In the course of a week, the Supreme Court has ruled on fundamental issues for two foundational statutes of federal environmental law: the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), otherwise known as Superfund, 42 U.S.C. §§ 9601 et seq., and the Federal Water Pollution Control Act, otherwise known as the Clean Water Act (CWA), 33 U.S.C. §§ 1251 et seq.
Superfund Decision
Atlantic Richfield Co. v. Christian (Case No. 17-1498) (U.S. Supreme Court April 20, 2020)
In Atlantic Richfield Co. v. Christian, the Supreme Court found that CERCLA does not strip Montana courts of jurisdiction over landowners’ common law claims for nuisance, trespass and strict liability for restoration damage that arise under state law—not CERCLA. While state courts do not have jurisdiction over CERCLA claims, CERCLA does not displace state courts’ jurisdiction over claims brought under other sources of law. However, the Supreme Court did find that the landowners were potentially responsible parties (PRPs) under CERCLA and therefore need Environmental Protection Agency (EPA) approval to take remedial action at a Superfund site. A property owner continues to be a PRP even if the statute of limitations has run and they are no longer subject to suit in court.
- Landowners may seek restoration damages for contamination of their property in state court even at Superfund sites.
- Landowners will, however, need to plan ahead and work with EPA to obtain its approval in order to prepare such state-based damage claims concerning properties located within Superfund sites.
Background
In 1983, EPA designated the Anaconda Copper smelter site in Montana, an area of more than 300 square miles around the smelters, as one of the inaugural Superfund sites. Since then, EPA, working with Atlantic Richfield, has managed an extensive, ongoing cleanup at the site, including the remediation of more than 800 residential and commercial properties.
In 2008, a group of 98 owners of property within the Superfund site filed a lawsuit against Atlantic Richfield in Montana state court, asserting trespass, nuisance and strict liability claims under state common law. The landowners sought restoration damages, among other forms of relief. The landowners proposed a restoration plan going beyond EPA’s approved cleanup plan, which the agency had found “protective of human health and the environment,” including stricter soil cleanup criteria and additional groundwater remediation measures not found necessary by EPA. On summary judgment, the trial court found that CERCLA did not preempt the landowners’ claim for restoration damages, which the Montana Supreme Court affirmed.
The Opinion
Chief Justice Roberts authored the high court’s majority opinion. After confirming its jurisdiction to review the Montana Supreme Court’s decision, the Supreme Court addressed whether Montana courts have jurisdiction over the landowners’ claim for restoration damages at a Superfund site. The Court found that CERCLA does not strip Montana courts of jurisdiction over the lawsuit. While state courts do not have jurisdiction over CERCLA claims, CERCLA does not displace state courts’ jurisdiction over claims brought under other sources of law. The landowners’ common law claims for nuisance, trespass and strict liability arise under Montana law—not CERCLA. As a result, the Montana courts retain jurisdiction over the landowners’ lawsuit.
In rejecting Atlantic Richfield’s interpretation of CERCLA Section 113, the majority recognized the deeply rooted presumption in favor of concurrent state court jurisdiction over federal claims. Only an “explicit statutory directive,” an “unmistakable implication from legislative history” or “a clear incompatibility between state-court jurisdiction and federal interests” can displace this presumption, which the Court found “are not words that describe Atlantic Richfield’s knotty interpretation of §§ 113(b) and (h).”
The high court did find, however, that the Montana Supreme Court erred in its holding that the landowners were not PRPs under CERCLA and therefore did not need EPA approval to take remedial action, as required under CERCLA Section 122(e)(6). ). The Supreme Court concluded that the landowners were PRPs. As such, the landowners’ restoration damages cannot be taken without EPA’s approval at the Superfund site, which the Supreme Court observed could ameliorate any conflict between the landowners’ restoration plan and EPA’s Superfund cleanup, just as Congress envisioned.
The landowners unsuccessfully argued that even if they were once PRPs as property owners, they are no longer because CERCLA’s six-year limitations period for recovery of remedial costs had run, and thus they could not be held liable in a hypothetical lawsuit. The Supreme Court found that their argument collapses status as a PRP with liability for the payment of response costs, recognizing that a property owner can be a PRP even if they are no longer subject to suit in court. The Supreme Court observed that under the landowners’ interpretation, property owners would be free to dig up arsenic-infected soil and build trenches to redirect lead-contaminated groundwater without even notifying EPA, so long as they have not been sued within six years of commencement of the Superfund cleanup. The high court expressed doubt that Congress provided such a fragile remedy for such a serious problem and suspected the displeasure that other landowners would have if Congress required EPA to sue them just to ensure an orderly cleanup.
Nor did the Supreme Court share the landowners’ concern over the consequences that such an interpretation would create a permanent easement on their land, forever requiring them “to get permission from EPA in Washington if they want to dig out part of their backyard to put in a sandbox for their grandchildren.” Holding that the grandchildren of Montana can rest easy, the Court found that “remedial action,” as broadly defined in CERCLA, does not reach so far as to cover planting a garden, installing a lawn sprinkler or digging a sandbox. Importantly, the Court noted that Section 122(e)(6) applies only to sites on the Superfund list, which EPA is required to annually review and reissue and to delist once responsible parties have taken all appropriate remedial action and the pollutant no longer poses a significant threat to public health or the environment.
Clean Water Act Decision
County of Maui, Hawaii v. Hawaii Wildlife Fund et al. (Case No. 18-260) (U.S. Supreme Court April 23, 2020)
The Supreme Court ruled that, in addition to direct point source discharges to navigable waters, a Clean Water Act permit is required “when there is a functional equivalent of a direct discharge.”
- Determination as to what constitutes a “functional equivalent of a direct discharge” will depend on several factors and considerations unique to every situation. For the County of Maui, it meant discharges to groundwater that clearly made their way to the ocean triggered a Clean Water Act permit. According to the Supreme Court, travel time and distance traveled from the point source are the key factors.
- Citizen suits will likely leverage this new, not-so-bright-line test and ask courts to enforce compliance. Entities with point source discharges should prepare accordingly.
Background
The county of Maui (County) operates four wastewater injection wells at the Lahaina Wastewater Reclamation Facility. Approximately 4 million gallons of treated wastewater are injected into the groundwater via these wells each day; the wastewater then travels half a mile through groundwater to the ocean.
In 2012, environmental groups brought a CWA lawsuit against the County for discharging pollutants from the wastewater reclamation facility (a point source) into the Pacific Ocean (a navigable water) without a National Pollutant Discharge Elimination System (NPDES) permit required by the CWA. In June 2013, the EPA and the state of Hawaii conducted a tracer dye study to assess the potential hydrological connections between the injected treated wastewater effluent and the coastal waters. The study involved injecting tracer dye into the disposal wells and monitoring the neighboring ocean to see if and when the tracer dye would appear. The study confirmed that the dye was making its way into the Pacific Ocean.
The U.S. District Court for Hawaii, relying in part on the tracer study, found that a significant amount of effluent from the wells wound up in the ocean. The court granted summary judgment for the environmental group plaintiffs, ruling that because the “path to the ocean is clearly ascertainable,” the discharge from the County’s wells into nearby groundwater was “functionally one into navigable water.”
The County appealed to the U.S. Ninth Circuit Court of Appeals, which affirmed the district court but employed a slightly different statutory standard. The Ninth Circuit wrote that a NPDES permit is required when “pollutants are fairly traceable from the point source to a navigable water such that the discharge is the functional equivalent of a discharge into the navigable water” (emphasis added). The Ninth Circuit’s opinion did not address “when, if ever, the connection between a point source and a navigable water is too tenuous to support liability.”
The Supreme Court granted the County’s petition for certiorari, which sought a bright-line test requiring point sources to be the direct means of delivering pollutants to navigable waters.
The Opinion
Justice Breyer authored the high court’s majority opinion. The Supreme Court held that the CWA requires a permit when there is a direct discharge from a point source into navigable waters or when there is the functional equivalent of a direct discharge—thereby creating a new, middle-ground test. The majority opinion specifically rejected the Ninth Circuit’s “fairly traceable” test as too broad, noting that all water eventually makes its way to navigable water and that, under such a test, science could allow EPA to assert permitting authority over the release of pollutants that reach navigable waters many years after their release and in highly diluted forms.
The Court also found that the CWA’s statutory text allows for significantly broader permitting reach than the narrow interpretation requested by the County (and by the EPA via amicus curiae argument), which would have totally excluded all discharges through groundwater from CWA permitting requirements. The Court reasoned that if the County’s interpretation were accepted, a pipe owner could avoid CWA permitting by simply moving a discharge pipe a few yards back so pollution had to travel through some groundwater before reaching the sea; it stated, “We do not see how Congress could have intended to create such a large and obvious hole in one of the key regulatory innovations of the [CWA].”
In describing its new test, the Court stated that whether pollutants that arrive at navigable waters after traveling through groundwater are “from” a point source depends upon how similar to (or different from) the particular discharge is to a direct discharge. The Court openly recognized that the functional equivalent of a direct discharge test “does not, on its own, clearly explain how to deal with middle instances.” However, the Court provided a nonexhaustive list of potentially relevant factors applicable to factually different cases for point source discharges that make their way to navigable waters:
(1) transit time, (2) distance traveled, (3) the nature of the material through which the pollutant travels, (4) the extent to which the pollutant is diluted or chemically changed as it travels, (5) the amount of pollutant entering the navigable waters relative to the amount of the pollutant that leaves the point source, (6) the manner by or area in which the pollutant enters the navigable waters, (7) the degree to which the pollution (at that point) has maintained its specific identity.
The Court noted that “time and distance will be the most important factors in most cases, but not necessarily every case.” The Court recognized that EPA can provide administrative guidance within its statutory boundaries and that future court decisions will undoubtedly provide additional clarification on the new test for CWA permitting.