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Issue

Volume 15, Issue 4 — April 1985

Articles

Minnesota's Environmental Response and Liability Act: An Economic Justification

by Mark Hester, Gary Johnson, and Thomas Ulen

Editors' Summary: In 1983, the Minnesota Legislature enacted the country's most aggressive and comprehensive state Superfund statute, the Minnesota Environmental Response and Liability Act (MERLA). The statute establishes an extensive private cause of action that includes joint and several liability for economic and personal injury, broadly defined; relaxes standards of proof of causation; and applies this liability retroactively.

Recently, there has been a strong move in the legislature to amend MERLA to remove its most aggressive features. One of the most vigorous criticisms has been that insurance will be unavailable to cover liability for hazardous waste exposure. The authors use the tools of economic analysis to examine the Act and the reasons that have been put forth for amending it. They conclude that MERLA provides for greater safety from hazardous waste disposal than other statutes, and in a responsible and cost-effective manner. Though it will impose greater costs on disposers and generators of hazardous wastes, these costs provide appropriate incentives for responsible behavior. Further, there is no reason to believe that insurers cannot evaluate the risks involved and issue coverage in the same way as other novel risks have been covered in the past.

Comment(s)

Using CERCLA to Clean Up Groundwater Contaminated Through the Normal Use of Pesticides

by James L. Conner II

Editors' Summary: In October 1984, EPA proposed listing on the National Priorities List six groundwater sites on the Hawaiian island of Oahu. Those sites are the first to involve contamination by intentionally and legally applied pesticides. EPA's proposal to use CERCLA to respond to that contamination has caused a great deal of controversy, from an exchange of letters between Congressman Florio and EPA Administrator Thomas to submission of CERCLA amendments by the Administration that would explicitly exempt pesticide contamination from the statute's coverage. The author gives an overview of the problem, examines the statute for authority to respond to this sort of contamination, and briefly considers whether Congress should amend the statute to address the issue. He concludes that there is no compelling reason in law or policy for EPA to decline to exercise authority over the sites or for Congress to remove that authority; in fact, he argues, Congress would be better advised to broaden the liability provisions so that pesticide manufacturers could be more clearly held liable for this sort of contamination.