State Law Claims by Private PRP Are Not Preempted by CERCLA § 107 Claim, at Least Initially

Posted by in CERCLA, Cost Recovery, Environmental Litigation on April 2, 2013

On March 18, a New York federal district court held that a company seeking to recoup the response costs it incurred cleaning up contamination at a former chemical plant initially may maintain state law claims as well as a cost recovery claim under CERCLA § 107 MPM Silicones LLC v. Union Carbide Corp., N.D.N.Y., No. 1:11-cv-1542 (March 18, 2013).  However, the court also held that it may consider a renewed motion on this issue at a later, more factually developed point in the litigation.

However, the court also held that the plaintiff may not pursue contribution or indemnification claims under federal or state law, including CERCLA Section 113(f), because it voluntarily cleaned up the contamination.

Union Carbide Corp. operated a chemical manufacturing facility on a 50 acre site near Sistersville, W.V., from 1953 through the 1970s. Union Carbide used hundreds of thousands of pounds of polychlorinated biphenyls (“PCBs”) in the manufacture of various chemical products, mainly silanes and silicones. It disposed of the PCBs and other hazardous wastes at several locations on the Sistersville site, including in unlined lagoons. No other entity deposited hazardous waste at the site.

Union Carbide discovered PCB contamination at the site in the late 1970s and early 1980s, but failed to disclose it to federal regulators.   It sold the Sistersville site in 1993, and MPM Silicones LLC (“MPM”) acquired it in 2006. MPM incurred various response costs associated with Union Carbide’s release of PCBs at the site, but Union Carbide refused to reimburse MPM, which then sued Union Carbide, under both CERCLA and state law, to recover the costs it incurred and expects to incur cleaning up the site.

Union Carbide filed a 12(b)(6) motion to dismiss, arguing that MPM’s state law claims were preempted by CERCLA.

After reviewing cases from the U.S. Court of Appeals for the Second Circuit and other federal courts in New York that have addressed the preemptive effect of CERCLA on state law causes of action, the court determined that CERCLA § 107(a) does not preempt the plaintiff’s state law claims.

CERCLA § 114(b) precludes anyone who receives compensation for removal costs or damages under CERCLA from recovering compensation for the same removal costs or damages under any state or other federal law. This “double recovery bar” led the Second Circuit to hold that Section 113(f) contribution preempts state law recovery, in Bedford Affiliates v. Sills, 156 F.3d 416 (2d. Cir. 1998), and Niagara Mohawk Power Corp. v. Chevron USA Inc., 596 F.3d 112 (2d Cir. 2010).

District courts considering whether state law claims were preempted by Section 107(a) claims, on the other hand, have decided they were not. Double recovery is less of a concern when the PRP has incurred response costs voluntarily and has not incurred liability to a third party, the U.S. District Court for the Eastern District of New York held in New York v. Hickey’s Carting, 380 F. Supp. 2d 108 (E.D.N.Y. 2005) and New York v. West Side, 790 F. Supp. 2d 13 (E.D.N.Y. 2011).  Union Carbide argued that Hickey’s Carting and West Side were distinguishable because MPM was a private plaintiff, not a state.

To determine whether concurrent state law claims are preempted where a private plaintiff brings an action against another party under Section 107(a), the court first considered whether allowing the state law claims to proceed would conflict with CERCLA’s settlement scheme.

“A PRP has just as much incentive to settle its CERCLA liability with the government when faced with simultaneous Section 107(a) and state-law claims as when faced with a Section 107(a) claim alone,” the court said.  The court then considered whether the double recovery bar in Section 114(b) preempts a plaintiff’s state law claims.  The court said it would be “acting prematurely if it were to dismiss Plaintiff’s state-law claims merely because it is possible for Plaintiff to recover the same costs, and only the same costs, under those claims as it could under CERCLA. Because the circumstances under which double recovery would not result are numerous, dismissing the state-law claims at this stage would be imprudent.”

Ultimately, the court found the distinction between state and private plaintiffs irrelevant, and concluded that even when the plaintiff is a private party, CERCLA § 107(a) does not preempt state law claims.   The court left the door open for the defendant to make a “renewed attack at a later, more informed and factually developed point in the litigation” when it might be appropriate for the court to dismiss the plaintiff’s state law claims.

The court also dismissed the plaintiff’s claim for contribution under Section 113(f) because MPM has never been the subject of a Section 106 or 107(a) suit, and has not settled its CERCLA liability with the government. Although the plaintiff might be subject to such a suit in the future, the claim is too speculative now, the court said.   Likewise, MPM may not seek contribution or indemnification under state law for claims it was not obligated to pay in the first place, the court said.

United States Supreme Court Holds that the Clean Air Act Displaces Federal Common Law Public Nuisance Law and Prohibits Nuisance Claims Against Carbon-Dioxide Emitters

Posted by in Clean Air, Emerging Issues, Environmental Litigation on June 30, 2011

On June  20, 2011, the United States Supreme Court held in an 8-0 decision that the Clean Air Act (Act) 42 U.S.C. §7401 et seq., and the Environmental Protection Agency action it authorizes, displace federal common law public nuisance claims against carbon-dioxide emitters. (American Electric Power Co., Inc., et al. v. Connecticut et al., 564 U.S. (2011) 13 (AEP)).

The underlying lawsuits considered by the AEP Court began well before EPA initiated efforts to regulate greenhouse gases under the Act.  In July 2004, two groups of plaintiffs filed separate complaints in the Southern District of New York against the same five defendants, each of which was a major electric power generator using fossil-fuels.  The first group of plaintiffs included eight States and New York City, the second joined three nonprofit land trusts.  The defendants/petitioners are four private power generating companies and the Tennessee Valley Authority, a federally owned corporation that operates fossil-fuel fired power plants in several states.  According to the complaints, the defendants “are the five largest emitters of carbon dioxide in the United States.”   The plaintiffs asserted that by contributing to global warming, the defendants’ carbon-dioxide emissions created a “substantial and unreasonable interference with public rights,” in violation of the federal common law of interstate nuisance, or, in the alternative, of state tort law.  Plaintiffs sought injunctive relief requiring each defendant “to cap its carbon dioxide emissions and then reduce them by a specified percentage each year for at least a decade.”  The District Court dismissed both suits as presenting non-justiciable political questions, but the Second Circuit reversed.  On the threshold questions, the Court of Appeals held that the suits were not barred by the political question doctrine, and that the plaintiffs had adequately alleged Article III standing.  Turning to the merits, the Second Circuit (1) held that all plaintiffs had stated a claim under the “federal common law of nuisance” by relying on a series of United States Supreme Court decisions holding that states may maintain suits to abate air and water pollution produced by other states or by out-of-state industry, and (2) determined that the Act did not “displace” federal common law.  At the time of the Second Circuit’s decision, EPA had not yet promulgated any rule regulating greenhouse gases, a fact the court thought dispositive.


Cities Prepared For California’s New Green Building Code

Posted by in Emerging Issues, Green Building on December 2, 2010

As many of California’s cities have adopted green building ordinances over the last several years, the state’s new Green Building Standards Code, to be added to the building standards code on January 1, 2011, is not likely to hinder development in these communities.  The Green Building Standards Code will be Part 11 of the California Building Standards Code in Title 24 of the California Code of Regulations.

Green Building

The new Green Building Standards Code, known as CALGreen, is the first in the nation statewide mandatory green building code for newly constructed buildings.  Finalized earlier this year by the California Department of Housing and Community Development and the Building Standards Commission, CALGreen is a comprehensive code that will apply to newly constructed residential, commercial, school and hospital buildings.  Residential-type buildings, such as single family dwellings, and motels, hotels, and apartments of three stories or less, are subject to the CALGreen Code when constructed new, under a permit issued on or after January 1, 2011.  Newly-constructed nonresidential buildings subject to CALGreen include, among others, state-owned buildings, state universities, and privately-owned buildings used for retail, office and medical services.  While CALGreen applies to all newly constructed buildings unless otherwise exempted by law (i.e. federal buildings and buildings constructed on Indian land or reservations) it does not apply to remodels and additions.


10th Circuit Holds That EPA May Change Tentative Interpretation of Regulation without Following Procedural Requirements of the Administrative Procedure Act

Posted by in Environmental Legislation and Regulation, Environmental Litigation on November 30, 2010

In United States v. U.S. Magnesium, No. 08-4185, the 10th Circuit United States Court of Appeals addressed whether failure to comply with the notice and comment procedures of the Administrative Procedure Act (“APA”) precluded the United States Environmental Protection Agency (“EPA”) from changing its prior interpretation of an ambiguous 1991 regulation. 

The lawsuit underlying the appeal concerned five waste byproducts (“the five Complaint wastes”) generated by U.S. Magnesium through its magnesium production process.  The United States argued that U.S. Magnesium’s handling of these wastes did not comply with Subtitle C of the Resource Conservation and Recovery Act of 1976 (“RCRA”).  U.S. Magnesium responded that the EPA previously exempted the five wastes from Subtitle C’s requirements in a prior interpretation of its own regulation, and that the EPA was precluded from changing that interpretation without first complying with the notice and comment procedures of the Administrative Procedure Act (“APA”).  The district court agreed with U.S. Magnesium and granted partial summary judgment in its favor.  


EPA and DOT Propose To Regulate Greenhouse Gas Emissions For Heavy Trucks

Posted by in Clean Air, Emerging Issues, Environmental Legislation and Regulation on November 1, 2010

Responding to a Presidential directive to take coordinated steps to produce a new generation of clean vehicles, the U.S. Environmental Protection Agency (EPA) and the U.S. Department of Transportation (DOT) announced last week the first ever national standards to reduce greenhouse gas emissions and improve fuel efficiency of heavy-duty highway vehicles.  This broad sector of vehicles – ranging from large pickups to sleeper-cab tractors – represents the second largest contributor to oil consumption and greenhouse gas emissions, after light-duty passenger cars and trucks.  The program is projected to reduce greenhouse gas emissions by an estimated 250 million metric tons and save 500 million barrels of oil over the lives of the vehicles produced during the program’s first five years.


California Proposes To Regulate Nanomaterials as Chemical Substances

Posted by in Emerging Issues, Environmental Legislation and Regulation, Green Chemistry on October 12, 2010

Nanotechnology, the study of the controlling of matter on an atomic and molecular scale, promises a number of benefits to society.  If current trends in manufacturing are any indication, this emerging technology is here to stay.  The August 21, 2008 Project on Emerging Nanotechnologies estimated that over 800 manufacturer-identified nanotechnology products are publicly available, with 3 to 4 new products arriving in the market place per week.

Early research has established that while some types of nanomaterials are seemingly inert, others may be highly toxic.  Thus, the field of nanotechnology is ripe for regulatory intervention.  Policy makers in several jurisdictions are already establishing legal frameworks for the management of nanotechnology.  For example, the federal Toxic Substances Control Act (“TSCA”) already includes nanoscale materials within its definition of “chemical substances.”  And if recent legislative proposals to overhaul TSCA become law, the level of federal regulatory scrutiny of nanotechnology will expand, subjecting manufacturers and processors to additional notification, reporting and review procedures.


Ninth Circuit Grants Non-Settling PRPS a Right to Intervene to Protect Interests in Contribution and in the Fairness of Proposed Consent Decree

Posted by in CERCLA, Environmental Litigation on September 24, 2010

 In United States, et al. v. Aerojet General Corp, et al. (606 F.3d 1142; 2010 U.S. App. LEXIS 11131), the United States Court of Appeals for the Ninth Circuit held that non-settling Potentially Responsible Parties (“PRPs”)(referred to by the court as “Applicants”) have a right to intervene under Federal Rule of Civil Procedure 24(a)(2) and § 113(i) of the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”)(42 U.S.C.S. § 9613(i)) in a lawsuit brought by the United States Environmental Protection Agency (“EPA”) for the purpose of obtaining court approval of the lawsuit’s settlement.     


California Releases Proposed Green Chemistry Regulation

Posted by in Emerging Issues, Environmental Legislation and Regulation, Green Chemistry on September 16, 2010


On September 14, 2010, California’s Department of Toxic Substances Control (“DTSC”) released the Green Chemistry Proposed Regulation for Safer Consumer Products, also known at the “Green Chemistry” regulations.  DTSC’s adoption of the regulation, required by AB 1879 (Feuer, 2008), was signed into law by Governor Schwarzenegger and establishes a process for the identification and prioritization of chemicals of concern and the performance of alternatives assessments. 

According to Linda Adams, Secretary of the California Environmental Protection Agency, “[t]his regulation propels California to the forefront of the nation and the world with the most comprehensive Green Chemistry program and will lead to safer products for consumers.”


Federal Court Finds Corps’ Decision To Permit Development Of Florida Wetlands Violated Federal Law

Posted by in Environmental Litigation, NEPA on July 12, 2010


Sierra Club v. Van Antwerp, No. 07-1756, 2010 U.S. Dist. LEXIS 64650 (D.D.C.  Jun. 30, 2010) involved a proposed multi-use development project near Tampa, Florida, known as the Cypress Creek Town Center.  The project site partially encompassed wetlands and thus required special fill permits under the Clean Water Act (“CWA”) prior to development.  After conducting an Environmental Assessment, the Army Corps of Engineers (“Corps”) issued a “Finding of No Significant Impact” under the National Environmental Policy Act (“NEPA”) and issued a fill permit in May 2007.  Project development began shortly thereafter.  Several months later, plaintiffs filed suit alleging violations under NEPA, the CWA, and the Endangered Species Act (“ESA”).  In the interim however, site construction resulted in the discharge of turbid, silt-laden water into Cypress Creek in violation of the Corps-issued permit.  After an initial suspension of the permit by the Corps and an investigation into the discharges, a slightly modified permit was re-issued after the Corps found that the discharges were the result of human error rather than a flaw with the permit itself.  Plaintiffs continued with their legal claims asserting that the Corps: (1) violated NEPA by failing to prepare an Environmental Impact Statement (“EIS”) and failing to take a “hard look” at adverse impacts and potential alternatives;  (2) violated the CWA by failing to require practicable alternatives and “arbitrarily and capriciously” deciding there would be no degradation to a nearby creek and its wetlands and no violation of state water quality standards; and (3) violated the ESA by failing to obtain formal consultation on the development’s impact on protected species.


Reinstatement of Superfund Tax Provisions Supported By EPA

Posted by in Brownfields & Superfund on June 21, 2010


The U.S. Environmental Protection Agency (“EPA”) announced today that it has sent a letter to Congress in support of reinstating the lapsed Superfund chemical feedstock  taxes.  Passed in 1980, the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA” or “Superfund”) established a fund to be used to finance governmental response activities, pay certain claims arising from the response activities of private parties, and to compensate governmental entities for damages caused to natural resources.  The money for the Superfund was generated by special taxes on crude oil, imported petroleum products, hazardous chemicals, and imported substances that use hazardous chemicals as a feedstock, and on corporate modified alternative minimum taxable income.  The taxes expired in 1995 and, despite several bills introduced to reinstate them, the taxes have never been reauthorized.  (more…)