SCOTUS Plays Red Light, Green Light in CERCLA Decision

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The Supreme Court issued a landmark CERCLA decision in Atlantic Richfield Co. v. Christian. Most notably, the court held that CERCLA did not deprive Montana state courts of jurisdiction over state law trespass, nuisance, and strict liability claims brought by owners of land within a Superfund site, even where the landowners sought a cleanup that went beyond the remediation plan approved by the EPA. However, the court also held that the landowners were potentially responsible parties under CERCLA, and therefore the landowners’ remediation plan had to be approved by EPA.

The case deals with the Anaconda Copper Smelter site, which covers over 300 square miles in Butte, Montana. For the past 35 years, EPA has worked with the site’s current owner, Atlantic Richfield Company, to design and implement a cleanup plan under CERCLA. A group of 98 landowners sued Atlantic Richfield in Montana state court alleging common law nuisance, trespass, and strict liability based on the presence of lead and arsenic on their property originating with historical mining and smelting operations at the site. Among other remedies, they sought restoration damages under Montana law to fund a cleanup costing $50 to $58 million. The landowners’ proposed cleanup included measures rejected by EPA in the CERCLA cleanup plan as too costly and unnecessary.

Atlantic Richfield argued that CERCLA deprived the state courts of jurisdiction over the landowners’ suit because it grants original jurisdiction to federal courts over all controversies “arising under” CERCLA. However, the court held that the landowners’ claims arose under state law, not CERCLA. The court rejected contentions from Atlantic Richfield and the federal government that various provisions in Section 113(a), (b), and (h) of CERCLA—which set out the jurisdiction of federal courts—implicitly restrict the jurisdiction of state courts over state law claims. Therefore, the Montana state courts properly exercised jurisdiction over the landowners’ suit.

 However, the court went on to hold that the landowners—whom no party contended actually caused or contributed to the contamination present at the Superfund site—were nonetheless “potentially responsible parties” (PRPs) as the term is used in CERCLA. This holding was significant because CERCLA Section 122(e)(6) prohibits any PRP from undertaking a remedial action at a Superfund site once the federal government or another potentially responsible party has begun a remedial investigation and feasibility study, except with EPA approval. The Act’s goal is to ensure “the careful development of a single EPA-led cleanup effort rather than tens of thousands of competing individual ones.” The court looked to Section 107(a) for the definition of “potentially responsible party,” rejecting the landowners’ contentions—championed in a dissenting opinion by Justice Gorsuch—that the landowners could not be PRPs because the statute of limitations for CERCLA actions against them had long since run. The court distinguished between a party’s status as a PRP, which is based on the definition in Section 107(a), and the party’s potential liability, which is determined by other provisions in the Act.

As a result of the court’s holding, the landowners have a green light for their state law claims against Atlantic Richfield. They may be entitled to compensatory damages. And, indeed, they may be entitled to the cleanup they seek. However, if any cleanup on the landowners’ property is to proceed, it will have to overcome a potential red light: EPA approval.