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Volume 23, Issue 5 — May 1993


Institutional Controls at Superfund Sites

by David F. Coursen

Institutional controls (ICs) are restrictions on the use of land. In the context of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA or Superfund),1 they are used to reduce the dangers to the public from releases or threatened releases of hazardous substances or dangerous pollutants or contaminants. ICs are used frequently as part of the overall strategy for cleaning up a release, instead of or in addition to active response measures, such as treatment or disposal. ICs, such as restrictive zoning, may operate broadly by preventing particular activities or classes of activities at or near a site. ICs may also be narrow, specific restrictions, such as fencing off a particular area and prohibiting entry, or restricting the use of contaminated groundwater.

While CERCLA does not expressly provide for ICs, they are consistent with CERCLA's purpose. CERCLA recognizes that a remedial action may "result] [ in … hazardous substances … remaining at [a] site."2 In addition, it states that relocation of affected persons or facilities may be an appropriate part of a remedy if "such relocation is more cost-effective than and environmentally preferable to the transportation, storage, treatment, destruction, or secure disposition offsite of hazardous substances."3

Federal Wetlands Law: Part II

by Margaret N. Strand

Editors' Summary: In this second of a three-part series on federal wetlands law, the author continues her comprehensive review of the current state of federal wetlands laws and regulations. The author first analyzes individual permits under the Clean Water Act § 404 program, including the application process, interagency consultations, the substantive standards for § 404 permits, and EPA's § 404(c) veto authority. She next covers enforcement mechanisms in the § 404 program, including administrative enforcement options and civil and criminal judicial enforcement. She then analyzes judicial review of § 404 wetlands actions, including review of permits, regulatory decisions, and citizen suits. The author next analyzes the controversial takings issues associated with regulating wetlands. She includes coverage of recent takings cases involving wetlands and assesses the potential impacts to wetlands issues from the U.S. Supreme Court's 1992 decision in Lucas v. South Carolina Coastal Council, 22 ELR 21104. Finally, the author explores state program authority under § 404, including the process for state authorization and the preservation of other state powers.


The Value of Wetlands as Wetlands: The Case for Mitigation Banking

by Royal C. Gardner and William J. Haynes

Wetlands mitigation banking, a concept endorsed by former President Bush as a means to achieve the goal of no net loss of wetlands, is a valuable resource management tool that deserves the support of the Clinton Administration. Wetlands mitigation banking, which provides for the advance compensation of wetlands losses due to development activities, offers an opportunity to show that environmental protection and economic development are not necessarily incompatible. Indeed, mitigation banking may help resolve, or at least alleviate, the tension between protecting private property rights and preserving wetlands.

In its simplest terms, wetlands mitigation banking involves restoring, enhancing, creating, or preserving wetlands to offset the impacts of a future project. Credit for these environmentally beneficial actions is, in effect, banked until needed. The credit is later withdrawn to satisfy the mitigation requirements of federal, state, or local permits. In a more complex scenario, an individual or entity that has accumulated credits may sell them to third parties which in turn use them to satisfy their own mitigation requirements. Ideally, a market would emerge in which these credits could be bought and sold.

The EPA Lender Liability Regulations: EPA's Questionable Authority to Promulgate the Regulations as Part of the National Contingency Plan

by Charles Dewey Cole

The Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA or Superfund)1 has been construed to impose strict, joint and several, and retroactive liability on owners and operators of sites where there is a release of a hazardous substance.2 The U.S. Environmental Protection Agency (EPA or the Agency) is charged with the responsibility of enforcing CERCLA to clean up the nation's toxic waste sites. Though CERCLA sets up a fund to pay for cleanup,3 the Act also envisions that those responsible for the contamination will pay cleanup costs. Thus, the Act provides for cost recovery actions, which may be brought by EPA and others who have the responsibility for cleanup.4

One vexing issue that has arisen under CERCLA is the liability for cleanup costs of a lender that holds a security interest, such as a mortgage, in the site.5 CERCLA § 101(20)(A) says that the phrase "owner or operator" does not include a person who, without participating in the management of a facility, holds indicia of ownership primarily to protect a security interest in the facility.6 Thus, CERCLA exempts from liability secured creditors, such as mortgagees, that do not participate in the management of the hazardous waste site.7

Emerging Tensions Between CERCLA and the Bankruptcy Code

by Patricia L. Quentel

The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA or Superfund)1 provides for the allocation of responsibility for and cleanup of damage to the environment caused by hazardous substances.2 The policies underlying CERCLA assign responsibility for payment of cleanup costs to those who pollute. In contrast, the policies underlying the Bankruptcy Code3 attempt to provide a reorganized debtor the opportunity for a fresh start after certain claims against it have been discharged. These "competing objectives"4 have come into focus as the U.S. Environmental Protection Agency (EPA) has attempted to assert liability for cleanup costs against business entities which have filed for protection under the Bankruptcy Code.5

The juxtaposition of the Bankruptcy Code's policy of discharging debts with CERCLA's policy of making the polluters pay for cleanup costs of hazardous substances creates a tension between these two statutory schemes. The stakes in resolving this tension are high, as statistics on CERCLA's cleanup costs and bankruptcy filings illustrate. For example, it is estimated that the average cost of cleaning up a hazardous waste site on CERCLA's national priorities list (NPL)6 is over $40 million.7 Further, according to the Administrative Office of the United States Courts, more than 970,000 bankruptcy cases were filed during the year ended June 30, 1992. This figure reflects a 10.6 percent increase since 1991 and a 167 percent increase since 1985.8