THE CIRCLE OF CERCLA OR IS THE SILVER TARNISHED
| Jurisdiction | United States |
Fognani & Faught, PLLC
1700 Lincoln Street, Suite 2222
Denver, CO 80203
lwalker@fognanilaw.com
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The Comprehensive Environmental Response, Compensation and Liability Act (CERCLA, or commonly known as "Superfund") recently celebrated its Silver Anniversary.1 Enacted twenty-five years ago last December in the rush of an imminent Congressional adjournment and in the heat of public outcry over hazardous waste pollution, the history of CERCLA's effect on the natural resources industry has been a roller coaster ride of agency and judicial interpretation. In the wake of this milestone anniversary it is a good time to reflect on Superfund's history and impact on the minerals industry.
As a general matter, CERCLA gives the President authority, largely delegated to the U.S. Environmental Protection Agency (EPA),2 to respond to the release or threatened release of hazardous substances from a facility. Generally speaking, EPA can either cleanup the contamination and then, under CERCLA Section 107, seek to recoup cleanup costs from potentially responsible parties (referred to as PRPs) or the agency can order the PRPs to perform the response action under Section 106.
After CERCLA's enactment, the natural resources industry took the position that the statute did not impose liability on former owners of facilities, was not retroactive in its application, did not impose joint and several liability, required causation in fact before the imposition of liability and, in general, did not apply to mining waste.3 EPA did not share these views and several of the earliest court decisions interpreting CERCLA involved challenges to EPA's interpretations and application of CERCLA at mining sites. Thus, the mining industry has been at the forefront of many of the major legal battles that shaped and are continuing to shape the course of Superfund.
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CERCLA'S LEGISLATIVE HISTORY
Many legal practitioners today are too young to recall the turbulent Seventies when there was a surge in public interest in environmental issues and the concomitant enactment of several new federal environmental statutes. In part inspired by the National Environmental Policy Act (NEPA), this was the era for the enactment or substantial amendment of statutes dealing with clean air, clean water, hazardous waste, toxic substances, pesticide control, and drinking water. In the same time frame, conservation statutes were blossoming, such as the Marine Mammal Protection Act, Coastal Zone Management Act, and the Endangered Species Act. Mineral development faced additional restrictions under such new laws as the Federal Land Management and Policy Act, the Surface Mining Control and Reclamation Act, and the Energy Supply and Environmental Coordination Act of 1974.
Superfund was originally proposed in June 1979 and the concept was much debated and underwent substantial revision before passage. The result, unfortunately, was neither carefully crafted nor internally consistent. Rather, it was a hasty compromise bill passed in the last days of the 96th Congress before the Presidency and control of the Senate passed from the Democrats to the Republicans. A number of courts called upon to interpret CERCLA have complained about the ambiguities and generally poor draftsmanship of the statute. It is therefore not surprising that CERCLA has spawned a considerable amount of litigation.
CERCLA was enacted to provide a mechanism for cleaning up waste disposal sites that threatened to release hazardous substances into the environment. While the Resource Conservation and Recovery Act of 1976 (RCRA) was intended to address 'newly created' hazardous waste, Congressional action was sought to address so called "orphaned" sites where either responsible parties could not be found or were financially insolvent. The type of hazardous waste site that inspired CERCLA was clearly indicated in the legislative history. Newspaper headlines and sensational stories about the infamous "Love Canal" in Niagara Falls, New York where homes had been built over waste drums buried by Hooker Chemical Company gave Congress and the American public a crash course in past hazardous waste disposal practices. "Then the Valley of the Drums took center stage. This noxious deposit of leaking storage barrels quickly became one of the most notorious places not just in Kentucky but in the United States."4 Next to add fuel to the fire were the stories about Times Beach where dioxin-contaminated soil had impacted the water supply of a small Missouri community.
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By the time Congress recessed for the November 1980 national elections, a stringent Senate bill (S. 1480) had been reported out of the Senate Committee on Environment and Public Works but had not yet reached the floor for debate. The House had passed two bills (H.R. 85 and H.R. 720) in September. When the lame-duck Congress reconvened--still in Democratic control but facing an imminent Republican majority--the Senate sponsors of S. 1480 encountered strong opposition to their bill and were forced to introduce a less stringent version.
Some of the more onerous provisions of the earlier bills which had evoked the most bitter opposition (such as specific medical compensation to victims and joint and several liability) were deleted. After agreeing to limit the new bill to a single amendment, this compromise version was passed with virtually no debate. In sending the bill to the House, the Senate leaders notified the Representatives that any amendment, no matter how minor, would kill the bill if it was returned to the Senate.5 The House then considered the bill under a suspension of the rules and promptly passed the Senate compromise language verbatim. On December 11, 1980, outgoing President Jimmy Carter signed the bill into law.
Since the legislation was a compromise measure passed under the pressure of the expiring session, there is no committee report, conference report, or floor debate to guide the courts in interpreting CERCLA's provisions. Additionally, since the final legislation differs substantially from predecessor bills, traditional reliance on legislative history and committee reports of the precursor bills has been of limited value. The final product has been considered ambiguous at best. And as time has shown, it has been a judicial nightmare to interpret.
In one early decision the court noted that CERCLA "leaves much to be desired from a syntactical standpoint" and unfortunately, "the legislative history is unusually riddled by self- serving and contradictory statements."6 After more than two decades, Courts continue to struggle with the Congressional intent behind CERCLA's provisions. For illustration, in the recent Ninth Circuit Court decision involving the former mining and processing operations near Libby, Montana, the court noted that CERCLA's legislative history is "particularly unhelpful because of the haphazard passage of CERCLA with many of the more lucid descriptions of the statute falling under the oxymoronic category of post-enactment
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'history.'"7 The court concluded that in the absence of committee or conference reports, "it is apt to describe the search for legislative history as 'somewhat of a snark hunt.'"8
THE POLLUTER MUST PAY!
One of the features of CERCLA that makes it stand out from other environmental laws is the extreme scope of the liability scheme. Individuals, small businesses, schools, charitable organizations, etc. with little or no exposure to other environmental laws can find themselves enmeshed in CERCLA's snare.
An over-arching, fundamental precept of CERCLA is that liability for cleanup should be borne by the responsible party (referred to as the "potentially responsible party" or "PRP").9 In the words of Judge Magnuson, CERCLA was enacted to address two key congressional concerns. "First, Congress intended that the federal government be immediately given the tools necessary for a prompt and effective response to 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 cost and responsibility for remedying the harmful conditions they created."10 Such beliefs have led to the oft cited catchphrase of "the polluter must pay."
EPA has enjoyed remarkable success in its efforts to expand liability under CERCLA Section 107. Throughout the years, EPA has pursued a policy of "enforcement first" at Superfund sites, arguing that its policy promotes the "polluter pays" principle.11 The battle cry of the "polluter must pay!" at first blush seems like an equitable approach, but the strict, joint and several liability coupled with liability for past actions which were entirely lawful at the time undertaken has resulted in CERCLA liabilities that have far exceeded industry's worst nightmares.
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THE CONSEQUENCES OF CERCLA LIABILITY
CERCLA imposes liability on certain persons for costs of response actions incurred as a result of releases or substantial threats of releases of hazardous substances from a facility together with damages for injury to or destruction of natural resources. Statutory exceptions for CERCLA liability include releases that have been "federally permitted" and releases that cause natural resource damages where such damages are "specifically identified as an irreversible and irretrievable commitment of natural resources in an environmental impact statement" or equivalent document.12 The legislative history for the latter provision states that where the specific resource tradeoffs are understood and anticipated and the permitting agency takes these tradeoffs into account when making its...
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