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Natural Resource Damage Assessment: Methods and Cases

Natural Resource Damage Assessment: Methods and Cases

With respect to the

With respect to the second category of PRPs, past owners/operators of the site, liability will attach if there was “disposal” during their ownership. CERCLA defines “disposal” to include “the discharge, deposit, injection, dumping, spilling, leaking or placing of any solid or hazardous waste into or on any land or water so that such solid waste or hazardous waste or any constituent thereof may enter the environment.” 42 U.S.C. § 6903(3) (incorporated by reference in 42 U.S.C § 9601(29)). Courts, however, have split on whether the passive migration of hazardous waste during the ownership of a prior owner/operator constitutes disposal. Compare Nurad, Inc. v. William E. Hopoper & Sons Co., 966 F.2d 837 (4 th Cir. 1992) (holding that passive migration during prior ownership constituted “disposal” under CERCLA), with United States v. CDMG Realty Co., 96 F.3d 706 (9 th Cir. 1996) (rejecting the view of Nurad). Accordingly, it is possible that a past owner/operator will not be liable for NRDs if the “disposal” that took place while it owned or operated the site was simply passive leaking. Ultimately, the resolution of this issue, however, will depend on the court where litigation is brought. Moreover, past owners and operators have the defenses to liability noted above (such as the innocent landowner defense) available to them as well. The third category of PRPs, those that have arranged for the disposal or treatment of hazardous waste, is quite broad. To be liable as an arranger, most courts have held that it is enough if it is shown that: the arranger sent a hazardous substance to the site; the arranger’s hazardous waste or some like it is found at the site; there is a release or threatened release of any hazardous substance from the site; the release or threatened release is causes the incurrence of costs. See United States v. Wade, 577 F. Supp. 1326 (E.D. Pa. 1983). A corporate officer may be individually liable as an arranger under CERCLA if he or she was closely involved and had direct supervisory powers over the events that led to the wrongful conduct. See Kelley v. ARCO Indus., 723 F. Supp. 1214 (W.D. Mich. 1989). Again, as with the other categories of PRPs, the limited defenses available to all PRPs, like the federally permitted release, are also available to arranger PRPs. The final category of PRPs, transporters to the site, may also be held liable for NRDs, but only if the transporter selected the site. See Tippins Inc. v. USX Corp., 37 F.3d 87 (3d Cir. 1994). Transporters that ultimately select the site are included as well as transporters that have “substantial input into the disposal decision.” Id. at 95. Like arrangers, transporter PRPs have the limited defenses like the act of God defense available to them as well. Once PRPs are identified, their liability is strict. This means that PRPs are liable even if they were not negligent in their handling of the hazardous substance at issue. In addition, liability is joint and several. Therefore, a PRP is potentially responsible for 100% of the cost of NRDs regardless of how much hazardous waste the PRP contributed to the site. Although liability under CERCLA is intended to be broad, there are a few limits on recovery for NRDs. First, CERCLA limits the recovery of NRDs per release to $50 million unless the release was the result of willful misconduct, willful negligence, or a violation of federal safety or operating standards. CERCLA § 107(c)(1)(D), (c)(2). The Ninth Circuit has held that “incident involving release” means “an occurrence or series of occurrences of relatively short duration involving a single release or a series of releases all resulting from or connected to the event or occurrence.” United States v. Montrose Chemical Corp., 104 F.3d 1507 (9 th Cir. 85

1997). Second, there can be no recovery if the release that caused the damages and the damages themselves occurred “wholly before December 11, 1980.” CERCLA § 107(f)(1). A trustee can recover, however, for all damages that occur after December 11, 1980, regardless of whether they result from pre-enactment or post-enactment releases. If damages are divisible and it can be shown that the damages occurred before December 11, 1980, the trustee cannot recover for the pre-December 11, 1980 portion of the damages. But if damages are not divisible and the release and/or damages continue post-December 11, 1980, the trustee can recover for the entire amount of non-divisible damages. See generally In re Acushnet River & New Bedford Harbor: Proceedings re Alleged PCB Pollution, 716 F. Supp. 676 (D. Mass. 1989). Third, the statute of limitations period for NRDs under CERCLA is different than that for response costs. If the damaged site is listed on the National Priorities List (NPL) or is a federal facility, the statute of limitations is slightly different: an action for NRDs need only be filed within three years after the completion of the remedial action. CERCLA § 113(g)(1). Under CERCLA § 113(g)(1), if the site is not on the NPL and it is not a federal facility, an action for NRDs must begin within three years of the later of “(A) [t]he date of the discovery of the loss and its connection with the release in question” or “(B) [t]he date on which regulations [on natural resource damage assessment procedures] are promulgated under [CERCLA § 301(c)].” This date of regulations prong is irrelevant for future cases because the courts have ruled that the regulations were promulgated, at the latest, as of March 20, 1987. See Kennecott Copper, 88 F.3d at 1212-13. Accordingly, the trustee is left with the “date of discovery” prong, which is not defined by CERCLA. But it is important to remember that even where there is a release, the nature and extent of the injury as well as the connection of the injury to the release is often not known until much later in time. As a result, the clock may not begin to run as quickly as one might anticipate. Nevertheless, trustees have entered into tolling agreements at some sites to avoid any statute of limitations problems. Once the PRPs are determined and liability seems appropriate, the next question is how much damage was done. Or, more simply, what do the PRPs owe for NRDs? Although the proper measure of damages is discussed in more detail in the other chapters, there are a few basic components. CERCLA § 301(c) provides that regulations shall be promulgated that specify “standard protocols for simplified assessments,” known as the Type A rules, and “alternative protocols for conducting assessments in individual cases to determine the type and extent of short- and long-term injury, destruction, or loss,” known as the Type B rules. These regulations “shall identify the best available procedures to determine such damages, including both direct and indirect injury, destruction, or loss and shall take into consideration factors including, but not limited to, replacement value, use value, and ability of the ecosystem or the resource to recover.” CERCLA § 301(c)(2). Thus far, DOI has promulgated only two types of Type A procedures. One is for coastal and marine environments and the other for Great Lakes environments. See 43 C.F.R. § 11.40; see also National Association of Manufacturers v. United States Dep’t of the Interior, 134 F.3d 1095 (D.C. Cir. 1998) (detailing procedures under Type A rules and upholding the rules). 86

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