A Practical Guide to Litigating Natural Resource Damages Claims

• Pages: 239-279

CHAPTER 5

239

A Practical Guide to Litigating

Natural Resource Damages Claims

IRA GOTTLIEB,RICHARDW.DUNFORD,

AND CYNTHIA S. BETZ

Natural resource damages (NRD) claims present a wide variety of

factual, legal, scientific, and economic issues. The complexity of

these claims sometimes can cause those involved in NRD litigation

to lose the proverbial forest for the trees. An understanding of cer-

tain fundamental concepts at the root of NRD claims facilitates a

practical approach to litigating such cases. Indeed, much of NRD

litigation involves gathering massive amounts of scientific data and

other facts, and then organizing and analyzing this information in

light of core concepts. This chapter endeavors to provide an over-

view of some of those core concepts.

The chapter begins with a basic overview of relevant statutes. It

then addresses the development of the factual record in an NRD

case and includes such topics as identifying potentially affected

natural resources and the estimation of the NRD. Next, it provides a

practical discussion of key legal issues related to causation, divis-

ibility of harm, baseline considerations, and defenses that may come

into play in preparing and litigating an NRD case. Finally, the chap-

ter concludes with a brief discussion of the pros and cons of coop-

erative assessments in NRD cases.

I. Basic Overview of Natural Resource Damages Law

There is a fundamental difference between liability for cleanup of

environmental sites and liability for damages to natural resources.

240 CHAPTER 5

When a hazardous substance is discharged and released into the

environment, various federal and state statutes require the poten-

tially responsible parties (PRPs) to clean up the resultant contami-

nation.1 These cleanup actions often are referred to as “remedial” or

“response” actions. But environmental statutes, as well as the com-

mon law, draw a distinction between a company’s liability for envi-

ronmental cleanup costs (for example, remediation) and liability for

damages to natural resources resulting from contamination. Although

the two claims are intimately related, they are nonetheless very dif-

ferent creatures and are subject to a host of different legal burdens

of proof, defenses, strategies, and damages calculations. Thus, as a

starting point, a basic grasp of the various NRD legal regimes, as

well as an understanding of the elements associated with each, are

essential.

A. What Are Natural Resource Damages?

Claims for natural resource damages seek to recover the value of

injured or destroyed natural resources and impaired services related

to the subject resources. They are compensatory; their purpose is to

compensate the public for actual losses of natural resource services

resulting from reliably measurable natural resource injuries not re-

stored through remediation. Even when remediation effectively re-

stores the resource, there still may be losses, including loss of

services that the resource would have provided (sometimes called

“loss of use”) and the cost of damage assessment; these damages,

too, are components of the NRD.2 Byfederal and state law, various

governmental authorities are designated as trustees for natural re-

sources and are authorized to assess natural resource injuries and

damages, and then, if necessary, to sue alleged PRPs for damages to

those resources arising from their contamination.3 The natural re-

sources subject to such claims are broadly defined. For example,

the Comprehensive Environmental Response, Compensation, and

Liability Act (CERCLA) definition of natural resources includes

“land, fish, wildlife, biota, air, water, groundwater, drinking water

supplies, and other such resources belonging to, managed by, held

in trust by, appertaining to, or otherwise controlled by the United

States . . . any State or local government, any foreign government,

any Indian tribe, or, if such resources are subject to a trust restric-

tion on alienation, any member of an Indian tribe.”4

A Practical Guide to Litigating Natural Resource Damages Claims241

The Park System Resource Protection Act (PSRPA) definition of

park system resources is simpler, but is similarly encompassing, in-

cluding “any living or non-living resource that is located within the

boundaries of a unit of the National Park System.”5 Damages to

“purely private”6 resources are not recoverable, but “a substantial

degree of government regulation, management or other form of

control over the property” is sufficient to invoke CERCLA’s natural

resource damages provisions and perhaps those of other statutory

regimes.7

Natural resource damages are essentially the difference between

the condition of a natural resource without the release of a contami-

nant (often called the “baseline” condition) and the resource’s con-

dition after the release.8 Arguably, therefore, if a release did not

make the conditions of a natural resource any worse than its baseline

condition, there could be no NRD.

By way of example, imagine that a company’s ship runs aground

and spills fuel oil into a bay. Some of the oil floats on the surface of

the bay and some of the oil coats the shoreline. Federal and various

state laws require the ship’s owner or operator to remove the oil

from the water and shoreline. Removing the oil (to the extent pos-

sible) fulfills the owner or operator’s cleanup (that is, remediation)

obligations. If, however, the spill results in the death of waterfowl

that use the bay’s water and shoreline and causes a temporary clo-

sure of the bay to recreational boating and fishing during the cleanup

operations, the ship owner or operator also may be liable for the

NRD (that is, the lost resource services) associated with the water-

fowl deaths and the lost or impaired opportunity for recreational

boating and fishing by the public. If the spill did not harm any wild-

life or disrupt any recreational use of the bay, then there may be no

NRD. In that case, the owner or operator’s liability would be limited

to removing the oil from the water and shoreline (in other words,

the remediation).

NRD exclude alleged private losses resulting from pollution,

such as lost business profits, diminution in the value of private prop-

erty, and losses of personal property.9 NRD also exclude harm to

human health from exposure to pollutants. NRD are not a fine or

penalty, nor are they intended to be punitive.10 NRD recoveries are

to be used “only to restore, replace, or acquire the equivalent of”

the affected resources.11