The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA),¹ the Superfund legislation, makes no provision for the recovery of damages for personal injuries and property damage resulting from exposure to hazardous wastes, although there was frequent reference to such individual injuries in the course of its legislative history. Earlier bills had indeed provided for such recoveries, including major recoveries for the medical costs of injury, but the Congress during the closing part of the 96th Congress, the "lame duck" session following the November 1980 election, decided not to address this difficult problem. Instead, Congress in § 301(e) of CERCLA provided for the creation of a Study Group to deal with this contentious issue. It is clear from the provisions of § 301(e) that Congress was well aware of the difficulties likely to be encountered in private lawsuits for hazardous waste injuries.

The United States Department of Justice requested the four designated organizations to appoint members who were to compose the Study Group. The final composition of the Group indicates that no easy consensus was sought. Congress had intended to reflect a variety of interests in the Study Group, and in fact, differing views and sharp dissensions on policy characterized many of the Group's deliberations.

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The massive problems presented by hazardous substances and hazardous wastes might be regarded as unprecedented in their magnitude and complexity. The Congress authorized the Study and called for a Report precisely because the problem is a newly emerging one — involving some novel and serious injuries with extended latency periods — for which existing law offers few ready answers.

The Report of the Study Group, entitled Injuries and Damages from Hazardous Waste — Analysis and Improvement of Legal Remedies,² was released on July 1, 1982. It includes an analysis of available causes of action for recovery for injuries resulting from exposure to hazardous waste, and an examination of the adequacy of available remedies and existing barriers to recovery. It concludes with the submission of appropriate recommendations to the Congress.

Dimension and Complexity of the Hazardous Waste Problem

The Study Group was impressed by and concerned with the dimension and complexity of the hazardous waste problem. The discussion of the legal issues relating to injuries from hazardous wastes must proceed in a setting of factual and legal uncertainty at the present time, because it is impossible to determine the number of persons who have been injured or who could be injured by exposure to such wastes.

Compounding this uncertainty are the widely differing estimates of the number of hazardous waste sites, ranging from a low of 4,802, based on an industry-sponsored study, to a high of 50,000 sites, based on a government-sponsored study. Other problems contributing to the uncertainty include locating and determining the content of old waste sites, tracing the path of contamination through the groundwater, determining baseline concentrations of chemical substances and determining toxicity in the face of long periods of latency and exposures to multiple substances. In spite of strong efforts, little data or even estimates could be obtained on the number of persons exposed and the risk of serious injury or disease.

Experience with substances such as kepone, PCB, PBB, and others indicates that a substantial possibility exists of large numbers of latent injuries and future claims. The hazardous waste problem presents the legal system with a task unprecedented in its scientific and medicalcomplexity and in its potential for major health and economic impacts. To protect against substantial though uncertain risks of injury, Congress will need to make decisions based on an assessment of risks that are largely unquantified.³

Analysis of Existing Legal Remedies and Barriers to Recovery

Recurring Problems and Barriers

The Study Group analyzed available common law and statutory remedies in considerable detail, drawing on both federal and state legal sources and authorities. The scope of the Study Group's analysis of the legal remedies was limited to injuries and damage caused by hazardous spills and wastes, which matches the scope of CERCLA.

The Study Group in its discussions and Report first focused on certain recurring problems that face an injured plaintiff regardless of the cause of action he or she has selected.These recurring issues include problems relating to the applicable statute of limitations, apportionment of liability among the parties defendant, joinder of parties plaintiff, and the critical problems relating to proof of causation.

The statute of limitations is a substantial problem in states that have not developed the discovery rule — i.e., the rule that the action accrues and the statute begins to run when the plaintiff discovers, or reasonably should have discovered, the injury. With latency periods of twenty years or more, the typical three-year statute of limitations running from the moment of exposure will lapse long before the plaintiff knows he or she has been hurt.

A variety of problems relate to the issue of defendant's responsibilities and to the appropriateness of joinder of defendants. Because numerous parties have some connection with a waste site (e.g., multiple waste producers and transporters, previous owners, etc.), apportionment of liability can be an insurmountable barrier to recovery unless the burden of proof is shifted to the defendants to exonerate themselves or to allocate liability.

Joinder of parties plaintiff is not uniformly available in all juridictions. Such a device can be essential to sharing the cost burden of securing expert medical and scientific testimony necessary to prove causation.

The major recurring issue, regardless of the particular cause of action, is proof of causation. The plaintiff must prove the causal nexus between the injury and the exposure for which the defendant is allegedly responsible. This proof is hampered by such factors as the variety of wastes disposed at one site from a variety of sources, long latencies of diseases, change in site ownership, and exposure of the plaintiff to other hazardous substances, to name a few. Proof of causation requires sophisticated medical and scientific testimony to show that the duration, frequency and intensity of exposure could or did produce the kind of injury suffered by the plaintiff. Reliance on government documents developed under a variety of federal health and environmental protection laws may eventually be possible as evidence. It is clear that proof of causation is an almost overwhelming barrier to recovery, particularly in smaller cases, regardless of their merit.⁴

Available Statutory and Common Law Causes of Action

The Report of the Study Group examined virtually all available federal and state statutory remedies and all common law tort remedies available in the several states. It found that there are no federal statutes that expressly provide remedies for personal injury due to hazardous waste in non-occupational settings. An examination of state statutes provided only four instances of recent legislation — California, North Carolina, North Dakota and Rhode Island — to establish liability, usually strict liability, for personal injuries resulting from exposure to hazardous waste. None of the [14 ELR 10107] states, however, except California, aids the plaintiff in meeting the burden of proof of causation.

In general, it is clear that there is no basis for reliance on implied private right of action derived from federal pollution control statutes and there can be no reliance on the federal common law of unisance.⁵ There is some basis for reliance on a violation of a statutory standard in a negligence action to show a breach of a duty of care — i.e., to establish negligence per se or to provide some evidence of negligence. In a few states, some reliance may also be placed on state public nuisance statutes, which sometimes provide for private causes of action for their enforcement. An examination of statutory remedies, however, leads to the conclusion that to recover for hazardous waste injuries a plaintiff must currently rely primarily on tort causes of action.

The Report examined available common law tort actions in several states, including negligence, trespass, and private and public nuisance actions. It found that each of these actions has some useful application in suits for hazardous waste injuries — subject, however, to the usual barriers of proof of causation, statute of limitations, and allocation and apportionment of liability.

The Report also examined the full range of strict liability approaches to hazardous waste injuries. Strict liability for injuries due to hazardous waste appears to be a viable theory because of the dangerous nature of the activity of hazardous waste disposal. Analyzing the various formulations of strict liability under the RESTATEMENT and the RESTATEMENT (SECOND) OF THE LAW OF TORTS, the majority of the Study Group indicated its preference for a formulation of strict liability based on the magnitude of the risk, deemphasizing such elements as the locale of the activity or the forseeability of harm, which are relied on in alternative formulations of the strict liability doctrine. The Study Group's analysis emphasizes the application of strict liability to spread costs and to impose liability on those who economically benefit from the polluting activity and who are in the best position to reduce or eliminate the risk. The Report notes, however, that strict liability does not resolve the problem of proof of causation so as to link the defendant's dangerous activity with the injury to the plaintiff, and it is not at all clear that all states would impose strict liability for injuries from exposure to hazardous waste.

After its complete review of the law, the Study Group concluded that although causes of action do exist for some plaintiffs under some circumstances, a private litigant faces substantial substantive and procedural barriers in a personal injury action for hazardous waste exposure, particularly where the individual claims are relatively small. Plaintiffs willing to undertake the major costs of litigation would be aided substantially by an easing of plaintiffs' burdens in regard to causation, apportionment of damages, and statutes of limitation. Persons with smaller claims, however, would be unlikely to recover at all unless further steps were taken to reduce both legal and economic barriers to their recovery so as to facilitate their assertion of valid but difficult claims. This supplies the basis for the Tier One compensation remedy recommended by the Study Group in Part IV of the Report.⁶

The Recommendations of the Superfund 301(e) Study Group

The following discussion seeks to convey the major aspects of the Study Group's recommendations. In the Report itself each recommendation is followed by a detailed discussion providing background on the Group's decision.

As a broad outline, the Study Group proposed two levels of remedies for personal injuries due to hazardous waste exposure. Tier One provides for an administrative no-fault compensation scheme, to be managed by the several states under a federal program. Claims under the administrative scheme are aided by a rebuttable presumption, which was recommended to be unavailable in the Tier Two tort remedy. The victim may also assert his claim under existing state tort law, with the chance for unlimited recovery. This comprises the Tier Two remedy. The two-tiered system is designed to handle the large majority of cases in the first tier.

The Study Group unanimously recommended not only that the two-tier approach be used but also that the amount of any compensation award recovered by the claimant in Tier One be deducted and repaid from any judgment orsettlement in a Tier Two plenary action. The difficult issue of access from Tier One to Tier Two was resolved after long debate, by a 9 to 3 vote that recovery at Tier One should not bar access to Tier Two, but if the plenary action at Tier Two does not result in a judgment or settlement which exceeds the total amount of the Tier One compensation award by 25 percent or more, the judge should have the discretion to assess the costs of the plenary action and the expert witnesses against the plaintiff, in order to reduce frivolous or cumulative use of both systems. A number of members of the Group would have preferred to leave to judicial discretion whether to bar access to Tier Two after compensation at Tier One had been awarded. Other views on the problem of access between the two tiers were also expressed.

The Tier One compensation scheme was recommended to overcome the substantial obstacles faced by an injured person in bringing a plenary lawsuit. Tier One is a risk-sharing system similar in approach to the older, employment-related insurance systems like workers' compensation. Tier One, however, covers only non-occupational exposure to hazardous wastes. The administrative compensation plan is to be established by federal legislation, but would be operated by the states pursuant to federal law, based on a grant-in-aid scheme. The purpose is to provide certain, though limited, compensation to meet the medical and economic needs of injured persons. It provides a prompt and useful method of recovery and of cost allocation and sharing. The coverage of the plan would be coextensive with the coverage of CERCLA.

The claims process proposed is very simple. The claimant must file the claim no later than three years after discovery of the injury. This provision reflects the long latency periods of many hazardous waste injuries. To establish a claim, the claimant must offer proof of exposure, proof of disease or injury, and proof of causation. Proof of causation is to be eased considerably by reliance on appropriate rebuttable presumptions.

The Tier One scheme provides two kinds of rebuttable presumptions. The first goes to the issue of causation only, while the second provides rebuttable proof of such aspects of the disease as its disabling effect, likely duration, and other consequences. Both rely on the same basic showing. [14 ELR 10108] The claimant must prove exposure to a source involved in hazardous waste activity and suffering from the kind of injury that is known to result from such exposure. The rebuttable presumption then arises that the exposure contributed to such death, injury or disease, and that the source of such exposure was responsible. The fact that such death, injury or disease "is known to result from such exposure" may be demonstrated by a so-called Toxic Substance Document, prepared by the federal agency in charge and adopted in accordance with established administrative standards, on the basis of scientific data. The issue of the use of presumptions proved to be difficult, and is discussed at great length in the Report, as it was by the Study Group.

The Study Group recommended that the compensation award afford recovery of all reasonable medical expenses and two-thirds of the loss of earnings (not limited to wages or salary), up to a limit set by the Congress (suggested under current economic conditions at $2,000 per month), for as long as the disability continues. The amount is to be reduced by collateral receipts from other public programs such as Medicare, Medicaid, and other such sources. A minority of members of the Group had recommended that other collateral sources, such as private insurance proceeds, be also deducted; but they are exempt. Provisions are also made for death benefits.

The compensation award recommended would fully compensate members of the public with incomes of $36,000 or less (after taxes). This level was set to provide full compensation for persons below the level at which they would likely provide for their own income protection by insurance. Such a level would also have the result of disposing of more claims at Tier One rather than proceeding to Tier Two.

After payment of a claim, the state compensation board would be subrogated to the rights of the claimant and would then be in a position to assert that claim against the parties responsible for creating the condition that led to the exposure. To avoid difficult problems of retroactivity, it was recommended that subrogation claims only be asserted against a person causing exposure after the effective date of the statute. Older claims would still be paid by the fund, yet without subrogation.

The compensation scheme is recommended to be funded from industry contributions similar in all respects to the taxes and contributions made to Superfund for waste site cleanup. The fund would be replenished, to some extent, by the collection of subrogation claims.

The recommendations provide for judicial review of compensation awards.

The recommendations for Tier Two merely suggested that the several states enhance and develop common law and statutory remedies that apply strict liability, especially by removing unreasonable procedural and other barriers to recovery, with special reference to statutes of limitation, joinder of parties, apportionment of damages, and proof of causation. These recommendations are much in line with the findings relating to these areas in the earlier analysis of legal remedies. The Report, however, rejected the extensive use of rebuttable presumptions or the application of class actions in plenary actions for hazardous waste injuries. With respect to actions for damage to private property and environmental interests, the Study Group recommended that plenary actions under state law in the state courts be retained as the appropriate remedy. The Tier Two remedy offers the plaintiff, in appropriate cases, the possibility of unlimited damages, including damages for pain and suffering, but with all the standard difficulties and uncertainties of litigation.

The Study Group urged that the federal government proceed with dispatch with its Superfund efforts to clean up old hazardous waste sites. The Group urged the states to consider the development of remedial programs to deal with hazardous waste pollution problems where the provisions of public programs (such as the improvement of public water supplies) may be more effective and economical than private lawsuits (such as for damage to an underground water supply).⁷ The Report also includes the broad and important principle that, to avoid the need for remedial provisions for hazardous waste injuries in the future, more attention should be paid to prevention of problems arising out of hazardous waste disposal.

Problems of regulating hazardous substances and hazardous wastes are likely to be with us for a long time. Legal and technical solutions, too, will take time to develop, to take account of the experience gathered in their initial application. Law reform and the development of sound legislation has always been an important and continuing effort. The Study Group Report is a significant step in that incremental process.

1. 42 U.S.C. § 9601 et seq., ELR STAT. 41941 et seq.

2. INJURIES AND DAMAGES FROM HAZARDOUS WASTES — ANALYSIS AND IMPROVEMENT OF LEGAL REMEDIES, A REPORT TO CONGRESS IN COMPLIANCE WITH SECTION 301(e) OF THE COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION, AND LIABILITY ACT OF 1980 (P.L. 96-510) by the "Superfund Section 301(e) Study Group," Serial No. 97-12, Pts. 1 and 2, printed for the use of the Senate Committee on Environment and Public Works, 97th Cong., 2nd Sess. (September 1982), at 1-20. (Hereinafter cited as "Superfund Study Group Report.")

3. Superfund Study Group Report, supra n.l, at 21-39; Part 2, Appendix J.

4. Superfund Study Group Report, supra n. l, at 70-71.

5. See Milwaukee v. Illinois, 451 U.S. 304, 11 ELR 20406 (1981); Middlesex County Sewerage Auth. v. Nat'l Sea Clammers Ass'n, 453 U.S. 1, 11 ELR 20684 (1981).

6. Superfund Study Group Report, supra n.1, at 40-161.

7. Superfund Study Group Report, supra n.1, at 193-283

14 ELR 10105 | Environmental Law Reporter | copyright © 1984 | All rights reserved