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Union Pac. R.R. v. Reilly Indus., Inc.

Citation: 30 ELR 20711
No. Nos. 99-1456, -1871, 215 F.3d 830/(8th Cir., 06/14/2000) Aff'd

The court affirms a district court judgment denying a railroad company's Comprehensive Environmental. Response, Compensation, and Liability Act (CERCLA), Minnesota Environmental Response and Liability Act (MERLA), and common-law contribution and indemnification claims against a creosote manufacturer for the costs of an environmental cleanup necessitated in part by pollution from the manufacturer's site. The court first holds that the district court did not err in dismissing the railroad's CERCLA claims because the railroad failed to substantially comply with the public participation and comment requirements in the national contingency plan (NCP). Under CERCLA, a private party cannot recover its reasonable response costs from a potentially responsible party (PRP) unless it has complied with the NCP. The railroad's selection of a cleanup remedy was a foregone conclusion prior to its meeting with the public. At the meeting, the public was informed of the selected remedy and allowed to ask questions about the nature and effect of the remedy, but there was no indication that the selection of the response action was open to discussion or change. At the second public meeting, the public was informed that the cleanup workplan was available, but the period for submitting written or oral comments lasted only until the next day. The court next holds that the state environmental agency's involvement in the railroad's remedy selection does not effectively fulfill the NCP's public participation and comment requirements. Such state involvement is not per se, and it substitutes for participation and comment only where the state agency is extensively involved and the PRP does not dispute the quality or cost of the remedy. Here, the manufacturer consistently asserted that the railroad incurred unnecessary response costs under CERCLA.

The court then holds that MERLA's six-year statute of limitations barred the railroad's claims under that Act. Although MERLA does not specifically state when a claim for property damage accrues, CERCLA preempts state statutes of limitations for hazardous substances cases and sets the commencement date as the date when the railroad knew or reasonably should have know of the contamination. Nevertheless, under CERCLA § 309, the federal commencement date yields to state law if the state limitation is later than the federal date. However, the state commencement date is the same as the federal date, and the railroad knew or should have known about the creosote contamination more than six years before it commenced litigation. The court also holds that the railroad failed to prove an express or implied legal relationship that would allow a common-law indemnification claim. Likewise, the court holds that the railroad failed to show a common liability between joint tortfeasors that would allow a common-law contribution claim, and equity did not dictate that the claim should be allowed.

[A prior decision in this litigation is published at 28 ELR 20477.]

Counsel for Appellant
Richard Ihrig
Lindquist & Vennum
4200 IDS Center
80 S. 8th St., Minneapolis MN 55402
(612) 371-3211

Counsel for Appellee
Becky A. Comstock
Dorsey & Whitney
220 S. 6th St., Minneapolis MN 55402
(612) 340-2600

Before Hansen and Arnold, JJ.