The federal Superfund law (Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) of 1980) defines broad categories of parties who might be deemed responsible for chemical contamination (“responsible parties”) and liable to pay for some or all the costs o cleaning up. Nearly 45 years after CERCLA was first enacted, a federal Court of Appeals has confirmed for the first time that a party that “arranges for” disposal can be liable for cleanup costs
, even if there’s no evidence that the party knew that the materials being disposed were hazardous. Although this ruling is consistent with the statutory text and decades of practice, it’s still the first formal ruling by an Appeals court (68th Street Site Work Group v. Alban Tractor Co.). The rest of this note summarizes “arranger-for” liability, and this case.
Who can be liable under CERCLA to pay for cleanups?
CERCLA provides “joint, strict and several” liability for “responsible parties” – i.e., the parties responsible at least in part for contamination subject to CERCLA’s cleanup provisions. The statute, regulations and policies issued by the Environmental Protection Agency (EPA), and decades of court cases generally identify four categories of responsible parties:
- Owners – the owner of the facility or property where hazardous substances were disposed (intentional or unintentional)
- Operators – the operator of the facility or property
- Arrangers-for – parties that arranged for disposal, including arranging for transport to the site, treatment or use of the hazardous substances that led to contamination, and disposal
- Transporters – parties that accepted hazardous substances for transport to the location where they were eventually disposed
Some of these roles clearly include passive involvement – landowners can be liable even if they had no direct role in the activities that led to contamination. Others have generally been interpreted to include active involvement, but not to require knowledge that the substances were “hazardous” for CERCLA purposes.
What was this case about?
The “68th Street Dump Superfund Alternative Site” covers a complex of seven landfills in Rosedale, Maryland that had accepted a variety of wastes for disposal, including “solid and liquid municipal, industrial and commercial wastes” containing a wide array of hazardous substances, including heavy metals and pesticides. Concerns about contamination eventually triggered administrative actions under CERCLA by EPA and the state of Maryland, leading to administrative settlements by responsible parties and a consent decree requiring remediation. The entities that had agreed to conduct the remediation formed the “68th Street Group” and is spending millions of dollars on cleanup. They sued a variety of entities that had arranged to send their wastes to these sites for disposal, claiming those entities were “arrangers-for” liable under CERCLA and seeking contributions to cleanup costs. Most settled, but the Group eventually sued 31 non-settlers (under the case name 68th Street Site Work Group v. Alban Tractor Co.).
The plaintiffs claimed that all the defendant parties had generated waste materials containing hazardous substances, and arranged to have those waste transported to one or more of the dumpsites for disposal. The district court found those claims to be insufficient to prove CERCLA liability, because they did not include any claim that the defendants knew their wastes were “hazardous substances” subject to CERCLA.
On appeal, the Fourth Circuit Court evaluated whether “whether the phrase ‘arranged for disposal . . . of hazardous substances’ in CERCLA’s arranger-liability provision [] requires that a defendant knew or should have known that the waste for which it arranged disposal was hazardous.” The Court reviewed CERCLA, including the statute’s general imposition of strict liability and the narrow provisions where parties’ knowledge of contaminants or contamination are critical (particularly the “innocent landowner” defense against property owner liability). Finding no knowledge requirement for arranger-for liability, the Fourth Circuit determined that “to sufficiently claim arranger liability, a plaintiff must allege that a defendant intended to dispose of waste and that the waste was in fact hazardous. But a plaintiff need not allege that a defendant knew its waste was hazardous.” The Forth Circuit vacated the district court’s decision requiring direct knowledge, and remanded the case for further (conforming) proceedings.
Now What?
Because this decision reaffirms longstanding general approaches to arranger-for liability, its primary impact is to reduce uncertainty. However, it should be a good reminder to organizations that generate wastes (including “hazardous wastes” subject to the Resource Conservation and Recovery Act (RCRA)) that it can be difficult to extinguish potential liability for such wastes. In particular, over the years many RCRA-regulated recyclers and treatment, storage and disposal (TSD) facilities have closed without sufficient operator/insurer funding for post-closure decontamination, and their customers have ended up with arranger-for liability under CERCLA even though the customers thought they were managing their wastes appropriately. This is a good time for organizations to review their waste management practices.
Self-Assessment Checklist
Do any of the organization’s activities generate wastes, including wastes that may be considered “hazardous wastes” under RCRA and/or “hazardous substances” under CERCLA?
If so, does the organization takes steps to ensure that these wastes are managed in ways that prevent unauthorized discharges, releases or disposal?
- If so, does the organization review operations undertaken by offsite transporters, recyclers and TSD facilities?
If any unauthorized events have occurred, has the organization undertaking remedial activities, with or without enforcement actions by relevant agencies?
If any enforcement actions have occurred, has the organization ensured that its responsibilities and liabilities under applicable legal requirements (and prohibitions) are clearly demarcated?
Where Do I Go For More Information?
- 68th Street Site Work Group v. Alban Tractor Co. decision (Fourth Circuit Court of Appeals, 6/25/24)
- 68th Street Dump Superfund Site website
- EPA Superfund webpage
About the Author
Jon Elliott is President of Touchstone Environmental and has been a major contributor to STP’s product range for over 30 years.
Mr. Elliott has a diverse educational background. In addition to his Juris Doctor (University of California, Boalt Hall School of Law, 1981), he holds a Master of Public Policy (Goldman School of Public Policy [GSPP], UC Berkeley, 1980), and a Bachelor of Science in Mechanical Engineering (Princeton University, 1977).
Mr. Elliott is active in professional and community organizations. In addition, he is a past chairman of the Board of Directors of the GSPP Alumni Association, and past member of the Executive Committee of the State Bar of California's Environmental Law Section (including past chair of its Legislative Committee).
You may contact Mr. Elliott directly at: tei@ix.netcom.com