As a statute, the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) hinges on a variety of definitions which courts have applied inconsistently to cases since CERCLA passed. On October 15, 2013, the Second Circuit issued an important opinion that contrasted “removal” versus “remedial” activities under CERCLA.  New York v. Next Millennium Realty, LLC, No. 12-2894 (2d Cir. Oct. 15, 2013). Because the trigger for starting the statute of limitations period is different for a “removal” and a “remedial” action, the determination of whether an activity constitutes one or the other can be dispositive on whether an action is time-barred. In this opinion, the Second Circuit took an expansive reading of a “removal” action and essentially limited a “remedial action” to only those activities that are taken after a Record of Decision, and that address the permanent removal of contaminants.

In Next Millennium, volatile organic compounds (VOCs) from an industrial area migrated into groundwater near Hempsted, New York resulting in groundwater contamination. Before federal or state regulators could determine the source of this contamination, the town installed a Granulated Activated Carbon Adsorption System (GAC) to remove the contaminants from the groundwater at the wells in 1990. Because this system was found over time to be insufficient to address the groundwater issue, the state agency also installed an air stripper tower that became operational in 1997.

The state agency entered into tolling agreements with the potentially responsible parties in 2001 and then brought a cost recovery claim in 2006 for costs related to the construction and operation of the air stripper tower.

The District Court concluded that the State’s complaint was time-barred because the construction of the GAC system and air stripper tower were both “remedial” actions. As a result, they were subject to the six year statute of limitations that commenced at the time of “construction.” 42 U.S.C. §  9613(g)(2)(B). However, on appeal, the Second Circuit held that the GAC system and air stripper tower were both “removal” actions, not “remedial” actions. As a result, the State was subject to a three year statute of limitations that commenced at the completion of the removal action(s). 42 U.S.C. § 9613(g)(2)(A). Because neither action was complete at the time the suit was filed, the statute of limitations had not yet begun to run and thus did not bar the State’s claim.

The Second Circuit’s opinion is important because it suggests that activities that do not address the source of the contamination and are not part of the “permanent remedy” are not “remedial” actions. The Second Circuit found that the remediation was a removal action because it was taken “in response to an imminent public health hazard.” Id. at 22. It was also important to the Court that the GAC system and air stripper tower were “designed as measures to address water contamination at the endpoint – the wells – and not to permanently remediate the problem” by addressing the “underlying source of contamination.” Id. at 23. The Court explicitly rejected the argument that because the installation and operation of these two systems was both lengthy and costly, they should be considered “remedial” actions.

Please contact an environmental attorney from Schiff Hardin if you have any questions about this opinion or any other issue related to CERCLA liability.