14 ELR 10224 | Environmental Law Reporter | copyright © 1984 | All rights reserved

CERCLA Litigation Update: The Emerging Law of Generator Liability

Editors' Summary: The federal government has liberally interpreted CERCLA to give it great power and discretion in cleaning up unsafe hazardous waste disposal sites. The government has reserved the Superfund response monies for emergencies and sites where no solvent responsible party can be found, and has insisted that a broad group of waste handlers, including non-negligent, off-site waste generators, are jointly and severally liable for site cleanup. In some two dozen recent decisions, the courts have accepted most or all of the government's interpretation of the law. This Comment reviews the recent judicial rulings on CERCLA, covering the definition of liable parties, liability for pre-CERCLA acts, strict liability, causation, defenses, joint and several liability, and contribution. The Comment also considers the reach of CERCLA § 106, the hazard abatement section, as compared to CERCLA § 104, the cost recovery section. The comment concludes that the liberal interpretation of CERCLA advanced by the government and accepted by the courts is reasonable given the remedial objectives of the statute, and is likely to be sustained in future litigation unless pressed to inequitable extremes.

[14 ELR 10224]

The Federal government's aggressive program to force companies that "generated" hazardous substances to clean up old, unsafe chemical dumps has fared well in the courts in recent months. The Environmental Protection Agency (EPA) has interpreted the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA)¹ to bridge gaps in causation and culpability that shielded the compaenies that produce toxic wastes from liability under common law, if they exercised due care in arranging for others to dispose of the wastes.

In the mid-1970s, when it became apparent that old toxic chemical dumps posed a grave nationwide threat to public health and the environment, it also became clear that those directly responsible for the unsafe disposal typically could not be made to clean up the mess under common law, because they could not be found or were without assets. The Resource Conservation and Recovery Act (RCRA),² passed in 1976, required EPA to regulate future hazardous waste disposal, but gave little or no attention to past sins.³

CERCLA was enacted in 1980 to fill this gap in the law. The Act established a "Superfund" to enable the federal government itself to clean up unsafe hazardous substance disposal sites. It expanded the class of private parties liable for unsafe sites, including site owners and operators, and waste transporters and generators. The Act also authorized EPA to go to court to force the abatement of hazardous substance pollution that presents an "imminent and substantial" threat to public health or the environment. In the rush to produce an acceptable compromise act in the face of considerable controversy, Congress did not clearly spell out the scope of liability of generators of hazardous substances, or the relationship of the response/cost recovery provisions, on the one hand, and the imminent hazard provision, on the other.

EPA has interpreted CERCLA to sidestep certain common law causation and culpability requirements, putting the burden of cleaning up old chemical dumps on hazardous substance generators and other responsible private parties first, essentially relegating the Superfund to cases where no "financially viable" private parties can be found.The Agency also has treated its response/cost recovery and imminent hazard authority as broadly equivalent alternatives for achieving the Act's cleanup and liability goals. The Agency's policies have been controversial, and since CERCLA is designed to be carried out in court, not in regulatory processes, have produced a flood of complex, site-specific litigation. During the past year, [14 ELR 10225] a score of federal court opinions addressed the legal issues raised by EPA's implementation of CERCLA. EPA won on most points. The recent decisions appear to have resolved several major issues, but also have raised a host of new questions. This Comment surveys recent CERCLA decisions and considers their significance for the Act's implementation.

EPA Implementation of CERCLA

EPA interprets CERCLA to give it two basic options to deal with hazardous substance "releases" or threatened releases.⁴ It may take money from the Hazardous Substance Response Fund (the "Superfund")⁵ and clean up the site of the release under the "response" authority of § 104.⁶ If the Agency subsequently identifies private parties made liable for federal response costs by § 107 of the Act,⁷ it can bring cost recovery actions to replenish the Superfund. The owner or operator of a disposal site, the person who transported the hazardous substances to the site, and those who "arranged" for disposal of the substances all could be liable.⁸ Alternatively, if the release or threatened release constitutes an "imminent and substantial" danger to public health or the environment, EPA has the choice, under § 106 of CERCLA,⁹ of issuing an administrative order or seeking a court injunction ordering private parties to eliminate the danger. As a third option, not expressly in CERCLA, EPA may negotiate with potentially liable private parties in hopes of securing "voluntary" agreements for the cleanup.

The two statutory courses of action are clearly identified in the Act, and the settlement alternative seems a logical extension of that authority. But the statute does not specify when to use these mechanisms, or how EPA should choose among alternative sources of cleanup funding. EPA has tailored its policies to place the cleanup burden on private responsible parties wherever possible, using §§ 106 and 104 as equivalent remedies. Congress clearly intended those who generated and arranged for the disposal of hazardous substances to the among those liable under § 107 of CERCLA.¹⁰ However, the hasty, last-minute drafting that produced the Act¹¹ obscured critical questions about the nature and scope of generator liability and the relationship of the §§ 104 and 106 remedies.

EPA concluded that Congress intended those connected with a hazardous substance release, not the Superfund, to bear the cost of cleaning up the release, even if the "responsible" party's connection to the release was tenuous and not colored by fault. The Agency reads § 107 to impose strict, joint and several liability on hazardous substance generators.¹² It argues that if a generators's hazardous substances were sent to a CERCLA site and substances of that type remain, the generator is liable, without further proof of causation, for any release of hazardous substances.¹³ Essentially, EPA argues that, as a practical matter, reading CERCLA to require the government to prove proximate causation, negligence, or the precise share of each defendant's responsibility for a given release would mean that EPA would almost never be able to prove that a private party with enough money to finance cleanup was liable under CERCLA. With strict, joint and several liability, coupled with a limited causation requirement, on the other hand, EPA will be able to make such financially viable generators as it can find handle the entire cost of cleaning up sites for which they are responsible. The Superfund will be saved for those releases for which there is no alternative to government cleanup.¹⁴ EPA further contends that the liability principles governing cost recovery actions under § 107 apply to cleanup orders under CERCLA § 106.

EPA's current CERCLA policy¹⁵ places relatively even[14 ELR 10226] emphasis on response and cost recovery actions under §§ 104 and 107 and "enforcement" actions under § 106 (backed up by the parallel imminent hazard provision of RCRA, § 7003¹⁶). Negotiation, at least as an opening gambit, is used only under limited circumstances. The announced selection process turns principally on the availability of "financially viable" "potentially responsible" parties, the urgency of the environmental or health threat, and the strength of the evidence linking the potentially responsible parties to the release.¹⁷ If EPA has identified one or more potentially responsible parties that appear able to finance the necessary cleanup, and the danger is not so grave as to preclude waiting for the administrative or judicial process to run its course, EPA will use the "enforcement" mechanism of § 106. Other considerations, such as the possibility of establishing useful legal precedent, may further tip the scales toward enforcement. Where investigation of the site turns up no likely responsible parties, or the immediate threat is severe, EPA will act itself. EPA also would be forced to take this route if the danger at the disposal site was not "imminent and substantial," but the Agency's interpretation of these terms fits most old hazardous substance dumps and the courts seem willing to accept this interpretation.¹⁸ Where potentially responsible parties with "deep pockets" have been identified, but the enforcement case is likely to be difficult, EPA will make a limited attempt at negotiation before pursuing one of the alternative remedies.

CERCLA defendants, particularly hazardous substance generators, have challenged the basic elements of EPA's implementation program and a number of related issues in court. District court have been ruling on many bits and some chunks of the issues. It is the work of a jigsaw puzzle expert to piece together the results so the overall picture can be seen. The job is made more difficult by the fact that some important pieces are missing, and any of them might be remade by appeals courts at any time. Nonetheless it is possible to draw some preliminary conclusions.

It helps in this process to divide the puzzle into parts. First, concerning generator liability under §§ 106 and 107: What are the elements of liability? What affirmative defenses are available? For what damages is a responsible generator liable? How will those damages be divided if more than one person is found liable? Where only a subset of all those who might have been liable are sued, what rights do they have against other potentially responsible parties? The answers also provide insight into whether § 106 can serve as a major force in EPA's program, or whether Congress intended to limit it to occasional emergency situations that could be corrected with prohibitory injunctions.

Who May Be Liable As a Generator

CERCLA § 107 specifies four categories of persons who may be liable for response costs and natural resource damages. They are: current owners and operators of facilities from which there are releases or threatened releases;¹⁹ past owners and operators of such facilities;²⁰ any person who arranged for the disposal or treatment of hazardous substances at such facility;²¹ and any person who selected such a facility and transported hazardous substances to it.²² Thus CERCLA § 107(a)(3) makes generators of hazardous substances liable if they "arranged" to have those substances sent to sites from which there later were releases or threatened releases.

Recent cases have clarified the scope of § 107(a)(3) somewhat. In United States v. Northeastern Pharmaceutical and Chemical Co. (NEPACCO)²³ the court held that the section applies to corporations and to corporate officials who had control over the disposition of wastes.²⁴ Section 107(a)(3) liability does not require that the person own or have produced the hazardous substances at issue, so the provision is not really limited to generators. The wastes need only have been "possessed,"²⁵ which extends [14 ELR 10227] to persons operating storage facilities and those who inherited wastes from previous owners of their property. Indeed, the NEPACCO court specifically held a defendant generator liable not only for its own wastes but also for wastes left on its property by a previous owner, wastes that the defendant had disposed of along with its own.²⁶

Another court interpreted the "arranged for" language in a different context. In United States v. A & F Materials, Inc. (A & F II),²⁷ the court held that § 107(a)(3) covers the sale of wastes to a chemical disposal and recycling company for use in its reprocessing operaton. The court distinguished United States v. Westinghouse Electric Corp. (Westinghouse),²⁸ in which the court held that a manufacturer of polychlorinated biphenyls (PCBs) was not liable as a generator when the transformers in which the PCBs were contained were improperly disposed of by defendant Westinghouse. The manufacturer had no say in the disposal of the transformers, the A & F II court reasoned, while the company that sold hazardous substances to A & F Materials, Inc. knew that they would be disposed of at the A & F site.

It is not clear whether § 107(a)(3) requires that the generator defendant selected the specific disposal site in which its wastes were deposited. The language of the section, "arranged for disposal … or … with a transporter for transport for … disposal, by any other party … at any facility owned or operated by another party," could mean that a generator is covered as long as it intended the hazardous substances' to be taken to any disposal site. Alternatively, the passage could mean any facility owned by the specific party to whom defendant decided to send the wastes. None of the recent decisions addresses this issue. It is clear from the facts in several of the cases that the generators indeed chose the disposal company or site.²⁹ In at least one case, it appears that the transporter chose the sites.³⁰

While there is no doubt that the generators of hazardous substances can be liable under CERCLA § 107, whether they also can be liable under the imminent hazard provision of CERCLA has been open to question. As the issue arises under CERCLA § 106,³¹ it turns on the timing of the conduct controlled, an issue discussed below.³²

What Generator Conduct Creates Liability?

The language defining generator liability under § 107 is imprecise, but appears to spread the net widely. The issues fall into three categories. Is there a time limit on actions creating liability, or more precisely, is there liability for conduct occurring before enactment of the statute? To what extent must the generator's actions have caused the environmental or health threat that brought CERCLA or RCRA into play? Finally, what degree of culpability is required to establish liability, or more precisely, is the standard one of negligence or strict liability?

Timing of Conduct

CERCLA § 107(a) clearly imposes liability for pre-CERCLA acts, if they were connected to current releases or threatened releases of hazardous substances. As the court in NEPACCO stated:

There can be little doubt that sections 104 and 107(a) were intended to apply retroactively. A brief review of the case law and legislative history clearly supports this proposition. It was the precise inadequacies resulting from RCRA's lack of applicability to inactive and abandoned hazardous waste disposal sites that prompted the passage of CERCLA.³³

Whether the imminent hazard provision of CERCLA § 106 applies to past conduct is a slightly more open question. In United States v. Wade (Wade I)³⁴ the court relief heavily on its conclusion that RCRA § 7003 does not apply to past generators and on the use of the present tense in § 106(a) in limiting § 106(a) to current conduct. In United States v. Price (Price III),³⁵ however, the court rejected the Wade I court's reasoning, concluding that intervening judicial analysis,³⁶ the broader language of § 106(a) compared to RCRA § 7003, and the purposes of CERCLA indicated that Congress intended to reach into the past to remedy current threats. The heart of its reasoning was that

The primary purpose of CERCLA was to "[accelerate the] elimination of unsafe hazardous waste sites." H.R. REP. NO. 1116, supra at 25, reprinted in 1980 U.S. CODE CONG. & AD. NEWS at 6128. In view of the overriding need, it is doubtful that Congress would draft § 106 intending it to apply only prospectively. It is far more likely that Congress envisioned possible problems with the government funding numerous clean ups and drafted § 106(a) as a viable alternative or concurrent means of achieving the same goal. If, in fact, Congress did not intend the EPA to pursue remedial action with respect to past sites, other than just by use of the superfund, it would have been forced to allot more money to the fund itself.³⁷ [14 ELR 10228] Several other courts have adopted the Price court's reasoning, while none have followed Wade.³⁸

The Standard of Generator Culpability

CERCLA is silent on the measure of generator culpability. Language prescribing strict liability was dropped in the last minute flurry to prepare a compromise bill. However, the final language and the legislative history strongly suggest an intent to impose liability without fault. Congress created liability "subject only" to the defenses in § 107,³⁹ which makes due care exculpatory only in limited circumstances.⁴⁰ The legislative history is replete with references to the fact that negligence was not an element of liability.⁴¹ Indeed, requiring EPA to prove negligence would mean that CERCLA added little to available common law remedies, which the Act was intended to surpass in imposing cleanup liability.

Every court that has addressed the issue has found that § 107 of CERCLA imposes strict liability.⁴² Several courts have found that § 106(a) imposes strict liability as well, ruling that the § 107 standard is applicable.⁴³

Causation

The government's arguments that CERCLA's cost recovery and imminent hazard provisions impose liability on non-negligent, past generators have caused only a ripple of controversy compared to its arguments on causation.⁴⁴ EPA has argued that a generator is implicated by the fact that (1) its hazardous substances were sent to the site, (2) wastes of that type were present in the site at the time of the release, and (3) there was a release or threatened release of any hazardous substance, resulting in a reimbursable response action.⁴⁵ Generators have argued that a showing of proximate cause is required, or that, at a minimum, the government must prove that defendant's hazardous substances were sent to the site and that the release contains substances of that type.⁴⁶

The debate has great practical significance. The standards advanced by generators would force the government to identify all the substances in a release, a costly and arguably irrelevant exercise since, regardless of what has been released, the entire site usually must be cleaned up. The government's causation standard would increase a generator's chances of being stuck with the bill for the cleanup of someone else's pollution. Acting alone, the causation test would not have that effect, but in combination with joint and several liability, under which a single liable generator could end up paying for the entire cleanup, the effect is significant.

Recently two courts adopted the government's three part causation test.⁴⁷ The United States v. Wade (Wade III)⁴⁸ court concluded that the somewhat ambiguous statutory language should be read broadly, because to require the government to "fingerprint" the substances in a release to identify the responsbile generators would be impossible and would effectively undermine joint and several liability. The court also placed weight on the ultimate deletion of language in the House-passed bill requiring proximate cause.⁴⁹ The court in United States v. South Carolina Recycling and Disposal, Inc. (South Carolina Recycling)⁵⁰ expanded on this reasoning. It concluded that the commingling of different wastes, which is common at disposal facilities, combined with the potential for synergistic multiplication of the hazard resulting from mixing different chemicals, in effect created a presumption that if a generator's hazardous substances were in the site they contributed to the danger resulting from a release, regardless of the substances identifiable in the release. It went on to hold that the presumption is rebuttable only with the § 107(b) defenses.⁵¹

The limited causation test applied in Wade III and South Carolina Recycling means that a critical issue in determining whether a generator is liable for abatement of pollution at a waste site is whether its hazardous substances were indeed sent to the site. Often it will be difficult to find factual support for either side of this question. The two courts disagreed on how much evidence is required to demonstrate that a defendant's hazardous substances ended up in the site. In United States v. Wade [14 ELR 10229] (Wade V)⁵² the court held that circumstantial evidence (in this case, records kept by the transporter suggesting that a generator's waste might have been delivered to the Wade site) would not be sufficient to prove this element of liability.⁵³ Addressing the question of the evidence needed to prove that substances of the type discarded by defendants were at the site, the court in South Carolina Recycling states that "circumstantial proof that the wastes were hauled to the site absent proof that they were subsequently taken away, should also be sufficient to satisfy this element of proof."⁵⁴ This suggests that the court would accept evidence of delivery to satisfy both the "delivery of defendant's wastes" and the "continued presence of similar wastes" elements of the causation test. The statement is dictum since the government had proved both delivery of some of defendants' wastes to the site, and, by chemical analysis of on-site wastes, the presence of materials of that type at the time of the release.⁵⁵ Nonetheless, it illustrates how much variation is possible in applying even this relatively simple causation test.

Indeed, South Carolina Recycling shows that by shifting burdens of proof, a court might effectively collapse the three part causation test urged by the government (delivery of defendant's substances, continued presence of substances of that type, a release of any hazardous substance producing a reimbursable response) into two. Defendants would have to resurrect the middle element by presenting evidence that their substances had been removed, treated, or destroyed — a difficult evidentiary problem to solve in many cases.

Elements of Liability Under § 106

CERCLA § 106 does not contain any language from which one could infer the essential elements of liability. Under the circumstances it might be logical to find those standards in § 107. There is some support for this approach in § 101(32), which defines the term "liability as used in this subchapter" as the standard operative under § 311 of the Federal Water Pollution Control Act (FWPCA).⁵⁶ Since § 107 is given the heading "Liability," one might infer that Congress intended that section to govern liability issues throughout the subchapter, which includes § 106.⁵⁷ Recent decisions concerning the elements of liability under § 106 have indeed found them in § 107.⁵⁸ An alternative would be to seek the standards of liability under § 106 in the parallel provisions in earlier statutes such as RCRA and the FWPCA.⁵⁹

Defenses

CERCLA § 107(b) enumerates affirmative defenses. They are very narrow. Only releases and damages caused solely by acts of god or war, or acts or omissions of third parties other than employees or agents of defendant or those in contractual relationships with defendant are protected. If the intervening cause was a third party, defendant also must establish that he or she exercised due care with respect to the substances and the third parties causing the release.

In interpreting the liability provisions of CERCLA, the courts have not been called upon to interpret defensive provisions of § 107 to a great extent. They have touched upon several issues, however. In South Carolina Recycling the court ruled that a defendant must do more to support a pleading of the third-party defense than state that third persons were responsible for the release. The court granted the government's motion for summary judgment on liability, since defendant failed to present even an affidavit supporting its third-party defense.⁶⁰ The court also rejected the third-party defense of a defendant landowner, since the third party was the operator of the waste facility, who leased the site from the landowner and thus was in a contractual relationship with a responsible party.⁶¹ The court did suggest, however, that a lessee of the property that did not handle or dispose of hazardous substances might be able to avail itself of the third-party defense.⁶²

Remedies

Cost recovery actions under §§ 104 and 107 and abatement actions under § 106 appear to offer the government different types of remedies, but they can be used to obtain the same things. Under § 107 the government⁶³ can recover the full range of costs incurred in responding to releases and threatened releases of hazardous substances so long as those costs are "not inconsistent with the national contingency plan."⁶⁴ Monitoring sites, building security fences, removing and disposing of drums of chemicals, providing alternative water supplies, treating contaminated groundwater, and a host of other activities [14 ELR 10230] are covered.⁶⁵ Section 106, on the other hand, simply authorizes EPA to seek such relief in court as "may be necessary to abate" the threat to the public health or the environment.⁶⁶ Any action for which the government could recover costs under § 107, it could directly order under § 106. Section 106 remedies presumably could be broader.⁶⁷

None of the recent decisions address the scope of remedies under § 106, but several rule on cost recovery actions. The government has sought to define the scope of § 107 cost recovery broadly.⁶⁸ It has been successful for the most part. Generators have argued that "costs incurred" is limited to expenditures (1) actually made, (2) after the enactment of CERCLA, and (3) after promulgation of the national contingency plan (NCP).⁶⁹ Courts have accepted part of this argument. Two courts have ruled that the government may not recover response costs incurred before enactment of CERCLA.⁷⁰ Costs incurred before promulgation of the NCP were held recoverable in one of those decisions, however.⁷¹ Several courts have held that the government may sue to determine liability for future response costs after beginning the response and incurring costs, but before completing its action.⁷²

Generator defendants have failed to limit the types of response costs recoverable under § 104. In Wade III the court rejected the argument that only costs for which the Superfund can be used under § 104 may be recovered:⁷³

The generator defendants err in attempting to link liability under § 107 to restrictions placed on Superfund expenditures under § 104. The clear language of § 107 negates any such interdependence of the two sections. Liability is imposed under § 107 for "all costs of removal or remedial action … not inconsistent with the national contingency plan." Furthermore, liability is imposed "notwithstanding any other provision or rule of law, and subject only to the defenses set forth in subsection (b).⁷⁴

The court also based its conclusion on the difference in the purposes of the sections. Section 107 is to impose liability on responsible parties who created the environmental threat, it reasoned, while § 104 is to protect the integrity of the Superfund and, therefore, demands a more limiting interpretation.⁷⁵

While § 104 does not appear to limit recoverable costs, there is no question that the NCP promulgated under § 105 does to some degree. Only costs "not inconsistent" with the plan are recoverable.⁷⁶ However, the court in NEPACCO ruled that this limitation is not easily invoked. The defendant has the burden of demonstrating that the costs were "not inconsistent" with the NCP.⁷⁷ If a defendant does not succeed in carrying this burden, the costs incurred are presumed reasonable and recoverable.⁷⁸ NEPACCO further illustrates the breadth of recoverable costs. The court awarded response costs, attorneys fees, and other litigation costs, along with prejudgment interest.⁷⁹

Where a defendant seeks to challenge the costs claimed by the government, recent cases offer at least some procedural solace. In J.V. Peters & Co. v. Ruckelshaus⁸⁰ the court ruled that plaintiffs had standing to challenge the government's proposed § 104 response action prior to the inception of the action, since it was highly likely that the government would seek to recover response costs under § 107. However, the court then dismissed the motion, ruling that defendants failed to allege specific violations of § 104 standards.⁸¹ The court concluded that it would undermine CERCLA's purpose of achieving rapid cleanup of hazardous waste sites to allow preliminary challenges to cleanup actions without specific allegations of nonconformity with the requirements of § 104.

Allocation of Liability Among Multiple Responsible Parties

One of the most controversial issues in the implementation of CERCLA has been whether the government must prove the share of the total response costs (or natural resources damages) attributable to each defendant where there is more than one responsible party. The alternative is joint and several liability, which would make each defendant potentially liable for the entire amount. The practical consequences in CERCLA litigation are enormous [14 ELR 10231] given the difficulty of sorting out what is in virtually every hazardous substance disposal site, much less determining where the substances originated.If liability must be apportioned, the government bears the heavy burden of proving the contribution of each defendant, and bears whatever share of the costs cannot be allocated. If liability is joint and several, both the burden of proof and the risk that not all costs can be allocated fall on defendants (assuming the government can identify responsible parties that are financially viable).

The Senate CERCLA bill made joint and several liability mandatory, but the provision was deleted.⁸² In district courts around the country, the federal government has argued that Congress did not intend to bar application of joint and several liability, but only to limit it to cases where it would be imposed under § 311 of the FWPCA or under the common law. A few statements in the legislative history by key sponsors of the legislation support this interpretation. Generator defendants have countered that Congress could not have intended to impose such a heavy burden on liability without a clearer expression of intent.

In seven district court decisions to date the government has won on joint and several liability. Starting with United States v. Chem-Dyne Corp. (Chem-Dyne)⁸³ in October of 1983, and continuing through United States v. Stringfellow (Stringfellow II),⁸⁴ decided April 5 of this year, the courts have held that CERCLA § 107 imposes joint and several liability where the injury is indivisible. They held that the question calls for a uniform federal rule given the national scope and significance of hazardous waste problems and CERCLA's corrective program.⁸⁵ They found the federal rule in § 311 of the FWPCA, the Restatement (Second) of Torts, or both.⁸⁶ They also held that the burden of proving that the injury is divisible falls on defendants.

Two courts have gone on to rule as a matter of law that the relative volume of material sent to a given site is not an appropriate basis for dividing the injury.⁸⁷ The court in South Carolina Recycling responded to generators' argument that waste volume was an appropriate basis for dividing the injury as follows:

But, as noted by the court in Chem-Dyne, "the volume of waste of a particular generator is not an accurate predictor of the risk associated with the waste because the toxicity or migratory potential of a particular hazardous substance generally varies independently of the volume." Chem-Dyne, supra, at 18. Such arbitrary or theoretical means of cost apportionment do not diminish the indivisibility of the underlying harm, and are matters more appropriately considered in an action for contribution between responsible parties after plaintiff has been made whole.⁸⁸

If waste volume is not a reliable predictor of contribution to the hazard, then it seems unlikely that generators will be able to prove the injury is divisible in many cases. Since the total hazard will be very difficult to measure, even the generator that could establish the volume, toxicity, and migratory potential of its contribution would not necessarily be able to calculate its share of the overall hazard. An exception might be where the generator's wastes were separate and identifiable (e.g., contained in a known number of drums). In such cases the actual costs of removing that generator's wastes could be calculated. Few hazardous waste sites are this orderly, however.

Two courts have modified the basic rule on joint and several liability in an attempt to avoid its potentially harsh consequences.⁸⁹ The court in United States v. A & F Materials Co. (A & F I)⁹⁰ reasoned that Congress did not intend rigid application of the Restatement (Second) of Torts rule that

any defendant who could not prove its contribution would be jointly and severally liable. This result must be avoided because both houses of Congress were concerned about the issue of fairness, and joint and several liability is extremely harsh and unfair if it is imposed on a defendant who contributed only a small amount of waste to a site.⁹¹

The court found a safety value in an amendment proposed by Representative Gore in the House, but not enacted, "both persuasive and consistent with the intent of Congress."⁹² The Gore amendment would expressly have allowed a court to apportion damages, even when the injury was indivisible, according to six criteria including the amount and toxicity of the waste involved, the extent of the defendant's involvement in the disposal, and the degree of care it had exercised.⁹³ While the judicial resurrection of the defeated Gore amendment is questionable, concerns for equity create strong pressure to find some means of protecting a minor generator from paying for the entire cleanup of a site.

Multiple Parties Under § 106

Several courts extended the joint and several liability standard they found in § 107 to § 106 as well. In ruling that § 106 incorporated § 107's strict liability standard, the court in Price III⁹⁴ concurred with the holding in United States v. Outboard Marine Corp.,⁹⁵ and added its own reasons for applying the § 107 standards.

The heading used for § 107, "Liability" denotes an intention to have this section define liability for the entire act. [14 ELR 10232] This conclusion is reinforced by the fact that § 107 does not contain any qualifying language. Instead, it appears that Congress desired to use quite broad and unrestrained terminology. In this manner, § 107 sets forth standards of liability and associated defenses. Section 106(a) on the other hand, is quite vague and does not discuss any independent standards of liability with respect to those parties coming within its coverage. As such, it appears that § 106(a) is dependent upon the substantive provisions explaining liability outlined in § 107.⁹⁶

The first two courts that had to consider whether joint and several liability applies under § 106(a) relief on the reasoning in Price III, discussed above.⁹⁷ The recent decision in Stringfellow II went the other way, however.⁹⁸ The court ruled that § 106 provides equitable remedies distinct from the legal remedies of § 107, and that § 106(a) does not impose joint and several liability to abate hazardous substance pollution.⁹⁹ The court noted that § 106's focus on abating "current dangers" distinguishes it from § 107, which "specifically addresses" liability for "past disposal." The court did not, however, rule that § 106 is inapplicable to past generators. Rather, it used the past/-present distinction to introduce another distinction, that § 107 is a legal remedy, § 106 an equitable remedy. The court then seemed to conclude that to apply joint and several liability under § 106 would be to provide an alternative way for EPA to recover damages, which would not be appropriate with an equitable remedy. The court ruled that EPA could require a generator to take positive actions under § 106, but that it would have to specify the actions required of each defendant.¹⁰⁰

Generator Recovery from Third Parties

The strong possibility of joint and several liability in CERCLA cases gives defendants an interest in contribution from potentially responsible parties not sued by EPA.As discussed below, defendants have failed in attempts to force the government to add potentially responsible parties as indispensable defendants. Third-party complaints to seek contribution should the government prevail on the merits may prove more effective. Alternatively, defendants could wait until after judgment to seek contribution, but the complexity and high cost of CERCLA litigation argue for tying the contribution action into the main government case. It is by no means settled that rights of contribution exist under CERCLA against responsible parties not sued by the government, but it seems likely that courts imposing joint and several liability will recognize such rights. The more difficult question in the long run may prove to be how to handle contribution in cases where the government has settled with one group of potentially responsible parties and sued another.

Indispensible Parties

The importance of contribution in CERCLA cases is highlighted by the fact that generator defendants have failed in several attempts under Rule 19 of the Federal Rules of Civil Procedure¹⁰¹ to have CERCLA actions dismissed for the government's failure to join "indispensable" potentially responsible parties. In A & F I¹⁰² and United States v. Conservation Chemical Corp. (Conservation Chemical)¹⁰³ the courts ruled that joinder is permissive where liability is joint and several. The government prevailed on this motion in Conservation Chemical even though it sued only four generators and left out "at least 46" whose wastes were found at the site. However, the four defendants were responsible for approximately three-quarters of the hazardous material in the site.¹⁰⁴ In A & F I the court explained that its rejection of the motion would not prejudice any defendant; if a defendant could prove that the injury was divisible, it would only be liable for its share of the injury; and if it could not force apportionment the generator could "protect itself through the impleader provision of Rule 14."¹⁰⁵ The A & F I decision, at least, suggests that third-party actions for contribution are generator defendants' best means of insuring they do not pay more than their fair share for CERCLA cleanups.

Contribution

The one court that has ruled on rights of contribution under CERCLA did not address the question of rights among generators, transporters, owners, and operators. In Westinghouse¹⁰⁶ the court dismissed defendant generator Westinghouse's third-party claim against Monsanto. Monsanto was the manufacturer of the hazardous substances, PCBs, being released into the environment. The claim was based in part on an alleged federal common law equitable right to contribution under RCRA and CERCLA. The court ruled that Westinghouse's state law contract and tort claims against Monsanto were barred by statutes of limitations. The court next seems to have held that the federal statutory schemes do not allow rights of contribution.¹⁰⁷ However, it really addressed the separate question of whether those statutes make an allegedly negligent manufacturer of chemicals liable for subsequent releases to the environment attributable to the purchaser of the chemicals: "Monsanto did not generate or dispose of any hazardous waste and did not contract for disposal of waste and, therefore, Monsanto is not, under the facts alleged in the complaint of the United States and the third-party complaint, liable to Westinghouse."¹⁰⁸

Thus, Westinghouse was essentially trying to resurrect time-barred state law claims and this decision does not [14 ELR 10233] address the availability of contribution among jointly liable parties. Indeed, the inference of the quoted passage is that Monsanto would have been liable to Westinghouse if it were liable under CERCLA or RCRA.

Other CERCLA decisions imply that rights of contribution will be recognized. The statement in A & F I that a generator could protect itself with Rule 14 impleader implies recognition of such rights, since Rule 14 addresses actions against a "person not party to the action who is or may be liable to" the defendant.¹⁰⁹ The court in South Carolina Recycling raised a similar inference in noting that waste volume might be a basis for dividing liability in an action for contribution after judgment.¹¹⁰

Whether a right of contribution exists is now being hotly debated in United States v. Chem-Dyne Corp.¹¹¹ The United States and third-party plaintiffs argue that the right exists, while third-party defendants reject the argument. The strongest point in favor of contribution is that it is allowed by the common law authorities that, according to the recent decisions, Congress intended to be the source of liability apportionment standards. Section 886A of the Restatement (Second) of Torts,¹¹² which several courts have cited as a source of the federal common law principle of joint and several liability for indivisible CERCLA injuries, allows contribution.¹¹³ The United States also cites § 4 of the Uniform Contribution Among Joint Tortfeasors Act in support of the argument.¹¹⁴ Arguments against allowing contribution build principally on the failure of the statute and legislative history to expressly allow it, and on limitations on the federal courts' ability to create federal common law.¹¹⁵

The government seems likely to win this debate in the district courts. It is unlikely that courts that have found a federal common law principle of joint and several liability would shut the door on a companion right of contribution based on the same authority in which they found the liability rule. Older principles barred contribution among jointly liable parties, but that was because the heavy liability burden had a punitive aspect.¹¹⁶ As joint and several liability has been extended to a wider range of situations, and to less culpable conduct, the right of contribution has been recognized more and more widely. Contribution also seems especially appropriate in CERCLA cases given the nofault, minimal causation basis of liability. Another reason why district courts are likely to allow contribution is that the government is arguing in favor of it. In case after case the courts, while not explicitly relying on the principle of deference to agency interpretation of an ambiguous statute, have adopted the government's analysis. That pattern will probably continue on the contribution issue.

If contribution is allowed in CERCLA cases, how will liability be divided? South Carolina Recycling suggests waste volume.¹¹⁷ The Restatement notes that contribution is based on equal shares in some states and comparative fault in others.¹¹⁸ Under the Uniform Contribution Among Joint Tortfeasors Act, which the government puts forth as a source of appropriate common law, pro rata contribution is the rule.¹¹⁹ These appear to be the practical alternatives. The choice may be complicated by whatever division of responsibility among defendants and/or settlers has already occurred.

A further problem for courts that allow rights of contribution is how to give effect to those rights in cases where EPA has settled part of its case. Should defendants be entitled to contribution from generators that settled earlier? What if response costs have increased dramatically from those estimated at the time of settlement? Should the judgment against defendants take account of the settlement amount? These questions are resolved in several different ways under state law.¹²⁰ In Chem-Dyne the United States argues that § 4 of the Uniform Contribution Among Joint Tortfeasors Act should govern.¹²¹ Section 4 would bar contribution from settling parties, but would reduce the judgment against defendants by the amount of the settlement.¹²²

In United States v. Wade (Wade VII)¹²³ the court addressed the relationship between the settlement and any judgment against defendants. It ruled that any judgment against defendants under joint and several liability would have to be reduced by the full amount received by the government in an earlier settlement, even if the settlers turned out not to have CERCLA liability for some of the claims.¹²⁴

The Wade court later declined to resolve an alleged conflict between plaintiffs and defendants over who had rights to recover from a group of potentially responsible parties that did not settle and were not sued. In Wade IX¹²⁵ the court allowed generator defendants to file a third-party complaint against the as yet uninvolved potentially responsible parties. The government opposed the third-party action, allegedly because it was saving the third group of potentially responsible parties as a source of funding for response actions that might be needed if [14 ELR 10234] the current program for which settling parties and defendants would pay did not succeed in full.¹²⁶ Defendants, on the other hand, wanted to share any liability they might incur with the third group. They asked the court to rule that the government had no rights against these potentially responsible parties, as a result either of estoppel, sponse costs" from defendants, or the statute of limitations. They feared that the government would negotiate a settlement with the third group, insulating settlors from third-party claims by defendants. The government's interest in preserving a group of "rainy day" potentially responsible parties presumably arises from the fact that the Wade court has not ruled on whether EPA can obtain a liability judgment for future response costs. However, it is not even yet clear in that case whether plaintiffs can prove response costs greater than the amounts already received in settlement. The court ruled that the issue was not ripe since the government had not filed a complaint against the third group or even given evidence that it intended to do so.¹²⁷

A special set of issues is raised by potential third-party liability of government agencies. In United States v. Union Gas Co.,¹²⁸ the court ruled that the Eleventh Amendment bars a third-party complaint by defendant generator against the state and a municipality that allegedly owned and operated the disposal site. However, courts may be more responsive to counterclaims against federal agencies whose hazardous substances were disposed of at CERCLA sites. In Wade V¹²⁹ generator defendants alleged that a Navy facility sent hazardous wastes to the Wade site. The court gave defendants extra time to obtain factual information linking the Navy to the site, since it only had circumstantial evidence from the same source which the government sought to use to link defendants.

The Relationship of CERCLA §§ 104 and 106

The recent spate of CERCLA decisions for the most part upholds EPA's aggressive use of § 106. The Agency's strategy suffered an initial setback in Wade I¹³⁰ when the court held that § 106(a) took a back seat to §§ 104 and 107 in remedying problems from inactive sites. The court limited the imminent hazard provision to cases in which the government could enjoin (stop) current conduct to abate an imminent threat to public health or the environment. This reading of CERCLA has been rejected by several courts in recent decisions. Addressing the question of whether § 106(a) applies to inactive waste dumps, the court in Price III¹³¹ stated that Congress probably did not intend the Wade I result:

It is far more likely that Congress envisioned possible problems with the government funding numerous clean ups and drafted § 106(a) as a viable alternative or concurrent means of achieving the same goal.¹³²

The Price III reasoning seemed to be winning the day,¹³³ until the court in Stringfellow II¹³⁴ ruled that "It is eminently reasonable to assign to sections 106 and 107 distinct functions in CERCLA. Thus, the Court holds that plaintiffs may not seek through section 106 an alternative means of reimbursement under CERCLA."¹³⁵ The court ruled only that § 106 does not incorporate CERCLA § 107's standard of joint and several liability. It implied that CERCLA § 106 could be used to compel past generators to take positive steps to abate hazardous pollution.¹³⁶ The Stringfellow II decision could limit the effectiveness of EPA's enforcement program. Without joint and several liability, the government must not only apportion the injury, but presumably must also specify abatement actions for each defendant that are appropriate in light of each's contribution to the imminent hazard, adding to the practical difficulties facing the government litigator.

Will other courts follow Stringfellow II? The court's reasoning is neither crystal clear nor convincing. The court argues that § 106 provides an equitable remedy and that joint and several liability is appropriate only in actions for damages, citing Wade I and PROSSER, THE LAW OF TORTS 603 (4th ed. 1971).¹³⁷ Neither authority addresses this issue. Rather, both address the use of injunctions to block current activities. In Wade I the court ruled that since past, off-site generators were conducting no activities contributing to the current imminent hazard, they were beyond the reach of § 106. The cited passages in PROSSER deal with the use of equitable injunctive relief to abate nuisances. But the Stringfellow court appears to disagree with its authorities on this point. It concedes that § 106 could be used to force defendant generators to take positive steps to abate the imminent hazard currently emanating from the Stringfellow Acid Pits.

Perhaps the court was merely saying that EPA was pushing § 106 too far given the limited direction from Congress. However, if there is to be joint and several liability under § 107 for cost recovery actions, it makes little sense to bar it under § 106. It does not seem plausible that Congress would have made it harder for EPA to make its case in an action to abate an imminent hazard than in a less urgent matter.

Perhaps underlying the Stringfellow II decision is the fact that § 104 places constraints on the costs for which a generatory may eventually be made liable, thus making it a more equitable vehicle to carry the heavy burden of joint and several liability. However, there is no apparent connection between many of the limitations on § 104 actions, which were intended to protection the integrity of the Superfund, and the rights of liable generators.

A final possible rationale for the Stringfellow II result, that § 106 inherited the limited "emergency" role of its predecessors under other statutes, also is flawed. [14 ELR 10235] CERCLA § 106 is drafted in broader terms than its predecessors, which originally were intended to do no more than fill in the occasional gap in the comprehensive regulatory schemes that were the primary mechanisms of those pollution control statutes.¹³⁸ By the time CERCLA was passed, Congress was aware of the potential for aggressive use of imminent hazard authority as a result of experience with RCRA § 7003. If earlier generations of imminent hazard provisions were intended to be limited "emergency" provisions, there is evidence that Congress began to change their role in statutes aimed at protecting the public health from acutely toxic pollution.¹³⁹ The fact that Congress wrote § 106 without language that had proved limiting in § 7003, e.g., "to restrain any person contributing to," suggests that it intended to give the imminent hazard provision greater power than its early predecessors. Moreover, CERCLA, unlike RCRA and earlier pollution control statutes, does not operate through a comprehensive regulatory program. In a statute designed to impose liability for cleanup costs, Congress may well have intended a very different role for an injunctive relief provision.¹⁴⁰

If EPA is faced with further decisions in the Stringfellow II mold, its cleanup program will suffer. There are several reasons why enforcement under § 106 offers EPA advantages over proceeding under §§ 104 and 107. Every national priorities list (NPL) site EPA can compel potential responsible parties to clean up under § 106 is one that will not require expenditure of Superfund monies. Enforcement actions also avoid limitations on fund cleanup actions in § 104 that rule out or constrain direct federal action.¹⁴¹ However, to the extent EPA can use § 107 to recover response costs not meeting all the § 104 standards¹⁴² this advantage diminishes in significance. Another distinction between enforcement actions and cleanup actions is that the former can be used at any site, while with the exception of limited "immediate removal actions" EPA cannot respond to non-NPL sites under § 104.¹⁴³

Conclusion

It might appear that the CERCLA legal war between the federal government and hazardous substance generators is over. It is not. However, the government has won so many of the early battles that it will have a decided advantage in future engagements, unless it allows the momentum of its early victories to carry it into terrain where equitable opposition to imposing liability on specific generators outweighs the public interest in hazardous pollution cleanup.

The government has had convincing victories on most of the major issues concerning implementation of CERCLA. To prove that a generator of hazardous substances is liable under CERCLA for response costs, the government does not need to prove negligence or that the generator's specific wastes, or even wastes of the same type, are in the release or threatened release triggering CERCLA. Generators and other parties found responsible are liable jointly and severally unless they can carry the burden of proving a basis for apportionment. The government may investigate a CERCLA site, take preliminary action to stabilize the situation, and sue for past and future response costs, although to date it has not been allowed to recover response costs incurred before enactment of CERCLA. And the government may sue generators and other responsible parties directly to force them to abate imminent hazards posed by hazardous substances. Most courts that have addressed the issue have held that the government may use the same theories of strict, joint and several liability it uses in § 107 cost recovery actions in § 106 abatement actions. The Stringfellow II decision, holding that joint and several liability does not apply in § 106 actions, is the only setback in the government's aggressive enforcement program, and it seems unlikely to be widely adopted.

CERCLA has been criticized as confusing legislative drafting, but one message has gotten through to the courts. Congress intended that there be prompt action to clean up hazardous substance disposal sites and it intended private parties, like non-negligent, past, off-site generators, that would not be liable under common law, to pay for the cleanup process where possible. Even courts that have cast a jaundiced eye on some of the government's legal theories have been unwilling to let generator defendants off the hook.The Wade court is a prime example. It rejected the government's efforts to force non-negligent, past, off-site generators to abate hazardous substance pollution under CERCLA § 106(a) or RCRA § 7003, but imposed joint and several liability for response costs on non-negligent generators that had not necessarily caused the threatened release under CERCLA § 107. The Stringfellow II court refused to impose joint and several liability under § 106, but did under § 107. In neither case is there any indication that generators and other responsible private parties will avoid paying for the full abatement of the hazardous substance threat to health and the environment. The question at this point seems to be not whether the courts will allow the government to make generators pay for hazardous substance cleanup to the maximum extent possible, but how much flexibility the government will have in pursuing that end.

The recent cases suggest that CERCLA places few limits on the government's ability to force hazardous substance generators to pay for cleaning up dangerous chemical dumps, but general concepts of equity may impose [14 ELR 10236] constraints. The government's theories of generator liability are not startling. Strict and joint and several liability and familiar concepts in the common law, and are applied under CERCLA in accord with developing common law trends. The limited causation test accepted in Wade III and South Carolina Recycling raises more questions. It appears to do away with the need to prove cause-in-fact, a prerequisite to liability even under modern theories like product liability that stretch older principles of causation. Combined with broad liability principles, this approach raises the spected of gross injustice.

A company, one barrel of whose hazardous substances was found at a CERCLA site, might become liable for the entire cost of cleaning up the site. Indeed, a company that took every reasonable precaution in selecting a transporter to deliver its barrel of hazardous waste to a state-of-the-art disposal facility might nonetheless be confronted with the multimillion dollar bill for cleaning up a completely different site, if its wastes were diverted there by the unscrupulous transporter. And if the company is small, the cleanup costs resulting from that one barrel of waste could cause its financial ruin. It is quite possible that the government would not proceed against this hypothetical generator. However, given the pressure on it to speed up the cleanup process and the limited amount of money in the fund, absent proof that no more than one barrel could have been sent to the site, EPA may well proceed against such a generator. From a policy point of view it is difficult to see what end is served by having such a company pay for the cleanup instead of the Superfund. There might even be constitutional due process questions.¹⁴⁴ Other courts, confronted with what appear to be abuses of the government's broad power to impose generator liability under CERCLA, may cut back that power.

But is the hypothetical "clean hands, de minimis contribution generator" unprotected in fact? The recent CERCLA decisions, while easing the government's task in making generators liable for cleaning up CERCLA sites, do offer several avenues of escape for generators with de minimis contributions to the waste in the site or whose waste is safely segregated from the release. The defenses of § 107(b) do not offer much solace, since intervening wrongdoers do not break the chain of liability if they are directly or indirectly connected to the generator by contract. However, other machanisms may be more effective. A generator that can prove that its wastes are segregated from those involved in the release can force apportionment of liability. It should end up paying nothing if its waste requires no remedial action, or only the amount necessary to safely dispose of its waste otherwise. A minor generator whose wastes are commingled with those of other generators also may be able to apportion liability.If it cannot, it may persuade a court that it should benefit from equitable apportiment under the rulings in A & F I and Stringfellow II. And, an overpaying generator can cut its liability by identifying other responsible parties and obtaining contribution. With these limited but significant safeguards in place, the issue boils down to one of burden of proof.¹⁴⁵ Given the lack of information concerning the trial of hazardous wastes disposed of years ago, placing this burden on generators will make it likely that they, not the fund, will pay for the cleanup. These safeguards seem adequate to protect the hypothetical de minimis generator in most cases. And other generators bear greater responsibility for current hazardous substance pollution problems than do those who otherwise would bear the cost of cleanup.

1. 42 U.S.C. §§ 9601-9657, ELR STAT. 41941.

2. 42 U.S.C. §§ 6901-6987, ELR STAT. 41901.

3. See, e.g., United States v. Northeastern Pharmaceutical and Chemical Co. (NEPACCO), 579 F. Supp. 823, 14 ELR 20212 (W.D. Mo. 1984); "Apparently, Congress' major purpose in passing RCRA was to control the manner of disposing of hazardous wastes as opposed to cleaning up the results of past disposal." Id. at 834, 14 ELR 20216.

4. CERCLA's cleanup and liability provisions are triggered by "releases" or threatened releases of hazardous substances. See CERCLA § 104(a)(1)(A), 42 U.S.C. § 9604(a)(1)(A), ELR STAT. 41945; CERCLA § 106(a), 42 U.S.C. § 9606(a), ELR STAT. 41947; CERCLA § 107(a), 42 U.S.C. § 9607(a), ELR STAT. 41947.

5. CERCLA §§ 111, 221, 42 U.S.C. §§ 9611, 9631, ELR STAT. 41950, 41953.

6. 42 U.S.C. § 9604, ELR STAT. 41945.

7. 42 U.S.C. § 9607, ELR STAT. 41947.

8. CERCLA § 107(a), 42 U.S.C. § 9607(a), ELR STAT. 41947.

9. 42 U.S.C. § 9606, ELR STAT. 41947.

10. See, e.g., 126 CONG. REC. H11787 (daily ed. Dec. 3, 1980) (statement of Rep. Florio explaining the final compromise CERCLA bill: "This bill sets forth the classes of persons (for example, owners, operators, generators) who are liable for all costs of removal or remedial action, other necessary costs of response, and damages to natural resources"), reprinted in 1 ELI, SUPERFUND: A LEGISLATIVE HISTORY 614-65 (1982).

11. See, e.g., United States v. A & F Materials Co. (A & F I), 578 F. Supp. 1249, 14 ELR 20105 (S.D. Ill. 1984):

CERCLA was enacted on December 11, 1980 in the last days of the 96th Congress.The final version of the Act was conceived by an ad hoc committee of Senators who fashioned a last minute compromise which enabled the Act to pass. As a result, the statute was hastily and inadequately drafted.

12. See, e.g., United States Response in Opposition to Defendants' Motion to Dismiss, United States v. Conservation Chemical Co., 14 ELR 20207 (W.D. Mo. Feb. 3, 1984), ELR PEND. LIT. 65785 (response filed May 2, 1983).

13. See, e.g., Plaintiff's opposition to Defendants' Motion for Summary Judgment, United States v. South Carolina Recycling and Disposal, Inc., 14 ELR 20272 (D.S.C. Feb. 23, 1984), ELR PEND. LIT. 65804 (opposition filed Aug. 11, 1983).

14. In addition to federal cleanup, CERCLA authorizes states to recover from responsible parties or the Superfund for cleaning up hazardous substance releases. CERCLA §§ 104, 111, 42 U.S.C. §§ 9604, 9611, ELR STAT. 41945, 41950. It is unclear for how many hazardous substance disposal sites fund-financed cleanups are the only alternative. A recent EPA report to Congress discussed the selection of enforcement versus fund-financed responses in some detail, but did not indicate how many sites would fall into either category. See EPA, REPORT TO THE APPROPRIATIONS COMMITTEE UNITED STATES HOUSE OF REPRESENTATIVES (Nov. 1, 1983) [hereinafter cited as EPA REPORT]. The EPA REPORT did state that of the first 419 sites proposed for priority action under CERCLA, EPA originally classified 113 as "enforcement-only." While the lack of financially viable responsible parties could be one reason for not classifying a site as enforcement-only, EPA initially also sought to negotiate before enforcing at many sites. See, e.g., Jeffrey G. Miller, EPA Superfund Enforcement, 13 ELR 10062 (1983). Thus it would not be safe to assume that EPA had no alternative to fund-financed action at the remaining 306 sites on the first priority list of 419. However, if the number of sites for which fund financing was the only alternative was any substantial share of those 306 sites, it would help explain EPA's desire to conserve the fund, since the Agency estimates that the fund is only large enough to clean up 170 sites. See EPA REPORT at 37.

15. EPA's CERCLA policies are not spelled out in a comprehensive and definitive document. Some policy guidance has been formally issued and widely disseminated. See, e.g., Memorandum from Lee M. Thomas and Courtney M. Price, EPA, to Regional Administrators, Regions I-X, et al. Re: Administrative Orders Under § 106(a) of CERCLA (Sept. 8, 1983), reprinted in ELI, SUPERFUND: CRITICAL CHALLENGES AND CONTROVERSIES (May 11, 1984). In other instances draft policies are the only available guidance. See, e.g., Memorandum from Michael A. Brown, EPA, to Regional Counsels, Regions I-X, Re: Interim Pre-Litigation Settlement Procedures in Hazardous Waste Cases (May 20, 1983), reprinted at 13 ELR 30011 (1983). The EPA REPORT, supra note 14, appears to be as clear and current a statement of Agency policy on choices of CERCLA actions as is available.

16. 42 U.S.C. § 6973, ELR STAT. 41922. EPA uses § 7003 in tandem with § 106. The added value of § 7003, according to an EPA policy description, is that it covers solid wastes in addition to hazardous wastes, and thus is broader than § 106. EPA REPORT, supra note 14 at 47, n.37. RCRA § 7003 might strengthen EPA's hand with regard to pre-CERCLA problems, however, CERCLA § 107 has been held to apply to pre-CERCLA disposal, see infra note 33 and accompanying text, but not to pre-CERCLA response costs, see infra note 70 and accompanying text. EPA has claimed that § 7003 authorizes it to recover response costs in restitution. Since § 106 generally is broader than § 7003, any expansion in authority offered by the latter should be marginal, though it could be significant in individual cases.

17. The Agency uses a "preliminary site classification" to categorize sites of the national priorities list on which the federal government is to take the lead for (1) fund financing, (2) enforcement only, or (3) limited negotiation. After completion of a "remedial investigation/feasibility study," the Agency makes a final classification based on (1) whether "financially viable" responsible parties are available, (2) the strength of the enforcement case, (3) whether the situation (e.g., the number of potentially responsible parties) is conductive to productive negotiation, (4) the urgency of the need for response action, and (5) whether all the conditions for fund-financed action (e.g., state able to satisfy cost-share requirement) will be met. EPA REPORT, supra note 14, at 41-43.

18. In NEPACCO, the court ruled that a combination of substances highly toxic at low dosages and a substantial likelihood of eventual human and environmental exposure demonstrates imminent and substantial endangerment. 579 F. Supp. at 846, 14 ELR at 20221-22. In a footnote, the court cited the legislative history of the Safe Drinking Water Act, 42 U.S.C. §§ 300f-300j-10, ELR STAT. 41101, and cases that gave the language a relative unrestrictive interpretation. 579 F. Supp. at 86 n.28, 14 ELR at 20222-23 n.28.

19. CERCLA § 107(a)(1), 42 U.S.C. § 9607(a)(1), ELR STAT. 41947. The court in NEPACCO seems to have concluded that § 107(a)(1) includes the owner or operator of the facility generating the hazardous substances. 579 F. Supp. at 847-848, 14 ELR at 20222, 20223. The court appears to have mislead § 107. The "facility" for which § 107(a)(1) makes the owner or operator liable is one "from which there is a release, or a threatened release." That is, the last quoted language, found under § 107(a)(4), modifies all four subsections. See S. REP. NO. 848, 96th Cong., 2d Sess. 31 (1980).

20. CERCLA § 107(a)(2), 42 U.S.C. § 9607(a)(2), ELR STAT. 41947.

21. CERCLA § 107(a)(3), 42 U.S.C. § 9607(a)(3), ELR STAT. 41947.

22. CERCLA § 107(a)(4), 42 U.S.C. § 9607(a)(4), ELR STAT. 41947.

23. 579 F. Supp. 823, 14 ELR 20212 (W.D. Mo. 1984).

24. Id. at 846-848, 14 ELR at 20222-23.

25. The section addresses hazardous substances "owned or possessed" by the person arranging for their disposal. CERCLA § 107(a)(3), 42 U.S.C. § 9607(a)(3), ELR STAT. 41947.

26. 579 F. Supp at 847, 14 ELR at 20222.

27. 14 ELR 20432 (S.D. Ill. Mar. 30, 1984).

28. 14 ELR 20483 (S.D. Ind. June 29, 1983).

29. United States v. South Carolina Recycling and Disposal, Inc. (South Carolina Recycling), 14 ELR 20272, 20274-75 (D.S.C. Feb. 23, 1984); United States v. Conservation Chemical Co. (Conservation Chemical), 14 ELR 20207, 20208 (W.D. Mo. Feb. 3, 1984); NEPACCO, 579 F. Supp. at 847, 14 ELR at 20222.

30. United States v. Wade, (Wade VIII), 14 ELR 20440, 20441 (E.D. Pa. Apr. 27, 1984).

31. Under RCRA § 7003 the issue is whether a generator can be a person "contributing to" the imminent and substantial endangerment. See, e.g., NEPACCO, 579 F. Supp. at 834, 14 ELR at 20216.

32. See infra text accompanying notes 34-37.

33. 579 F. Supp. at 839, 14 ELR at 20218. See also Ohio ex rel. Brown v. Georgeoff (Georgeoff), 562 F. Supp. 1300, 13 ELR 20457 (N.D. Ohio 1983) (CERCLA § 107(a) applies to preenactment conduct of transporters).

34. 564 F. Supp. 785, 12 ELR 21051 (E.D. Pa. 1982).

35. 13 ELR 20843 (D.N.J. July 28, 1983).

36. United States v. Price (Price II), 688 F.2d 204, 12 ELR 21020 (3d Cir. 1982).

37. 13 ELR at 20846. RCRA § 7003's application to inactive sites is a different story, but one that may well end up with the same conclusion. United States v. Waste Industries, 556 F. Supp. 1301, 13 ELR 20286 (E.D.N.C. 1982), held that § 7003 does not apply to inactive sites. NEPACCO, 579 F. Supp. at 834, 14 ELR at 20216, held CERCLA § 106(a) to be properly retroactive, but held that § 7003 does not apply to the preenactment conduct of generators or transporters. See also United States v. Wade (Wade I), 546 F. Supp. 785, 12 ELR 21051 (E.D. Pa. 1982). Until recently, the only contradiction came from the Third Circuit in dicta in United States v. Price (Price II), 688 F.2d 204, 12 ELR 21020 (3d Cir. 1982), in which the court interpreted § 7003 to apply to dormant sites presenting current threats to health and the environment. However, the Fourth Circuit recently reversed the district court ruling in United States v. Waste Industries, 14 ELR 20461 (4th Cir. May 8, 1984), reopening the issue. See also Jones v. Inmont Corp., 14 ELR 20485 (S.D. Ohio, Apr. 26, 1984) (RCRA § 7003 applies to past generators of wastes sent to sites that now pose imminent hazards).

38. See Conservation Chemical, 14 ELR at 20208. In NEPACCO the court said: "Although the statutory language does not explicitly refer to inactive sites, Congress made this explicitly clear. The Court finds that section 106(a) applies to inactive sites and that the same persons listed as liable under section 107(a) are liable under section 106(a)." 579 F. Supp. at 839, 14 ELR at 20219. The NEPACCO court also went into a lengthy analysis of the constitutional implications of CERCLA's retroactivity, concluding that retroactive application was intended by Congress and does not violate the Due Process Clause. 579 F. Supp. at 840, 14 ELR at 20219. See also South Carolina Recycling, 14 ELR at 20276-77 (CERCLA not retroactive as applied, but if retroactive, would be constitutional).

39. 42 U.S.C. § 9607(b), ELR STAT. 41947.

40. CERCLA § 107(b)(3), 42 U.S.C. § 9607(b)(3), ELR STAT. 41947.

41. See, e.g., 126 CONG. REC. H11787 (daily ed. Dec. 3, 1980) (statement of Rep. Florio explaining the final compromise CERCLA bill), reprinted in ELI, 1 SUPERFUND: A LEGISLATIVE HISTORY 164 (1982):

With respect to strict liability, this bill contains no significant change from that in our earlier bill. Liability remains "subject only to the defenses" provided in the bill. That is, a defendant can escape liability only if he establishes that the release or threatened release is caused solely by an act of God, an act of war, or an act or omission of a third party, with third parties being narrowly defined. Thus, the absence of negligence is not a defense to liability.

42. See, e.g., South Carolina Recycling, 14 ELR at 20274; Conservation Chemical, 14 ELR at 20208; NEPACCO, 579 F. Supp. at 844, 14 ELR at 20220-21.

43. NEPACCO, 579 F. Supp. at 844, 14 ELR at 20220-21; Price III, 13 ELR at 20847.

44. See, e.g., Rogers, Three Years of Superfund, 13 ELR 10361, 10363 (1983) ("Liability Without Causation: The Last Straw").

45. See supra note 13.

46. See, e.g., South Carolina Recycling, 14 ELR at 20274.

47. Id. at 20274; United States v. Wade (Wade III), 14 ELR 20096 (E.D. Pa. 1983).

48. 14 ELR 20096 (E.D. Pa. 1983).

49. Wade III, 14 ELR at 20098.See also Price III, 13 ELR at 20847 n.11, concerning deletion of this language.

50. 14 ELR 20272, 20274 n.5 (D.S.C. Feb. 23, 1984).

51. Id. The operation of the government's test, and the decision in South Carolina Recycling indicated that it is not really a presumption, at least not one that is rebuttable. See infra note 143.

52. 14 ELR 20436 (E.D. Pa. Mar. 8, 1984). See also Wade VIII, 14 ELR 20440.

53. See also Price III, 13 ELR at 20848 (circumstantial evidence that a generator's wastes were sent to a site overcomes generator's summary judgment motion, but probably is not enough to establish liability).

54. 14 ELR at 20275 n.6.

55. Id. at 20274-75.

56. 33 U.S.C. § 1321, ELR STAT. 42132.

57. Unlike other pollution control statutes, in which the imminent hazard or emergency provisions are included in subchapters separate from those with the main regulatory authority, CERCLA includes its imminent hazard provision among the substantive provisions.

58. Conservation Chemical, 14 ELR at 20208; Price III, 13 ELR at 20847.

59. See United States v. Waste Industries, 556 F. Supp. 1301, 1311, 13 ELR 20286, 20290, 20291 (E.D.N.C. 1982) ("Like its predecessors, the emergency provision of the RCRA was not intended as a substitute mechanism for dealing with the chronic problems caused by abandoned waste disposal sites.").

60. South Carolina Recycling, 14 ELR at 20274 n.5.

61. Id. at 20275.

62. Id.

63. Section 107 makes responsible parties liable for all federal or state remedial or removal costs "not inconsistent with the national contingency plan [NCP] …." The section also makes responsible parties liable to "any other person" for "other necessary costs of response … consistent with the national contingency plan." This standard is more stringent than that faced by EPA in two regards. The response costs must be necessary and mustbe consistent (as opposed to "not inconsistent") with the NCP. In Jones v. Inmont Corp., 14 ELR 20485, 20487 (S.D. Ohio Apr. 26, 1984), the court ruled that private parties living near a CERCLA site could seek to recover response costs, and that the medical expenses and lost use of wells, for which plaintiffs claimed a right of recovery, apparently qualified as "response costs."

64. The NCP is prescribed by CERCLA § 105, 42 U.S.C. § 9605, ELR STAT. 41946, and is published at 40 C.F.R. pt. 300, ELR REG. 47401.

65. Section 107 authorizes recovery of removal and remedial costs. Removal actions are designed to protect against the immediate dangers posed by an unsafe hazardous substance disposal site, including removing wastes above ground at the site, fencing off the facility, monitoring for groundwater contamination, and providing alternative sources of drinking water to neighbors of the site whose wells are contaminated. CERCLA § 101(23), 42 U.S.C. § 9601(23), ELR STAT. 41943. Remedial actions are intended to provide a permanent solution to the toxic waste contamination, including capping sites with impermeable clay; constructing slurry walls to prevent the migration of contaminated groundwater; treatment or destruction of chemicals recovered or removed from the site; treatment of contaminated groundwater; and permanent relocation of residents of the contaminated area. CERCLA § 101(24), 42 U.S.C. § 9601(24), ELR STAT. 41944.

66. 42 U.S.C. § 9606, ELR STAT. 41947.

67. Whether the NCP and its cost-effectiveness criteria have any relevance in establishing § 106 relief is an open question. Nothing in § 106's language suggests that it does. However, as EPA uses § 106 broadly as an alternative to § 104 actions, courts might look to the NCP as a measure of the reasonableness of relief sought.

68. It has sought recovery of pre-CERCLA response costs, as well as adjudication of liability for costs not yet incurred. See, e.g., NEPACCO, 579 F. Supp. at 850, 14 ELR at 20223-24.

69. Id., 14 ELR at 20224.

70. United States v. Wade (Wade VI), 14 ELR 20437 (E.D. Pa. Mar. 23, 1984); NEPACCO, 579 F. Supp. at 843, 850, 14 ELR at 20220, 20223.

71. Wade VI, 14 ELR at 20438.

72. NEPACCO, 579 F. Supp. at 850, 14 ELR at 20224; A & F I, 578 F. Supp. at 1259, 14 ELR at 20109; Price III, 13 ELR at 20845; Georgeoff, 562 F. Supp. at 1315-16, 13 ELR at 20464-65. See also South Carolina Recycling, 14 ELR at 20277 (CERCLA allows adjudication of liability for future response costs; dictum because response completed prior to judgment).

73. 14 ELR at 20099, citing United States v. Reilly Tar & Chemical Corp., 564 F. Supp. 1100, 1118, 12 ELR 20954, 20960 (D. Minn. 1982).

74. Accord, NEPACCO, 579 F. Supp. at 850, 14 ELR at 20224.

75. See also Wehner v. Syntex Corp., 14 ELR 20265, 20266 (E.D. Mo. Dec. 30, 1983) (private party response costs are not subject to § 111 limits on fund actions).

76. See supra note 63.

77. 579 F. Supp. at 850, 14 ELR at 20224.

78. Id.

79. Id.

80. 14 ELR 20277, 20278 (N.D. Ohio Feb. 17, 1984).

81. Id. A procedural alternative for resolving disputes over cost recovery claims recently was announced. On May 31, 1984, the Price court reportedly issued a case management order requiring resolution of recoverable costs issues prior to resolution of liability standard issues. INSIDE EPA, June 8, 1984 at 2.

82. See Comment, Conservation Chemical: Generator Liability for Imminent Hazards on the Docket, 13 ELR 10208, 10212 (1983) [hereinafter cited as Conservation Chemical Comment], for a discussion of the treatment of this change in language in the legislative history.

83. 572 F. Supp. 802, 13 ELR 20986 (S.D. Ohio, 1983).

84. 14 ELR 20385 (C.D. Cal. Apr. 5, 1984).

85. But see NEPACCO, 579 F. Supp. at 845, 14 ELR at 20221 (it is not clear whether there should be a uniform federal rule or state law should govern, but both yield the same result in this case).

86. See, e.g., Chem-Dyne, 572 F. Supp. at 809-10, 13 ELR at 20988.

87. South Carolina Recycling, 14 ELR at 20275; Chem-Dyne, 572 F. Supp. at 811, 13 ELR at 20989.

88. 14 ELR at 20275-76.

89. Stringfellow II, 578 F. Supp. at __ 14 ELR at 20387; A & F I, 578 F. Supp. at __ 14 ELR at 20108.

90. 578 F. Supp. 1249, 14 ELR 20105 (S.D. Ill. 1984).

91. Id. at 1256, 14 ELR at 20107-08.

92. Id., 14 ELR at at 20108.

93. Id.

94. 13 ELR at 20847.

95. 556 F. Supp. 54, 12 ELR 21153 (N.D. Ill. 1982).

96. Price III, 13 ELR at 20847.

97. Conservation Chemical, 14 ELR at 20209; NEPACCO, 579 F. Supp. at 845, 850, 14 ELR at 20221, 20223.

98. 14 ELR at 20387.

99. Id.

100. Id.

101. FED. R. CIV. P. 19.

102. 578 F. Supp. at 1260-1261, 14 ELR at 20110.

103. 14 ELR 20207, 20209 (W.D. Mo. Feb. 3, 1984).

104. See Conservation Chemical Comment, supra note 82.

105. FED. R. CIV. P. 14; 578 F. Supp. 1261, 14 ELR at 20110. The Conservation Chemical court ruled that defendants' motion was governed by FED. R. CIV. P. 20 on permissive joinder. It mentioned Rule 14, but did not speculate on its applicability. 14 ELR at 20209.

106. 14 ELR at 20483.

107. Id. at 20485.

108. Id.

109. FED. R. CIV. P. 14(a).

110. 14 ELR at 20276.

111. No. C-1-82-840 (S.D. Ohio) (the briefs on the contribution issue will be summarized in the July 1984 ELR Pending Litigation issue).

112. RESTATEMENT (SECOND) OF TORTS § 886(A) (1979).

113. See. e.g., Chem-Dyne, 572 F. Supp. at 810, 13 ELR at 20988.

114. See Response of the United States to Motion of Settling Third-Party Defendants to Dismiss, Strike and/or for a Separate Trial of Third Party-Claims at 14, United States v. Chem-Dyne Corp., No. C-1-82-840 (S.D. Ohio) [hereinafter cited as U.S. Response].

115. See Supplemental Memorandum of Certain Settling Third-Party Defendants in Support of Motion to Dismiss, Strike and/or for a Separate Trial of Third-Party Claims at 14, United States v. Chem-Dyne Corp., No. C-1-82-840 (S.D. Ohio) ("Federal courts, as courts of limited jurisdiction, lack power to fashion a general federal right of contribution.").

116. See PROSSER, LAW OF TORTS 305-10 (4th ed. 1971).

117. 14 ELR at 20275-76.

118. RESTATEMENT (SECOND) OF TORTS § 886A comment h.

119. Uniform Contribution Among Joint Tortfeasors Act § 1(b) (1955) ("No tortfeasor is compelled to make contribution beyond his own pro rata share of the entire liability.").

120. The Restatement takes no position on the effect of a partial settlement. RESTATEMENT (SECOND) OF TORTS § 886A (Caveat).

121. See U.S. Response, supra note 114, at 15.

122. Id.

123. 14 ELR 20439 (E.D. Pa. Apr. 27, 1984).

124. The settlement predated the court's ruling that pre-CERCLA response costs were not recoverable under the Act. The court ruled that while the settling defendants could not escape the liability they had accepted in settlement, defendants could not be disadvantaged by settlors' overpayment. Id. at 20440.

125. 14 ELR 20441 (E.D. Pa. Apr. 27, 1984).

126. Id. at 20442.

127. Id.

128. 575 F. Supp. 949, 14 ELR 20246 (E.D. Pa. 1983). See also Thomas, Superfund and the Eleventh Amendment: Are the States Immune from § 107 Suits, 14 ELR 10156 (Apr. 1984).

129. 14 ELR 20436 (E.D. Pa. Mar. 8, 1984).

130. 546 F. Supp. 785, 794, 12 ELR 21051, 21055 (E.D. Pa. 1982).

131. 13 ELR at 20846.

132. Id.

133. Conservation Chemical, 14 ELR at 20208; NEPACCO, 579 F. Supp. at 850, 14 ELR at 20224.

134. 14 ELR at 20385.

135. Id. at 20387.

136. Id.

137. 14 ELR at 20387.

138. The parallel provisions include Clean Air Act § 303, 42 U.S.C. § 7603, ELR STAT. 42256 (1970) ("Emergency powers"); Federal Water Pollution Control Act § 504, 33 U.S.C. § 1364, ELR STAT. 42147 (1972) ("Emergency powers"); Safe Drinking Water Act § 1431, 42 U.S.C. § 300i, ELR STAT. 41110 (1974) ("Emergency powers"); and RCRA § 7003, 42 U.S.C. § 6973, ELR STAT. 41922 (1976) ("Imminent hazard").

139. There was little legislative history on the provisions prior to enactment of the Safe Drinking Water Act. See NEPACCO, 579 F. Supp. at 846 n.28, 14 ELR 20221 n.28. Congress paid some attention to RERA § 7003 in 1980, amending it to expand EPA's authority. See United States v. Waste Industries, 556 F. Supp. at 1307, 1311-12, 13 ELR at 20289, 20291. The CERCLA legislative history does not provide much detail on the intended scope of § 106(a), however. See ELI, 1 SUPERFUND: A LEGISLATIVE HISTORY at 149-62 (1982).

140. That Congress intended a broader role for § 106(a) than was given its predecessors is further suggested by its inclusion with the substantive provisions of the statute.

141. For example, the state matching-share requirement and the need for consistency with the NCP.

142. See Wade III, 14 ELR at 20099.

143. See EPA REPORT, supra note 14, at 9.

144. See Vlandis v. Kline, 412 U.S. 441 (1973), which held that an irrebuttable presumption concerning residency requirements for instate tuition rates at a state university violated the Due Process Clause.

145. Presented in this light, the due process issue, see supra note 144, disappears. As a legal matter there is no irrebuttable presumption, although it may be very difficult to rebut the CERCLA presumption of liability in fact.

14 ELR 10224 | Environmental Law Reporter | copyright © 1984 | All rights reserved