Elephants Hang Out at Watering Holes, and Other Key Takeaways from the Supreme Court’s Recent CERCLA Decision

April 28, 2020

Can state courts order a cleanup remedy at odds with EPA’s cleanup plan for a Superfund site?  The U.S. Supreme Court rejected jurisdictional limitations on consideration of state law claims challenging CERCLA remedies, but held that landowners on the Superfund site in question must obtain EPA approval before they can implement a cleanup plan that differs from EPA’s.  This post analyzes the implications for future cases.

Joshua B. Frank and Martha S. Thomsen, Baker Botts LLP

On April 20, 2020, the U.S. Supreme Court issued its long-awaited decision in Atlantic Richfield Co. v. Christian, No. 17-1498.  The high court’s first Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA” or “Superfund”) decision in several years addresses collateral state-law challenges to EPA’s selected cleanup plans.  While the ruling provides some protection from such challenges under some circumstances, it also opens the door to some second-guessing of EPA-selected cleanup plans. 

Case Background

Atlantic Richfield has undertaken cleanup work at the Anaconda Smelter Superfund Site in Montana under the direction of EPA since the 1980s.  Notwithstanding the EPA-selected cleanup plan, property owners within the Superfund Site sued for restoration damages and cleanup under Montana law.  The plaintiff landowners proposed significantly lower cleanup thresholds than those set by EPA that would have resulted in soil excavation and other measures beyond those selected by the Agency. 

Summary of the Supreme Court Decision

Plaintiff landowners have PRP status and therefore require EPA approval for proposed remedial work.  The Supreme Court held that because “pollutants have ‘come to be located’ on the landowners’ properties, the landowners are” PRPs.  The Court considered it immaterial that the landowners had not and likely would not be pursued by EPA for cleanup costs, noting that to hold otherwise would “collapse[] status as a potentially responsible party with liability for the payment of response costs” (emphases added).

The import of this ruling is that PRPs are specifically prohibited under CERCLA Section 122(e)(6) from engaging in remedial actions at a Superfund site without EPA approval, which the plaintiff landowners had not obtained.  The Supreme Court commented that such an outcome is fully consistent with CERCLA’s structure and purpose, with Section 122(e)(6) being “one of several tools in the Act that ensure the careful development of a single EPA-led cleanup effort rather than tens of thousands of competing individual ones.”

No general prohibition on state law “challenges” in state court.  The Supreme Court nonetheless rejected the view, espoused by Atlantic Richfield, EPA, and the Chamber, that Sections 113(b) & (h) must be read together to first divest the state courts of jurisdiction of claims related to CERCLA and then limit the circumstances under which challenges to CERCLA cleanups can be brought.  Calling Sections 113(b) & (h) “devilishly difficult statutory provisions,” Justice Alito dissented from this part of the majority opinion.

Practical Impacts and Key Takeaways of Atlantic Richfield

New considerations for CERCLA settlements.  This opinion nudges, but does not fully close, the door to future landowner challenges to EPA-selected remedies.  The plaintiffs’ status as PRPs inhibits their challenge; but non-PRPs plaintiffs at other sites, such as nearby landowners without current contamination on their properties, will not face the same barrier.  Aside from ruling on the jurisdictional challenges discussed above, the Court did not address what restrictions CERCLA might impose on parties that do not qualify as PRPs.  

The extent to which a proposed CERCLA settlement with EPA provides finality has always required careful consideration: whether the settlement provides protection against cost recovery claims as well as contribution claims and the scope of reopeners are just two examples.  The Supreme Court’s Atlantic Richfield decision will now also require companies to carefully consider who might challenge an EPA-selected cleanup, and whether Atlantic Richfield leaves the door open to them.

Is the Court’s Section 122(e)(6) ruling even more limited than it appears?  By its own terms, Section 122(e)(6) only prohibits PRPs from undertaking a remedial action, after a remedial investigation and feasibility study has been initiated, unless such action is authorized by EPA.  What it does not facially prohibit is removal actions, which are the other type of response action under CERCLA.  Enterprising future plaintiffs may argue that the specific cleanup they seek meets the definition of a removal action – typically shorter term and more limited in scope – and therefore was not addressed by Atlantic Richfield.  However, claims in other cases seeking broad and permanent restoration like that at issue in Atlantic Richfield likely would be classified as “remedial actions.”

Statutory Construction and Quotability.  Separate and apart from the CERCLA impacts of the decision, Chief Justice Roberts’ majority opinion coined a new analogy we expect to see in many future appellate briefs.  Responding to criticisms that that the majority’s interpretation of Section 122(e)(6) reads an elephant into a mousehole, the majority wrote that “§ 122 of the Act is, at the risk of the tired metaphor spinning out of a control, less a mousehole and more a watering hole – exactly the sort of place we would expect to find this elephant.”

Joshua B. Frank is a partner and Martha S. Thomsen is a senior associate in the Washington, D.C. office of Baker Botts L.L.P.  Both are members of the firm’s Environmental, Safety, and Incident Response practice group.