Environmental Law - Julie v. Mayfield

• Publication year: 2003

Environmental Lawby Julie V. Mayfield^*

The significant decisions handed down by the Eleventh Circuit Court of Appeals during the last three years concern only a few federal environmental statutes.¹ First, four cases arose under the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"),² with three of those addressing issues of first impression in the Eleventh Circuit. The latter three cases address defenses to cost-recovery actions,³ prohibitions on challenges to approved remediation plans,⁴ and exemptions from liability for secured creditors.⁵ The other CERCLA case addresses arranger liability.⁶ Second, two cases concern the Resource Conservation and Recovery Act ("RCRA"),⁷ one addressing criminal liability under RCRA,⁸ and the other addressing the interaction between state law and RCRA.⁹ Finally, this Survey discusses an Eleventh Circuit case¹⁰ and two district court cases¹¹ concerning the Endangered Species Act ("ESA"),¹² which appear to be the final chapters in the battle, first reported in the 1999 Environmental Law Survey,¹³ over protection of sea turtles on the Florida coast.

I. Comprehensive Environmental Response, Compensation, and Liability Act

A. Defenses to Cost Recovery Actions

In Blasland, Bouck & Lee, Inc. v. City of North Miami,¹⁴ the court addressed for the first time whether equitable defenses are available to defendants in CERCLA cost recovery actions. Plaintiff Blasland, Bouck & Lee ("Blasland") was under contract with the City of North Miami ("City") to clean up a contaminated site owned by the City. The contract contained a "pay-when-paid" clause stating that Blasland would be paid for portions of the work only after the City received payment from the Florida Department of Environmental Regulation ("FDER"). After the work was underway, the City terminated the contract with Blasland, resulting in a suit by Blasland against the City for claims including breach of contract and cost recovery under CERCLA. The City countersued, and following a jury trial on the common law claims and a bench trial on the CERCLA claims, the trial court concluded that Blasland could recover most of its fees under both the contract and CERLCA claims. The court held, however, that Blasland could not recover $110,000 of its fees because the City had not received payment from FDER for this work and the pay-when-paid clause barred Blasland from recovering this amount, even under the CERCLA cost recovery claim.¹⁵

The issue for the court of appeals was whether the pay-when-paid clause in the contract barred Blasland's recovery of these fees under the CERCLA cost recovery claim.¹⁶ The court determined that the City's reliance on the contract clause was akin to an equitable, instead of a legal, defense of the cost recovery claim.¹⁷ The court then noted that while CERLCA does contain several defenses to cost recovery actions, such as the defendant is not responsible for the contamination, the defendant is an innocent landowner, and the contamination is not covered by the statute, the statute does not allow for the assertion of equitable defenses.¹⁸ Citing the Third, Seventh, and Eighth Circuits, the court stated that there are two reasons to prohibit the use of equitable defenses to cost recovery actions:

The first, of course, is the plain language of section 107(a) which explicitly limits defenses to those three enumerated in section 107(b). The second reason is the Congressional intent behind the statute, which was to have pollution cleaned up as quickly as possible and to see that the responsible polluters are made to pay for the cleanup.¹⁹

Reversing the district court and holding that equitable defenses cannot bar a cost recovery claim, the court stated, "Recognizing unenumerated equitable defenses would widen too far the circle of exemption from CERCLA liability, and invite defendants in suits brought by an innocent party . . . to raise such defenses in the hopes of persuading the court that although the defenses were not enumerated in CERCLA, they should have been."²⁰ Thus, defendants may only avail themselves of those defenses specifically identified in the statute.²¹

B. Challenges to Approved Remediation Plans

In Broward Gardens Tenants Ass'n v. EPA,²² neighbors of a contaminated site undergoing cleanup sued the Environmental Protection Agency ("EPA"), the Department of Housing and Urban Development ("HUD"), and other officials, alleging violations of the Fifth, Thirteenth, and Fourteenth Amendments.²³ Because the cleanup was being conducted according to an approved remediation plan, an EPA Record of Decision, and a consent decree, the district court concluded that section 113(h) of CERCLA, which bars all but a few enumerated challenges to remediation plans, barred plaintiffs' suit. Plaintiffs appealed, asserting that they were not challenging the approved clean up plan and, alternatively, that section 113(h) does not bar judicial review of constitutional claims.²⁴

The court dispensed with the first assertion quickly, concluding that plaintiffs' complaint clearly sought reliefthat would change the approved remediation plan.²⁵ The alternative assertion presented the court with an issue of first impression: whether section 113(h) bars challenges that a remediation plan violates certain provisions of the Constitu-tion.²⁶ Holding that section 113(h) does bar these constitutional claims, the court looked to the plain language ofthe statute, which provides, "No Federal court shall have jurisdiction . . . to review any challenges to removal or remedial action" approved according to the statute, except those challenges specifically listed in the statute.²⁷ Stating that "'any' means all,"²⁸ the court concluded that "Congress meant to bar jurisdiction over constitutional as well as statutory claims challenging the adequacy of a remedial plan."²⁹ In this case, the court continued the strict constructionist interpretation of CERCLA seen earlier in Blasland, holding that plaintiffs may only assert those challenges specifically listed in section 113(h).³⁰

C. Arranger Liability

In Concrete Sales & Services, Inc. v. Blue Bird Body Co.,³¹ the Eleventh Circuit provided an analysis of "arranger liability" under CERCLA for the third time in four years.³² In each of these cases, the court cited the standard set forth in its decision in South Florida Water Management District v. Montalvo.³³ In Montalvo the court held that because the statute does not define "arranged for," courts must look at a variety of factors and make a fact-specific determination in every case.³⁴ The court in Concrete Sales listed a number of factors as relevant to the analysis, including: (1) whether a sale involved the transfer of a "useful" or "waste" product; (2) whether the party intended to dispose of a substance at the time of the transaction; (3) whether the party made the "crucial decision" to place hazardous substances in the control of a particular facility; (4) whether the party had knowledge of the disposal; and (5) whether the party owned the hazardous substances.³⁵

Concrete Sales was initially an action by one former owner of contaminated property against other former owners, seeking contribution for clean up costs.³⁶ one of those former property owners, the McCord Trust ("Trust"), in turn brought contribution actions against other parties, including Peach Metals Industries ("PMI"), the Blue Bird Body Co. ("Blue Bird"), and Simplex Nails ("Simplex"). PMI had operated the electroplating facility that was the source of the contamination on the property in question. Blue Bird and Simplex were customers who had outsourced their electroplating needs to PMI. The trial court granted summary judgment against the Trust in its attempt to hold Blue Bird and Simplex liable as parties who "arranged for" the disposal of hazardous substances, and the Trust appealed.³⁷

The Eleventh Circuit first addressed whether the Trust had proved its case for arranger liability against Simplex.³⁸ The Trust alleged that Simplex had control over the parts it sent to PMI for electroplating, that Simplex knew the electroplating process produced hazardous substances, and that Simplex had even loaned money to PMI.³⁹ Using the Montal-vo factors, however, the court found that the Trust failed to prove its case.⁴⁰ The court stated that, although Simplex's officers were aware that hazardous substances were produced during the electroplating process, there was no evidence that Simplex intended to arrange for the disposal of these hazardous substances, no evidence that Simplex knew of or had any power to control the disposal practices, and the loan could not be tied to any specific purpose, such as the disposal of hazardous substances.⁴¹

The court then turned to the more difficult case of Blue Bird, against whom the Trust made three primary arguments.⁴² First, the Trust asserted that Blue Bird actually exercised control over PMI and could have controlled its disposal practices. In support ofthis allegation, the Trust pointed to the fact that a former Blue Bird employee founded PMI, that Blue Bird was PMI's largest customer, that Blue Bird loaned money to PMI to purchase hazardous substances, that Blue Bird dictated the work to be done on its parts, and that the contracts between Blue Bird and PMI required PMI to be in compliance at all times with applicable law. Second, the Trust claimed that Blue Bird could have inferred that PMI was not properly disposing of the hazardous substances because Blue Bird knew that hazardous substances were generated there, that PMI was in financial trouble, that the facility was in disrepair, and that Blue Bird employees had seen contaminated waste water on the facility's floor. Finally, the Trust asserted that Blue Bird intended for PMI to dispose of Blue Bird's electroplating waste because without PMI, Blue Bird would have done its own electroplating and would have had to dispose of the waste.⁴³

Again applying the Mo...