiring specific intent. The lack of a unified judicial approach places individuals and corporations affected by the statute in the precarious position of being uncertain of their potential liability as "arrangers" under CERCLA. The confusion is unnecessary, however, because the existing statutory language and the available legislative history are sufficient to discern the meaning of "arranged for" intended by Congress and required of the courts when interpreting CERCLA.

During the first decade following CERCLA's enactment, courts consistently applied a strict liability standard to those who "arranged for" the disposal or treatment of hazardous substances, relying primarily on the statutory wording of CERCLA and its available legislative history. In 1993, however, when writing for the United States Court of Appeals for the Seventh Circuit, Judge Richard Posner opted instead to adopt an approach requiring specific intent,(3) ignoring over a decade of existing CERCLA case law. Unfortunately, the effect of Judge Posner's decision extended well beyond the facts of that individual case; in essence, the opinion served as an indication to other courts that CERCLA arranger liability was subject to varying interpretations, setting the stage for judicial activism.

Following Posner's decision, federal courts located in jurisdictions that previously had not ruled on the issue of CERCLA arranger liability discovered two disparate approaches when consulting appellate case law. This eventually led to the genesis of a third, middle-ground approach involving a "totality of the circumstances" assessment of each individual case. The strict liability scheme intended by Congress has been virtually abandoned by the modern judiciary, replaced with a trend toward a case-by-case analysis that specifically considers the intent, knowledge, and ownership interests of the parties.

This Note traces the evolution of CERCLA's liability scheme since the statute's inception. It begins with a brief history of CERCLA and a short description of the traditional framework for statutory interpretation. The Note then describes the various approaches the courts have adopted in holding CERCLA "arrangers" liable: strict liability; specific intent; and a "totality of the circumstances," or case-by-case analysis.

This Note argues that sufficient evidence exists, both in the statute and in the legislative history, to show that Congress intended to hold CERCLA "arrangers" strictly liable. This Note also postulates that Judge Posner's decision was an unjustified judicial deviation from the virtually universal approach of strict liability previously applied by the courts. Finally, this Note recommends that the United States Supreme Court resolve the different approaches the federal appellate courts have adopted in interpreting CERCLA arranger liability by applying the strict liability scheme referenced in the statutory wording and intended by the federal legislature.

HISTORY OF CERCLA

At the time of CERCLA's enactment in 1980, the Environmental Protection Agency (EPA) estimated that the United States produced fifty-seven million metric tons of hazardous waste per year, or about six hundred pounds per citizen.(4) The EPA also calculated that ninety percent of this waste was being disposed of by U.S. farmers, manufacturers, and producers in environmentally unsound ways.(5) Improper disposal methods and abandoned waste disposal sites resulted in pollution of surface water and groundwater, causing "contamination of drinking water supplies, destruction of fish, wildlife and vegetation, and threats to public safety due to health hazards and threats of fires and explosions."(6)

CERCLA was passed in the wake of several nationally publicized "environmental disasters,"(7) including the infamous Love Canal tragedy in New York.(8) Additionally, the possibility of new federal legislation governing the release of hazardous substances gained acceptance in Congress after a series of major maritime oil spills resulted in the passage of federal bills governing oil spills and chemical wastes.(9)

The legislature's purpose in creating CERCLA was two-fold:

First, Congress intended that the federal government be immediately

given the tools necessary for a prompt and effective

response to the problems of national magnitude resulting

from hazardous waste disposal. Second, Congress intended

that those responsible for problems caused by the disposal of

chemical poisons bear the costs and responsibility for remedying

the harmful conditions they created.(10)

Few could disapprove of such laudatory goals, developed to counter a burgeoning environmental problem that squarely confronted the nation.(11) After all, "[l]egislative and judicial pronouncements that `the polluter should pay' resonate with deep chords of fairness and justice."(12)

CERCLA authorized the EPA to clean up hazardous waste sites(13) and created a "Superfund" with which to fund its activities.(14) The financing for Superfund came from a combination of appropriations, industry taxes, and judgments received through legal actions to recover response costs from those responsible for the creation of the hazardous waste sites.(15)

Many courts have criticized the congressional drafting of CERCLA.(16) The language of the statute, believed inartful by some critics,(17) was the product of a lame-duck Congress(18) and a lame-duck President(19) intent on passing comprehensive environmental legislation before the end of the Ninety-sixth Congress.(20) Based on the remedial nature of the statute, courts have interpreted CERCLA to provide broad coverage.(21) As a consequence of the unusually rapid passage of the legislation, however, little legislative history exists to guide the courts in interpreting the statute.(22) "The controversial nature of the various CERCLA bills and the political complexities caused by the change in control of the Senate following the November, 1980 election[] are largely responsible for its enigmatic legislative history."(23)

The sponsors of CERCLA crafted the statute's liability scheme with an anticipation that the common law would provide guidance in interpreting the legislation.(24) As the courts have opined their disparate interpretations of CERCLA, Congress has considered making drastic changes to CERCLA's liability scheme.(25) Some have viewed Congress's failure to alter the original statute's liability standard appreciably as an indication that it is satisfied with CERCLA's language and with the interpretations of the statute's language by the courts.(26)

Unfortunately, judicial opinions under CERCLA have been far from uniform.(27) "Lacking direction from the traditional tools of statutory construction, and unable to wait for Congress to correct the errors, the courts interpreting CERCLA muddle along."(28) Not surprisingly, there has been considerable litigation concerning the interpretation of this sweeping legislation,(29) resulting in inconsistent decisions and significant jurisdictional differences. Such interpretive incongruities are blatantly evident in CERCLA arranger liability case law.(30)

FRAMEWORK FOR STATUTORY INTERPRETATION

The Statute

CERCLA is a complex and technical statute(31) that imposes liability on four classes of potentially responsible parties: (1) current owners and operators of hazardous waste producers; (2) former owners or operators of hazardous waste producers; (3) "arrangers" of hazardous substance disposal or treatment; and (4) transporters of hazardous waste.(32) An "arranger" is defined in the statute as

any person who by contract, agreement, or otherwise arranged

for disposal or treatment, or arranged with a transporter

for transport for disposal or treatment, of hazardous

substances owned or possessed by such person, by any other

party or entity, at any facility or incineration vessel owned or

operated by another party or entity and containing such hazardous

substances.(33)

Although the act broadly defines "person" to include individuals as well as corporations and other business entities,(34) it unfortunately offers no definition of "arranged for." This shortcoming has led some to conclude that defining "arranged for" is "problematic," and has subjected CERCLA arranger liability to substantial judicial interpretation.(35) In addition, there is disagreement over the statute's application in the traditional corporate environment of limited liability, resulting in disagreement among the courts as to whether liability can extend to corporate officers, directors, and shareholders.(36) Finally, CERCLA specifies only four narrow defenses against liability.(37)

Plain and Ordinary Meaning

There is a "strong presumption that Congress expresses its intent through the language it chooses."(38) Further, when a statute is clear and unambiguous on its face, a court need not, and indeed cannot, interpret its language.(39) When a statute requires interpretation due to its ambiguity, however, it is undeniably the duty of the judiciary to interpret it.(40)

"When a word is not defined by statute...