Household Garbage as a Hazardous Substance: What's a Mayor to Do?

Mark J. Zimmermann

Mark Zimmermann is a partner with Updike, Kelly & Spellacy, P.C., in Hartford, Connecticut, where he specializes in environmental law. Mr. Zimmermann represents the interests of Harold Murtha in B.F. Goodrich Co. v. Murtha.

[21 ELR 10453]

Industry has won the first round in the ongoing skirmish to determine whether local governments and municipalities are subject to the strict, joint, and several liability scheme of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA)¹ for the disposal of household garbage, or municipal solid waste (MSW), at municipal landfill sites across the country. In the first decisions to address the issue, U.S. District Courts in Connecticut and California have ruled that MSW is not automatically exempt from coverage as a "hazardous substance" under § 101(14) of CERCLA.²

The Murtha Decision

In Connecticut, 23 municipal and governmental agency defendants (collectively, the municipal defendants) in a CERCLA contribution action moved for summary judgment in B.F. Goodrich Co. v. Murtha.³ The municipal defendants argued that they were not liable under CERCLA for the generation, transportation, or disposal of MSW at the Beacon Heights and Laurel Park landfills.⁴ Pointing to the exclusion of household waste from those solid wastes deemed "hazardous waste" under the Resource Conservation and Recovery Act,⁵ the municipalities argued that MSW, which consists primarily of household waste, was likewise exempt from CERCLA liability. The court summarily dismissed this argument. Judge Dorsey ruled, in a 36-page opinion, that CERCLA's broad remedial mandate and its expansive definition of "hazardous substances" preclude an exemption for MSW from CERCLA liability.⁶

The court held that the plaintiffs had established that a question of fact existed as to whether each municipal defendant's MSW contained "hazardous substances," as defined by CERCLA.⁷ In making this initial determination, the court relied on a number of generic studies and reports that estimate MSW contains .3 to .4 percent of CERCLA-defined hazardous substances.⁸ In addition, the court referenced the affidavit of Kirk W. Brown, Ph.D., which was offered by the plaintiffs in opposition to the municipalities' motion. Dr. Brown concluded that MSW contains CERCLA hazardous substances in the .3 to .4 percent range and that the sites' leachates contain hazardous substances commonly found in MSW.⁹ In addition, it is significant for summary judgment purposes that the municipal defendants acknowledged that MSW may contain hazardous substances and they had no reason to believe their MSW to be different from the MSW addressed in the generic studies and expert reports referenced by the court.¹⁰

The municipal defendants urged the court to adopt EPA's Municipal Settlement Policy (Policy)¹¹ as the law of the case. Essentially, the Policy provides that EPA will not designate a municipality as a CERCLA potentially responsible party (PRP) if its only connection to the site is the generation, collection, or transportation of MSW, absent some site-specific information indicating that the MSW [21 ELR 10454] contains a hazardous substance and there is reason to believe that the hazardous substance is derived from a commercial, institutional, or industrial process or activity.¹² In rejecting this argument, the court noted that the Policy itself reiterates that MSW is not exempt from CERCLA liability.¹³ Furthermore, as the court correctly pointed out, the Municipal Settlement Policy "is a guide to EPA in administering the Superfund and reflects EPA priorities…. It does not limit a private party's claims."¹⁴ That private parties have instituted the vast majority of the existing CERCLA cost recovery actions against municipalities is indicative of the lack of weight, in the legal persuasive sense, that the Municipal Settlement Policy is accorded by private parties.

The Transportation Leasing Decision

In Transportation Leasing Co. v. California,¹⁵ the court reached a similar, but much shorter, decision in rejecting the defendant municipalities' argument that household waste is excluded from CERCLA's "hazardous substance" definition.¹⁶ The court in Transportation Leasing, like the court in Murtha, accepted the plaintiffs' argument that an exemption for MSW would have been specifically set forth in CERCLA, as was the petroleum exclusion, if Congress had intended to exempt MSW.¹⁷

Ramifications of the MSW Decisions

The Murtha and Transportation Leasing decisions are merely the tip of the iceberg as industrial waste generators and transporters struggle to identify additional PRPs in an effort to spread the enormous costs associated with the multimillion dollar investigations and cleanups of CERCLA sites. The industrial PRPs argue that the large volume of waste usually associated with MSW disposal dramatically increases the cost of the ultimate site remedial measures and, therefore, municipalities should contribute to site cleanup based on their volumetric share, without regard to toxicity. The municipalities, on the other hand, argue that MSW is relatively innocuous and that Congress selected industry, and not taxpayers, to pay for cleaning up these sites on the theory that industry was primarily responsible for the presence of the hazardous substances that necessitate the expensive Superfund site cleanups.

While the municipalities have apparently lost the first round, the MSW decisions still leave several important questions unanswered. The Connecticut and California courts have determined that questions of fact exist as to whether these particular municipalities' MSW contained CERCLA "hazardous substances." One significant issue is how these questions of fact will be resolved at the trial level. While the Municipal Settlement Policy indicates that generic studies and reports do not constitute the site-specific information necessary for EPA to determine that a particular municipality's MSW contains a hazardous substance,¹⁸ it is unpredictable whether the trial court will adhere to the same policy. As the Murtha decision demonstrates, the Policy is merely a guidance document for EPA and is not binding on a court or, more significantly, on another PRP. Given the presence of detergents, paints, cleaners, and other hazardous wastes typically associated with ordinary households, it is improbable that the trial court would hold the nonmunicipal plaintiffs to a very high level of proof as to the hazardous contents of the municipal defendants' MSW.

A bigger question is the allocable share attributable to the municipalities. In Murtha, Judge Dorsey cited the court's authority under CERCLA § 113(f)(1) to use equitable factors in allocating cleanup costs among liable parties: "The degree of liability to which the municipalities are exposed will be determined by the extent of their contribution to the problem. The municipalities' liability under CERCLA will, accordingly, be limited to a share based on the amount of disposition shown to have contributed to the damage."¹⁹ It remains to be seen whether the municipal share of the investigatory and cleanup expenses will be the MSW volumes disposed of at a site, the .3 or .4 percent hazardous substance content noted by many of the generic MSW studies, or some other yet-to-be-determined standard. Industry's initial victory could ultimately be hollow if the municipal contingent obtains a favorable decision on the allocation issue. Further, it is important to note that resolution of this issue will also have a far-reaching impact on nonmunicipal PRPs that have dipsosed of MSW-type waste, and other relatively innocuous waste materials, in their attempts to assert a nonhazardous defense to CERCLA liability.

Municipal Strategies

One question posed by many municipalities in the aftermath of the Murtha and Transportation Leasing decisions is whether they can change their waste collection practices to minimize their potential liability in the future. While theoretically municipalities can minimize their potential liability by eliminating all sources of CERCLA "hazardous substances" from their waste streams, as a practical matter, this may be next to impossible to achieve, let alone enforce.

At the local level, the town would need to ensure that its various departments, such as the highway, public works, and police departments, maintain strict controls over all waste materials that conceivably could contain CERCLA hazardous substances. Such materials could not be commingled and disposed of with the remainder of the town's nonhazardous solid waste. Documentation of these practices and their enforcement would obviously be important if the town were subsequently forced to defend itself in a CERCLA cost recovery action. Given the expansive nature of the CERCLA definition of "hazardous substances" and its potential application to many seemingly innocuous waste materials, this may be an impossible burden for a town to meet. Obviously, some type of cost/benefit analysis is needed before a town should decide to change its operations in an attempt to avoid the potential liability arising out of [21 ELR 10455] these two decisions. However, a final accurate assessment cannot be made until the next round of this battle, the allocation issue, is decided at the trial level. Only then will municipalities be in a position to predict the extent of their exposure to CERCLA liability for the disposal of MSW.

Similarly, if the courts determine that the generic studies are sufficient to establish the presence of hazardous substances in MSW, towns that "arrange for" the disposal of their residents' waste materials also face an insurmountable burden. Given the enormous number of households, it would be ludicrous, from a purely practical standpoint, to expect a town to change its waste collection practices to eliminate the .3 to .4 percent of hazardous substances typically found in MSW. However, depending on the outcome of the allocation issue, steps taken to reduce the hazardous content of MSW could enhance a municipality's negotiating position with EPA or the other PRPs over its allocable cleanup share.

In addition to changing their waste collection and disposal operations, municipalities should also be mindful of various other strategies or options that can impact their liability for the investigation and cleanup of a CERCLA site. CERCLA provides for a limited number of defenses that should be carefully examined in the course of fully evaluating a municipality's potential liability.²⁰ In addition, CERCLA's de minimis provisions can be extremely attractive to a small volume generator and, depending on the ultimate resolution of the allocable share issue, could arguably apply to a municipality.²¹

EPA has indicated that municipalities will not be notified as PRPs in the absence of site-specific information that the MSW contains a hazardous substance and if there is reason to believe the hazardous substance is derived from a commercial, institutional, or industrial process or activity.²² Although private parties are not bound by the Municipal Settlement Policy, CERCLA's contribution protection provisions provide a municipality the opportunity to settle its potential liability with EPA, while at the same time obtaining protection from the claims of private party PRPs.²³

Relief in Sight?

As the banking industry was spurred into action by the Eleventh Circuit's decision in U.S. v. Fleet Factors Corp.,²⁴ the proliferation of cost recovery actions against municipalities across the country, culminating in the Murtha and Transportation Leasing decisions, seem to have had a similar effect on municipalities. While the municipal defendants in Murtha have been granted an interlocutory appeal in an attempt to reverse Judge Dorsey's decision, local governments are simultaneously attempting to organize in an attempt to revise CERCLA so that the unique characteristics of MSW are recognized and treated in an equitable fashion.

The most active municipal group lobbying for an exemption under CERCLA for MSW is the American Communities for Cleanup Equity (ACCE). The ACCE originated out of the Operating Industries site in California, which is the subject of the Transportation Leasing case. The 29 municipal PRPs at the Operating Industries site organized themselves into a lobbying group that has now grown to approximately 60 municipalities. The ACCE seeks (1) to amend CERCLA to have MSW recognized as nonhazardous, (2) to designate EPA as the only entity entitled to seek cost recovery from local governments, and (3) to make it easier for municipalities to enter into settlements at those sites in which they are implicated.²⁵ The ACCE proposals, which are expected to be vigorously opposed by the industrial community, also have the support of the National League of Cities and the U.S. Conference of Mayors' Solid Waste Disposal Task Force.²⁶

At the EPA level, it is doubtful that further modification of the Municipal Settlement Policy will advance the municipal cause, especially given its advisory nature and its nonbinding effect with respect to private party PRPs that institute CERCLA cost recovery actions against municipalities. However, in an apparent effort to partially accommodate municipal concerns and assist them in negotiating settlements and de minimis agreements with EPA, the Agency has recently announced that it will send out notification letters to area municipalities.²⁷ These notification letters will serve to warn local governments of the pendency of a Superfund enforcement action in their vicinity and alert them to the window of opportunity that may be available in which to resolve their potential liability with EPA on somewhat more favorable terms.

Conclusion

The Murtha and Transportation Leasing decisions are a blow to the legal positions of municipalities across the country, but they were not unexpected given the broad interpretations generally accorded CERCLA's statutory language, as well as the language contained in the Municipal Settlement Policy. While the industrial PRP community has won the first battle, it remains to be seen which side will win the war. The unresolved, determinative issue is the allocable fair share attributable to municipalities whose only involvement at a site is the transportation or generation of MSW. Resolution of this issue will ultimately determine the extent of municipal CERCLA liability, which will in turn impact the municipal-driven efforts to amend CERCLA to allow an exemption for MSW. The final outcome, either legislatively or judicially, will unquestionably have a dramatic impact on the Superfund process in the years to come.

1. 42 U.S.C. §§ 9601-9675, ELR STAT. CERCLA 001-075.

2. Id. § 9601(14), ELR STAT. CERCLA at 007-08.

3. 754 F. Supp. 960, 21 ELR 20777 (D. Conn. Jan. 7, 1991), petition for permission to appeal from interlocutory order granted, No. 91-7450 (2d Cir. May 8, 1991).

4. Id. at 967, 21 ELR at 20781; see Memorandum In Support of Motion for Summary Judgment Filed on Behalf of the Defendant Municipal/Government Agency Collectors Group (D. Conn. filed May 31, 1990) (No. N-87-52 (PCD)), digested at ELR PEND. LIT. 66099.

5. RCRA § 3001(i), 42 U.S.C. § 6921(i), ELR STAT. RCRA 011; 40 C.F.R. § 261.4(b)(1).

6. See Murtha, 754 F. Supp. at 966-67, 21 ELR at 20780-81.

7. Id. at 972, 21 ELR at 20783.

8. See, e.g., OFFICE OF SOLID WASTE, U.S. EPA, SURVEY OF HOUSEHOLD HAZARDOUS WASTES AND RELATED COLLECTION PROGRAMS, at 1-2, 2-3 to 2-4, 4-6 to 4-7 (Oct. 1987); G. CHARNLEY, E. CROUCH, L. GREEN & T. LASH, MUNICIPAL SOLID WASTE LANDFILLING, at 2-2 (1988); D. BOMBERGER, R. LEWIS & A. VALES, WASTE CHARACTERIZATION STUDY, at 2-3 to 2-4, 4-34 to 4-35 (1988); V. KERAMIDA & J. GUSS, STUDY OF INDIANAPOLIS MUNICIPAL WASTE (1985-86); HOUSEHOLD WASTE, CHEMECOLOGY, at 2-3 (June 1989); NEW DATA ON HOUSEHOLD HAZARDOUS WASTE, CHEMICAL TIMES AND TRENDS, at 24 (July 1988).

9. 754 F. Supp. at 972, 21 ELR at 20783, citing Affidavit of Kirk W. Brown, Ph.D., at PP4-6 (June 29, 1990).

10. Memorandum In Support of Motion for Summary Judgment Filed on Behalf of the Defendant Municipal/Government Agency Collectors Group (D. Conn. filed May 31, 1990) (No. N-87-52 (PCD)), at 25 n.20, digested at ELR PEND. LIT. 66099.

11. Interim Policy on CERCLA Settlements Involving Municipalities or Municipal Waste, 54 Fed. Reg. 51071 (Dec. 12, 1989), ELR ADMIN. MATERIALS 35225 [hereinafter Municipal Settlement Policy or Policy]. Although the Municipal Settlement Policy is entitled an "Interim" policy pending EPA's review of the public comments, it is deemed effective as of December 12, 1989.

12. Id. at 51075, ELR ADMIN. MATERIALS at 35226.

13. Murtha, 754 F. Supp. at 966-67, 21 ELR at 20781.

14. 754 F. Supp. at 967, 21 ELR at 20781 (citation omitted).

15. 21 ELR 20826 (C.D. Cal. Dec. 5, 1990).

16. Id. at 20826-27.

17. Id. at 20827. The petroleum exclusion is set forth in CERCLA's definition of "hazardous waste." CERCLA § 101(14), 42 U.S.C. § 9601(14), ELR STAT. CERCLA 007-008.

18. 54 Fed. Reg. at 51075 n.8, ELR ADMIN. MATERIALS at 35226 n.8.

19. Murtha, 754 F. Supp. at 973, 21 ELR at 20784.

20. CERCLA §§ 101(20), 107(b), 42 U.S.C. §§ 9601(20), 9607(b), ELR STAT. CERCLA 008, 025.

21. CERCLA § 122(g), 42 U.S.C. § 9622(g), ELR STAT. CERCLA 058-059; Interim Guidance on Settlements with De Minimis Waste Contributors under SARA § 122(g), U.S. EPA (June 19, 1987), 52 Fed. Reg. 24333 (6/30/87), ELR ADMIN. MATERIALS 35067.

22. 54 Fed. Reg. 51075 n.8, ELR ADMIN. MATERIALS 35226 n.8. However, EPA has drafted a "non-notice" letter that it intends to send to local officials announcing Superfund enforcement actions in their areas. See infra note 27.

23. CERCLA § 113(f)(2), 42 U.S.C. § 9613(f)(2), ELR STAT. CERCLA 039.

24. 901 F.2d 1550, 20 ELR 20832 (11th Cir. 1990).

25. See Cities Band Together to Fight Superfund Claims, INSIDE EPA's SUPERFUND REP., Nov. 21, 1990, at 5.

26. See Move to Protect Towns Gets Major Lobby Support, INSIDE EPA's SUPERFUND REP., Jan. 30, 1991, at 4-5.

27. See EPA Issues Model "Non-Notice" Letter for Warning Cities, INSIDE EPA's SUPERFUND REP., May 22, 1991, at 3.