In a key decision earlier this month with potentially hefty ongoing implications for developers and property owners, the U.S. Court of Appeals for the Third Circuit held a chemical company liable for nearly $1 million in pre-acquisition cleanup costs. The case is Pennsylvania Department of Environmental Protection v. Trainer Custom Chemical, LLC and offers another clear illustration that property owners and developers may be liable for environmental response costs incurred before they acquired property. Continue Reading Property Owners and Developers Beware: Third Circuit Holds Chemical Company Liable for Pre-Acquisition Cleanup Costs
In a break with long-standing policy, Environmental Protection Agency (EPA) Administrator Scott Pruitt has taken back authority to approve remedies costing $50 million or more at Superfund sites effective immediately. According to the delegation of authority memo issued on May 9, 2017, the purpose of these revisions is to promote accountability and consistency in the remedy selection process and encourage speedier remediation and revitalization of contaminated sites. Continue Reading EPA Takes Back Decision-Making Authority for the Most Costly Superfund Cleanups
Parties that settle environmental claims with the government frequently include covenants not to sue in their settlement agreements. But how does a party ensure that a covenant not to sue prevents the government from suing it again? By negotiating a broad covenant not to sue that contemplates all the ways in which the government may hold it liable at a site.
On May 11, 2016, the 9th Circuit held that EPA information requests under CERCLA § 104(e) may trigger general liability insurers’ defense obligations. This case marks the second time that the Ninth Circuit has held that § 104(e) letters — which often merely request information and do not designate an entity as a Potentially Liable Party (PRP) — can trigger insurers’ duty to defend. Other state and federal courts have held the same in recent years. These cases — which may mark the beginning of a trend — may allow companies to shift more of their CERCLA-related costs to insurers. Continue Reading Insurers’ Duty to Defend May Be Triggered at Early Stages of CERCLA Enforcement Process
Three recent district court cases have refined the contours for timely bringing a remedial action under the Comprehensive Environmental Response Compensation and Liability Act (CERCLA). In all three opinions, the courts rejected arguments that preliminary or investigative activities to determine the magnitude of contamination at Superfund sites necessarily triggers the six-year statute of limitations for remedial actions under 42 U.S.C. § 9613(g)(2). Continue Reading Trio of Recent Cases Help Refine CERCLA Remedial Statute of Limitations
On October 5, 2015, the United States, BP Exploration and Production Inc. (BP), Alabama, Florida, Louisiana, Mississippi and Texas lodged a Consent Decree with the District Court for the Eastern District of Louisiana to resolve claims for federal civil penalties and natural resource damages (NRDs) related to the Deepwater Horizon drilling unit / Macando Well oil spill in the Gulf of Mexico. If approved, this would be the largest natural resource damage settlement in U.S. history. Continue Reading Proposed Largest Natural Resource Damages Settlement in U.S. History
On May 15, 2015, the United States District Court for the Eastern District of Wisconsin held that a defendant successfully established a divisibility defense in a government enforcement action dealing with the cleanup of the Fox River Superfund Site in northeastern Wisconsin (the Site). United States v. NCR Corp., No. 10-C-910 (E.D. Wis. May 15, 2015). The ruling appears to be the first district court decision to uphold a divisibility defense under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) since the Supreme Court’s 2009 decision in Burlington Northern. It remains to be seen whether this is an indication of how courts will address divisibility going forward. Continue Reading CERCLA Divisibility Defense Is Alive and Well
On April 2, 2015, the Ninth Circuit held that a district court has the discretion to determine the most equitable method of accounting for settlement between private parties when it allocates liability to a non-settling defendant in a CERCLA contribution action. AmeriPride Serv. v. Texas Eastern Overseas, Case no. 12-17245 (9th Cir. Apr. 2, 2015). The Ninth Circuit’s decision is consistent with previous case law from the First Circuit (Am. Cyanamid Co. v. Capuano, 381 F.3d 6, 20-21 (1st Cir. 2004)) but splits with case law from the Seventh Circuit (Akzo Nobel Coatings, Inc. v. Aigner Corp., 197 F.3d 302, 308 (7th Cir. 1999)), which has held that a court must use the pro tanto approach of the Uniform Contribution Among Tortfeasors Act when allocating liability to a non-settling defendant.
AmeriPride brought CERCLA § 107(a) and § 113(f) claims against Texas Eastern Overseas (TEO) related to a contaminated industrial site in Sacramento, California. The district court granted a summary judgment motion filed by AmeriPride, holding that TEO was liable for AmeriPride’s response costs under CERCLA § 107(a) and that AmeriPride could recover amounts AmeriPride had paid in settlement to other parties from TEO under CERCLA § 113(f). In an earlier order in the case, the court also said it would adopt the proportionate share approach of the Uniform Comparative Fault Act in allocating response costs. Continue Reading Ninth Circuit Holds District Courts Have Discretion in Accounting For CERCLA Private Party Settlement When Allocating to Non-Settling Parties
Keeping with a growing trend, a New York appellate court in Exxon Mobil Corp. v. State of New York Tax Appeals recently upheld a ruling applying a sales and use tax assessment to environmental remediation work.
New York law has a provision imposing a sales tax on services related to “[m]aintaining, servicing or repairing real property, property or land…as distinguished from adding to or improving such real property, property or land, by a capital improvement.” 20 NYCRR 527.7(a)(1). The court held that this language was broad enough to extend to environmental remediation work. Exxon Mobil Corp. v. State of New York Tax Appeals Tribunal, No. 517504, 2015 WL 919788, at *2 (N.Y. App. Div. Mar. 5, 2015). Continue Reading Monitoring and Testing (and Taxing): New York Appellate Court Imposes Sales Tax on Environmental Remediation Work
For the first time, a court has held determined that CERCLA, by itself, is sufficient to displace a federal common law nuisance claim for damages. In a January 5, 2015, decision, the United States District Court for the Eastern District of Washington dismissed federal common law public nuisance claims brought by a group of residents seeking damages for personal injury allegedly caused by the release of hazardous substances from the defendant’s metal smelter and fertilizer manufacturing facility. Anderson v. Teck Metals, Ltd., No. 13-420 (E.D. Wash. Jan 5, 2015). The court held the plaintiffs’ claims were displaced by CERCLA. Continue Reading CERCLA Displaces Common Law Nuisance Claims