Natural Resource Damage Assessment: Methods and Cases

The Type B rules, however, have a more complicated history. The first set of Type B
rules was promulgated in 1986. After a court challenge, the rules were amended and the
amended rules were finally promulgated on May 25, 1994. See 59 Fed. Reg. 14,262 (codified at
43 C.F.R. §§ 11.60-.84). These rules were then challenged in Kennecott v. Department of the
Interior, 88 F.3d 1191 (D.C. Cir. 1996), but the court upheld most of the new rules.
The Type B rules set up a four stage administrative process. First, there is the
“preassessment screen,” during which the trustee determines whether a hazardous substance
release may have caused injury to a natural resource. Next, during “assessment planning,” the
trustee decides what methodologies to apply during damage assessment and plans the assessment
process, often with the help of the PRPs. The third step is the “damages assessment.” During
this stage, the trustee determines the injury to the natural resources, quantifies the injury and the
lost “services provided by the resources,” determines the release pathways of the hazardous
substance to the injury (satisfying the causation requirement), and quantifies the damages.
Finally, there is “post-assessment” phase that takes place after a settlement is reached or
litigation has concluded. At this point, the trustee knows how much money is available and can
develop the final plan for restoration, replacement, or acquisition of equivalent resources based
on that amount.
The goal of NRDs is to return the natural resources to their “baseline” condition. The
baseline condition, however, is not necessarily the condition of the resource before the release of
the hazardous substance. It is, instead, the condition the resource would have been in if it had
not been exposed to the reservoir of hazardous substances to which the defendant contributed.
See 43 C.F.R. § 11.14(e). Congress also realized, however, that trustees could not always restore
the exact resources that were injured. As a result, there is no general preference expressed in the
DOI rules for restoration over acquisition of replacement resources. See Kennecott v. Interior,
88 F.3d at 1224. But DOI has made clear that restoration/replacement is complete only if the
services are returned to their baseline level. In addition, NRDs may also include lost use values
(benefits derived from the availability of a resource for current and future uses by identifiable
people), lost non-use or passive values (benefits derived from the knowledge of the existence of
resources), and any other indirect costs so long as they are “necessary” to “support” the selected
remedial option.
Compliance with the DOI NRD regulations is optional with trustees. See 40 C.F.R. §
300.615(c)(4); 43 C.F.R. § 11.10. If the trustee conducts the damage assessment in accordance
with the DOI rules, the assessment will be entitled to a “rebuttable presumption” in any legal
proceeding. See 42 U.S.C. § 9607(f)(2)(C). It is unclear what the practical significance of this
“rebuttable presumption” is. But it is clear that a trustee that is willing to forego this statutory
presumption may use any injury tests and/or methods of damage quantification it chooses, even
though the DOI has not adopted them.
Trustees may settle NRD claims under CERLCA. Some have settled natural resource
damages claims before the remediation process. While the statute does not prohibit settlement
prior to remediation, courts have frowned upon this approach. See Utah v. Kennecott Corp., 801
F. Supp. 553, 568 (D. Utah 1992); In re Acushet River and New Bedford Harbor: Proceedings re
Alleged PCB Pollution, 712 F. Supp. 1019, 1035 (D. Mass. 1989) (ultimately approving
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