Contractor Liability Under CERCLA

AuthorBy Robert Denney
Published in The Construction Lawyer, Volume 40, Number 3 Summer2020. © 2020 American Bar Association. Reproduced with permission. All rights reserved. This information or any portion
thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association.
Contractor Liability Under CERCLA
By Robert Denney
Robert Denney is a 2020 graduate of the University of
Virginia School of Law. He plans to join the Atlanta ofce
of Jones Day as an associate this fall.
Between 1942 and 1953, over
21,000 tons of hazardous
chemicals were dumped into
the abandoned Love Canal
site in upstate New York. The
resulting landll was covered
and extensively developed into
a residential area. However, in
the 1970s, it was discovered
that toxic chemicals from the
landfill had migrated into
sewers and nearby creeks and
caused severe health problems
in the local population. This
discovery required the evacuation of the area and led Presi-
dent Jimmy Carter to issue two emergency declarations.
also prompted Congress, in 1980, to enact the Comprehen-
sive Environmental Response, Compensation and Liability
CERCLA established requirements for the
cleanup of hazardous waste, and it also created a nancing
mechanism to manage abandoned hazardous waste disposal
sites.3 CERCLA enshrines the “polluter pays” principle.4 At
rst glance, one might think that the harsh liability regime that
CERCLA imposes is only pertinent to the owner of the site.
However, as this article will discuss, contractors engaged in
routine activities at construction sites can also be liable under
the statute. CERCLA imposes liability for cleanup on four
categories of potentially responsible parties, including (1) the
current owner and operator of the hazardous waste facility,
(2) the past owner or operator of the hazardous waste facility,
(3) anyone who “arranged for” the treatment or disposal of
hazardous materials, and (4) transporters of these hazardous
materials.5 This article rst explains how contractors can be
deemed potentially responsible parties under CERCLA and
then discusses ways contractors can protect themselves from
possible liability.
Potential for Contractor Liability Under CERCLA
CERCLA liability is retroactive, joint and several, and
strict. Therefore, once an entity is identied as a poten-
tially responsible party (PRP), the probability that it will
not be found liable is slim.6 CERCLA casts a wide lia-
bility net, and section 107 denes the four categories of
PRPs: (1) the current owner and operator of the hazard-
ous waste facility, (2) the past owner or operator of the
hazardous waste facility, (3) anyone who “arranged for”
the treatment or disposal of hazardous materials, and
(4) transporters of these hazardous materials.7 CERCLA
does contain a few narrow exemptions to this harsh liabil-
ity regime, including for households that send their trash
to municipal dumps.8
In many cases, it would seem straightforward to identify
a PRP under one of the four categories imposed by section
107. For example, identifying the current owner of a facility
leaves little room for interpretation, and past owners can be
identied through a title search.9 However, the identication
process is quickly muddied when many different parties have
come into contact with the site, and a prototypical example
of this complication comes with construction projects. CER-
CLA, of course, does not explicitly dene when contractors
and subcontractors at construction sites could be deemed
PRPs.10 But case law shows that contractor liability under
CERCLA is highly fact-specic and depends on the work
that the contractor performed. Contractors can potentially
be held liable as operators (both past and present), arrang-
ers, and transporters.
Operator Liability
CERCLA imposes liability on both current and former
“operator[s]” of the hazardous waste “facility” at issue. While
the rst PRP category imposes liability on the current “owner
and operator,” courts have held that the “owner” and “oper-
ator” do not have to be the same person.11 Moreover, the
second PRP category imposes liability on those who “owned
or operated” the facility when the hazardous materials were
disposed of.
The statute denes “facility” in a broad and
detailed manner to include “any building, structure, installa-
tion, ... or ... any site or area where a hazardous substance
has been deposited, stored, disposed of, or placed, or other-
wise come to be located.”13
The term “operator,” however, is dened tautologically
as “any person . . . operating a facility.”14 The U.S. Supreme
Court discussed and expanded on this statutory denition in
United States v. Bestfoods.
Specically, the Court explained
that an “operator” as used in the context of CERCLA “must
manage, direct, or conduct operations specically related to
pollution, that is, operations having to do with the leakage
or disposal of hazardous waste, or decisions about compli-
ance with environmental regulations.”16 Therefore, the term
“operator” “obviously mean[s] something more than mere
mechanical activation of pumps and valves, and must be
read to contemplate ‘operation’ as including the exercise of
direction over the facility’s activities.”
While this denition is
clearly more helpful than the denition provided in CERCLA,
Robert Denney

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